This is an edited transcript from my presentation for CustomerThink’s CX Forum webinar on B2B Customer Experience Management, conducted February 21, 2013.
The ClearAction Business to Business Customer Experience Management Best Practices Study has been conducted for three years now. It was established in 2010 with an emphasis on understanding which functional areas were driving customer experience management and the scope of deployment within each company. In 2011, we continued the core set of questions along with an in-depth exploration of B2B voice of the customer practices, and we explored customer experience management success factors seem to be driving business results. And in 2012, we continued with that core set of questions and emphasized success stories of companies’ progress in their customer experience management, as well as showing three-year trends.
CEM Practices in Top-Performing Businesses
First of all, we wanted to identify which companies had the strongest business results. For example, some companies attributed customer experience management to their financial progress, such as 200 percent increase in market share over the past four years or 20 percent improvement in revenue over the past year. Some companies mentioned figures such as 15 percent reduction in churn and so forth.
Secondly, among the companies with strong business results, we identified which ones also had strong performance of at least 20 percentage points advantage in most of the other best practices in the study. It turned out that there were six of those practices that had such strong correlations, and that’s what we’re going to be talking about today.
To illustrate, when managers of various customer experience activities coordinate their work by reporting to a single department or to a committee or executive, or meeting quarterly or more often for coordination purposes, their companies are at least 20 percentage points more likely to collect voice of the customer from all influencers in the purchase decision, to capture front line employees’ observations, and to capture customer complaints. There were also many other best practices that correlated with this coordination of communication among managers of customer experience activities. This gives you the idea of what we mean by having a more holistic customer experience management effort on these six success factors.
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Success Factor 1: Coordination Among Managers of CEM Methods
For the first success factor, coordination among managers of customer experience methods, an interesting example is TW Telecom. When the economic downturn occurred, TW Telecom was in the midst of acquiring about 20,000 small and medium business accounts and yet, they were able to reduce churn by 27 percent and outperform their competition by 20 percent in most of their customer management processes.
They did this by setting up a customer operations team comprised of people from strategy, operations, marketing and service, and it’s positioned as the company’s customer conscience. They have very vocal roles in the business units and help the company to evolve their customer experience management to a more organized, cross-functional mode that even adapts the company, itself, to the customers’ needs. Other companies are doing work like this with customer champions in every business unit: Symantec and JD Uniphase are examples that come to mind. Others are coordinating managers of surveys, advisory boards, customer references, contact centers, loyalty, and so forth.
Success Factor 2: CEM is a Determinant of Corporate Strategy
The second success factor is viewing customer experience management (CEM) as a determinant of corporate strategy. When companies have this view, rather than viewing CEM as a sub-set of corporate strategy or irrelevant to it, these companies tend to have stronger business results and more comprehensive customer experience management.
During the economic downturn, SunTrust realized it needed to go back to the drawing board and make sure that they could earn their clients’ trust. They reworked their enterprise guiding principles to focus on the client first and everything that they do in their business. They set out to change the way they include voice of the customer in their decision-making process. They migrated from a product focus to a client focus through a massive cultural change that included people asking in meetings, “Do we believe X because we’ve been bankers for so many years or because the clients told us?”
This changed the way they sought customer input and how every employee, regardless of their role, viewed their job. Essentially, they saw voice of the customer as a part of their larger business transformation and how they’re leading, using insights, prescribing action, holding people accountable, and communicating the value of keeping clients first. Despite the fact that only about one in five companies is using customer experience to determine corporate strategy, those who are, are reaping greater benefits.
Success Factor 3: Presentation of Survey Results to All Employees
The third success factor is presentation of survey results to all employees.
At Applied Materials, their decentralized culture and matrix organization structure caused them to create more than 50 reports of their customer surveys so that each business unit and every sales office and functional area across the company could see their own impact on customer experience. They also conducted “train the trainer” sessions through a video conference with the champions in each location, who then presented the results locally to ensure common interpretations, answer questions and discuss the implications. These presentations included an action-planning workshop to digest customer comments and make a difference for customers.
Success Factor 3: Calculation of Customer Lifetime Value
The fourth success factor is calculating customer lifetime value. There are many ways to do that — very thorough methods and other approaches to just create a number that is helpful. When companies do such calculations, they tend to have stronger business results and broader deployment of their customer experience management.
Citrix is a great example where they’ve mapped their customer contract values to the ratings for likelihood to recommend the brand. By setting up listening posts from brand awareness to brand advocacy, they’ve been able to gain valuable insights about the functionality that could have increased positive word of mouth and specific revenue lost or gained as a result. After product trials and contract periods, they asked, “What could we have done differently that could have led you to buy?”
A customer insights team created a business case model that uses this data to help managers prioritize product changes, based on their impact on keeping customers, as well as acquiring new customers. Because this is a quantified approach that helps all of the internal stakeholders to make decisions, it has been embraced as a methodology that they use on a regular basis. While few companies actually perform some type of customer lifetime value — generally about one in four or one in five companies — they see more success in establishing a single view of the customer across the company, using customer feedback to guide their annual operating plan, and many other customer experience management practices that go hand-in-hand with this one.
Success Factor 5: Action on Survey Results by Owners of Key CX Drivers
The fifth area of customer success is action on survey results by owners of key drivers of customer experience. The companies that do this have not only better business results, but also a more holistic approach to their customer experience management.
One example I’d like to share is from LexisNexis. They have done a variety of voice of the customer efforts, including a spontaneous customer feedback opportunity where customers could e-mail their concerns right away, and a customer experience manager routed those messages internally and thanked the customer, whether it was positive or negative. People who were receiving these were expected to make improvements, as well as provide feedback that could be shared with the customers.
Additionally, when the regular survey is being done on an ongoing basis at a division in LexisNexis, they have a closed-loop process where managers in the company have to contact the customers directly. Initially, many of the back office employees did not feel very comfortable with that, but as they began to do it, they started realizing that this whole process not only brings the voice of the customer to life, but it actually inspires their own action to make improvements. And, therefore, they’re seeing better business results because of this approach.
Success Factor 6: Funding of Cross-Organizational CEM Collaboration
Finally, the sixth success factor is funding of cross-organizational collaboration for customer experience management.
One of the examples I really like is from Maersk, a freight company that realized that businesses made of people and, therefore, they need to be people-oriented in the way that they pursue customer experience management. And they knew that in order to earn the trust of their customers, they needed to earn the trust of their employees. And so, they involved human resources and many other functions to work together in helping everybody become aware that they all have a role to play — not just the customer-facing people, as front-line staff are only as good as the rest of the company internally enables them to be, by resolving and preventing issues. Otherwise, nobody wins.
Maersk set out to help their employees understand customer experience by reflecting on how they, as consumers, feel about their experiences. They held a three-day session with managers across the company where they presented a playbook of 24 solutions ranging from very simple things such as how to talk to customers without using jargon, and putting customers’ pictures on the wall so that they could connect to customers more personally, to other more sophisticated things. They kept a score card, which emphasized that the countries with the best success were the ones that were embracing cross-functional collaboration. Other parts of the company jumped on board and now they’re seeing upward trends globally.
In summary, the success factors for customer experience management include:
- Coordinating customer experience management across the people who are in charge of the various activities for customer experience in the company.
- Making customer experience a strong input to your corporate strategy and not an adjunct to it.
- Presenting the results of your customer surveys to all employees.
- Using customer lifetime value.
- Expecting actions to be taken on the customer surveys by all employees, especially all the ones who are owners of the key drivers of customer experience.
- Collaborating cross-functionally to improve customer experience.
You can view the complete CX Forum webinar recording and download slides (free registration required).