Should Your Organization Provide a Differentiating Customer Experience?

You have undoubtedly heard about businesses that provide amazing customer experiences and, in some cases, create life-long customer relationships. You may have also wondered whether this strategy is right for your organization. Here are some key points to consider when determining whether a differentiated customer experience will help your business win.

How Businesses Have Learned to Create “Lemonade” from the Pandemic’s “Lemons”

Despite the tribulations and disappointments of 2020, some businesses found imaginative ways to capitalize on the increased customer focus on health and safety, staying home, and finding creative ways to make purchases. These companies have recognized what their customers want and have pivoted their organizations to meet or exceed customer expectations, creating greater loyalty and connections with their customers. For example, Whole Foods transitioned its popular cooking classes to an online series that covers cooking skills, baking substitutions, food usage, and more. The classes are free and offer a new way for customers to connect with Whole Foods while learning valuable skills. Some car dealerships have moved online automobile sales and delivery to the customer’s home. Many fast-food restaurants have moved to cashless transactions and have made it easier to pick up food. And Netflix created “Teleparty,” a free Chrome extension that allows people to watch Netflix remotely with friends and family and chat about the show.

What Is a True Differentiating Customer Experience?

A differentiating customer experience is often referred to in online reviews with phrases like “amazing” or “best in class.” If your organization provides an experience that is uniquely compelling and attracts new customers, your business is likely differentiated through the customer experience.

According to a survey of consumers and business buyers conducted by Salesforce and published in the second edition of “The State of the Connected Customer,” customers now expect more proactive service, personalized interactions, and connected experiences. The report notes that 70 percent of customers prefer connected processes such as seamless handoffs or contextualized engagement based on earlier interactions.  Eighty-four percent of customers reported that their highest priority is “being treated like a person,” not a number.

Should You Jump on the Bandwagon?

It is important to recognize that pursuing a differentiated customer experience is not the right strategy for every organization. Business leaders must be able to articulate a unique position for winning in the marketplace and understand the organizational implications of that strategy.

Marketplace differentiation typically occurs when a company identifies a distinctive niche and then fills the needs and expectations of customers in that market. The key to sustained marketplace success is setting up the organization to deliver a differentiating strategy, and any differentiating capabilities developed to support the strategy of an organization should be unique and/or difficult to duplicate. 

Some companies have achieved competitive differentiation from their product or service offerings. A business that provides a unique product in high demand may find that it only needs to provide “good enough” customer support. If data shows that reliability, dependability, and competence already meet customer expectations, increasing the hours of the customer support team’s availability will not necessarily move the needle for customer retention.

Other businesses differentiate themselves and compete successfully by simply being more efficient internally with their product or service while providing good value to their customers.

Both Google and Microsoft have developed technology that has made them successful in the marketplace. These organizations continually look ahead, designing products that satisfy market demand in a distinctive way, while also constantly improving the internal operational efficiencies of the business. Their winning differentiation has been achieved primarily through advancement in technology and products and through their development of operational efficiencies.

Your organization should take a broad view of the marketplace and carefully consider how differentiation might best be achieved. Processes should be created to enable leaders to look at available capital and decide how to best allocate it in a differentiated way.

Use Research to Support Your Customer Experience Strategy

It is important to understand your company’s position in the marketplace before deciding whether a differentiating customer experience will be part of your organization’s winning strategy.  Start by answering the following questions:

  1. What are the strengths and weaknesses (from the customer’s perspective) of your current customer experience?  Why do customers choose your company or offering over the competition?
  1. What are the strengths and weaknesses of your competitors?  Can a redesigned customer experience make your value proposition compellingly different enough to propel your organization to the top of your marketplace? 
  1. What additional resources will be necessary to ensure optimal customer experience outcomes? What capabilities will be required to deliver that future value proposition? 
  1. Is there an organizational commitment to a differentiated customer experience?  Are leaders committed to the cause and willing to prioritize the company’s efforts, communication, resourcing, and follow through?  Can methods or systems be developed and utilized to inform business leaders of problems requiring immediate, high-level attention?
  1. Will the organization design implications of a differentiated customer experience compromise your products/services or any of the other sides of your “organizational cube?”

The most important of these points is to determine whether your organization’s strategy to create a differentiating customer experience will move the company ahead of your competitors or will simply improve operational efficiency. In a highly competitive market, with many businesses providing similar offerings, the customer experience may be the best way for your company to differentiate itself – indeed, the best way to win.

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