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Stop Wasting Your Money On Customer Experience 

Jon Picoult | Mar 28, 2017 2,165 views 8 Comments

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Faced with increasingly commoditized markets, more and more companies are launching customer experience improvement programs to differentiate themselves.  However, there’s something many of these companies don’t yet realize:  the vast majority of their programs will fail.

In a survey of over one thousand companies by communications provider Avaya, an astounding 81% indicated that their customer experience improvement programs had failed to deliver results.

Those are a lot of companies wasting a lot of time and a lot of money on something that isn’t working.

What’s worse, given how these failures typically play out, companies end up losing more than just their investment in a better customer experience.  They lose credibility – in the eyes of their employees, and potentially even their customers.



Launched with great fanfare, most of these programs are left to die a slow death, starved for funding and attention.

What remains strong, however, is the signal that sends to their workforce – confirming the staff’s suspicions that customer experience really wasn’t that important to the company.  These programs become yet another casualty in the long line of corporate transformational changes that, in reality, just turn out to be the “initiative du jour.”

Given how that realization can take the wind out of an organization’s sails, many companies are probably better off never launching a customer experience program in the first place, as opposed to pursuing one halfheartedly and letting it wither over time.

With so many of these programs cratering, it’s no surprise that one of the most common questions companies ask about these initiatives is “what’s the number one driver of success?”  I love that question because the answer is so clear and unambiguous:  it’s executive commitment.

Having witnessed many organizations tread the customer experience strategic path, there’s no doubt in my mind that the unflinching commitment of a company’s senior leadership is the single greatest predictor of success for these programs.

That’s not to suggest that a compelling vision, flawless execution and skillful change management aren’t critical to the journey.  They absolutely are.  But it all has to start with a level of executive commitment that goes beyond mere sponsorship for the customer experience cause.

To be among the 19% of companies that succeed on this journey, what does that required level of commitment involve?  Here are three markers to look for:

#1:  Consistency

If you view customer experience improvement as a project like any other, with a defined beginning and end, then you may want to reconsider this path.

Companies that succeed in this realm recognize the need to embed customer experience in their DNA, to make it an integral and enduring part of how they do business.  That work never ends.  Customer expectations and preferences will always evolve, as will a firm’s products and services.  As a result, fixing, polishing and tuning the customer experience is an ongoing task.

If yours is an organization that easily gets distracted by the “next big thing” – whether it’s Big Data, predictive analytics, AI, or some other shiny object – then that may foreshadow problems down the road.  When it comes to building an effective customer experience improvement program, the importance of consistency – in organizational focus and executive messaging – cannot be overstated.

#2:  Appreciation of Scope

Some business leaders think customer experience initiatives are about a good tagline or a clever marketing campaign.  Others think it’s about sending satisfaction surveys to customers, or putting staff through soft-skills training.

These may be components of a customer experience improvement effort, but they alone hardly constitute a robust one.

Executive support for these programs tends to wane once business leaders realize how comprehensive this work can be.

Creating an environment that cultivates customer-centricity requires setting a myriad of organizational switches and dials in just the right position:  hiring and training practices, performance measurement and recognition programs, compensation and incentive systems, IT infrastructure and business processes, customer research and feedback instruments…  just to name a few.

This is precisely why a superior customer experience accords sustainable competitive advantage – because it’s not as simple as making an advertising shift, revising a training program or installing a new CRM system.  It requires much more holistic change, involving not just customer-facing activities, but employee-facing ones, as well.  Do it right and it can be very difficult for competitors to replicate.

The unfortunate reality, however, is that most organizations don’t have an appetite for such sweeping change.  And that ultimately fuels the demise of many customer experience programs.

#3:  Receptiveness to a New Economic Calculus

Not unlike the customer experience itself, the benefits from these improvement programs tend to cut across organizational silos.

For example, enhancements in the clarity and readability of customer communications (such as contracts, correspondence or bills) may appear, based on traditional business accounting, to drive a net increase in expenses.  What traditional accounting doesn’t easily account for, however, are the savings associated with reduced inquiries from less confused customers.

Effective customer experience design frequently involves upstream improvements that pay dividends downstream, often in a totally different organizational unit, cost center and time period.  That economic calculus can be unsettling for some organizations that are more accustomed to the clear-cut ROIs of office consolidations, lease renegotiations and distribution expansions.

That doesn’t mean the ROI of customer experience improvements is any less compelling (see this research if you need convincing).  It does, however, require a more thoughtful, holistic and long-tailed approach to benefit quantification.

Without executive openness to that kind of economic calculus, it’s likely that an organization’s customer experience projects will be subordinated to other business endeavors, sowing the seeds for the program’s downfall.

Customer experience differentiation is hardly a waste of money.  In a highly competitive marketplace, it is perhaps the best and only way for companies to stand out from the crowd.

Investments in this area, however, do become wasteful – and potentially even harmful – when companies underestimate the commitment and fortitude needed to shape a truly customer-centric organization.

Before embarking on a customer experience improvement program, executives should engage in some soul-searching, looking for those three markers to gauge their personal commitment to this journey.

And if those markers aren’t present, then perhaps the best thing those business leaders can do for their organizations…  is to focus on something else.

[Editor’s Note:  A version of this article originally appeared in Carrier Management magazine.]

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8 Responses to Stop Wasting Your Money On Customer Experience

  1. Winifred March 29, 2017 at 6:17 am (1 comment) #

    Well said! Customer Experience should not be a project , a catchy tagline but rather a organizational culture! that defines every output of the organization’s various divisions

  2. Michael Lowenstein March 29, 2017 at 6:52 am (1320 comments) #

    Results from Avaya, similar to CX program initiatives over the past 20 years, reflect the fact that most will either fail outright or otherwise show poor performance. Albert Einstein is often credited with exclaiming “The definition of insanity is doing the same thing over and over again, but expecting different results”, and that’s what far too many companies do – and that, indeed, is a waste of money and other resources.

    Agree that achieving CX goals is largely about disciplined leadership, cultural and stakeholder-centric DNA embedment, customer-focused process modification, active employee partnership and ambassadorship, and more optimized value delivery. Companies might pull one of these CX components off, but doing all effectively, and at the same time, is much more of a challenge.

  3. Brian Pia March 29, 2017 at 7:10 am (2 comments) #

    You brought up some great points Jon. First, the notion of CX as a “program” shows how misguided companies really are about what customer experience means. I have talked to executives across multiple verticals and their understanding of CX varies widely. Some thinks it’s good customer service others, as you point out, think it relates to taglines and slogans. In fact, the majority never really talk about the customer when they try to explain their vision. Secondly, I absolutely agree that companies must embed CX into their DNA. For those 81% that failed, they obviously looked at CX as a short-term, quick fix. CX must be strategic and it must be part of everyone in the organization. Thanks for your insight.

  4. Andrew Rudin March 29, 2017 at 9:49 am (240 comments) #

    A program that ‘fails to deliver results’ (good results? bad results?), hasn’t necessarily failed in my view. In the blogosphere, ‘fail’ tends to be an emotional word, and not based on empiricism. While as a decision maker, I take an assessment of ‘fail’ into consideration, I also recognize that one person’s ‘fail’ is another person’s ‘mixed success’ and another person’s ‘not so bad!’ I always ask, “based on what?” And often I discover that the expectations were misguided, impossibly high or inflated. All of this must be viewed in the context of the project, the company, and how they went about implementing it. Your title suggests that, because of the high failure rate, investing in CX improvements is wrongheaded. That seems illogical to me. Based on the survey results you cited, my top concern is whether CX improvement the correct strategy done the wrong way (for the survey group), or is it the wrong strategy? Superficially, the survey results don’t answer that question.

    Your points about the perils of the “initiative du jour” and not receiving executive buy-in are well taken. In fact, in many project retrospectives I have done, these two are frequently cited as the root cause for under-performance, as well as failure.

    And finally, an observation about commoditization. Some industries that had highly differentiated products are becoming commoditized – or, more precisely, less differentiated. Other industries are moving in the other direction. As I see it, this is the cycle of business. I don’t think commoditization is more prevalent today than it was, say, 100 years ago. Blame it on innovation. Or technological advancement. Or a changing regulatory environment. The problem is, executives in industries that are in the former group find themselves in ‘panic mode’ when they see prices, margins, and market share erode. So improving CX as a proprietary advantage seems a plausible approach. And if the effort seems to be ‘failing’ (however that might be defined), my suggestion would be to first examine the execution before dumping the strategy.

  5. Claudio Moreira March 29, 2017 at 10:06 am (1 comment) #

    “sweeping change”, these are the words that repel attempts to bring the customer into the center of corporate culture. Nobody wants sweeping changes, everyone is averse to the risk of sweeping changes. How about a smooth path, starting by culture, step by step, consciousness, beliefs … I believe the results would be much better.

    Thanks for the great text!

  6. Bob Thompson March 29, 2017 at 12:49 pm (226 comments) #

    CRM has been slammed as a failure with 50-80% failure rates “back in the day.”

    But the reality, based on a comprehensive study we did 10+ years ago, was quite different. About 2/3 were successful, based on ROI or perception.

    Yet, that perception of CRM=failure lingers because of media reports on shaky research, some designed to sell analyst reports or consulting services. (“Don’t be roadkill on your CRM journey.”)

    The CX industry has said it will be different, and in some cases it is. Not positioning as an automation strategy is a huge difference. Focusing on customer perception (outside-in) another.

    Yet, CXM lacks a clear ROI or perception of success for similar reasons as CRM – organization change is hard.

    With a decade or more of development and thousands of solution providers and consultants, not to mention the lessons learned from the CRM days, one would think that we would have more than 20% success rate.

    My own research finds about one in three CX projects have achieved a clear success — either in terms of quantifiable benefits or a competitive advantage.

    Said another way, two-thirds of CX programs are failing to deliver results, although the majority say they are making progress. Should we declare all of those “making progress” as success? I don’t think so.

    In the end, success is a perception. If a business believes their CX program is a success, does it really matter what the metrics are?

    All that said, I’d say CXM is behind CRM in terms of success. In part, I believe, because it’s easier to know if technology delivers business results in the short term. CX is more of a long-term play.

  7. Dave Fish March 29, 2017 at 7:00 pm (4 comments) #

    Its a marathon not a sprint for sure. It also has to be holistic cutting across ops, marketing, finance, hr. I , etc. i think would some folks don’t appreciate is it an org change endeavor not a marketing campaign or tech implementation. The second reason for failure is orgs trying to do too much too fast. Keep the focus and bootstrap on small successes…and dont stop. Good article!

  8. Warren Whitlock April 3, 2017 at 8:19 am (6 comments) #

    The problem with buzzwords phrases is the tendency of management to say “that’s what we need” and demand that the organization buy one.

    “Customer experience” is one of the best examples. We know that happy customers enjoy the experience of buying. It’s a good experience. It’s not a line item on an invoice.

    Understanding one’s customers and serving them is the essence of business.

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