Everyone believes employee experience (EX) and customer experience (CX) are symbiotic: one affects the other continually.
Hmmm . . . Is this how your CEO has setup the senior leadership team? Does the Chief Customer Officer coordinate employee experience with customer experience? Does your Chief Human Resources Officer coordinate customer experience with employee experience? If not, why not?
What does it mean for your Chief Customer Officer leadership playbook? And to investors?
A) Take a Page from Sports Playbooks
B) CX Trends Reflect EX Trends, or Vice Versa
C) Excessive Costs to Investors, Customers & Employees
D) Who’s Driving Employee-Centricity & Customer-Centricity?
E) Your CCO Leadership Playbook
Take a Page from Sports Playbooks
A sports playbook is more than tactics to win games. The playbook’s basis is the team’s coaching philosophy, team culture, player development, and preliminary depth (player adaptability to fill eventual gaps). Without this basis, each game relies on a star player’s heroics. Likewise, the basis for your leadership playbook as Chief Customer Officer is company-wide management philosophy, culture, capability depth, and development of everyone you rely upon to win the game of business: maximum lifetime value.
Employees are the keepers of your promises to customers. They are the ones who deliver on your promise in your earnings call, your vision, values, value proposition. — Tiffani Bova (The Experience Mindset: Changing the Way You Think about Growth)
In the football playbook for high school teams’ first games of the season last week in Arizona, players (and fans) were encouraged to hydrate deeply for 24 hours before and during the game. This is due to higher than usual temperatures for evening kickoff time — above 100 Fahrenheit (38 Celsius). This was advocated even in television evening newscasts.1 Indeed, several pre-season practices were canceled by coaches this year because of record-breaking excessive heat warnings. Of course this is a life-and-death example, but it is also a leadership example of winning by building trust. Ironically, investors win this way in both the short-term and long-term.
In your Chief Customer Officer Leadership Playbook, here’s How Trust is the Basis for Value from Customer and Employee Experience. Investors gain when your internal and external trust is high.
CX Trends Reflect EX Trends, or Vice Versa
“Customer Experience Index (CX Index™) scores [dropped] for an unprecedented second year in a row,” said Pete Jacques, Forrester Principal Analyst in June 2023. “Companies are struggling to deliver great CX at scale in the middle of a talent-constrained recession. And as CX leaders know all too well, customer expectations constantly increase, regardless of macroeconomic conditions.2 . . . No industry average improved3. . . . Only 6% of brands saw a significant increase in CX quality, compared to 10% last year. . . . High-quality CX isn’t a nice-to-have — it’s a revenue driver. Even small improvements in CX quality can reduce an enterprise’s churn and increase its share of wallet, adding up to millions of dollars in revenue.”2
In your Chief Customer Officer Leadership Playbook, here’s how to Crack the Code for Your Performance on the CX Index. Investors gain when your fundamentals are strong.
Likewise, for employee motivation in 2023, a downward trend is underway (drop from 121 to 100 in the December 2022 to August 2023 period). This is in stark contrast to a steady upward trend in 2022 (jump from 100 to 121 in the December 2021 to December 2022 period), according to ADP’s Employee Motivation and Commitment Index (September 2023)4.
High costs may be masked temporarily by revenue tactics, acquisitions, and launches. Yet, weaknesses are more transparent than you think among employees, customers, and investors.
When you rise above trends, your superior performance easily stands out — naturally, employees, customers, partners, and investors will reward you.
Excessive Costs to Investors, Customers, & Employees
58% of tech workers are NOT very motivated and 78% of health care workers are NOT very motivated, according to the Today at Work study5 by ADP (September 2023).
Quiet quitting at this level is certainly damaging overall employee experience with low, slow, and sloppy follow-through and coordination. As an investor and customer, this is deeply alarming. This list is a tiny tip of the iceberg of excessive costs:
- Lost productivity: “American worker productivity is declining at the fastest rate in 75 years, with 5 straight quarters of decline.”6 This trend finally turned around a bit in Q2’23 with 1.3% increase compared to Q2’22. 7 Still, compared to pre-pandemic levels, these losses strain your financials with temptation to raise prices, reduce value, and increase pressure (i.e. even more job stress!).
- Inflation: shifts to thrift shopping and off-brand products.8 Prices must rise due to workers’ low productivity: unfair to everyone. And higher cost of living means employees demand higher wages and salaries.
- Shrinkflation: “62% of consumers said they’ll stop buying from brands who change product size or quality to cut costs.”9 Shrinking value via higher prices, smaller products, or lower quality is a downward spiral of distrust. Why damage your brand strength?
For your leadership playbook, here’s how Chief Customer Officers Can Stop Shrinkflation and Skimpflation. Investors gain when you differentiate your brand by rising above value reduction.
- Extra marketing and sales: as you add customers without addressing root causes of issues, there is a continual increase in negative word of mouth and churn that must be offset by Marketing and Sales for monthly increases in revenue. Additionally, Net Promoter Scores are a misleading sense of safety because there are numerous customers you don’t hear from in calls or surveys who are spreading word-of-mouth and taking their business elsewhere.
- Cost to serve: shrinkflation and non-customer-facing workers’ low, slow, and sloppy follow-through and coordination significantly expand Service inquiries, remedies, returns, refunds, escalations — and staffing and technologies to accommodate all of this.
Customers contact Service typically after your value proposition failed. Thus, likely to recommend after a Service transaction is not a good indicator of your brand’s CX quality. Customers are exhausted from the problem itself, plus failed self-service, muzak, and extreme repetition proving their identity. This is not a good time to up-sell and cross-sell. The quest to make Service a revenue center is ill-advised. In your Chief Customer Officer Leadership Playbook, here’s how to Make Service a Value Center. Investors gain when everyone improves by learning from mis-steps.
- Churn: “60% of technology buyers involved in decisions to renew or expand ‘as-a-service’ agreements regret nearly every purchase they make, a 6% increase from 2020.”10 Even when churn is reduced, its precursor of negative word of mouth may be a huge hidden cost for attracting new customers.
Customer Success costs expand with minimally viable products and silos.
In your Chief Customer Officer Leadership Playbook, here’s How to Solve Silos. Investors gain when dysfunction is curtailed.
- Cost pressure: To offset all of this, budgets and salary increases are smaller, austerity restrictions hamper personal development and employee experience, corners are cut (Jenga Management), and digitalization and launches have insufficient customer input and feedback loops. Cost reduction in these ways is a never-ending spiral of negative consequences.
Investors would be thrilled to see a turnaround in any of this tremendous squandered value!
Tough business decisions are not necessarily non-customer-centric: customers want you to survive and thrive so they can, too. They bought into your value proposition, so your company owes them full delivery of it, right the first time! Issue-free performance is customer-centric and investor-centric.
In your Chief Customer Officer Leadership Playbook, here’s how to generate Growth via Massive Customer Experience Savings. Investors gain when sunk costs are converted to growth opportunities.
Who’s Driving Employee-Centricity & Customer-Centricity?
“All executives understand the power of investing in people, according to our 3 studies over 2 years” said Tiffani Bova, author of the book released in June 2023, The Experience Mindset: Changing the Way You Think about Growth12. “However, three-quarters of executives said nobody in the organization is setting the roadmap for how to be an effective employee and have a great career.”13
This lack of ownership for “how to be an effective employee” is at the heart of excessive costs to investors, customers, and employees. Strong customer experience performance is impossible under these circumstances. Therefore, we see circularity with no end in sight in downward CX and EX trends and excessive costs pointed out above.
For what’s needed, you’ll see that your HR Chief is a vital partner, but your Chief Customer Officer is better suited:
- Business context for every employee’s purpose, i.e. their effect on gaps in what’s received versus promised to customers who make their salaries and budgets possible.
- Lifetime value mindset regarding employees, internal customers, and external customers.
- Expertise in listening posts and analytics.
- Urgency in acting on insights.
- Accountability in closure of action plans.
- Continual progress in closing gaps between the value proposition and what’s received by both external customers and internal customers.
Elevate your Chief Customer Officer to this top priority, with their deputies driving their other responsibilities.
Today’s trends are an urgent call for Chief Customer Officers to pivot to their true purpose: 81% of CX leaders say the top purpose of a Chief Customer Officer is to influence evolution as a customer-centric company.
Nobody is leading this, and it is costing your investors, employees, and customers painfully.
Indeed, employee retention, customer retention, cross-selling, and cost reduction are higher among companies with higher CX maturity, according to Qualtrics’ State of Customer Experience study11 (April 2023).
Thus, serious stewardship for customer experience maturity is long past due! Qualtrics also reported:
“Just 3% of organizations reached the highest stage of maturity, Embed. More than two-thirds of organizations fell into the first two stages of maturity, Investigate (36%) and Initiate (31%).”11
Similarly, Forrester reports: “The number of US enterprise business leaders whose companies are customer-obsessed rose by 3 percentage points to 6%.”2
Note that it has been 15 years now since the 2008 global financial crisis when companies began investing heavily in CX with firms like Qualtrics and Forrester.
3% and 6% ??? Your CCO playbook is outdated!
Shouldn’t we be seeing far greater progress after 15 years? Absolutely! Companies are not mature because they’re not aiming to be mature. Ridiculous. When I led CX company-wide, we were in the top 2 tiers within 18 months in a fast-paced industry and economy, and without the luxury of CX technologies. Therefore, you can certainly do this in 2024 by committing to it.
Inconsistent executive buy-in is the largest gap between CX Leaders’ and Laggards’ obstacles. Laggards cited this obstacle 43 percentage points more than CX Leaders. Other competing organizational priorities is the top obstacle to CX success.11
In your Chief Customer Officer Leadership Playbook, here’s How to Motivate Executive Buy-in to CX, EX, and PX. Investors gain when all leaders are unified in enthusiasm for customer well-being.
Your CCO Leadership Playbook
To upgrade your Chief Customer Officer Leadership Playbook, let’s pull together the key points from this article.
The key is in how you collect, clarify, communicate, and champion insights from customers and employees.
1. Establish the business context for every employee’s purpose, i.e. their effect on gaps in what’s received versus promised to customers who make their salaries and budgets possible. Most employees want their work to shape the future in a meaningful way, according to the Trust at Work study14 by Edelman (September 2023).
In your Chief Customer Officer Leadership Playbook, show each work group how they are shaping the future by winning customers’ trust and funding of their job, using a futbol team analogy or baseball team analogy. Investors gain when everyone coordinates and collaborates like a stellar sports team.
2. Instill a lifetime value mindset regarding employees, internal customers, and external customers. When you show them how much of their budget is being squandered by their mis-steps, their response is “That can’t stand! What can we do about this?”. Aim for this reaction in every CX/EX report you share. Point out that your numbers are the tip of the iceberg in total costs. Everyone wants more budget for more resources, salary/bonus, hiring, and so on. Show diagrams for how the iceberg builds from a snowball of costs. Then show them how the iceberg can melt significantly by getting things right the first time. Talk about what it means as an employee to receive things right the first time, and then talk about what it means to customers, and then how that, in turn, affects employees.
In your Chief Customer Officer Leadership Playbook, here are Easy Keys to Lifetime Value Mindset. Investors gain when value is top of mind for everyone.
3. Apply your expertise in listening posts and analytics. 64% of workers say their employer does not make it easy to give input.14 This is a key reason why the CX team is better suited to collect employee inputs. “Your employees know the answer to what will make them most efficient, effective, and willing to go the extra mile for their teammates and company,” says Bova. “Ask: What’s the one thing that if we stop doing would be great for you? When you ask, take action. Be open to alternatives, be courageous to ask and listen, communicate what and why, admit what you don’t know, and take action. This builds trust and commitment.”
4. Facilitate urgency in acting on insights. “In the majority of firms nothing is being done with that data. Actions do not line-up with the employee surveys. This is where we have failed as leaders,” says Bova.13 Give every group their own report and guide each group in discovering root causes for the top 2 issues in their report. Facilitate their single-page action plan to stop the root causes forever.
In your Chief Customer Officer Leadership Playbook, here’s How to Drive Action on Insights. Investors gain when you continually improve, especially everywhere at once in their top weaknesses.
5. Ensure accountability in closure of action plans. Your CCO core team of facilitators and your CX/EX champions in each business unit should become experts in change management and speaking the jargon of each work group. Give high visibility to Gantt charts, swim lane diagrams, RACI (role, action, communicate, inform) charts, and single-page strategies. Get them at the top of meeting agendas. Really, what’s more important than making it easier for your customers to give you more money? That’s what CX/EX accountability is all about: permanently removing pebbles from all customers’ shoes and all employees’ shoes.
In your Chief Customer Officer Leadership Playbook, here’s How to Drive Follow-Through. Investors gain when you drive completion of every action plan.
6. Drive continual progress in closing gaps between the value proposition and what’s received by both external customers and internal customers. Make the 5 steps above THE way of life in your firm. Establish a council that drives accountability, smooths silos, and balances interests across stakeholders.
“Airbnb has an employee advisory board that is a cross-section of people in HR, IT, CX, and revenue generation,” explained Bova. “These 4 functions have impact on systems, processes, training, etc. When something is going to happen at Airbnb, it goes through this advisory board, to assess intended and unintended consequences for employees, customers, hosts, community, etc.”13 Instead of increasing effort for one party at the expense of another party, this advisory board ensures a mindset that balances stakeholders’ outcomes. Similar case studies in balancing all parties’ interests are in books like Firms of Endearment.
In your Chief Customer Officer Leadership Playbook, here’s how to setup Customer/Employee Experience Governance that builds on your company’s strengths and balances the greater good. And here’s How HR Can Add Value to Customer Experience Excellence.
Here’s how every work group in your enterprise can use CX/EX insights in their role:
By adopting this Chief Customer Officer Leadership Playbook, you’ll influence far more profitability and revenue growth than a Customer Success, Customer Service, or Chief Revenue Officer can do on their own. Revisit the list of excessive costs in this article as a reminder of the huge potential that is flying out the window.
Will this CCO Leadership Playbook boost Gross and Net Retention Rates, Fist Time to Value, Product Usage and Adoption, Unit Cost of Delivery, Net Recurring Revenue, Net Promoter Scores, Customer Effort Scores, Customer Health Scores, Market Share, Return on Assets, and Earnings Per Share? Absolutely.
This CCO Leadership Playbook is your key to stopping the insanity of reciprocal negative trends in employee motivation and customer experience performance relative to rising customer expectations. You can’t afford to wait. I welcome your stories and questions.
CX/EX Leadership influences how all managers manage.
CX/EX Management controls touch points.
1AZ HS football players tackle excessive heat, KSAZ Fox 10 Phoenix, Yahoo News.
2US CX Quality Falls For An Unprecedented Second Consecutive Year, Forrester, June 2023.
3The US Customer Experience Index Rankings, 2023, Forrester, June 2023.
4ADP’s EMC Index tracks how people think and feel about their job, their place on the org chart, and their employer. It tell us whether workers are flourishing in their jobs or detaching. There is a clear relationship between retention and the EMC Index. EMC Index of 100 implies growing commitment and motivation, while EMC Index less than 100 signals diminishing commitment and motivation. The EMC Index weights certain responses more than others, using a 5-point scale from strongly agree to strongly disagree, for 9 survey items:
- I know I will be recognized for excellent work.
- I have great confidence in my company’s future.
- In my work I am always challenged to grow.
- I trust my team leader.
- I completely trust my company’s senior leaders.
- In the last week, I have felt excited to work every day.
- I see myself represented in the leadership of my organization.
- I believe my company promotes people based on the work they do, not what they look like.
- When I share my opinion, I feel heard.
5Today at Work, ADP, September 2023.
6American Worker Productivity Declining at the Fastest Rate in 75 Years, Fortune, May 2023.
7US Productivity Surges in Second Quarter; Labor Costs Growth Slows, Reuters, August 2023.
8How Consumer Shopping Behavior Has Changed in 2023, BrandWatch, April 2023.
11The State of CX Management, 2023, Qualtrics XM Institute, April 2023.
12Experience Mindset: Changing the Way You Think About Growth by Tiffani Bova, June 2023.
13On Leadership with Scott Miller and Tiffani Bova, Franklin-Covey, June 2023.
14Trust at Work, Edelman, September 2023.
This article is the fourth in a five-part series:
1. Chief Customer Officer Playbook: Balancing Experience Leadership with Experience Management
2. Chief Customer Officer Strategy: Redundant Playbook or Most Valuable Player?
3. 3 Ironic Success Factors for Your Chief Customer Officer Maturity Playbook
4. How to Thrill Investors with Your Chief Customer Officer Leadership Playbook
5. Chief Customer Officer Prosperity Playbook