By Fabian Hieronimus, Mariah Byrne, Florian Jodl, Philip Matlachowsky, Christine Mäenpää, and Christof Schminke
Satisfied customers are good customers. Good customers, in turn, increase revenue and profit, which is why many firms invest in programs to increase customer satisfaction. They improve services, train call-center workers in customer-oriented communication, and refine their products. Indeed, striving to satisfy customers in all areas is important and the right thing to do. Consumers will not remain loyal to a product if it does not fulfill their expectations. Satisfaction is the fundamental requirement of any stable customer relationship.
That said, while customer satisfaction programs may be extremely helpful in retaining customers, they do not tend to attract new ones and do not necessarily encourage customers to pay a premium. In times of product proliferation and more than 3,000 advertising messages a day, it is no longer enough to merely satisfy expectations. Incremental changes intended to optimize customer satisfaction only have a limited effect on purchasing behavior. Companies that want to acquire customers for the long haul must surprise, thrill, and captivate them. In short: they need to excite them (see chart 1).
Customer excitement—truth and legend
Many marketing functions equate customer excitement with a mere increase in satisfaction – this is a fallacy. Excitement actually arises from a surprise, from the feeling of experiencing something unexpectedly positive. Marketing experts speak of customer excitement when expectations are exceeded to such an extent that the customer is electrified. Therefore, the criteria for generating customer excitement systematically must be fundamentally different from those used in a satisfaction program. While the latter is about making gradual improvements to products and services, generators of customer excitement specifically look for a moment of surprise – the "pleasant shock." Achieving this requires an entirely new approach.
Higher revenues and marketing for free
Excitement creates immediate value, such as higher revenue due to customers being willing to pay more, strengthened customer loyalty, and free word-of-mouth advertising. Fiat, the Italian carmaker, created a huge wave of excitement when it relaunched the legendary Fiat 500 in 2007. Combining authenticity and a successful design gave the compact car cult status. The carmaker can still charge a premium -- roughly 30 percent higher than cars in the same category – thanks to lasting customer excitement.
But it is not just the costly “big bangs” that generate excitement. Often it is enough to change a small detail, such as greeting guests by name in luxury hotels. Every company can create “Wow!” effects without overstretching the budget. The “return on customer excitement investment” is correspondingly high.
A recent campaign from Tipp-Ex demonstrated just how quickly wow effects can spread among consumers. The correction fluid brand's YouTube video "A hunter shoots a bear" was a major coup. The campaign got 10 million hits within just a few days, thanks to the idea of letting viewers erase the title and decide for themselves how the story ends. The interactive campaign triggered massive word of mouth in the online community and a surge in popularity for the product.
Practical and psychological stimulators
Customer excitement rarely appears out of thin air. It needs a purpose, a trigger, and something to help it grow. A McKinsey analysis shows that certain stimulators can help create customer excitement. These stimulators can be tangible (generating excitement through practical experiences) or intangible (affecting the customers' longings and desires).
Tangible excitement levers include outstanding design and extreme user-friendliness, as Apple has demonstrated with its products. Internet bookseller Amazon relies on its simple and convenient 1-Click ordering system. Innovative technologies and tailored services are further tangible experiences that generate customer excitement.
Intangible excitement factors are even more diverse: exclusivity, fun, mystification, breaking of taboos -- these can all generate fascination. But a product's authenticity, or the opportunity for a customer to co-create a product, causes excitement too. Skincare brand Dove celebrated a resounding marketing triumph by breaking a taboo and using ordinary women instead of professional models in its "campaign for real beauty." It struck a chord with female consumers tired of flawless perfection in advertising.
Some companies combine several levers to generate excitement. Apple, for example, offers tangible wow effects, such as innovative technology and ease of use, and consistently shrouds new product launches in mystery: targeted spreading of rumors, selective distribution of information, and limited editions fuel the hype and increase purchasing desire to an extent that classic campaigns very rarely achieve.
Creating excitement systematically
Many people believe that excitement occurs at random – when a creative mind or marketing guru has a flash of inspiration. Though this does happen, marketing experts need to understand and channel these supposedly random occurrences and set up a process for systematically producing excitement. Innovative market research techniques can help to generate new ideas in a structured way. The value of this tool is its holistic approach. The user maps 50, 60, or more ideas in a matrix made up of available excitement levers and the most important customer touch points ("moments of truth"). All suggestions are then assessed for potential, economic feasibility, realization duration and prioritized accordingly (see chart 2).
It is not uncommon for an external stimulus to give teams new ideas. "Learn through transfer" is the name of a technique in which companies from other industries provide impetus. Teams trace exciting ideas back to their core and apply them to their own industry, often leading to surprising results.
The basics also need to be right in order to create excitement. Many companies limit themselves to culling average values from a large volume of data. Customer excitement, however, always occurs at outlier points and is not found in standard quantitative measurements. It is therefore recommended to use new techniques and metrics that enable the tracking and assessing of emotions, such as capturing sentiments in social networks.
Customer excitement is a key element of customer relationship management and a valuable complement to satisfaction programs. It opens the door to acquiring new customers and retaining existing ones. Last but not least, customer excitement creates immediate value because it gets customers talking about products and increases their willingness to buy and pay higher prices. Companies should not miss out on the opportunity to capture added value created by the “wow” effect.
http://csi.mckinsey.com
Fabian Hieronimus is a partner in McKinsey's Munich office and a member of the firm's European Marketing & Sales Practice. Mariah Byrne is a consultant in McKinsey's São Paulo office. Florian Jodl is a consultant in McKinsey's Munich office. Philip Matlachowsky is a consultant in McKinsey's Frankfurt office. Christine Mäenpää is a consultant and Consumer & Shopper Insight Specialist in McKinsey’s European Marketing & Sales Practice in the Munich office. Christof Schminke is a consultant in McKinsey's Frankfurt office and a member of the firm's European Marketing & Sales Practice.