The biggest danger to CX is simply this … HYPE

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There’s a very interesting discussion going on the Customer Experience Management group on LinkedIn. You’ll need to join the group to see the full discussion, but I’d like to share a few tidbits here.

I’d like to applaud Kevin Brown for starting the discussion, with this: “I am concerned with the growing executive backlash against CX and would like to hear your insights.”

I don’t know Kevin personally, but based on his comments and LinkedIn profile it seems he works mainly in the call center, and has expertise in CRM technology as well.

He starts with this:

During several C level meetings I recently attended, whenever Customer Experience was mentioned (not by me!), their eyes rolled and I detected several snickers of laughter.

I’ll be completely transparent here – I share their concern about Customer Experience being the latest fad where “those who can’t, attempt to teach.” I try not to use the term Customer Experience at all, and since we focus solely on the voice channel, get away with saying caller experience whenever I slip into a generalist term mode.

My firm focuses completely on caller experience with Fortune 500 firms, and nothing else. We keep running into situations where “CX experts” have pitched an all too familiar generalist sales pitch, but they have been tossed out by our potential clients.

He and some others go on to say that CX could become a fad like Six Sigma, TQM and CRM, as the industry fills with consultants, vendors and gurus hoping to cash in on the CX wave.

I share his concern, but perhaps from a different vantage point, having lived through the CRM and Social CRM hype. I see tremendous value in CEM as a discipline, and don’t think CX is just “old wine in a new bottle.”

And I believe the focus on the customer experience has been a crucial development in companies trying to become more customer-centric, customer focused, outside-in, or whatever term you’d like to use for delivering value that creates more loyal customers.

However, the industry seems poised to paste the CX label on virtually everything, and therein lies the biggest danger. Here’s my take, as I posted on the discussion:

Yes, the Customer Experience is important. It’s one key element in customer loyalty, but it’s not the only thing. Products still matter, and so does competitive pricing. (For more on this, see my article “What Really Drives Customer Loyalty? It’s Not Just About the Experience!” at http://bit.ly/JRowxF .)

The issue I see developing is that CX/CEM is becoming the cure for everything. Products aren’t products anymore, they are product experiences! Price is not a price, it is a pricing experience! Everything is an experience!!!! So of course you need CEM to make those experiences AWESOME.

This is the path that CRM and Social CRM advocates took, and it didn’t end well. People get tired of hype, and business managers don’t believe consultants/vendors/gurus who proclaim they have the cure for everything that ails business.

I would hate to see CX/CEM going the way of yet another fad, due to “over selling” by all of us who are passionate about the idea. That includes me, who lived through the CRM hype.

So as we start a New Year, my advice to CEM/CX advocates is to tone down the rhetoric and don’t try to be all things to all people. Show how improving customer/company interactions will increase customer loyalty and drive more profitable revenue growth. That’s what really counts for most business leaders; they are not worshiping at the CX altar.

Kevin goes on to say this, and I agree completely:

Even the best CX folks get too enthusiastic sometimes, and while the core of what they are saying is true, the output sounds too much like a TV evangelist and the message is lost, while poisoning the listener’s opinion of CX.

But I also think that business leaders would be wise to look past the hype and not discount the CX movement. Or, as I said in the discussion:

… perhaps the executives doing the snickering are really only interested in doing “point solutions” whereas the idea behind CX/CEM is more strategic in my view. The idea is not new — it dates back some 25 years ago to Jan Carlzon’s book Moments of Truth. His belief as that “Anytime a customer comes into contact with any aspect of a business, however remote, is an opportunity to form an impression.”

On the one hand, I think it’s fair to say that just about anything you do in business can be connected to the customer experience. If you improve your supply chain and cut costs, that improves the “pricing experience.” If you build more innovative products, that improves the “usage experience,” and on it goes.

But is that really what CEM is about? I see it as mainly focusing on the company/customer interactions; expanding to product innovation or pricing is a “bridge too far” to keep CEM focused and adding new value to business.

Unfortunately, what I’m seeing more of lately is that anything that has even a whiff of a customer is being re-labeled as CEM or CX. That would be a repeat of a big issue with CRM, which for a time became the “flag of convenience” (per Gartner analyst Ed Thompson) for any customer-related project, but later became a term to be avoided as the hype ran wild.

To sum up, we could muck up a really good thing by trying to make CX mean everything. Please, let’s not, because then CX will mean nothing, and those executives rolling their eyes will just say “I told you so” and wait for the next fad.

9 COMMENTS

  1. Bob,

    Nice post and fair perspective (I like the “old wine new bottle” axiom too).

    What I think is different this time around is that many more products are actually services, than they used to be. Consider the software space, I do not buy applications as much as I buy access to do something. It is the same for devices, TVs, Tablets, Phones,… consumers have a unique experience upon each use.

    Here is the problem, Customer Experience cannot be given, nor managed. The whole concept of managing assumes control and is inside-out thinking. All we can do is our best to design what we hope the experience will be. Enterprise Customer Experience is the discipline of trying to put it all together. I do think Social CRM has a role here, maybe not as big as I would have hoped, but it is just a name.

    Social CRM might be the link in the chain between CRM and Customer Experience. If I know more about you, can participate in the conversation maybe, just maybe I can enhance the experience – who knows. Social CRM allows me to listen, act and interact. In 2013 the Social part will be consumed by the CRM application itself.

    I do agree, and hope that the HYPE does not put too much of a damper on the concept, as I do believe in it.

    Mitch

  2. This is a critical thing to think about. I was joking last year that 2012 was the year many, many marketers woke up and declared it the “year of customer experience.” The phrase itself has become part of the buzzword vernacular, unfortunately. I think it’s very important to embrace the many facets of the discipline. Kevin highlights the very specific way his company focuses their efforts, and more should do so. If we all collaborate and listen (I think I just quoted Vanilla Ice!) we can do more together that is much more meaningful, IMHO.

  3. Maybe a bit glib, but when we look at what customers think of our companies as less than a critical business issue, the company stands in the way of stampeding competitors and fading customers.

    We all know of CX studies where executives are convinced they deliver a top notch experience and where their own customers rate them down the totem pole. The disconnect explains why we see some execs scoff at the importance of customer experience.

    You are right to be concerned about hyping what CX is and making it so broad that it loses definition. At the same time, limiting it to just interactions might be a bit narrow–although it is one of the most telling ways we judge the companies we buy from. It is more about the attitude of executives … if they lower price to be more competitive or if they lower price to be more attractive to customers.

    At any rate, this is topic discussion is a big deal. We would all do a disservice to our companies to let executives dismiss CX as a fad.

  4. A timely and thoughtful post, Bob.

    I’ve been conducting research and analysis into first user experience and then customer experience — full time — since 1998. So on the one hand, the “it’s a fad” meme amuses me: Those 14+ years sure don’t feel like an overnight sensation! 🙂

    But I also appreciate the legitimate concerns as enthusiasm outpaces expertise. Let’s face it, there’s a customer experience conference every other week (including the three we put on at Forrester), the media are all over the topic, vendors are tripping over themselves to re-position themselves as “customer experience solution providers” and so on and so on.

    Here’s how we think about this situation: Customer experience leads to profits…but ONLY IF you treat it as a business discipline. That means doing the hard work of understanding your customers through qualitative research, crafting a customer experience strategy, embracing design (of the kind taught at the Stanford D School), crafting a customer experience measurement program, creating CX governance processes, and then ultimately transforming your culture to be customer-centric.

    We’ve been studying companies that have done those things. No one has reached CX nirvana but I can tell you that the customers of companies like USAA, Southwest, and Vanguard — to name a few — rate the CX at those firms highly. Certainly those companies do other things well (I don’t believe in silver bullets) but it would be disingenuous to say that superior CX isn’t an important part of their overall success.

  5. Thanks for this discussion, Bob. ‘Been there, done that’ is certainly a risk faced by any endeavor, and proactive change management is essential to overcoming skepticism, apathy, and ‘throwing the baby out with the bathwater’.

    I agree with all the points made by you, Mitch and Jeannie … and that customer experience management is the composite of all its predecessors — applied from the customer’s perspective (not the company’s), hence busting silo’s (which very few firms have mastered) to fully deliver brand promises in order to engender trust, brand preference, positive word-of-mouth, and higher revenue and profitability. Here are the definitions I’ve written about for the past several years:

    Customer Experience includes all of a customer’s experiences with a solution from realization of a need until the need no longer exists. Hence, it is broader than touch-points, deeper than user experience, and its duration and components are determined entirely by the customer.

    Customer Experience Management is enterprise-wide dedication to serving customer needs from their perspective. CEM recognizes that businesses exist to serve customer needs, which results in revenue for paychecks and budgets and shareholder value.

    Customer Experience Optimization is enterprise-wide alignment with customer priorities, to prevent hassles for customers, reduce waste, increase organic customer enthusiasm, and grow both revenue and profit sustainably.

    Accuracy in our representations is more important than ever in the ultra-fast-paced over-right-sized world we live in. Most of us who represent ourselves with the customer experience moniker may be expert in a specific component that will aid organizations in making the 3 definitions above come to life for themselves … but a holistic viewpoint is essential to reap the promised rewards of superior customer experience. A balanced approach, with effective change management, to deploying all the CEM best practices is necessary for executives, associates, and customers alike to truly appreciate what the real implentation of customer experience optimization has to offer in making life and the world much nicer for all. Let’s prevent skepticism, apathy and throwing the baby out with the bathwater.

  6. Hello Bob
    This was my response when the Customer Experience Management Group:

    To make sense of the whole CX phenomenon it is worth confronting the ‘truth’. And the truth is something like this: in business nobody gives a damn about the customer!

    The Tops do not wake up in the morning worrying about the customer and what matters to the customer. The Middles do not wake up in the morning thinking about how to do the best for the customer. The Bottoms do not wake up in the morning and wrap themselves up for their concern/care for the customer. Neither do the folks in marketing – they are busy designing/pushing messages to drive leads/sales. Neither do the folks in sales – they are busy figuring out how to make the quarterly sales numbers. Neither do the folks in customer service – they are just busy deflecting calls when they can via IVR/websites and then handling calls as cheaply as possible. Nor do the folks in logistics whose concern is getting the delivery job done cost efficiently. Nor do finance whose job is to collect the cash and manage bad debt risk. I do hope you get the message. This is the reality!

    Given that is the case how has the level of product quality and customer service improved over the years. Competition – genuine competition. It is the hungry new entrants into a market place that generate the energy for creating better products, delivering a better service, and thus creating greater value for customers.

    What are the Tops concerned with? Competition! They are concerned with eliminating and/or reducing competition. Which is where all kind of marketing/spin practices come on – to generate differentiation where there is no differentiation. And thus reduce competition. As Seth Godin said “All marketers are liars”. Who are they lying to? Customers. So the focus is not on creating genuine value for customers. It is reducing the level of competition through a whole number of mechanisms including collusion/market rigging, buying governments, IP etc.

    What else are Tops concerned with? Intelligent, informed, connected customers. Why? Because for many a business profit margins are based on the ignorance and exploitation of customers. Nothing frightens Tops as much as losing these fat profit margins on their watch. And/or having to earn fat profit margins through genuinely creating value for customers. No, what is preferred is ‘financially engineering’ fat profit margins – it is so much easier.

    The ideal for just about every CEO is to be in a monopoly position like that of Google or Apple. Why? Because then the money rolls in without worrying about pesky customers, or pesky competitors – because there are none. And the bonus pot fills up nicely as the share price is flying high. And by the way Google is preferred to Apple. Why? Because Google has hit the jackpot and it is a matter of tweaking rather than continuous invention to stay in the lead. Whereas with Apple, it is much harder as one has to put in place and nurture an organisation that continually invents new products. And that shows up as risky, as hard work.

    So is CX being touted as the latest silver bullet? Yes. Will it take the same path as CRM? That depends on the level of genuine competition. And the willingness of customers to actually move, as opposed to stating their desire – usually in surveys and when expressing frustration to friends to move – their business from the suppliers that provide greater value, the better customer experience.

    What I am 100% sure is that any shift towards authentic customer-centricity will be driven from the outside: customers, competitors and regulators. It has always been thus. Yes, I know that there are a handful of exceptions (USAA, Zappos, Zane Cycles, John Lewis, Richer Sounds…). Take a good look and you will find people who have a very different philosophical stance to the many Tops leading the big businesses of our age.

    What I would add today that I did not write originally is this. For CXP to take hold and flourish requires a business revolution in the sense that Thomas Kuhn shared in his book The Structure of Scientific Revolutions. Put differently, CXP requires a new paradigm distinct from the existing one to flourish. This is not there. And so CXP is being bastardised to fit into the existing paradigm like what happened to CRM. And as such CXP will not deliver what it can deliver and so is most likely to follow CRM and become a bunch of IT applications plus some process changes. Which is great for the likes of John Lewis, Zane’s Cycles, USAA, Southwest Airlines, Amazon, Zappos etc. What you have to get is that CXP is a radical innovation and most Tops / organisations loathe radical innovation until their organisations are poised on the cliff. Remember IBM and Gerstner?

  7. The companies that grow do so by focusing on customers and employees.

    What drives me nuts is when companies want to leap-frog over that hard work by saying that they are “doing” the latest new label for this hard work. This has happened with TQM, and Net Promoter and now with Customer Experience.

    This is hard, deliberate work. It entails understanding customer needs and building an operation to deliver based on what motivates them. It means connecting employee hiring, development and motivation so that they can deliver.

    Back in 1984 when I was at Lands’ End building the Lands’ End Customer Experience for founder Gary Comer, we didn’t do this work because it was a fad or in vogue. We did it because of our devotion to customers.

    What happens is that the best companies stay focused and do the hard work that enables this focus to be embedded inside the organization.

    Other companies “learn” and “label” and try to emulate and copy those actions. But without the intent (caring about customers’ lives) and motivation (growing through delivering based on customer priorities) these actions become the dreaded “work streams” that kick up a lot of dirt and get a lot of hoopla but aren’t sustained.

    Customer Experience label is a victim of what i call “silver-bullet-itis.” That is to label this hard work the great companies have been doing for years around process change, communications, agile change management and culture and leadership. Somehow the new label gives way to people jumping on the bandwagon and not doing the hard work – but saying they believe in the outcome. Those are two very different things.

    I do believe there will continue to be a chasm between those companies that aspire to this new label and those that are working hard to deliver it (an experience) without even labeling it such. Regardless of the new emerging label there will always be companies that do the right thing and those that want the outcome without the hard work.

    This time around there is a wonderful forcing function of the social media megaphone where customers get to tell it like it is – and companies have to earn the right to the rave. And that pleases me very much indeed. I also agree with a previous point that more and more deliverable (software as a service etc.) are forcing companies to finally figure out how to be deliberate about reliably delivering an experience wrapped around whatever promise or product they profess to offer to customers.

  8. Bob –

    Agree that Kevin appears to to be looking at customer experience from a basic, and now fairly antecedent and narrow CRM, service, and overall management perspective. Also agree that it is wise to have rigorous focus on what customer experience really means and how it underpins and drives both enterprise and customer behavior.

    Real customer-centricity has chicken-and-egg and cowboy-and-saloon connotations. The outside-in communication and purchasing behavior desired of customers is critical to customer bonding and advocacy in the marketplace; and equally critical are the customer-focused inside-out architecture and engineering culture, processes, and people within an organization that help set up the desired value in transactions and long-term relationships.

    You are absolutely right in bringing attention and caution in how those of us who are actively engaged in customer-centricity and customer experience optimization research, consulting, training, and writing address this. We know that CEO’s tend to be very tactical in how they approach acceptance and use of management or research concepts, frameworks and models. They want immediate and sustained success, they want simplicity and comfort of application, they want relative economy and scale, and they want ongoing proof points to support their decisions. This is a basis, for example, for how NPS – massively flawed and marginally effective as a metric (http://www.customerthink.com/article/customer_advocacy_behavior_personal_brand_connection) – was accepted by so many organizations, and remains despite significant evidence that more effective, yet very smiple, metrics exist to help understand/plan performance and customer value.

    It’s essential to remain watchful and skeptical in how customer experience is defined and applied, so that we don’t fall into the ‘boil the ocean’ issues which, rightfully, caused you challenge the meaning and discussion of CRM. Over the past half-decade or so, consulting, training, and research companies have ‘discovered’ what experience, relationships, trust, and value mean to customers and organizations. Customer experience will endure as a focus and set of practices so long as, collectively, we are concentrating on both outside-in and inside-out optimization, recognizing that they need to be conjoined and sustained to be effective:

    http://www.customerthink.com/article/inside_out_advocacy_creating_and_sustaining_customer_centricity_and_loyalty

    http://www.customerthink.com/blog/after_thousands_of_years_are_we_there_yet_the_effect_of_trust_and_offlineonline_social_media_in

  9. @all: Thanks for the great comments. Keep ’em coming!

    @Maz: I don’t think it’s fair to say that “nobody cares about the customer.” Although I do agree that it’s a remarkably short list of companies that get talked about as having a truly customer-centric culture. Perhaps my bar is set lower than yours, but I don’t expect company leaders to worship at the altar of customer happiness without concern for revenue/profit. Companies exist to make money, not to fulfill a moral or social obligation. I’m happy when CEOs and other “tops” as you call them begin to see customer loyalty as a path to company success. A means to an ends. But the shining stars will continue to be companies driven by a genuine passion for customers, and not view them as “assets” to be managed.

    @Mitch, will it really be different this time? I’m not so sure. On the one hand, CX/CEM has had a longer time to incubate with the consulting community. The CXPA is one example of it becoming a real discipline as apposed to a fad. Yet CEM as a term could fade out like Social CRM if it is marketed by all quarters as the cure for cancer. As I’ve said, when something means everything, it means nothing. So I suggest CEMers start thinking more clearly about what CEM *doesn’t* include and communicate that more clearly. And stop claiming it is the only thing that business leaders need to do to succeed. It isn’t.

    @Lynn, your definitions are a step in the right direction. I hesitate to start a CEM definition war like we’ve see with CRM/SCRM, but maybe a debate about CEM includes, and what it doesn’t include, would be helpful to companies trying to get started.

    @Harley, I really like your expression “enthusiasm outpaces expertise.” But I like this one even more when you discussed top CX performers: “Certainly those companies do other things well (I don’t believe in silver bullets) but it would be disingenuous to say that superior CX isn’t an important part of their overall success.”

    CX is clearly a key part of an service industry. And, yes, some products (e.g. software) are becoming services. And yes, even products need service/support. But where do you draw the line at Forrester? Is product design now part of CX? Is price part of the experience and if so, then pricing optimization is now part of CEM? Again, CX seems to be pulling in everything else, and is losing focus on customer interactions, which in my mind is still the core idea.

    @Jeanne, your point about companies wanting the outcome without doing the hard work is spot on. And fostering employee engagement is one of the hardest things to accomplish. However these are the companies that, after they jump on the bandwagon (with a little encouragement from the CX industry, I might add), find CX is too much work, label it a “failure” and move on to the next thing. Anybody remember CRM?

    @Michael, increasingly I’m coming to a view that we’ll eventually end up back at customer loyalty as the foundation of all these trends. If you recall, increasing customer loyalty was one of the ways CRM was sold. Now CX is following a similar arc. I see a lot of repackaging of basic loyalty principles in the CX trend. People shouldn’t think CEMers invented all of these ideas. You and your loyalty research colleagues deserve a lot of credit for laying the foundation for CRM and CEM.

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