Establishing an emotional bond with customers

The concept of Customer Experience is becoming an increasingly popular talking point among Kazakhstani entrepreneurs

Фото: © Depositphotos.com/Lenets_Tatsiana

Following the example of Western countries, CEOs of key market players establish Customer Experience (hereinafter - CEX) improvement departments; CEX is called the main priority within the long-term strategies of these companies. Competitors compete to achieve the highest ratings in various indices reflating customer loyalty and satisfaction.

However, during informal communication the representatives of Kazakhstani business complain about the lack of understanding in practical CEX, and admit that they do not see how the CEX improvement is connected to the growth of a company’s revenues and profits.

This publication opens a series of articles aimed at providing a holistic view of customer experience, best practise examples, as well as a practical guide on CEX improvement relevant in the Kazakhstan business environment.

A customer era

Following the leading countries, Kazakhstan enters the time of customer primacy. We are accustomed to the fact that successful business can be built on advanced technologies and the ability to offer an original product with a lower price.

However, the leaders of the most innovative and successful global companies (such as Apple, Google, Amazon, Verizon, Zappos, Uber, etc.) say they have built their success on work with customers and their emotional perception of products.

What trends have led to the fact that success of companies depends on the customer's emotions and feelings and not on the technology applied, the product or even its price? In addition, are these trends relevant to Kazakhstan?

·         Markets are getting rapidly saturated, competition is increasing. There are not many “free niches” left. Potential for the traditional revenue growth by attracting new customers, who have never used a service before, is limited. This tendency has become particularly obvious in 2015 in the aggravated struggle of Kazakh mobile operators for the retention of this own customers and attracting competitors' customers. Several years the country's mobile market penetration exceeded 100%.

·         Consumers are becoming more experienced. Our requirements for goods and services have become more sophisticated. Receiving positive CEX in one industry, we expect the same in other industries. When we see shops open 24/7 shops, for example, we expect the same from banks.

In order to meet such customer expectations, for example, Kaspibank was one of the first (followed by other Kazakhstani banks) to extend its branches working hours to the evenings and weekends. The next step are online banks (announced by Altyn Bank and Bank of Astana), where there is basically no need for the customer to visit the bank at all.

·         The voice of the customer is getting “louder”. At present, consumers can instantly share their positive and negative opinions globally about a company. Moreover, we started to trust each other more and make decisions taking into account the views of other people, for example, we give our preference to a particular hotel or restaurant based on peer feedbacks. Think of how many people you know who have changed their choice of a hotel based on negative reviews on TripAdvisor and Booking.com.

·         Brand loyalty is getting weaker. Our loyalty to a particular company is as strong as it is confirmed in every interaction with it. A new generation – so called Millennials – grew up; they are young, impatient and quick in changing their preferences.

In short, modern entrepreneurs around the world including Kazakhstan are working in markets with increasing competition and with ever more sophisticated and experienced users, who listen to each other and easily change their preferences.

Customer experience is based on emotions

To earn success in these conditions, businesses more than ever need to understand and satisfy customers. The most efficient tool for this is to work with the CEX. Simply stated, the Customer Experience is a combination of feelings and emotions that the customer gets while interacting with a company.

Each of us several times a day gets the Customer Experience: buying groceries, ordering a taxi or waiting in a bank.

What creates emotions / where the Customer Experience occurs

What the consumer wants

Examples

Quality of goods or services and the value obtained

- maximum quality;

- maximum value.

- Swiss watches quality perception

Support before, during and after any interaction with a company

- quick resolution of issues;

- employee attitude to the client.

- employee attitude in Starbuck’s: greeting, name on the glass with a drink, knowing the preferences of regular customers;

 

- customer support of successful online stores: global leader - Zappos, an example in Kazakhstan – Lamoda.kz.

Convenience of interaction with the company/service/brand

- constant availability;

- flexible sales and service channels.

- Uber: smartphone application, bank card payment option, driver rating etc.;

- Apple: a user-friendly interface, gesture control, synchronization of music across all devices etc.;

- Kazpost: around the clock points of parcel release (“parcels’ supermarket”), machines for parcel release (“parcel automat”)

Presentation of a company to its customers

- unique history of the company;

- stylish design of office or store;

- luxury goods

- carefully built luxury brand Louis Vuitton

Community that forms around the company or brand

 

- loyalty programs;

- “only for members” events;

- subculture around Harley-Davidson brand;

- communities built on the basis of brand vehicle ownership (Subaru owners, Honda owners)

Together these elements constitute the Customer Experience, regardless of the industry or purchased goods and services.

Receiving a positive or even a unique Customer Experience, consumers are willing to pay more. After all, we do not pay for a cup of coffee and not for a chipset; we pay for the feelings and positive emotions we get from that experience.

Is this all true for small businesses? Absolutely. The owner of a coffee shop around the corner, or a neighborhood retail store, family laundry or shoemaker’s shop, in principle builds his business on the loyalty of a rather narrow range of customers. Do you go to the store where the gloomy seller is constantly rude, goods scattered on the shelves, and ice makes the entrance slippery having not been removed in wintertime? Especially when you have a choice of several shops in the same district and a supermarket is within 15 minutes driving distance.

It would seem that the success formula is simple – provide your customers with the best experience possible. However, if the employer follows each and every customer need blindly, it will quickly suck the profits out of his business. Consider an exaggerated example, where the owner of a second-hand clothing store pays every visitor the taxi drive or treats them with expensive wine.

The formula of success is to correctly identify the customer's needs and find the right balance between satisfaction of absolutely all the needs of every customer and business profitability.

How to find this balance and what are the four simple steps you need to take to improve the Customer Experience, you will learn in the next publication.

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PwC Kazakhstan Advisory department manager

 

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