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Mind the customer experience gap

Joe at Intellexo Customer experience, Customer retention, Customer satisfaction

Are your customers as happy as you think they are? This was the theme of a conversation I had last week, and it’s a topic I’m increasingly coming across.

I’m not the only one. Ryan Smith, the CEO and founder of Qualtrics, the US customer experience management company, calls the problem the ‘experience gap’ – the difference between how satisfied you think your customers are and how satisfied they actually are.

The concept derives from a study by Bain & Company, where the consultancy identified that 80% of companies believed they were providing a superior service but only 8% of customers agreed that was the case.

Smith believes the experience gap exists in every organisation and can take a variety of forms: product gaps, customer gaps, employee gaps and even brand gaps. In each case, do companies have a different view on what is going on from what is actually happening?

The Bain research identifies a series of reasons for the existence of an experience or delivery gap:

  • Good relationships are hard to build;
  • It’s difficult to understand what customers really want;
  • It’s difficult to keep promises you make to your customers;
  • It’s difficult to maintain the right dialogue with customers so you can adjust your propositions according to their needs;

The consultancy found:

  • Only 50% of management teams tailor their products and services to the needs of customers;
  • Only 30% organise the functions of their company to deliver superior customer experiences;
  • Only 30% maintain effective customer feedback loops;

The issue, Smith believes, comes down to one of using the right data to understand customers. He says companies need to think of their data as either operational data (o-data) or experience data (x-data). The former category tells a company what is happening, while the latter tells companies why things are happening. The problem, he says, lies in the lack of x-data that companies capture or have access to.

Bain says the best way to tackle the gap is to look at those companies with satisfied customers. The consultancy found that these companies share “a simple but powerful goal: they focus, above all else, on treating their most profitable customers in ways that ensure that they come back for more and recommend the company’s products and services to their friends.”

These companies also know, at all times, what their customer issues are, tying in with Smith’s assertion that companies just don’t have enough data.

It’s easy to be overwhelmed with the possibilities around capturing experience data – technology offers so many options – but even a simple survey comprising a handful of spot-on questions can help a company make a huge step forward in their understanding. Bain’s analysis rests on the Net Promoter Score system*, which uses a simple question to gauge customer satisfaction and categorise customers according to how satisfied they are with a product or service.

Bain’s full report is well worth a read if you think your company might fall into the gap.

I think it’s also important to ask yourself questions around the customer journey: What does it look like? What potential barriers do customers (or potential customers) face? Who owns the customer journey and are they doing that job well?

For me, the last question is absolutely crucial. If the response to that question is vague, or clarified with ‘but’ or ‘though’, you probably need to think about what the answer should be.

Ask yourself if your company falls into the experience gap. Are your beliefs around customer experience at odds with your customers’ thoughts? Do you know what your customers think or why they buy your products or services? What is the customer journey and could it be improved?

The companies that do this well are relentlessly customer focused – I can think of companies that aren’t, but I can’t think of any companies that couldn’t, with a bit of work, shift into the right place.

Intellexo is a strategic insight agency. We can help you think about your customer satisfaction, customer loyalty and other aspects of customer experience management. If you’re interested in an informal discussion, get in touch.

*Net Promoter Score is a trademark of Satmetrix Systems, Inc., Bain & Company, Inc., and Fred Reichheld.