Wednesday 13 May 2015

Experience as the competitive advantage

User experience, customer experience... these mean different things in business but for the consumer - the individual, the person - who encounters a business, it's all just the experience of dealing with your company.

I received an email today from the Cheap Energy Club, part of Martin Lewis' Money Saving Expert. This is how it started:

You asked us to tell you when you’re paying too much on your energy bills

About 7 seconds later, I was looking at a list of energy companies and the amount I would save, compared with what I pay today, as well as other bits of information.

Crucially, it also told me what other Cheap Energy Club members were saying about aspects of their experience when it fell outside the norm, either good or bad; or if the provider had too few customers for a reliable reading.

There is a good piece by Seth Godin today about becoming unsubstitutable. Put simply, if there's no discernible difference between what you and someone else is offering, the customer will opt for the cheaper. However, when you're in the business of providing a commodity like gas or electricity, you can only compete on price up to the point where you aren't providing a worthwhile return on investment. So the trick is to differentiate, to stop being a commodity. I switched to Ovo Energy a year ago, when I moved home, not only because it was cheaper than the alternatives but because consumers rated the experience highly.

Today, as I looked down the list of cheaper alternatives, the decision was easy. I was not prepared to give up the excellent experience of buying energy from Ovo in return for a cheaper price. Effectively, I'm prepared to pay something like 10-15% more for it, so that I don't have to deal with the problems of other utilities:
  • "in recent months our users have reported major issues with its switching process and customer service."
  • "difficulties contacting by phone or email and in some cases it has not completed requested switches"
So whether you're responsible for the handling of calls or the design of an app, you are today fundamentally implicated in the long term value of your customer.