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Four Types of Customer Experiences for Competitive Advantage

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Want to improve your customers’ experience? Try these connected strategies.

What’s the secret to a winning business model and long-term competitive advantage? It’s not just about technology, products and services. Your customer experience may just be the ultimate competitive advantage.

Strategy and innovation experts Nicolaj Siggelkow and Christian Terwiesch just published a new book called Connected Strategy: Building Continuous Customer Relationships for Competitive Advantage.  The authors contend that at every step of the customer experiences continuum there’s an opportunity to either delight customers, or uncover a pain point or negative experience for them that can be turned into an opportunity.

Customer “journey maps” have been around a long time. Understanding the steps customers go through allows you to simplify or add value within a step or across the full journey.  Siggelkow and Terwiesch distinguish three phases of any customer journey:

  • Recognize–the part of the journey where a latent need of the customer arises and either the customer or the firm is made aware of it
  • Request–the part of the journey where the need is translated into a request for a solution to the particular need
  • Respond–the part of the journey where the customer receives and experiences the solution.

Their research into connected strategies revealed four distinct approaches that organizations use to reduce the friction within the customer journey–i.e., four types of connected customer experiences. These customer experiences are distinguished Even when you deliver on these customer experiences, there’s another element critical to create a truly connected customer relationship: Repeat. If a firm is able to learn from repeated interactions with a customer, it can become better with the Recognize, Request and Response sequence. What makes the repeat dimension so powerful is that it involves positive feedback effects that, over time, can create a tremendous, sustainable competitive advantage.

A tight fit between customer needs and available products–the high degree of personalization–leads to more value, either in the form of higher willingness-to-pay Soren Kaplan is the bestselling and award-winning author of Leapfrogging and The Invisible Advantage, an affiliated professor at USC’s Center for Effective Organizations, a former corporate executive, and a co-founder of UpBOARD. He has been recognized by the Thinkers50 as one of the world’s top keynote speakers and thought leaders in business strategy and innovation.