Businesses have long used the 4Ps – Product, Price, Place, and Position – as the foundation for differentiation. The traditional assumption was that if the product or service could differentiate itself versus the competition on one or more of the 4Ps then it would suffice to stand out in the marketplace. In today’s era of plenty, that is not enough. Whether it is B2B or B2C the customer is not looking for an element-based differentiation but that the overall experience should be unique.
In this context, it is better to use the ABCD model to understand how we can achieve this uniqueness of the overall experience.
A is for Added Value
What is the additional value that your experience delivers to the user? The point of reference can be either incremental in terms of improvement over existing offerings or in providing a solution to a customer problem.
Added value can be found in any one of the 4 Ps. You can innovate customer experience by enhancing the product, reducing/increasing the price, modifying the positioning and changing the distribution model and location.
Take the offer from many airlines in India, where if you are present at the airport early for your flight, you have the option of moving to an earlier flight – subject to availability of seats – by paying Rs 1000/-
The Product is pre-ponement. Pricing is a flat fee. Place is defined as airport. This offer is not available through other channels (key to retaining airlines’ hefty charges for rescheduling). Positioning – for passengers in a hurry.
The whole offering is built around addressing an identified pain point and thus improving the flier experience. You should try to offer as much Added Value as possible.
B is for Behavioral Change
How can we reduce the behavioral change required to use the product or service? Humans are not always receptive to a different way of doing things even if there is an obvious benefit. Technology can be used to replicate the “old” way of doing things even while the offering is new. For example, digital DJs can create the experience of listening to a radio even as the experience is delivered with personalization and through your phone. No radio waves are involved yet the product is named as ‘radio’. Or retaining the QWERTY keyboard on state of the art devices, even though the original reason for the alphabet positioning is no longer relevant. E-commerce retailers who offer try-and-buy options with multiple choices are also trying to replicate the shopping experience at a brick and mortar shop, as are options such as 3D try-ons of say, spectacles.
Natural Language Programming and Chatbots are replicating the traditional models of interactions even as they try to simplify the enormous amount of choices and decisions available to the modern user. For example, a banking chatbot is modeled on the traditional teller role but can do so much more because of the capability for personalization and advice based on masses of central data and insight. Robo investment advisers very popular for the same reason – you can replicate the experience delivered by your star advisors by a million times and with precise personalization.
In the airline example I used earlier, this was a service offered for free by many airlines on a case to case basis. The transformation was to package it as a paid product and make it widely available. So the behavioral change was minimal.
A successful customer experience is one that significantly enhances the value to the user with minimal effort on their part to change their behavior or learn new things.
C is for Complexity
Most experiences should be easy. Simplifying a complicated procedure generally results in a valuable enhancement of the Customer Experience. Modern technology is very powerful in doing this. The world as a whole is moving from an economy driven by constraints to one of managing plenty. Whether it is data or SKUs we are dealing with a dramatic increase in multiples over the past couple of decades driven by manufacturing and distribution innovations that allow us to address the long tail in a very personal manner. However, exposing these tremendous volumes of information or products to a person is like offering a drink from a firehouse.
So we must design the customer experience in such a way that what is exposed to the end user is personally relevant and contextually valuable to them. For example, shoe manufacturers today have tens of thousands of shoes. However the shoes must be offered to shoppers in a way that recognizes where they live, which sport they play, how often they play, and previous purchases. The ability to produce the best few choices without customer intervention is much coveted and can be enabled with today’s technology stacks.
Research from CEB shows that for a low-effort support experience repurchase is as high as 84% while it drops to just 4% for a high-effort experience. Further 88% of respondents spent more with a low-effort experience. An important insight from this research and earlier efforts is that customers value ease more than delight.
Even as technology enables an increasingly complex world, it simplifies our choices.
D is for Diffusion
This is about having your product or service sell itself. Every time it’s used it is an active endorsement and attracts other customers. Your users and customers become your advocates. This is the holy grail of marketing and sales.
Multi-level marketing is, of course, one such example. But so are more subtle examples such as invoice generation tools and payment gateways saying “This invoice was created using xxxx” Or your bill was paid using yyyy” It is also social amplification of creating an experience and enabling sharing on multiple channels.
CX is the potential magic sauce that can displace incumbents and increase loyalty, repeat business and word of mouth for your brand. It requires a holistic view of the firm and the multiple journey paths of the customer.