6 expert tips for setting customer expectations
Consumers have almost unlimited choices on where and when they can spend their money. Brick and mortar and online, products and services, necessities and experiential (things like travel and entertainment) are all viable options for their consideration.
And with nagging inflation, lurking fears of some sort of recession, as well as a persistent concern about job security, consumers are becoming more discerning on their spending. Almost all retail categories in most channels are seeing eroded unit velocity, though they may be seeing some dollar growth due to inflated retails.
Competition is becoming more intense in retailers’ efforts to protect market share, with an increased positioning on price; and “value” channels such as dollar stores, warehouse clubs, and limited assortment grocery retailers like Aldi and Lidl are experiencing robust growth and physical expansion, all at the expense of their more traditional competitors.
That said, airlines, hotels, entertainment attractions (e.g., Disney products and concerts), and other domestic and international travel destinations — all self-gratification and experiential purchases — are realizing a banner year. Hence, consumer spending is becoming stratified in two directions: price and experiential, and retailers must make a conscious decision which side of the spectrum to commit to. (P.S. Price will always be important to IGCs, but I’m an ardent supporter of an experiential approach to achieve competitive differentiation, rather than price alone.)
Great Expectations
There’s been a lot of talk about customer experience over the past few years, but one key point hasn’t been talked about enough. As a retailer, you don’t create or control customer experiences — the consumer does. What you can do is set the expectations for the consumer (and exceed the expectations, I hope!) and provide the opportunities for the customer to create, feel, see, touch and smell their own experiences. Knowing what makes your customer tick allows you to set the stage, making sure all the touch points for a positive experience are in place, ready for your customer to engage them.
In a blog titled “Customer Experience Matters,” Bruce Temkin, vice president and principal analyst at Forrester Research, presented his Six Laws of Customer Experience. Many of the concepts and thoughts he shared are appropriate for any size business in any channel. I’d like to share some of the highlights: You can incorporate the ones that make the most sense for your own operation.
Temkin’s Six Laws of Customer Experience are:
- Every interaction creates a personal reaction.
- People are instinctively self-centered.
- Customer familiarity breeds alignment.
- Unengaged employees can’t create engaged customers.
- Employees do what is measured, incented and celebrated.
- You can’t fake it.
1. Every interaction creates a personal reaction.
Temkin suggests that any experience is individualized; the same experience may be perceived by one customer as good and may be seen as bad by another. That is why it’s critical for each employee to take the time to understand the needs of each individual customer and understand his or her problem, need or goal before creating a solution for the individual. And to accomplish this effectively, employees need to be empowered (and trained) to have the latitude to accommodate the needs of each customer (within the parameters and guidelines you set for them).
2. People are instinctively self-centered.
You’ve heard many times that we need to become more customer-centric, building our businesses around establishing an environment that helps establish positive customer experiences, even at the expense of changing our own business platforms to achieve this. Temkin offers these precepts that need to be understood to allow this to happen:
- You know more than your customers. Uncomplicate things and make it easy for them to comprehend the attributes of the products and understand things at their level, not yours. I’m not suggesting that we talk down to customers, but we need to be able to relate to them in their own terms, whether that’s through employee interaction, signage copy or store design and layout.
- Don’t sell things — help customers buy them. Always frame the customer experience from their point of view; this will help them grasp your recommendation or solution in a way they can relate to personally.
3. Customer familiarity breeds alignment.
Simply stated, retail is all about satisfying customers’ needs and providing a positive experience so they will return. To this end, everyone in your organization — from the accounting department to buyers to landscape installation crews to cashiers — needs to understand they are an integral part of the customer experience. This should be the primary driver in what they do.
Actively seek customer feedback — both positive and negative — from complaints, suggestions and surveys, and use this to help guide and adapt your operations to continuously improve.
4. Unengaged employees can’t create engaged customers.
In successful companies, you’ll see the emphasis is on developing employees and providing them with the tools needed to deliver exceptional customer experiences, not on the customer themselves. Though this initially may sound counterintuitive to the other comments in this article, it really does make sense. Take Disney theme parks as an example; what really sets them apart from their competition is their emphasis on training their employees to make the vision a reality and to exceed the customer expectations. Ongoing training, making it easier for them to do their jobs, keeping the employees informed and finding ways to celebrate successes as a means of reinforcing positive behavior are activities that Temkin recommends to help in this area.
5. Employees do what is measured, incented and celebrated.
You need to have a frame of reference for employees to use as a guide or benchmark for them to understand the expectations. Define your expectations and find ways to not only communicate, but also to measure compliance and progress for improvement.
6. You can’t fake it.
You can’t give lip service to creating an exceptional customer experience; it must be one of the top priorities of your corporate and employee goals. And it must be a consistent goal because the marketplace, competition, and consumer are constantly changing. You need to continuously adapt and improve.
One of the pithiest points Temkin makes is that you “advertise to reinforce, not create, positioning.” If you advertise your customer experience position and can’t deliver, you’ve set false expectations and your customers will be sorely dissatisfied. Only promote what you can deliver.
We keep hearing about the most compelling point of differentiation for the IGCs versus the box stores is the customer experience they offer. While I completely agree this is the way it should be, are we really providing this, and have we reached our potential in differentiating through the customer experience? In tough economic times and with a consumer who is challenging every discretionary purchase, the customer’s experience can transcend price as the deciding factor in where they’ll spend their limited resources.
Without exception, every company I’ve ever talked to makes the statement that “our employees are our greatest asset.” But do we treat them this way, give them all the training and tools to reach their potential, and empower them to use their strengths to help create the customer experience we want and need them to?
The consumer mindset is focusing on price and experience as their guiding principles in what they buy and where they buy it. Though both are important, which one do you want to make the conscious effort to emphasize?
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