Stop Practicing the Conventional Customer Experience Management – Part 4

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Why is there a high failure rate of customer experience (CX) initiatives? And why do most CEOs not buy into CX? Because CX professionals and companies are not practicing a Real CX.

Conventional and Real CX in a Nutshell

Many CX professionals currently assess customer experience through the lens of biased ‘service’, and are becoming “A man with a hammer”: Always adopting the “Serve Customers Better” approach to try to solve every CX problem their respective clients or companies face. The Conventional CX is just service-in-disguise. It’s merely an expanded version of ‘service’ or customer interaction management (CIM). It is not a Real CX.

What is a Real CX, then? Well, in my opinion, a Real CX should possess the following five attributes:

    1. It includes ‘product’ and ‘pricing’.
    2. It objectively assesses customer experiences.
    3. It renders non-biased solutions to CX problems.
    4. It can generate quick wins.
    5. Its role is strategic, not functional.

This article is about the fourth attribute.

Real CX can Generate Quick Wins

Quick wins are important. They prove upfront the ROI and boost morale. Quick wins allow you to get the support to continue the CX journey, which is a decisive factor in influencing the successful rate of CX initiatives.

Many companies complain that they can’t obtain quick wins for their CX initiatives. This is mostly a problem created by the Conventional CX. A Real CX manifests that quick wins shouldn’t be hard to achieve by performing the following tasks:

  • Simplify and operationalize customer journey map.
  • Include ‘pricing’ and ‘product’ in the map.
  • Identify appropriate quick win drivers.

Simplify and Operationalize Customer Journey Map

Many CX professionals are now building sophisticated and fancy models of customer journey map. However, sophisticated things are usually difficult to operationalize. To reverse any complication, we ought to simplify these models in order to put them into operations.

Figure 1: Importance Ranking of the Sub-processes of the Starbucks In-store Experience in Driving NPS

Take the Starbucks case and NPS as an example, we correlated the satisfaction rating of each sub-process during the in-store experience to the NPS (net promoter score) given by the Mainland Chinese and American customers for a global research [note 1].

Figure 1 lists the X-VOC Data [note 2] – the importance ranking of each of the 26 sub-processes in driving NPS. With 26 sub-processes, the importance rankings literally range from 1 to 26, with 1 being the most important and 26 being the least important factor affecting NPS.

Numerous companies use NPS, but not many of them know how to make NPS actionable. From now on, you can find out which particular sub-processes or attributes you need to sweat to improve your NPS. And it’s all supported by quantifiable data.

Include ‘Pricing’ and ‘Product’ in the Map

The Conventional CX always leaves out ‘price’ and ‘product’ in their customer journey maps. It creates an irreversible impact on identifying business drivers.

If ‘pricing’ and ‘product’ are excluded from the Starbucks journey map, two of the top five NPS drivers – ‘Coffee taste/flavor’ and ‘See and be seen (feel you are “part of the group”)’ of the U.S. Starbucks; ‘Appropriateness of prices’ and ‘Coffee taste/flavor’ of Mainland China Starbucks – would be permanently absent on the map.

All the remaining NPS drivers – ‘Friendly/attentive staff’, ‘Knowledgeable staff’, ‘Free trial of new drinks/snacks’, and ‘Goodbye with genuine smile’ – are service or service-related attributes.

In other words, it would become a project of pure service improvement. The whole purpose is then distorted: it would be trying to enhancing service instead of driving quick wins.

For making the best informed decisions to achieve our target results, we ought to aggregate every piece of relevant data for identifying business drivers. ‘Pricing’ and ‘product’ must be included in the customer journey map.

Identify Appropriate Quick Win Drivers

There are always options – oftentimes low-hanging fruits – for you to choose from based on the X-VOC Data. To select suitable attributes that can deliver quick wins, there are two important conditions to be met.

Align or coexist with brand promise. In this sense, ‘Appropriateness of prices’ wouldn’t be a good choice and should be the first one to be taken out of the target candidate list. Because it is the Good Valley – premium prices – that supports the Branded Peak of Starbucks – the Third Place.

Relatively fast and easy to execute. ‘Coffee taste/flavor’ and ‘See and be seen (feel you are “part of the group”)’ do not look like the right targets, and nor do ‘Friendly/attentive staff and ‘Knowledgeable staff’. These four attributes are wiped out since substantial time and efforts could be required to enhance them.

The ideal candidates are ‘Goodbye with genuine smile’ and ‘Free trial of new drinks/snacks’ – the relatively easy targets – you would soon be able to set up inexpensive pilot projects to test out and enjoy a quick win, and most importantly, you connect CX to the target business result – in this case, driving NPS.

A Real CX does not use the X-VOC Data only for generating quick wins. It adopts the data to constantly seek out the respective drivers for achieving business results, i.e. on-site purchase, first-time purchase (acquisition), repeat purchase (retention) and NPS (referral). It ensures that resources wouldn’t be wasted on irrelevant attributes.

For the Conventional CX, resources are consumed for enhancing ‘service’. While for a Real CX, resources are invested in what really matters for driving business goals.

The High Failure Rate of Conventional CX

To understand the high failure rate of Conventional CX, let’s take a look at its potential impact on brands. For simplicity sake, I categorized them into three types:

    A. Extraordinary brands.
    B. Ordinary brands not ready for a CX breakthrough.
    C. Ordinary brands ready for a CX breakthrough.
Figure 2: Impact of Conventional CX on an Extraordinary Brand

A. Extraordinary brands. Extraordinary brands with brand promises relevant to ‘service’ – like Ritz Carlton and Virgin Atlantic – know crystal clear what they stand for and already fulfill their brand promise by delivering a – dynamic Emotion Curve – branded experience. They just don’t need the Conventional CX.

Extraordinary brands with brand promises irrelevant to ‘service’, e.g. if Ryanair and Sukiyabashi Jiro went for the Conventional CX to reduce or eliminate the ‘service’ valleys, what would happen? Resources are diluted, Branded Peak is lowered, and the brand is homogenized – Emotion Curve is flattened. Bad move.

Figure 3: Impact of Conventional CX on an Ordinary Brand Not Ready for a CX Breakthrough

B. Ordinary brands not ready for a CX breakthrough. It is the largest group out of the three. There must be reasons why they are ordinary in the first place. They typically lack 1) The ambition to be extraordinary, 2) The courage to be different and go against the grain, and 3) The capabilities to create significant peaks.

In short, these ordinary brands are not equipped for a CX breakthrough. Out of the fear of falling behind other companies, they are particularly susceptible to widespread propaganda – like “Customer Experience is at the top of every business’ priority list.” – Gartner – and are too quick to jump onto the CX bandwagon. Not surprisingly, these CX initiatives eventually fall short.

Most likely, no improvements are made as it takes too long and too much effort for them to bear, e.g. it could take years for these brands to transform their culture or change their DNA to be customer-centric.

Furthermore, without generating any quick wins, these initiatives would hardly gain adequate support to sustain or proceed further. As a result, resources are diluted and wasted, and their overall competitiveness are weakened. Wrong decision.

Figure 4: Impact of Conventional CX on an Ordinary Brand Ready for a CX Breakthrough

C. Ordinary brands ready for a CX breakthrough. These brands are the minorities within the ordinary brands. They are equipped with the ambition, courage and capabilities to take a quantum leap in CX. They know what they are trying to do.

However, transforming the culture or changing the DNA of an existing – especially the well-established – organization is much more difficult than a new company.

Implementing the full-scale and company-wide “Serve Customers Better” approach could take years before it pays dividends, which adds to the uncertainties and risks (such as whether the sponsored C-level executive still survives, the competitive strategy or business model may have changed). Therefore, only some of the type C brands might reap genuine benefits from practicing the Conventional CX. The remains wouldn’t be successful.

Based on the above brief analysis, it is a bad move for type A brands and a wrong decision for type B brands to implement the Conventional CX, and merely some of the type C brands could enjoy ultimate success.

The Conventional CX is unnecessary and bad for most companies.

Real CX is Necessary and Good for Most Companies

A Real CX helps companies to deliver their brand promises, create values for their customers and achieve business results.

Figure 5: Impact of Real CX on an Extraordinary Brand

A. Extraordinary brands. Even great brands make mistakes sometimes – e.g. unable to fulfill their promises and deliver a de-branded experience. For instance, a Real CX detects the De-Branded Valleys of IKEA Mainland China and recommends a non-biased solution to convert them into a Branded Peak and a branded experience.

A Real CX unleashes the full potential of an extraordinary brand by enlarging the Pleasure-Pain Gap (the gap between the Branded Peak and Good Valley). This way, the extraordinary brand can consistently beat rivals and eliminate imitators by offering an unprecedented level of value – Branded Peaks – to their target customers.

Furthermore, resources are put to their best uses. For example, the No. 1 repeat purchase driver of IKEA is ‘Product pricing’ [note 3], for Starbucks, it is ‘Coffee taste/flavor’ [note 4], while for Louis Vuitton it is the ‘Exclusive feel of wearing/owning LV products’ [note 5]. Resource allocation can be well aligned with the target objectives by identifying the respective business drivers.

Figure 6: Impact of Real CX on an Ordinary Brand Not Ready for a CX Breakthrough

B. Ordinary brands not ready for a CX breakthrough. A Real CX can help the ordinary brands to focus their resources on delivering their brand promises, so that they can differentiate themselves from other ordinary brands.

A Real CX identifies target Good Valleys for saving resources to support target Branded Peaks through Value Exchange. It creates more value for the customers of the ordinary brands.

In addition, unlike the Conventional CX, which focuses on enhancing ‘service’, a Real CX concentrates on driving business results by aligning CX to target objectives. It enhances the effectiveness of resource allocation of the ordinary brands.

Extraordinary brands, such as Starbucks and IKEA, were all ordinary brands at the beginning of their business, and started with relatively gentle Emotion Curves. Rome wasn’t built in a day.

Figure 7: Impact of Real CX on an Ordinary Brand Ready for a CX Breakthrough

C. Ordinary brands ready for a CX breakthrough. Similar to the Conventional CX, a Real CX calls for the same requirements: the ambition to become extraordinary, the courage to allow for Good Valleys, and the capability to create significant Branded Peaks. It also has its own risks and uncertainties, and is more difficult to change for an established organization than a start-up. To be extraordinary is never easy or risk-free.

However, in stark contrast with the Conventional CX, a Real CX affords companies the liberty to choose ‘product’ or ‘pricing’ as their brand promise, and not just limited to ‘service’.

In addition, a Real CX can offer quick wins and achieve business results which are critical to justify further support, and hence, to raise the successful rate of the CX implementation.

A Real CX is superior to the Conventional CX for all brands – type A, B and C. It is necessary and good for most companies.

* This is the fourth article of the “Stop Practicing the Conventional Customer Experience Management” series. There is a total of five articles in this series.

1. Stop Practicing the Conventional Customer Experience Management – Part 1
2. Stop Practicing the Conventional Customer Experience Management – Part 2
3. Stop Practicing the Conventional Customer Experience Management – Part 3
4. Stop Practicing the Conventional Customer Experience Management – Part 4
5. Stop Practicing the Conventional Customer Experience Management – Part 5

A reminder to the audience: I run a CX certification program which may have conflict of interest with other CX training providers. Readers are advised to take this fact into consideration when judging the objectivity of my arguments presented in this article.

NOTES

1. Global Starbucks In-store Customer Experience Research, Global CEM and CustomerThink (U.S.), September-October 2007.

2. X-VOC (Voice-of-Customer @ Experience) Data are generated by customer research to obtain the satisfaction ratings and derive the importance levels of each sub-process (touch-point experience) and attribute during a touch-point experience (total customer experience).

3. Global IKEA In-store Customer Experience Research, Global CEM, CustomerThink (U.S.) and TOTE-M (Netherlands), December 2008-February 2009.

4. Global Starbucks In-store Customer Experience Research, Global CEM and CustomerThink (U.S.), September-October 2007.

5. Global Louis Vuitton In-store Customer Experience Research, Global CEM and CustomerThink (U.S.), October 2008.

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