What do you think, boss? How to gain board support for your Customer Experience (CX) program

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According to our most recent research, CX Management, for better or worse, is firmly allocated in the firm’s marketing function. This association, however, triggers multiple challenges for CX managers, or, to be more precise, CMOs worldwide. The most prevalent challenge is the CEOs’ and boardroom members’ unfavorable perception of both marketing-led strategies and CMOs.(2) For decades, marketers have been trying to be more accountable and elevate marketing from a purely functional and tactical to a strategic level. Yet marketing, once the darling of executives’ strategic efforts, remains heavily criticized for its inability to present compelling evidence of the effectiveness of the huge sums it directs to promotion and brand building. This perceived lack of accountability is reducing marketing’s influence on strategic decision-making, and is a cause of other functions.

In addition, CX is often used in the same sentence with other marketing-driven strategic initiatives, such as CRM, which managers do not see as an investment delivering the value it promised. Paradoxically, despite the increase of CX and the voice-of-the-customer programs, marketing’s strategic role is in decline. Our global study highlights that CEOs do not believe that marketers, and their CX initiatives, can be an integral part of strategy development for three main reasons:

  1. the lack of financial accountability,
  2. marketers’ fascination with and focus on new technologies, tools, and frameworks without establishing that they generate consumer demand for the firm’s offerings in a quantifiable way, and
  3. the resulting lack of trust towards marketers’ capabilities and towards marketing in general.

These themes cannot be viewed in isolation. They reflect the heterogeneous nature of the current status of, or lack of, marketing in the firm’s strategy planning and execution. I could make the point that CEOs and/or the firms’ boards are as responsible for the fall of the CMO and marketing from the strategic agenda as marketers themselves. This discussion, however, will not add any value. CMO/CXOs work for the CEOs, not the other way around. My contribution is to acknowledge and learn from these developments in order to put marketing and CX management back on the CEO’s strategic agenda.(3)

If marketing is disconnected from the firm’s strategy, then the firm’s strategy would be expected to become less adapted to market needs. Taken to its logical conclusion, this should result in eroding profits and vulnerability to competition. Therefore, there is an overriding need for marketing, and, in particular CX, to become a key component of the firm’s strategy. (When we refer to “marketing” we mean what company management recognizes as such, and not what scholars and businesses put forward as part of marketing.)

As a result, in today’s business environment, marketing is relinquishing ground to other functions rather than expanding its role. If CX or VOC are (partially or completely) not under marketing, the CEO and board will never consider it to be marketing. Moreover, the business units that take over these marketing tasks consider them to be part of “their” function (e.g., operations, information systems, etc.) and not part of marketing. Therefore, for marketing to succeed in these efforts, CMOs must garner support from all stakeholders: in particular the CEO and the firm’s board. This can be achieved by converting existing main challenges into opportunities, such as:

  • Augmenting traditional sales indicators presented to senior management (e.g., conversions, revenue, etc.) with clear defined customer demand-related indicators, developing tangible links. For example, by delivering evidence for the positive relationships between abstract constructs such as customer experience5 and word-of-mouth on customers’ buying behaviors, CMOs will have a significantly better chance of demonstrating the strategic impact of their actions. Another way to achieve that is by using mid-range metrics, such as real-time tracking linked to revenue generation, to demonstrate accountability. For example, CMOs can introduce segment level reporting that includes P&Ls by brand, market, product, distribution channels, and end customers.(1)
  •  Take ownership of a variety of activities within and outside of what is considered their core functional area, such as marketing related IT and IS initiatives. This would allow CMOs to demonstrate, for example, the possible impact of new media as a supportive tool (with an emphasis on “supportive”) in crafting winning strategies (and by winning we mean generating quantifiable customer demand).

Thus, the job description of a CMO becomes closer to that of a CEO. In a literal sense, CMOs must see themselves as the Marketing CEO. This means running CX, and all marketing activities in a manner that parallels that of the CEO in the running the firm.  This requires that CMOs shift their perspective to that of a holistic business leader from simply being a manager of the marketing function.  As such, it requires a CEO’s mindset of seeking to maximize value in a tangible way that can garner the support of the board of directors and shareholders.(4)

The following Figure summarizes the main steps that we believe are necessary to put CX on the CEO’s strategic agenda by using actions to convert challenges into results that will be appreciated by the CEO and other board members.(1)

How to gain 'board support' for your CX program In this series we now discussed which CX strategies are most profitable, explored how these strategies are converted into a successful multichannel strategy, outlined the crucial role customer-facing (direct and indirect) employees play in managing the CX, and elaborated on how executives can gain support from the boardroom in order to compete successfully on the new competitive battleground – the customer experience. I hope these series delivers useful insights into how to manage and measure the most profitable customer experiences, and am looking forward to your CX questions that I will answer during the Center for Services Leadership podcast.

________

References:

  1. Klaus, Ph. (2014), Measuring Customer Experience – How to Develop and Execute the Most Profitable Customer Experience Strategies, Palgrave-Macmillan.
  2. Klaus, Ph., Keiningham, T., Edvardsson, B., and Gruber, T. (2014), “Getting in with the “In” crowd: how to put marketing back on the CEO’s agenda,” Journal of Service Management, Vol. 25, No. 2, pp. 195-212.
  3. Klaus, Ph. and Edvardsson, B. (2014), “The road back to relevance – how to put marketing (and marketing scholars) back on the Top Managements’ agendas,” Journal of Service Management, Vol. 25, No. 2, pp. 166-170.
  4. Klaus, Ph., Gorgoglione, M., Pannelio, U., Buonamassa, D. and Nguyen, B. (2013), “Are you providing the ‘right’ experiences? The case of Banca Popolare di Bari,” International Journal of Bank Marketing, Vol. 31, No. 7, pp. 506-28.
  5. Klaus, Ph. and Maklan, S. (2013), “Towards a better measure of customer experience,” International Journal of Market Research, Vol. 55, No. 2, pp. 227-46.

Republished with author's permission from original post.

Phil Klaus
Dr. Phil Klaus is Professor of Customer Experience and Marketing Strategy. His multiple award-winning research has appeared in a wide range of academic and managerial journals. Phil is a frequent keynote speaker at seminars and conferences around the world. He has an active, international portfolio of Blue-Chip clients, for whom he advises on customer experience strategy and profit enhancement.

6 COMMENTS

  1. Dear Phil, I agree largely with your post, you are quite correct when you say that ‘marketing’ is a function that lacks respect in many companies. The industrialist who many years ago famously once said “I know 20% of my marketing works, if only I could identify which 20%” led the demise. Unfortunately, statements like this continue to abound and hence the perception you refer to continues to undermine the function in many companies to this day.

    Then let’s talk about the tools. Again you are correct to say that many ‘marketers’ leap into action at the chance of being first to market with something new, to be that early adopter seen as the ‘holy grail’ of product and service expansion, often without proving the case. Just because you can do something doesn’t mean you should. CMO’s must therefore work far more closely with CFO’s and in my experience harnessing that relationship works wonders in business as both skill sets are paid to generate growth. The old silo system of marketers spending and financier’s ring-fencing funds can’t work any longer, collaboration throughout a business is paramount for success.

    If we bring the two elements together (weak process and ineffective tools) it’s easy to see why an erosion of ‘confidence’ in marketing exists in many quarters. Marketing is one of those disciplines where everyone in an organisation can contribute something that equates to customer service and often does, whether that’s an element of communication and branding or the development of new products, it’s easy to see why what many people see as ‘marketing’ is often undervalued in a way that finance isn’t.

    But here’s the rub, this increase in poorly trained or knee-jerk marketing will mean more budget being wasted than ever before and so for those of us who thrive in this field by delivering greater accountability and better CX the future is bright. How, because as you also suggest marketing is a function that should cascade into all areas of a business, from operations, to sales, from the production floor to finance and for those professional marketers who have experience at board level the world is our oyster. Clearly we can’t take responsibility for every communication in a company directly, but we can and should be accountable for driving the direction of those communications (both internally and externally) starting at board level. If CEO’s want more from marketing then they should allow greater access (as my clients do) to other functions within the company. As everyone in a business is involved in ‘marketing’ to some degree, then it’s only right that CEO’s and CFO’s see CMO’s as their equal and allow marketing professionals to show why we are the only ones within the business who should deliver a relevant CX. Isn’t that after all why businesses exist…to deliver value for customers? When CMO’s can demonstrate this successfully and start to divest responsibility, then forward thinking CEO’s and CFO’s can genuinely claim to be early adopters.

  2. Hello Phil,

    If only the real world fitted into theory made by followers of Plato. The real world is more the kind of world articulated by Aristotle. And it occurs to me in that kind of world, your ideas may be listened to, and are highly unlikely to be implemented.

    Human beings, at leas in our day and age, do not show up in service of the ‘ideal’, the good – at least stated by theorists. Human beings, are inconsistent, selfish, generous, short-sighted, long-sighted. So they will continue to muddle through. This includes CEOs as well as CMOs.

    All the best
    maz

  3. Dear Nigel,

    Thank you for your sharing your both, candid and keen observations and perceptions. I conclude that we are aware of the challenges and opportunities the current status quo can offer for the few enlightened ones. However, our research aims to go further by guiding us towards practices establishing CX as the only feasible future business strategy. And, as you pointed out so correctly, we have to do everything in our power to avoid that CX will become just another ‘marketing fad’ or the ‘theory of everything.’

    Yours sincerely

  4. Dear Maz,

    Thank you for sharing your thoughts with us. While I appreciate your reference to some of the most prevalent Greek philosophers, I do not necessarily share your gloomy vision. As a matter of fact, our research demonstrates clearly that if you highlight the individual benefits of the ‘ideal,’ managers are indeed implementing these changes. Thus, not all is lost, and there is more than just hope, there is evidence that our findings are successfully (as in profitably) implemented.

    Yours sincerely

  5. Phil,

    Unfortunately, I think CX is well on its way to becoming (in the eyes of its proponents, anyway) as the theory of everything.

    And it doesn’t help when you say your research is about “establishing CX as the only feasible future business strategy.”

    Really? The only feasible future business strategy? Product and pricing are no longer relevant for any business?

    My research continues to find that businesses expect to deliver value that is a balance of the “solution” (product or services being purchased) and the experience (interactions with brand’s people and systems). Price is of lesser importance but still relevant.

    So unless your view is that CX = everything, then promoting CX as the only feasible business strategy is at odds with your desire to avoid CX becoming another marketing fad.

    I say all this with respect for you and for CX. I’ve been researching and promoting CX since 2005, and continue to believe it’s a key ingredient in business success. But it’s not the only thing that matters.

    Consider the fate of CRM, which also became the theory of everything, and eventually ended up on the acronym scrap heap, considered by most to be a synonym for automation tools.

  6. Dear Bob,

    Thank you for sharing your perceptions and experiences. Much appreciated. Forgive me if don’t want to start a discussion about the definition of CX strategy and management practices.

    Our research, leading back now 10 years highlights that CX, as in how customers perceive the value of a product/service in use, is (unlike price and product category) the key driver of consumer/customer behavior. Customer behavior is defined as purchasing, and the desired outcomes are measured as in share-of-wallet, share-of-category, and positive recommendation behavior. I am well aware of the fate of CRM. As a matter of fact, we just published a paper on how to learn from the case of CRM in order to avoid a similar fate for the likes of CX, Social Media, Big Data, Cloud computing etc.

    If you have an opportunity to, please be kind enough to familiarize yourself with our work and CX definition, which might be the cause for our different perceptions on the feasibility of CX as the most important business strategy. It goes back to the famous saying of ‘do not kill the messenger.’ The master of academic research is the truth and we are simply presenting the facts.

    Thank you again for sharing your thoughts.

    Yours sincerely

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