Customer Experience, or CX, is the study of how customers relate to brands, products and businesses on emotional level. It’s being hailed as a “new discipline,” but CX has been been around a very long time.
Take, for example, department stores. These early pioneers of customer experience found that displaying their goods in a beautiful environment did more than merely showcase the wares; opulent surroundings made the customers behave differently. If a customer was in a palace, that customer was likely spend more money… and enjoy himself or herself doing it. Because of this discovery, department stores came to resemble miniature palaces and offered generous credit terms and liberal return policies to facilitate liberal spending. Increased competition also spurred the merchants to offer various premiums, some of which are still enjoyed today. Where would Christmas be without the Macy’s Parade or the ubiquitous depart store Santas? You can see customer experience alive and well in any men’s department that is decked out with wood paneling and armchairs. Although Nordstrom and Nordstrom Rack sell identical merchandise, the Rack’s warehouse-like environment conveys none of the branded splendor experienced in the flagship stores. These stores function as a semi-branded clearance outlet, offering a deliberately shabby customer experience that drives home the emotion message that the shopper is getting a great deal. It’s still Nordstrom, but a cut-rate one.
These stores learned, too, that loyalty could span generations and affect whole families. My grandmother knew certain New Yorkers more divided by the Macy’s vs. Gimbels rivalry than by politics. You could forgive Uncle Herbie for being a Communist, but not for shopping at Macy’s.
The auto industry knows something about opulence and brand identity… make the customer feel like a big shot and suddenly price is not as much of a factor. General Motors knew this when they began buying up small, independent manufactures and rolling them under the same umbrella. A man’s first car is a Chevy and his last is a Caddy. Brand loyalty for a lifetime… or longer. You are what you drive, and money is only one of the considerations. This became all the more prevalent with the immense profitability of auto financing options.
Customers are loyal to brands they value. And value is far, far more than cost. It’s more than build quality, it’s more than materials. Value is, in essence, an emotional satisfaction of money well spent. Value is a “tangible intangible.” You know value when you see it, and the owners of brand names will go to any lengths to protect that value.
Restaurants, too, have long championed customer experience. Food, location, décor and service all play important roles in whether or not a restaurant succeeds, but there are often other intangibles at work. Loyal restaurant customers will endure long lines, poor service and wrong orders if they perceive that experience of dining there is valuable. Sometimes that can be because of a good review, but more often it’s word of mouth from other customers who have crossed over from loyalty to sheer evangelism. Food is food, but some experiences are more valuable than others. Anyone who has dined at an exclusive Manhattan restaurant will tell you the same.
But some restaurants have wild success while many others fail. (While not nearly as drastic as is commonly believed, 65% of new restaurants fold up within three years of opening.) The food may be equally good, the staff equally efficient, yet one place will thrive while another shutters. It certainly isn’t because the owners want to fail, nor is it because they are unwilling to give the customers what they want.
It’s because they simply don’t know. Customers will stop coming in, and the reason will elude the owner all the way up to the bitter end. It may be the parking lot, it may be the bar. By the time the owner starts wondering, it is often too late. The point is: if you don’t pay attention, you won’t know that you are failing until you fail.
Let’s take the greatest success story in recent years as a case study. You know who I mean: Apple. Apple did the impossible and not only came back from near extinction, but did so in a market that was completely dominated by a competitive monopoly. It achieved this through its innovative use of customer experience management. Every aspect of the Apple customer experience was designed and refined, from the screws used on the computer cases to the online store, from the type of metal on an iPod to the color of glass in the windows of the Apple Store. Steve Jobs was known as a detail man, but more importantly he was fully aware that attention to detail alone was not enough; it was absolutely vital to determine what the customers felt about the products. Jobs knew that emotions can overrule almost any other aspect of human interaction, even when it comes to technically-oriented decisions such as buying a computer or music player.
In an upcoming article I will address some of the “touch points” that can be monitored and refined to help improve your customers’ experience both on your website and your physical store. In the meantime, feel free to contact me at firstname.lastname@example.org with any questions or comments. You can also read a bit more about this at http://grapnel.net/cx.html