Nov 17, 2022
Three Principles That Elevate the Customer Experience and Enhance Customer Lifetime Value
This week, we welcome Dennis Wakabayashi to the Digitally Irresistible podcast. Known as the global voice of CX, Dennis is a renowned thought leader on the topic of customer experience. He teaches digital marketing at the University of Wisconsin-Madison and is also a distinguished speaker at the University of Oklahoma.
In 2021, Dennis was a keynote speaker at the World Marketing Summit in Turkey, the West African CX summit, and the LATAM CX conference; a workshop leader at Customer Contact week in the U.S.; and the host and MC of CXS Canada’s largest annual Customer Experience event. In 2022, he was named CX influencer for Expo 2020 Dubai.
On this episode, we tap into Dennis’ expertise and discuss how to create a profitable customer experience based on the insights he shares in his book, “Laying Golden Eggs: How to Create Profitable Customer Experiences.”
The Writing Was on the Wall for a Creative Career
Growing up in the inner city, street art provided an outlet for Dennis to express his creativity and transform his neighborhood streets into vibrant sources of inspiration. One day he completed a mural that read, “greatness can start from anywhere.” This garnered national recognition and features on news programs that caught the eye of the CEO of a prominent advertising agency. The CEO appreciated Dennis’ talent and hired him as a production artist. Over the years, Dennis worked his way up to art director, strategist, creative director, and ultimately senior vice president of strategy for a national ad agency.
Through it all, Dennis maintained his curiosity to investigate what makes advertising and marketing effective and profitable. Today, as an instructor, speaker, and author he shares his thoughts and techniques so others can do the same.
Getting Omnichannel CX Right
The modern omnichannel customer service environment adds complexity and opportunity to the customer journey that didn’t exist in years past. It can be a lot for brands to manage omnichannel CX in ways that align with their corporate culture and growth model while limiting costs and maximizing returns.
This can lead to inconsistencies throughout the customer journey across different lines of business or even from one customer to the next. When organizations create a unified customer experience based on values that matter to them, they can better meet customer expectations and drive consistent revenue.
3 Components of a Profitable Customer Experience
In his book, “Laying Golden Eggs: How to Create Profitable Customer Experiences,” Dennis separates the customer experience into three primary components: reputation, reach, and relationship. He finds that prioritizing these three elements throughout the customer journey provides opportunities to increase customer lifetime value, boost loyalty, and support long-term revenue gains.
These three components unify the important touchpoints that connect a brand to a customer. In the modern digital world, social media and algorithms play a significant role in each of these three elements of the customer experience.
While working for a national burger chain, Dennis stood across the street from one of the restaurants and typed “burgers near me” into his phone. The search results didn’t show the restaurant he worked for, even though he stood only a few feet away.
Reputation is everything to a brand and its visibility to customers. Google wants to show you the good burgers near you, not just any burger.
When Dennis later started executing for that brand, he used social media to share great things about the burger chain and build its reputation. Then he introduced product promotions. This strategy yielded more profitable results than simply posting ads.
Reputation plays a powerful role in today’s customer experience even though it's not as tangible to measure as other aspects of the customer experience.
Customers are willing to go out of their way to buy from brands with great reputations, even if their pricing is a little higher than their competition. This creates profitable customer experiences. Conversely, brands that lack a good reputation are hard for customers to find, especially when Google doesn’t recommend them in search results.
This leads to the second part of the experience.
In the burger situation, Dennis found that the promotions they offered through social media (such as a dollar off) would generate a huge backlash of criticisms of the restaurant or the burgers.
Although this is to be expected to a certain degree due to the nature of expression on social media, Dennis recognized the importance of building a strong reputation before focusing on the brand’s reach through ads or promotions.
The combination of a good reputation and broad reach reduced customer care costs and increased sales for the burger chain through social media monitoring and responding promptly to negative comments on the internet.
Dennis finds there is a strong correlation between the strength of a brand’s reputation and the degree to which they can reach customers.
Because this form of scaled communication relies on algorithms to connect with people online, a good reputation is essential in order to reach customers authentically. This builds a long-term customer relationship that supports greater customer lifetime value and revenue.
In addition to reaching a wide audience, reach also encompasses omnichannel customer experiences that offer myriad opportunities for brands to connect with customers through various channels.
By building a strong reputation, reaching customers across a vast number of channels, and developing a relationship with them through the use of technology, brands essentially adopt a business model that more closely resembles a subscription model than retail.
In this process, loyalty forms a key attribute of the relationship or the experiences that brands have with customers at scale.
This leads to the third and final pillar, relationship.
With so much content across all these digital channels, brands must think about how to develop and sustain relationships with customers.
When a brand wants to drive incremental revenue year over year, building long-term customer relationships is one of the best CX strategies they can deploy. These relationships are cultivated well through email and loyalty programs, but many brands have also been able to use social media to convert connections to e-commerce opportunities.
Digital channels form the main element of most customer experience strategies that drive consistent revenue at scale through a strong customer relationship across industries.
The bigger the brand, the more customers they have, the more integrated their customers are into their technology, and the more difficult it is to advance the additional technological opportunities that are available to them.
Newer companies and startups, on the other hand, tend to have an advantage in building relationships through digital channels because they're not built on legacy technology systems. Instead, they start with a new technology base to acquire customers, build relationships, develop a social presence, and build their reputation.
Dennis finds that business to business brands tend to move a little faster in developing their customer experience because they're typically inbound marketing organizations, while business to consumer brands enjoy greater opportunities for profitability although they implement CX a little slower.
The Role of the Customer Journey
The customer journey should connect the reputation, reach, and relationship between a customer and a brand. These three principles are connected by transparent, actionable data to create profitable customer experiences at scale for any organization, large or small.
What Dennis Does for Fun
Dennis’ family and coworkers would say work is where Dennis finds his fun, because he's always working.
But that all changed when Dennis received a virtual reality (VR) headset from his family for his birthday. Now, his favorite pastime is playing Beat Saber—a rhythm and music VR game set in a futuristic world.
Watch the video here.
Read the blog post here.