Innovation and value creation doesn’t come from the lowest cost approach


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innovation and value creation doesn't come from the lowest cost approach

Customers are not commodities. Service is not a number on a balance sheet.

“Technology led approaches or an inability to invest are leaving customers out in the cold”

Because the current market is defined by a lowest cost approach to providing service, this constrains innovation and value creation. The impact of which is now being felt by customers. They are frustrated their expectations aren’t being met. Brands that have worked really hard to acquire their customers often find a significant mismatch with the brand promise, just when they needed it most.

Aspect’s 2017 Consumer Experience Index tells us that 66% (2/3rds) of US customers will pay more for a great service experience. The figure was lower for UK customers at 29%, but we’re catching up. The same survey tells us that another 36% of UK customers will stop doing business with a company because of bad customer service. That’s an increase from 31% in the prior year (16% up).

And it’s not just about getting it right, getting it “extra right” increases brand favourability. Ipsos MORI’s 2017 Great Expectations report found that those who had a positive experience that was better than expected, were more than twice as likely to increase their brand favourability than those who had a positive experience that was in line with or worse than expectations. These surveys were done a couple of years ago, but I believe expectations will have only increased.

“Getting it extra right increases brand favourability two fold”

The more competitive and rapidly changing the sector, the more at risk they are of leaking expectations. For example, airlines are five times more likely than public service to have experiences with competitors cited as a reason why a service encounter failed to meet expectations. The survey concluded that consumers’ expectations are influenced by a much wider body of prior experiences than before. They now go beyond directly comparable sectors, and this should mean there is more of a focus on liquid expectations in the future. Personally now I compare my train travel and the booking experience, to my experience of online shopping, I am simply doing stuff online.

In other words, the tail is wagging the dog when it comes to service delivery, because service is the biggest driver of value. An opportunity for customers to connect with a brand, so make it a memorable one.

“The tail is wagging the dog: service is the biggest driver of value”

So why do we continue to force bad business solutions onto customers? All they want are simple, responsive services, regardless of who they are chatting to or what they are chatting about, whether that be through voice or text.

In my next post, I’m going to look why we need to innovate to make it simple.

Norie Collister
Nicola is the Founder/CEO of Custerian with 25 years Senior Executive experience having worked with UK & Global companies across industries including: Financial Services; Retail; Logistics; Education; Pharmaceutical; Utilities and Technology. Operating on or with Main Boards to transform businesses profitability, by identifying, refining and refocusing the entire business on delivering the customer brand experience that creates the greatest level of sustained competitive advantage – often funded from OpEx savings. Worked with PE companies / PE backed businesses on M&A strategies & plans.


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