CX Life cycle management for continuous improvement in Customer Experience and Revenue/Customer

Customer Experience is like a product created for customers and it displays a lifecycle similar to product life cycle. It has the four stages of Introduction, Growth, Maturity and Decline. During Introduction phase, a new initiative is implemented by an organization which starts getting noticed by customers through the experience they get during various transactions with the company. The pace of receiving a new customer experience is slow and sporadic. People start talking about this new experience in person as well as on social media and the rate at which customer throng to get this experience increases significantly. Advertisement by the company about the change also helps picking up the rate.

This is the Growth phase during which a large section of customer are trying out this new experience. The hype creates a pull for new customers to try out the new experience and presents significant potential for the company to acquire these customers and retain them. More customers connect with company, do more and more transactions and provides a positive impact on the overall revenue as well as revenue per customer. When the initial euphoria of new experience is over, the customers start expecting this experience to be available and the speed of new customer addition slows down, the customer transaction volume remains steady. We are now in Maturity phase. This phase also keeps customer experience more or less at same level. This phase also faces a challenge in terms of competition trying to start initiatives to give same or better experience. The customers are in two minds but most of them continue. How ever some of the customers start building a customer experience fatigue i.e. the experience, which thrilled them some time ago does not excite them anymore and they start looking for something more, something different. They then start losing interest and try out a different experience offered by competitors and company start losing customers along with the revenue. The decline begins. If company does not take any action, the decline continues and company will continue to lose its customer and revenue. 

A few things that needs to be addressed by a company to grow their business. First; Growth phase should be short and rapid where the acquisition of customers as well as customer revenue occurs fast in a short period of time and second; Maturity phase should be stretched as long as possible so that company is able to maintain high level of customers and revenue over a period of time. Ideally company should be able to create another intervention at the right time so that a new life-cycle with new experience starts and impact of decline phase is arrested before it begins. Company needs to acquire mastery over two aspects

1                     Identification of time when new initiative needs to be introduced

2                     Creating a specific new initiative every time so that the cycle continues

The right time for intervention could be determined through measuring customer experience fatigue. As soon as customers provide indications of fatigue, it is time for intervention. The signs of fatigue are stagnant revenue, stagnant rate of new customer addition and introduction of similar experience initiatives by competition. If a company regularly goes through the customer numbers and revenue numbers for specific category (where the initiative was implemented) it can find the trend and catch the moment when a slight declining trend is observed. It can also watch the social media to understand chatter about its experience initiative and initiatives by competition to see if it is going to trigger the decline phase for its initiative.

How do we identify what kind of intervention to be introduced? Intervention should address the right needs which are near and dear for the specific customers who are experiencing fatigue. For which company can use the differentiated needs pyramid method, where in we can create a pyramid with differentiated needs of customer that we are trying to fulfill. We create such a pyramid for our segment of customers and map the existing initiatives against various needs. This will provide us the white spaces where company has not addressed, and competition is trying to address. Then the company can create an intervention targeting specific needs/white spaces so that the interventions are effective and provide the desired outcome of restarting the cycle. The following blogs provide detailed methodology for creating a differentiated needs pyramid for specific customer segment. 

Customer Experience Improvement using Differentiated Needs Pyramid (Maslow’s theory) --https://personalandprofessionalexcellence.blogspot.com/2018/03/customer-experience-improvement-using.html

Predictability in Customer Experience Improvement – A Perspective for Grocery Retail Industry ---https://personalandprofessionalexcellence.blogspot.com/2019/07/predictability-in-customer-experience.html?_sm_au_=iVV4Rtj4p0NLfDVr

In summary, Customer experience has a life cycle of Introduction-Growth-Maturity-Decline. Every intervention created by company will flow through these phases and will stop giving any results in due course. An injection of new intervention at right time can restart the life cycle and enable companies to maintain higher customer experience as well as higher revenue per customer.