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Customer experience is becoming more important with every passing year. Sadly though, even today there are brands that think that it is just a buzz that will die with time. I, however, believe that customer experience is becoming a part of the boardroom discussion in companies. Looking at the Google search trend also reinforces my confidence in the fact that customer experience will only become more significant and popular in the coming years.
In the coming years, I am certain that brands will be competing with each other to deliver better customer experience and that customers would flock to the brand that does a great job at it.
About three years ago, I created a Slideshare presentation – 10 reasons why customer experience is more important NOW – that has been viewed around 20,000 times since then. It’s interesting to see how relevant it is even today. Here’s the slideshare for a quick refresher:
We are in the ‘Age of the customer’ and companies that know this are investing in delivering greater value to customers. In the startup world, customer experience has always been important because it ultimately leads to the growth or death of the startup. Interestingly, customer experience is fast catching up with traditional manufacturing companies and FMCG brands too! However, businesses still have a long way to cover in this direction. This need is becoming even more pressing with each new year. Each year, a new wave of technological advancements is introduced to customers. Furthermore, disruptive startups launch innovative products that get adopted by millions of users almost overnight. With this pace of development, consumer expectation with brands is also increased massively. Companies that are not using technology to connect and interact with their customers are becoming irrelevant for the consumer. Brands that are not making it easy for consumers to experience the brand’s products or services are no longer attractive. If companies are not thinking about their business from the customer’s perspective, they are missing the real picture of their business.
In a global customer experience study conducted by Oracle, it was found that while businesses want to be seen as CX leaders in their industry, they aren’t doing much about it.
I know you might wonder that the data is quite old. The natural question to ask as you look at these stats is: Has anything changed in the last 4 years since this report was published?
Well, I am delighted to share that I am seeing some positive movement in this direction. According to a Gartner research, 50% of product investment projects will be redirected to customer experience innovations in 2017. In another survey conducted by CX Network, over 800 respondents shared their view on the challenges and investments in Customer Experience for 2017. It was found that an average of 45% of the respondents have allocated an annual budget of up to £100k for CX in 2017. 13% respondents had budgeted between £101k to £500k, and around 6.6% had a budget of over £501k for investments in CX initiatives in 2017. Here’s the snapshot of the report for your reference:
I know that the stats I am sharing are contradicting my statement that companies aren’t willing to invest in CX. Let me help you understand where I am coming from. The challenge with CX initiatives is not just the money invested in it. The biggest challenge is aligning the organization towards the goal of customer centricity. Without this alignment, any investment will fail to get returns and therefore will be killed sooner than expected. While companies are making their biggest investments in technology to improve customer experience, they should be prioritizing organizational re-alignment over everything else. Without a customer-centric vision and leadership, CX initiatives are bound to fail.
In her latest Forbes article, Blake Morgan – a leading CX authority – discusses the five trends that will shape CX in 2018. Her topmost item in that list is “CEO’s get more involved in CX Strategy.” It is an irrefutable ask! Business leaders have to not only invest the money in CX but also put in their time. Only through constant communication and action can the CEO shape the organization’s focus towards customer experience. This is, of course, the biggest miss I have seen throughout my experience of working as a CX professional.
In one of our own research at Customer Guru conducted in 2015, almost one-third of respondents said that employees don’t have a clear understanding of what exceptional customer experience means. Furthermore, almost 50% of the respondents said that employees don’t know what they need to do in order to deliver a great customer experience. We shared these insights in our infographic below:
Are these challenges still relevant today? Referring to the CX Network research cited above, it confirms that building a customer-first culture, linking CX initiatives to ROI, and understanding the customer are the top three challenges faced by companies in 2017.
Working with companies from different industries, I’ve come across this challenge in almost every company that I have engaged with. For as long as I have known, companies had operated with a mindset of delivering better dividends to its shareholders without worrying too much about the customer experience. The entire company culture was aligned towards that goal and every employee was driven to deliver on their non-customer-experience performance indicators. However, with customer experience becoming critical to a company’s success, business leaders and employees are required to bring about a mindset change. Of course, this change has to be driven from the top and aligned strategically with growth.
Another interesting problem with the current state of customer experience is that companies want an immediate return on their investment in CX. Furthermore, business leaders think that it is the responsibility of the newly appointed CX Head to deliver those results. The issue is that CX cannot be driven by a department in an organization. It has to be seen as an organizational goal and aligning every department towards this goal is a prerequisite. Delivering a great customer experience requires every department to work with an outside-in perspective. This is easier said than done. Depending on the kind of business, some departments might have zero interaction with the end customer. In such a case, it becomes difficult for these departments to develop a customer focus. It’s important for these businesses to clearly define who the customer is for each department.
For example, in a manufacturing company, the procurement department would hardly ever interact with the end customer. It becomes extremely difficult for a procurement manager to understand the needs of the end customer when he or she is only dealing with suppliers outside the organization and the production department within the organization. In such a case, it is imperative to define that the production department, for example, is the customer for procurement. Mapping the customers for each department gives a clear view of how the department’s work impacts the customer experience of the end customer, who is most likely being served by the sales and account management department.
It is pivotal for an organization to have a holistic view of how each department impacts the customer experience. The best way to achieve this is to build a Customer Journey Map (CJM). Among several other benefits of CJM, one of the most significant benefits is that it helps build a holistic perspective of your organisation, which in turn helps deliver a one-company experience to customers. Here’s an infographic on the several other benefits of CJM:
One of the hardest question that a CEO gets asked from his or her board is to quantify the ROI on CX initiatives. I agree, computing an ROI for CX is not easy and it is not short-term for sure! Interestingly, Gartner addresses this question in their research paper – Survey Analysis: Customer Experience Innovation 2017:
Let me also share a video from McKinsey & Company where Kevin Neher, Principal at McKinsey, talks about the value of improving customer experience.
In a nutshell, what Kevin explains in the video is that by improving customer experience, a company improves its customer loyalty, increases customer retention, enhances employee engagement, and reduces the cost of service to the customer. The value, of course, is many folds but returns take time because customer experience is a cross-functional discipline. Getting that cross-functional efficiency in traditional silo-based organizations requires consistent focused effort in first breaking those silos and then aligning the entire company towards one goal: improving customer experience. The CEO of an organization that is embarking on this journey should declare to its board and shareholders that this journey will definitely reap results, but it is a long one. It is best to be very clear from the beginning and showing conviction in words and action is the winning formula.
It is an exciting time for the customer experience management industry because a lot is being talked about and done in this space. I am confident that the coming year will see another wave of improvements in customer experience practices. I would like to share a few pointers on where companies should focus their CX efforts in 2018.
The first and foremost thing is to appoint a Chief Customer Officer (CCO) or at least a Head of Customer Experience. However, appointing a CCO and making him or her responsible for driving business benefits will be a mistake. The goals should be well defined and at least a three-year plan should be put in place to drive change management, organizational realignment, and a culture shift towards customer centricity.
The second step is to coach the middle management on how to deliver better customer experience. For any company, mid-management is the engine that drives change. Therefore spending a good amount of time in coaching people at VP, GM, AVP and AGM level and aligning them towards the three-year plan is critical. Without proper alignment at the mid-management level, any customer experience program would not be successful.
It’s a known fact that a company’s frontline team is the company’s face to its customers. Ultimately, the frontline team directly impacts the customer experience. The top management sets the customer experience vision, mid-management drives it, and the frontline team actually delivers it. Therefore, it is imperative to coach the frontline team on what great customer experience looks like and what role it plays in delivering that experience.
I am sure you can see that I am giving a top-down framework for setting up a customer-centric organization. I have helped organizations of all sizes setup the same framework. However, this works only when there is buy-in from the top management. Without that, I would suggest you to not start this journey.
No system would be complete without the right measurement and control. Setting up customer experience measurement metric such as NPS is as critical as having a system to measure and track an organization’s revenue. Do not wait for the organizational alignment before thinking of implementing NPS. Instead, use NPS as a tool to measure and improve the effectiveness of customer experience initiatives. Ultimately, what gets measured gets improved!
I have realized that companies need more education and awareness around customer experience to start embracing this management practice. Improving customer experience has great benefits for every business. However, with so little known about customer experience and its demands being so different from how companies have traditionally operated, business leaders are uncertain about how to start this journey.
With that in mind, my team at Customer Guru has started interviewing customer experience leaders in India to share their experiences and thoughts on how companies can achieve their customer experience goals. In the past few weeks, we have had the honor of conversing and sharing the thoughts of the following customer experience leaders from India. I would be delighted if you too would like to share your journey as a CX professional and support us in our mission to create customer-centric businesses around the world!
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