Globalization and the Internet have created an abundance of goods and services, and it has become increasingly difficult to differentiate based on the core offering (functional capabilities) or price. An IBM study in 2005 revealed that, “to create a new and lasting source of competitive advantage, businesses must manage the customer experience.”
Customer Experience Management is valuable in any industry—and in both business-to-business and business-to-consumer relationships. Shaw and Ivens of Beyond Philosophy cite their own research, which found that “85 percent of senior business leaders agree that differentiating solely on the traditional physical elements such as price, delivery and lead times is no longer a sustainable business strategy.”
That’s why tuning in to the customer experience is so important. Unhappy customers can bolt to a competitor—or simply stop using a service. All it takes is a computer browser set to any of the complaints sites on the World Wide Web to see the true story of how easy it is to irritate and lose a customer. “Because of one rude person you have put in charge, you no longer get that weekly cut out of my check, but you also have lost a very loyal customer who did ALL of their shopping, fueling and video rentals” complained one person on www.complaints.com about a grocery store she used to patronize. Now angry, she was willing to pay more money to pump gas from the more expensive station across the street and travel farther from home for her groceries and videos.
How are companies doing today? In CRMGuru’s survey, only 22 percent of respondents agreed that companies “currently provide an excellent customer experience.” As you can see, more than half of respondents had no strong opinion one way or the other, and 18 percent had a negative response. Full-service restaurants got the highest positive ratings and one of the lowest negative ratings. At the other end of the spectrum, fixed-line telephone companies earned the highest negative rating at 32 percent, perhaps an indication of the lack of competition in this industry.
Electronics companies had the lowest positive rating, and the long-suffering airline industry fared only slightly better.