Why a Wise CEO would Never Buy-in CX

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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 fifth attribute.

The TCE (Total Customer Experience) Model

Let’s face the realities:

  1. CEOs scarcely spare enough attention for CX initiatives.
  2. CX budgets won’t be adequate as companies’ resources are limited.
  3. VOC is usually disregarded and rarely converted into purposeful actions.

You won’t be able to change the status quo with the Conventional CX. But with a Real CX you can. Let me illustrate how with the TCE (total customer experience) Model [note 1].

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Figure 1 –The TCE Model of a Credit-Card Issuing Bank
Figure 2 –The TCE Model of a Mobile Network Operator

Figure 1 shows the TCE Model of a credit-card issuing bank. Figure 2 is a simplified version of the TCE Model for a mobile network operator.

The data are derived from a research with 4,567 valid responses of credit card holders [note 2] and another research with 2,275 mobile service users [note 3].

The horizontal axis spans the customer lifecycle from experiences at X1 to X39 in figure 1 and X1 to X30 in figure 2. The vertical axis addresses all interacting touch-points from T1 to T27 in figure 1 and figure 2.

In both figures, white stars denote the touch-point experiences that are important in driving both retention and NPS/referrals, green dots important to retention, red dots important to NPS/referrals, and black dots unimportant to both [note 4].

Real CX Makes CEOs’ Lives Easier

The most important job that CEOs have is to make decisions. A Real CX rides on the TCE Model to enhance both the efficiency and effectiveness of their decision-making.

1. Make faster decisions. CEOs can visualize all trees and the entire forest in one comprehensive blueprint. Instead of reviewing numerous CX reports of each function and touch-point, the TCE Model consists of all the touch-point experiences that affect how customers perceive your brand across the entire customer lifecycle.

It helps reduce the efforts and time needed for CEOs to make CX-related decisions. You would undoubtedly and consistently capture CEOs’ primary attention.

2. Make better decisions. The TEC Model illustrates the importance of each touch-point experience in driving target objectives, e.g. retention and NPS/referral for the credit-card issuing bank in figure 1 and mobile network operator in figure 2. CEOs can more accurately align resources with target business results.

Instead of playing a functional role to fight for more resources, you strategically advise how to allocate the limited resources amongst different functions and departments.

3. Make fairer decisions. The data of the TCE Model is derived directly from your customers, not from any internal consultants or external authorities. It would reduce the disputes between different departments as it is a more objective and a transparent approach in resource allocation.

The TCE Model links the data to business results, objectively allocates resources and might reduce departmental silos. VOC is heard and used in a meaningful context.

The TCE Model is useful. But don’t get me wrong, I am not trying to sell it to you here. It is indeed more sophisticated than customer journey mapping, but it’s not rocket science. There are many brilliant brains and clever minds out there in the market who can create better models and solutions.

My point is, however, that the role of CX has to be strategic in order to carry out its destined duties.

Real CX’s Role is Strategic, Not Functional

As illustrated in figure 1 and figure 2, CX includes everything that customers can perceive – all experiences at the pre-purchase, at-purchase and post-purchase stages delivered by various functions and channels.

That said, just because CX includes everything that would affect the feeling of customers throughout the entire customer lifecycle, doesn’t mean that it has to do everything. No functions can. The nature of CX dictates its role – strategic and not functional.

If services have to be improved, leave it to Customer Service. If products or pricing are in trouble, let the Marketing folks handle that. Let the respective functions do their jobs.

The role of CX should never be functional. It ought to be strategic and monitoring. It identifies what has gone wrong, where resources are used poorly and ensures brand promises are delivered.

This direction is what CX should be heading towards. Without a neutral perspective, how can it render the best and non-biased solutions for companies to deliver their brand promises, yet satisfy customers’ needs and achieve business results?

Therefore, the positioning of CX has to be strategic, not functional.

Real CX must Detach from CS and Marketing

With the TCE Model, you can change from the biased “Managing CX = Managing Service” to an objective “Managing CX = Managing TCE” perspective.

With the “Managing CX = Managing TCE” perspective, a Real CX connects your CX efforts to business results. It maximizes the productivity of the limited resource of any organization in driving repeat purchase (retention) and referral (NPS) – the resultant behaviors of loyalty.

On the other hand – as the Conventional CX is just service-in-disguise – when “Managing CX = Managing Service”, your CX efforts and investment will overwhelmingly concentrate on service-related initiatives and touch-point experiences.

But in truth, it could be the other touch-point experiences that affect how customers perceive CX and influence customer loyalty. Would anyone in your organization dare to speak out and say that resources could be used more effectively in some other channel or touch-point? Who will voice this opinion when CX is the responsibility of Customer Service or Marketing?

To maximize the effectiveness of CX, the CX function has to gain its independence. It is entirely necessary to have a Chief Experience Officer or Chief Strategy Officer – who is detached from Customer Service or Marketing and reports directly to the CEO.

Why a Wise CEOs would Never Buy-in Conventional CX

Why are so many CEOs not buying into the Conventional CX? Because it’s not a real CX:

    1. It doesn’t include ‘product’ and ‘pricing’. The Conventional CX is just service-in-disguise. Its core value is to “Serve Customers Better”. When it doesn’t include ‘pricing’ and ‘product’, to many CEOs, it just looks like another “make customers happier” project. What kind of CEOs would put this type of customer satisfaction enhancement initiative on their priority list?

    2. It subjectively assesses customer experiences. The mission of CX is to deliver brand promise. However, different brands have non-identical brand promises. Since the Conventional CX disregards any brand promises other than ‘service’, how can a rational CEO trust that it would objectively evaluate CX and create a branded customer experience?

    3. It renders biased solutions to CX problems. The one prescription of the Conventional CX – the full-scale and company-wide “Serve Customers Better” approach – doesn’t fit every company and all situations. Why would any sensible CEO take unnecessary risks to deploy this singular and subjective solution trying to solve the different CX challenges they face?

    4. It can’t generate quick wins. The Conventional CX excludes ‘pricing’ and ‘product’ from customer journey maps. Thus, all business drivers would surely be ‘service’ or service-related attributes. It would become a project for enhancing service instead of driving quick wins or business results. Why should a pragmatic CEO support a pure service improvement initiative?

    5. Its role is functional, not strategic. A Real CX includes everything that would affect the perceptions of customers about your brand. Its nature dictates its role – strategic not functional. The Conventional CX puts CX as a function parallel to Customer Service and Marketing. It only creates chaos and redundancies. A wise CEO would not add a CX function on top of existing functions or departments.

As the Conventional CX is only about interactions, it should rightfully be renamed as CIM (customer interaction management) and cease to hijack the name “CX” any longer. CX is supposed to be necessary and good to all companies. However, because the Conventional CX is only suitable for or welcome those companies whose brand promises are ‘service’ or service-related, it becomes the privilege of the members of SERVICE club. Due to its one prescription – the company-wide and full-scale “Serve Customers Better” approach – the Conventional CX is unnecessary and bad to most companies. Furthermore, with its biased perspective and functional role, the Conventional CX wouldn’t be able to maximize the productivity of company’s limited resources.

A wise CEO would never buy into the Conventional CX.

Conventional CX should Get a Worst CX Award

There was a joke.

“CRM software vendors should get a Worst CRM Award. They practiced the worst customer relationship management when dealing with their clients.”

Now, let me tell you a story.

There once was a brand that tried very hard to sell a ‘great product’ to its target customers, aimed at solving an important problem.

However, most target customers refused to buy. For the minority who bought, the product didn’t work out at all.

The brand shifted the blame onto customers, e.g. they didn’t read the user manual or use the product properly. Customers were wrong and must change.

They seldom reflected yet kept on complaining, so much so that many target customers have turned their back on their ‘great product’ – for over a decade.

As a CX professional, what advice would you give this brand?

“They should shift from product-centric to customer-centric: Listen to their customers, and improve or swap the product.” It is blatantly obvious, isn’t it? Wake up! It’s you, not your customers, who are wrong and must change.

That brand is us, that product the Conventional CX, and we are product-centric.

“CX professionals should get a Worst CX Award. We practiced the worst customer experience management when dealing with our clients.” Sadly, it is not a joke.

Shall we change?

* This is the final 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. The TCE (Total Customer Experience) Model maps the matrix of all the touch-point experiences in which customers interact with a company or a brand during the entire customer lifecycle using X-VOC Research to derive the importance levels of each of the touch-point experiences that drive target business results. I created this model in 2009. See Sampson Lee, Building an Effective Total Customer Experience Model for Telecom Operators (Customerthink.com, 28 May 2009).

2. Mainland China Credit Card Customer Experience Research, Global CEM, May-June 2008 and May-July 2009.

3. Global Mobile Communications Customer Experience Research, Global CEM and CustomerThink (U.S.), March-May 2009.

4. The importance rankings in the research findings shown in this article were generated using the derived importance approach with regression analysis.

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