The Customer Experience Hierarchy

Customer experience initiatives aren’t a once-and-done tactic for customer acquisition—although that’s truly important. Rather, it’s an ongoing strategy that relies on a 360 customer view and experiments to understand the preferences of buyers that win their hearts and minds, retain them, and create loyalty.  Here’s how it plays out.

A person ordering an item online illustrates the need to understand the difference between a satisfied customer and a loyal customer | Informatica

A Satisfied Customer is Not Necessarily a Loyal Customer

Our coffee maker of 8 years stopped working. The brand doesn’t manufacture that same coffee maker—which we loved—but a similar one was available. We tested it when it arrived, filling the reservoir with water and running it through twice. With excitement that Sunday morning, we were set to make our first pot of coffee the following day. However, we didn’t even get one pot of coffee out of it. We pushed the brew button, but nothing happened.

Sadly, I spent the better part of that day searching for a replacement. Investigating brands. Looking for similar features. Reading review after review after review. The search and filtering capabilities of the different web sites was maddening (there’s a solution for that). Eventually, I realized I had to compromise. A similar coffee maker just didn’t exist.

The frustration of the experience eclipsed everything. Product data was inadequate to help me find the perfect coffee maker. I felt like Goldilocks: this one was too small at 8 cups; that one had too many features I wouldn’t use; another had a glass carafe that breaks according to the reviews. I hopped from site to site. And eventually, I settled.

Was I satisfied with the purchase? Yes. Do I remember the web site I purchased it from? No. Will I purchase from them again? Possibly. And that’s a problem for many companies who want repeat buyers.

The Hierarchy of Customer Experience

The Hierarchy of Customer Experience is one way to illustrate the spectrum of how customers engage with a brand as they traverse the customer lifecycle. From identifying potential prospects, to acquisition, growth, and retention, the goal is to move the customer from indifference and a broad base of interactions to engagement and long-term loyalty.  

The hierarchy of customer experience | Informatica

Companies that focus only on one level of the hierarchy—such as individual interactions, for example—miss the opportunity to create the kind of loyalty that ensures a customer is truly engaged with the brand. According to research, engaged consumers buy 90% more frequently, spend 60% more per transaction, and are five times more likely to indicate it is the only brand they would purchase in the future. On average, they also deliver 23% more revenue and profitability. (Source

The problem with satisfaction

Another point to consider is the satisfaction tier. When companies put too much emphasis on customer satisfaction (and related metrics such as Net Promoter Score and Customer Satisfaction surveys), the customer experience tends to be only as good as the last interaction or transaction. 

When the gauge of how well a company is doing focuses only on the last interaction or transaction, the customer gets stuck in a perpetual state of evaluating how well a company is meeting their short-term needs. This opens the door to customers who continually evaluate other options and alternatives. A solitary focus on satisfaction can be an indicator of how you are improving the processes that support interactions and transactions—which is important to the overall customer experience—but it won’t necessarily encourage long-term customer loyalty.  

Getting over the hump

When the focus is only on measuring satisfaction, what frequently gets missed is the emotional connection: the type of deep allegiance and loyalty that’s created by building relationships supported by trust.  To get beyond the “satisfaction hump,” companies must learn to differentiate themselves through the experiences they deliver.  

To encourage customers to move beyond satisfaction, the first step brands should take is to recognize, acknowledge, and support the relationship that exists with those customers. That is, after all, what customers expect when they join a loyalty program, sign up for a credit card, register for a warranty, opt-in for email communications, or simply buy a coffee maker.  They are raising their hand and saying, “Hey there! I’m here. I’m here to do business with you.”

Trust & loyalty

Trust is increasingly important in any business relationship and is becoming much more complex. The customers who lose trust in a company will not become loyal without a lot of effort on the part of the company to regain that trust. Trust today not only involves ‘companies doing things right’ but also ‘companies doing the right things.’ Tightly coupled with brand reputation, trust grows as companies act responsibly across all interactions and transactions they have directly or indirectly with customers.

At the apex of the hierarchy there is loyalty. This vision to strive for this top level of the hierarchy must be set by the CEO. This isn’t the tactical loyalty of airline programs, but the strategic loyalty that leads to irrational, emotional bonds with customers. This happens when the customer considers a brand as their first choice, if not their only choice.

Keeping customers engaged

Attaining a high level of customer engagement requires a commitment to create advocates, employ authenticity, set realistic expectations, and ensure the best experiences. And as customers become fully engaged, companies encourage them to remain loyal because: 

  • experiences are differentiated 
  • customers trust and rely on companies to not disappoint 
  • employees are empowered to do what’s right, both at  an individual and at a collective level 
  • customers needs are met consistently
  • processes are transparent and simple

Will evaluation of the company continue? Of course it will. Customers will continually look for alternatives that better meet their needs. But as the bond between customer and company grows stronger, the barriers to leaving are higher and harder—and, just maybe, customers evaluate other options less often.

And although everything on this purchase was satisfactory, will I purchase from them or recommend them to friends? I really don’t know. If you’d like to learn more, I’ll be discussing the components of customer experience in a new way to grow customer loyalty, personalizing interactions with increased customer insights for relevance that scales, and finding new insights by pairing a trusted data foundation with rich context. I’ll also explore the customer hierarchy further. Join me for Argyle Digital:  Customer Experience for Retail Forum on November 16, 2020, or download our eBook, A Marketer’s Guide to Customer Experience, to see how it may apply to your business.

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