Customer experience strategy guides exceptional experience and bolsters growth. When executed well, it impacts not only your market share, but the entire industry in which you operate. In fact, a well-crafted, consistently deployed CX strategy built to address customer personas, needs, and wants, and to anticipate market changes and opportunities, contributes to customer experience as a competitive advantage.
As we close out 2022, we look at three strategic approaches to customer experience from top brands that took CX to the next level. These brands who fearlessly pursue customer experience inspire us to think differently about how to transform customer experience in 2023.
Total Customer Commitment from T-Mobile Means Doing More for Others
T-Mobile excelled in customer experience in 2022 because of strategic marketing and customer experience decisions the mobile provider made starting with Un-carrier Campaign it launched in 2013. The campaign, which T-Mobile describes as 100% customer commitment, aimed to disrupt the mobile provider landscape. This included designing plans that responded to customer painpoints and acknowledged what customers need and want.
Adopting a customer-centric approach, T-Mobile dropped contracts for postpaid customers. The company built device upgrade programs, and changed long-distance and international roaming fee structures. They rolled over monthly data, responding to a historic painpoint for mobile service customers. And they offered new streaming and music options, among other initiatives.
Customers responded with loyalty. T-Mobile grew. Spurred by that growth, T -Mobile reinvested in the business. In 2020, T-Mobile merged with Sprint to become the number three wireless carrier in the United States. Now, T-Mobile boasts a significant 5G Network. However, the size of the network itself does not define customer experience Or customer loyalty. In fact, to differentiate itself in a competitive market, T-Mobile leaned in to its small, nimble roots. And doubled down on its commitment to customers.
The ongoing Un-carrier campaign (now a vital component of the brand’s identity), and its attendant focus on the needs and wants of the customer, continues to roll out services designed for customer happiness. And customer loyalty. T-Mobile launched free Netflix access to customers. The company also stepped away from traditional loyalty programs that require customers to accrue and track points for access to offers at specified times. Instead, they connect with partner brands to offer customers weekly giveaways on T-Mobile Tuesdays. For the connected travelers among us, in conjunction with Samsara Luggage, they released a limited-edition smart suitcase. T-Mobile calls it the “perfect adventure companion.” They are reinforcing to customers that they are with them, providing value, wherever they go.
Further, T-Mobile is creating the infrastructure for better experiences by replacing DSL cable with wireless connectivity for home internet services and continuing to build a robust 5G network to support Meta mobile experiences and other digital experiences customers crave.
Beyond that, T-Mobile is taking customer commitment to the next level by committing to greater corporate social responsibility, guided by the idea of tech for good. Energy conservation and environmental responsibility are priorities in retail stores and for fleet vehicles. The commitment to good (for customers and the community) requires risk. It comes at a cost. That is a cost the mobile provider is willing to take on. And one that has earned them returns, both in terms of revenue and customer retention.
Citi Makes Customers’ Financial Lives Easier at Their Own Expense
On the consumer banking side, Citi took a major risk to align with a customer-centric strategy by eliminating overdraft and transaction fees for all customers, regardless of the size of their balance or enrollment in programs like Citi Priority. Eliminating fees is part of an overall Citi strategy that focuses on the customer, and the concept of “financial inclusion.”
Getting rid of overdraft fees means truly meeting customers where they are. And providing a level of service for customers not considered “high value” for their financial profile, but valued highly as members of the Citi brand. Eliminating overdraft fees does more than merely resolve a customer painpoint. It provides a service to customers when they need it most. And it enables customers who are experiencing a momentary financial struggle to recover more quickly. Very little can generate the trust and loyalty that Citi promises in its brand experience more than that.
But this customer-centered strategic decision comes at a significant cost to the bank. On average, consumer banks brought in $15.47 billion in overdraft fees in 2019, according to the Consumer Financial Protection Bureau. In fact, in recent years, many large banks (think Bank of America, Chase, and Wells Fargo), have relied on overdraft fees to generate profits. CFPB Director Rohit Chopra says, “[r]ather than competing on quality service… many banks have become hooked on overdraft fees to feed their profit model.”
Citi changed the game and focused on customer-centricity as a path to profitability. Now, you could say Citi saw the writing on the wall. With so many banks applying the fees to profit model, and organizations like CFPB taking notice, legislation is on its way to protect customers from out-of-control fees that threaten long-term financial health. However, even if this awareness is included in Citi’s overall strategy, there is no question the bank is owning the customer-first space. They are leveraging the moment to lead the way for customers who want better experiences by giving them the choice to bank with a brand that recognizes who they are, what they need. And what kind of experience they deserve. They are willing to put themselves, and their margins, on the line.
That’s a lesson we should all take into 2023.
Knowing Customers and Meeting Them Where They Are: Lessons from Best Buy
Another 2023 customer experience strategy lesson comes from consumer electronics retailer Best Buy, whose Q3 2022 earnings outpaced Wall Street expectations in a year that saw many retail businesses struggle. Best Buy’s relative success is due to a targeted strategic turnaround that began ten years ago and is described in The Customer Centricity Playbook by Peter Fader and Sarah Toms.
To ward off competition from Amazon that drove stock prices down to $10 per share in 2013, Best Buy hired CEO, Hubert Joly, and embarked on a customer-centric strategy. Ultimately, this strategy drove stock prices up to $70 per share by 2017. As we close out 2022, Best Buy stock is over $79 per share. Why? Because the retailer redefined itself centered around the customer.
For Best Buy, that meant learning who the customer is, an essential piece of customer strategy we often note. When they embarked on building a customer-centric strategy, Best Buy uncovered two things that changed how they did business. First, prices were too high compared to online-only competitors like Amazon. Even worse, the Best Buy in-store experience was driving business to Amazon! Customers came into Best Buy stores, browsed the inventory, asked questions, and learned about products from salespeople. Then, they searched competitors’ sites for prices. And purchased online from the competition.
To resolve this, Best Buy took a risk. They found much of their customer base shopped on price alone. So, they lowered prices to match competitors. Of course, this is not enough to precipitate a turnaround. Nor is it a holistic customer-centric strategy. To truly put the customer at the center of the experience strategy, Best Buy needed to take the next step. They had to define who their customer is, what they need, and what generates their loyalty.
That is exactly what they did. Under Joly’s strategic guidance, and now helmed by CEO Corie Barry, Best Buy determined most of their customers were women who wanted not only products, but services like installation and tech support. Thus, the birth of Best Buy’s Geek Squad. Free, 24-hour tech support for most services for Best Buy TotaltechTM members. The value add of Geek Squad made it easier for more customers to say yes to big ticket purchases, and promoted membership in the retailer’s loyalty program.
What is important to understand is that building and maintaining the Geek Squad program comes at a cost to Best Buy. This is a risk they take on behalf of customers. As a customer-centric experience and retention strategy, it is a risk that paid off for the retailer. The lesson from Best Buy, like the lessons from T-Mobile and Citi, is clear. Put the customer at the center of your strategy.
Build your CX Strategy for 2023
Remember, putting the customer at the center requires changing how you have done business historically, in order to meet the needs of the customers you have. And the customers you want. It also requires investing in people and programs that serve those customers in ways that are immediately valuable to them.
This is how CX strategy breeds customer loyalty. And it is the foundation for customer-centric organizational growth.
Are you ready to discover who your customer really is, and what your customer wants? Make 2023 the year you invest in customer experience strategy to know and serve your customers and fuel your growth with The Petrova Experience.