This week Walker’s annual B-to-B CX Summit in Seattle reinforced a number of topics that I’ve been researching and writing about in recent months.
The conference is a highlight of the year for me, because Walker puts so much into making it a true thought leadership event. They present new research, bring in excellent outside speakers, and engage the audience in exercises to help them share and collaborate.
Oh, and it’s 100% focused on B2B. So if that’s your thing, I strongly recommend putting it on your calendar for next year.
I could write an article about every session I attended, but this short post will have to suffice to highlight some key messages.
Extraordinary CX
The conference theme was about how to get a competitive advantage with CX. I think this needs a LOT more attention. Unfortunately, the majority of so-called CX projects are really fit-it initiatives. Fixing is a good thing, but unless all your key competitors suck, it won’t make you a leader.
“Extraordinary” CX means, quite literally, more than ordinary. From a recent study (done in collaboration with CustomerThink), Walker shared that those “effective at CX” were more likely to grow faster, have a superior competitive position and deliver differentiated products. While not a clear cause-effect relationship, it does show that effective CX is part of the equation for successful firms.
Another key point that I’d like to emphasize is that “products and experiences are interwoven.” In this context, CX clearly means the non-product interactions. Extraordinary CX is complementary to great products/services (the stuff customers buy). In the ideal world, customers don’t want to choose one over the other.
Still, from some recent research of my own (results to be published soon), it’s clear that strong products remain a priority for B2B companies. If you’re selling tractors, jet engines or enterprise software, great CX won’t overcome a bad product or uncompetitive cost/prices.
Leadership and Culture
You won’t get far on your CX journey to “extraordinary” without active leadership. According to the Walker research, the “effective CX” group had passionate leaders who held themselves and others accountable. Yes! In my view, this is the single most important factor — what I call the “X Factor” — in customer-centric success.
Heidi Castagna of Seagate shared how the company has tried to move the needle on culture in a market that has changed dramatically in recent years. In short, they found that doing a culture assessment and declaring values didn’t result in any change. To create meaningful change leaders had to come to grips with a harsh reality. The company’s focus on competition and perfectionism was undermining its stated desire to be more customer-focused.
To change the culture, Heidi says they used a three-step process:
- Improved decision-making. Seagate had collected survey data for a long time, but didn’t act on customer issues as aggressively as they should.
- Leadership and collaboration. Customer requests were evaluated and prioritized based on how they fit Seagate’s corporate objectives. In other words, being customer-focused doesn’t mean saying “yes” to everything.
- Employee engagement. Measurements, rewards and communication programs were used to get all employees on the same page. For example, infographics were created to communicate why customer focus was important even to factory workers several steps removed from customer interactions.
Proactive CX
To build on a previous point about moving beyond “fix it” CX initiatives, Walker President Phil Bounsall said predictive analytics can help and will increasingly be embedded in applications. I agree, and have seen evidence in my own benchmark study that business performance Leaders make more aggressive use of analytics.
On that point, Carolyn Muise of EMC shared compelling examples of the power of predictive analytics. The company built a predictive model to try to identify potentially dissatisfied customers, even though they didn’t fill out a survey. The three top influencers of CSAT were resolution time, number of handoffs and team transitions.
Essentially, if an incident showed these characteristics there was a 58% likelihood the customer wasn’t happy. EMC created a proactive follow-up process to contact these customers and tamp down any issues. Brilliant.
The Squishy Stuff
Walker is an analytics-driven firm, and being a left-brain type myself I enjoy learning how data/analytics can improve the customer experience. Most likely, improvements will make experiences more functional or easy, which is a good thing for sure.
But these days customers expect things to work. And Amazon has trained us all to value and increasingly expect easy experiences. Technology is really good at tackling these issues, but what really sticks with us are the emotions, more commonly generated through human interactions.
Megan Burns of Forrester gave a fascinating talk on this subject, stating “you can’t be extraordinary without emotion.” Turns out emotion was the biggest factor in CX improvement from 2011 to 2014, according to Forrester’s CX Index. Other research found that customers that were emotionally connected were 4 times more profitable.
As Megan put it so well, we’ve got to “get more comfortable with the squishy stuff.” Employees need to demonstrate empathy for their customers. For example, at USAA, new employees without a military background are required to go through a basic training program so they can appreciate the sacrifice that service people make.
Disclosure: This post is part of my independent coverage of industry developments. No endorsement is implied for any companies mentioned in this post. CustomerThink was a media sponsor of this conference and received a free pass. Walker has been a recent CustomerThink sponsor. Please visit our sponsor page for information on companies that have supported this community.
B2B and B2C CX are more alike than different. To drive extraordinary experiences and organizational customer-centricity, leadership and a senior enterprise CX optimization champion are essentials. Then, culture drives both customer processes and employee engagement/ambassadorship behavior. Positive and negative customer emotion from the experience drives memory, and memory drives customer marketplace action. This, considered both strategically and tactically, also has a lot to do with customer life cycle and the customer journey.
These elements are certainly not linear – customer decision-making is a fairly complex stew of rationality and irrationality – but they all contribute and need to be understood.
Thanks, Michael. What do you see as the key differences between B2C and B2B CX?
B2C decision-making is generally less fettered and/or subject to enterprise rules and regulations, such as those imposed by procurement groups in B2B. That said, the positive and negative emotions associated with CX, and the impact they represent in vendor selection, individual transactions, and continued relationship are pretty similar.
We very much subscribe to the “Peak-End Rule”, a model co-created by Daniel Kahneman. The peak–end rule is a concept of human emotions in which people judge experiences largely based on how they were at their peak (i.e., their most intense point) and at their end, or final point, rather than based on the total sum or average of every moment of the experience. Peak-End occurs regardless of whether the experience is pleasant or unpleasant. happy or sad, annoying or soothing. According to Kahneman’s concept, other ‘information’ aside from that of the peak and end of the experience is not lost, but it is not used; or in the case of CX, it is not actively processed by the customer. This includes net pleasantness or unpleasantness and how long the experience lasted.
‘You can’t be extraordinary without emotion” – what a wonderful quote – I love it and completely agree. So many organisations have lost this vital connection with their customers, forgetting that it is the emotional component of the experience customers have that they will remember. They will remember something good; something bad; or nothing at all. If you want to create a competitive advantage, you need to drive more positive memories, recover the bad ones well and avoid customers remembering nothing about you t all!!
Many thanks for sharing the insight Bob!
Agree wholeheartedly with the importance of Kahneman’s Peak-End Rule. It is so important to leave the customer (B2B or B2C) with a positive emotional memory (based on best part of experience & how you close).
Beyond that I feel one also needs to engage with helping your clients avoid other behavioural pitfalls. Is any information you provide framed in such a way that the most important points to guide a fair decision are visually eye catching & memorably worded? Do you help your client avoid the planning fallacy by providing real world case studies of how long it will actually take to put your product or service into practice?
It may feel like raising the bar, but helping your customer through proactive consideration of behavioural biases can avoid being manipulative & rather engender long term mutually beneficial relationships.