On today’s episode of The Engaging Marketeer, Darren is joined by Katie Stabler, whose passion for customer experience (CX) has led her to become the founder of the wildly successful CULTIVATE.
Using a combination of psychology and good business practices, Katie uses her expertise to help companies better understand their market, and put steps into place to keep retention high. Below is what she had to say:
Darren: Customer experience. What exactly is that, and why is it so important for businesses to know about it?
Katie: Oh, that’s a massive question!
Darren: I thought I’d open up with a simple one.
Katie: What is customer experience … well, I think customer experience is a little bit like the old saying, “beauty is in the eye of the beholder”. Customer experience means different things to different people, but what we can all agree on is that we are all customers, and we all have an expectation of what we expect from the organisations that we interact with. It’s also how an organisation designs and delivers the experience to their customers, through every single touch point and interaction, right from the very second that the customer first hears about them, to the point where, for whatever reason, they stop engaging with that company.
Darren: How many do you think actually put this into a plan, and have a strategy for this?
Katie: It’s growing – definitely over the last decade, the insurgence of customer experience professionals has been huge. But despite that, what’s really sad is that the data suggests we are at a 17-year low in customer satisfaction. So, in answer to your question – how many companies actually practice it deliberately? I’m not saying businesses don’t, but clearly something isn’t working. Despite the growth in CX as a conversation, companies are still massively under-resourcing it.
Darren: I imagine there are companies out there that consider customer experience to be the same thing as customer complaints.
Katie: Absolutely. Don’t get me wrong, that can be a fantastic piece of insight, and a great way to support your understanding of the customer experience, but oh my gosh, if you’re focusing on customer complaints, you’ve done something very wrong with your customer experience. That shouldn’t be where your interaction with the customer starts.
Darren: So, how important is it? I mean, UX (user experience) is a big thing in our industry – how somebody works through a website, or works through an application. It’s important to make it nice and simple for the customer to use, but CX isn’t something I hear a lot. So, how important is it for a business to actually consider – what are the financial ramifications?
How important is it to get the customer experience right?
Katie: Ah, well, that’s a great question. UX is part and parcel with customer experience, especially now that we are in such a significantly digital age. There are very few companies that don’t have a digital experience, and therefore UX is important, but CX is the umbrella that it all sits under. It’s the overarching understanding of what your customers expect, what they feel, what they want and your ability to operate on all of those levels. If you are able to tick all of those boxes, and you know your customer incredibly well, their expectations of your business, and the things that cause them frustration, you should be able to see huge cost savings in efficiencies. If you can prevent complaints from happening in the first place, and maximize customer satisfaction, you will see your customer lifetime value grow. The ability to demonstrate a return on investment on customer experience is often one of the biggest problems that a CX Department faces, because there’s a degree of correlation over causation. You can’t necessarily 100% associate a returning customer with a good customer experience, and there could be many other factors, but it’s unequivocal that the better the customer experience, the more profitable your business will be.
Darren: I see stats banded around every now and then along the lines of, “it’s five or six times more expensive to recruit a new customer, than it is to retain an existing customer”. So, from that basis alone, good customer experience obviously saves your business money – so, why do certain companies (and I think we all know who they are) only seem to care about new customers? You see it particularly with TV companies – they don’t seem to care about existing customers.
Katie: It’s frustrating, isn’t it. You see those examples where you’re a brand-new customer, and you get this fantastic new offer, which is very enticing, yet if you’ve been a customer for 10 years, you don’t get half as good a deal. That happens all the time.
Darren: Why would you say that is?
Katie: I would say because they don’t have a good customer experience lead. When companies make it hard for you to stay as a customer, there’s something significantly wrong in their customer experience strategy. Companies have to make money, of course – people aren’t in business for completely altruistic reasons. It’s not like you can say a good customer experience means giving 50% discounts every year – that’s not what it’s about. But it IS about making your customers feel valued, and feel that they are getting good deal for their money. There’s lots of ways you can do that, but recognition of loyalty is a massive one, and those companies that don’t do it will need to change their strategy, because there’s always competition, and there’s always growth.
Darren: It seems to me that in certain industries, they’re all doing it. Sky and Virgin Media are the obvious ones – they don’t seem to care that they’re alienating existing customers in exchange for new customers, because they know the options of where you can go are quite limited.
Katie: It’s frustrating, and I call those “captive customers”. So, when you’re in a position where there may be limited choice, you might stay with a company for reasons other than actually wanting to stay with that company. But customers always end up having choice – you never have to stay captive for long. Customers are fickle beings, and while there is a number of people who have real loyalty, statistics show that it often takes just two bad customer experiences to jump ship. So, it again comes down to what your version of what a bad customer experience is – but if you’re not feeling like you’re a valued customer, I would say that’s pretty high up there in a bad customer experience.
Darren: It’s interesting that two bad customer experiences is enough to make you jump ship.
Katie: Yes – if you’re loyal to a company, typically you’ll put up with one, but it’s a bit like that old saying, “fool me once, shame on you. Fool me twice, shame on me”.
Darren: This has reminded me of my parents – typically, I feel that the older generation are the ones that really get shafted by this, because they’re the ones that tend to respect loyalty, especially if it’s a company they’ve always used.
Do changing demographics reflect different values?
Katie: You make a good point. I think the demographic of customer is changing hugely. The older demographic definitely has more loyalty, whereas the younger Gen Zs are a different breed of consumer. They tend to value pace (what with the likes of next day delivery being so prominent now), but they also appreciate things we haven’t really massively considered as businesses before, like ethics and company values. While bigger companies are pretty good at what they’re able to offer, the smaller companies are able to make it really personalised, and there’s a real magic in what smaller companies can do. The sadness is when those small companies start to become more popular, and with growth, they lose all of the things that the initial customers went to them for in the first place.
Darren: Yeah, as you grow as a business, you experience problems with scaling. So, you bring in more team members, and the passion and the drive you have for your own business isn’t always reflected in them, so it’s not the same experience anymore – it’s not the same love for it. So, you can experience a dip in quality as you grow, which is frustrating. What would you recommend to other businesses to ensure that customers are getting a good experience?
Katie: The first thing is insight. So many companies ask for feedback – through surveys, for example. There are a hundred touch points across your company, whether big or small, in ways you can get insight – whether that’s through social media, complaints, interaction with your website – there’s so many data points that tells you the behaviour of your customers. Most companies are pretty good at collecting data, but very few are good at actually using it. I think the biggest tip I give consistently to the customers and clients that I support is to USE data. Collect it, analyse it, understand what it’s telling you, and then crucially, of course, act on it.
Another thing I’m really passionate about is customer journey mapping. So, this is the methodology of walking through the customer experience with your customer shoes on. You need to truly understand how your customers feel with every single interaction, every button they have to click, every letter they have to read, every phone call they have. What do customers want from that interaction – and how does it make them feel? Some companies might think that sounds a bit fluffy, but actually, it’s so crucial, because if your customers are feeling frustrated, they’re not going to come back. Alternatively, if your customers are having a seamless experience, you’re connecting with them, and building loyalty.
Darren: So, there’s a lot of crossover here between customer experience and user experience, isn’t there. Basically, if you make it really difficult for a customer to get in touch with you, then they’re probably not going to bother.
Katie: The amount of people that do it is mind blowing though, and it’s a great example of just having no real intent or thought behind the design of a website. Councils are notorious for this. Try going on a council website and finding a telephone number!
Darren: That’s not through bad design, though – that’s deliberate!
Katie: Exactly, and how frustrating is that for a customer, if they can’t contact you.
Darren: I think the main problem with websites is there’s so many people building them who don’t actually know how to market them. They might have the skills, but they don’t understand why they’re doing it, or who it’s for, and it’s infuriating, because a lot of businesses end up with websites that just don’t work, and don’t get them business.
Katie: No, and there’s a bias as well, isn’t there. We all care about our businesses, but are you actually able to offer what the customer wants? If we can truly understand our audience, we should be able to jump over a lot of the hurdles we face, such as bad website design. We can be very inward-facing creatures, and we don’t necessarily think about what the best thing is for the customer.
Darren: I hear that so often – business owners saying things like, “I don’t like the way that looks”, or “I don’t like the colour”. It’s not for you, it’s for your target market. I had one guy that wanted a website to be a particular shade of blue because he was an Everton fan, and it didn’t relate to the market he was in at all – he just wanted it blue, because of the football team he supported. It’s like people who refuse to use Facebook Ads because they don’t like Facebook – you have to remember that a lot of your customers WILL be on Facebook, whether you like it or not. You’re basically closing the door on a load of customers who could get in touch with you.
Katie: This happens all the time when businesses are making decisions, and again it comes down to the whole collection and use of insight. It’s not always easy, which is why you need skilled professionals who are disciplined in the practice of customer experience, to help you truly understand the data and what it’s telling you.
Darren: Well, we’re almost out of time, and that seems like a good way to segue into this next point – if somebody’s listening and thinking you could be a great help to them, what’s the best way for them to get in touch?
Katie: LinkedIn is probably the easiest way! You can also go on my website, CULTIVATE – all my contact details are on there, and I’m always happy to have a quick chat.
Darren: Thank you very much for being on this podcast – I’ve loved talking to somebody who knows as much about complaining as I do!
Katie: Thank you for having me!
After having founded her company, CULTIVATE, in 2020, Katie has since gone on to co-author the Amazon No #1 best seller, ‘Customer Experience 2’, as well as ranking in the top 20 CX influencers in 2023. Along with regularly contributing to professional publications and conferences around the world, she also managed to find the time to appear on a MasterChef, making it to the quarter finals!
You can find out more about Katie, or contact her, here:
About your host:
Darren has worked within digital marketing since the last century, and was the first in-house web designer for video games retailer GAME in the UK, known as Electronics Boutique in the States. After co-founding his own agency, Engage Web, in 2009, Darren has worked with clients around the world, including Australia, Canada and the USA.
Engaging Marketeer: https://engagingmarketeer.com
Engage Web: https://www.engageweb.co.uk