Has the economic downturn minimized the importance of the Customer Experience?
In Chapter 5 of my book, Strategy Activation: How to Turn Your Vision into Marketplace Success, I talk about how important it is to improve your holistic customer experience to differentiate your company from your competitors. As products and services continue down the inexorable path toward commodification, it is the ongoing customer experience that drives customers to choose one vendor over another.
However, in the past two years, as the economic downturn has forced significant changes in customer behavior, many have questioned the importance of the overarching customer experience. These naysayers claim that in tough times price is the only thing that matters. Customers, they say, are more likely to accept a bad experience as long as they are getting a good deal. This perspective, however, is not confirmed by the data.
When Money is Tight, Customers Expect an Even Greater Customer Experience...
The most recent Harris Interactive Customer Experience Impact Report surveyed consumers on how they engage with companies both online and via phone, what they find frustrating, and how negative and positive customer experiences affect them.
They discovered these facts that are startling to most business owners today...
* 87% of the surveyed consumers stopped doing business with an organization or company because of a negative customer experience. That's up from 68% reported just two years ago.
* Even during tough economic times, the significance of customer experiences does not dwindle. More than half (58%) of consumers polled said they will pay more for a better customer experience during a down economy.
* Consumers stated that the most important thing companies could do to encourage them to spend more is to improve the overall customer experience
So, it's clear that even when finances are tight, people still value good service.
Why This Study's Results Are Not Surprising To Me...
When money is easy to come by customers are likely to be more forgiving. Consider this restaurant dining example...
When the economy was booming many couples found themselves dining out twice per week or more. With eight to ten dining-out occasions per month a single bad experience is easily forgotten. However, when belts tighten, monthly dining-out occasions may settle back to just two or three. With fewer opportunities to "splurge" on an evening out couples and families now demand that each experience justifies the expenditure of limited funds. Thus a bad experience like poor service, long wait times and cold food makes a bigger impression and stays with us longer.
Once you have a bad customer experience, you may wait months before you visit that restaurant again – and that's if you ever go back. Plus, you'll probably tell your family and friends about your experience. This will make them think twice before they visit that restaurant.
Real Proof That Bad Customer Experience News Travels Far...
A recently published Forrester Research report, "How Customer Experience Drives Word of Mouth" cites:
* Consumers tend to discuss bad experiences with more people than they discuss good ones
* Gen Xers, as a group, tend to tell the most people about a bad experience
* Gen Yers are the chattiest in general. They are more likely to tell someone about a good experience. They are also the most likely to share a bad experience.
So, don't you think that you should find out right now exactly what your customers are saying about your organization's performance over the past eighteen months? Have their experiences diminished in the wake of corporate austerity? As we begin to see the recession bottom out, now is the time to explore this issue; to find new ways to improve the customer experience; to ensure that your customers have only good things to say!
Strategy Execution Consultant Scott Glatstein, President of Imperatives LLC turns market opportunities into record breaking profits even in a recession. Now, with his new book, "Strategy Activation: How to Turn Your Vision into Marketplace Success," Scott unveils his groundbreaking plan for improved customer experiences and higher strategic profits. Get your FREE Sneak Preview at: http://www.strategyactivation.com
The best-laid strategic plans often go awry once exposed to the light of day and the rudeness and ruthlessness of reality.
Former President Lyndon Johnson understood that. He often told a story of a man who had applied for a job as a flagman at a railroad crossing. The man was told he'd be handed the job if he could pass a test consisting of just a single question
The applicant was told to imagine that he was a flagman at a crossing consisting of a single track when he suddenly observed the Continental Express bearing down from the east at 95 miles per hour. Coming from the other direction was the Century Limited at 100 miles per hour. With the trains only 500 yards apart, the man was asked, what would he do under these circumstances? Without hesitation, the would-be flagman responded that he would go and get his brother-in-law.
Puzzled, the railroad examiner inquired, "What good would that do?"
The job applicant promptly replied, "He ain't never seen a train wreck."
Clearly the would-be flagman didn't understand the overarching strategy of his potential employer (prevent accidents) nor his potential role in executing that strategy. Unfortunately, this is not unlike the current state of corporate strategic execution as evidenced by the train wrecks (AIG, Lehman Brothers, Citigroup, and the automotive industry) we see everyday in the marketplace.
How would I know? Well, my name is Scott Glatstein and I help companies execute their strategies in the marketplace for a living. In fact, I've been doing so as a corporate executive and a consultant for over 25 years.
I even wrote about strategy execution in my book, "Strategy Activation: How to Turn Your Vision into Marketplace Success." In this book I present a breakthrough, holistic planning discipline that links strategic vision to marketplace reality.
Here's What I Learned During My 25+ Years Executing Corporate Strategy:
1. Organizations who have mastered the intricacies of translating strategic vision into marketplace execution are, far and away, more likely to outperform competitors in key areas like:
This is particularly true when the economy falters. When money tightens consumer confidence falls and commerce slows. As a result customer needs and expectations change. Every spending decision becomes an exercise in deploying limited resources. Whether it's a consumer considering a night out on the town or a manufacturer trying to preserve margin the decision to spend money is not taken lightly. And the tolerance for imperfect execution melts away.
2. The old disjointed execution methods don't work anymore.
Historically, work has been divided into two parts: strategy and execution. Top executives wrote the marketplace strategy, which always looked good on paper. Everyone else was supposed to execute it. However, many necessary steps and important questions were usually skipped over when moving from theory to implementation. For example:
- Would employees be able to implement the marketplace strategy given the new expectations placed on their performance? - Can the company execute its strategy within its existing culture, reward system, or fundamental workflow processes and systems?
If you want to succeed in today's difficult marketplace than you need to break down the historical wall that exists between strategy and execution.
3. Corporate strategic plans fail when there is no disciplined approach to their execution.
Strategy has to be more than a feel-good presentation shared with your managers, shareholders and the media. It has to be woven into the fabric of your organization. This means you must go beyond articulating the typical strategic plan. You must translate your marketplace strategy into specific employee roles and create the infrastructure and processes that enable them to fulfill those prescribed roles.
4. Strategy fails when companies fail to recognize that existing tools and methodologies will NOT enable success.
It's difficult to implement a new strategy without changing the way your organization works. Too often, though, we redefine employees' roles with little regard to the systems and processes that guide and enable their work. Your business processes and systems must meet the demands of your new strategic vision. Do your customer-facing and internal workflow processes enable the customer experience defined by your strategic vision? Do your tools facilitate communication and information sharing across the organization and enable the completion of the specific tasks that deliver your marketplace vision? Pursuing a new strategy with old capabilities is a recipe for disaster.
5. Strategy execution can improve as executives streamline daily activities and realign them so they are in harmony with the company's overarching go-to-market strategy.
I bet every division across your organization thinks it's different and therefore needs its own unique tools and workflow processes. In most cases that's just not true. While customization may be appropriate in some instances, one must not lose sight of the broader organizational advantages of standardization. Consistent information and task tools support a consistent approach to the marketplace and allow employees to move seamlessly from one part of the organization to the next with less training. In short, standardization can bring more organizational flexibility and consistency to operations. And internal consistency drives consistent marketplace execution.
These difficult times call for a disciplined, thoughtful approach to execution of strategy in the marketplace. I created the Strategy Activation® planning approach to facilitate corporate strategy execution excellence. Apply it to your business and you will achieve higher revenue growth, profitability and customer satisfaction.
Corporate Strategy Execution Consultant Scott Glatstein, President of IMPERATIVES, LLC turns market opportunities into record-breaking profits with effective marketplace strategy planning & execution. Now for the first time, with his new book, "Strategy Activation: How to Turn Your Vision into Marketplace Success," Scott unveils his groundbreaking plan for higher strategic profits. Get your FREE SNEAK PREVIEW at: http://www.strategyactivation.com
