Improving customer experience to drive profit

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Over the last fifteen years or so, much has been written about the primacy of customer experience to bolster organizational growth and profitability. Pretty much every large organization claims to compete on the basis of customer experience (CX). Yet, the organizational competencies required to deliver a superior guest experience are seldom understood, let alone aligned.

What is a competency? Competency is generally understood to mean that a person or organization is qualified, capable, and able to understand and do certain things in an appropriate and effective manner. Distilling CX competencies is not easy because of the ubiquitous scope of customer experience. CX is impacted by the actions of every department and every level within the organization. Based on two decades of research and consulting experience, I have extracted six CX competencies which, if developed and refined, should result in a superior customer experience.

Market Orientation

The concept of market orientation came about in the early nineties when researchers were looking to identify what separates great companies from the merely good ones. An offshoot of the marketing concept, market orientation refers to the “organization wide generation, dissemination, and responsiveness to market intelligence.” Market intelligence is organizational understanding of customers’ current and future needs and the factors affecting them. Market intelligence thus becomes the foundation on which to build the customer experience. Without understanding customer needs and expectations, and responding to these with appropriate design and actions, customer experience will always fall short of customer expectations.

Employee Engagement

Employee engagement can be defined as putting forth ‘‘discretionary effort,’’ in a job-context. The discretionary effort could be extra time, brainpower, or energy. To garner requisite employee engagement competency, organizations should address the drivers of engagement and disengagement. First, there needs to be alignment in values between the employer and the employees. If the organization is looked at as something more than a provider of jobs and a means of making a living, employees will be more willing to exert discretionary effort in their jobs. Second, interactions between senior management and employees has a strong bearing on engagement. Senior management needs to communicate with employees at all levels in a manner that is open, transparent, and caring. The third driver of employee engagement is the relationship an immediate supervisor has with an employee. The human touch, so necessary for employee morale and well-being, is often absent in superior-subordinate interactions. The fourth major driver of employee engagement is providing a setting where employees feel that they have plentiful opportunities to learn and grow. Where development is clearly in sight, discretionary effort follows.

Emotional Intelligence

Over the last two decades, much has been written about emotional intelligence (EI). So, exactly what is emotional intelligence? It’s the ability to recognize, understand, and relate to your own emotions as well as the emotions of others. In his path-breaking book, “Emotional Intelligence: Why It Can Matter More Than IQ,” Daniel Goleman reported on a variety of research studies making the case that skill in handling emotion is as significant as skill in handling other forms of data (such as those measured on an IQ test). A study reported by the University of Maryland in 2011 stated that over 70 percent of hiring managers considered EI to be more important than IQ in recruiting of employees.

Emotional intelligence is comprised of five key elements: Self-awareness, motivation, empathy, social skills, and self-regulation. This combination of traits helps individuals control their own emotions while relating to people to establish a bond. Emotionally intelligent employees are almost intuitively able to assess customer emotions and expectations and respond to these in a manner that creates customer intimacy and enriches the customer experience.

Service Blueprinting

A service blueprint is a diagram that visualizes the relationships between different service components — people, props (physical or digital evidence), and processes — that are directly tied to touchpoints in a specific customer journey. It is a visual, information-laden document that describes where and how customers interact with your organization. The unique benefit of using a service blueprint is that it allows an organization to view the entire customer experience from the customer’s perspective. By providing an overview of the entire service process—both current and future—employees can get insight as to how their roles fit into the integrated whole. The blueprint also generates understanding into the various role and relational interdependencies throughout the entire organization, thereby highlighting the interrelationships across business processes.

Given the potentially innumerable applications of service blueprints, it is no wonder that three of the six major casino operators in Macau are using these tools for fixing fail-points in the customer journey, for identifying touch points where cost savings can be generated, and for designing touchpoints that differentiate their customer experience from competitors.

Designing the Servicescape

A servicescape comprises of tangible elements within a gaming property. It encompasses the physical environment where the service is delivered and is composed of numerous elements such as the color, music, scent, layout, design and employee uniforms. Environmental stimuli affect the emotional states of pleasure and arousal, which, in turn, becomes an important determinant of customer experience. Gaming providers need to ensure that the entire servicescape is such that guests want to visit and spend time in the environment that is provided for them.

In designing the servicescape, care must be taken to avoid a clash between the different elements. For example, the color of the carpets should not clash with that of employee uniforms. If you are piping in low arousal music, you should avoid using a high arousal scent in your property. Ensuring harmony across the multitude of elements constituting the servicescape is no easy task. Typically, an integrated resort is built in phases, often under the stewardship of leaders with somewhat different tastes and preferences when it comes to resort décor and ambience. Therefore, it is always advisable to bring in external experts to assess the servicescape at regular time intervals.

Linkage Analysis

Linkage analysis involves connecting customer experience outcomes to business metrics such as revenues, market share and profits. CEOs of gaming organizations will buy into CX enhancement only if they see tangible financial rewards from enhancing the customer experience. While there exist aggregate findings on the benefits of CX (e.g. a billion-dollar company can increase revenues by $375 million by becoming a CX leader), CEOs want to see irrefutable evidence that CX pays off handsomely in their context.

With the right data and appropriate evaluation, linkage analysis will answer questions such as, “What is the bottom-line impact of increasing customer satisfaction scores by ten percent?” “What is the relationship between Net Promoter Score and profitability?” “How much money should be spent on fixing a particular touchpoint along the customer journey?”

Obviously, for linkage analysis to thrive within an organization, there needs to be a culture that promotes data-driven decision making. Data generated and disseminated from market-oriented activities should form the inputs for CX initiatives. CX metrics resulting from the CX initiatives should then be tied to key financial metrics such as revenues and profitability.

Conclusion

The gaming industry has become increasingly competitive over the last decade. Customers have an increasing array of choices between online as well as land-based gaming options. Gaming analysts estimate that US$65 billion will be spent in Asia alone between now and 2025 to create additional integrated resorts. To attract and retain valuable customers in such an ultra-competitive marketplace will necessitate offering the best possible customer experience. The six competencies discussed in this article should provide gaming operators with an understanding of what it takes to offer a superior customer experience. As with most business initiatives, the robustness of the CX will be determined by the weakest link across the six competencies.

 

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Sudhir H. Kalé, Ph.D., has studied the topic of customer experience for over 20 years. He is the Founder and CEO of GamePlan Consultants, a company that has helped companies enhance their customer experience on five continents. To know more about customer experience or to get in touch with Sudhir, you can write to him at [email protected]