The Future of Customer Experience Calls Urgently for a Significant Shift

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customer experience visionThe future of customer experience (CX) is sure to be influenced by artificial intelligence, digitalization, the sharing economy, generational preferences, cross-pollinated expectations and much more. That’s exciting, yet the future of customer experience management (CXM) is calling out for significant shifts beyond the trends and forces in technology, socio-economics and competitive environments. The future is urgently calling for us to shift to company-wide alignment with CX. Here’s why:

CXM Status Quo
A loud warning siren can be heard in study after study showing customers’ and managers’ perceptions to be static over time and lower than desired overall. For example, the 2017 and 2018 Forrester Customer Experience IndexTM reveals no companies exceeding 72 on a 100-point scale and very little change in any industry.

Forrester 2018 CX Index

Similar findings are reported in studies by CMO Council, CustomerThink, Confirmit, West Monroe Partners, Leapfrog Marketing Institute, MarketingSherpa, Forbes Insights, and many others. Clearly, the CXM status quo is likely necessary but certainly insufficient. Artificial intelligence, digitalization, emerging technologies, the sharing economy, and other trends won’t solve what’s shown in these studies:

  • “Only 20% of companies scored 9-10 for seeing a Return on Investment, with a significant 14% of companies scoring 0-2. This suggests a huge proportion of companies doing almost nothing in terms of proving the value of their programme.”1
  • “61% of CX execs say their company’s ability to quickly adapt is a top strategic priority. Despite this, nearly a quarter of the respondents’ orgs have no one dedicated to these efforts — and it’s time CX professionals stepped up to the plate.”2
  • “Only 16% of marketers feel their organizations are extremely responsive to the consumer.”3
  • “Only one in eight Sales and Marketing professionals believe their organization’s ability to deliver connected, personalized, contextual experiences, regardless of channel and across the entire organization, is exceptional.”4
  • “Only 13% of marketers feel they are fully implementing customer revenue-producing strategies and engaging differently, including driving deeper relationships, collaborating across stakeholders and leveraging data to uncover new opportunities and options for engagement.”5
  • Compared to laggards, customer engagement leaders “plan to improve analytics capabilities in order to gain a more contextual understanding of the customer (55%), connect engagement systems across all touch-points — including those outside of marketing’s ownership (45%) — and will forge improved cross-functional partnerships to better align the strategy across all touch-points (35%). Leaders take a more long-term approach to measuring the business value of customer engagement, focusing more on overall retention or churn versus a one-time purchase.”6

Faulty CXM Trajectory
Temkin 2018 CX MaturityAnother example is Temkin Group’s 2018 Customer Experience Competency and Maturity Assessment. Only 22% of companies now are operationalizing, aligning or embedding CX. This is after 10 years — since the 2009 economic downturn — when companies began investing heavily in CXM technologies and teams. Why would we not see more companies in the upper echelons of CXM maturity? In my view, it’s likely that CXM teams’ scope, authority, funding and accountability are not aimed beyond mobilizing. Likely, the promise of CXM ROI has been alluring to executives who have asked for quick wins and near-term gains. Likely, CXM teams rush to buy technologies to deliver this charter, and the CXM technology providers’ vested interests and their limited CXM purview largely shape CXM teams’ tactics and vision. Ironically, in our quest to improve customers’ end-to-end journey with our brands we’re introducing numerous CXM silos.

Bottom line: to a large extent, we’ve been following faulty CXM recipes. Mainstream practice is clearly not aiming for operationalizing, aligning or embedding CX.

Temkin 2017 VoC MaturityThis conclusion is reinforced by Temkin Groups’ annual Voice of the Customer (VoC) Maturity study. Year after year in this study, the vast majority of companies are still in the Collector and Analyzer stages of VoC maturity. These static trends are very revealing: if we’re not aiming to be VoC Collaborators and Transformers we may never get there! And unless we’re applying VoC insights as Collaborators and Transformers we aren’t likely to generate the business growth promised by loyalty-revenue correlation. ClearAction’s 5-year global study of B2B CXM practices revealed strong desire among VoC managers for executives to take greater action on CX insights, yet they admitted that just administering their portfolio of customer listening posts was consuming all their time, energy and budget. Even the most sophisticated VoC programs’ managers acknowledged that they didn’t have a plan nor the skills and bandwidth to drive company-wide action on VoC insights.

CXM Status Quo vs. CXM Flow
CXM silo modelsCompare CXM status quo with what’s needed in CXM for the future. The status quo manages CX programs and competencies as pillars or silos, with little or no connectivity, communication or synergies across the various CXM programs and departments. CXM for the future requires a flow: holistic outlooks and strong connectivity, communication and synergies flowing across CX programs, departments, lines of business and competencies.

Flowing CXM starts with VoC as the shaper of corporate strategy and culture. VoC flows into additional data and insights to become customer intelligence. Apply customer lifetime value to customer intelligence and you’ll prioritize, motivate and sustain internal engagement in improvement and innovation efforts that your whole customer base will reward. This is what moves the CXM ROI needle: earn customers’ trust by aligning your company to CX insights. This is what generates ongoing external engagement (e.g. customers, channel partners, alliances).

CXM Flow Model

Deploying the whole CXM system at a basic level within a year is similar to what you’d do in establishing a new sports team. For example, in American football, you wouldn’t want to put only your quarterback and receiver in the game — you’d want all positions doing their part to move the ball down the field. You’d want to have playbooks that show all players how to navigate to a second down, third down, and of course field goals. Deploy the basics within the course of a year to activate flowing CXM. Within a few years, migrate beyond the basics across CXM flow to build maturity for stronger, sustained ROI.

  CXM Status Quo: Pillars (silos) CXM Future: Flow (holistic)>
Timeline:   . . . long slog to CX-centricity . . . build-in CX-centricity now
Aim:   . . . customers as brand evangelists . . . align company to CX
Focus:   . . . administer CX programs . . . facilitate CX ownership
Reap:   . . . quick-wins >> NPS & revenue (now) . . . earn trust >> NPS & revenue (lifetime value)

 
CXM Timeline to CX-Centricity
CXM status quo is on a long slog to CX-centricity because it begins with a program such as customer service, customer voice, CRM, customer loyalty program, or digital marketing. Each of these starting points emphasizes customer-facing roles, reacting to and seeking to shape customers’ actions. By emphasizing customer-facing roles, outside-in is skin-deep and the rest of the company continues to be mis-aligned with CX. This is like the game of Jenga, where short-cuts in the base (headquarters) generate wobbliness at the top (customer touch-points).

CXM flow builds-in CX-centricity now, whether you’re starting CXM or have been actively managing CX for years. By definition, VoC-infused corporate strategy and culture unifies top management in actively driving their respective contributions to the company’s CX goals. As such, outside-in is more than skin-deep, with non-customer-facing employees understanding their ripple-effects on CX and preventing unnecessary CX snafus and undue burdens on customer touch-points and on customers.

CXM Aim
CXM status quo aims for growth by increasing the number of customers who evangelize your brand. It’s more outward-oriented than inward-oriented. Its inherent gap is inaction between incessant requests to customers for feedback on the brand and engagement with the brand. Customers have already paid fair market value for solutions they’ve received from you. Participation in feedback and engagement are favors with an uphill battle for response rates unless customers are seeing commensurate effort by your company to resolve their concerns.

CXM flow aims for growth by aligning the whole company to CX insights and CX goals. Note that CX goals in this case describe how you want your customers to feel about your brand (not survey scores). The best-performing CX (Disney, Virgin, etc.) embeds CX in all roles. Unless we expect it, our CX strategies won’t achieve it. The best-performing companies expected it from the very beginning. You can, too. Now’s the time. It’s never too early or late to expect it. But there’s an art to doing it right.

CXM Focus
Temkin 6 Ds CompetenciesCXM status quo focuses on administering programs. Only 10-20% of CX managers know how to facilitate action on VoC, according to Temkin’s Customer Experience Management Survey. How can this be, after 10 years of concerted CXM investment since the economic downturn? It goes back to limited CX vision, as described above. ClearAction’s 2018 study revealed that CX managers are seeing success in individual and small group efforts, but they are not seeing ROI traction in endeavors that require cross-functional collaboration and sustained focus. CXM teams need to master formal change management, problem-solving, cross-functional influence and other skills that empower them to facilitate company-wide ownership of customer experience excellence.

ClearAction 2018 Study

CXM flow focuses on facilitating CX ownership by every group across your company and its ecosystem (e.g. suppliers, channel partners, routine management events).

Most of what we do in CX management is making up for things that went wrong. What’s your gut-feel estimate for the percentage of your investments in each of these areas that’s caused by upstream disciplines such as legal, accounting, IT, engineering, operations/manufacturing, finance, quality, safety, HR, facilities? If you could eliminate 25% of that next year, how could you redirect those funds? Essentially, that elimination and redirection are gifts that keep on giving: annuities.

CX Annuities Sources

“Annuities” can be achieved by re-directing preventable costs to higher value opportunities. How you do this is very important: make sure it’s VoC-inspired and VoC-validated. Non-customer-facing functional areas can prevent costs by becoming more in-tune with customers’ expectations. As this happens, customer engagement and referrals naturally grow, followed by sustained growth in revenue and customer lifetime value.

CXM ROI
CXM status quo reaps quick wins as the path to immediate growth in NPS and revenue. It’s aimed at steps that Marketing, Sales, Success and Service teams can take to gain revenue uplift. It’s typically limited to what a single management group can achieve within a quarter or two. It’s often preoccupied with one-by-one fixes for individuals who rated something low on a survey. By definition, this approach falls short of reaping lasting rewards from your whole customer base.

CXM flow reaps trust as the path to customer lifetime value or sustained growth in NPS and revenue. Many companies are increasing their appreciation for the cumulative nature of CX and the absolute necessity of company-wide alignment (e.g. ease-of-doing-business) to build trust and customer relationship strength. They’re realizing that CX boils down to a customers’ realities relative to their expectations. Living the brand promise, ease of doing business, consistency, and trust-building are recognized by these companies as the ingredients for enduring relationship strength with their customers.

They’re realizing that aligning with their primary target customers’ expectations goes beyond digitalization of customer touch-points to the complete value-chain of processes and players throughout their company. Clorox SVP Doug Milliken said: “You can’t provide a seamless experience to the consumer unless the organization is integrated and seamless as well. We’re changing our organization’s mental model, really dramatically, from thinking linearly to thinking non-linearly. We’ve been very brand-centric and we’re now becoming more radically consumer-centric and human-centered. Our consumer’s goal is not the product per se, but wellness. It’s about their whole end-to-end experience. We have to rethink how we work. We’re becoming dramatically more cross-functional and integrated in what we do. We’re only in the second inning of what’s possible. Discovering our ability to grow our business while we’re helping consumers move across their journey, to enable them to reach their goal is very exciting.”

The future for customer experience success demands that we shift from CXM status quo to CXM flow. This shift is about company-wide alignment with CX. It’s about ease of doing business as a means of trust-building, relationship-strengthening, differentiating, and high-growth generation. Let’s shift our timeline, aim and focus so that we can show significant improvements in CX indexes and ROI. Let’s shift to becoming more radically customer-centered company-wide to meet the future with satisfaction and delight for all.

1The State of Customer Experience: Time to Get Real, Confirmit & Engage Business Media, 2017.
2Adapt or Fail: The Customer Experience Imperative, West Monroe Partners & Customer Experience Professionals Association, 2018.
CX Day Blog Carnival3The Responsiveness Requirement: How Agile Marketers Act on Consumer Feedback to Drive Growth, CMO Council & Danaher, August 2017.
4Customer Experience Dynamics: Defining the Requirements for a Strong CX Ecosystem, CMO Council & SAP, September 2017.
5Gaining Traction with Every Digital Interaction, CMO Council & SendWithUs, 2018.
6The New Rules of Customer Engagement: How Leading Companies are Connecting with Customers to Drive Greater Growth, Forbes Insights & Pegasystems, 2017.

Vision image licensed to ClearAction Continuum by Shutterstock.

This article was written for the Customer Experience Professionals Association‘s #CXDay2018 blog carnival — a round-up of fresh blog posts from the profession’s thought leaders to celebrate the days leading up to Global CX Day, October 2. Happy CX Day!

Check out the other CX Day Blog Carnival posts at CXday.org and follow me on Twitter: @clearaction

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