Squaring Excellent Customer Experiences with Customer Affordability
Jul 28, 2016
Providing an excellent Customer Experience is a worthy objective, but it may not necessarily be aligned with corporate goals. A recent New Yorker article on planned obsolescence and an equally insightful New York Times article on tech support points out this hard, if unfortunate, reality.
Suppliers that offer lesser quality products and services at lower prices calculate their strategy will generate higher repeat sales and profits. In this paradigm customers will overlook minor flaws and inconvenience, having to fix but ideally replace items, and endure minimal customer service, if they perceive overriding benefits from their purchases.
The more dominant the suppliers, the more difficulty in changing them, the less elastic the demand, and the higher the barriers to entry, the greater the likelihood of poorer quality and that this strategy will pay off. But the opposite is true when there is more customer choice. As the Times notes, support is often excellent “in competitive markets… [and when]hungry upstarts trying to break into markets traditionally dominated by large national companies.”
Unfortunately too many suppliers have cut corners that result in preventable injuries and deaths. There are far too many toxins entering the environment and ultimately into our bodies from hazardous substances both in the products and released in resource extraction, in manufacturing and distribution, and disposal. There are also too many recalls in this era of sophisticated computer-driven design, repeatable automated manufacturing, and quality assurance standards, such as ISO 9000. Finally there is an unsustainable volume of non-recyclable waste that causes added dangerous pollution.
Unfortunately none of these resulting costs, which also include wasted customer time, inconvenience, and transportation expenses for repairs and returns, are accounted for in product prices. The end result is a distorted marketplace that penalizes quality-, socially-, and environmentally-conscious suppliers.
Yet creating quality goods and delivering excellent Customer Experiences is expensive. For example the cost of handling a support call for a unit of packaged software will often cancel out the profit of that sale. With a vast majority of customers having limited and slowly growing incomes and budgets most suppliers have had to balance quality, experience, and price in order to grow and stay in business.
There are several strategies that companies can undertake to square these issues. They should insist that governments create and maintain a level playing field between suppliers by imposing fair, practical, and tough safety and environmental including recycling standards. The non-compliance penalties should be stiff enough and written to discourage treating them as costs of doing business.
The New Yorker article points to the remarks of Tim Cooper, a design professor who heads the sustainable-consumption research group at Nottingham (U.K.) Trent University and who is seeking longer product lifetimes. In the book he edited, “Longer Lasting Products,” he suggests having “minimum standards of durability, repairability, and upgradeability. “
“The economic model to aim for, Cooper said, is founded on people buying fewer, but better, products, and paying more across those products’ lifetimes,” said the article.
Frost & Sullivan has identified Innovating to Zero as a critical MegaTrend. It is a vision of a zero concept world with zero emissions, accidents, fatalities, defects, and breaches of security, and complete recyclability.
To get there companies should investigate a growing array of advanced product design and delivery and supply chain applications and methods. They include enterprise resource planning (ERP), the Internet of Things (IoT), and 3D Printing, modular architectures, open source software, cloud/hosted delivery, and PraaS (product-as-a-service) models, These and other solutions are covered and touched on in an expanding library of Frost & Sullivan reports, such as these IoT and cloud ERP Market Insights.
At the same time companies should research and pilot a developing array of high-touch and high-productivity customer service applications. These include guided resolution, remote access, diagnosis, and repair, and automated chatbots and virtual assistants, which were discussed in another recent Frost & Sullivan Market Insight.
Finally companies must ensure that their brands and brand promises are aligned with customers’ expectations. Customers will respect brands more (and complain less) when suppliers are authentic and honest and deliver the products and services that match their requirements and budgets.
Brendan Read is Senior Industry Analyst with over 25 years’ experience covering business, communications, staffing, and technology. He has worked in, prepared reports, and blogged on a wide range of topics including customer contact, CX, CRM, IoT, social media, supply chain, and BC/DR. He also has backgrounds in construction, manufacturing, materials, resource extraction, site selection, and transportation. He examines the broad economic, environmental, innovation, political, and social mega trends, and their impacts on businesses, markets, and society.