Gaining a Competitive Edge at the Point of Interaction
A critical aspect of customer retention are the key touch points where customers see, hear, feel, taste, touch, and experience your products, services, people, environment, processes, procedures, policies, and attitudes.
This is extremely true in many of today’s markets, where intense competition and commodity functions and features of competing product offers lead to price-driven and promotion-driven marketing tactics.
As I have written numerous times, the experiences customers receive through their interactions with your organization will make or break your ability to develop a long-term relationship with them. The experiences customers receive will also impact your immediate sales and short-term relationships, as well as any hope you have of turning casual customers into loyal ones.
Competitive advantages are eroding faster than ever in today’s world.
Great products, top-notch technologies, and superb customer service are merely the cost of entry into today’s markets. How do you get a sustainable edge when all of these supposedly competitive advantages are easily replicated?
One route to a sustainable competitive edge is how your organization interacts with customers.
According to the authors of the article Beyond Better Products: Capturing Value in Customer Interactions (MIT Sloan Management Review), “customers often value how they interact with their suppliers as much or more than what they actually buy.” Their conclusions were based on data collected from more than 1,500 senior executives in interviews and discussion groups on the topic “why do your customers choose to buy from you rather than your competitors?”
I believe the authors are correct, especially when it comes to services and non-tangible purchases (creative services from an agency, legal advice from a law firm, recommendations and therapies from a health care provider, etc.).
Taking this further, authors Jeffrey F. Rayport and Bernard J. Jaworski argue in their book Best Face Forward: Why Companies Must Improve Their Service Interfaces With Customers that overwhelmingly intense competition and markets where products and services become commodities overnight have combined to make superior interface capabilities the only lasting competitive advantage.
According to them, companies must create more effective (yield a better quality customer interaction) and more efficient (incent a better interaction at a lower cost per interaction) interfaces with customers to create and sustain true competitive advantages. Other than their overuse of the word interfaces (I much prefer interactions, as it is more consumer friendly and less of a technical lingo), these authors are on the right track.
If you are interested in learning more about their views, there is an excellent CMO Magazine audio interview with former Harvard Business School Professor Rayport. It is well worth listening to this 30-minute interview as Rayport explores why the points of interactions that determine how customers view a company has become the new frontier of competitive advantage.
At the end of the day, the customer experiences at every point of interaction with your organization create the brand experience. To keep customers returning, these unique brand experiences must be customer-focused and virtually imitation proof.
Doing so not only creates a unique corporate brand that cannot be copied, but simultaneously creates strong emotional and rational reasons for your good customers to continuing doing business with you.
Your points of interaction with customers may be the only competitive advantage you have. They may also be your weakest points. The old proverb about a chain being only as strong as its weakest link applies readily to the strength of your customer relationships and the points of interaction upon which these relationships are built.
The bottom line is: if you are not delivering the right kinds of customer experiences at every point of interaction, all your other relationship building efforts will be for naught.
KEY POINT: one route to a sustainable competitive edge is how your organization interacts with customers.
TAKING ACTION: have your senior managers brainstorm and develop a list of answers to the question “why are your customers buying from you and not from your competitors?” Analyze these responses in terms of product features/functions and the ways customers interact with your organization.
Which of your customer interfaces are machine driven? Which are people driven? Which are a combination of the two? Survey your key customers to ascertain if these interfaces are delivering the quality of interactions they want and, if not, how would they like to see changes made?
Give us a call or an email to discuss your customer interactions strategy. We can help you analyze your needs and work with you to create better interactions that cannot be copied or replicated. You may also benefit from our two-day workshop on Innovative Strategies for Reaching (and Keeping) Good Customers or from our half-day interactive program Customer Retention: Creating Value for Customers in the Service Sector.
This article is excerpted from our book The Best of the Monday Morning Marketing Memo, available at Amazon in paperback ($13.88) and Kindle formats ($3.88).