Tuesday, September 3, 2013

Customer Experience Crisis: Waning Customer Experience Will Bring Wave of Change

If there’s one reason we have done better than of our peers in the Internet space over the last six years, it is because we have focused like a laser on customer experience, and that really does matter, I think, in any business. It certainly matters online, where word of mouth is so very, very powerful.
                                                         Jeff Bezos

photo credit: niallkennedy via photopin cc
This quote from Amazon founder and CEO Jeff Bezos represents a sort of "north star" for me--user experience is a guiding principle upon which I set my professional compass. Give people what they want and make it easy, and you succeed. At least, that's the theory, but in the last few years, I have come to feel my compass does not always align to the actions of today's most popular online services. Some have lost the customer experience religion, and I predict a few of our top digital services may soon have "come to Jesus moments" with their increasingly annoyed and neglected customer bases.

The user experience of many top sites and services has become mediocre, and this is happening at a time when the tools of competition have never been more available or less expensive. The growth of social and mobile technology, advent of wearable tech, arrival of the sharing economy, rise of cloud services and ever-lowering cost of developing scalable digital products will bring new and better alternatives. I have been lucky to attend many of the New York Tech Meetups in the past year, and the creativity, power and polish of these tiny startups demonstrate that there are many capable Davids looking to defeat today's overly confident Goliaths.

I predict a wave of change in the next several years. Either the functionality and usability of the sites and tools we all love and use will evolve rapidly, or consumers will soon adopt new sites and tools to love and use. Some will argue the companies I cite as examples have grown too big and have too much traffic and too many users to fail, and to them I say this: Monster.com, Myspace, Goecities, Prodigy, AOL and Excite. This last site is an excellent example, because many people today would be hard pressed to recall Excite, but the company reached a peak market valuation of $35 billion in 1999, more than LinkedIn's or Yahoo's market cap today. No one is safe--even the most popular online services can lose loyal customers to competitors offering better customer experience.

It is hard to understand why some businesses need to relearn the importance of customer experience when the lessons are still so fresh. Bezos' observation tells the story of why some online firms succeeded and others failed, both in the halcyon days of the dot-com boom and the distressing years following the bust. Prodigy and Excite, with their pages full of blinking and distracting ads, are gone, while Google's clean, white interface lives on. A thousand e-tailers went bust, but the transparent consumer ratings and one-click purchasing of Amazon earns ever more customers and retail dollars.

But even if one is not familiar with recent history, the importance of customer experience is evidenced by a constant barrage of studies and surveys:

It is obvious customer experience is paramount, but someone needs to remind today's most popular web sites and digital services. I think three services are on the bubble in the next three to five years, and the rest of this week I will explore how Groupon, Yelp and Facebook may be facing customer experience crises that could hurt their bottom line and limit future growth potential.

These three are hardly alone--in recent months I've had frustrating experiences with the web sites and customer service processes with a variety of firms, from giants like Sprint and Comcast to tiny upstarts like Pebble. Still, Groupon, Yelp and Facebook are good companies to focus on because all have risen quickly and have much to lose if the companies do not rapidly improve customer experience.

In the next few days, I hope the lessons learned about these three companies may provide you with some guidance and ideas to implement at your own organizations. As always, I welcome your input about the companies you see as being at risk due to disappointing customer experience and the ways you feel customer experience will affect business in the coming years.


3 comments:

csrollyson said...

@Augie, thanks for a useful summary of how neither old brands nor tech firms get customer experience. I think what it boils down to in many cases is us v. them (company v. customer). Companies need to discover that customers are very trustworthy, especially in public. They must lead in most cases. In case useful, I riffed on Facebook's trust issues last year. Lack of trust with users is their biggest barrier to monetizing the immense value they are creating.

csrollyson said...

@Augie, thanks for a useful summary of how neither old brands nor tech firms get customer experience. I think what it boils down to in many cases is us v. them (company v. customer). Companies need to discover that customers are very trustworthy, especially in public. They must lead in most cases. In case useful, I riffed on Facebook's trust issues last year. Lack of trust with users is their biggest barrier to monetizing the immense value they are creating.

Augie Ray said...

Thanks for the comment and the link, Christopher. "The community has to feel that Facebook wants to serve it. Facebook talks the talk but has not walked the walk. There’s no faking here." Very true!