We have seen in earlier blogs that Customer Experience depicts characteristics of a new product and has a lifecycle similar to a product lifecycle.
Just to recap quickly; It has four stages,
·
Introduction,
·
Growth,
·
Maturity
and
·
Decline.
During
Introduction phase, a new CX initiative is implemented by an organization which
starts getting noticed by customers through the experience they get during
various transactions with the company. During this stage, the pace of receiving
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. This hype creates a pull for new customers to try out new
experience and presents significant potential for the company to acquire these
customers and retain them for long term. More customers connect with company,
do more and more transactions and provide 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 every time.
This results in slowing down speed of adding new customers and transaction
volume remaining 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. However,
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 better, 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, resulting in loosing customers
and revenue.
In this
blog we are going to examine if this cycle works in abnormal situations like
COVID-19. We will also extrapolate if it will work, and if it works how it will
manifest, in post COVID-19 scenario as well.
Let us
take example of grocery shopping and its evolution from perspective of consumer
and seller. When COVID-19 started spreading like wildfire and fatalities
started mounting, entire population was gripped with panic without knowing what
to do. Everyone wanted to be safe from getting infected. So experience of “Safety”
was paramount in the minds of customer which moved them in hordes to sellers who
were providing them this experience i.e. “Home Delivery”. The customers were
ready to pay additional money to get the experience they desired. They let go
their brand choices, which they were particular about in the pre-COVID-19
scenario, for the sake of safety. Looking at the significant shift (growth in
volumes) due to Home Delivery, most of the companies launched Home Delivery
option and provided “safety” option to customer. Customer now had choice of sellers
who can provide him his needs and in safe manner. Now the brand choices started
coming back and customer started splitting the orders so that they get the
products of their choice. This resulted in reducing in volume for some. To enhance
this experience, few more variants came in to play like Free Delivery, Same-day
delivery. This intervention compelled a few more customers who were apprehensive
of Delivery charges as well as who wanted specific item urgently; and volumes
started increasing for a few sellers. Some other sellers started giving another
experience of “Curb Side Pickup” which is safe and from your neighborhood
stores, your loyalty points counted, you get the products you are used to and care
you were used to. This initiative also shifted the loyal customer base back to
the stores and with development of “Same-day pick up” or “2-Hour pick up” it
was almost like old times. Now the situation is most of the grocery sellers
have all the services like Free home delivery, Curbside pick up etc. and every
one can provide the same experience to customer. These things have become a
norm and customer expects the same with every seller. There was one thing to
which customer had turned a little blind eye in the quest for their need of “Safety”
which was price, they were paying some additional money for every product,
although it was few cents per product, but total bill was higher; there was
almost no SALE or MARKDOWN on prices anymore. Customers were OK with this with
an expectation that COVID-19 is an aberration for a few months and things will
be back, which unfortunately has not come true. We have completed almost a year
in this situation and with no clear end in sight. We have also observed that
consumption of store brands increased as compared to national brands due to availability
and cost considerations. Now all the sellers are almost on equal footing as
they were prior to pandemic (with some exceptions), the original differentiation
has started playing again and some of the Grocery chains have started price
reductions to attract the customers and other old tricks.
If we observe all these happenings in last one year, we can see the Customer Experience life cycle in full play. As a seller creates intervention for satisfying the customer need of “Safety” and give a great experience to him, the seller saw a jump in customer base and volumes (Introduction).
Social media played a significant role in terms of spreading the word about the facilities provided by a seller to bring in more and more customers to its fold (Growth). Observing this trend, the competitors jump on the
This manifestation
of gives us a glimpse of what to come in future after the population at large
gets grasp on the COVID-19. We can easily extrapolate how the CX cycle will
play out. During the COVID-19 pandemic grocery chains rolled out a slew of
initiatives in the areas of Home delivery, Curb Side pick-up, Safer stores etc.
in their unique way. By the time we get an upper hand over COVID-19, these initiatives
would become part of basic services any grocery chain should provide. The grocery
chains will have to look at multiple different initiatives beyond “Safety”
aspect and differentiate their products/services so that they can attract more
and more customers and revenue. To name a few, it could be “Great in-store
experience”, “Personalized home or anywhere delivery”, “Restaurant style pick
up of gourmet food to your order while you shop”. We will continue to see the
CX cycle playing out, extensions created.
If we look
at another critical intervention that happened on the work front is “Work from
Home”, “Safety” at core. The companies who were able to address this need
successfully and created investments have been able to survive/thrive in the
pandemic. This has resulted in significant flexibility in customer service
without actually meeting customer in person. Today this model is forced on
everyone, but will definitely be part of offerings of many companies going
forward. Customers will be expecting providers to use this model and create a
great value for customer beyond just “lights-ON” or “cost benefit”. We have already
seen certain offerings (CX interventions) from a few organizations addressing
this challenge and will see many more as go forward
In conclusion:
Customer Experience
Life Cycle is clearly seen operational in preCOVID-19 era as well as during
COVID-19. It is expected that it will play out in post COVID-19 era also. So
organizations can really look at what interventions they are planning and their
timing to ride the CX fatigue as well as address the challenges thrown by competitors.
Differentiated Needs Pyramid could be used understand the unique / differentiated
customer needs and create targeted interventions
Reference:
CX Life
Cycle management for continuous improvement in Customer Experience and Revenue/customer
Customer
Experience Improvement using Differentiated Needs Pyramid (Maslow’s theory)
Predictability
in Customer Experience Improvement – A Perspective for Grocery Retail Industry
