SKU’d Thoughts 6: Is there a formula for great customer experience?
Customer experience is synonymous with brand intensity; if a company creates a great customer experience they will inevitably have a strong brand association with its customer base. My formula for measuring that experience is:
The responsive, convenience, and reliability variables are supply chain related and are the more subjective components of a CX formula. They are quantified on a 3-point scale (Low (1), Medium (2), High (3)).
A Responsive (RP) supply chain is designed to quickly adjust to any change in consumer demand or to take advantage of new market opportunities. An example of a highly responsive supply chain is Nike’s reduction of its order lead time with suppliers by 83.3% because consumers wanted a greater variety of apparel to be available more often.
The Convenience (C) variable in a supply chain is when a product or service is easily available to consumers. Amazon Prime Now tracks high on this variable. From the comfort of your couch, you can order a wide range of items for guaranteed delivery within two hours.
Reliability in a supply chain is the degree to which the company provides consistent results. As an example, PepsiCo developed an app that alerts retailers and distributors about pending shelf outages. This supply chain improvement ensures that consumers can rely on the availability of PepsiCo products when they go to their local grocers.
Product (P) is a non-supply chain variable in the CX formula that determines if a company is actually making a product customers want. This is arguably the most important variable so it is a binary (1 or 0) factor in the formula; a company is either making something people want or it isn’t. There are no gray areas. The 3 companies cited in previous examples are all generally providing products and/or services that consumers want so they would be assigned a 1 for Product. Here’s how they did on customer experience using the formula I developed.
On the other end of the product spectrum is Juicero. The infamous $400 Wi-Fi connected tabletop juicer is an example of a product that would receive a 0 in customer experience.
The results of the CX formula fall into 6 experiential categories along a scale of 0–10: Excellent, Very Good, Good, Average, Poor and Very Poor. Amazon has excellent customer experience when quantified by my formula, while Nike and Pepsico fall into the very good range. Juicero’s bad product puts it in the very poor customer experience category.
Creating a great customer experience requires several inputs but you’ll notice the product itself carries the most weight. The better a customer’s experience with your product or service, the more loyal they will be to your brand and more likely to become a product evangelist who recommends you to more potential customers.
Cross-posted on Medium