Recognize Customers as Individuals, Part 1

Over the past few weeks, I’ve been exploring the use and applications of maturity models to help organizations understand where they are in their analytical capabilities and develop strategies and road maps for moving forward. In my own simple maturity model, the next step involves customer centricity, where an organization moves from a site focus to a customer focus. It’s a move from process optimization to customer optimization. But why is customer centricity important, what does it means from an analytics perspective, and what are the challenges involved?

In a site-centric world, we don’t really recognize visitors and customers as individuals, we see them as numbers, reminiscent of a line from a cult TV program from the 1960s, “The Prisoner.” In one famous scene the hero of pushes back against the authoritarian environment that he finds himself in with the line, “I am not a number, I am a person.” Over 40 years later, we have to recognize that people are individuals with different aspirations, wants, and needs and that we can no longer develop Web sites with a one-size-fits-all user experience.

Problem is we still get it so very wrong. When running workshops and seminars and speaking at conferences, I often ask a simple question: “Who here hasn’t had a poor experience on the Internet in the last couple of weeks?” No one ever puts their hand up. Either people don’t understand the question, or more likely we all routinely suffer from poor online experiences. This might not be surprising; after all, digital marketing is still a relatively young industry. Brand marketing is over 100 years old, and direct and catalog marketing is well over 50 years old. But digital marketing is at best 15 years old. While companies generally think they deliver a decent service to their customers, their customers don’t. In the digital world the consequences can be disastrous.

In its “2008 Customer Experience Impact” report, RightNow Technologies cited that 84 percent of people who’ve had a bad customer experience will tell others; it also found that 87 percent of those surveyed who’ve had a bad customer experience have stopped doing business with that company. Bad news travels fast.

What’s the solution? Developing a customer-centric view of the world is a massive step in the right direction. Customer centricity enables organizations to build better customer experiences, and there is increasing evidence that links customers’ perceptions of their online experience with their loyalty and advocacy. In its report, “Customer Experience Correlates To Loyalty,” Forrester finds that across 12 different U.S. industries there was a 65 percent to 76 percent correlation between a customer’s perception of her experience and the propensity to buy again. The evidence also suggests that this correlation is becoming stronger, with the results generally up compared to the prior year.

Customer experience is becoming more important. In this day and age, we must move away from the one-size-fits-all approach and focus on developing better customer experiences through an understanding of what the key customer segments are, why each visits the site, and what they do when they get there.

First, work out where your organization is in terms of understanding the current customer experience. Organizations at this stage may need to accept the hard truth that the baby is ugly, figure out where they need to be, and determine how they are going to get there. We’ve developed a framework to help organizations improve the quality of the customer experience along the following lines:

  1. Understand
    • Understand fully who your customers are.
    • Understand the nature of the current proposition.
    • Understand what data you have and what it tells you.
  2. Define
    • Define the experience that you want to deliver.
    • Define the processes that will underpin that experience.
    • Define the measures by which the quality of that experience will be assessed.
  3. Improve
    • Improve the experience’s quality.
    • Improve the experience’s effectiveness.
    • Improve the experience’s efficiency.
  4. Assess
    • Assess the changes’ impact.
    • Assess the changes’ ROI (define).
    • Assess the lessons that have been learned.
  5. Optimize

Obviously data and analytics are key to this process, from understanding what needs to be done to determining whether it’s been successful. But it’s not all about ones and zeros, there’s a range of quantitative and qualitative techniques needed as part of the customer experience toolkit. I’ll take a closer look at them next time. Till then…

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