CX Governance: Unifying Organizations, Delighting Customers, Driving Profit

Image generated by DALL-E and Eric Karofsky

Creating quality customer experiences (CX) is no longer a luxury but an imperative. Consumer expectations are ever on the rise, and those organizations that foster experiences that meet and exceed expectations will see dramatic benefits. At the heart of a customer-centric company is a CX governance structure.

CX governance refers to the structured approach to managing and optimizing customer experiences across an organization. It’s a roadmap that will ensure every interaction, touchpoint, and decision aligns with a customer-first vision.

The challenge: Each department has its own priorities

Ultimately, every department in an organization contributes to customer revenue, but each has its own priorities. For example, consider a hotel chain. Marketing might be focused on highlighting luxurious and personalized experiences. Yet, the front desk prioritizes efficiency and quick check-ins and doesn’t have the insight or time to personalize check-in. Housekeeping may learn that the customer has an allergy to pet dander and a preference for hypoallergenic bedding, but has no way to communicate that for future reservations.

Companies also often lack inter-departmental communication. A recent client, a very large, multi-product and service company had four different groups sending out NPS surveys. Upon signing up for services, a customer would get four NPS requests within two weeks of signing up. Even worse, each NPS survey included redundant questions and used inconsistent styles.

Despite good intention in both examples above, the customer experience comes across as fragmented and can erode confidence and trust.

Governance aligns the customer experience across departmental boundaries. Organizing cross-functional initiatives for customer-focused initiatives assures that various departments are integrated into one unified strategy.

The components of CX governance

Image generated by DALL-E and Eric Karofsky

1. Vision: Your North Star. At the heart of CX governance is a clear, inspiring vision of the desired customer experience. It serves as the rallying point for the whole enterprise to align and drive purpose. It is the guiding light that informs each decision and each action.
2. KPIs and metrics: Measuring what matters. KPIs must be carefully chosen to ensure measurable progress and verify that targeted areas are indeed improving. Common CX metrics include Net Promoter Score, Customer Satisfaction, and Customer Effort Score. These give actionable insights into the customer journey.
3. Team structure: The right people in the right places. Effective CX governance requires professionals who can orchestrate cross-functional teams to align on goals and actions.
4. Roles and responsibilities: Clarity is key. A clear definition of roles obviates confusion and fosters accountability. When everybody knows their role in the CX puzzle, execution goes smoothly and becomes more effective.
5. Meetings, communications, and cadence: Keeping the rhythm. Regular touchpoints ensure that CX initiatives don’t go off-track. A defined communication strategy ensures that insights and decisions flow smoothly from one department to another.
6. Continuous improvement: Monitor and adjust. Defining processes to refine CX and learn is critical. This includes mechanisms to gather information about problem areas and collaborate on how to rectify the challenges.
7. Processes and tools: Empowering your team. Aligning technology with CX goals will empower teams to drive data-backed decisions. The right tools can transform raw data into actionable insights.

CX drives profitability

CX doesn’t just create better experiences; it drives profit. Consider these studies:

• Companies that lead in CX grow revenues 5.1 times faster than their competitors. (Forrester)
• Companies that excel in customer experience grow revenues 4–8% above their market. (Bain & Company)
• Companies earning $1 billion annually can expect to earn an additional $700 million within three years of investing in customer experience. (The Temkin Group)

Steps to implement CX

1. Assess your current state Conduct an honest audit of current CX practices to understand what might be working well and where opportunities for growth exist.
2. Define your North Star Set clear CX goals aligned with the larger business strategy.
3. Find champions to support Build a cross-functional CX committee to drive initiatives forward, including key representation from departments across the organization.
4. Invest in technology Implement tools to collect customer feedback and analyze that feedback to help drive decision-making.
5. Educate and empower Provide CX training to employees, and empower them to drive customer-centric decisions.
6. Measure and iterate Regularly review CX metrics, and be prepared to adapt based on what the data you collect dictates.

Embracing CX governance for sustainable success

A governance structure enables companies to excel in CX. These strategies and tactics enable companies to drive a quality experience and reap the benefits such as increased loyalty, advocacy, and profits.

Start building and refining your experience now, starting with governance. Your customers—and your bottom line—will thank you.

Author’s note: This overview of CX governance and the challenges when not putting proper governance in place is the first of a series. CX governance impacts everything from organizational structure to policies to corporate vision to AI. This is a deep, critical topic area, filled with opportunity when done right, and laced with obstacles when it’s not a priority. Our next piece will address how management must champion the importance of CX and integrate it into the company’s mission and strategic goals.