Has CXM “Jumped the Shark,” trying to be the Theory of Everything?

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The term “jump the shark” originated in a 1977 episode of Happy Days, when the Fonz literally jumped a shark on water skis. In common usage it means “the moment when a brand, design, franchise or creative effort’s evolution declines.”

I’m worried that’s what has happened to the Customer Experience movement, as proponents attempt to define and redefine it to include every aspect of a customer relationship.

In recent months there’s been a lot of debate on CustomerThink about Customer Experience (CX) and Customer Experience Management (CXM). Let me start by attempting to simplify what CX is, by listing what isn’t included.

[crickets]

Well, that was easy! OK, so if nothing is excluded from CX, then it must include everything, right? And indeed, according to CX industry thought leaders, the customer experience encompasses every interaction, thought, or feeling a customer has about a company including products, services, pricing. Therefore CXM must logically be an approach to manage CX=everything.

Of course, the same could be said about “relationship.” Everything a company does can impact a customer relationship. So CRM must also be a “theory of everything,” just like CXM.

Except that’s not how the market perceives CRM. Based on numerous studies, I know that most people think CRM means using technology to extract value from a customer base. While CRM was promoted by industry experts as an all-singing-all-dancing business strategy to drive customer loyalty, it didn’t end up truly meaning that. CRM is defined by what people think it means, not what industry experts say.

I share this because the same CX experts who say CX=everything are also quick to position it as either completely different from CRM, or a strategy that includes CRM. Yet the CX crowd conveniently ignores the fact that CX as currently practiced doesn’t really mean what they say it means.

Confused? Me, too. Let’s move on, and I’ll share a few examples to illustrate my point.

CXM evolves to Theory of Everything

It’s really tough to create a Theory of Everything (ToE) because everything is, um, really big and complicated. In physics, a lot of brilliant scientists have spent decades trying to develop a single theory that encompasses both Quantum Field Theory and General Relativity.

In business, there are thousands of books that purport to hold the secret to success. In recent years the Customer Experience industry has essentially said: “focus on improving interactions and your business will prosper.” Do a search on CX/CXM and read some articles. Start with Wikipedia and you’ll learn that:

The customer experience has emerged as the single most important aspect in achieving success for companies in all industries. With products becoming commoditized, price differentiation no longer sustainable, and customer demand, companies – particularly communications service providers (landline, wireless, broadband, cable, satellite, etc.) – are focusing on delivering superior customer experiences.

OK, now I get it. Since companies can’t compete on product or price, they should focus on experiences instead. Except, if experiences include products and pricing, how exactly does that work? How do you focus on something when it includes everything?

Here’s another example from a lengthy CustomerThink discussion. Self-described “car guy” Chris Travell of MaritzCX says “nobody makes a bad vehicle anymore” and therefore, “the next competitive battlefield will be the customer experience” including customer service in the dealership. But he goes on to say that “how the customer interacts with the product and how much they pay for it is an absolutely essential element of the customer experience in the automotive industry.”

In a recent blog post Gartner Surveys Confirm Customer Experience Is the New Battlefield, Gartner analyst Jake Sorofman says:

  • “Customer experience is the most pressing mandate for marketers, the top area of marketing technology investment in 2014, and it will lead innovation spending for 2015.”
  • “…as competition and buyer empowerment compounds, customer experience itself is proving to be the only truly durable competitive advantage.”
  • “By 2017, 50% of consumer product investments will be redirected to customer experience innovations.”

Forrester Research is often cited as “proof” that CX will pay off, because CX leaders outperform laggards. But it should be noted that Forrester originally created the Customer Experience Index (CXi) to measure how consumers rated their interactions as being enjoyable, easy, and effective at meeting their needs. About a year ago, Forrester evolved the CXi to a general-purpose customer loyalty framework. One that presumably includes products.

So, over the past decade the CXM industry used excellence in interactions as the key to sell CX, then redefined CXM to include everything. Clever.

The only problem is that reality has not caught up with rhetoric. See if you can find product or pricing mentioned in the CXPA’s exam blueprint. Try to find a customer journey map that includes products or pricing.

Refreshingly honest, journey mapping expert Jim Tincher explains that “most of us CX folks spend our time communicating that its not JUST about product. And, as a result, we don’t write much about the product experience. This focus can certainly lead people to believe that product isn’t a part of the customer experience.”

Right, the product is part of the experience, it’s just not the part that needs attention. So how is CXM about the product?

I could go on, but you hopefully get the idea that the CX industry is trying to have it both ways. CX is most commonly positioned as an alternative to competing on product or price. That leads naturally to a conclusion that CX is about the interactions a customer has with a company — including people and systems. Product experiences, often called the user experience, are of course important, but these are already included in that, you know, product.

The Missing Ingredient: Being Distinctive

Name one business that has been successful trying to be all things to all customers. Walmart, the biggest company on Fortune’s Global 500, can’t. Neither can Amazon, IBM, GE, or any other mega company on the planet. Even the biggest firms have to focus their resources.

The same can be said for ideas, acronyms and methodologies. When proponents pitch them as a ToE, it’s a sign that the hype cycle has peaked. Indeed, in the past year many CX tech vendors have shifted their messaging from “customer experience” to “customer engagement.” Why? Because when a term means everything, it means nothing.

I think the CX industry is at a cross roads. Maybe it will become a ToE for customer relationships. If so, it will have to overcome the groundswell of content available on the Internet which reenforces the notion that CX = non-product interactions.

A more likely outcome in my view is that CXM will be commonly practiced as Jan Carlzon wrote in his seminal book Moments of Truth, published nearly 30 years ago. In a 2006 CustomerThink interview he explained that airlines tended to focus on technical developments (better aircraft) and cost management, while customers valued all sorts of interactions.

…for some time, we thought if we just had very new and nice and technically developed aircraft, people would regard our company as good. But when we questioned our passengers, it showed that 90 percent of them didn’t even know what kind of aircraft they were flying. Where did they get their impression or perception of the company? We found out that they got the perception in those meetings with human resources, the employees working in the company: a salesman over the telephone; a girl behind the check-in counter; a stewardess on board the aircraft; the captain, the way he spoke over his microphone.

That’s pretty well in line with what Pine and Gilmore wrote in their groundbreaking book The Experience Economy, where products are viewed as props on stage. Sure, you need props (products) but they are not the focus. It’s all about the actors (employees) and how they communicate with the audience (customers).

A third approach is developing a distinctive or “branded” total customer experience. To me, this is the path forward for those that seek a real competitive edge.

Shaun Smith, co-author of one of the early CX tomes Managing the Customer Experience defines a branded experience as “consistent, intentional, differentiated, and valuable … via product, place, promotion, pricing or people or, a mixture of all of these. All of which to say that customer experience per se does not differentiate brands but only if the experience is distinctive to the brand and valuable to the customer.”

In other words, the key challenge for CX designers is not touchpoint improvement, but creating an overall perception based on a unique combination of touchpoints.

Which path will you choose?

Wrapping up, to me the key value of CX/CXM has nothing to do with interactions, products or pricing. It’s the fact that the CX movement has brought an outside-in focus to customer relationships, which is complementary in a yin-yang sort of way to CRM.

CRM - CEMThe weakness in both is that products are a blind spot. The idea that products don’t matter anymore is ridiculous. The CX industry lavishes attention on service businesses like airlines, hotels, retail, etc., but what about pharma, manufacturing, and consumer products companies?

Based on a studies I’ve repeated numerous times over the past 15 years, product and price hold about 70% of customer perceived value, and that hasn’t changed to any meaningful degree in the past few years. In the B2B world, creating great products is still the lead strategy. Ask a software provider if they are winning deals because of the quality of their own customer experiences, or is it mainly about product excellence and being price competitive?

To my many friends and colleagues in the CX industry, I say this: Be careful what you wish for because you might get it. If you’re successful in defining CX=everything, then how will your firm differentiate? Are you planning to offer solutions to help companies design and build better products? Innovate pricing models and packages? If not then you’re creating an expectation that you can’t fulfill, and you know where that ends.

To CX practitioners and business leaders, I suggest you spend some time debating what CX really means at your company. How will you create a strategy to deliver more innovative and distinctive experiences?

My own research finds the most significant differentiator between business performance Leaders and Laggards is “constantly seeking ways to improve solutions delivered to customers.” I don’t think jumping on the CX bandwagon to “improve” experiences — fix problems with existing processes based on VoC feedback — will be enough to set your company apart.

17 COMMENTS

  1. There are exemplars, of course, that have created a distinctive, if not personalized, branded customer experiences. Companies like Wegmans, Zappos, Southwest Airlines, Costco, The Container Store, Metro Bank and Umpqua Bank, Zane’s Cycles, IKEA, and Trader Joe’s come immediately to mind: http://www.slideshare.net/lowen42/branded-customer-experience-white-paper That said, fully agree with you that defining, and sustaining, unique and value-driven customer experiences is a challenge for most organizations, and for most consultants. Choosing the right path is a bit like what Tom Lehrer described as “sliding down the razor blade of life.” And now…we’re dealing with the next stage of CEM, clienteling (I’m writing a blog about what it is and where it seems to be headed).

  2. Brilliantly written piece, Bob.
    My fear s that the over-emphasis of many people on the day to day experiences, prevents them from thinking through the real big steps needed in getting companies and CEOs to be customeric. Fighting in the trenches is not the complete battle, however well you fight. It is hand to hand, face to face and what we would call front facing, and we want to give an experience to the person on the other side. But what about the battle itself . How will it be won. (not belittling the man in the trench)
    Bob, may I just repeat something from a wise man:

    My own research finds the most significant differentiator between Leaders and Laggards was “constantly seeking ways to improve solutions delivered to customers.” I don’t think jumping on the CX bandwagon to “improve” experiences — fix problems with existing processes based on VoC feedback — will be enough to set your company apart.

  3. Bob – GREAT piece and couldn’t agree more! We focus on B2C industries specifically and believe that companies need tools to better operationalize CX – think visibility AND control – in order to sustain financial performance over time. Once this is achieved, they ultimately have defined (or redefined) CRM in a new way for their business. We call it B2C CRM.

  4. Bob you have picked a timely and important topic. You mention that “CRM is defined by what people think it means, not what industry experts say.” the same can be said of CX. Right now most people define customer experience in terms better suited for customer service. They are rushing to hire CX professionals who will be put in a silo to manage reactive customer interactions. This concerns me. I think it is time that we have frank conversations and hold each other accountable for delivering value to our employers and our clients. My research has shown that what sets apart the leaders from the laggers is not that they have great customer service – but that they set out with a vision of the experience that they want to deliver and they focus on delivering that experience. Through the customers they select, their sales process, their products, their pricing, their interactions, their culture and who they hire. It is a strategic decision, not hand to hand combat trying to smooth over bad product experience or poor expectations set during the sales cyle. CX leaders need to reframe our tools and our message to focus on actions that will deliver differentiated value.

  5. Thank you for the wonderful article! I’m an intern who had no idea what CX was before this year. Then a couple of months ago I was the one writing the definition of CX and CXM for our company’s SEO pages. Trying to clearly define it all was difficult, even after I did plenty of research, so I appreciate any conversation on what all of these relatively new terms actually mean.

    I agree that transactional experience and product experience are separate on the company’s end of things, and I think it’s interesting to see how VoC/CX programs deal with them together – as a customer, my overall perception of a company or brand is shaped by both my transaction and the product, after all, and while I may be able to comment on them separately, my emotional connection to the company can’t really be distinguished by transaction or product. My future buying choices depend on both of those factors and many more, some of which are influenced by the company and others of which are not.

    An accounting professor told my class that finding an accounting error didn’t help you solve the problem – it just led you to the person who could solve the problem. I think CX data is similar. It sends you to problem areas in transactions and products, and then it’s up to the people in the company to figure out solutions.

    So maybe it has to be that far-reaching; it would be kind of odd to want customer feedback on just the product, or just the transaction. A CX team can (hopefully) point out the problem and send it on to the people in charge of that area. Maybe the role of CXM is like a funnel – to take all of the data for every department and make it actionable. That makes more sense to me than the idea that CX should be focused on just a few things.

  6. Interesting quandary. I agree that if nothing is EXcluded from ‘customer experience (CX),’ then it includes everything. That’s onerous, and too big to grasp.

    When companies add the ‘M’, as in Customer Experience MANAGEMENT, boundaries become clearer. Since ‘everything’ cannot be managed, companies have to make strategic choices about their customers’ CX – how they think about it, define it, and how they invest resources to ensure the right objectives are met. By necessity, that includes considering some things and not others, and taking certain actions to the exclusion of other actions. Boundaries are inherent in CXM, whereas they really aren’t in CX.

    Today, because IT has become deeply embedded in customer interactions, and tightly integrated into supply chains, it’s difficult – if not impossible – to tease out and isolate exactly what a company does that constitutes ‘product’ and what what it does to deliver a valuable and differentiated Customer Experience (CX). As I read your article, I thought about a prosaic purchase I just made from Amazon – a low-voltage dimmer switch. The ‘product’ that I bought INCLUDED the physical switch, but what I also bought was the speed and simplicity of ordering, and the rapid fulfillment (the product was ordered on Friday and delivered two days later on Sunday!)

    As much as I try, for that transaction (and for many like it), I have a hard time partitioning what is product and what is CX. Deciding on a strategy still boils down to asking and answering, “what outcomes will our customers pay for?”

  7. Hi Bob

    An interesting post about a long-standing topic.

    From my perspective, as someone who has been a consultant and director of both CRM and CXM operations in the recent past, the differences between the two are quite simple. CRM is about marketing, sales and customer service from the company’s perspective. It is what companies do to their customers to extract more value from them. Although it includes customer service, its emphasis is very much on marketing and sales. It is not typically about creating more value for customers.

    CXM arose when CRMers realised that customers were on to them and that offering nothing of value to customers was not a viable long-term strategy. CXM is about how companies manage interactions with customers throughout the customer lifecycle. CXM thus includes marketing, sales and customer service interactions but also others, particularly the all important post-sale usage interactions that create most of the value for customers. Although it It is not primarily about creating more value for customers, it is how companies work with their customers to create more value for both.

    CXM this incorporates but goes beyond the limited focus of CRM. It is about more than just Marketing, Sales and Customer Service. And it is about more than just creating value for the company.

    (There is an equally heated discussion going on between CXM, User Experience and Service Design practitioners about which includes the others, but we will leave that for another day).

    CXM is not a theory of everything. It never was. But just like CRM did before it, CXM provides a framework for companies to use to create temporary competitive advantage. And just like in CRM, the devil is in the details of how you implement CXM.

    A parting thought. Just as CXM has expanded upon but not replaced CRM. What do you think will be the next big thing after CXM?

    Graham Hill
    @grahamhill

  8. Thanks to all for your comments!

    Michael, I like your examples, but they mostly re-enforce the idea that CX is about interactions, not products. CXM really should be CIM — Customer Interaction Management.

    Laura, I agree that CX should be about differentiated value. But as currently practiced, it’s mostly about listening to customers complain and fixing problems.

    Andy and Eliza, there are plenty of examples where interactions and product experiences blend together. Starbucks being one. But plenty more where they don’t. When I go to a drug store, I’m looking for specific brands/products. Why? Because the product does something I want. Calling it a “usage experience” doesn’t change that. But I will choose the store for different reasons. Products still matter.

    Graham, in general I agree with your characterization of CRM and CXM. Neither is a ToE, although some in the industry present them as such. Both are/were driven by the bandwagon effect. A term becomes hot and everyone jumps on to define it in a way that suits their business — be it software or consulting. As I said in my post, both CRM and CXM have a blind spot about products, which continues to be a huge source of customer value. Another blind spot is innovation, which I think should be part of any “next big thing” after CXM.

  9. There is no CX, CXM or Customer Centricity without a “product” that customers hire to do their “job”. That is where CXM starts IMHO. The terms in quotes come from Clayton Christensen works on innovation.

    I completely agree with Bob that CX is about focus on your operations, products and pricing from customer’s perspective and therefore price is only meaningful as how the customers perceive the value of their experience with the product and the company. In other words how friction-less was experience of obtaining a desired outcome http://blog.cx-iq.com/voice-of-customers-challenge-to-product-managers/

  10. Bob –

    This is sort of a redux of the dialogue on product and service quality effect relative to customer experience effect from earlier this year (http://customerthink.com/how-much-do-product-quality-and-service-quality-influence-customer-behavior/).

    In my blog on the subject, I concluded by saying: “In the past 20 to 30 years, we’ve learned a lot about the connection between quality and customer behavior. Today, we understand the correlation and causation between the tangible, functional aspects of value and customer actions. Tangible and functional quality helps create and sustain (or undermine) trust, but it is far less impactful than, for example, the emotion and memory behind interactions and experiences.”

    So, for me, the operative, and consistent, word for intersecting product and customer experience is “connection”.

    Michael

  11. Hi Bob

    An interesting summary.

    I disagree when you suggest that CXM’s natural emphasis on interactions should result in it being relabelled CIM. CIM already exists – just look at most trigger-based marketing programmes – but like CRM is all about creating value for the company and not about creating value for customers. CXM, particularly the version practised by people trained at D-School, is much more about creating value for the customer than CIM or CRM are. The emphasis on co-creation of value for both parties is a key differentiator.

    I agree with the importance of emphasising products. But perhaps not in the way you are thinking of. In reality, a product is merely a value proposition for the services it enables. For example, a car is a value proposition for mobility services.The car provides physical transport to get the customer from A to B. It is this service that the customer uses to do his job and achieve the outcomes he desires, as Gregory suggested. The customer’s wife and children are waiting for him at B, an out of town shopping centre. The customer is happy to see them waiting for him. His job has been done and the outcomes he desired achieved. All of this should is part of contemporary CXM. There is so much more to it than just interactions, products and pricing. At its heart, CXM is about how value is co-created for the company and its customers.

    Graham Hill
    @grahamhill

  12. Great post Bob. You highlight the challenges that organisations and CX Professionals alike need to be very aware of and able to determine strategies to address.

    The greatest risk to the newly recognised CX Profession is that ‘the business’ perceives the CX Professional to be the ‘irritant preacher’ who thinks they know better than anyone else. Ultimately, it is absolutely true to say that businesses exist to make money. They make money through their interaction with customers. Hence, the experience they deliver their customer will determine whether or not the customer returns. It is hugely important that CX Professionals work with the business to help everyone understand the role they play in delivering and improving the ‘end to end’ customer experience – NOT to try and become responsible for the whole experience.

    I have already said that businesses exist to make money and they do so through their interaction with customers – if the company does not have a product or service that the customer wishes to purchase/use, then the businesses will have products and services but NO customer experience.

    Then there is proposition – I completely agree that too many businesses try and be too many things. They are not bold or clear enough in clarifying their proposition. Ryanair for years bucked the trend by brilliantly delivering a brutally simple and arguably un customer friendly proposition. Although they have now had to make radical changes to it, their proposition has led to their emergence as the airline that transports more international passengers in the world than any other. http://www.ijgolding.com/2014/11/13/ryanair-the-brand-we-can-now-learn-to-love/

    At the end of the day, the best Customer Experiences are delivered by those businesses who recognise that their PURPOSE is one that EVERYONE in the business aligns to. Organisations that align brilliantly to a common PURPOSE are ones that deliver three things – 1) what the business wants; 2) what the employee wants; 3) what the customer wants. Customer Experience is not the theory of everything – yet the better aligned to an organisation’s purpose it is, the more likely it is that everything the business and it’s employees want will be realised!

  13. Ian

    What a wonderful world that would be; where everyone in the business aligns to the same purpose. The trouble is, there are very few companies that evenly remotely achieve this state of nirvana. The company wants to be more profitable and must closely manage costs to do so. That conflicts with staff who want to get paid more for spending less hours at work. And who is even thinking about customers who just want good products that do what they say on the tin and help from the company when something goes wrong. The brutal reality is that all three are continuously traded-off against each other to reach an uncomfortable dynamic equilibrium.

    In the mid 1990s AT&T looked at building performance management system build around three measures: Economic Value Added (EVA), People Value Added (PVA) and Customer Value Added (CVA). The three measures worked fine until increasing competitive pressure forced AT&T to quietly abandon PVA. As pressure further increased CVA was also dropped so that AT&T could focus purely on EVA. It was always clear which measure was in the driving seat. And what went for AT&T in the 90s goes for practically every other large company today.

    Graham Hill
    @grahamhill

  14. Bob, first I feel old that one has to describe what “jump the shark” means to your Millennial readers, but so be it. Solid article.

    I remember one of my earlier assignments with a large luxury auto company. We are going to help them with reinvigorating the brand. Being a product planning-type role in the past, I was struck by the fact that small facet of “brand” was being left out in the discussion. It was solely focused on the retail experience. Ok, so people spend a few hours in a dealership every year, but several hours per day in their vehicle. It seem a very distorted approach, but we were dealing with the retail ops folks at the automotive company…not marketing or product planning.

    The best thing about conceptualizing customer experiences broadly is it move us away from such partial and silo-ed approaches to looking at the customer experience. At the end of the day can substitute “brand” for “customer experience” in most instances. However, brand is a static term, while “experience” is more dynamic – always changing.

    IMO its about reverse engineering (as you suggested above). CX is about thinking about how we create experiences for customers and work backwards from there.

    Thanks for perpetually challenging the status quo. Nature abhors the static 😉

  15. Thanks for your comments, Dave.

    A few years ago I was chatting with a CXer and at one point I said “aren’t we really talking about the “brand experience.” Because brand does encompass the totality of what customers perceive.

    This individual didn’t like the idea because “brand” has its own set of issues. The big one being the (mistaken) belief that it’s determined mainly by marketing/advertising.

    CX thinking is that brand is an outcome of experiences. I suppose that’s true, if you include every possible interaction, thought or feeling about a company or its products.

    I see advertising all the time on TV for soft drinks, alcohol, cars, and other stuff where marketers are clearly trying to create a feeling that is associated with the product.

    Does the CX profession have a role here? Not really. Although I suppose you could field a survey to ask people who like Coke whether they really are happier, or Mercedes drivers if they feel more successful, or vodka drinkers if they could be mistaken for James Bond.

    Advertising is part of brand-building, yet the CX profession has nothing to do with it. Trying to lay claim to everything that goes into a brand is part of the overreaching that will tarnish the CX brand.

    Think of it this way: Proclamations that CX includes everything and everyone is a kind of advertising for the profession. Can CX professionals live up to it?

  16. Bob, thanks for taking the time to respond. I get the “if you everything you are nothing argument.” However, I think in this omni channel world people are thinking too narrowly rather than too broadly about the CX. Some think its only the in-store or UX online experience. CX is larger than that. I think it is a big mistake to think that “brand” is somehow in the mystical exclusive domain of marketing advertising folks. Quiet the opposite IMO. Marketing and retention efforts are starting to merge. The role of advertisement, frankly, should be to highlight and reflect the best aspects of the brand. Nabisco makes tasty crackers. Porsche makes fast fun cars. Apple makes cool technology. Customerthink has great thought leadership (plug plug). The role of advertising, IMO is to emphasize what is great about the experience provided by product or service. If firms go too far and promise something the brand isn’t…then the the organization pays the price. Advertisement is a means to end. Some wonder about the role of traditional advertisement altogether. I love the quote by Robert Stephans founder of Geek Squad… “Advertising is the tax you pay for being unremarkable.” Thanks again for challenging the status quo.

  17. Hi Bob

    I am pleased that this interesting conversation hasn’t dried up.

    You suggest that CXers have little role to play in advertising. Contemporary good practice suggest that nothing could be further from the truth. Advertising to build awareness almost invariably involves a response mechanism built in to it, whether that is go to a Facebook page, to a website, or to a store. Best practice today is to see the ad as a trigger in a series of subsequent interactions, decisions and matching responses by the company; a customer journey in other words. If that is not the job of the CXer to orchestrate, then I don’t know whose job it is.

    Interestingly, a trend in the UK at the moment is for the CMO to be replaced by a CCO or a CExO. The thinking behind the trend is that CMOs typically do not have enough influence inside companies to orchestrate the end-to-end customer experience (and are not particularly customer-focused anyway). The new role organises the experience in the places that marketers generally do not reach. Legendary retailer John Lewis is the latest of many to have replaced their CMO, with a CCO in its case, in recent months.

    Graham Hill
    @grahamhill

    PS. A headline in Marketing Week today highlights ‘How CRM is becoming the ‘new advertising’’
    http://www.marketingweek.com/2015/11/09/how-crm-is-becoming-the-new-advertising/
    It is déjà vu all over again!

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