This tip answers the question: on what should I focus my next investment in customer experience?

It will help you make better decisions in both the short and long-term. The result will be a brand that stands out and a competitive advantage that’s hard to copy.

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Provide a good frictionless experience, then focus on meaningful experiences

Impacted metrics: Customer spending | Customer satisfaction
Channels: Customer experience (any channel)

Recommendation

Aim to provide a good-to-great frictionless experience for your industry (e.g. if you’re a bank and customers need more than 3 days to open an account, you’ve got a problem; if you’re an online retailer and not offering free shipping, get on that now).

Then, turn your focus to meaningful experiences instead (e.g. a fun and memorable bank account activation; delightful packaging and unboxing).

Customers expect and choose frictionless experiences, but meaningful experiences are memorable and unique to your brand - setting you apart and building into a long-term competitive advantage.

Effects

On average, frictionless experience is more impactful on making customers choose you (0.74). But it reaches a point where it doesn’t give you a competitive advantage anymore.
It’s useful for increasing conversions, especially at scale, but it can easily increase your cost to service each customer (e.g. free shipping).
Meaningful experience is less impactful (0.54), but unique to your brand.
It often gives you the ability to charge more, making it useful even at low customer volumes. It makes it more likely that customers will recommend you (word-of-mouth), compared to frictionless experiences. It may or may not increase your cost to service each customer (e.g. memorable onboarding).

Why it works

Frictionless experience works on the principle that: “simpler is better, faster is better, easier is better”. Potential customers can more easily become your customers, and existing customers can more easily use your product or service.
Meaningful experience creates intense memories in a way that customers are more likely to remember you, recommend you, and return to you.

Limitations

The study is based on survey results found in banking. It’s not certain if these hard data conclusions can be extended to all industries.
Most of the recommendations are based on an interpretation of previous research and current market conditions by the authors (a practitioner and three academics).

Companies using this

Notable leaders in frictionless experiences: Amazon, Costco, Uber, and Netflix.
Notable leaders in memorable experiences: Ritz Carlton, IKEA, Harrods, and Monzo.
Many companies (especially in tech) are structured to constantly reduce friction in their customer/user experience, but few have developed the culture and creativity necessary to build meaningful experiences.

Study type

Review of previous research and online survey, United States

Source

Williams, L., Buoye, A., Keiningham, T. L., & Aksoy, L. (November 2020). The practitioners’ path to customer loyalty: Memorable experiences or frictionless experiences?. Journal of Retailing and Consumer Services, 57, 102215.

[Link to paper]

Affiliations

Qualtrics (company), St John's University, and Fordham University.

Remember: Because of the groundbreaking nature of this paper, it could be disproven in the future (although this is rare). It also may not be generalizable to your situation. If it’s a risky change, always test it on a small scale before rolling it out widely.

Additional mini-tip

Scapegoating as a strategy to manage brand scandals

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Ariyh

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