Amazon Affiliate Marketing

What’s the Right Customer Experience for Your Brand?

What’s the Right Customer Experience for Your Brand?
Written by publishing team

What exactly makes a great customer experience?

Sometimes the answer seems to be companies that offer hassle-free get-togethers. (Think of Amazon, where you can order anything seamlessly and have it delivered to your door, or New York times, through a frictionless, automatic renewal process.) Other companies outperform by offering immersive, tailored customer journeys. (Consider the experience of visiting a Disney theme park, or an IKEA warehouse.)

But what do customers think is more important? Do they prefer companies to focus on experience design or flawless delivery and execution?

To find out, we asked 4,500 US consumers for 134 unique brands in five different industries to learn about a broad spectrum of ongoing buying behavior, drivers of customer confidence, drivers of spending behavior and more.

Our analysis revealed three notable findings.

First, we found a positive association between both frictionless and memorable experiences and consumer sentiment and spending behaviour. Second, we find that those relationships differ across industry. None of these results were surprising.

The third consequence, however, is: At some point, there are zero-sum gains when pursuing frictionless and memorable experiences as a competitive strategy. Brands can only grow so much by following a common strategy of being frictionless and memorable. To get past this point, brands must choose to focus on one or the other—either increasingly frictionless or increasingly memorable.

Unveil the unforgettable frontier

The experiences of all brands compete on a continuum from being mostly frictionless to being mostly memorable. Walmart, McDonald’s and Zipcar are brands that strive for friction-free experiences, while Nordstrom, Trader Joe’s and Ritz Carlton target unforgettable experiences.

The conventional wisdom is that a strategy aimed at reducing friction and a strategy aimed at increasing memorability offer equal opportunities to gain market share. However, our findings showed diminishing returns as brands were seen as memorable. Brands with high market share tend to be frictionless, while memorable brands tend to have lower market share with little noticeable growth above 15% market share.

One might assume, then, that brands should drop the focus on memorable experiences and instead make their customer experiences as frictionless as possible. This assumes that brands can easily go from being memorable to being frictionless and vice versa. While this might be possible in theory, it would mean completely abandoning the brand’s strategy and positioning. Companies should instead embrace their core brand characteristics and then chart their best course of action to improve customer experience and financial results, in accordance with their brand.

The competition for experience

The first step of a successful customer experience strategy is to be clear about the type of brand you own. Basically, brands exist on a continuum from the big, well-established brands to the smaller competing brands. These differences inherently affect how brands compete with each other. They also influence the type of customer experience that is likely to have the greatest impact on customers’ buying behaviors.

By incorporating the brand’s market share and how customers perceive their experiences with the brand (either as tougher or more memorable), you can place the brand into one of four categories, as described in the Customer Experience Matrix.

But with so many opportunities to differentiate and gain, what kind of experience management strategies should you apply to different segments?

Mass Market Brands

For the vast majority of brands with high market shares, the answer is simple: make the experience as frictionless as possible. Brands in mega-markets, such as Uber, McDonald’s, and Amazon, tend to invest extensively from supply chain placement to automation to support these strategies. Mass market brands compete on price, assortment, availability, and relative ease.

This does not mean that having pleasant customer experiences is not necessary. Rather, it’s the recognition that mass market brands typically achieve growth through frequent use. Almost by definition, this gives them an incentive to focus their strategy on reducing friction. Also, frequent use makes it difficult to maintain memorable experiences, because customers quickly get used to their environment.

Convenient Brands

Convenience brands such as Wawa, Ryanair and Do it Best compete largely on the ease with which customers can cater to their needs. Comfortable and friction-free experiences are expected. Unlike their mass market counterparts, there are usually barriers to scaling their service environments, such as limits on geographic or market size. The right brands often have the chances of having more balanced, memorable and memorable customer experience strategies, but they win a share of the portfolio due to their frictionless qualities.

boutique brands

Boutique brands, such as Grainger, Wegmans and Pottery Barn, compete primarily to remember their experiences. In some cases, certain types of friction improve the ability to remember and the value of these experiences (eg, booking dinner at a large restaurant, securing tickets to a folk show, etc.). However, in most cases, the ability to remember is improved by comprehensive and well-planned customer journeys. While there is an opportunity to remove friction, this should be done to facilitate customers’ immersion in the experience.

Gravity Brands

These brands are so rare that there is no traditional term for them. Some people think they are ambitious brands. Others believe they are Gravity brands, as they are able to increase market share despite the natural forces that tend to limit the growth of companies whose strategy focuses on creating memorable experiences. Although rare, attractions brands such as Disney Resorts, Lego and IKEA do exist and are often iconic and emotionally resonant and operate in uniquely competitive environments that allow them to differentiate themselves and attract customers. Building memorable experiences is typically achieved by investing in superior recruitment and training processes, high-quality experience components, and enhanced physical environments.

As customer experience increasingly becomes the key factor that characterizes all industries, there has been debate about the best approach going forward: memorable or memorable experiences. The truth is that there is no one right way to manage the customer experience. Different approaches will be more suitable for different brands depending on how they are currently competing. Regardless, no company should forget that managing the customer experience is equivalent to managing customers for growth. The path to winning in business has remained consistent even if the strategies for achieving it have changed over time: make sure your customers want to keep coming back.

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publishing team