Creating The Perfect Storm Of Bad Customer Experience

In this guest post, Zach Hotchkiss (pictured below), country manager ANZ at Medallia, argues no amount of marketing dollars can save a brand with a bad customer experience…   

Sit back and think who is getting customer experience right. My guess is there aren’t more than five companies that come to mind straight way. Just the opposite in fact. You, like me, can probably list off more than 20 that are getting it incredibly wrong. But why?

It has long been clear that the days of telling customers what they need is gone. The power has shifted and expectations have risen, but many of our biggest brands remain complacent to change.

Marketing is experiencing huge head winds with a decreasing impact on the consumers’ purchase behaviour and loyalty. Sure your product matters but it’s becoming increasingly apparent that one of the most important ways to differentiate, especially in a highly commoditised market, is on the experience and interactions consumers have with your business. That’s not being fully embraced today and the dollars continue to follow into the same advertising channels and strategies instead of being leveraged for innovation, servicing and customer focused initiatives. Imagine the impact of your marketing spend if you had strong brand advocates and loyalists that further fuelled that fire. It’s the 1+1 = 3 multiplier effect.

In any market you have leaders and laggards. In my observations, banking, insurance, telco and hospitality have the most progressive mindset when it comes to leveraging the voice of their customers to take action and fundamentally change their day to day operations. Indeed, when it comes to banking in particular, Australia is  amongst the leaders in technology and adoption of mobile banking. Why then do the big four banks have an alarmingly low Net Promoter Score for such best in class products?

Generally speaking, we aren’t known as a society of ‘complainers’ but maybe it’s because consumers don’t see meaningful action when we do speak up. This cultural nuance for not expressing, and worse accepting, disappointment from poor customer service in turn leads to antipathy. Are we creating a ‘circular reference’ that’s self-perpetuating? It certainly feels like it.

Couple these two factors with a lack of strong external competitive pressures entering the market and we have the conditions for a perfect storm. As a result there is really no urgent driving force to change behaviour, but as we have seen with international disruptors including Uber, Airbnb and Amazon, that threat is real and can quickly creep up from behind.

It’s always a fool’s errand to compare which markets or sectors perform better when it comes to delivering great customer experiences. The way people buy and shop differs, as does technology infrastructure, logistics and other variables which makes these comparisons difficult. However generally speaking there is still much work to be done to deliver and meet the evolving expectations of the consumer.

It would be disingenuous to suggest there isn’t a good understanding of CX or a desire to strategically action the voice of the consumer to drive business change, however some organisations are failing to execute a well defined and strategic CX program in harmony with building a strong customer centric culture. Easier said than done I know, but it should rank among the top priorities for the C-suite.

In summary, to further bolster brand positioning and increase market share, more and more money is being pumped into marketing which is seeing massive head winds from negative customer experience and bad word of mouth. Secondly, there doesn’t really seem to be strong competitive market dynamics and external entrants that are forcing a need for rapid innovation. Finally I think it’s fair to say we aren’t a society known for proactively and openly complaining mainly due to the fact of receiving poor responses and little to no resolution from those we voice our opinion to. This trifecta is driving complacency and non-customer centric initiatives that are inhibiting rapid ‘outside in’ innovation which businesses must get ahead of. Anything less will result in consumers voting through their actions and finding themselves standing at the front door of your competitors.