New IPA report reveals formula to maximise value of Customer Experience

A new IPA report investigates the complexities and tensions surrounding Customer Experience to provide a four-step framework and a new formula to unlock the value of this significant area.

The report was launched as part of the free, virtual IPA-led EffWorks Global 2020 Conference by report author, former Samsung analytics expert Nick Milne.

Customer Experience is complex, but the ‘Positive Brand Friction’ report demonstrates that getting Customer Experience right is increasingly key to unlocking the growth potential of many organisations. According to the findings, when managed effectively, it delivers value and distinctiveness that is seen in commercial performance and doesn’t have to be considered as simply a cost centre.

Based on in-depth interviews and online workshops with CX consultancies, marketing, media, advertising and marketing-services agencies, and brands (including L’Oreal, Lloyds Banking Group, Samsung, Eve, Centrica, TfL and more), this report highlights the tensions which make Customer Experience a complex area to master, including:

  • Customer Experience is designed around the parts of the organisation, rather than around the customer.
  • Customer Experience is ‘owned’ by different parts of the organisation, making collaboration and agile decision-making increasingly important.
  • There is commercial tension between identifiable efficiency gains through cost reduction, and more variable returns through an effectiveness and value-growth focus.
  • Customer Experience investment spreads across both CAPEX and OPEX, with Marketing owned investment often within OPEX. This means that it can be harder for Marketing to deliver longer-term value, if changes to commercial performance mean that OPEX is cut.

In the process of segmenting Customer Experience, the report uncovers the concept of ‘positive brand friction’ and the value that this can bring to unlocking growth potential. This is something the report defines as ‘purposefully slowing the experience down in a way that accentuates the brand and positively impacts the experience without making it harder for the customer’.

With this idea of positive brand friction in mind, it goes on to outline four focus areas to help navigate and overcome the identified Customer Experience tensions.

  • Experience Intelligence and Measurement: a measurement, reporting and insight ecosystem with the purpose of identifying areas of opportunity to improve the experience, predict the benefit, and measure the outcome.
  • Experience Collaboration: introducing organisational agility based around a strong customer focus, moving away from the concept of an individual owner of Experience to that of an enterprise-wide approach.
  • Brand Friction and Effort Balance: the evolution of experiences to ensure the right balance of positive brand friction without impacting negatively on customer effort. This includes a new formula that can calculate the Experience Value.
  • Experience Leadership, Influence and Accountability: Marketing to develop its role as the Experience leader and influencer, helping the organisation deliver both customer and business value. This last point is critical, argues the report. If we can make the case that creating moments of positive brand friction is indeed key to unlocking growth potential, then Marketing needs to step up and become more influential in their organisation’s Customer Experience programme.

Says report author Nick Milne, Founder and Director, Go Ignite Consulting: “Due to COVID-19, organisations, more than ever, need to be more aligned, more integrated, more agile, and really clear around how to best use all growth levers to aid their financial recovery. From a Marketing perspective this throws open the challenge of whether organisations are being as impactful as they can be in delivering the right distinctive key moments across all paid and earned touchpoints with customers. Customer Experience is a major lever to that growth. It is complex, but we hope this framework of where organisations should look to unlock its potential and change the culture of their organisations will help to drive their short and long-term success.”

With Customer Experience being the buzz phrase of the moment, we were curious to explore the role of brand thinking and customer insight in this new discipline. As we can see from this report, Customer Experience needs to complement and build on brand marketing and communications to provide an integrated and memorable consumer proposition. Indeed, brand understanding lies at the heart of the Experience Value equation and can provide invaluable, predictable incremental returns.

Janet Hull, Director of Marketing Strategy, IPA
Download Full Report here

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