Differentiate with Customer Experience

Customer Experience is more and more becoming the main decision criterion for customers to turn to or to stay with a business. Yet most brands approach Customer Experience with the goal to design experiences that are easy and frictionless. This results in a sameness of experiences, counteracting the efforts by Marketing to create a unique brand that differentiates to competitors. Applied strategically, creatively and in collaboration with Brand Management, Customer experience can live up to its full potential and position and differentiate brands effectively. We show 6+1 approaches to differentiate with Customer Experience.

A design discipline with potential 

Customer Experience is what people experience when dealing with companies. Experiences, encountered one after the other result in the Customer Journey. In corporations, Customer Experience Design describes the area of responsibility that directs the customer journey with all its touchpoints and interactions. Various design management methods are used here, e.g. Design Thinking, Human Centered Design, Service Design or UX Design. The goal of the discipline is to improve processes for customers, make interactions more enjoyable and, in the end, to have more satisfied, loyal customers who recommend the service to others. Recently, however, the discipline of Customer Experience Design has made a name for itself with another corporate contribution: as a differentiating competitive advantage. Digital companies such as Amazon or Netflix, which offer particularly easy and smooth interaction, are the pioneers in this area. This makes them role models for both digital, but also classic players.

So far, differentiation and positioning have been classic marketing tasks. The first tool for this is the USP, which is very closely tied to the product in the actual sense. Today, however, the entire Customer Journey is important to customers, not just the product itself. A second tool for differentiation is price. However, the continuum price vs. premium traditionally offers only limited possibilities of differentiation. As a third way, differentiation can be played communicatively via the brand. It is a vehicle for unique values and attitudes, delivering meaning to customers and prospects. Today, however, this path also reaches its limits: due to the oversupply of communication and the increasing literacy of customers with it, the traditional way of conveying brand through advertising and corporate communication loses its original effectiveness.

This is where Customer Experience Design comes in. Because it can do much more than just “easier” and “more frictionless”: it can offer customers a tangible benefit – and thus create immediate relevance. A symbol for not using its potential is the widespread use of the NPS in companies which only distinguishes between good and bad experiences. When marketing and Customer Experience Design work closer together, they can jointly use this new opportunity to position the brand and differentiate from the competition. The result is a new set of instruments that goes beyond what has been possible so far: to differentiate with Customer Experience.

The 6+1 Customer Experience Strategies

In the field of Experience Design, practice is ahead of theory. In our search for approaches to the strategic use of Customer Experience, we therefore turned to leading minds in the areas of Customer Experience Design and brand. In joint discussions we talked about how Customer Experience can have a strategic effect. My special thanks for the open discussions and inspiring thoughts that led to the development of the 6+1 strategies go to Konstantina Bata (Deutsche Telekom), Claire Davidson (GetYourGuide), Carme Prats Sandiumenge (MediaMarktSaturn), Katrin Rieger (formerly at Eurowings) and Guido Woska (formerly at Lufthansa Group).

The first six strategies to differentiate with Customer Experience show specific ways how the offer can be made unique with CX. Each of the strategies supports a particular initial situation: e.g. a product category or a price positioning. The seventh strategy has above all an internal task: it aims to guide the company as such to a more customer-centric working mode, using methods and thinking of customer experience design as springboard. This modus operandi, Customer Centricity, is, figuratively speaking, the backend, while Customer Experience Design would be the frontend in this comparison. (More about Customer Centricity and how it can be applied within organizations here.)

The strategies are not exclusive and can complement each other. For example, the strategy Frictionlessness fits the strategy Value, but not Brand Personality, because particularly simple, smooth processes determine the personality to a certain extent.

For each strategy, Customer Experience Design sets a slightly different focus, for example by selecting and prioritizing the touchpoints to be worked on or by setting different goals for the respective revision.

Continuity - CX for a consistent performance experience

  • What: coherent quality experience without breaks
  • When: for brands with many, very different touchpoints
  • Challenge: selection and prioritization of touchpoints
  • Examples: telecommunications companies

Frictionlessness - CX for uncomplicated, pleasant interactions

  • What: simple, easy, fast, uncomplicated processes
  • When: for complex offers or process steps
  • Challenge: constantly increasing expectations due to other experiences
  • Examples: online shopping, on-boarding processes

Value - CX to keep a premium promise

  • What: communicating appreciation and value at relevant touchpoints
  • When: for a premium positioning 
  • Challenge: identification of touchpoints for maximum impact, constantly rising expectations
  • Examples: premium/luxury brands 

Event - CX to create memorable experiences

  • What: lasting emotional experiences through specially staged moments
  • When: for offers/ moments with high emotional involvement
  • Challenge: selection of suitable touchpoints, repeated creation of memorable experiences
  • Examples: hospitality, entertainment, luxury brands 

Character - CX to convey a brand personality

  • What: bringing brand personality/character to life in interactions
  • When: for brands with few factual differences, brands positioned via character  
  • Challenge: translation of brand personality into experiences, realization of personality 
  • Examples: Apple, Coca-Cola, Nike

Speciality - CX to play out category specific characteristics

  • What: system immanent “disatvantages”of a subcategory are converted into advantages 
  • When: for competitors with systemic differences in the product concept 
  • Challenge: identification of relevant differences, finding ideas 
  • Examples: brick-and-mortar vs. online commerce

Transformation - CX as vehicle to implement Customer Centricity

  • What: researching customer needs and customer journeys, promoting good CX solutions
  • When: for companies with a product-centric way of working
  • Challenge: corporate culture, silos

Implications for brand management

Based on the interviews, four steps are central to differentiate with Customer Experience, using Customer Experience Design strategically for positioning and differentiation:

  1. Creating the basis with the Customer Journey: First, the customer experience must be mapped end-to-end. For each encounter, customer’s expectations and goals need to be researched, as well as thoughts and feelings triggered. This requires a different kind of insight research – qualitative, ethnographic and understanding rather than purely quantitative.
  2. Unleashing the potential of Customer Experience Design: Often there is the notion that Customer Experience cannot be controlled as specifically as classical media communication. It is true that Customer Experience is less suitable for conveying complex cognitive messages. However, it may be even better at triggering emotions and creating basic moods in a subtle way. Also, Customer Experience can already be influenced by the selection and sequence of experiences offered, without modifying them itself. Service Design offers a potent approach for more purposefully designed brand experiences. For details please refer to the article “From Corporate Behavior to Branded Customer Experience”  in the book “Corporate Identity & Corporate Design”.
  3. Better linking of marketing and Customer Experience Design: Both areas are interrelated, because the brand creates expectations, which the Customer Experience Design has to meet with the design of products, services and interactions. A first step might be that both disciplines together create a brand statement from which both attractive messages for prospects, as well as guidelines for experiences can be derived. Conflicts of interest are obstacles on the path that need to be cleared up, for example when one department pursues customer loyalty at a touchpoint, while the other pursues revenue generation. In an ideal world, the disciplines marketing, customer experience design, market research and service innovation work together as a super department that addresses customer’s needs holistically.
  4. Play out strategic potential: Customer Experience must be recognized by management as a strategically valuable discipline. It can only effectively strengthen the competitive position if it is allowed to realize more than simple and uncomplicated interactions or unspecific “wow” effects. An example of the current status is the popularity of the Net Promoter Score, which treats all customer experiences in the same way and says nothing about whether the offered Customer Experience is contributing to the positioning. Strategically applied Customer Experience Design offers customers a differentiated experience across the entire Customer Journey, which has the chance to shape the brand more strongly than any other discipline.

 

 

The first and most important step, however, is to better synchronize marketing and design, and thus promise and experience. After all, today more than ever, brands are measured by whether they keep their promises.

Brand and Customer Experience follow different approaches – but via memory and preference both have a common effect on purchase decision (illustration inspired by Cyrill Luchsinger).



Download a poster of the 6+1 strategies to differentiate with Customer Experience as PDF here.




Illustrations: Daniel Faller

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