Should Your Organization Provide a Differentiating Customer Experience?

We’re always hearing about businesses that provide amazing customer experiences and, in some cases, create life-long customer relationships.  Wondering if this strategy is right for your organization?   Below 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 the COVID pandemic, many businesses were able to capitalize on the new-found customer focus on health and safety, staying home, and finding creative ways to make purchases. These companies recognize customer needs and wants, pivot to meet or exceed expectations and create greater loyalty and connections. For example, Whole Foods’ popular cooking classes became 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. Additionally, some car dealerships shifted online automobile sales and delivery to the customer’s home.  Many fast-food restaurants now utilize cashless transactions and easy to pick up options.  Lastly, Netflix created “Teleparty,” a free Chrome extension that allows you to watch remotely with friends and family and chat about the show.

What Is a True Differentiating Customer Experience?

A differentiating customer experience is often described as “amazing” or “best in class.” If your organization provides uniquely compelling experience and attracts new customers, it’s likely a differentiating customer experience.

According to a recent survey, customers now expect more proactive service, personalized interactions, and connected experiences. In addition, 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 report that their highest priority is “being treated like a person,” not a number.

Should You Jump on the Bandwagon?

Pursuing a differentiating customer experience may not the right strategy for every organization. Business leaders must articulate a unique position for winning in the marketplace and understand the organizational implications of that strategy.

Marketplace differentiation occurs when a company identifies a distinctive niche and fills the needs of customers in that market. Therefore, the key to sustainable marketplace success is delivering a differentiating strategy through capabilities that are unique and/or difficult to duplicate. 

Some companies achieve competitive differentiation within product or service offerings. A business providing a unique product in high demand may only need to provide “good enough” customer support. As a result, if data shows that they are already meeting customer expectations, increasing the hours of the customer support team will not necessarily move the needle for retention.

Other businesses differentiate and compete through internal efficiencies and customer value.

For example, both Google’s and Microsoft’s technology makes them successful in the marketplace. These organizations continually look ahead to design products, satisfy market demand in a distinctive way, and improve the efficiencies of the business. Their winning differentiation is through technological product advancement and operational efficiencies.

Your organization should take a broad view of the marketplace to consider how to best achieve differentiation, then create processes that enable leaders to allocate available capital in a differentiated way.

Use Research to Support Your Customer Experience Strategy

Understand your position in the marketplace before deciding on a differentiating customer experience as part of your organization’s winning strategy.  Start by answering the following questions:

  1. What are the strengths and weaknesses of your current customer experience?  Why do customers choose you over the competition?
  1. What are the strengths and weaknesses of your competitors?  Can a redesigned customer experience propel your organization to the top of your marketplace? 
  1. What additional resources are necessary to ensure optimal customer experience outcomes? What capabilities are required to deliver the future value proposition? 
  1. Is there an organizational commitment to a differentiated customer experience?  Are leaders willing to prioritize the company’s efforts, communication, resourcing, and follow through?  Can we develop and utilize methods to inform leaders about issues 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?”

Finally, the most important point is to determine whether creating a differentiating customer experience will move the company ahead of competitors or simply improve operational efficiency. In a highly competitive market, customer experience may be your organization’s differentiator – and the best way to win.

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