I’m thrilled to be a judge at the 2017 UK Customer Experience (CX) Awards, and I’m looking forward to seeing for myself the accomplishments of these finalists, who are leaders in the field of CX.

The finalists will be making a final push this week to take home a coveted CX Award, and this will be the culmination of a lot of hard work – great CX doesn’t just happen by itself.

Research has been done – by Temkin, Forrester, and others – on what differentiates CX leaders from CX laggards.

One key difference is employee engagement. CX leaders have a clear focus and understanding of the importance of engaged employees.

They ensure employees are engaged and make sure all employees – from the top to the front lines – understand the organization’s CX vision and why it’s important; how they fit into that vision; and how to take ownership of their particular piece of the CX process.

According to Temkin Group’s 2017 Employee Engagement Benchmark study:

CX Leaders Have More Engaged Employees

79 percent of employees working at companies with “significantly above average” Customer Experience in their industry are “highly” or “moderately” engaged, compared with only 49 percent at companies with “average” or “below average” CX.

This means that employees working for CX leaders are more committed to their jobs.

Better Performing Companies Have More Engaged Employees

82 percent of employees at companies with strong financial results are “highly” or “moderately” engaged, as opposed to only 68 percent at under-performing companies.

Highly Engaged Employees Are More Productive

Engaged employees demonstrate a higher commitment to their work across an array of different activities.

Compared to disengaged employees, highly engaged employees are

• five times more likely to recommend the company’s products and services
• three times more likely to stay late at work if something needs to be done
• five times more likely to recommend an improvement at the company
• almost nine times more likely to recommend that a friend apply for a job within their company

What Exactly Is an Engaged Employee?

Gallup defines engaged employees as the following:

“Engaged workers stand apart from their not-engaged and actively disengaged counterparts because of the discretionary effort they consistently bring to their roles.

“These employees willingly go the extra mile, work with passion, and feel a profound connection to their company. They are the people who will drive innovation and move your business forward.”

In 2016, Gallup conducted its ninth employee engagement meta-analysis, the largest employee engagement study of its kind, and showed once again the connection between employee engagement and key business outcomes.

The study showed that work units in the top quartile in employee engagement outperformed bottom-quartile units by 10 percent in customer loyalty/engagement, 17 percent in productivity, 20 percent in sales, and 21 percent in profitability.

Work units in the top quartile also saw significantly less turnover (24 percent in high-turnover organizations and 59 percent in low-turnover organizations), shrinkage (28 percent), absenteeism (41 percent), fewer safety incidents (70 percent), patient safety incidents (58 percent), and quality defects (40 percent).

In Aon Hewitt’s 2017 Trends in Global Employee Engagement report, it was found that a five-point increase in employee engagement is linked to a three-point increase in revenue growth in the subsequent year.

With employee engagement clearly showing it positively affects the bottom line, it’s surprising that employee engagement remains low.

Gallup reports that only 33 percent of US workers are engaged, and only 15 percent of workers worldwide.

Reasons for this include candidates limited (or none) onboarding activity, no clear development plan to help employees grow, lack of open communication in the organisation, and poor manager-employee relationships.

If your employees are not engaged, how are they going to engage customers?

If you want stronger customer engagement and improved Customer Experience, then creating highly engaged employees is a must.

However, engaging employees doesn’t mean giving some perks and calling it a day – employees want opportunity, autonomy, responsibility, and respect.

Onboard Employees

Not onboarding employees leads to more turnover, and turnover costs companies a lot of money in recruiting and lost productivity thanks to the vacancy.

CBS MoneyWatch notes that it costs companies between 16-20 percent of that employee’s salary to replace them.

Organisational costs of employee turnover are estimated to range between 100 percent and 300 percent of the replaced employee’s salary.

According to the Wynhurst Group, 22 percent of staff turnover occurs in the first 45 days of employment. Also, Talya Bauer PhD notes, more than half of new hires fail within the first 18 months.

Yet according to Bauer, new employees who went through a structured onboarding program were 69 percent more likely to still be with the organisation after three years.

Onboarding is not just about orienting new employees to the company’s policies and procedures – it also involves helping employees understand their job, performance expectations, and the culture; introducing them to co-workers and management; and connecting them with sources that will enable them to do their jobs well.

Consider these onboarding best practices:

• Prepare new employees before their first day
• Ensure their first day on the job is special.
• Ensure new employees clearly understand what is expected of them through clearly defining objectives, roles and responsibilities.
• Provide an onboarding plan and monitor it over time to ensure success.

Help Employees Grow Through Meaningful Employee Development Programs

• Work with employees to create a plan for their personal and professional growth.

Check in frequently and monitor progress. Offering more feedback, providing more reviews, and recognising employees for a job well-done will make them feel more valued, and as a result they will be more motivated to do their best work.

• Offer employees coaching and mentoring so they feel that they are being supported and respected.
• Encourage them to take ownership for their development.
• Provide training to employees. Don’t just provide hard-skill training – include soft-skill training, too.

Also consider cross-departmental training, which provides two key benefits: employees learn how different parts of the organisation work together, and they can connect with other employees to build camaraderie.

Encourage other training activities like outside class attendance and membership of professional associations.

Training helps give employees more autonomy – they have different methods and tools at their disposal to do things well on their own. Effective training affects the bottom line.

The American Society for Training and Development (ASTD) found that companies which provide comprehensive training have 218 percent higher revenue per employee than those with less comprehensive training, enjoy a 24 percent higher profit margin than those who spend less on training, and generate a six percent higher shareholder return.

• Search out the right managers and hold them accountable for their employees’ engagement. Poor manager/employee relationships are usually cited in studies as a top cause of employee turnover.

The best managers understand that their success and the organisation’s success rely on employees’ achievements.

Yet not everyone is a great manager. Organisations’ ability to select people who have this talent is key.

Give Employees a Sense of Purpose

A recent Harvard Business Review article said only a small percentage of employees understand their company’s strategy and direction.

It cites research that says even in high-performing companies with “clearly articulated public strategies”, only 29 percent of their employees can correctly identify their company’s strategy out of six choices.

That’s seven out of 10 employees who are not aligned with their company’s strategic direction.

How can an organisation perform optimally with only 30 percent of its people rowing in the same direction?

Senior leadership should help employees understand where they are going and give them tools on how to get there.

They can do this by:

• Developing a clear, agreed-on vision and strategy, where all employees can contribute to its formation so they feel they are a part of the decisions being made.
• Translating the vision and strategy into clear, understandable goals and measurements. This gives employees a sense of ownership and passion to reach goals, resulting in business outcomes being met.
• Making sure employees have the talent, information, and resources to enable them to perform at their best.
• Creating an environment of open and clear communication. That includes providing feedback, and keeping employees informed and excited about the vision and the mission.
• Providing meaningful incentives, rewards, and recognition that serve to set an example for other employees and encourage staff to go over and above expectations. Incentives, rewards, and recognition should be tied to a company’s business objectives.

Create an Effective Voice of the Employee (VoE) Program

Research shows that happy employees translate directly into more loyal, satisfied customers and increased revenue.

VoE measures employee engagement, which shows how motivated, involved, and productive employees are.

These factors, in turn, directly affect employee turnover rates, product and service quality, customer loyalty, and overall profitability.

Organisations must be willing to listen to their employees and implement actionable insights identified from this feedback.

Best practices include:

• Use multiple channels – online feedback, surveys, social media, interviews etc. – to find out what motivates or troubles employees. Use the right tools to collect the right data. Data should be specific, relevant, and actionable for any team. And data should be proven to influence key performance metrics.

• Extract actionable insights from the data and route them to the right people who can take action.
• Complete the loop by communicating with employees on the actions that have been taken.

One question that has plagued many is where to place Customer Experience (CX) within an organization.

There are two schools of thought on who should own CX.

Some think there should be one functional group that owns CX.

The common thought is that Marketing is the functional group that should own CX.

This notion is actually backed up by two reports.

A report from the Economist Intelligence Unit and Marketo revealed 86 percents of CMOs and senior marketing executives believe they will own the end-to-end CX by 2020. Walker Info released a report that says by 2020, CX will become the key brand differentiator.

CMOs shouldn’t think that because these reports might allude to it, that CX belongs in Marketing.

There are key reasons why CX does not belong in Marketing.

1. Marketing Participates in Only a Small Piece of the Entire Customer Journey.

A basic customer journey map looks like this:

Marketing directs the awareness and consideration phases. It has limited involvement in the purchase phase. Sales handles that. Marketing is typically not involved in the post-purchase phases of retention, loyalty, and advocacy. Sales and Customer Service tend to handle those touch points.

There are many touch points across an organization. The CMO would have to align activities across the entire business.

That means the CMO would have to ensure that every employee – from leadership to the front lines – understands what the company’s CX vision is, why it is important, how their role fits into that vision, and that they take ownership of their piece of CX.

That is a tall order for any CMO.

Which is why, in a recent CMO Council and Deloitte study, only six percent of CMO respondents said they are defining routes to revenue across all facets of their business globally.

2. Marketing’s Prime Focus Is Still on Acquisition, Not Post-Purchase Activities.

Econsultancy reported three years ago that acquisition was still the dominant proportion of respondent budgets.

Not much has changed.

According to the recent State of the Conversation report from Corporate Visions and Demand Gen Report, approximately 66 percent of B2B companies dedicate less than 20 percent of their marketing budgets to customer retention and upsell/cross-sell activities.

Target Marketing’s 2017 Media Usage Survey is similarly shocking.

More than half of respondents are increasing their acquisition budgets vs. a third of respondents increasing retention spending.

We know that it costs approximately seven times more to get a customer than it does to keep one, according to Bain. We also know that customer growth occurs in the post-purchase phases of the customer journey.

So, why does Marketing continue to focus on acquisition and doesn’t place at least an equivalent focus on post-purchase efforts?

3. CX Tends to Get Siloed in Marketing.

When one functional group manages or owns CX, silos form.

When CX sits in Marketing, its activities are not aligned with the activities of other customer-facing groups of a company.

Lack of integration across the company results in disjointed and inconsistent messages to the customer. There is no way a customer can have a consistent experience across channels. This impedes corporate growth. Thus, customers and companies suffer.

According to a recent Econsultancy report, 40 percent of marketers admit that they do not receive adequate support from other members of the organization and that different departments have their own agenda. If different departments have different agendas, that creates animosity between departments and kills morale. And, if employees aren’t happy, why would customers be?

Others think the entire organization should own the CX.

This can be problematic as well.

If CX remains undefined, leadership doesn’t champion the effort, employees aren’t passionate or accountable about CX, no framework is in place to manage it, then CX initiatives become inconsistent without focus to guide it, and, ultimately, no one manages the CX.

In both of these scenarios, customers and organizations suffer.

Customers’ experience becomes so poor that they either get stuck in a bad relationship and become resentful, or they churn, as they are forced to look elsewhere for a good experience.

The organization pays the price because as churn widens, internal competition grows, morale suffers, the silo beast continues to feed, and growth becomes nonexistent.

What’s the Solution?

CX Must Start at the Top

A successful transformation to customer centricity occurs when the CEO champions and drives CX.

According to a recent Genesys study, 58% of companies with a high degree of profitability relative to their rivals report that, ultimately, the CEO has ownership of CX management.

Organizations that get the importance of CX know that executive leadership must champion the CX effort. Leaders establish an environment of open communication, so their teams have a voice in defining CX and create the framework to support it, so teams feel empowered to take ownership of and be accountable for CX.

It takes an empowered team that can communicate effectively to create processes that can improve the CX at each touch point of the customer journey.

A top-down integration will serve to bust any existing silos and prevent new ones from forming. To truly achieve this result, there needs to be total transparency and unity across the organization and in every customer interaction.

CX Must Take a Cross-Functional Approach

Organizations that take an “inside out” approach believe corporate agendas take priority over customers. Silos are formed, leading to competition, animosity, and low morale within and across departments.

Organizations who want to truly be customer-centric must take an “outside in” approach with their vision, culture and strategy – it must be based on a customer’s view of their needs and wants.

In addition, organizations must take a cross-functional approach that encompasses the entire organization and is based solely on understanding the customers’ needs and creating and executing a strategy that will make them successful.

For CX to work effectively, all functional groups and systems must align to support each other in CX efforts.

It’s not enough for functional groups to align to connect strategy and operations.

Each functional group must share knowledge with the others, understand and breathe a consistent brand message, be able to coordinate across the organization and then be able to understand the customer and meet their needs in the way the customer wants.

Organizations Must Seriously Consider the Chief Customer Officer Role as a Vital Component to Success.

While the CEO champions CX throughout the company, the CEO needs a conduit, to execute on this vision.

The Chief Customer Officer (CCO) fills that role.

The CCO doesn’t own CX. The CCO unites the leadership team that helps drive CX.

Uniting the C-suite is necessary because CX travels across the organization. Thus, it is vital that organizations take a centralized approach with CX.

For a customer to have an omnichannel experience, all teams must have the same goal and row in the same direction to offer a consistent message across all channels.

The CCO ensures that teams row in the same direction with one unifed viewpoint; and people, processes, and measurement all support this viewpoint to deliver the experience that the customer wants.

Because the CCO handles uniting all silos, the CCO position cannot live in Marketing but be under the CEO.

The CCO must have a seat at the executive table and help develop corporate strategy.

In Gartner’s CMO Spend Survey 2016-2017, of 86 percent of the companies surveyed, 41 percent said the CCO reports to the CEO.

It is the CCO who:

• puts the CEO’s viewpoints into action
• leads the effort to get the customer viewpoint into all aspects of the business
• educates everyone in the C-suite why the company must be customer-centric – in fact, the CCO can even speed up a company’s transformation to customer centricity
• creates the CX framework
• ensures that leadership to the front lines are consistently living up to a common understanding of customer centricity in their behaviors and actions so the entire company is delivering on its brand promise

Organizations that are serious about customer-centricity and ensure a strong CX program, will focus on unity across the organization to help customers be successful.

Interesting Links:

• Why Being Connected to Your Customers Is Not Enough
• How to Use Negative Feedback to Be More Successful
• Putting the Focus Back on the User Journey