Early in my career, when I was first voraciously learning about the new hot discipline called "customer success management", I drafted and printed out a simple equation and hung it next to my monitor. As the owner of recurring revenue for my company, it helped focus preventative actions to help boost our retention rate. What I didn't expect, is that this equation could be attributed to almost every single customer loss. I've never been able to disprove it. It has now guided me through my now 20-year career and I've shared it with every team I've lead.
"Experience" refers to the sum of all the interaction points that a person or entity has with your brand. All customers have an expectation on what their relationship with your brand will look and feel like. These expectations can be born in a short as a matter of seconds and once these first impressions are set, they are difficult to change. Expectations are influenced by your team (such as through your marketing efforts and sales cycle), through your product usage (UX and ease of use), and through your support and service channels (responsiveness, resolution of complaints). Additionally, external influences that you have no direct control of (think word-of-mouth, online reviews, social media) can distort your customer's expectations of your brand - even to the point where they choose to break up with you.
When an expectation is missed, damage control occurs. It is almost always more costly to repair a relationship after expectations have been missed. Valuable resources are pulled in to address the concerns reactively. Focus shifts from growth planning to fire fighting and momentum slows down. Customer confidence decreases and in the worst situations, trust is broken.
Once trust is broken, it's an uphill and often lengthy battle just to get back to ground zero.
So why do we keep finding ourselves in this position?
The emphasis for businesses over the last decade has been on growth. The incredible digital transformation across every industry has fueled expansion opportunities and new growth channels, all of which have driven hyper growth at unsustainable rates.
The consequence of indexing too far on growth is that business maturation is condensed into unreasonable conditions. Operational focus and investments go to supporting the growth, without leaving enough space to analyze and address the inevitable gaps that open up along the way. These gaps accumulate, and often don't get attention until a related crisis emerges.
As companies have been adjusting their spending and hiring over the past year due to economic conditions worsening, they have also had to face a long-delayed recognition: a poorly designed customer experience is a key determining factor in their current profitability. Neglected experiences have resulted in unhappy customers who are quick to abandon ship when the status quo changes.
Let's take a lesson here: Sustainable growth requires some (more than you want, but less than it takes to be perfect) continuous investment into addressing the operational gaps that open up as your business grows. Don't allow them to accumulate or they will catch up to you during the downturns.
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