Getting to know your customers

I have previously written about a launderette that had created a digital experience for its customers by internet-enabling its washing machines and dryers and creating a mobile app that enables customers to pay for services with their smartphones.

The solution is a good example of the outside-in perspective that is required for digital – looking at the business from the customer’s perspective to understand what outcomes or benefits the business provides for the customer, and asking what additional or new outcomes or benefits it could provide in the future. In this case the customer outcome was to not have to collect and carry large amounts of coins to operate the machines. By combining freely available technologies such as a controller within the machines, a cloud-based server, a mobile app and a payment gateway the launderette created a digital service that gives customers an added benefit and enhances their experience of using the underlying service, which in itself has not changed.

And that is a key point for traditional companies that provide physical products or services for which there is no obvious digital alternative: it may not be possible, or even necessary, to change the core offering but technology can still be used to enhance the customer’s experience of using the core product or service. And in doing so it can also generate a number of benefits for the organisation.

To identify how technology can be used to enhance an existing offering, it is necessary to map the customer journey by documenting all of the touch-points or interactions between the customer and the organisation. The customer journey is likely to start with an initial contact or query and pass through stages such as purchasing, service/support, and ending with a decision to repurchase or renew a contract/subscription. Having identified the steps of the journey the organisation can analyse each touch-point to assess the quality of the customer experience and determine if and how it can be improved. And whilst technology may not always be the answer, it is likely to play a key part in creating the seamless end-to-end experience that customers expect in the digital age.

This is essentially what the launderette owner did; they looked at each step of the customer journey and identified the payment touch-point as being a source of frustration or friction for the customer. They then designed a technology solution to remove this point of friction without changing the underlying physical service. And this is what companies such as Uber have done. Uber has not changed the core service of transporting customers from one location to another; it has, however, transformed every other aspect of the customer journey from ordering through to payment. The result is a seamless end-to-end customer experience that uses technology to remove all sources of frustration, difficulty or friction for the customer.

As the launderette example demonstrates, understanding the customer journey and identifying how to improve it using technology is not the preserve of disruptive start-ups or tech companies. Any business can (and should) do it no matter what industry they are in or what size they are – if the owner of a single launderette can use digital to improve the customer experience then any organisation can.

And this is exactly what Australian car park operator, Secure Parking, has done. The company created a mobile app that enables customers to book a parking space at a car park of their choice. The Secure-a-Spot app also helps customers get the best rate for their parking and also allows them to pay online. Secure-a-Spot was the product of extensive research into the customer journey through which the company was able to identify the areas where customers wanted a better experience.

As with the launderette and Uber, the underlying service – parking a vehicle – has not changed but the experience for customers that use the app has been significantly improved. And Secure Parking is growing its market share and revenues as a result of this digital enhancement to its core service: about 40% of bookings made via the app each month are from new users.

Using technology to enhance the customer’s experience of an existing physical product or service can improve satisfaction and retention, attract new customers, increase market share and grow revenue. But there is also another key benefit that both the launderette and Secure Parking have realised from their investment in digital: both organisations are collecting large amounts of data about their customers. In a non-digital world, users of facilities such as launderettes and car parks are usually anonymous. The service provider knows nothing about its customers; it does not know how often they visit, how much they spend, whether they use other locations/outlets, etc.

But as soon as these organisations introduce a digital element such as an app to their service, they create a one-to-one relationship with their customers that can be used to create value for both parties. The service provider can use the data they collect about their customers to create loyalty programmes, tailored offers and incentive schemes. It can also better target its digital marketing activity and improve how it engages with customers on an ongoing basis. And data on customer behaviour, consumption patterns, etc. can be used to improve existing offerings, design new products and services, plan capacity and even support dynamic pricing.

Enhancing a physical product or service with a digital experience is likely to help an organisation attract new customers, grow market share and increase revenue. But perhaps more importantly in terms of the long-term success of the business, it will generate data that can help the company to get to know its customers and to create insights that will drive the future direction of the business and the products and services it provides.

If your organisation wants to map its customer journey or use technology to improve the customer experience then please contact me or visit my website, axin.co.uk.

To read more articles about digital business visit TheBusinessLeader.co.uk.