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.