Truly understanding customer needs may help companies improve not only the buying experience but also their bottom line.
A company’s relationship with its customers is about much more than improving product ratings or decreasing wait times.
Understanding the customer journey is about learning what customers experience from the moment they begin considering a purchase, and then working to make the journey toward buying a product or service as simple, clear, and efficient as possible.
In this episode of the McKinsey Podcast, McKinsey principals Harald Fanderl and Nicolas Maechler talk with McKinsey’s Bill Javetski about what companies have to gain from focusing on the customer experience and how they can evaluate and enhance the purchasing journey.
Bill Javetski: Welcome to another episode of the McKinsey Podcast. Hello, I’m Bill Javetski, an executive editor with McKinsey Publishing. I think today’s topic is one that everyone will have their own stories to tell about.
It’s customer experience. Think back for a moment to the last time you called your electric company or your cable company or you filed an insurance claim or ordered something online. Maybe you took a trip on an airline or by taxi. You’ll probably have a memory of how the whole experience felt. When you were done, did you like the experience? Did you hate it? What did you think of the company that provided it?Well, companies are thinking a lot about how they treat their customers. So we’re going to talk about what it means to put a customer’s needs and wants at the center of a business strategy. My guests today are Harald Fanderl, a partner in McKinsey’s Munich office. Welcome, Harald.
Harald Fanderl: Hello, Bill.
Bill Javetski: We’re also joined by Nicolas Maechler, a partner in McKinsey’s Paris office. Welcome, Nicolas.
Nicolas Maechler: Hello, Bill.
Bill Javetski: The two of you have just been collaborating on a compendium of articles on customer experience. So, Harald, let me start with you. Customer experience seems to be a big business topic now. What exactly are we talking about when we talk about customer experience?
Harald Fanderl: When we talk about customer experience, Bill, it’s actually all of the above. It’s all about putting customer needs at the center of what a company needs to do, and then ensuring along all the touchpoints and even more so along all the relevant customer journeys that the customers have a flawless experience. When a customer is satisfied with a company, they are also lower in the cost to serve, but also have a higher potential to be more loyal customers for this company. And maybe they’ll even promote this company among their friends.
Bill Javetski: This idea of touchpoints and journeys, can you explain that a bit more?
Harald Fanderl: Happy to do so. At the center of what we are discussing at McKinsey, all around customer experience, is the concept of customer journeys. We used to discuss improvements of customer touchpoints, but we see when we also do analytical research that in order to satisfy customer needs, you typically need more than one customer touchpoint to satisfy a need. This could be to join a company, to pay a bill, or to change something in your address. As that is more than one touchpoint, it’s important that you as a company have the whole journey in sight. Then think about how you can improve this customer journey.The complexity comes when you go deeper and understand that companies are often organized in silos for multiple customer journeys. Therefore, this cross-functional collaboration is crucial for putting the customer need in the center and then working together in multiple areas of the company, be it the more sales-driven guys, the marketing guys, the operational guys, and even support areas like IT and finance, to then jointly work and improve this customer journey along the various touchpoints.
Listen and read more at the Source: Why the customer experience matters | McKinsey & Company
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