Customer Touchstone
Share This

The Principles of Human Customer Experience

There are a wide range of psychologies involved in the way we experience the world as customers.

There are often of course, multiple channels or touch points which will shape our opinions and experiences. It might be seeing an advert, reading a press release, looking at a review on a social media website, talking to a company representative, going to a shop or store, all the way to buying the product or service. All these and more will affect us for good or for not so good.

Matt, calls them principles and has identified ten of them as being critical to customer experience;

  • Reflect the Customer’s Identity
  • Satisfy a Customer’s Higher Objective
  • Leave Nothing to Chance
  • Set and Meet Expectations
  • Effortless
  • Stress Free
  • Indulge the Senses
  • Be Socially Engaging
  • Put Customers in Control
  • Consider their Emotions

I’m going to break down and talk about what I consider to be the most important principles, meanwhile…

A quick story

I recently received a letter, in this case the letter came from a fairly well known energy provider. The letter explained how they would deliver the very best and world class service, plus I would save money. All I had to do was switch from my current supplier to them and I would save money.

So, what do you think I did?

I put the letter in the bin.

Why did I put the letter in the bin?

Because a few years earlier, I had given them my custom and was ripped off or conned. Yes, I got some money back but it was difficult to imagine a worse service. If I were to compare it to the bulleted list above, I would say that the initial sales pitch did make me feel fairly positive but the bitter aftertaste when things unravelled was hugely negative.

I suspect, I’ll never trust them again.

The lifetime value of a customer

Every business should be thinking about the average lifetime value of a customer. If you’re not, why not?

The average lifetime value of a customer is the total value as measured by profit of the customer’s time with you.

Imagine going to a barbers or hairdressers, something I haven’t done for quite some time (I’m more than a bit follically challenged), how much do you spend each visit, how much do you spend each year and how many years of loyalty or business would you give your barber/hairdresser?

One visit might be £15, over 3 months you might pay for two sessions, over the course of a year, it will likely be around 8 sessions. All those £15 spent per session build up, a years’ worth is £120.

5 years later and you would have spent £600 with that hairdresser.

Cost of Acquiring a New Customer

I’ve no idea who suggested it and I’ve not actually measured this but with those caveats’ aside how much do you think it costs to acquire a new customer compared to the cost of keeping a customer?

Here’s one quoted source;

“The lifetime value of a customer includes everything they will ever buy from you today, tomorrow, and in the years ahead—and the cost of acquiring a new customer is estimated to be 20 times greater than keeping an existing customer happy.”


So, if we accept the notion that it pays to stay very close to your customer, why do we feel so alienated?

Why do businesses spend so much acquiring new customers and not so much in keeping them?

It’s called inertia – Most companies believe that people tend not to buy from someone else because it’s easier to stay where you are.

Well, I think it might have been true, even five years ago but not now.

Now, people share and talk like never before. People do move and in their droves.

Remember that energy supplier, they recently announced job losses because so many people are fed up and are voting with their wallets. In other words, their customers are now their ex customers who are busy paying other organisations to supply their utilities.

Please – Not Shareholder Value

Increase Average Lifetime ValueIf you are reading this and own, manage or are building a business which is not listed in the stock exchange you can safely ignore this rant.

If you are involved with a listed company, then I have a few words to say.

I’m not sure whether all the blame should be laid on Michael Jensen and Dean William Meckling of Simon School of Business at the University of Rochester but I think they started it.

They wrote a paper called; “Theory of the Firm: Managerial Behaviour, Agency Costs and Ownership Structure.”

So what exactly did this paper do?

It helped and in a big way, to divert attention away from doing real business and focused attention on expectations and numbers so loved by wall street and the city.

Focusing on financial numbers and expectations is a lot easier than doing the sweaty hard work of creating and keeping customers happy. So managers who are often incentivised with shares are happy to oblige this agenda.

And therein lies the paradox because companies have hit quarterly earnings but have failed their customers and failed their own staff. Given a long enough time frame you will in the end see profits and real shareholder value suffer. Customers will go elsewhere.

The financialising of a business is the end game where businesses are encouraged to buy back their own shares. The idea of this is that it can in theory raise the share price because the number of shares in circulation is reduced.

It also stifles a business’s ability to invest in new products, services or new businesses.

Sometimes companies are encouraged to borrow money to buy back their own shares. This may not end well for the business though for all sorts of reasons. Lack of cash is one thing but when you owe cash it’s a real threat to the survival of the business.

About the Author Steve

Leave a Comment: