Our meaningful customer relationships series has explored what is meant by customer relationships and their ever-changing nature, the role of purpose in consumer purchasing decisions, and how to create high-impact, memorable experiences.
In our fourth and final article of the series, we explore the combined importance of these factors and how to weave them together to create and maintain the fabric of successful business – long-lasting customer relationships that are truly meaningful.
LET’S START WITH MEMORABLE EXPERIENCES
Forging meaningful customer relationships is key to a successful business. What cannot be taken for granted, however, is the human side of those connections. Our strongest personal relationships are built on memories created through collective experiences, shared values and trust. Customer relationships are no different. According to a recent study, 84% of customers say being treated like a person, not a number, is very important to them.1 The more you create memorable interactions with your customers, and the stronger your common purpose, the greater the impact will be.
The ‘experience economy’ is about driving memorable experiences to influence buyer behaviour.2 With 86% of buyers willing to pay more for a great customer experience3 and 32% willing to leave a brand they love after one bad experience, this is more important than ever.4
REBALANCING MEMORABLE EXPERIENCES WITH PURPOSE
According to Kantar’s 2020 report on purpose-led growth, brands recognised for high commitment to purpose have grown at more than twice the rate of others.5 In a global 2021 survey, 50% of brands said COVID-19 made them rethink their personal purpose and re-evaluate what’s important in life.6 As our report “Keeping customers close: Customer-centricity in a rapidly changing world” outlines, more customers are expecting brands to make them feel part of something bigger.7 These consumers are shifting their buying habits accordingly. Companies need to follow suit – and fast.
Despite the importance of purpose, we’ve seen that giving customers great experiences can pull companies through difficult periods. For example, Amazon reported a near 200% rise in profits through COVID-19,8 likely driven by its efficient customer experiences, despite the reputational challenges they have faced around worker conditions. However, if Amazon is not perceived to be purpose-driven, can customers really have a meaningful relationship with them? Perhaps we’ve felt the guilt of buying from Amazon, especially when there was a universal push to support smaller businesses, yet we still did it because it’s convenient. Our report on customer-centricity highlights the tension between purpose and convenience.7 How many Amazon customers would say they have a connection that really means something to them or have a meaningful relationship with Amazon that they would maintain as new competitors emerge?
The link between experience and purpose is only likely to increase in importance. Gen-Z is the fastest-growing segment of consumers and employees, so it’s important to factor this into business design. They’re digital natives and expect frictionless, omnichannel and personalised interactions. They value integrity and are purpose-driven – 65% cite ‘making a difference to a cause they care about’ as a top priority.9 This generation expects a balance of experience and purpose, and their demands will become increasingly central to future business design.
If consumers feel a company is both authentically purposeful and consistently creates positive memorable experiences, then that is a meaningful relationship that will last, especially as upcoming generations take centre stage.
So, it’s crucial to focus on both purpose and memorable experiences for long-term business success. Now what?
THREE WAYS TO INTERTWINE PURPOSE AND THE CREATION OF MEMORABLE EXPERIENCES
Companies should see purpose and the creation of memorable experiences as firmly interwoven. We’ve identified three ways to intertwine both to form long-lasting meaningful customer relationships.
1. Start with employees
Being authentically purpose-driven starts with employees. When the core of an organisation understands the ‘why’, they can genuinely champion it and deliver it to customers through every interaction. However, in recent findings, only 27% of employees strongly believe in their company’s values and less than 50% strongly agree that they know what their company stands for.10
For an organisation to create memorable experiences for customers, it helps to spark them internally first. Take The Lego Group as an example, whose purpose is “to inspire and develop children to think creatively, reason systematically and release their potential to shape their own future – experiencing the endless human possibility”. Lego has built fun into its employee experience (EX) by drawing on at least three of the seven memorable experience levers. It provides opportunities for employees to facilitate play sessions in local communities, and hosts an ‘annual play day’ worldwide, when the company closes in order to experience the power of play together. It’s no coincidence that Lego’s revenue in the first half of 2021 increased by almost 50%.11
To re-evaluate your EX strategy, consider the following.
- Understand EX through journey mapping, identifying pain points and ‘moments that matter’.
- Deliver consistent and clear messaging throughout the employee lifecycle to build trust.
- Focus on the fulfilment of employees, such as growth potential and a sense of belonging.
When employees embrace a company’s purpose in their day-to-day work and experience positive moments infused by this, a meaningful relationship is formed. This trickles down to customer relationships with the business.
2. Understand the relationship type
When building meaningful relationships aligned to your purpose, it’s important to understand the relationships that customers have with you – this is key to striking the right balance between experience and purpose. We identify three types.
- Functional: Customers regularly complete a single action or series of ‘jobs to be done’. Efficiency, consistency, reliability and simplicity are greatly valued.
- Emotional: Customers consume an experience that fulfils emotional needs, often with others. Social enablement, entertainment and nostalgia are valued highly.
- Transformational: Customers receive support to fulfil life goals. Belonging, community and motivation are key to these relationships.
Understanding where your customers see you is critical – you may have different relationships with different segments. At a typical fitness company, a customer with a functional relationship might use the gym for its equipment alone, valuing the quality, with no specific goal – here, a convenient experience may be more important than purpose. In an emotional relationship, a customer might join the occasional class and enjoy the sense of camaraderie. A transformational relationship could be a customer training for a marathon and engaging with the instructor to achieve their life goal – for this type of relationship, purpose is fundamental.
Over time, these relationships can move between the three types. As they grow, so too does the importance of a strong company purpose and consistent delivery of memorable experiences. Here are four tips on how to identify relationship types.
- Listen: Read and reply quickly to customer reviews and complaints. This will provide insight into what kind of relationship they already have with you and how their specific experiences can be made more memorable.
- Analyse: Customer data comes in fast and in different forms, so robust analytics must be in place to keep up. Dedicate time, effort and investment into analytics and derive tangible insights from the results.
- Map: Track the customer journey to identify the typical activities across the different types of relationships.
- Take stock: Cross-reference activities per relationship type with company purpose and strategy. Decide where to invest based on your organisational ability to fulfil your customers’ needs as their relationship with you evolves.
Once a company has activated its purpose internally and understands the current and evolving relationships with customers, leadership can decide which levers of memorable experiences to pull to develop meaningful relationships.
3. Optimise digital
Our customer-centricity report found a major misalignment between customer expectations and what businesses think they expect.7 This indicates a lack of understanding of customer expectations in the digital era, where COVID-19 drove two years’ worth of digital transformation in just two months. Companies are gathering more information, with 84% collecting more data in real time than ever before. Yet despite this, 65% of businesses believe their organisations often make decisions without factoring in customer insight.7 Now knowing your customer well, and keeping them close, has never been easier – but only if companies invest in the right digital tools.
Infusing the right technology with your company purpose can make experiences feel more human – without creating frustrations for customers or employees. To understand how this can be done, let’s look at global restaurant chain Chipotle Mexican Grill. Chipotle’s purpose is about cultivating a better world – emphasising the connection between how food is raised and prepared, and how it tastes. With sales growth struggling, Chipotle extended the concept of their authenticity from ingredients to food preparation. A video of an employee doing a Chipotle bowl trick was shared to the brand’s social media, racking up millions of views. They’ve invested in other digital partnerships and as a result, reported 88% digital sales growth and approximately 15% revenue growth to US$1.4bn for Q3 2019.7 By embracing social media, they’ve increased brand relevancy and reach, and used purpose-driven insights to learn about current customers, gain new ones and deliver more memorable experiences.
But while there are significant benefits of digital, it can exclude some societal groups. The pandemic exposed digital poverty – a lack of digital skills and confidence. As our customer-centricity report outlines, businesses must be wary of digital-only strategies to create meaningful relationships and consider omnichannel to combine purpose with experiences.7
MEANINGFUL RELATIONSHIPS ARE THE FUTURE
For businesses to survive, it’s critical to intrinsically combine company purpose and the creation of memorable experiences to create and maintain meaningful customer relationships, while keeping track of their evolving nature. Start with your employees, understand and act on the types of customer relationships in your community, and optimise digital to drive brand purpose and experience.
READ THE SERIES
Catch-up with our meaningful customer relationships series including Customer relationships and their ever-changing nature, The role of purpose in consumer purchasing decisions and How to create high-impact, memorable experiences.
1 Realizing the dream of 1-to-1 personalization | Salesforce
2 Welcome to the Experience Economy | B. Joseph Pine II and James H. Gilmore (1998) – HBR Economic Cycles and Trends
3 37 customer experiences statistics you need to know for 2022 | SuperOffice
4 Experience is everything: Here’s how to get it right | PwC
5 Igniting purpose-led growth | Kantar
6 Life Reimagined: Mapping the motivations that matter for today’s consumers | Accenture
7 Keeping customers close: Customer-centricity in a rapidly changing world | Gate One
8 Amazon profits increased nearly 200% since start of Covid-19 pandemic | Research FDI
9 What’s inside the minds of Gen Z | Girls With Impact
10 The future of your workplace depends on purpose | Gallup
11 LEGO Group reports 46% revenue increase in first half of 2021 | Retail Insight Network
At Gate One, we believe there are some unifying principles that create a truly memorable customer experience. Get in touch to see how we can help you navigate your next customer experience challenge.