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CXX is the only sustainable differentiator in business - here’s why

Gary Adey

Gary Adey

Operations Director, Group Enterprise, Vodafone PLC

In the 20 years or more I’ve spent in business, the most important thing I’ve learned is this:

Providing your customers with a consistently outstanding experience is the only sustainable way to stand out as a brand.

And I do mean the only way.

Whatever your sector, fighting on the strength of your product or pricing will only ever gain you a temporary advantage.

Let’s start with product. The proliferation of the internet means competition is no longer local but global, and the level of transparency created by all that connectivity ensures it’s never long before a product or service is noticed and imitated.

In addition, the speed at which start-up brands can bring ideas to market means bigger, arguably slower corporates will rarely have a new and exciting idea for long, and will struggle to bring products to market first.

What about price? I’d say you’ve got even less chance of competing.

Take UK supermarkets as an example. Between them they’ve pumped hundreds of millions of pounds into cutting prices to compete with each other over the past few years.

Yet relative newcomer Amazon Fresh is still 17% cheaper on average, according to recent research by Profitero and Retail Week.

Distribution costs, too, have become almost impossible to compete on. For just £7.99 a month (or $10.99 in the US) Amazon Prime members receive unlimited free next-day deliveries, as well as TV, film, music and cloud storage – significantly undercutting the average price of delivery for traditional retailers.

All this is brilliant news for those at the buying end, of course – they have the power now. This increasing competition means cheaper products and services and more choice for consumers than ever before.

But for businesses it means something else: we need a new way to stand out.

That’s why I believe customer experience excellence (CXX) is the only source of sustainable differentiation.

Defining CXX

Before we go any further I want to make sure we’re all agreed on what CXX actually means.

The business world is rife with buzzwords, and sometimes it’s easy to get caught up in using them without pausing to consider the weight they carry.

In my view, CX – the customer experience – refers to the sum of every individual interaction a person (or machine - more on that in my future articles) has had with your organisation, and their perception of your brand as a result.

CXX is about making those experiences count, and making them positive.

Sounds simple enough, but today those interactions could come from any number of sources: social media, web chats, chatbots, online ads, physical stores, articles like this, the humble telephone call – an endless list of places where customer interactions could go perfectly right or hopelessly wrong.

And with hundreds of touch points for customers to choose from, it’s virtually impossible for a business to monitor and address each of them individually. That’s why it’s critical to build a culture of CXX that permeates into every part of your organisation.

I mentioned above that price and product are too easy to better or imitate. But an authentic and effective culture (i.e. the behaviours, beliefs and habits of your employees) is something almost nobody can copy.

It’s built over time, specific to the values of your organisation. It takes time to change.

And a culture centred on ensuring the customer has an excellent experience at every touch point gives you a huge advantage in retaining and attracting customers.

Why CXX matters

You might still be wondering: why CXX? And here’s the answer:

CXX is not just about marketing and it isn’t only about making customers happy. It’s about having a tangible business impact.

Back in 2015, market research firm Forrester compared five pairs of companies over a period of five years. One company in each pair had a significantly higher score than the other based on Forrester's own index.

In every single pair, the company with a high CXX score outperformed the other on revenue. And the high CXX scorers collectively grew 14% faster than the other five firms during the five-year period.

Granted this is only one study, but it does indicate a link between CXX and business performance.

But while the bottom line is important, this article is about CXX in the context of sustainable brand differentiation. Price and product can no longer be relied upon to create returning customers. Does CXX have that power?

According to research by marketing consultancy Rare, the answer is yes.

More than four in five consumers it surveyed (86%) said brand loyalty is primarily driven by likeability, while 83% said trust.

On a very basic level CXX is no different to cultivating relationships with other people. Ultimately you decide how you feel about someone – friends, family, strangers or colleagues – based on the interactions you’ve had with them: what they’ve said, done, or not done.

The way we make our minds up about brands is no different. Imagine how much you listen to somebody you like and trust – what you’d do for them, or what you’d forgive – compared to somebody you don’t. Apply this same principle to your customer relationships and the potential rewards are enormous.

One often-quoted company that realised this a long time ago is Amazon – everything it does is with the customer in mind. The brand is rated number one for customer satisfaction in the UK, according to the Institute of Customer Service.

As a result, Amazon has grown exponentially in recent years where other more established retailers have shrunk or died altogether, and I’m proud to say Vodafone for Business has helped power that journey.

Winning hearts and minds

CXX isn’t just about what you can gain – it’s about what you stand to lose should you get it wrong.

I’ve been in the business of trying to make customers happy for most of my career and in that time, I’ve found people generally remember three experiences they’ve had with your brand: the best, the most recent and, importantly, the worst.

Given that it takes 12 positive customer experiences to undo the damage of a single unresolved, negative one, it seems logical to me to focus the bulk of your energy on removing those bad interactions altogether.

But you only achieve that by winning the hearts and minds of your employees and creating the kind of CXX culture I’ve outlined in this article first.

Then the relationships you have with your customers will flourish, and I promise your ultimate reward will be greater market share and increased revenues – not just now, but in five or ten years’ time.

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