Customer Experience Improvement using Differentiated Needs Pyramid

The current wave of transformation in the industry is led by the combination of Customer Experience and Digital Technologies associated with it. Industry has already reaped significant benefits from ideas of Volumes, Global and distributed manufacturing (Low cost geographies), Process optimization, etc.  Now the industry has reached a stage where most of the competing products in any specific category look similar in specs, performance, price. The only ray of light for retaining and growing customers is through creating an experience which will compel customers to repeat the process again and again. As an old saying goes that “Satisfied customer will keep the satisfaction to himself but a Delighted customer will spread the story to others”, the companies are vigorously working on building a great customer experience.

The customer experience themes and actions have now moved from touchpoints to journeys; the responsibility to drive implementation has moved to the leadership levels in the organizations. Consulting organizations like McKinsey have built models around how these journeys should be undertaken by the organizations to reap the maximum benefits; Forrester Research have defined six disciplines for great customer experience i.e. strategy, customer understanding, design, measurement, governance and culture; Wharton's Professor of Marketing Barbara E. Kahn has established an evolutional approach to customer experience as the third of four stages of any company in terms of its customer centricity maturity and so on…. There is a significant variability in this exercise as it depends on selection of journey which is determined by the interplay of strategy, business criticality, customer feedback, competition, organizational change required, etc. These factors are different for each company and thus each journey for each company is unique giving rise to anxiety and uncertainty of its success.

I feel, if one uses the good old Maslow’s Theory to create a differentiated needs pyramid while designing Customer Experience improvement initiatives/actions, the results could be effective and predictable. 

Briefly speaking, Maslow’s theory states that people are motivated to achieve certain needs and that some needs take precedence over others. Our most basic need is for physical survival, and this will be the first thing that motivates our behavior. Once that level is fulfilled the next level up is what motivates us and so on. The hierarchy includes Physiological, Safety, Belonging/Love, Esteem and Self Actualization in that sequence. There might be cases where some needs at higher levels get satisfied before lower levels but overall trend for large % of needs follows the hierarchy. The first four levels are called as deficiency needs i.e. they arise due to deprivation and intensity of these needs is directly proportional to the level of deprivation and the top most needs in the category of Self Actualization are called as Growth needs, which helps person in his/her individual growth. 

If we keep this hierarchy in mind and build a hierarchy of needs of customers for a product / service a company is offering, it provides a superior insight in to extent of change in customer experience in response to specific actions undertaken by the company. Let us take an example of grocery retail store and see how it works.

I have defined one such hierarchy for grocery retail and distributed various needs of customer in to various levels of the pyramid. 

For a customer, the physiological needs from a Grocery retail store would be something like, store should be easily identified by name signs and has basic things like parking, access, etc., the stores should have the most of the essential goods that the customer would be looking for, once customer enters stores, there should be a fair identification of isles v/s products to find the products easily and the stores should not be dirty.

Moving upwards to safety related needs, which cover physical, financial and other securities, would include things like detailed isle marking, properly stacked products easy to reach and remove, there are no boxes lying around and one can freely move around with no hindrance, clean and effective mechanism to keep it clean and finally you have a variety of products to choose from.  If all these things are present, then customer feels better than the store which can fulfil only physiological needs; and chances that he/she will come back are higher.

The next level of needs would include extension of products beyond Grocery, which is main purpose for customer visit, like cloths, furniture, gift articles, home décor, etc. or a restaurant, a coffee shop which could help shopper to spend some time relaxing after the Grocery shopping or some activities like cooking workshops, kids arts/craft workshop, etc. These things start building an emotional connect and satisfying multiple needs of customer beyond Grocery. This emotional bond plays an important role in bringing him/her more frequently to the store.

When we extend this emotional bonding through some highly specialized things like significant variety/choice of specialty foods like vegan, glutton-free, fat-free, sugar-free, organic, etc. or the whole store associated with any specific sport/sporting team or philanthropic activity or a gourmet restaurant, creates a CULT LIKE FOLLOWING with some of the customers. These customers are PROUD of the store and how it fulfills their needs; they visit often and strongly recommend the store to their friends and family.

The self actualization level for a store could be catering to customers by their specific needs in all the levels without being asked; if there is a shift in the needs, the store is capable to reflect and re-present themselves to their customers. Which is very difficult but could be aspired by grocery stores to achieve through latest technologies in AI/ML.

When an organization is building strategy and actions to enhance their customer experience, this Maslows hierarchy based mapping comes in handy. We should do a simple assessment for each action with respect to which customer need gets fulfilled. Depending on the level of the need which gets fulfilled, the impact on the experience and subsequent improvement in sales could be assessed. If the need at physiological level gets fulfilled, we may not see any significant change in the customer behavior, but if the need at belonging or esteem level, we can see tremendous impact.

So when we cross check our strategy and actions there in with this hierarchy we understand two important aspects

1                     Is there any types of need that are not being addressed? which means we may not reach desired level of customer experience.

2                     What kind of change we should expect from the customer after implementation of these actions.

Based on the result of assessment, the strategy and actions could be modified before implementation. This proactive approach will save missteps, wrong investments as well as miscommunication and ensure a significant positive impact on customer experience.

I have explained the concept with one example, the needs pyramid will be different for each company even if they are in the same industry segment. If each company spends energy to build such pyramid for their product/s, they can refine their strategy for improving their customer experience to give expected results.