It’s Not 2008 Anymore — How to Meet Customers’ 2017 CX Standards

by Michael Klein

posted on 05-19-2017

In 2008, chairman and chief executive Howard Schultz ordered all Starbucks’ 7,100 US locations to be shut down for three hours during the peak of the business day. In his book, Onward, Schultz admits that his 2008 sales were in free fall up to that point. As a result, he sent a memo to employees in which he announced the closure, stating that the goal was to improve the “Starbucks Experience.” The shutdown gave Starbucks the chance to retrain all its 135,000 baristas in the art of espresso. In parallel, the company made drastic changes to return to its roots — a complete and unabashed dedication to optimizing every detail of Starbucks store experiences. If foods, when combined with the scent of fresh coffee brewing, didn’t produce the aroma of an Italian cafe, they were nixed from the menu.

Since 2008, Starbucks has led the evolution of the customer experience. Today, they’re skilled in adapting to the future before it happens. The Starbucks experience no longer revolves around the product — now, it is centered on the customer. With the same dedication to creating flawless customer experiences, Starbucks predicts customers’ needs and designs experiences to delight their impatient, fast-moving, caffeine-loving customer base. Customers can pick up their latest addiction from the brand’s secret menu (after requesting it via the Starbucks app), which recalls their most recent orders and uses GPS to suggest the closest location.

Source Fresh Ingredients — Focus on the Customer not the Product.
In 2008, Schultz’s obsession with the customer experience was revolutionary. Today, it’s a basic expectation. Winning experiences, like those delivered by Starbucks, start with data that informs and predicts customers’ needs and wants at every moment. Sadly, unlike Starbucks, many brands are still in the Starbucks-2008 mindset, centering the brand experience on the product rather than the customer.

For brands to retain — or perhaps regain — their competitive advantage, this must change. This generic, one-size-fits-all engagement isn’t working, says Robert Cantave, senior director of solution architecture at Epsilon. “Not too long ago — from around 2007 to 2011 — organizations made investments in A/B and multivariate testing and saw terrific results from optimization. They were able to improve the overall experience of their web sites and see double-digit growth. But growth can slow down once the one-size-fits-all version of the user experience works as well as it can.”

As the value of personalization grows, brands like Starbucks are reinventing themselves as customer-centric organizations to deliver exceptional experiences. For this to happen, brands must combine and analyze their data to provide a complete customer view. Here’s how you can use data to design holistic experiences that are sure to win, serve, and retain customers — now and in the future.

1. Mix the Perfect Brew — Make Your Organization as Connected as Your Customer Journey.
To be successful, designing meaningful personalization for topnotch experiences must be an organization-wide imperative that goes beyond inserting your customer’s name in a “Dear [Customer]” salutation. Even in 2008, Starbucks was leading by example to show that winning customer experiences are holistic in nature. Today, though the brand now revolves around the customer instead of the offering, this approach hasn’t changed.

Sadly, many companies fail to deliver customer experiences that meet expected standards because they optimize only bits and pieces of a customer’s experience: a home page here, an email offer there. Even within the same organization, marketers use different marketing platforms, resulting in multiple profiles for the same customer and the delivery of experiences that compete to win a share of her.

This is because many companies organize their marketing by function —web, mobile, and social, for instance — and a different set of key performance indicators (KPIs) motivates each team. As a result, they may talk customer-centric, but disconnected departments, touchpoints, and customer data mean they can’t walk it — and their customers can tell. Those that do align business goals across functions can also align them with customers’ needs, resulting in unforgettable customer experiences.

For example, like Starbucks, British retailer Topshop is marrying in-store shopping experiences with “on the go” apps, technologies, and channels. During London Fashion Week (LFW), they encouraged brand lovers to post their looks — using the #TopshopWindow hashtag — and then featured the images in a digital fashion show at flagship stores. Via their social-media submissions, fans entered a contest in which five winners would be invited to view the LFW show in store by using fashionable virtual reality (VR) headsets. As a result, the Topshop fashion show ranked in the top five most talked about LFW shows on social media channels that year.

2. Customize the Order — Create a Holistic View of Customers’ Tastes.
Personalization on the Starbucks and Topshop level is fast becoming the new normal, especially for younger generations who have always relied on technology to solve their problems. Consider that as many as 78 percent of people will not engage with brand offers if they’re irrelevant to them based on their previous brand engagements. Business alignment is essential. But, for the benefits to reach your customers, it must also be paired with a complete customer view. An integrated data platform across all functions gives marketing teams insight into customer interactions with brands, their preferred products, and the sequence of purchases.

Marriott knows who their customers and prospects are across every touchpoint both online and offline and no matter how unique their journeys. With this holistic view, they can track the preferences of each traveler to predict their needs even before they ask for them to be met. Simple gestures — like offering coffee made the way a customer would order it from their favorite airport cafe, or offering early check-in based on a passenger’s habitual need for it — tell customers Marriott knows them and cares about them. It’s a luxury experience that deepens weary travelers’ appreciation of Marriott’s hotel offerings now and in the future.

3. Don’t Forget the Cherry on Top — Deliver Customer Service That Predicts and Acts on Needs.
Once brands have their business KPIs aligned with the customer and a data platform that spans the organization, combining a customer relationship management (CRM) solution with automation can help brands both predict and deliver on customers’ needs. Automation allows brands to test and personalize content at scale, and a good CRM solution predicts which content will resonate whenever and wherever customers engage. Robert Cantave of Epsilon explains how it works:

CRM data helps us understand what current customers are interested in seeing. Combining that with our third-party data lets us better understand what clusters of customers have in common. We present that information to the automated models and have them test and ultimately identify the product, categories, or content most likely to be of interest to both returning customers and brand new unknown users who’ve been seen elsewhere in our network.

In 2013, T-Mobile rebranded itself as the “un-carrier” by separating the cost of monthly service plans from devices. With a new competitive advantage in hand, they began to target competitors’ clients who wanted to break free from costly contracts. Based on device data that was collected when customers visited T-Mobile’s website looking for alternative options, the company sent a timely and seemingly telepathic text message to potential customers: “Stop waiting. Switch to T-Mobile and we’ll pay your termination fees when you trade in your device.” By automating the connection of data to relevant content based on a single customer view, T-Mobile received two million new customers in each of the last three quarters of 2015.

4. Own the Flavor — Create Agile, Connected Experiences to Maintain Strong Loyalty.
Connected, data-driven insights help brands deliver real-time customer experiences that delight — regardless of the situation. This is because they allow companies to pivot as the customer leads the experience demand. To reveal pain points, brands can gain insights through techniques and tools such as customer journey analytics and automation. Then, they can look at how brand and performance marketing can complement each other for added customer benefit.

For example, Southwest Airlines knows that customers who are caught in the melee of stranded passengers and amiss schedules often turn to social media to vent their frustrations, even sharing photos of long lines caused by cancelled flights. They address this reality directly by taking responsibility and apologizing on social media when necessary. Unhappy customers are allowed to rebook flights at no cost within two weeks of their original travel dates, and they receive refunds even for non-refundable flights. By answering every complaint on every channel as quickly as possible, Southwest is owning the experience to delight customers even in a crisis. As a result, Southwest Airline’s exceptional customer experience has allowed them to both attract new customers and maintain existing ones despite obstacles.

For instance, consumers’ delight with Southwest Airline’s experience has been featured in recent news. Juan (@xadoringpaige), a fan of Southwest Airlines, recently played a social-media trolling joke on the airline. The airline’s response was a delightful surprise — showing that the brand can pivot based on customers’ wants and needs — and it went viral. When asked why he chose to engage Southwest, Juan said that his great experience with the airlines made them the perfect choice to help lighten the mood in an industry that’s experienced some bruises over the past few years. Following the exchange, other customers jumped on board to express their deepened loyalty to the brand.

Design Customer Experiences That Deliver Real-Time Delight.
Since 2008, Starbucks has come to understand that customers are the center of successful brand experiences. As such, digital insights are the new currency of business. So, they have transformed their brand to become an experience business that revolves around the customer and not the product. Further, those brands that have followed suit — Topshop, Southwest Airlines, and T-Mobile, for instance — are able to win the hearts of today’s consumers. But, they must continue to evolve with customer needs.

In 2014, the average company used only four data sources for analysis and measurement; today, companies use six. According to Adobe research, 47 percent of companies in North America plan to increase their analytics budgets in the next 12 months. But, digital moves quickly, and customer standards are ever-increasing. So, your ability to use data to design exceptional customer experiences — like those of Starbucks, Southwest Airlines, Topshop, and T-Mobile — is likely to determine your success in the next era of marketing. By aligning organizational KPIs based on a single, real-time view of the customer, smart brands are getting to know their customers at scale and on a personal level — both in the physical and in the digital worlds — and it’s paving the way for topnotch experiences.

To learn more about designing exceptional experiences to meet today’s consumer needs, download Experience Counts: Exceptional Experiences Happen at the Intersection of Data and Design.

Topics: Retail