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.
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.
The 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.