The Customer Loyalty Code – And How to Crack it – Science & Systems
I’ve already written about Factor.1, Leadership and Culture, and Factor.2, People and Culture. So I’m now turning to Factor.3, Science and Systems.
The science we need to understand for successful customer loyalty building is based in Psychology and Behavioural Science. It’s the science of why people behave in certain, and often predictable, ways. There are numerous books and papers on this but the ones I think are most relevant and useful come from Daniel Kahneman who is a professor of psychology working at the Woodrow Wilson School at Princeton University in the USA. He is also a Nobel Prize winner for his work in Economic Sciences.
His research indicates that we may have got it slightly wrong over the current obsession with customer experiences. That’s because he suggests that it is not the actual experiences that are the strongest influencers over the decisions we make and the behaviours that result. Rather, it is the anticipation or expectation of what those experiences will be and/or the memories of what they or similar experiences were when we last experienced them. There is an excellent TED presentation, with already over 3M hits, in which Daniel explains this at: www.ted.com/talks/daniel_kahneman_the_riddle_of_experience_vs_memory?
For me, this was a revelation and it changed my thinking about where the focus should be on customer loyalty building. It indicated that it’s vital to understand how there are actually three critical considerations that will impact on success. One is ‘what is the expectation?’the second is ‘what is the experience?’and the third is‘what will be remembered?’- and they are not the same thing.
So although it’s widely thought that the expectation and the memory of an experience will be the same as the actual experience; science has shown that’s not so. In fact, they can be very different. And if the goal is to build long-term customer loyalty, the experience may influence a customer’s current behaviour; but that experience could be ruined by a false or unrealised expectation, and it is the memory of the experience that will actually have the biggest influence on future behaviour. This means that all three need to be well understood and carefully managed.
Daniel Kahneman also explains how three elements in any experience can easily overshadow all the others and so become the only things that are remembered. They are –
- Changes – These are things that are noticeably different to how we expected them to be.
- Significant events – These are things that trigger strong emotions and/or sensations.
- Endings – This are impactful and memorable, positive or negative, final experiences.
This leads to these memorable elements becoming the ones that have the greatest (often only) influence over any future behaviour.
For example, a really bad check-out experience at a hotel can ruin what has been a generally good overall visit experience and so make the guest decide never to return. Alternatively, a really attentive and helpful server can make what was expected to be an average in-store shopping experience seem great and so stimulate a return visit.
So having covered the science, lets now consider the systems that will turn the theory into practice.
There are many systems that can be utilised to ensure that customer loyalty grows. There is not space on this blog to cover them all in detail. I will therefore just give an overview of what I consider being a few of the key ones.
A Customer Experience Journey Mapping System
Those of you that are familiar with the concept of 'Systems Thinking' or 'Lean' will know what 'Value Stream Maps' are and how they are created. Put simply, they are an 'Inside -Out' view of all the systems and processes in an organisation, which show how they connect and work together to create the overall system, which hopefully creates value for both customers and the organisation. In essence, a Customer Experience Journey Map is similar, except that it is the ‘Outside-In' view of those same systems and processes, for the purpose of showing where and how customers ‘touch’ the organisation and their view of all their experiences in those ‘touch points’.
Let's begin by saying that there is no 'one right way' to do this. Whatever works best for you should be right for you. However, to be effective and to make the exercise worthwhile I believe there are a few key things that must result. Again these may vary slightly from organisation to organisation, and even from exercise to exercise, but the following outcomes are I think essential for success. -
- The maps must enable people to clearly see, through customers' eyes, and from their perspective, what your organisation makes them do, or they choose to do (their experience journey or journeys), in order to do business with you.
- They should help you to understand which parts of the journey(s) customers like and/or dislike and where you are adding or subtracting value for the customers and/or building or destroying loyalty.
- They should make it easy to identify where and how loyalty can be built through improving or changing certain experiences at the ‘touch points’ in the journey(s).
An internet search will throw up numerous examples of different customer experience journey maps. Some will be linear, some circular, some just illustrations. How they are drawn is not what matters. What matters most is point 3 above. In fact, I think it’s the key to success. The purpose of any Customer Experience Journey Mapping exercise must be to highlight where and how customer loyalty can be improved through changing, adding or removing specific experiences within the overall customer journey. So to be successful, this must be the clear focus throughout the process.
I will continue with details of more key systems in the blog next week but if you have any comments on this one, I would love to hear them.