Chapter 1: Defining Customer Centricity

Customer Service

Customer service is the assistance and advice provided by a company to customers throughout the customer journey; before, during, and after the sale.  Humans usually provide customer service to other humans, but some service comes from machines, technologies, animals, etc.   The service a customer receives becomes part of the experiences they have with the company.

For example, if you purchase a product and need to return it because it is missing a part, you might drive to the store, get the product out of your back seat, put it in a cart, wheel it into the store, visit the return counter, speak with an employee about your return, and so on.  You may even phone the store before driving there.  In this example, your perception of the company and your experience with the company will be based on many factors:

• Availability of parking
• Availability of carts
• Wait time in the line-up at the return counter
• The manner in which the employee speaks to you at the return counter (courteous, professional)
• The efficiency of the employee implementing the return process (equipment, cash)
• The manner in which the employee speaks to you on the phone (courteous, professional)

Now, imagine that you did phone the store before driving the product back to the store for a return and refund. You explained that there was a missing part to the staff member on the phone. The staff member on the phone who works at the service desk informed you that many customers have had this same issue and that the manufacturer is able to send you the missing part by express delivery, free of charge.  As well, the manufacturer will include a small gift, an accessory item for your product, due to the inconvenience.  Will you now decide to keep the product?  You may or may not, but you will feel that the information the customer service representative shared with you over the phone was valuable and you will appreciate that they did so.  This touch-point, over the phone, is an experience that should leave you with a positive view of the manufacturer and the retail store, even though the manufacturer made an error by not including one of the parts in the first place.   Would your perception of your experience have been negative if the representative on the phone had not shared this information with you, and you found out only after you had driven all the way to the store and stood in the return line for some time? Most likely it would not be as positive as hearing this information before you put in the effort to return the product.  That is why it is so important for leaders and managers to build a culture of customer centricity, train employees, build standards, and measure performance pertaining to customer service.  Companies need to retain customers to stay in business, and you need to help the company retain customers to stay employed.

A final note about the scenario above, the retailer is actually a customer of the manufacturer (product supplier or vendor); therefore, the manufacturer also has the desire to keep the relationship positive with their customer (the retailer).  If the manufacturer did not satisfy the retailer’s customers by offering a free replacement part with express shipping, the retailer’s customers would become angry at the retailer (the place they purchased from). If this situation occurs often, the retailer will most likely search for a different product supplier or at least stop purchasing that product from that specific supplier.  So, it is not only important to keep individual customers happy in business-to-consumer sales (B-2-C), but it is also important for businesses to keep their business customers satisfied in business-to-business sales (B-2-B).

In subsequent chapters, you will learn about providing customer service in both a face-to-face retail environment as well as in a contact center environment, and about managing customer service teams and customer service technologies.

Watch the “Poor versus Great Customer Service” YouTube video below for an example of what bad service looks like compared to good service.^[1] Transcript for “Poor vs Great Customer Service” Video [PDF–New Tab]. Closed captioning is available on YouTube.

Customer Experience (CX)

Customer experience is the result of an interaction between the customer and the company.  It is how customers perceive their interactions with the company or brand. A customer touch-point is a point in time when the company connects in some form with the customer (e.g., website, phone, email, social media, retail store, returns, service, and products).  There are many different customer touch-points, for example, when a customer phones the contact center for support, when a customer first visits the company website to review its products, or when the customer visits the store.  The customer will get an impression of the company from each of these interactions.  If the store is unclean, the products are difficult to find, or the staff are rude this may leave the customer with a negative impression of the company which the customer will perceive as a negative customer experience.  The customer’s perception IS the customer’s experience.

Companies work hard to create a positive experience for customers, but things do go wrong at times, and some customers will perceive that the company has not met their expectations in some way, thus, leaving those customers with a negative impression or perception of the company.

Over time, as the customer has more and more experiences with the company, these experiences may shape the customer’s perception negatively or positively, and too many negative experiences will most likely cause the customer to discontinue engaging with the company; they will visit a competitor’s store instead.

There is a popular saying, “A company is only as good as its people.” This saying refers to the need to hire good people, train employees, and create a positive corporate culture.  When the employees are happy working for the company they will most likely do their best work to help the company provide positive experiences to customers.  Of course, while the interactions your employees have with customers are a large part of the customer experience, other factors are also important.

Customers have certain expectations of service and what they experience with the company, for example, when you shop at a Dollar Store (e.g., Dollarama, Dollar Tree, Dollar Store, Dollar Shop, etc.) you probably expect low prices and do not expect that every product the company sells is of high quality and comes with a warranty.   You might expect those things from Apple, BMW, Harley Davidson, or other company that is known for high quality and prestige. From a dollar store, you expect the store to be clean and the products arranged in a manner that makes it easy to find the products you are looking for.  You expect prices to be low. You probably expect the staff to be helpful, friendly, and professional. If for example, you walked into the store and the lights were not working, it might upset you, or if it was the middle of winter and the store had no heat, you might not shop very long.  If the products were not on the shelves and there were boxes blocking the aisles, you might become annoyed.

What if you had received poor service at the store, the store was a mess, the cash register was not working the day you visited the store, and you could not find the product you wanted in stock?  What would you do or say to the staff?  What would you think about the store?  Would you shop there again?  Would you tell your friends about the poor experience you had? Most likely, you would not go back, you would think the store was not professional, you would not shop at that location again, and you would probably tell your friends and family what a bad experience you had there.

Organizations that do not improve their customer experiences through improved customer service, improved customer journeys, and improved customer centricity will not stay in business long in today’s global and technological world.  Consumers today are savvy and they can easily shop online to purchase whatever they desire quickly and easily.  They can also switch to a competitor, in most cases, with little risk or switching costs.  Consumers research and learn about products they want before they buy and they expect a lot from the organizations they patronize.

Customer experience has become the ultimate competitive advantage. The big retailers, with Amazon at the forefront, have served consumers so effectively that most people now demand high-quality, ultra-fast service for everything they buy.^[2]

Customer Journey

The customer journey is the complete sum of experiences that customers go through when interacting with a company and its brands.  It considers the complete path from brand discovery to purchasing and beyond. The focus is not on purchases made, but rather on how the customer feels about the interactions throughout their journey with the company.

Below is an example of one customer’s journey.

Tom is shopping online for a new car (website touch-point). He decides to phone a car dealership to ask about a vehicle he saw online (phone touch-point).  Tom is greeted in a friendly manner and has all his questions answered by a salesperson (employee touch-point).  Tom makes an appointment and comes to the dealership to test-drive the vehicle he is interested in (location/organization touch-point).  The salesperson, Jordon, whom Tom spoke with on the phone greets him, answers his questions, demonstrates a friendly and professional manner while dealing with Tom, and sends him out on a test drive (employee and product touch-points).  Tom decides to purchase the vehicle and Jordon completes the paperwork, processes the sale and payment, and offers to deliver the vehicle within two days (employee and company policies/practices touch-points).

Jordon assures Tom that the vehicle comes with warranties, and should Tom change his mind about the purchase, he may return the vehicle within the first 30 days no questions asked (employee, manufacturer, and company policy touch-point).  Jordon asks if Tom would like to register for a loyalty program whereby Tom will receive emails on future promotions and receive gifts for referring others (if they purchase a vehicle too). Tom is interested and Jordon gathers Tom’s email.  Jordan provides Tom with a $100 gas card as a thank-you gift for purchasing the new vehicle (employee and company policies touch-points). Later in the week, Tom tweets a picture of himself standing in front of his new vehicle and he mentions the dealership and the excellent service he received from Jordon.  He even recommended the dealership on dealerrater.ca. A few months later, Tom feeling loyal to the dealership, and remembering the loyalty rewards program, refers a friend to Jordon at the dealership.

In building a customer-centric business, personas and customer journey maps are important strategic tools that help provide an in-depth understanding of who a company’s customers are, what they need, and how they interact with the company across all touchpoints.^[3] These tools help to share customer insights across the organization and can be critical for building employee buy-in and helping teams take targeted action to improve customer experience.

Personas are fictional customer types created to represent real target customer groups.  They are more than generalized customer segments because they have individual names and stories that reflect personal attributes and behavioural characteristics such as customer needs, motivations, and attitudes.  For example, a company may target Reza, a college professor, a parent of three teenage children, age in their mid-40s, shops online due to time constraints, orders delivery from restaurants a few times per week, enjoys exercise, eats vegan, etc.  The company creates these personas to help them better understand all the needs of their target customers, which in turn helps them provide products, services, and processes that will meet or exceed the customers’ expectations.

Once a company fully understands the lifestyle and demands, responsibilities, attitudes, and desires of their target customer; they can map the customer journey.  Mapping the customer journey will allow the company to identify where they may not be serving the customer to the best of their ability so they can make improvements to the customer experience.

The customer journey map is a visual depiction (diagrammed or written) detailing the path the customer takes from the time the customer first discovers the brand, to purchasing, and beyond. The customer journey map examines the full experience of being a customer with the company and examines all touch-points and channels.

It is important to create many personas and scenarios because every customer’s journey will be slightly different.  It is also important for companies to talk to customers (and employees) to learn more about the customer journey and experiences customers have.  Creating personas and customer journey maps will help organizations identify poor service issues so they can take action to improve their customers’ experiences.

Customer Centricity

Customer centricity is a way of doing business that fosters a positive customer experience before, during, and after the sale in order to drive repeat business, build customer loyalty (which leads to customer referrals), increase business growth, and gain a competitive advantage.

A customer-centric company is more than a company that offers good customer service. Anytime a customer-centric business makes a decision, it deeply considers the effect the outcome will have on its customers. An organization that forgets about customers is destined to fail. They will build the wrong products, invest in the wrong resources, and lose goodwill with customers.^[4]

Customer-centric organizations identify their most valuable customers and ensure their satisfaction.  These organizations focus on ensuring employees understand how important customers are to the company.  Often the organization’s mission, vision, and values include a customer-centric focus as more and more companies see a need to build relationships with their customers.  Based upon the company’s mission, vision, and values the company aligns goals, distributes resources, develops products and services, defines processes, and develops strategies for competitive advantage.

Markets have moved from product centricity to customer centricity. Companies used to focus on design, manufacturing and logistics and in the past when products and services could achieve a clear product/service difference, sustainable and beneficial, a product-centric approach made sense. Today, we have informed consumers, competitive markets, and few tangible product/service benefits—a combination that has resulted in the focus shifting to customers.^[5]

Don Peppers has a very good article on LinkedIn explaining why businesses have moved from an era of product centricity into an era of customer centricity.  For a good read, visit Product-centricity and customer-centricity – source Don Peppers – read on LinkedIn

The main reason organizations should follow a customer-centric strategy is that if they do not acquire and retain customers they will not survive.  Many company leaders believe their business is customer centric, but employees and customers do not always agree.  Why do you think that is?

Why do so many companies struggle to get customer centricity right? The volume, velocity, and variety of customer data that now exists overwhelm many organizations. Some companies do not have the systems and technology to segment and profile customers. Others lack the processes and operational capabilities to target them with personalized communications and experiences.^[6]

Being customer centric is about more than just offering a good product or staffing a contact center. It becomes a cultural way of life for the company and impacts everything from employee engagement to customer experience.

Forbes provides a list of 100 customer-centric companies from 10 industries including Retail, Finance, Healthcare, B2B, Software, Hospitality, Insurance, Telecom, Manufacturing, and Agriculture. Listed below are a few of the companies included on the 2022 list.^[7]  

• Airbnb regularly donates housing during times of trouble, including offering 100,000 places for healthcare workers and first responders to stay during the pandemic. When travel was limited, Airbnb pivoted to digital experiences to expand its mission of belonging and inclusion.
• Google helped prevent the spread of false information during the pandemic. The company created a fund to allow staff to take paid leave if they tested positive for COVID-19. Google also donated $800 million to small businesses and healthcare organizations.
• Lululemon found innovative ways to adjust to at-home fitness growth, including building a robust omnichannel experience and offering virtual classes.
• Nike’s app offers recommendations through chat and connects customers to in-store workshops and events. Nike is also opening more Nike Live stores with a shoe bar and consultations.
• ​​Starbucks pivoted away from in-person dining to improve its drive-thru and delivery offerings and continues to strengthen its already top-tier app and rewards program. Its innovative Deep Brew AI system streamlines operations so employees can better serve customers.
• Shopify, named the #1 most innovative company by Fast Company, pivoted quickly during the pandemic to launch tools to support small businesses as they shifted to e-commerce. It highlights local stores on its app and designed a plug-in to create shoppable ads on TikTok.
• Samsung recently unveiled a new support site and chat features that increased customer engagement by 19%. It uses AI to measure feedback and calls, find patterns, and prevent future issues. Samsung earned the highest customer satisfaction score among cell phone companies.
• Trader Joe’s customers love the unique products, personalization, and great service, as do employees. The grocery chain is leading the way in sustainability to reduce food waste. Unlike other grocery stores, Trader Joe’s didn’t pivot to delivery during the pandemic because in-store discovery is essential to its business model.

If a company is committed to making customer centricity a corporate priority for the organization, the absolute first step is to fully understand the customer’s needs and expectations. While much of this happens through the customer-facing employees, they will require the support of the rest of the organization to succeed. As such, everyone, regardless of department or role, should actively contribute information, background, tools, resources, and training to achieve a unified understanding of the customer. Once this happens, the organization will be well on its way to becoming customer-centric.^[8]

Factors Impacting the Service Sector

Many factors have caused an economic shift from manufacturing to service, some of which include globalization of the economy, government deregulation, government programs, customers expecting personalized experiences, and increased use of technology both by customers and businesses.

The service sector accounts for 75% of Canadian jobs and 70.5% of the country’s GDP. As a vital part of the Canadian economy, the most popular sector is retail with some big franchise names including Walmart and Future Shop.  In recent years, the financial services, real estate, and communications industries have grown exponentially, especially in the business hubs of Vancouver, Montréal, and Toronto.^[9]

Services play a key role in economies around the world and Canada is no exception. The economy is divided into three sectors; the primary sector of an economy is the sector in which companies make direct use of natural resources, the secondary sector produces finished goods, while the tertiary sector, also known as the service sector, makes use of people’s knowledge and time to improve productivity, performance, and potential.  This sector includes businesses that offer services in the following areas: transportation, government, health care, construction, banking and finance, communication, retail, tourism, education, utilities, recreation, social work, real estate, etc.

Customers Want Personalized Experiences

Consumers today view personalization as the default standard for engagement; they want companies to recognize them as individuals and know their interests. Companies that offer these experiences are able to differentiate their brands and create a competitive advantage.

Personalization has become integral to the customer journey and is now a key driver of brand loyalty across all channels. Consumers are much more likely to buy from brands, both in-store and online when offers are personalized. Consumers are also interested in purchasing more personalized products and services and are willing to wait longer to get them.^[10]

Forty-eight percent of consumers spend more when their experience is personalized. Seventy-four percent of people dislike being shown irrelevant content. So what does this say about personalization? In customer experience, personalization is a winning strategy that can help companies advance their relationship with customers. Eighty-eight percent of marketers claim that they’ve seen a measurable improvement in their businesses after implementing customer experience personalization tactics.^[11]

Personalized Customer Experiences for Millennials

Millennials, sometimes known as Generation Y, is a demographic cohort that follows Generation X and proceeds Generation Z. Millennials were born between 1981 and 1996 (although this age range may vary depending on the source). So as of 2023, the millennial age range is between 27 and 42. They were the first generation to grow up in the Internet Age but also remember life before social media. They have lived through not one but two generation-defining recessions and have been noted for craving work-life balance.^[12]

The customer experience for millennials means experiencing something genuine and incredible that will build lasting memories. Therefore, businesses market their products in such a way that will show millennials how their experience will be better as a result of purchasing from that brand. For instance, if a company sells luggage and is marketing a new suitcase, the company will not just market the suitcase, instead it will market the experiences and trips around the suitcase, thereby making the product a part of a bigger experience.^[13]

Personalized Customer Experiences for Gen Z

Generation Z, sometimes known as “zoomers,” is the demographic cohort that comes after millennials and proceeds Generation Alpha. Members of the Gen Z years were born between 1997 and 2012. So as of 2023, the Gen Z age range is anywhere from 11 to 26. They are commonly referred to as the first fully “digitally native” generation. They grew up with social media and smartphones—they’re used to living in a digital-first world. Research from the National Library of Medicine shows that this diverse generation is highly motivated and more risk-averse than previous generations.^[14]

Generation Z spends most of their time online, in fact, close to three-quarters of these consumers choose to spend their free time on the Internet. They value the ability to solve issues on their own, and they find it one of the most frustrating bad customer service experiences when they cannot find the information they need online. They may be young, but these consumers have colossal buying power. Uniquely Gen Z influences everything from their families’ food purchases to clothing, electronics, household goods, and even furniture.  Gen Z is very cyber-savvy and very savvy in general, and just because they are young companies need to be careful not to underestimate them or treat them as young and inexperienced.  Rather, businesses should bear in mind that Gen Z’s perception of customer service is that things should be frictionless, which is unlike that of any other generation. Their world is one of immediacy and convenience, and they want their interactions with businesses to be just as seamless. This expectation extends from making a purchase to the customer experience overall.^[15]

Differences Between Millennials and Gen Z

Refer to Figure 1.1 below for a comparison of the customer experiences expectations and preferences of Millennials to Gen Z.

 

Canada Goose is Getting Personal

Canada Goose is getting personal with its customers, offering an immersive experience; it has a Cold Room that blends both entertainment and functionality, making it a good example of experiential retail that actually serves a purpose. It has a faux-rock crevasse, a room that snows, and a floor that cracks like ice, but it does not have any products the customers can take home. Customers can only order products for delivery later, with limited sizes and models to try on.  In fact, the luxury coat retailer is not calling the store, a store, it is calling it “The Journey: A Canada Goose Experience.” Staff will guide customers through a series of themed rooms, before ending in an area where customers can browse a digital catalogue, talk to sales staff about fit and place an order.  A certain proportion of people visiting the store do not intend to buy a jacket, but are just curious about the Cold Room experience. This gives the brand an opportunity to make a good impression on people who are not yet Canada Goose customers, but might be in the future.  The Cold Room is a fun, unusual experience that helps customers make more informed shopping decisions.^[16]

The Running Room is Getting Personal

The Running Room, which is a store for people who like to run, provides personalized customer experiences through training programs that meet the needs of a wide variety of customers, ranging from those who are just getting into a fitness routine to those contemplating a marathon.    The store sells a selection of top brand-name running shoes and apparel and offers training programs such as Walking, Learn to Run, 5K Training, Marathon and Half Marathon training, 10K Training, and For Women Only Running. The Running Room training programs are committed to educating customers on a lifestyle of fitness.  Running Room’s free Run Club meets twice weekly, where runners of all levels run in a social, supportive group. This social component brought to running by the Running Room builds a true sense of community in each location. Communicating with its customers via its in-store team, its website, Running Room Magazine, forums, Twitter, and Facebook keeps the company agile and innovative. “We believe that the Running Room philosophy and our in-store environment are unlike any other retail business in North America. While we offer clothing, shoes, products, and accessories for walkers and runners, we also help people to change their lives through fitness activities,” says the Stanton family.^[17]

Increased Use of Technology

Digital transformation is the integration of digital technology into all areas of a business, resulting in fundamental changes in the way a business operates and the value it delivers to its customers. Digital transformation is forcing companies to change their business models and adapt to the new market reality. Today, customers expect relevant content in relation to what they are doing anytime, anywhere, in the format, and on the device of their choosing. It is the customer’s journey that dictates the company’s strategy.^[18]

Customers have always wanted efficient, friendly, and reliable service, but with the development of new technology, their expectations have increased. Customers no longer tolerate poor service because there are just too many businesses out there that will meet or exceed customer expectations.

In 2021, an estimated 2.14 billion people worldwide purchased goods online. At the same time, global ecommerce sales were forecast at $4.891 trillion USD. Projections show that ecommerce sales worldwide are going to grow to $6.4 trillion USD by 2024.^[19] An online store and social media presence are essential for companies selling in this global and digital business world. Customers want simple, direct, and easy transactions; technology has taught them to expect it.

Customers today are more informed than ever before.  They use technology to shop online, conduct research, and compare prices, products, and services among competing companies. According to Outerboxdesign.com, 80% of shoppers use mobile phones in-store to check product reviews, compare prices, or find other store locations. It’s estimated over 50% of all eCommerce purchases during the 2022 holiday season were made on a smartphone.^[20]  With so many individuals owning cell phones today, social media is a great way to connect with customers.

In order to keep up with this new kind of “always-connected” customer, businesses must embrace technology to deliver unmatched customer experiences. Fortunately, putting the customer first is already at the center of many organizations’ strategies. Global digital transformation spending will reach $6.8 trillion USD by 2023. One of the main benefits is faster time to market, with 36% of businesses citing this as a key advantage. In fact, 79% of companies admit that COVID-19 increased the budget for digital transformation, and 70% of organizations already have a digital transformation strategy or are working on one.^[21]

Below is a list of a few of the customer experience technology trends that are changing how businesses interact with their customers and shaping the future of customer experience.

1. Machine learning is a branch of artificial intelligence (AI) and computer science that focuses on the use of data and algorithms to imitate the way that humans learn, gradually improving its accuracy. Over the last couple of decades, technological advances in storage and processing power have enabled some innovative products based on machine learning, such as Netflix’s recommendation engine and self-driving cars.^[22] Some advantages of machine learning include intelligent customer service chatbots, improved product search, and fraud detection and prevention. By analyzing customer interactions and feedback, machine learning models can predict the likelihood of a customer issue escalating to a higher level of support, such as a supervisor or manager. This enables customer service teams to intervene early and address concerns to prevent escalations, resulting in improved customer satisfaction.^[23]
   
2. Remote Work is also referred to as telework, telecommuting, mobile work, flexible workplace, flex-hours, or e-commuting and is a work arrangement in which employees do not commute to a central location instead they work outside the office location from various locations. Many workers can work from home (WFH) when they have access to the technologies they need to do their jobs.  Remote Work has become a popular choice and employee incentive in some cases for those who wish to work from home. Customer service and sales representatives need to learn how to use customer relationship building (CRM) software in order to meet customer expectations, whether working from home, at the office, or on the road.  With access to technology, employees can be located in the same city as the company they work for, or located anywhere in the world.  
3. Customer-centric virtual and augmented reality (AR) retail applications today focus on helping consumers experience brands and products without having to go into stores. Beauty brand Cover Girl, for example, opened an AR makeup station in its flagship store in New York where shoppers can virtually try on a range of cosmetics and then share their makeovers on social media with friends. Pottery Barn offers an AR app for its Pottery Barn and PBteen brands that lets users drag and drop items in a room to see how they work with existing furniture and decor. They also can completely empty a room to start the design process from scratch, and shoppers can purchase the items they like right from the app. Swedish retail IKEA has a similar offering with its “Place” app, helping users visualize how an item will look in their homes before they purchase it.^[24]
4. The Internet of Things (IoT) is made up of billions of smart, connected devices, and gives any “thing” a voice through the data it gathers, produces, and distributes.  With around 26 “smart objects” for every human being on Earth predicted by 2020, the ability for companies to leverage connected products and other sensor-generated data to enhance the customer experience is unprecedented.^[25]
   

   

   IoT devices will change eCommerce by turning everyday objects into potential sales channels for retailers.  IoT products and devices include smart and digitized vehicles, laptops, smartphones, smart gadgets, and smartwatches. You may already own some of these devices.  Have you heard of the Amazon Dash Button?  A device that connects over Wi-Fi to ensure that you do not run out of household items such as milk, bread, medicine, soap, or dog food, ever again.  Maybe, you have a Google Home Voice Controller.  It allows you to enjoy features like media, alarms, lights, thermostats, control the volume, and many more functions just using your voice.

5. Business intelligence (BI) is software that ingests business data and presents it in user-friendly views such as reports, dashboards, charts, and graphs. BI tools enable business users to access different types of data — historical and current, third-party and in-house, as well as semi-structured data and unstructured data like social media. Users can analyze this information to gain insights into how the business is performing.^[26] BI can help marketers create a unique customer experience by providing them with data that shows who their customers are, what motivates them, and which channels they use most often. It also helps marketers understand why customers abandon carts or leave negative feedback on social media sites such as Facebook, Twitter, and Yelp. BI helps businesses monitor what’s happening with customers across channels. BI enables companies to see patterns of behavior, such as when customers are most likely to buy, that might otherwise go unnoticed so that improvements can be made accordingly.^[27]

References

(Note: This reference list was produced using the auto-footnote and media citation features of Pressbooks; therefore, the in-text citations are not displayed in APA style).