Are You Competing on Customer Experience to Keep Up, Get Ahead, or “Leave a Dent”?


Share on LinkedIn

Painting is self-discovery. Every good artist paints what he is.
—Jackson Pollack

Three years ago, MassMutual embarked on a journey to reconnect with its customers. This 165-year-old financial services firm realized that “you can’t spray paint excitement” on largely set-and-forget products. Furthermore — and listen up marketers, because this is meant for you — customers don’t want mass marketing messages on critical life issues like planning for college, caring for loved ones, or retirement.

All this according to Ernan Roman of ERDM who conducted Voice of Customer studies for MassMutual to learn what it would take to get consumers to invest their time in low-engagement products like life insurance or 401K plans. Surprise! The research found people would in fact share their attitudes and needs in exchange for truly personalized offers, education, and communications.

Pilot programs of a new engagement strategy based on this “human” data generated a 400% increase in response to email and direct mail, validated across several hundred thousand names. Still, Roman cautions that successful pilots are just the first step. To gain a competitive edge requires scaling and operationalizing.

Competing… or Just Interested?

Did you know that in 2016, “89% of companies expect to compete mostly on the basis of customer experience”? That statistic was generated from a 2014 Gartner survey of marketers, reported on analyst Jake Sorofman’s post declaring that “customer experience is the new battlefield.” In that same survey, only 36% of marketers said their businesses were competing “mostly” based on CX in 2012.

Source: Gartner report "Gartner Survey Finds Importance of Customer Experience on the Rise — Marketing Is on the Hook," Sept. 29 2014
Source: Gartner report “Gartner Survey Finds Importance of Customer Experience on the Rise — Marketing Is on the Hook,” Sept. 29 2014

Wow — a shift of 53 percentage points over a four-year period! According to Sorofman, the marketers in the Gartner survey understood the context to be the “whole experience or relationship” – not just marketing interactions.

I polled two dozen industry thought leaders whether they agreed with the Gartner statistic. The consensus answer was a resounding “NO.” Colin Shaw, a CX industry luminary with several best-selling books, sums up this way:

“I think 89% is high by 2016, assuming that CX is not their ‘product or service’. For me the acid test is ‘if you took their products away what would you be left with’? So for example, I can see that you could take Ritz Carlton people out of hotels and put them in a retail store and do a good job. How many companies are like that? Very few. They are still dependent on their product and service.”

Unabashed CX proponent Ian Golding first agreed with the statistic but then explained that:

“Businesses are becoming more consciously aware of the need to start differentiating the ‘end to end experience’ as a way of driving sustainable growth. The reality is whilst they may be conscious of this, right now not enough of these businesses possess the competencies and capabilities to know how to do it!”

In short, I think 89% of these marketers might think their organizations need to change. But are they really competing mostly on CX in 2016?

Not Everyone Gets a Trophy

In business, winners have to compete. They don’t just do the basics like opening a store for business, processing orders, or keeping the lights on. No more than a basketball team competes just by donning uniforms and showing up for games on time.

Turning to Customer Experience, a MaritzCX maturity study found that 87% companies are stuck in the doldrums of the first four stages of CX maturity, with no significant difference in performance from the initial stage of “apathetic.”

Source: MaritzCX
Source: MaritzCX

Only those in last four stages (13% of respondents) show significant performance gains (AKA winning). You don’t get any real advantage just from investigating, measuring, and responding.

And let’s remember that there are many ways to compete. Walmart competes based on low prices and supply chain management. Apple competes based on innovative, must-have products. Tech companies compete based on brand reputation and product features. Utilities compete based on being the only game in town. The corner store competes based on convenience.

Now, some argue that these are all forms of customer experience. But if so, then 100% of companies are already competing based on CX because a) all companies deliver a customer experience whether they do so intentionally or not and b) everything (including products) is already included in the customer experience.

This is nonsensical. Howard Lax of TNS points out that “this casts the definition of CX so broad that it loses meaning.” While Lax agrees that CX is growing more important, “not even close to 89% even measure the customer experience, let alone compete on it.”

Do B2B Software Vendors Practice the CX That They Preach?

Let’s take a look at B2B software vendors that increasingly tout CX in their marketing messages. According to Megan Headley, Research Director at TrustRadius:

“We see platforms that previously branded as A/B testing vendors, or web content management vendors, or personalization vendors, or customer feedback tools, that are now rebranding as customer experience platforms.”

I’ve noticed the same thing. However, a recent strategy shift by web content management supplier SDL may be the canary in the CX hype coal mine. The company concluded that its CX messaging had failed because, in the words of executive chairman David Clayton, it put the “wrong salesmen” in “wrong opportunities.”

When I talk to vendors, read analyst reports (Gartner, Forrester), or visit online review sites (G2 Crowd, TrustRadius, etc.), I continue to see traditional messages of solution features, market position, pricing, etc. Nevertheless, the game has shifted due to the widespread adoption of cloud-based, pay-as-you-go solutions. Bob Apollo of Inflexion-Point says this new paradigm is “forcing vendors to deliver a consistently superior customer experience or risk losing their business.” But he admits: “I doubt it will it stop technology-based businesses from continuing to compete on the basis of differentiated feature sets.”

Tech industry veteran Jon Miller, co-founder of Marketo and Engagio, says that brand reputation and thought leadership continue to be critical elements of buyer decisions. But he also believes that, over time, the cumulative effects of CX help build a brand.

Over all, I think it’s fair to conclude that Gartner’s 89% statistic may reflect good CX intentions, but it isn’t backed up in the real world with the actions necessary to get a competitive edge. Let’s take a look at three strategies to play the CX game with an intent to win.

Strategy 1: Keep Up with Touchpoint Improvements

Every customer touchpoint can potentially be improved. Advertising and marketing communications can be made more engaging. Sales reps can be trained and outfitted with the latest sales tools. Products can be upgraded and made easier to use. Self-service can be provided via mobile devices.

No matter how you define Customer Experience, you can generate a long list of interaction points and get to work improving as many of them as possible. Until the money runs out.

A decade ago banks made the transition to online banking. As a Wells Fargo customer, I remember it taking some time to get used to web-based banking, but now it’s routine and expected. If Wells Fargo had not invested in online banking, I might well have taken my money elsewhere. I could say the same about ATMs in the 1980s.

In recent years the financial services industry has focused on mobile. Despite huge investments, has any major bank realized a sustainable competitive advantage by just adding this touchpoint? The order of banks is essentially unchanged in ACSI benchmark data, where most of the major banks can be found in the low to mid 70s. Ironically, Bank of America is mired in last place at 68, despite its all-automation-all-the-time strategy with a heavy emphasis on mobile.

A recent TNS study of generational differences sheds some light on why this is happening. It’s true that millennials are “significantly more dependent on mobile banking than other generational cohorts.” However, across all age groups and other demographic factors, the study found that consumers value banks that: “communicates honestly and clearly; looks out for your best interests; is accurate and reliable; shows customers their business is appreciated, and has knowledgeable employees.”

Meeting these needs requires a lot more than adding mobile technology.

Nancy Porte, VP of Customer Experience at Verint, says while consumers want quick and effortless service, it’s not enough to drive loyalty. Human-to-human interactions still matter, and have to be designed into the overall experience. For example, says Porte, Hilton Hotels invested in digital check-in to bypass the front desk, but found removing personal contact actually decreased loyalty. So the hotel is now looking for ways to increase personal engagement in other ways.

Companies have made massive investments to upgrade touchpoints and find themselves no better off vs. their competitors. Is this a form of competing? Maybe. Actually, it can more correctly be called “not losing.” With rare exceptions, the result is what Frank Capek dubbed “better sameness” in 2009.

“Better sameness is doing what you’ve always done… and what pretty much all your competitors do… a little bit better and faster; providing friendlier customer service, incrementally faster response times, a more appealing retail environment, a more streamlined web catalog and ordering processes, etc.”

A recent Michael Hinshaw post highlights ways that mobile tech can disrupt the insurance industry. However, I’ll wager that if we check back in a few years, mobile touchpoints will be SOP while the competitive order of major insurance companies will be unchanged –- unless they compete with one of the following strategies.

Strategy 2: Get Ahead with Seamless, Customer-Focused Journeys

A couple of years ago my wife and I moved to San Diego which, among other things, required that we find new health care providers. We ended up choosing Sharp Rees-Stealy because of 1) high-quality care (doctors, facilities); 2) convenience (network of local service providers); and 3) access to FollowMyHealth® (secure online access to health information, records, appointments, and more).

Now, I’ll be the first to say that if the doctors weren’t first-rate, points 2 and 3 wouldn’t matter. This is the core “product” we wanted. Fortunately, we have found Rees-Stealy doctors to be skilled, empathetic, and willing to spend the time necessary to answer questions. I’ve never felt rushed even though I know doctors have very demanding schedules to keep.

With great doctors as the foundation, an integrated network of service providers supported by the FollowMyHealth tool makes Rees-Stealy a cut above our previous health care providers. From the check-in using kiosks and handscanners, to appointment settings and reminders, to easy access to personal health care records, it’s clear they invested a lot to make it all work together. The result is a (mostly) seamless end-to-end experience that increases our loyalty.

What I’ve described, of course, is what the CX industry calls the “omni-channel” experience. My 2009 study of considered purchases with US consumers found that 70% of large enterprises admitted they don’t remember customer information from one touchpoint to the next. And 78% of consumers reported that information had to be repeated during complex (multi-touch) service experiences. The result of this “touchpoint amnesia” was that customers were 50% less likely to recommend and up to 35% less likely to purchase. Ouch.

What about more complex journeys? Recent McKinsey research found that “distinctive performance on journeys can set a company apart.”

“Indeed, across industries, performance on journeys is substantially more strongly correlated with customer satisfaction than performance on touchpoints—and performance on journeys is significantly more strongly correlated with business outcomes such as revenue, churn, and repeat purchase.”

One good example, according to innovation expert Robert Brands, is Paris-based Saint Gobain‘s implementation of an iPad-enabled integrated process that helps contractors place orders the night before and pick up in the morning. In Paris, which has limited room for on-site materials, this is a crucial capability. The result was “perfect CX, connectivity and bonded linkage between vendor and customer.” And, dare I say, a real competitive advantage.

Another example of how omni-channel can help a company break out of a commodity rut is START Lighting, says B2b marketing consultant Chris Ryan.

The commercial manufacturer/supplier of LED fixtures and lighting to the electrical distribution industry adopted a highly flexible approach that made the buying process more pleasant and customizable. In practical terms, this meant investing in more personal contact with clients and changing the measurement of success from revenue to satisfaction. This CX focus has led to three positive outcomes: loyal clients, more profitable transactions, and lower client churn rate.

For real omni-channel success you’ll need that right platform and integration to share data throughout the end-to-end experience. But the real secret is improving journeys that help customers accomplish their goals. That requires customer research, journey mapping, and innovating with a jobs-to-be-done approach.

Strategy 3: Stand Out with Signature Experiences


Close your eyes and imagine finding yourself in an Apple store. Or waiting to board a Southwest airplane. Or on the phone with a Zappos customer service representative.

Odds are you’d recognize these experiences without any logo or company name in sight. That’s because these companies have created an intentionally differentiated or “signature experience,” defined in a Harvard Business Review article as: “the odd or unique process that makes your company stand out in people’s minds.” You could also call this a distinctive or branded experience, uncommon practices that CX pioneer Shaun Smith has been advocating for years.

In the past few months I’ve become an Uber fan. It’s convenient, affordable, and fun. I’ve struck up interesting conversations with every Uber driver save one ex-taxi driver with a sour attitude. Suppose taxi fleets had implemented smartphones; would that be enough to match the total Uber experience? Not even close.

Also note that truly signature experiences may break some of the rules. For example, Amazon doesn’t try to support every interaction channel. Yes, most do the basics well (touchpoints) and support customer journeys (onmni-channel). But they also deliver a unique combination of elements that create a truly differentiated experience.

So, what should be your firm’s “signature experience”? I have no idea. That’s entirely the point: You can’t be different by copying others or taking the advice of consultants or pundits.

I believe that all truly great businesses are not “customer-driven” in the dumbed-down sense of just asking customers what they want and then trying to deliver, regardless of whether it fits the brand promise. Great business leaders know their values and purpose. As Steve Jobs famously said: “We’re here to put a dent in the universe. Otherwise why else even be here?”

Why else indeed. For those wishing to ascend to the upper tier of industry leadership, start by challenging yourself and the leadership team to answer this question: “What dent are we trying to make?” And then make sure you express that purpose in the customer experiences you deliver.

Images Purchased from ThinkStock

A special thanks to Jake Sorofman of Gartner for a thought-provoking discussion about the CX research that stimulated this article. My sincere thanks also to the many experts who contributed to this article via email and phone interviews. In addition to those already mentioned in the article text, I appreciate input from: Dave Brock of Partners In EXCELLENCE, Dave Capuano of Verint, Dave Fish of The Mars Agency, Bob Hayes of Business Over Broadway, Shep Hyken of Shepard Presentations, Mitchell Goozé of Customer Manufacturing Group, Doug Leather of REAP Consulting, Gautam Mahajan of Customer Value Foundation, Andy Rudin of Contrary Domino, Richard Shapiro of The Center for Client Retention, David VanAmburg of ACSI, and Tony Zambito.


  1. There’s a great deal of valuable insight in your post. Applying (all of) the three core strategies you’ve put forward would help any organization become more customer-focused and provide more emotionally positive, differentiated experiences. The challenge, as you’ve indicated, is that while companies recognize the benefits associated with holistic, seamless customer experience, most (per the MaritzCX maturity analysis and studies by other research organizations) haven’t the culture, architecture, allocated resources, or discipline to achieve excellence on a consistent, institutional basis.

    Your quote from Colin is particularly apt. In terms of customer experience optimization, Colin has looked at how companies become more customer-centric as enterprises, moving from what he defines as naive, where there is little customer insight, to natural, where there is complete focus on customers from a value delivery perspective. Rather similar to MaritzCX, I’ve looked at this from a customer focus standpoint. At the naive stage, companies begin with some general, passive, attitudinal awareness of customer needs in the aggregate, then move to greater sensitivity (often focusing on service and complaint management), build to greater understanding of experience on customer emotions, memory and downstream behavior, and reach the zenith of experience delivery by being truly obsessed with customer (and stakeholder) value.

    As Colin notes, and as you’ve also stated in the post, few companies achieve this top.level of customer value delivery effectiveness, despite the proven financial evidence of enhanced enterprise customer centricity: Agree, as well, that executive commitment and leadership is absolutely essential for any company seeking to provide world-class customer experiences.

    You’ve quoted Steve Jobs. Here’s another great observation of his: “You’ve got to start with the customer experience and work back toward the technology – not the other way around.” That’s a recognition that the best experiences are emotional and memorable, and that, for companies like Apple, the technological bells and whistles are the tangible, functional engine involved in the experience.

  2. This is a wonderfully broad exploration of Customer Experience. I like the 3 strategies. My window is a narrow one: I’m primarily concerned with the impact of the sales interaction in complex B2B sales environments – and there’s no doubt that the quality of the sales conversation plays a major part in shaping the prospect’s perception and preference.

    It’s a sobering thought that no matter how much an organisation spends on branding, demand generation, thought leadership, sales training or any other corporate initiative, one of the primary influences on the customer’s perception is the quality of their interaction with the vendor’s sales representative.

    Given their awesome personal responsibility (and the dangers of getting it wrong) in addition to investing in programmes and systems, we surely need to ensure that we’ve recruited the right people to represent us and equipped them to create the right impression. We can’t automate this: we need to employ and support artisans.

  3. Every stat and fact that researchers are sharing emphasize the importance of the customer experience. The set-up to the three strategies shared in this article should be the motivation that any company (in any industry – B2B or B2C) needs to take their CX to the next level. Furthermore, the three strategies aren’t optional, but necessary for success.

  4. Bob, thank you for a very thoughtful discussion regarding CX.

    It is important for companies to be honest about where they stand with CX.

    For example, are they merely going through the motions, or Is it a sincere aspiration that they have committed to achieve, or have they actually started on the path to CX and recognize that it is a painful, cataclysmic, multi year, multi department and multi channel process.

    This must be a top down initiative and sustained with unwavering discipline over multiple years in order to achieve the exponential increases in revenue, retention, satisfaction and loyalty.

  5. Let me be controversial. I believe that part of the reason why ‘Customer Experience’ is not making the gains it should be is because everybody is now jumping on the bandwagon, and to be honest, they don’t know what they are doing. An example? Only the other day I was talking to somebody who had ‘Customer experience’ in the job title. During the conversation they reveal the fact that they used being ‘customer service’. When I asked them what are they doing differently between now and then the answer was ‘nothing’. Their management perception is ‘they are doing Customer Experience now’ when the reality is nothing has changed. The danger that the industry faces is that with customer experience being the vogue topic that everybody just jumps on the bandwagon, but nothing ever changes and thus the topic itself gets the blame.

    What you have outlined are good ways ahead. But these are not new. The interesting debate is why people are not doing them? To encourage debate I will leave this open for others to comment.

  6. Let me jump into this fray if you don’t mind, guys. In general, am in agreement with most of the discussion here and truly find the points of view raised valuable and accurate in my own experience. That said, Colin surfaces a key question of why not? I think the question’s a poignant one and the answer rather evident.

    There is a likely belief that the world has improved since we had our last substantial downturn. The market is back, real estate is up, and bank accounts are getting fatter. Given this, even built on a fundamentally flawed and false premise, it’s a pretty jubilant time in most markets these days and frankly, the bursting-at-the-seems egos don’t see a compelling reason to course correct right now. There is no urgency to invest in change since in many people’s points of view, whatever they’re doing, no matter how misguided is working.

    I’m afraid it’ll take another sizable kick in the a** for most C-level people to have a renewed urgency to innovate in order to compete. For now they’re just riding the wave and enjoying the view.

  7. Much of what impedes greater focus on customer experience optimization resides in the minds and actions of C-suite execs. Here are four things (among many more) that, based on experience in working with them, gets in the way:

    1. Delegation

    Some executives believe it is more important to delegate certain decisions to lower levels and thus delegate how experiences should be designed and managed.

    2. Formality of Structure

    Jack Welch, for one, believes that customers should be at the top of the organization chart. But, he is in the distinct minority. For most execs, the rules of engagement are to follow the organizational architecture. As a result, customer experience, though seen as important (and even essential) get secondary or tertiary attention within the structure.

    3. Limited Time

    Executives are feeling stretched to the limits of time. And, it is the executives role to run the organization and be thinking strategically, and financially, for the overall good of their enterpirse rather than the perception of tactic or operational decisions.

    4. Negative Previous Experience
    Executives actually want to buy rather than being sold. When they have not seen the financial performance fruits of prior customer experience investment, they will be reluctant to divert more assets to it in the future.

  8. Bob,

    As usual, very insightful thoughts. I am especially fond of Strategy 3. We measure measure measure measure. We have a paucity of “do”. I have lately become obsessed with how you design those signature experiences. I think Journey Mapping is a critical step in understanding how to engaged the organization, develop a metric architecture, and engineer the experience. However, I am concerned many companies embark on Customer Journey work only to complete it and then put in on the shelf. It runs the risk of being the next silver bullet. As always, nothing happens until you actually do something. Time to role up our sleeves…then we will see some movement in those metrics.

  9. Thanks to all for the comments.

    I think Marc makes an excellent point which I’ll paraphrase as “fat dumb and happy executives are unlikely to change.”

    Regarding the 3 strategies, I debated whether to even call “touchpoint improvements” a CX strategy. Everyone already does this, but it changes little.

    So I agree with Colin, a lot of activities are being relabeled as “CX” which can lead to a false sense of accomplishment.

    I think the future of CX lies in innovative CX design (strategy 3). The others are important for “blocking and tackling” but not enough to be a real CX leader.


Please use comments to add value to the discussion. Maximum one link to an educational blog post or article. We will NOT PUBLISH brief comments like "good post," comments that mainly promote links, or comments with links to companies, products, or services.

Please enter your comment!
Please enter your name here