Customers are central to the success of a company. Period. And what we’ve discovered over the last couple decades is that the more we focus on customers, with a distinct purpose of improving their experiences, the more it leads to positive performance outcomes- revenues, profitability, shareholder value, among the hard ones, and loyalty, word of mouth or word of “mouse” buzz, among the soft ones.
Experience is the Competitive Differentiator
The experience itself has become a competitive differentiator because, as Pines and Gilmore (1998)1 have noted, goods and services have become commoditized. In response to this commoditization, companies are trying to separate themselves by such economic offerings as “wow” moments: speedy service responses, points of sale engagement, personalized communications, immediate benefits (like coupons), and numerous others. In short, companies are trying to be the best at crafting a distinctive CX strategy. And, as more and more companies try to do this, we will see overcrowding. Is it possible, therefore, for a company’s CX Strategy itself to become a commodity?
Red Ocean vs. Blue Ocean
This is a red ocean scenario in which companies are competing intensely with others. Their goods and services are indistinguishable, customer experience boundaries are well defined (and, if they are not, they’re copied from others), and improvements to experiences are incremental at best. Companies end up spinning their wheels trying to stand out from the competition, but they can’t because of the red ocean mindset.
The blue ocean approach calls for a radical shift away from a commodity “me too” paradigm. It challenges us to leap frog into the future. While there is no universal blueprint to deliver blue ocean strategies, we believe that customer experience professionals and other corporate executives should be asking the blue ocean question:
“What CX strategy can we design that makes it so distinctive that it would give us advantages that would make the competition irrelevant?”
It takes out of the box thinking and creative space to begin to ask questions and change the course of a company’s template CX strategy. The reward is worth the effort, however, because a company that enters the blue ocean can then think less about how to keep its head above water and more about how to keep reaching the horizon of the wide ocean.
1B. Joseph Pine II and James H. Gilmore , “Welcome to the Experience Economy”, Harvard Business Review, 1998
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Feeling stuck in the red ocean?
Check your knowledge about Customer Experience with CXU’s Online CX Quotient.