3 Types of Customer Interactions Every Customer Experience Manager Must Understand
Every time a customer interacts with a brand, they learn something about that brand, and adjust their behavior based on what they learn. They will adjust their behavior in ways that are either profitable or unprofitable for the brand. The implication of this proposition is that the customer experience can be managed in such a way to influence customer behavior in profitable ways.
In order to understand how to drive customer behaviors via the customer experience, it is first, is important to define the customer behaviors you wish to influence, and to align marketing message, performance standards, training content, employee incentives and measurement systems to encourage those behaviors.
It is impossible, of course, to plan every customer experience or to ensure that every experience occurs exactly as intended. However, companies can identify the types of experiences that impart the right kind of information to customers at the right times. It is useful to group these experiences into three categories of company/customer interaction: Stabilizing, Critical, and Planned.
Stabilizing interactions promote customer retention, particularly in the early stages of the relationship.
New customers are at the highest risk of defection. As customers become more familiar with a brand they adjust their expectations accordingly, however new customers are more likely to experience disappointment, and thus more likely to defect. Turnover by new customers is particularly hard on profits because many defections occur prior to break-even, resulting in a net loss for the company. Thus, experiences that stabilize the customer relationship early on ensure that a higher proportion of customers will reach positive profitability.
The keys to an effective stabilizing strategy are education, competence and consistency.
Education influences expectations, helping customers develop a realistic expectations. It goes beyond simply informing customers about the products and services offered by the company. It systematically informs new customers how to use the brand’s services more effectively and efficiently, how to obtain assistance, how to complain, and what to expect as the relationship progresses. In addition to influencing expectations, systematic education leads to greater efficiency in the way customers interact with the company, thus driving down the cost of customer service and support.
Critical interactions are service encounters that lead to memorable customer experiences. While most service is routine, from time to time a situation arises that is out of the ordinary: a complaint, a question, a special request, a chance for an employee to go the extra mile. The outcomes of these critical incidents can be either positive or negative, depending upon the way the company responds to them; however, they are seldom neutral. The longer a customer remains with a company, the greater the likelihood that one or more critical interactions will have occurred.
Because they are memorable and unusual, critical interactions tend to have a powerful effect on the customer relationship. We often think of as “moments of truth where the brand has an opportunity to solidify the relationship earning a loyal customer or risk the customer’s defection. Positive outcomes lead to “customer delight” and word-of-mouth endorsements, while negative outcomes lead to customer defections, diminished share of wallet and unfavorable word-of-mouth.
The key to an effective critical interaction strategy is opportunity. Systems and processes must be in a position to react to these critical moments of truth.
An effective customer experience strategy should include systems for recording critical interactions, analyzing trends and patterns, and feeding that information back to the organization. Employees can then be trained to recognize critical opportunities, and empowered to respond to them in such a way that they will lead to positive outcomes and desired customer behaviors.
Planned interactions are intended to increase customer profitability through up-selling and cross-selling. These interactions are frequently triggered by changes in the customers’ purchasing patterns, account usage, financial situation, family profile, etc. CRM analytics combined with Big Data are becoming quite effective at recognizing such opportunities and prompting action from service and sales personnel. Customer experience managers should have a process to record and analyzing the quality of execution of planned interactions with the objective off evaluating the performance of the brand at the customer brand interface – regardless of the channel.
The key to an effective strategy for planned interactions is appropriateness. Triggered requests for increased spending must be made in the context of the customers’ needs and permission; otherwise the requests will come off as clumsy and annoying. By aligning information about execution quality (cause) and customer impressions (effect), customer experience managers can build a more effective and appropriate approach to planned interactions.
For additional perspectives on research techniques to monitor the customer experience in the stabilizing phase of the relationship, see the post: Onboarding Research: Research Techniques to Track Effectiveness of Stabilizing New Customer Relationships.
For additional perspectives on a research methodology to investigate “Critical” experiences, see the post: Critical Incident Technique: A Tool to Identify and Prepare for Your Moments of Truth.
For additional perspectives on research methodologies to investigate “Planned” experiences through out the customer life cycle, see the post: Research Tools to Monitor Planned Interactions Through the Customer Life Cycle.