Lesson 3: Customer expectations rise with competitor offerings

A KAE customer experience masterclass

In the previous KAE customer experience masterclass lesson 2: “You don’t need to constantly wow your customers to drive brand advocacy”, we discussed the customer experience economic value sweet spot, in which brands can maximise economic value by meeting and only slightly exceeding customer expectation. This lesson will explore customer expectations – how they change and why they change, and the best ways to anticipate shifts in customer experience.

Throughout customer experience reports and articles, you’re likely to read headlines such as…

Forbes, 2019

Gladly, 2018

TTEC, 2019

And indeed, over the last decade, we have seen shifts in customers’ expectations. A common belief is that rising expectations are a result of shifting consumer mindset or collective psyche, for example – “consumers are becoming more impatient” or “consumers want more personalisation”. However, in this lesson, we argue that customer expectations are instead led by developments in product-lines, service-lines and/or wider value propositions that are being offered in marketplaces.

Take for example, banking. In the last decade, the competitive landscape has been flooded with new challenger banks and digital-only banks, such as Metro Bank, Monzo and Starling. Due to their agile nature, these new banks are able to compete with the large incumbent banks on services, but also customer experience. As a result of these new competitive offerings, customers now have higher expectations – to be able to perform many self-service actions through their mobile app, or to be able to contact a customer service agent via a chat service and receive a response within minutes.

Another example is in the e-commerce industry. Amazon’s introduction of next-day delivery, and then same-day delivery, resulted in a recalibration of customer expectations of standard delivery times. A similar change is happening as a result of new auto-replenishment options. Other e-commerce brands now have to quickly adapt and evolve to these new expectations, in order to compete on experience. But crucially, the competitive offering is what changed first, and new customer expectations followed.

In contrast, there are other sectors in which the competitive offering has not drastically changed in the last decade. The first example being public healthcare in the UK. Aside from a separate sphere of private healthcare, in which there is tight competition on experience, the centralised nature of the public sphere means that competition is minimal. As such, expectations of experience are more or less similar to those held ten years ago – customers expect there to be a fairly long waiting time, and do not expect a high level of personalisation or user-friendly apps.

Another example might be bowling. The basic premise of bowling holds, but different venues and brands have not competed on experience, but instead on price, location and inclusivity to all customer segments (bowling leaguers, families with children, youths and seniors[1]). Hence, customer expectations of experience have remained largely unchanged. We still expect the same – renting a pair of ugly shoes, still warm from another patron, buying some overpriced fizzy drinks and junk food, being allocated a sticky bowling alley at which point you struggle to type in your teams names on the screen that shows the scores. You bowl, the pins (hopefully) fall down, the screen shows a cheesy animation, and then the next player steps up. The experience is far from exceptional, yet many customers love this activity and recommend venues to friends regardless – their basic expectations of bowling have been met and maybe even slightly exceeded.

So how should brands track, or even pre-empt customer expectations? The key is competitive intelligence – what are you competitors planning to do in the next year? Which brands are seen as best-in-class, why is this and how are they differentiating themselves? How do you compare, and how can you match your competitors’ offering? By closely following competitors’ activity and plans, you can effectively pre-empt how your customers expectations are likely to change in the near future. For example, if several of your major competitors are planning to add a new functionality or features to their mobile app, this may reset customer expectations and it is therefore important that your brand focuses its efforts on meeting these expectations, and where possible exceeding them.

At KAE, we believe that by studying competitive best practise, we can help our clients become market leaders in customer experience. Please get in touch with us at hello@kae.com to understand how you can better identify and predict ways customer expectations might be impacted by your competitors.

[1] https://www.bplans.com/bowling_center_business_plan/market_