Insights

The benefits of Human Experience and why it matters to your business strategy

By

Actual Experience

Technology leaders like to believe that Human Experience is a new concept. Certainly the term itself is new, but before our lives became reliant on the digital world, people gravitated to businesses with the best working experience and customer experience. Companies that got this experience right built highly productive workforces and established successful brands over decades and centuries.

These days, people spend an average of six and a half hours online daily, as both part of their personal lives and at work. The online services we interact with as part of work and daily life have become integral to how we live and work, so the brands we use are under increasing scrutiny to provide the best experience they can. We call this the experience economy, and it is not a new concept.

Authors B. Joseph Pine II and James H. Gilmore summarized the experience economy in July 1998: “From now on, leading-edge companies – whether they sell to consumers or businesses – will find that the next competitive battleground lies in staging experiences.”

Over the last two decades, the experience economy has become the expectation. Not only are leading-edge companies expected to deliver a fantastic experience, almost all companies are expected to deliver a positively-charged experience to their customers.

So, what is Human Experience?

 We define Human Experience (HX) here at Actual as the feeling a person has when interacting with the digital world. Capturing that feeling is vital to successfully managing the experience of employees and customers. A good human experience is effortlessly smooth - so much so that we don’t even notice the interaction. A bad one might be slow, stuttering and full of friction. It causes frustration and lack of faith in a company or brand.

Human experience covers the experiences of your customers and your employees, and as the experience economy continues to thrive, it’s vital now more than ever to exceed your customers’ expectations. This is especially true as technology forces roles and expectations to evolve, pushing businesses to adapt as quickly as they can. Across the globe, companies are building out their HX agendas and the technologies needed to support them.

 

How Human Experience affects your customers - and how that affects you

 Our expectation of a positive experience has evolved as we adapt to an always-on digital universe full of social media, instant messaging and mobile apps - so it’s essential for brands to distinguish themselves at all touch points. A recent survey from Bain found that 80% of customers chose to leave a brand due to a poor experience. In the digital age, where transparency is high and products and services are quickly turned into commodities, a great experience is often a company’s only point of differentiation, making brands with stellar experience management stand out from the crowd. Customers’ expectations are driven by their best experiences ever, not their average ones. Even if their best experience wasn’t with your brand, it still affects their perception of your average. Despite this, many brands seem to think that success lies in being “good enough”.

Customers’ expectations are driven by their best experiences ever, not their average ones.

Brands must up the ante on their digital efforts to keep pace with customers, who now expect easy, frictionless experiences. Enterprises across the world prioritise improving digital experiences, and building out their digital ecosystem is the primary vehicle to facilitate this. However, customers’ expectations are a moving target, and many companies find themselves slipping increasingly further behind despite significant efforts to catch up.

Businesses get that digital is everything. Their brands will be rated based on the experiences they create for their customers. Almost everyone understands that digital strategy is the key to driving human experience, and that HX is the key to competing in the age of the customer. However, companies are complacent. Improvements are made in cautious increments, while our expectations as customers grow at a lightning pace. Many companies do not have the right structure to take ownership of HX, and therefore are unable to link digital strategy investment to better business outcomes.

 

Take care of your employees and they’ll take care of your customers

As digital transformation shifts how businesses operate to adapt to customer expectations, your employees’ jobs will be affected, too. Moving workloads to an online service sets up the risk for friction, frustration and dissatisfaction, leading to decreased performance and wasted payroll. Managed poorly, your business will suffer.

While most organisations have more data than ever to help identify and solve problems, People & Culture and business leaders continue to be surprised by experience gaps in their workforce. According to salary.com, 69 percent of CEOs believe they are delivering a superior employee experience, but a Gallup study found that employee engagement remains at just 34 percent. This is a huge gap between expectation and reality.

Customer experience has long been at the forefront of the experience economy, but treating employees like customers and understanding the experience from the employee’s perspective is still a work in progress for many companies, despite a prevailing body of research that suggests employee experience is the key to engagement, performance, retention, and, ultimately, business growth.

The best People & Culture leaders today must care as much – or more – about employees as they do customers. They cannot afford to be cautious. Human Experience Management is not about making minor improvements, but redesigning experiences with the person – employee or customer – in mind across every touchpoint.

 

Improving experiences improves your business 

A 2016 Forrester survey of customer experience decision-makers highlighted the pressure on companies to reimagine the experiences they delivered to customers. Almost three quarters of respondents suggested this was due to the changing digital economy. Half reported that creating a strategy for implementing digital transformation is a high or critical business priority. Even so, it transpires that these efforts are falling short of customer expectations.

While 52% of respondents believed that they are ahead of their competitors or “best in class” in their industries, only 7% are actually exceeding customers’ expectations. In 2015, 78% of companies felt that they “met or exceeded” customers’ expectations, which dropped 4 points to 74% in 2016, as customers’ use of digital has progressed beyond the bulk of companies that serve them. Almost a quarter of respondents who believed they “do not meet customer expectations” still believed that it was “good enough.” Given the growing trend of customers to drop brands offering poor experience, “good enough” is no longer enough to keep customer loyalty.

A group of high performers within the respondent base, roughly 17.8% of the companies surveyed, used their customer experience to drive brand differentiation. Exceeding their customers’ expectations produced better success rates across a number of key business metrics: differentiation (+22%), improved brand relevance (+21%), customer satisfaction (+16%), customer loyalty (+17%), revenues (+11%), scale and efficiency (+22%), ROI (+14%), and cost savings (+6%). These respondents reported that they are able to meet or exceed their customers’ expectations for customer experience 91% of the time — 21 percentage points higher than their peers.

The benefits of human experience management aren’t just reflected in customer behaviour, either. Employees today want and expect their work experience to mirror their consumer experiences, with technology easing the way. Companies with great employee experience outperformed the S&P 500 by 122 percent across the board, according to a study from Glassdoor. Companies with highly engaged workforces are 21 percent more profitable than those with poor engagement, so why is employee experience being ignored?

Leading companies are starting to recognize the connection between an employee’s experience and a customer’s one. Just over half of business leaders surveyed planned to create individualized employee experiences comparable to consumer experiences in the next two years.

 

The final word

Listening to the voice of the customer is vital when customers can simply move to the next brand. As we all adapt to a digital age, we come to expect the same great experiences offered by brands in our home life in our work lives, too, and when our work life becomes frustrating, our satisfaction drops.

Companies who can see the pain points of human experience for both their customers and employees and actively work to improve them rise head and shoulders above their peers, making them more attractive to customers and better to work for. Increased performance from employees and increased attention from customers increases revenue, loyalty and satisfaction across the board.

With the numbers showing how vital human experience management is, can anyone in this hyper-competitive economy really afford to say they’re just “good enough”?

See Human Experience Management at work. Read our case study where we helped DHL manage the experience of both their employees and customers.