… to Differentiate.
Why is that important? Because according to a 2014 Gartner statistic repeated ad nauseam:
by 2016, 89% of companies expect to compete mostly on the basis of customer experience
Folks, that was two years ago.
Ok, so maybe differentiation is too high a bar for “success.” How about getting tangible benefits? You know, what CEOs are looking for to fund CX initiatives. My study found just 23% of respondents claiming tangible benefits from CX investments.
Add it up, and only 30% claim success in terms of tangible benefits or differentiation.
Let that sink in for a moment — less than 1/3 of CX initiatives are successful. That’s worse than CRM!
Time for CX to Put Up or Shut Up
Maybe you think I’m being too hard on CX. “Give it time” I hear some saying.
It’s true that a majority of CX initiatives in my study claim they are “making progress” and some will no doubt turn into success stories. But CRM didn’t get more time 10 years in — it was widely declared a failure because it didn’t live up the hype. So executives moved on to… CX. Will the pattern repeat?
Before you dismiss my post as a “sky is falling” rant, consider this…
The CX movement is roughly 20 years old (since early books were published). Actually, you could start the CX clock a decade earlier, with Jan Carlzon’s groundbreaking 1987 book Moments of Truth. Compared to that, I’m a newcomer, researching and promoting CX since 2005. On CustomerThink we have over 10,000 posts from the brightest CX minds.
And that’s not all. The CXPA was launched in 2011 to make CX a real profession, and it has succeeded. Hundreds of consulting and tech firms are offering CX services and solutions. A lot of good work has been done to understand what drives CX success. Executives are not repeating the sins of CRM past — buying software and expecting magical results.
I’m not the only one with concerns. Here’s a sampling of posts sounding the alarm in recent weeks:
- Amanda Forshew: 2017 the Year of Undelivered Promise
- Ian Golding: The Customer Experience ‘7 Year Itch’! A frank and honest assessment of the CX profession
- Colin Shaw: Troublesome Trends & Predictions for 2018
- Mohamed Latib: Customer Experience will be a Fad without a Better Business Case
I could go on, but hopefully the point is made — it’s time for CX to put up, or shut up. Otherwise, CX will soon become yesterday’s news as business executives look elsewhere for something that will help their business grow.
What is the Problem? Solution?
I write this post to not just sound the alarm, but to stimulate some useful discussion about why CX is failing, and what to do about it.
To start off, I’ll share what learned from a discussion with Paul Hagen, a former Forrester CX analyst now head of Customer Experience & Innovation Strategy at West Monroe Partners. Like me, he’s worried about CX’s future, wondering “when will the term go away” as executives “focus on the next shiny object.”
Hagen points to combination of strategy and execution as reasons for few CX success stores. On the strategy side, he says some Chief Customer/Experience Officers are coming into their jobs without training on design thinking. CEOs are giving lip service to CX, without really understanding what it means.
According to a new study by West Monroe Partners and the Customer Experience Professionals Association (CXPA) called “Adapt or Fail: The Customer Experience Imperative”:
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.
Some other findings include:
- 54% of organizations cite culture as the primary challenge to becoming more agile, followed by the inflexibility of legacy technologies
- Agility is becoming a priority, though, with only 2% of orgs not trying to become more agile
- Agility is as easy as knowing what customers want and adjusting CX accordingly
Hagan believes 75% of CX initiatives fail on execution. For example, journey mapping is not tied to operational changes. The answer, he says, is for organizations to access to the pulse of customers (using VoC and other data) and implement a closed-loop program to find and fix problems quickly. Build that find/fix “muscle memory,” then focus on innovation, he advocates.
I agree. My research has found the top two leading indicators of CX success are “closing the loop from feedback to action” and “continuous innovation.” It doesn’t help to try to do something different if you can’t get the basics right. But just fixing problems is not enough to be different — unless all your competitors are asleep as the wheel.
A recent Confirmit study also found ROI a significant weak spot.
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.
The study found that “only 30% of respondents said that key stakeholders were truly invested in the goals of the program.” Yikes! Once again, ROI is a factor. In a statement, Claire Sporton, SVP CX Innovation at Confirmit said: “very few [businesses] are able to link the CX program with financial results,” which makes it “much harder to gain support of the C-suite, set the right goals for the business and secure the desired improvements and culture change across the business.”
If you care about the state of CX, it’s time to stop hyping “how great it’s going to be” and start working on solutions.
CX is failing due to the lack of interest in “listening” to what customers have to say. Not paying attention to their needs/desires is a huge error, and making it even worst is the fact that they are not getting the “attention” they expect. Mostly because companies rather focus on selling for revenue than selling for the customer – leaving aside important factors as customer service. Good CX depends on good CS, and companies tend to just comply with what’s bearly needed in customer service rather than going the extra mile and ensuring PERFECT CUSTOMER INTERACTIONS.
The genesis of CX as a strategic initiative was customer feedback that panned buying and post-sales experiences, but didn’t attribute the cause to a singular problem like product failure or service breakdowns. The message: overall, the experience of dealing with Company X is simply crappy. Companies correctly interpreted many of these complaints are systemic, cross-departmental problems, and attempted to solve them under the aegis of CX.
I think part of the problem you described lies in the fact that 1) CX really doesn’t need to be a thing in the first place. When a company is doing its job delivering value, when they are behaving ethically and in the interests of the customer, and when they provide consistent quality in product and service, doesn’t CX take care of itself? 2) Maybe CX results look bad because the wrong things are being measured. This has been a chronic problem in manufacturing and sales. In manufacturing, it took Deming to posit a new set of measurements focused on quality rather than traditional throughput metrics to improve manufacturing outcomes. In sales, it wasn’t until companies looked at Lifetime Value of customers rather than simple revenue achievement did companies achieve better growth and higher profitability.
I still look at CX as a weird sort of corporate Band Aid. It’s necessary now, but the fact that there’s a focus on it speaks to how overlooked the issue has been.
Your article comes at the right time.
Why the high failure rate of CX? Because companies are practicing a Fake CX.
Many CX professionals are now wearing the biased ‘service’ lenses to assess customer experiences, and becoming a man with a hammer: Always adopt the “Serve Customers Better” approach trying to solve every CX problem that companies are facing.
The Fake CX is just ‘Service-in-disguise.’ It is merely an extended or expanded version of ‘service.’
Is your CX real or fake? Answer the following three questions and you will know it.
1) Does your CX include ‘product’ and ‘pricing’?
2) Does your CX objectively assess customer experiences?
3) Does your CX renders non-biased solutions?
My observation: Many CX experts are preaching the Fake CX.
Great post! In addition to what’s been said already, I’ll add that we have an issue with silos. And not the traditional way we think of silos like sales vs. marketing vs. operations. I think too many silos exist even with Marketing. For instance, CX people are often at odds with the brand people who are often at odds with product people. We need to be aligned in our Go To Market strategies and seldom are.
Though not part of Marketing, I’ll throw HR into the mix as well. Hiring, training, incentives, etc. need to be aligned with CX and I don’t see that much either.
The concept of CX is too big, too strategic, for a small group within Marketing to drive success.
Great post, Bob. You sound a very important alarm. Like you, I recently surveyed my own 30+ year history of successful versus unsuccessful service initiatives. All were characterized by initial enthusiasm. All had the up front involvement of senior leaders. All had metrics to yield clear accountability and consequences. All involved lots of solid customer research, system-wide training, vision creating, strategy developing, standards setting, performance management integrating,, process aligning, employee involving, celebrating components. Without exception, the greatest challenge to long term success was the real commitment of senior leadership to stay the course long enough for new behaviors to become habit and new practices to become grounded in a universally respected core value. All of the initiatives I was privileged to help facilitate had great first year progress. But, by the middle of their second year, the shiny wore off of many as the tough, not so exciting CX work progressed. For about two-thirds, by year three, the CX initiative had gradually been replaced with some other “really important” initiative. Culture change is not easy, requires many leaders to rely on new (shaky) competencies, takes overcoming resistance to discomfort, and relies on a deep seated belief that the long-term gain will be worth the sacrifice.
By the way, I would count the start of the service revolution to be the ground-breaking, best-selling 1985 book Service America: Doing Business in the New Economy by the late Ron Zemke and Karl Albrecht.
I’m in complete agreement with you, Colin, Mohamed, Ian and others – for the same, and perhaps additional, reasons.
As consultants, specializing in understanding the prioritized value impact of both emotional and functional experience components, we’ve confidently conducted and presented highly actionable, granular CX research for many organizations. When our work is concluded, it can be frustrating to observe the degree of client ‘we-know-better’ hubris at senior levels, tactical orientation/short attention span, and lack of what I’d call ‘finishiative’, or dedication, discipline, and resolve (and also resource allocation) in taking proven results and recommendations to full execution and realization. Client ego, conservatism and risk-aversion have directly contributed to initiative shortfalls or failures and resulted in the stats you cite. As Pogo wisely said, “We have met the enemy and he is us.”.
There are two other key failure factors, and they concern a) the lack of inclusion (and even basic consideration) of roles and contributions other stakeholders, especially employees, in CX initiatives and a related lack of focus on employee experience and commitment to customers and b) reactive, passive cultures that can’t get out of their own way, and/or progress, re. CX optimization. Over the years, I’ve personally observed this again and again. Both situations, as well as what I’ve described above, serve, all to frequently, to compromise or otherwise impede the promise of CX.
Massively complex problem, Bob — kudos for even trying to take this on in something as short as a blog post. Let me add just a few points to the discussion.
First, I think most firms fail to clearly articulate their objectives from CX initiatives. Absent a stated goal, it becomes virtually impossible to identify what success is. And when they do define a goal, it all too often is defined in terms of a measurement that is not based on actual customer behavior or business outcomes; rather, they look to see if their “scores” are climbing.
Second, customer expectations are continuously changing, as is the performance of the competitive set. While some times expectations are “dumbed down” (as in, for example, when we call a company we now expect to be told they are “experiencing higher than normal wait times” and to have a hard time connecting with a live person), more often than not expectations are rising, as they are fueled by experiences that once were innovative, but now are taken for granted as table stakes. In other words, the customer experience has improved, but expectations continue to rise. So while perhaps sounding trite, CX is a journey and not a destination.
Third, I also have to take exception with one of your examples of success being a closed loop feedback program. I am not saying such programs aren’t important. But they usually are squeaky wheel fixes at scale. That is, even when the platform aims for a “census,” theoretically giving the firm the ability to capture and respond to EVERY experience failure, this is far from the case. As a practical matter, responses are collected on only a small fraction of customer touches and then response rates are only fraction of that fraction. On top of that, most feedback loops are simply triggered by ratings. So for the 0.02 of experiences that get specific negative feedback, these programs are great, but they tend to be tactical tools for handling individual issues rather than drivers of strategy.
On another note, CX and CX measurement continues to be dominated by “rational” assessments of product/service quality and performance, when “fixing” the product or service often isn’t the key to boosting the customer experience (and strengthening the larger customer relationship). Many companies simply are trying to solve for the wrong problem. (See http://customerthink.com/is-your-company-emotionally-intelligent/ ;
http://customerthink.com/you-have-a-customer-employee-bonding-problem-fixing-the-intangibles/). Absent an emotional connection, experiences are fleeting and leave little lasting imprint. Ditto for good, even excellent products and services: without an emotional hook, they are commodities.
Where do I net out? I agree that the hype around CX has exceeded its delivery. But as long as more than 95% of the revenues most companies will earn in a given year will be generated by existing customers, retention, cross-selling and upselling will remain the key to a firm’s success: call it whatever you will, this means that customers remain a company’s most precious asset.
Your alarm comes at the right time. Very nice post, I find much buzz about CX but not that much action. In the US even though there are still several issues with CX, you still have this discussion about the subject. In Europe, in other hands, we are even not yet discussing CX, since CX here and especially in DACH is almost inexistent. In one of my Korean customers, we tight product quality and services results with measurements and to analyze quality, for instance, we used journey mapping for the operation side analysis, which helped us to understand as a journey does where our pitfalls were as to connect the product and services journey and its problems within the process. The problem with CX is also related to the fact that many people talk and write great things, but in several cases, they still theoretical not doing hands-on work. But with all your article, I must to say that you should be very happy, first in the US good or bad you are having a discussion about CX, since in Europe the situation is chaotic with services and CX. I am inquiring right now and leading an initiative to build the European Association focused in CX. Unfortunate besides very few companies, the focus in companies culture here in Europe that are really focusing in CX and Services excellence are growing extremely slowly, We are searching for EU sponsors to help us to develop this initiative. Thanks and this was a great analogy of the state of CX. R
All good points, let’s add one more. CX is often focused on helping a company climb the same hill they have been climbing for years and quite often the path to the top of that hill is an echo chamber. CX can be and often is focused on incremental improvement through the lens of human-centered design thinking. Thinking that often fails to consider all aspects of the operating environment. Many CX practitioners get stuck on what the customer is expressing, not why they are expressing it. Henry Ford and Steve Jobs might tell you that the hill your customer wants you to climb is not the hill your business needs to climb.
Bob, good article and good timing. I have been convinced for the past couple of years that the heart has always been in the right place for CX improvement. The consequence has been the interference of too many conflicting priorities, too many new things to try, disruption thinking, transformation thinking, AI, etc. I had an interesting event with a client a couple of years ago. We were planning a journey mapping exercise and I convinced them to lower the horizons and let’s bite off a lot less than they had planned. We subsequently broke the effort into a few pieces and went after the most painful first…with excellent results. My take from that and other experiences afterwards is the challenge is to pull back on the reins. In today’s frenetic environment, I am convinced that taking on smaller initiatives planned, executed, implemented and adopted before moving on will yield the CX results we are talking about and looking for. It seems to be necessary to match the number of initiatives to the organization’s available capacity. Overloading just cant cut it. Thanks again. I enjoyed this article.
Bob, great post. The root cause to your question is this: There is a quite a bit of pontification about what to do, and a dearth of doing it. I don’t think CX is dead any more than brand (which i would argue is pretty much the same thing) or CRM is dead. The unfortunate trajectory for CX is it devolves into a tech only solution in much the same way CRM ended up. Stephan Jay Gould once said if we mess up the earth so bad that humans can’t live here…no worries…other will take over. But they might be giant radioactive cockroaches. The same will happen with CX. Something is waiting to replace it. However, if we want CX not to de-evolve into spamming people with surveys we need to get folks to go out and get sh*t done, even if it is the small hills in which we plant those flags. Thanks as always for a provocative post. PS. This is a rare instance in which I pretty much agree with Sampson Lee 😉
Bob, very timely. I think we have to re-iterate that we feel CX has its own place in the Customer world. Unfortunately, making CX a be all and end all for Customers is a mistake. It excludes really important factors.
Question: Why do Customers buy? Because they have to fulfill a need. They buy based on what creates the best value for them in a competitive marketplace. Not the best experience, although experience is a factor in Value
Value is essentially Benefits-Cost. All the benefits are not based on experience. You may buy something for the first time, and have no experience. Or you may not experience the salt in a food, but you may experience the overall taste. Which salt will you buy? Maybe based on the brand, and iodine etc.
Question: If CX is so good and has so many believers, why is the real customer experience and satisfaction not improving? For example the ACSI (satisfaction) score has not moved from around 70% in the last 10 years
Question: Does CX relate to business results? No such correlation exists. The reason is customers look at competition also and not just at you.
Question: How is CX measured? By CSAT, or by NPS which is an incomplete measure?
Question: Is CX a souped up name for CSAT? In today’s world we are changing nomenclature to stay ahead. Examples:
Customer Journey: Its renaming the waterfall of needs
Value Proposition: same as price justification
Customer Success, whose goal is to create value, and so on
We need to get back to basics. We need to have the customer fundamentals right. We cannot say that only 2% will get a bad product, and concentrate on CX for those who get a bad product and undergo a journey. We need to have zero defects and zero complaints. Are we working on these? Or a customer friendly web site? Are we working on making the Customer reach us easily? Say, in India your Uber is not dispatched…How do you contact Uber to ask when you will be assigned a car, without canceling the request? Or Amazon sends you a wrong part , and you send it back and they send you the wrong part again. If you complain, they say send the part back, we will resend a new one (and you can be sure you’ll get the same part albeit new!)
Lastly, the customer priority is not the highest with companies. The lack of success of customer programs will never lift this priority.
Bob, we need to re-think where we are.
There is a joke.
“CRM software vendors should get the ‘Worst CRM Award.’ They practiced the worst customer relationship management when dealing with their clients.”
Tell you a story.
There is a brand trying hard selling a product to their target customers aiming to solve a problem which is both vital and urgent to the customers.
However, most customers refused to buy. For the minority who bought, the product didn’t solve their problem, i.e. the brand failed to deliver their promise.
For a decade, the brand keeps complaining that they have no glue why most target customers don’t buy their product.
For the customers who bought the product and found out that it didn’t work out as promised, the brand always shifts the blames to customers: For example, not paying enough ‘attention’ to the user menu, not properly ‘using’ the product, etc.
As a CX expert, what would you advice this brand to do? It’s obvious.
Why don’t they shift from ‘product-centric’ to ‘customer-centric’? Why don’t they ‘listen’ to customers? Why don’t they reflect and correct? Open their eyes – the barriers aren’t from customers; the problem is their mindset and the product!
That brand could be us and that product our CX offering.
Can you figure out why so many CEOs have turned their back on our CX offering for years if it were so good and could solve their CX problems?
Though we maybe in love with our ‘product’, a wise CEO would never buy-in something that (they perceive) won’t work. If we still offer the same solution, it’s no wonder why most CEOs will say NO to us, even for the coming 10 years (if we’ve).
“CX experts should get the ‘Worst CX Award.’ They are practicing the worst customer experience management when dealing with their clients.”
It’d be so sad if this joke became the reality.
Let US – the entire CX industry – CHANGE.
What merits closer examination is the portion of CX initiatives that are considered ‘successful,’ or ‘not unsuccessful.’ Although positive business outcomes in CX appear decidedly in the minority, they apparently occur. What made those outcomes successful in the minds of those judging the results? Were they qualitative outcomes, such as ‘our staff reports experiencing less stress when dealing with customer complaints.’? Or something harder and more tangible: ‘since we launched our CX initiatives, customer churn has been reduced X%, average revenue/transaction has increase X% . . . etc.’?
In the cases of companies responding that they had ‘successful’ CX outcomes, was the customer-sat bar already so low that almost anything they did could move the needle? In other words, what was the starting point? These questions need to be explored.
Still, I think there’s a fallacy in that businesses measure the ‘success’ of projects by looking strictly at financial outcomes. “We didn’t get an ROI benefit from our attentiveness to CX. Ergo, fail!” Many practitioners understand viscerally how such short-term thinking pollutes decision processes. Back to the point I made in my earlier comment: maybe the alleged failure rate of CX owes to having the wrong expectations and measuring the wrong variables.
Great article Bob,
Adopting a customer-centric mind-set is critical; customer experience – CX – needs to become a mantra and mindset, starting at the top. Most CEO’s and boards are not willing to invest the money, time and resources to implement CX strategies because of a flawed perception that the ROI returns won’t happen right away. The problem with developing a CX strategy is that most businesses begin with flawed assumptions and little or no relevant understanding or comprehension of the UX and CX experiences that they’re delivering today is in line with the needs of their target audience. I believe that this stems from a lack of knowledge and experience of how to do a CX audit and measure where and when customers experience issues. Most CX measurement programs are focused on metrics that reflect a more rational evaluation of experiences. The most widely used customer experience metrics that provides a baseline measurement of the CX performance and how users feel about the brand are Customer Satisfaction, NPS, Visitor Intent, and Task.
Those companies that have the fortitude to challenge themselves and adopt and integrate technology that will deliver an extraordinary CX experiences will be the ones that win new business and see their market share grow.
My input is from a B2B sales perspective. Many senior executives are paying lip service to improving buying experiences. For the last 20 years vendors have continued using selling approaches that assume buyers are a blank canvas as relates to their needs. This flies in the face of buyers that do extensive research via the Internet and social networking and establish most of their requirements before sellers get involved. Traditional selling approaches will not provide the desired customer experiences. Sales Enablement is a tepid evolutionary reaction when revolutionary change is needed.
Change has to begin upstream. Vendors can’t be customer centric and provide better buying experiences if Product Development isn’t creating offerings that address buyer needs. The silos of Product Development, Product Marketing, Marketing and Sales need a laser focus on desired buyer outcomes, figure out why they can’t be achieved and develop capabilities that empower organizations to improve business results. Failure to do so results in push strategies that amount to selling rather than getting pulls from the market because people want to buy offerings.
Hi John: I agree with all of your points until you equated push strategies with selling. I think what you described in your second paragraph is very much selling – it’s a description for how to sell effectively.
I personally have felt this way for some time. The signs have been there for a while. In fact, I wrote a blog back in 2012 called ‘RIP Customer Experience: 7 reasons why Customer experience is in danger of dying’. https://beyondphilosophy.com/rip-customer-experience-seven-reasons-why-customer-experience-danger-dying/.
To be honest, I have been expecting this for some time. When I start on CX back in 2002, there was no one talking about CX. At that point, I have expected a 10-year window, where CX would be the ‘new wave’. The good news it has lasted much longer than that. Here is a cut an paste from my blog back in 2012. I still think these are the same issues today.
RIP Customer Experience
I am becoming increasingly concerned that the focus on improving the ‘Customer Experience’ is heading the same way as CRM, into failure. I fear this as I am seeing the early signs I saw with CRM and really don’t want to see the Customer Experience be destroyed in the same way. Here are seven indications that are causing me concern:
‘If I buy this IT system it will solve all my problems’
No it won’t! I agree IT systems are part of the reason why many Customer Experiences are poor but only part of the reason. In my view the big IT companies, with their big marketing spend, are coercing organizations to believe all they have to do is buy an IT system and their Customer Experience will improve by magic, just like they did with CRM. We all know organisations made huge investments in CRM systems and expected the world to change overnight. It didn’t and this sullied the name of CRM.
‘Of course I know what the Customer Experience is about’
No you don’t! Back in the day, when CRM was on everyone’s lips, I always started a conversation about CRM by asking them ‘what do you mean by CRM’ as everyone had their own view of what it meant and I needed to ensure we were talking about the same thing. The same now is starting to apply with Customer Experience. I am seeing an increasing number of people who have a superficial knowledge of what a Customer Experience is really about. As the saying goes ‘a little knowledge can be a dangerous thing’. Customer Experience is a wide topic. It cuts across many areas. Customer Experience is about human behavior, customer’s emotions and to get the most from it you need to understand experience psychology. Like with anything else, you need to understand what you are doing in order to make a difference.
‘What is the one thing I can do that would improve the Customer Experience?’
To be honest it is naive to think there is one thing that will improve the Customer Experience. It also shows that people that think this is the case don’t understand the subject. I understand people always want a quick fix, it is human nature. But let me assure you there is no ‘silver bullet’ that will solve your problems.
‘Everyone else is doing Customer Experience, so should we’
No you shouldn’t! I understand you may feel the need to jump on the bandwagon, but that is not the reason to focus on improving your Customer Experience. You need to make sure you understand where the bandwagon is going and whether you want to go there and you are committed to the journey. Improving the Customer Experience is hard work. I strongly recommend that if you are not prepared to undertake this hard work, don’t even start as you’ll do more harm than good.
‘I work in Customer Experience’
Do you really? Or have you just rebadged your job that you’ve been doing for the last ten years? Rebadging jobs, projects, functions and calling them Customer Experience doesn’t means you will magically change things. To change things you need to do something different! I was chatting to a client who informed me they were looking for a VP of Customer Experience. Their problem was that everyone they had was supposedly in Customer Experience but when they delved deeper they discovered that it wasn’t really about Customer Experience, just a normal customer facing role.
‘We have mapped our processes to improve the Customer Experience’
There’s a hint in the phrase ‘Customer Experience’. It’s about a Customer EXPERIENCE not ‘Customer Process’! There is a big difference between experience and a process. Organizations obsess themselves with processes and fail to see the difference between an experience and a process. A process is internal. It is what you want the customer to do. Allow me to let you into a secret, Customers do not always do what you want them to do and if you force them to submit to your process this can cause a poor experience.
‘Lack of true Senior Exec engagement ‘
Which senior exec would say that focussing on the customer is the wrong thing to do? Most senior execs would say focussing on the customer is the right thing to do but there is a big difference between their actions and their words. As outlined above, too many senior execs are now just jumping on a bandwagon; too many don’t know what their organization needs to do to change. Too many are looking for a quick fix, too many fail to lead. Customer Experience is a way of life, it a cultural change, it’s a commitment needed from the heart as well as the head. It is not a slogan. You will do more harm than good if you say something and don’t mean it.
I hope by you raising this now Bob and the backing from the rest of the community will help resolve these issues. Fingers crossed.
To really succeed CX has to span the entire organization – which means breaking down barriers between silos and departments. And that isn’t easy. One way to do this, suggested by Gartner is to create customer hubs, small, agile CX teams from across the business to solve specific issues (and therefore deliver ROI). More on customer hubs in this post https://www.eptica.com/blog/building-customer-engagement-hub
The responses to your post are as fascinating ad the post itself Bob. Any business professional (let alone CX Professional) who has an interest in creating and sustaining a customer focussed culture must read this. Customer Experience is a business ethos that requires every single person connected to the delivery of the experience to ‘do what is right’ – for the employee, the customer and the shareholder. The startling reality that we may have to come to terms with, is that the way the corporate world has been created over the last 100 years, just does not allow people to make ‘doing the right thing’ a tangible reality. As a result, corporate politics will sadly rise above anything else.
One thing we must never forget – Customer Experiences have ALWAYS existed – they always will. Organisations who consistently meet (and sometimes exceed) the needs and expectations of their customers AND their employees, are the ones most likely to win in the long term. These organisations will always need skilled, capable professionals to apply the science that CX is – to operationalise it so it becomes intertwined into the way they work.
CX Professionals have spent the last twenty years ‘pushing water uphill’ – they will have to continue to do so. Yet one thing cannot ever be denied – without the CX Profession, customers would be far worse off than they are today – and I for one will never stop doing what I can to inspire others to keep driving towards a world where PEOPLE are put on an equal footing with PROFIT!
Hi Bob…………..WOW, WHAT A RESPONSE !!
To all the Contributors………..thank you for the valuable feedback……….someone should “COMPILE A CR/CE/CRM FEEDBACK BOOK….to be used as a reference….no writer of any “software solution” will compete, but will be forced to take note of very valid points.
My only comment:- CUSTOMER PSYCHOLOGY – when do we get a “matrix/metrix” which makes for a 90% response accuracy in terms of product/brand etc choice – from the customer angle !!
Heck, will that not make life far easier !!.
Thanks to all for your comments. It’s a lot to sort through, but let me suggest a couple of “solutions” and see what you think.
First, maybe we (the CX industry professionals) need to more clearly define what it means to do a “real” CX initiative. Colin, Sampson, and others have commented that CX has become a popular label to apply to anything related to customers.
If CX initiatives were defined more narrowly, then perhaps the success rate would be higher. For example, what not say you’re not doing a real CX program unless:
1. you have top management support (more that lip service)
2. you’re looking *across* functions (don’t just relabel a service improvement project as CX)
3. it’s grounded in the actual voice/feedback of customers (not what employees think customers think)
4. It considers all forms of value, not just interactions (per Sampson’s point)
Should be a short list (5-7 max) that can be answered yes/no. Need all Yes to be a real CX initiative.
Second, what does it mean to “succeed”? I’ve used tangible benefits and/or competitive differentiation because top management wants this to invest. I don’t think everything needs a formal “ROI” but in a previous discussion it was agreed by CX thought leaders fluffy benefits aren’t enough. (See http://customerthink.com/3-strategies-to-sell-the-ceo-on-customer-experience-management-cxm/.)
If we want an accurate picture of success/failure, we should have some agreement on what success looks like.
What do you think? Would it help to agree on these two items?
1. Define what a Real CX initiative must include.
2. Agree on benefits that must be there to be successful.
Look forward to your responses!
Hi Bob – very provocative article!
You hit the nail on the head with your observation that the top two leading indicators of CX success are “closing the loop from feedback to action” and “continuous innovation.” It doesn’t help to try to do something different if you can’t get the basics right. Based on what I see working at companies who generate tens or hundreds of millions of dollars in actual business impact – those are the two factors that matter. Yet, so many CX program leaders spend 90% of their energy focusing on a CX score, and arguing about score methodology. You don’t fatten a pig by weighing it!
Question: early in your post you say: “My study found just 23% of respondents claiming tangible benefits from CX investments. Add it up, and only 30% claim success in terms of tangible benefits or differentiation.” Wow! Can you point us to that study? Would love to see it in more depth.
Thanks again for your great thought leadership!
CX is in some danger of careening toward the void that CRM and re-engineering became, namely attempting to generate better enterprise results (strategic CX value being too abstract a term for many organizations to deal with) via automating customer contact, data management, and relationships while reducing costs and, hopefully, also increasing revenue. In addition to the 4 elements you’ve mentioned, a stakeholder-centric culture and set of processes and giving initiative leaders the authority and resources to bring CX programs to fruition are good places to start.
As you note, CX is holistic, not just service-centric. As such, it needs metrics (per Mohamed Latib’s recent post, for example), which can reflect the entire landscape and drive change, beyond merely correlating one result with another, and proclaiming it as the definitive ‘silver bullet’ measure..
Finally, a quick note about your recommendation #3. Customer insight actionability is often augmented (not replaced) by VOE, especially where perceived CX value delivery is concerned. This “mirroring” also has cultural, employee-inclusiveness and ambassadorial behavior benefits.
My answers to your two excellent questions.
First of all, I totally agree with Jeanne Bliss, “Customer Experience is a company’s delivery of its brand promise.”
Your first question: Define what a Real CX initiative must include?
1) Real CX includes ‘Product’ and ‘Pricing’
“In fact, according to the ‘Customers 2020’ study by Walker, a customer intelligence consulting firm in the US, by 2020 customer experience will overtake price and product as the key brand differentiator.”
Can you see what’s wrong with the above statement?
2. Brand Promise Discrimination Never Happens in Real CX
Premium brands like Ritz Carlton has “Ladies and Gentlemen Serving Ladies and Gentlemen,” ULCCs (ultra-low cost carriers) offers the cheapest airfares.
‘Service’ and ‘pricing’ are both critical needs of customers. Different brands chose to satisfy different customer needs, thus, they have different brand promises.
If we don’t discriminate customers’ needs, then why we discriminate brands with different brand promises?
3. The Prescription of Real CX Aligns with Brand Promise
Why there is always one solution “Serve Customers Better” to all CX problems:
* Change of DNA
* Culture transformation
* Service improvement
* Employee engagement
Your second question: Agree on benefits that must be there to be successful?
1) Create values to customers, i.e. on pricing, product or service.
2) Build brand loyalty – when you deliver your brand promise repeatedly and consistently.
3) Achieve business results – acquisition (first time purchase), retention (repeat purchase), and referral (positive word-of-mouth).
Emotion engagement is not a must. It depends on your brand promise. Customers purchase at 7 Eleven for fast and easy, Ryanair for cheap airfares. Just get the jobs done is good enough.
Don’t make the same mistake as CRM. Not every customer would like to have a relationship with your brand. Similarly, not all customers want to be emotionally engaged.
Bob, what a powerful and timely article! The range and quality of responses generated is fantastic. Since you already have great input from great CX professionals, let me focus my comment on your last comment regarding potential solutions and next steps.
Regarding your first approach, there is a process or technique for driving toward consensus. It is commonly referred to as the Delphi technique. A quick Google search will provide a synopsis of how this technique is used with a panel of experts (your comments indicate that you definitely have passionate experts!). It involves identifying criteria and driving toward a short list as you have suggested. If nothing else a Delphi Survey would lead to some fascinating results that can be summarized and published as appropriate.
I really am enthusiastic about your second suggestion focused on defining what it means to succeed. All too often CX is measured by one of two metrics: a) some satisfaction score or NPS, or b) sales/revenue increases. Not only must we drive to agree on what success looks like, we must build a more comprehensive set of metrics that can measure all the ways CX impacts an organization. CX can have an impact on a host of critical KPIs including: traffic, conversion rates, repeat visits, brand advocacy, social media engagement, return rates, referral rates, additional purchases, life time value etc. While we need to start with specifically defining intended CX outcomes, and there must also be a corresponding effort to align all of the possible metrics that can be used to measure impact, beyond just sales.
Finally, I don’t think that nearly enough has been done to identify CX success case studies. While Apple stores are “old hat” by now, they completely revolutionized the CX in stores, and continue to set customer expectations. Steve Jobs in fact designed Apple stores on a Four Seasons CX model, not a retail store model. Is Amazon perfect … no. But if there is one company aligned with customers who continues to raise customer expectations across all facets of the experience it would be Amazon. It might also be insightful to try and look at great CX players and where they still have fails.
Bob, CX is a process not an event. Your article and efforts have created a very healthy and much needed process and introspection at this critical time for CX.
Look forward to seeing where this journey leads.
Sampson, in the earlier days of the CX movement, “experience” meant “interaction.” Something other than product or price.
I run studies for many years asking consumers and business people to prioritize product, price, and experience (defined as interactions with people or systems). The results were product and price were received about 40 points each (out of 100) with price getting the remaining 20 points.
And the rationale for CX investment was (and still is, largely): “We can’t compete on product or price, so we’re going to differentiate based on customer experience!” What is that “other” thing — interactions of course.
Obviously you can’t have it both ways. If CX includes product or price, how does CX-based differentiation overtake product or price? Makes no sense, yet I continue to see this argument repeated.
Anyway, the official position of CX thought leaders now that CX includes all forms of value — product, price, interactions, feelings, phases of the moon, … if the customer perceives something, CX is at work! (see http://customerthink.com/has-cxm-jumped-the-shark-trying-to-be-the-theory-of-everything/ for more on this.)
Except, this doesn’t line up with what CX initiatives are really doing. Most are still concerned with a) improving interactions (and within that, service interactions to a large extent) and b) getting feedback on product issues so they can be fixed.
I’m willing to accept that “CX includes everything” (which makes it essentially the same as the old term customer loyalty management), provided that “Real CX” initiatives are also concerned with everything. But of course, most are not.
The problem is that the CX industry promotes a grand and glorious vision that few brands can live up to. That’s leading to a lot of frustration and, I believe, the growing perception that CX is too hard and is failing.
Hi Bob, thanks for the information.
In 2015, you asked, “Does CX include product and pricing?” A dozen of industry experts unanimously consented that it does.
And yes, “… this doesn’t line up with what CX initiatives are really doing.” That’s why it’s NOT real and is the CORE of the problem. That is why we have to CHANGE.
If CX is just about interactions, then it should be renamed as CIM (customer interaction management). Let’s don’t continue to confuse any people.
CX is including everything doesn’t mean it has to manage everything. We’ve to find out what really drives customer to buy and business results, thus we can’t afford to ignore important values / factors like ‘pricing’ and ‘product’.
The role of CX should never be functional. It ought to be strategic and monitoring. It identifies where resources are poorly used and ensures brand promises are delivered.
If services have to be improved then leave it to CS. If products or pricing are in troubles, let the marketing folks to handle. Let the respective functions DO the jobs.
I think this direction is what CX should be heading to. 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?
There are brands competing with values other than ‘service’. CX is good and necessary for ALL companies. It shouldn’t be something exclusive for the members of SERVICE CLUB.
Sampson, remember what happened with CRM…
The “experts” (you, me, Paul Greenberg, others) said CRM is all about relationship, delivering value to customers, building loyalty, etc. Sound familiar? Same as CX today.
What happened with CRM? While the experts continue to proclaim “CRM is a strategy,” the market came to know CRM by what was actually being DONE — which was technology-focused projects that helped the company, not customers. This was not my vision for CRM, but in the end, the market agreed that what people were doing and calling CRM was CRM — and not what the experts said.
It won’t be any different for CX. Yes, experts have agreed what real CX is, but what are companies actually doing? Mostly what you call Fake CX.
If enough people practice Face CX, and keep calling it CX, then CX will mean Fake CX and the experts will be overruled once again.
How do we stop this from happening?
Yes. That’s why we have changed our company names (yours from CRMGuru to CustomerThink and mine GCCRM to GlobalCEM).
I see the chance to winning this Real/Fake CX battle 50/50. The reasons why I am optimistic:
1) Last time the enemy was the giant CRM vendors. They had the tremendous marketing power promoting CRM = software. This time vendors play a minor role. The No. 1 enemy is our ego – Are we willing to admit that we’ve been preaching the Fake CX?
2. Last time the scale of application of CRM was more extensive. This time many CEO’s still hesitate to invest on CX. In short, fewer companies are involved. It’s relatively less difficult to change.
3. Last time the investments were much bigger. Think of the software license expenses plus all the internal/external consultants involved. This time mainly involves internal people and many CX staff are transferred from other departments.
However, when CX drops the functional role and takes up the strategic role, it means that the demand of related software and consulting works would be much lower.
In other words, if the Real CX wins this war, the software vendors, big consulting firms and giant research houses would have no interest to keep pushing CX.
Subsequently, CX may not die but would under the spot light no more. It may gain its independent role but works as a small team, or being absorbed as part of the duties of a chief strategy officer.
Inevitably, the creation of a new buzzword to replace CX is desperately needed to feed the big appetite of the software vendors, big consulting firms and giant research houses.
But don’t you think, sometimes, being ‘right’ is more important than being prosperous?
Hi Bob and other contributors,
What a tsunami of responses! If the companies that we’ve been referencing and probably engaging with as either customers or practitioners, were equally responsive, then perhaps the question would be unnecessary
As the quality and quantity of experience represented here dwarfs my own, I’m not sure how successful I’ll be in adding any substantive or new information as I’m very much in accord with most of the comments.
However, I did want to add to the discussion with my own version of what many of you have said or intimated, and that I included in my new book as one, if not the major reason, for CX failure.
I don’t believe that companies are just ignoring their customer’s complaints or issues – they are ignoring their customers completely or, amazingly, don’t care about them. And it’s not just me that thinks that. American business blogger and investor Tim Ferris asks a lot of people in his weekly podcasts “What would you put on a billboard?” Comedian Mike Birbiglia replied: “I’d put it in Times Square”, where many businesses feature large and bold adverts and it would say, ‘None of these companies care about you.’” While that may be an extreme view, many businesses feel that investing in customer experience belongs in the too hard or too expensive pile. In case you think these are the musings of anti-capitalist, rabble-rouser, let me refer you to a well cited Rockefeller Corporation study that showed that 68% of customers leave a company because “they believe you don’t care about them.”
When you read many of the newspaper and blog headlines, that maybe seem sensationalist. but are fundamentally accurate or have a bad experience yourself, it’s hard to come up with any other conclusion. I believe that many businesses especially those that we deal with every day, the utility companies, telecoms, banks, insurance companies et al, have simply done a cost benefit analysis and have figured out that they just need to address that still small majority of people that actually complain and they depend on the rest of the “silent majority” to suffer in silence.
That won’t last forever, and whether it’s government intervention (not the most reliable of remedies) or the slow but inexorable move towards a tipping point of companies that do care, change will happen. As Ian Golding pointed out, we are making a difference and the fact that populism in all it’s various guises is seriously impacting our political world, that movement is beginning to influence corporate behavior as well. And much of that revolutionary zeal starts and depends on the front line people that many of you have referenced as being the key to changing things. They are one of the major change agents and when more companies realize the value they have under their own noses, then we may see progress being made and customers ending up on the winning side.
At the risk of stating the obvious, companies want to be successful and be winners, but it can’t be at all costs. It should be based on growing their business by helping their customers succeed – and win. Companies are beginning to realize that customer interactions can’t be a zero sum game and a truly memorable, positive customer experience has to be a winning proposition for both customers and the company.
I’m just not sure that I’ll be alive to see that played out, but in the meantime, I’m making slow progress one company at a time to help them understand that when a customer wins, nobody loses.
It’s been a couple years, but I think the concepts here still hold true (https://www.linkedin.com/pulse/customer-experience-survive-brian-doyle/?published=t).
To avoid going the way of 6 Sigma, I’ve seen success in staying away from “CX for CX’s sake” and pushing for tangible results. Having said that, Bob and others bring up an excellent point – let’s clearly define what that success is. In my career, I’ve had the most success by building momentum – a win here that builds to a win there – all with the bigger picture in mind.
It’s almost like we have to take a step back and ask ourselves what we’re trying to achieve and then take the right steps to get there – with Bob’s checklist in mind.
To keep the laws of entropy from derailing CX, periodically it’s healthy to challenge and debate what it is and where it is headed. Habit #7 in Stephen Covey’s The 7 Habits of Highly Effective People is called “Sharpen the Saw.” Covey recognized that, as in CX, any endeavor or idea can reach a point where it becomes less clear and effective. So the solution is to step back a bit and sharpen the saw. Feels like the core objective of CX, perceived value based on customer needs, wants, and expectations, is getting lost in the weeds. As Bob and Sampson pointed out, for concepts and movements like CRM (and, I’d argue, re-engineering as well), the saw became dull. With diligence, we can keep that from happening in CX.
For quick wins on CX one needs to identify and prioritize low effort high impact projects to get started , few of the cases I know have hit a wall since they have started off with high impact high effort projects , no doubt they are important but could be time consuming hence to taste early success with cx you need to identify right kind of projects .. will help reinforce confidence among team members and across stakeholders
Thank you for a thought provoking article and a great discussion!
There is certainly a sense that CX is still a challenge for most organisations, and the raft of technology solutions to provide assistance is not always helpful. As with CRM, CX tends to be a business strategy, rather than an IT solution, the technology is merely the enabler to provide scale to the strategy across the business. There is also the notion that the experience can be captured as part of the balanced scorecard so customer KPIs and targets have manifested to help measure and manage, similar to Six Sigma and BPM. This is understandable, since data is the way we understand performance these days, and showing the financial business case for ROI is crucial for investment. However, changing human behaviour and future intentions are not easy to capture and explain with a dashboard showing the delta in NPS and a word cloud. Consequently, behavioural science is gaining momentum as a way to tease out false positives in our predictive models!
At the end of the day, CX is very much a customer insight and strategic marketing challenge that often requires a step change in the business operating model, not just incremental performance improvement. Leadership is often failing not only to co-create with customers but to respond boldly, drastically, effectively and rapidly to the moving target of rising expectations and changing preferences. This can mean anticipating future needs through foresight and innovation, pivoting and sometimes tearing up the rule book. Unilever is a recent example that comes to mind when thinking about leadership and provoking step change! Social media, CRM, CX and treatment of personal data all need attention when it comes to provenance!
With change becoming so rapid one could argue that agility in the market is now as important as designing a great customer experience. 18 months is now a long time in business terms. Employees (and their leaders away from the front line) need to train up in agility and recognise that processes (and journey maps) that work today may not always create great value exchanges with customers tomorrow.
As there were few Apples and Googles in 2000, there are not enough companies challenging their own culture and creating market value like Amazon, Microsoft and Tesla/SpaceX/SolarCity in 2018. A paradigm shift is needed in the boardroom for most businesses, our CX frameworks and metrics for measuring and building customer relationships need to reflect this.
Seems like you have struck a chord here! I completely agree with your comments as well as many of the other posts here. It must be an example of cosmic synchronicity because my last blog asked the question, “WTF is happening to customer experience?” https://www.smithcoconsultancy.com/cx-blog/the-need-for-boldness/
WTF indeed… but where I disagree with some of the responses is that I think quick wins are the problem, not the solution.
Thanks Bob & co… clearly an area of concern and emotion for us all, this discussion (and hopefully its ensuing change) has legs. Colin, your ‘7 indications…’ are spot-on and unfortunately all too familiar! And Sampson, you are right, surely as CX professionals, we can write a better ‘middle’ (because it’s not the end!) to that story!
Customer Experience as a field of expertise is not alone in having a different meaning for everyone (think Marketing, Operations, even Engineering!). The issue that differentiates CX however is that while other fields can somewhat independently ‘get on with’ their respective disciplines, CX is so wide ranging and so dependent on organisation-wide buy-in approach that a fluffy definition quickly becomes a fluffy acceptance… fluffy implementation and ultimately fluffy results! I really like the idea of a CX checklist Bob, perhaps an area for ongoing discussion?
CX initially at least, it should be the catalyst for organisational transformation. And we know the fundamentals of a successful transformation programme (interestingly and unsurprisingly, a similarly high percentages of transformation programmes fail) from clear purpose and active C-suite support to detailed planning, execution and management. Of course some key purchases will be needed (technology suite, CX professionals, etc.). These are, in theory at least, easily ticked boxes, like buying the equipment for your latest health kick… but using it to its best takes motivation, focused change and long-term commitment.
The reality of current commercialism means that annual and quarterly budgets are, for most organisations, the yardstick of success and C-suite support. CX is not the immediate fix it is often sold in as, though with a good structure that includes some quick (but significant) wins, the chances for successful support of higher ticket, longer term action are greater.
So, while CX may start out as a transformation programme, it must become a culture. It needs time to take hold, deliver results and become a ‘way of working’ rather than a change initiative. If successful, the early initiatives will have delivered tangible results as well as momentum for customer centricity, at every level and area of the business. Successful CX usually is not the shiny or fancy piece of kit that delivers overnight results… it’s the people, the efficiencies, the warmth and consistency that organisations who stick with CX develop over time by challenging long-held short-term profit mentality in favour of the customer.
Investing in CX and its potential for results is a great message- it’s inspiring and logical… but we need to be clearer about the timelines, the challenges and the real commitment needed. It’s easy (!) to sell a logical approach and a piece of kit to support it but selling CX is about the longer game and that’s where we need to deliver more!
I concur wholheartedly with the content of your post and many of the replies that my esteemed CX colleagues have also offered. Over the past 20 years ( I go back to the origina of the CX movement) I have had the pleasure of working with two organizations (one B2B and one B2C) where after about 7 years (re: Ian’s article) CX slowly started to fade into the background with leadership and then begin to crumble and disintegrate under the pressures of cost-cutting and “cost efficiencies.” In just these two experiences in my career I have seen the issue as one of leadership having developed a firm mental model around business success deriving mainly from focusing on revenues and profits versus customer-centric thinking and behaving. Unless the stakeholders in any business see value in CX as a strategic imperative and one that results in positive business outcomes, CX practitioners will continue to struggle with proving the ROI. There’s also the issues of culture and short-term thinking especially around the revenue and profit mindset. I also feel that the educational system is partly to blame for leaders not coming into organizations equipped with CX knowledge. How many MBA programs out there include at least a CX component? Very few.
In a B2B organization that I worked in for over 17 years, they brought in Six Sigma and developed a massive team of Black Belts and Green Belts with a clear and singular “cost-out” mission. Over several years, they cost-cut their way to increasing profitability and revenue growth while the customer experience initially soared and then hit a peak and gradually started to decline. Once they felt they had cut costs to the minimum, they let all of their Six Sigma trained employees go (project complete) as the final cost-cutting measure. Six Sigma came in, did its thing, and was then gone. CX was part of that experiement and shortly after Six Sigma, CX met the same fate. CX was trated like CRM and Six Sigma – a tool to be used for a period of time then dropped. This kind of mental model around business still prevails and I think there’s a definite opportunity within higher education to build CX into their MBA curricula and other business educational programs to prepare future leaders to arrive with or develop a CX mindset.
Email from a PR rep today contains this quote from an IBM study (source: https://www.ibm.com/services/insights/c-suite-study/):
“68% of CXOs expected their organizations to emphasize customer experience over products.”
Once again, if customer experience includes products, how does one emphasize CX over products?
There is IMO a view that, for some, CX is the annoying stuff you do for the customer after you sell stuff. That is an inside out view. The correct view of CX is what a customer experiences with your brand in totality (a outside in view). quote above is obviously leaving product out the equation (incorrectly imo)
Great topic. CX fails when you have pre determined process instead of understanding the individual requirement and providing solutions. Again for certain queries/ requests there are preset solutions, which is pushed without understanding customer comfort level in such preset solutions.
Instead of service to sales it’s more of sales before service, due to stiff targets. And again the satisfaction depends on the customer’s whole hearted acceptance of the preset solutions.
Customers are the actual source of job which the person is doing instead of considering them as disruption to complete his/her day to day activities.
Customer requirement may be unique, instead of saying “unable to entertain as per policy /criteria” need to understand the actual requirement and provide solutions
Apologies, as I am late to this very important party. This is a topic that is long overdue for serious discussion.
I am not sure I will offer anything that is drastically new. A more deliberate, thoughtful plan for CX economic impact is critical for any CX practitioner…assuming they want their job to last beyond 6 to 18 months.
In challenged, or failed CX organizations, the common threads I have observed include, but are not limited to:
• They have stopped short of connecting CX measures to customer & employee behavior
• Economic impact of behaviors is loosely defined/calculated (if at all)
• CX teams do not partner with finance to build a “finance-certified” metric framework
• “Why” they are measuring select metrics is ONLY a function of executive compensation plans
• When they deploy anything new, they have not quantified “the value of that is what?”…in terms that are supported by finance
• When asked to define their CX program’s success criteria, you get a story about unicorns & rainbows with no quantifiable impact measures anywhere
The road to CX failure is paved with good intentions, idealistic mantras, and unicorns.
I believe in a basic, waterfall approach to CX value:
1) What are the financial/business objectives of the broader organization (organizational measures)
2) How can CX support those objectives in a measurable way (strategic CX measures)
3) What are the tactical success measures that are connected to the organizational objectives (tactical CX measures)
4) What is each employee accountable to, based on their role, that has the greatest impact on the key CX measures (individual CX measures)
I fully recognize this is not a simple task, but for the survival of proper CX, a more impact-oriented approach & alignment is imperative.
Most practitioners don’t work for a company that has “.org” at the end of their URL, and they do not have leaders at the helm who are treating CX as a serious discipline. Therefore, CX leaders need to know how to navigate and leverage relationships, and must work closely with their finance team to design and deliver a CX program that is hard wired to financial impact… This will help elevate the conversation.
My intent is not to indict my CX brethren, rather to add fuel to this fire which is intended to focus CX practitioners on key disciplines and practices that will prevent CX from becoming the next CRM.
With all of the comments in the customer experience suggestion box, it may also be useful to take a more macro, enterprise-wide and surgical approach to help bring CX back from the abyss. Some years back, Jim Higgins, an academic colleague in Florida, wrote a terrific book – Innovate or Evaporate – for managers, professionals, team leaders and anyone in the enterprise concerned with increasing competitiveness. The foundation, or architectural plan, Jim used was the Seven S Framework, a management model developed by Tom Peters (yes, that Tom Peters) and Bob Waterman in the late 1970’s, while they were consultants at McKinsey. This was the basis for my second book, The Customer Loyalty Pyramid, which addressed how organizations could strategically create a culture that would focus on customer value, customer experience, and customer loyalty behavior.
Essentially, Peters and Waterman went full circle with this model by linking strategy and culture with organizational effectiveness. Here’s a brief description of each component of the framework, along with some brief perspectives on how it applies to optimizing customer experience and loyalty behavior.
1. STRATEGY is the integrated vision and direction of the company as well as the manner in which it communicates and implements that vision and direction. So, the key strategic question for any organization is the degree to which customer value and stakeholder behavior transcends customer acquisition, or a product or sales focus.
2. STRUCTURE is the form of the organizational chart and interconnections between positions in the organizational hierarchy. Is the structure compressed, or latticed, and responsive, even proactive, with customers, or is it a typical vertical architecture with the customer a secondary consideration?
3. SYSTEMS is represented by the procedures and routine processes required to perform the work, including the ways information moves through the organization. Who sees, analyzes, and applies customer-related data; and is it shared to optimize both value and experience for customers?
4. STAFF is the personnel categories within the organization, e.g. marketers, engineers, customer service, sales, accounting, HR, etc. Does each employee job description, irrespective of function or title, have an element which shows how that person a) provides value to customers and b) works with other individuals and groups to assure that value is delivered at the level desired by customers?
5. STYLE is the characterization of the ways key managers set priorities and behave in order to achieve the organization’s goals. In a customer-centric enterprise, goals are set around customer value delivery; and style represents the daily communication and action informal ‘rule book’ which governs how those goals are met.
6. SKILLS are the distinctive capabilities of the organization as a whole. How does the enterprise define its best elements of performance? If optimal value delivery isn’t core to skills, the organization can’t be truly identified as customer-centric.
7. SHARED VALUES are the core beliefs, or manifesto, underlying the organization’s existence and its expectations of its members. Values act as an organization’s conscience and provide guidance in times of crisis; however, these values, also known as superordinate goals, are what set the operating tone of the entire company and help to shape its reputation and image outside the organization.
The original intention of the framework was to help guide thinking about organizational effectiveness in the broadest operating sense. The 7-S model turned out to be an excellent tool for judging an organization’s ability to implement a given strategy, such as defining and executing CX. The model showed that thinking about strategy implementation was more complex than just the relationship between structure and how goals are met. It demonstrated that culture, employee contribution to value, and the flow and actionability of data, were also key pillars of customer experience optimization.
To be effective, an organization must have a high degree of internal alignment among all seven Ss. Each S must be consistent with the other factors for them to reinforce one another. All Ss are interrelated; and a change in one affects all others, especially where innovation and customer-centricity are concerned.
Certain key factors such as staff, strategy, structure and systems can be changed in the short term. The three remaining Ss — style, skills and shared values — are factors that can only be affected long term. Skills are both hard and soft. Since its introduction close to forty years ago, countless companies, in multiple industries and locations around the world, have successfully onboarded the seven S framework; and, when applied with discipline and innovation around customer experience and value optimization; have found it is a straightforward and very workable template for successfully attaining organizational and stakeholder goals.
Eric, well thought out
But customer centricity by any name requires seriousness of intent of the company and the CXOs and their belief customers come first.
Then they can do what you suggest
Lots of good points in the comments. And Bob, you and I have talked about our frustration with the hype around CX…
And when I see people writing about CX, I find that topics get called “CX” that aren’t CX:
– CX does not equal customer service . Customer service is what happens when CX goes wrong.
– CX does not equal VoC. VoC attempts to find (and fix) issues with products and services that could have been avoided if firms had used a customer-centric approach to developing them. (And with customer-centric I mean companies like USAA who ask what do customers want to do and how can the firm innovate to enable customers – mobile check deposit is one example.)
– CX does not equal NPS. NPS (like other metrics) is used as a measurement “accounting” practice without any perspective to how they relate to operationalizing improvements.
– CX is not an initiative. An initiative is a contained project.
CX is a mindset that changes how firms do business.
CX is a C-level problem, not a CX team problem (but too many CX owners kid themselves C-level commitment, agree with you, Chip).
CX is a growth engine because it can play a role at every stage of the corporate lifecycle:
– In the start up phase, good CX can attract customers to try products/services and it will attract new employees.
– In the growth phase, good CX can help gain the market share necessary to make economies of scale possible.
– In the mature growth phase, CX can reignite the company with a sense of purpose that has gotten lost among all the growth and the complexity that comes with growth
– In the decline phase, CX can help reduce costs to free up money for reinventing the business model.
Maxie, thanks for your comments.
You say CX is a “mindset that changes how firms do business.” Can you elaborate on what that means, exactly? How should these other CEOs change their mindset so that they see that CX is worth it? Or is the mindset simply a belief that it’s the right way to do business, so no justification is necessary?!
We all point to the same (short) list of examples, with customer-centric CEOs that “get it” about the importance of delivering a great (or at least the promised) customer experience.
Other CEOs want some of that CX magic, saying they also want to “compete based on the customer experience.” Yet their organizations are struggling to translate that rhetoric into meaningful business value. So is the problem the wrong mindset, or poor execution on the mindset?
CX has such a broad connotation these days that virtually anything that has a smidgeon of customer perception involved can be labeled a CX initiative. As I’ve suggested, maybe defining “real CX” more narrowly would help increase the success rate. The CEO mindset could be a way to filter out CX pretenders, so I hope you’ll comment more on this.
Thanks to everyone who has contributed to this important discussion.
Very good post and very timely in nature. CX is FINALLY getting the recognition it needs as being so much more comprehensive than simply front-line customer service skills.
In my opinion, CX is still failing in many ways is simply because while many C-Suite leaders understand WHAT CX is, they still haven’t wrapped their head around the strategies and methods involved to make transformative changes. While their intentions are good, they quit before they see success because they are still looking for the unicorn of instantaneous profits.
I like to remind my clients to do the Gut Check of asking themselves if they are merely interested in CX or truly committed. There is a huge difference. Just think of the number of people who SAY they want to improve their health, get fit, and lose weight… then head off to the restaurant and order heavy meals washed down with several glasses of wine and topped off with a sugar laden dessert.
The key, in my opinion, is the commitment. Accountability is crucial. If only one C-Suite member is committed and the others are merely bobble heads in agreement and not in practice, then all efforts will fall short.
I feel that individual companies will have to start to feel some pain in terms of losing customers to the competitors who understand that it takes commitment, time, effort, and resources to design a CX that customers want to pay for before they will fully embrace the CX movement.
And that’s when all of us CX professionals will be more than happy to help them out.
“You can talk with someone for years, everyday, and still, it won’t mean as much as what you can have when you sit in front of someone, not saying a word, yet you feel that person with your heart, you feel like you have known the person for forever…. connections are made with the heart, not the tongue.” C. JoyBell C.
WHAT HAS THIS TO DO WITH CX – EVERYTHING.
Race, Sex, Culture etc.
NO ONE PERSON IS BORN THE SAME AS THE OTHER and herein lies the CRUX OF THE MATTER – no system on earth can/will resolve issues around emotive reasoning – least of all the WHY. CUSTOMERS ARE FICKLE ? NO, satisfying the perception of excellence at a excellent price, within a excellent time-frame and with excellent service may get you there. !!! FOR HOW LONG ??
A year has passed since this article, in my opinion the most relevant of “customer think” content in 2018 (thanks!). The customer experience management has continued to move and I think that some of your predictions are on track to be fulfilled. It seems that now the “data” appear as the lifeline, but from your point of view, have we improved on average our ability to offer tangible improvement results to companies ?
Tomas, good question!
Short answer: no improvement, based on research conducted last year. We surveyed 200+ CX leaders and found just 25% are “winning” — able to quantify benefits or gain a competitive edge with CX initiatives.
This is slightly worse than the 30% success rate found in research about 2 years prior. But the samples are slightly different.
About 60% of companies are working on CX and “making progress” but struggle to quantify results. Some after several years.
Lack of skills in metrics and creating a business case is one critical problem. I think the success rate would be higher if CX leaders were more adept at showing business value for the work they’re already doing.
But in some cases the strategy is lacking, too. There’s too much focus on fixing problems and not enough on improving journeys or creating unique experiences. “Improving touchpoints” was the most popular activity but least likely to lead to success.
For those wanting all the gory details, I’ve published a detailed report available for purchase at http://customerthink.com/customer-experience-at-a-crossroads/.
It’s, unfortunately, an old story. Most companies don’t, or don’t know how to, pilot granular CX initiatives and cascade them to a wider landscape. Senior execs want big financial wins, bur are often far too tactical and undisciplined to a) build to scale across the enterprise or b) see initiatives on a strategic level, accepting that some shortfalls are both inevitable and part of the learning and perfecting process. And, agreeing with Bob, the lack of cultural and strategic focus is frequently compounded by popular metrics like CSAT, NPS, and CES, all of which have analytical challenges, especially assessing a CX initiative’s impact on perceived value.
We tend to pick on nomencalture: CX, customer-centricity, customer success etc.
Whatever we do for the customer should be important and give rise to results.
1, The overall customer scores are not increasing….We are not doing what the customer values, but just thinking whatever we do is good for the customer
2. the relative scores are not increasing perhaps because the competiition is doing the same thing.
What we need is a good measurement technique which tells us what is important to customers, where we are better of worse, and then work on the important ones that will bring us more customer value. Customer Value Added is one of these measures
Do not do more of the same if your results are not improving
Well, I’m late to the party, but better late than never….
I was going to sit down and write a piece about CX being a waste of time (we all need an attention grabbing headline, right?), so typed into Google “What proportion off CX initiatives fail?” and this article was near the top of the list. Thanks Bob!
There have been some outstanding contributions and observations within both the article and the comments, most of which I agree with and some which I don’t (e.g. I don’t believe that CX and profit are mutually exclusive – if CX activities don’t ultimately drive profit for a business, why would the business bother doing them? Plus Customer Experience isn’t just about interactions – it’s about the experience of the customer, which comes from service, proposition & channel experiences).
The two biggest things that resonate with me are:
1. Sampson’s comments about fake CX
2. Maxie’s comments about CX being a mindset, not an initiative
My observations are:
1. Most CX activity has no connection back to culture
Sounds like a pretty vacuous statement, I know, but relevant nevertheless. The organisations that get CX right have got the right organisational cultures – Zappos, SouthWest, etc. – we can all name them….
You can do a thousand different initiatives, actions and activities, but if the culture isn’t right and the people are not behind it, the CX activity will fail. Most of this is just Fake CX, as Sampson would call it
2. Activity without any outcome – CX without Transformation
I was responding to a tender once, where the client requested that they didn’t want to do journey mapping. As Journey Mapping sits at the heart of my approach, I asked why. They responded with “we’ve already done journey mapping four times and nothing changed”.
I find this statement completely astounding, yet I am not surprised either. I have come across organisations that have done journey mapping frameworks and even fully fledged journey maps, believing these activities to be the endgame. The number of times I’ve had to explain that Journey Mapping is not the end, rather a means to an end for discovering Pain Points, Moments of Truth, Wow Opportunities & Commercial Opportunities – all which should be used to drive transformation within the business – well I’ve lost count…
There are dozens of other issues I could call out, many of which are listed above, but the challenge is that we, as CX practitioners see the big picture, yet most of the people we deal with see the little picture and have little or no influence over the end-to-end story.
This isn’t just a matter for the C Suite – too many of them have vested interests elsewhere. If you’re very lucky, you can identify a CEO who is a visionary or who can be (relatively easily) converted into a visionary. But even then, most CEOs are too scared. Too scared of failure, too scared of their shareholders and too scared for their jobs.
A revolution is needed, but I fear it won’t come. We can point out the successful companies to the failing ones, but most CEOs don’t have the balls to do the right thing.
I fear for our future my dear colleagues, but as Mr Golding stated, I will continue to fight the good fight….
I’m even later to the party…
Great post indeed!! A lot has been covered here already and a lot of it I’m in agreement with so I’ll not repeat any of it except to say that I especially liked what Maxie had to say about CX being a mindset and one that critically needs to be that of the organizational leader because everything trickles downhill from there. CX is also a long-term proposition and so time would also be the enemy of CX success.
We generally have a very short-term business mindset and that doesn’t integrate very well with a CX mindset. How long does it take to realize positive and tangible business outcomes from well-orchestrated CX? That would seem to have an “it depends” kind of answer, and I would assert that it takes longer than you might think. Patience is a virtue when it comes to CX and in my experience, business, in general, has very little patience. Therefore, they are likely their own worst enemy when it comes to CX.
My perennial question to the leadership of any organization is this: If it’s not all about the Customer, then what exactly is it all about? And, if it’s not all about the Customer, then you have absolutely no hope of ever “competing mostly on the basis of customer experience” as the Gartner study predicted. That train has left the station. At that point, you’re better off reverting back to pumping your product until the proverbial wheels fall off the wagon. CX will then remain the strategy and the success model of the enlightened few.
Amazing answers. Well after Karl answer one year later. I thought it would be appropriate to let you know that CX in Europe is changing, especially after the acquisition by SAP of Qualtrics. Since in my first answer I related to that. These are helping us a lot; for the first time, we were approached by three big tech EU companies directly, without Samsung influence or a significant effort. We are also founding the ECXO.org to develop an evolving model to European organizations needs, which have very different issues than the US market. All are invited to help us, and we are open to everyone without discrimination of people that think different 🙂 as often happens in “some associations”. We appreciate different approaches and diversity and are not focusing on just self-promotion, but to help the European and neighboring regions and peoples. Have all a great summer, R
The experience we have had with Boeing 737 Max and Boeing ignoring potential problems with the plane, or Ford Pinto’s human life versus product cost analysis should be serious enough experiences to stop us from dealing with these two companies. But we still do. This is a troublesome aspect of experience for me. If experience relates to future business, then why is this not happening?
Hmmm. Gautam i think you had many people bail on the 737 Max and in fact it was consumer feedback that got the US government to pull it. The Ford Pinto was a PR disaster that helped the new upstart Japanese car companies move from niche players to global competitors. There is strong behavioral inertia that prevents people from changing (nominal decision making), plus just market conditions (i have few flight options from Bentonville for example). Many might want to use something else than Powepoint, but there is a paucity of better solutions. Nonetheless, the experience people have with a company (or other human being) certainly impacts attitudes…if not ultimately behavior.
My point was, Ford did the analysis, and the Pinto was a bad experience based on Ford’s anaysing people were less important than costs…and so did Boeing.
The bad experience has not prevented us to shun Ford or Boeing.
Experience is not all in making choices.