Customer Experience Management and Customer Expectations

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In the past weeks I found more and more articles like  this one that talk about the importance of continually exceeding customer expectations to be able to deliver a positive customer experience. Only this way, companies get advised, will they achieve customer loyalty and advocacy.

I, frankly, find this more than a bit disconcerting. To me this seems to be a very wrong objective to put the sole focus of customer experience management on. Minimally it is a very short sighted objective.

Not to be misunderstood. As a customer I like my expectations exceeded, too.

Why is the objective wrong, then?

Where we are at …

For a starter, and that may be true for many other customers, consumers as well as business customers, we have grown to expect very little. This is probably following many disappointing encounters where already the basics go very wrong.

I am talking about basics customer experience failures like:

  • Being ‘targeted’ by and served with irrelevant marketing e-mails, or plainly with too many of them
  • Complicated onboarding processes
  • Unavailable, uninterested, or plainly overly busy in-store personnel, or the personnel not having information at their hands
  • Long wait times in the customer service lines, even in chats
  • Inadequate solutions to problems
  • Different experiences when using different channels, like the necessity to repeat information
  • Delivery windows that span a whole day
  • Information about delays not being provided
  • Confirmations that differ from the agreement
  • Privacy policies that almost need a law degree, are very long and that put the customer on the back foot
  • Loyalty programs that clearly rather serve the company than offering value to the customers, too

I guess this list could be continued for a little longer. All of us have some examples, like this, this, …

In a 2014 report consultancy EY concluded that poor customer experience costs around $40 billion per year.

I am not saying that this is always the company’s fault, as e.g. customers regularly ask for the lowest possible price. A very low price comes at a cost, too. And this price very well can relate to customer experience in one way or the other.

As you see this incomplete list of issues stretches throughout all phases of customer engagement, starting from marketing and going right through customer service, and explicitly includes loyalty schemes.

Fixing some, or all, of them, surely would get me excited. My expectations would be exceeded.

And then I would take the new status for granted. I am excited no more and my expectations are merely met. And justifiably so. After all I was talking about basics. Once the basics are covered there will be the next level of things that I expect. This is not only human nature but also because technology advances. What is hardly possible this year will be a piece of cake next year.

From here we are starting to run into a vicious circle, caused by a running target. It is plainly impossible to consistently exceed expectations for the simple reason that the expectations rise at least as fast as the ability of a company to deliver on them.

And then one can ask the question whether customers do expect that their expectations get exceeded or whether they just want value. Are customer expectations towards a discounter the same as towards a luxury store?

On top of that companies always have financial restrictions – let’s face it: Companies need to make a profit for their owners. Last but not least companies are not necessarily interested in treating every customer equal, not even thinking of equally impressive.

In summary: Customer Experience Management is not about consistently exceeding customer expectations.

Period.

Then what is Customer Experience Management about?

In the words of Paul Greenberg Customer Experience Management
“is a business science that has the purpose of determining the strategy and programs that can make the customer feel good enough about the company to want to continue to do business with the company.”

There are some important key words in this definition: Strategy, programs, and good enough. Especially “good enough”!

And on a second look this definition is a lot harder than “consistently exceeding customer expectations”. It is far less scattergun and involves a thoughtful approach to what needs to be and shall be done – and in what order. It describes a continuous improvement process that also involves thinking big while acting small. After all there is no need in “wowing” a customer in an area that he/she is utterly uninterested in. On the other hand it is important to keep customers on board after the sale. Paul’s definition also implicitly requires leveraging the solutions that are brought in place with the programs. A program in itself does not deliver value – value comes only through the constant use of what got delivered by a program. And here we are possibly talking a culture change.

Customer experience management starts with a thorough analysis of what the company itself stands for, whether its culture supports this, and with constantly keeping an ear on what is important for the customers and where their moments of truth lie in their individual journey.

The Moments of Truth

Following research by Google, findings by P&G, and Brian Solis, who describes this in his book “X: The Experience When Business Meets Design” there are 4 important Moments of Truth, which are also called micro moments. Let me quote Brian:

  • Zero Moment of Truth (ZMOT): Introduced by Google, this is the moment when people are searching for what they want
  • First Moment of Truth (FMOT): This concept was introduced by P&G and is the moment when people see your product and form first impressions about it.
  • Second Moment of Truth (SMOT): This is actually more than a moment; it’s the collection of moments when people feel, think, see hear, touch, smell and (sometimes) taste as they experience your product. It’s also how your company supports them in their efforts throughout the relationship.
  • Ultimate Moment of Truth (UMOT): This is the instant when a customer creates content based on an experience with your product or service and publishes online, in apps, on YouTube, Amazon, and so on, in their social communities and networks for others to find.

Each and every of these micro moments are encountered by customers once or several times, in an arbitrary order, at different touch points. The customer journey is not linear.

Operationalising Paul’s definition, Customer Experience Management as a business discipline is about providing a menu of touch points that are consistent enough to minimally make the customer return and to ideally convert the customer into an ambassador.

Creating the Experience or: How to get there?

Key is to deliver on promise. And the promises are the brand- and marketing messages – which should be aligned, too.

Assuming that the company’s culture is customer oriented enough to support customer experience management initiatives at all, the starting point is an honest as-is analysis so that the current state can get mapped against the desired state. This is an across the board exercise that in my eyes has the CIO in the driver’s seat and the board, including the CEO, as the steering committee.

Why?

There is a lot of ‘digital’ involved here and the CIO should be in charge of enabling an agile business by providing the infrastructure for it. That puts the CIO plainly into the driver’s seat.

The board and CEO supervise, as the whole topic is covering the whole business and because C-level engagement needs to be shown in order to be successful.

On a high level the process works like this:

Process

  • Assess and plan. State where one is in respect to where one wants to be. Having an objective = destination is only half of any roadmap. One also needs a starting point to not suffer shipwreck on the way. This includes not at the least to get a good overview on the menu of customer touch points (yes, menu, not prescribed customer roadmap) and the main journeys used by the customers.
  • Select the right stakeholders from the relevant departments. It is important to cover business- and service units, including IT. Some of them might be a given but be mindful: The right people are not necessarily the department heads; there often are people on the ground who have a very good overview on what is good, what not so, and, even more importantly, who can act as influencers when it comes to implementation. Be sure that these stakeholders are empowered and not just bodies that are sent into useless meetings – else the exercise will become useless
  • Collect data to identify the pain points and get an overview on where in the organisation they are, and how much they affect different parts of it. This can be achieved as simple as having every stakeholder rank the individual pain points individually. The sum over the departments then is a measure of the organisational pain. This identifies potential initiatives that mitigate the identified issues, follow corporate-, departmental, and IT strategy and can get pursued. Price them! It is important to know their gains as well as their cost
  • Categorise the identified initiatives, e.g. Into strategic, growth, compliance, or efficiency projects. This can be done by assessing them according to project risk and economic climate. The hunger for risk decreases with weakening economic climate. Strategic projects e.g. tend to be more risky and thus often are started only in stronger environments, whereas efficiency or compliance projects are more interesting in weaker times
  • Prioritise! This is an important and often forgotten step. Use a transparent process for this and don’t just go for some influencer’s pet project. Tools that one can use for this step are for example business value indicators, IT efficiency index and many more. Yet, it is a good idea to map an IT index over a business index as this helps to get mutual understanding and agreement. After all IT- and business departments are not always fully aligned …
    After this step we have a good portfolio of project candidates that can get kicked off if needed
  • Build a roadmap that corresponds to the current priorities and budgets with these project candidates
  • Execute

Rinse and repeat! Regularly, often.

This is important. Business priorities change. With this the priorities of the customer experience initiative change as well.

2 COMMENTS

  1. Thanks Thomas, your thoughts really resonated with me. Thought I’d just share another take on the topic, more down to CXM implementation from the tech standpoint. This deals with translating common stances on how to manage customer experience into down-to-earth software functions. It’s interesting how they incorporate the ideas of continuous CX data collection and involvement of stakeholders: https://www.scnsoft.com/blog/how-to-actually-manage-customer-experience-know-your-software

  2. Darya, thanks for your comment. The article you refer to is interesting. Yes, a CRM system is on the backbone of providing customer experiences. As such it is essential. But there is no system that is able to deliver it all, as your colleague Denis says. It needs to be extensible and configurable/customizable as it will be always necessary to plug in other systems – starting from your ERP and analytics platforms, going to more specialized ones, even catering for the necessity of working with external parties. HR is part of it, too, as we will continue to deal with humans. In service scenario it needs a lot of empathy, which is a character trait to look out for. Then we have the products/services and solutions themselves, which are not governed by any CRM system but by a (hopefully customer centric) strategy. In retail environments we are also looking at store layouts.

    So, yes; the CRM system is important but I would be wary if someone tried to sell me a Customer Experience Management system. Customer Experience Management deals with much more than just systems.

    Cheers
    Thomas
    @twieberneit

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