It seems no matter whom I am talking with in business lately, a key theme is that customer expectations are higher and changing more rapidly than ever before. And as a result, the difference between winners and losers is becoming more dramatic. This reality seems to have sped up in the last 24 months within most industries due to technology advancements and shifts in what customers want and expect in their experience. When easier and more efficient interactions take place in our day-to-day dealings with product and service providers, our expectations quickly change for everyone. We want the least amount of effort with the best outcome, period. The winners in today’s marketplace are the corporate leaders who anchor themselves around the customer and ensure it influences daily decision making at every level of the organization.
Some evidence of the marketplace disruption that has been evolving for the last several decades is showcased in the continued shrinking of the average time companies are spending on the S&P 500 Index:
There is a concept that was coined by Joseph Schumpeter in the 1940’s called “creative destruction” that aptly fits the type of market changes we are seeing today. Simply put, creative destruction refers to the incessant product and process innovation mechanism by which new products and services replace old. It’s good for the economy and good for customers. Companies that win during times of heavy creative destruction do so by maniacally focusing on the needs of their customers. Let’s look at an example of a company who has focused on its customers consistently over time, and evolved its operations and employee experience to meet the ever-changing demands of the marketplace.
Southwest Airlines
Many have written about Southwest Airlines’ ability to focus on who they serve and what they solve. In the late ’60s and ’70s, Herb Kelleher established a clear target customer around the cost-conscious, no frills traveler who was looking for the best value and experience for their dollar. Over the years, the company was able to put many operating principles in place to support their customer experience goals, including:
- One type of airplane to support a consistent experience and reduce operating expenses
- Point-to-point transit minimizing delays and lost luggage
- Ticketless operation for efficiency and ease
- Horizontal organization promoting teamwork and employee empowerment
What Southwest has been able to do is maintain its focus on its core customer base and lead its organization to deliver on their needs over time. As expectations and technology have forced them to adapt, they have done so in a way that empowers and motivates employees. As Tony Hsieh, CEO of Zappos, said, “Get the culture right and success happens naturally on its own.” The culture of “LUV” at Southwest is about a caring, dedicated, exuberant, fun, and rewarding work environment that has allowed Southwest to hold NPS scores in the 60s – consistently beating out other major airline providers. Additionally, they have been profitable for 44 consecutive years, underscoring the connection that customer experience leads to financial success. Because Southwest has consistently put who they serve and what they solve at the heart of their company, they stand out as a winner against their competitors (even more starkly evidenced by some of the very unfortunate recent airline stories making the headlines).
With the Southwest example of good, and many cautionary tales to learn from as well (see Sears or Dex Media as two examples), you may want to consider taking our Customer Experience Maturity Quiz to help you determine your organization’s health around a set of key factors, such as:
- Does your organization have a customer strategy that acts as your North Star?
- Do you have a measurement system that helps you understand customer perception?
- How well do you understand your customers’ journey and critical moments?
If you have questions or thoughts about your results, the team at Aveus would be happy to discuss them with you.
