Frictionless Customer Experience: The New Business Competitive Advantage

We are living in an era of abundance. Consumers have more choices than ever. To survive, companies have switched from product-centric to experience-centric strategies.

Nowadays customer experience is the biggest competitive leverage a business could use to win the market. I am a big believer in the experience-centric approach. Companies that put customers experience at the center of their strategy are winners in this new era. Just think about why Amazon is crushing Walmart in retail, why Apple can sell a smartphone twice the average market price, or why Zoom has taken over the videoconferencing market.

Last year, I was invited by General Assembly to give a talk at Telefonica. The topic was about “Frictionless Customer Experience” (FCX). It was the first time I heard about that term. However, FCX instantly captures my attention, because of the natural fit with what I am trying to do with Landbot.io. Since then I had time to do some intense research, which helped me to get a better understanding of the topic and the huge potential it has.

Today I would like to share a framework so more companies could leverage FCX a new competitive advantage.

Definition

Let′s start with the basic definition of Frictionless Customer Experience:

“At its core, FCX is the alignment of the 4 Cs which describe the mindset of a company that has a customer-centric approach to offer the right content in the right channel with the right context.”

Some initial observations about the definition:

-First, I have added the Customer as the central piece of the framework. Every strategy should start with the customer, otherwise the risk of failure is much higher due to the misalignment between different components of the model.

-Secondly, to better remember the 4 key elements of the framework, I purposely named them to start with the initial "C": Customer, Context, Content, and Channel.

-Finally, instead of thinking a linear model, where you can fit one element after another, as you can observe in the diagram all 4 elements must be aligned with each other generating a flywheel effect.

Customer

As I mentioned before the Customer is at the center of the FCX framework, which reflects its importance. It′s fundamental that all strategy of a business starts with the customer.

We can understand the Customer as someone who has a problem or needs that we as a business are actively trying to solve.

The Customer can be internal (employees that work in the company) or external (clients that pay to the company). When defining the customer we should think about 3 dimensions:

• Demographics: Who is our customer? Some key factors about the demographics: location, age, gender, business or consumer, etc.
• Painpoints: what need/problem does the customer have? We should measure the pain points in urgency, frequency, and intensity to understand how important is the problem for the customer.
• Alternatives: what other alternative does the customer have currently? How can you offer a 10x better experience than the existing solutions?

Choosing the right customer to work with is fundamental to gain an advantage vs your competition. A very good example is the case of the Nintendo Wii. Back in 2006 in the video game console market, the leaders are Sony (PlayStation) and Microsoft (Xbox). Both companies were in fierce competition for getting the best graphics and processing power. However, Nintendo at that time couldn′t afford to compete in technical specifications. So they thought hard about how to innovate in other areas. After doing some research they realized that both Sony and Microsoft were mostly targeting hardcore gamers.

With that insight what Nintendo did was design a new game console for the casual gamers, who don′t care so much about the game graphics and processing power. In exchange, Nintendo would offer a new experience that would entertain better for the customer target. As a result, when Nintendo launched Wii it became an instant hit exceeding the sales of PlayStation and Xbox.

Context

Once you have considered who is your customer, the next step is to understand the context. For me, context is all the surrounding events that the customer is living in each moment. It can be very dynamic and be changing all the time. Is the customer working, eating, talking with somebody, reading, playing a game, etc?

Bill Buxton the principal researcher at Microsoft Research introduced a very interesting concept called "Place-ona", adapting from persona and basically describes the limitation of interaction depending on the location of the customer at each moment.

For example: if a user is driving a car, his hands and eyes are limited so the only way to interact with the user would be through his mouth and ears which would be the ideal scenario for a voice-based system.

However, if the user is in a library, his mouth would be restricted but his hands and eyes are free. So, in this case, a visual interface based interaction would make more sense.

Another factor that can affect significantly the context is the activity of the customer. Depending on the activity we should carefully design the experience to avoid misalignment. For example, if the user is in a stressful meeting situation the last thing you want to do is to interrupt his schedule. Or if the user is during vacation, it wouldn′t be very effective to send newsletters to improve their work productivity.

Understanding the customer′s context is critical to offer a frictionless experience. To illustrate this case we can see how Slack has designed its notification system. Slack is a very popular messaging platform for internal team communication used by millions of companies. They are known for their excellent design and seamless user experience. Every product decision they make must be carefully studied to truly help customers become more efficient in their team communication. Here below is the workflow of the feature “message notification”

You can see the level of detail they took, to analyze the different contexts of each user so they only send the notification when it′s most convenient for the user. This is the key reason why Slack is the fastest growing SAAS company in history. It “only” took them 2 years to grow to 100M$ of annual revenue.

Content

After visualizing the context of our customers, we should start working on the right content*. The mission of every business is to provide a solution that can solve a problem and satisfy the customer’s needs.

* Note that by content I mean anything material or digital goods that you can offer to customers as a solution to their problem: a software application or consulting service both can be considered as content in the FCX framework.

What is the right content? As human beings, we are easily affected by our bias of what’s best for clients. There is a study by Stanford where a group of students was asked to draw a capital letter “E” on their forehead. And below you can see the result:

It turns out that we can draw this E in one of two ways: one self-focused “E” like how you are seeing it and another “E” from someone else’s perspective. In this case, more than 90% of the people draw a self-focused “E”.

That is what happened most of the time when we are designing the solution. To provide the right content we have to think about two dimensions:

-Frontend: it′s the interface of the content, that users have to interact with. The key here is to adapt the interface to best match customer natural behavior. An excellent example of the right frontend is how Snapchat designed its video-sharing feature. Before, most videos you saw on the mobile were always in landscape mode. However, Snapchat realized that the natural position for people to use their phones is vertical, so they designed their whole user experience around vertical videos, which turns out to be a huge success allowing the company to grow to millions of users. Now many camera-related applications have followed this new design paradigm.

-Backend: it represents the information of the content we have to deliver to users. The key here is to provide the information as personalized as possible. Take for example the rise of the conversational website. Most landing pages on the market today offer the same content to every customer which is why the average conversion rate is around 2,35%. To solve this problem, the industry came up with the concept of conversational landing pages. Unlike a static web, with a conversational site, we can define conditional logic and offer personalized information in each customer interaction. As a result, companies can get between 50%-100% increase in conversion rate and customer engagement.

Channel

If we did a great job with the previous points, we should have a clear understanding of who is our customer, what is the context and what content should we provide. The last but not least thing we have to take into account is the channel we use to interact with the customer.

“Be where your customers are” has been the first rule of success for every business. History told us that each time a new “channel” emerges, a whole new market could build around it. Those companies who know how to take full advantage of the new medium become winners at a new market.

If we think about mobile apps as a channel, companies like Whatsapp (Mobile Instant Messaging), Uber (On-demand transportation), or King (Mobile Casual Gaming) would never become category leaders without designing their product from ground up for the new channel.

So what channel should you use? To choose the best channel we need to keep in mind some important factors:

• Cost: what is the cost involved to acquire and serve customers in the channel you choose? You should have a clear idea of the CAC and the LTV of the customer acquired from each channel.
• Maturity: Most channels tend to reach a saturation point from which it will be tough for new players to come in. Example: it will be quite difficult to start a new mobile app company right now due to the market share of some big corps. If you look at the ranking of the top ten apps, most of them are from companies like Facebook or Google.
• Control: you should look for the flexibility and the scalability you can have with a particular channel. Does it offer tools for 3rd party developers like APIs; analyze possible risks of being cannibalized by native solutions from the channel. You don’t want experience with what happened to Meerkat when Twitter banned it from the social network.

A fascinating case study is Grammarly, the best grammar checking tool of the planet. Hiten Shah wrote an in-deep review of how Grammarly grow into millions of users. One key point in their strategy was that they had designed the product to be where their customers are. Grammarly builds plugins for Microsoft Office and later as Chrome extensions so people can use it where they need the tool most: when writing a post, filling job forms, editing text documents, etc.

Final words

Just some final thoughts about the framework. First of all, it′s very critical to make sure of the alignment between the 4 Cs. The way we should proceed is to always put the customer in the center and align it with the rest of the Cs. In this way, we can detect very easily misfit in our framework that can generate customer friction. For example, it doesn’t make much sense for an Enterprise B2B company to work on Snapchat because they won’t attract the correct kind of customer.

Secondly, the frictionless framework can (should) be applied to any stages of the customer journey from acquisition to retention. The experience we offer must evolve depending on what stage is the customer.

Finally, remember FCX is a mindset. So for a company to truly leverage the framework, it must deeply integrated into the company culture where every employee needs to share the same mindset and continuously improving the customer experience.

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