How Chinese companies deliver excellent customer experience
Author: Jialin Wu
Unfortunately, the hotel industry has very much stagnated in its approach to technical innovations and modern and scalable ways to understand customers. Hotel service excellence is therefore highly dependent on the employees who deliver the service, whereas tech companies were able to go a step beyond that. Tech companies have not only understood the importance of customer service, but they are also constantly honing and creating systems to gain more data-driven customer insights. A/B testing, user behaviour analytics, usability testing, ethnographic research etc. are all part of an ever-expanding list of methods tech companies use to gain a better understanding of their customers at scale. (Biddle, 2018)
Take Tencent’s WeChat, for example. The very first Product Owner of WeChat in its initial phase had an unrelenting customer-first mindset. His mindset around customer-centric product development is arguably the reason behind WeChat’s current success. Allen Zhang believed that being a product creator is like being in a relationship with the end-users, which requires a deep understanding of the users and genuine interest in improving their lives. WeChat measure success not only by the number of users or the number of chat messages sent, but by how deeply their product is engraved in a user’s everyday life. The company is constantly looking for real-life scenarios and moments it can improve or digitise in order to become more relevant for users, to the extent that people can’t live without the product. (Zhang, 2019) WeChat has reached the status of an app that Mainland Chinese people can’t live without. WeChat is now everyone’s wallet, an important way of communication with friends, family, and business partners, a transport ticket, a utility payment tool, etc. It takes care of a variety of users’ essential needs and have also become a bridge between businesses and customers through its Mini Programs initiative.
There is a misconception that good ideas for new apps and functionalities just appear out of thin air or a good brainstorming session. Good ideas are only good when they are highly relevant and fit the end-user. Good ideas come from understanding the end-user in a simple context, but great ideas come from understanding end-users holistically, i.e., understanding their needs, goals, family situations, cultural backgrounds, and motivations. This also means that a lot of great products evolved over time to become as good as they are today. WeChat Pay is a great example of how letting an idea organically evolve as customers interact with it has created the most used feature of the app. WeChat Pay started out as Red Packets. It was a digital spin on the Chinese tradition of giving out red packets with money in them to friends and family during Chinese New Year. WeChat’s creators saw this cultural behaviour as an opportunity to enhance an offline behaviour by creating a more convenient, digital version of it. By gamifying the tradition, the digital version of Red Packet makes it easier and more engaging for families who live apart to gift red packets to each other. WeChat’s Red Packets can be easily sent into group chats and the sender is able to select how he/she wants to gamify the gift. The sender has the option to evenly distribute the amount to everyone who opens the gift or randomise how much each person would get. The randomised option provides a leader board of who got the most money of the red packet between friends. As luck is a big part of Chinese culture, people want to try their hands out and see how lucky they get with each Red Packet. The Red Packet functionality went viral quite easily among Chinese users and thanks to the gamification it also created stickiness with the users.
However, the stickiness of the functionality wasn’t only thanks to gamification. WeChat’s team successfully created a network effect with the Red Packet functionality by making it extremely easy for users to receive money through Red Packets. When one user tops up his/her account and sends a Red Packet to a group chat of 10 users, the other users never have to do anything other than click on the Red Packet to receive the money into their own accounts. This makes it extremely easy for those 10 users to then send their own Red Packets to other groups without ever having to top up with their own money. Users can send Red Packets of a couple of cents to a few thousand yuan, such that a lot of users send small amounts in their Red Packets just for fun. As a result, millions of users in WeChat receive and send Red Packets of their own, further familiarising themselves with the functionality.
WeChat has kept the Red Packet functionality as is even after the Chinese New Year period was over. This meant that users were able to find other contexts to use the functionality, such as everyday peer to peer payments. Many Chinese users started using the Red Packet functionality to pay their friends, family, small businesses, private tutors, etc., and to give pocket money. This organic evolution of the functionality increased users’ trust in WeChat as a payment processor, which gave way to the official WeChat Pay functionality that allowed users to pay in-store and online easily. Yet, payment behaviours take time and quite some effort to change. Mainland Chinese users were mostly cash users and credit card usage was not as widely spread as in the West. So it is quite a big leap from cash payments to mobile payments. This is why both WeChat and Alibaba promoted QR codes as a medium for businesses to allow customers to redeem and collect promotions, scan ads, and get information. This practice of using QR codes in multiple contexts made it easier for users to treat payments just an extra function of the QR code. Customers were already scanning QR codes in stores in order to get discounts and collect loyalty points, so why not also use QR codes for payments? This pre-existing behaviour created an easier transition for the user on a psychological level to accept mobile payments as just a more convenient alternative to cash payments. Today, over 90% of payments in Mainland China are mobile payments. The creators of WeChat did not necessarily plan for WeChat Pay to work as it does today, but instead they learned how the functionality should work by observing the behaviours of their users over time. A good idea can be implemented initially, but a truly great product is one that is co-created and evolves with its users.
