Supply Chain Resilience: A Prerequisite for Customer Experience Excellence
An excellent customer experience starts long before the customer buys the product.
There is a myriad of up-stream activities that a company must perfect to put products on the shelf. When one or more of those activities fail, then the customer experience is compromised.
As consumers look at empty shelves and extended delivery times, companies are learning that supply chain disruption can rapidly evaporate customer goodwill and prompt switching behaviour that may become permanent.
Customer loyalty is strongly linked to frictionless, seamless, customer journeys. If companies are not careful in how they navigate these disruptions and maintain their relationship with their customer, they face a substantial threat to customer loyalty.
The response must be more than simply damage limitation.
Firms now have two pressing objectives:
- Fixing the basics by rapidly improving the resilience of their supply chain.
- Preserving and nurturing the customer relationship until supply chains are functioning properly again.
In Customer Experience Excellence, myself and co-author Tim Knight identify the six factors that drive commercially beneficial customer behaviour. We call these factors the 'Six Pillars of Experience' and they have been derived from 12 years of research in 34 countries with some 5 million evaluations of 4,000 brands.
The Six Pillars of Experience are:
- Integrity: How corporate behaviour engenders trust
- Resolution: Fostering a problem-solving mindset
- Expectations: Delivering on the brand promise
- Time and effort: Ensurinf interactions are easy and frictionless
- Personalization: Individualizing experiences to a customer's circumstances
- Empathy: Showing that you care
They provide a useful check list to guide companies through this existential crisis and a successful outcome of the two objectives I mentioned before. Here’s how…
1. Fix the basics
Purpose and corporate behaviour are inextricable linked - now is the time to be purpose-led and make this clear to the consumer.
Consumers have a heightened awareness around sustainability. Supply chains are large producers of the CO2 gases that contribute to global warming – firms need to decide what this means for them; more local sourcing, less food miles, greater focus on the environmental efficacy as well as the efficiency of supply chains.
Transparency and traceability are critical. If there is a silver lining it is that now is the time to put supply chains right across every dimension of analysis, not just cost and time to market.
Risk management is about understanding every node in the supply chain and interconnections between each so that if one breaks, there is a fix or, at the very least, a contingency.
Firms such as Walmart, Costco, John Lewis and IKEA have taken the extraordinary step of chartering their own ships as they prepare for a peak in seasonal demand.
The end-to-end redesign of the supply chain is an essential first step. Predicting future issues is as important as fixing current ones - "what if" scenarios are crucial now if companies are to be prepared for further shocks to the system.
2. Preserve and nurture relationships
As the Covid-19 pandemic took hold, CEOs were proactive in communicating with customers - every week an email would arrive outlining what the company was doing to protect its staff, its people and keep food on the shelves.
That seems to have been forgotten now.
Relationship breakdown is often linked to a failure to communicate - it is important to keep your customers informed, explain what you are doing, outline how you are fulfilling your purpose and retain the emotional connection that the customer has with the brand.
Time and effort
Now is the time for choices. Which customers are the most important to you? If you had to choose, which relationships should you focus on? How do you make your customers lives easier and ensure you are present in their minds when they make purchasing decisions? Which products are critical to the relationship?
It is a time for segmentation and prioritization. Try to please everyone and there is a very real chance you will please no one. Strong data and analytics capabilities are crucial in understanding customer needs, complexity, anticipating potential disruption, and quickly developing a response.
People need to be uppermost on the agenda. Responding to customer’s personal circumstances is important but so too is the relationship with internal customers, the supplier ecosystem, and external partners all of which will most likely require new ways of working with.
There are two parts to empathy. Firstly, ensuring that the customer receives the emotional and psychological satisfactions they need when they interact with you, as well as the physical ones.
Secondly, demonstrating that you care about your customers and making a positive contribution to their lives. Firms need to rediscover the zeal with which they showed they cared when dealing with the initial stages of the pandemic.
Companies have an opportunity to use this challenging period to discover where investments are needed, evolve supply chain planning, and reposition the organization for growth once economies rebound.
But in the very near term, it requires dealing with the difficult structural issues that, unless addressed, will continue to undermine supply chain resilience and customer confidence over the long-term.
Vitally firms need to maintain the emotional connection they have with customers and ensure it is not damaged beyond repair during this period of rebuilding.