Are you aspiring to move into a Head of Customer Experience role or are you already either there or in a position of influence and looking for ideas on how to accelerate effective delivery into the corporate?
When I say accelerate I am suggesting something a lot more dramatic than “let’s get to the current target a little quicker”. I am proposing a really ambitious customer vision.
- Making customer experience the central strategy to your organisation. This means becoming obsessive about customers.
- The customer base recognising your company’s Customer Experience is a primary differentiator for their choice.
- Significant improvements to P&L and related KPI’s attributed to an exceptionally well executed CX strategy.
What I am proposing is a really tough vision to deliver but there is a lot of benefit in knowing what is possible. Today’s CX Head needs to be a genuine polymath dedicated to continual self-improvement as a thought leader, evangelist, salesman, professional speaker, entrepreneurial marketeer, programme manager, strategist and diplomat with patience of a saint but determination of a hungry Rottweiler.
Does that sound like an exaggeration? I promise it’s not!
Even if the Head of Customer Experience is genuinely part of the C Suite (most still report in), this is a tough ride. It is being reported that the average tenure is around 26 months comparing to the next worst tenure – the Chief Marketing Officer, who can expect to remain in position for 4.1 years. There is good reason for this:
- CX does not sit naturally in the functional structure where division of labour is focussed around specialisations in building, selling and delivering a product or service.
- The C Suite does not understand Customer Experience as well as reported.
- C Suite support for Customer Engagement is not as strong as reported
- Customer Experience often becomes a secondary priority when P&L related issues are at stake at the end of a reporting period. Sales people are encouraged to close important deals even if they are not in the best interest of customer. Spending on initiatives that do not immediately of obviously impact the bottom line are cut back. Customer Experience change is usually out of synch with financial reporting periods and when challenged immediate short term P&L impact usually wins.
- Employee engagement is not good for most organisations (Gallup report only 33% of US employees are engaged in their work). Employee engagement in the context of CX is even more challenging. Unless the employee is in a customer facing position the “not my responsibility” syndrome is alive and well.
- The benefits of Customer Experience are not fully understood and in the main conceptual. There will always be innovators and early adopter style personalities that just get it. Everybody else needs social proof. If the impact of a project on P&L or a directly related key performance indicator cannot be measured then it will often lose priority to an initiative that can.
- Although this aspect is getting better a lot of the responsibility for CX lies at a departmental level. One of the biggest issues I see constantly raised is “we deliver initiatives that produces real useful insight and the business just does not get around to acting on it”
Further, the Demand for Customer Experience Improvement is driven by the business performance gap. This constrains Customer Experience to remediation of the symptom.
Let me illustrate. Consider a technology company who have gradually changed their business model from focus on enterprise solutions to a mixed model where a proportion of products and services are sold on a “on demand” basis in the Cloud.
Companies who have pursued this model have historically found it reasonably easy to attract new customers and create new market segments e.g. with customers who would have never made the large investment purchases akin to the previous model. The problem they faced was on one side it was really easy for customers “to get in” on what the Cloud offered, but it also became real easy to get out. Guess what, customers are promiscuous and if “the grass appears greener” they will vote with their feet and move on.
If the Tech Company produced world class outcomes then customers will quickly realise and come back. Customer churn has become a real issue. The Tech Company realises the issue and after studying the problem decides that an upgrade to their customer experience is required. The drive for customer experience improvement is not as a result of a genuine desire to look after customers better as a core value, but as a result of a hole in the metrics and gap in P&L.
You may have seen terms such as “Customer Success” in recent years and this is reported as a commendable CX initiative. Is there benefit to be derived here? Yes – but nowhere nearly as much as could have been if the Customer Experience had been driven from a vision rather than a P&L problem.
A Customer Success strategy will help reduce churn to a degree but it does little to protect or increase margins.
Premier pricing is achieved through superior outcomes not superior products. Companies like Apple have made that their mantra creating a whole host of new outcomes and experiences in an attractive package using at times quite old technology. The customer does not care. Companies who continue to focus on what they see as “superior product” will see themselves regarded more and more as a commodity. People pay premier pricing for superior outcomes, not superior product and customer success is a “plaster over the cracks” strategy at best.
So how does a company start to create a success strategy that delivers against “The Ambitious Customer Vision”?
Success Strategies in accelerating CX
1. Define What Customer Experience Really Means for the Company
If you speak to 100 different companies you will find maybe 40 different flavours of what CX means. If you talk to 100 people within a single company you are likely to see considerable variance in what this means. Move away from problem statements or the issues that made you focus on CX in the first place, and think of a vision from a wider outcome basis. Learn what outcome based thinking means and find techniques that will reframe thinking patterns to a wider customer driven perspective. There are companies out there (including Customer Experience Magazine) that can show you how to do it and the results are impressive. The problem is 99% of the leadership team will not appreciate the power outcome based thinking will give you and will report they understand CX but miss “the art of the possible”. CX driven thinking is starting to progress again now after a few years of relative stagnancy. Some effort to understand what is now possible with new thinking will pay dividends!
2. The CEO Has to Be the Ultimate Customer Champion
Recent Economist Intelligence Unit Survey responses indicate that companies where the CEO is in charge of CX initiatives are more likely to believe in them. Many CEO’s will want to delegate to a line function, which may appear logical but it will immediately devalue its impact. The argument often offered is the CEO needs to focus on bringing the different lines of business together to maximise P&L and return to shareholders. CX executive needs to find a way of getting the CEO away from short term focus. For some companies this may be impossible BUT if it is achievable then the acceleration of CX can be greatly enhanced. It really is critical but some enlightened CEO’s will do this as naturally as breathing. Do you remember only a few years ago when Jeff Bezos declared a mantra on focussing on customer and the long term as they were aligned? He actually sacrificed P&L impact in the short term to build long term impact and sustainability. Do you remember the way analysts derided his strategy at the time? They are not deriding him now. It is reported Amazon is potentially a 3 trillion USD corporation within a decade. How many “short term focussed CEO’s” are achieving that? This may be the most difficult bottleneck to crack. Be under no illusion – you will never dominate a market unless you have a leader who is a customer champion to the core.
3. Educate the C Suite as a Priority
This is another area where I believe the surveys paint a misleading picture. Again and again I see reports that a majority of C Suite executives believe that CX is of high importance to the organisation, but under the microscope they are less effective at “walking what they talk”. Reality check – a significant percentage of those will only partially understand what CX can really achieve and many of those will not “walk what they talk”. An educated and CX motivated C Suite is more easy to achieve if there is a CX obsessive CEO at the helm. The start point is qualifying and “recruiting” the stakeholders who are TRULY supportive. The most important relationships to build are those who do not naturally support CX. They will be your bottleneck.
4. Obsessive Customer Experience Means Making CX a Central Priority to the Business Strategy
The Economist Intelligence Unit found that companies that prioritise future investment in CX believe they are reaping the benefits of better revenue growth and improved profitability more than companies that consider CX less important. If you are making progress with ideas written on sections B) and C) in this article, then this challenge becomes easier to deliver against. Traditional strategists still think about core competency and impact on P&L as their driving focus. Of course P&L has importance – but the short term and long term game needs to be balanced. Selling this concept to strategists is important but continued C Suite support for what that means is critical. Ultimately all strategists will have a reporting line and they are unlikely to change their focus if their bosses dont agree.
5. Move CX to Be a Profit Centre
The impact of CX is massive with every revenue, cost and service performance indicator potentially impacted. So why do most companies still have CX as a functional area below the line? The role of the CX function also needs careful consideration. Accelerating CX into a large organisation means responsibility lies within all areas of the business. CX functions that deliver programs are less likely to create meaningful outcomes than CX functions that mentor and assist – pushing accountability and responsibility into the business. The definition of what a CX function looks like is more likely to be a proactive and dynamic centre of excellence (and internal marketing function – see later section) than a function responsible for delivering projects and programmes.
6. Build the Business Case with Define Hard Impact Measures
The innovator and early adopter mindsets can be persuaded by concept. Everybody else needs social proof articulated ideally in terms that are specific to them. I have written regularly that CX is sold internally as a conceptual sell. The ability to create business cases that show impact in the context of P&L or any relevant revenue/cost/service performance indicator important to the organisation will help the case to prioritise change. If CX Heads are selling via concept with other functional heads demonstrating clear ROI and measurable performance impact then expect resistance. There are relatively few applications on the market but they are emerging. As a word of caution, be careful with Net Promoter Score economics. It does not work for everyone and there is good reason – explored in other articles.
7. Create the Programme to Identify 20% of Organisation Who Will Be CX Ambassadors and Define the Approach to Educating, Empowering and Motivating Them
Accelerating CX momentum is about developing people ahead of developing the business. Large companies will generally not quickly change unless there is an organisation within the organisation who are prepared to “make a movement”. Working on educating, motivating and empowering 20% of an organisation sounds like a massive ask, but it is by far the quickest strategy to genuinely create momentum.
8. Create an Internal Marketing Engine (and Become an Entrepreneurial Marketing Strategist)
In reality the mechanism will already be in place to do it – email, corporate intranet, internal ideas sharing platforms. You just need to make it work in the context of CX. An internal marketing function needs to work in much the same way an entrepreneurial external marketing function does. If you send a message to someone that is complex, boring and full of corporate speak it will be tossed aside with almost as much as it would externally. The key here is to deliver everything under the mantra to “inform, educate, entertain and inspire”. You will note that the first 3 criteria are those of the BBC, and they should know something about attracting an audience even if they dont always get it right. The right number of communications is between 2 and 3 per week and vary the content considerably. Inspiring and entertaining storytelling is a critical success factor to communicating in a way that resonates. You may choose to vary the lengths of what is sent. If you have read Seth Godin’s blog you will see that many communications are microblogs. They take 10 seconds to read usually with a very powerful message. Open and read rates are considerably higher because they are more likely to be absorbed during the opening of “morning mail” rather than passed over and read later.
Long article this time, ladies and gentlemen! And – this list is by no means exhaustive – only the start. The role of the customer experience head is extremely challenging and in some cases the steps identified above may not even be possible. If you are able to deliver on the above then you may just have created the basis for incredible change.
- Boost Your Customer Engagement with Faster Response Time and Shorter Decision Cycles
- Introducing New Customer Experience Thinking for 2017
- Top 5 Things that Companies with the Best Customer Experience Are Doing