Stop Practicing the Conventional Customer Experience Management – Part 1

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Why is there a high failure rate of customer experience (CX) initiatives? And why do most CEOs not buy into CX? Because CX professionals and companies are not practicing a Real CX.

Conventional and Real CX in a Nutshell

Many CX professionals currently assess customer experience through the lens of biased ‘service’, and are becoming “A man with a hammer”: Always adopting the “Serve Customers Better” approach to try to solve every CX problem their respective clients or companies face. The Conventional CX is just service-in-disguise. It’s merely an expanded version of ‘service’ or customer interaction management (CIM). It is not a Real CX.

What is a Real CX, then? Well, in my opinion, a Real CX should possess the following five attributes:

    1. It includes ‘product’ and ‘pricing’.
    2. It objectively assesses customer experiences.
    3. It renders non-biased solutions to CX problems.
    4. It can generate quick wins.
    5. Its role is strategic, not functional.

This article is about the first attribute.

Real CX includes ‘Product’ and ‘Pricing’

Despite the various definitions of CX, they don’t differ much from what Forrester Research had suggested in 2010:

How customers perceive their interactions with your company.”

In 2015, Bob Thompson, CEO of CustomerThink Corp., raised the following question: “Does CX include product and price?” A dozen industry experts unanimously agreed that it does. Here are some quotes from them:

CX management is what a company does to affect interactions for the purpose of altering (or maintaining) the perceptions of customers. CX management does encompass products and pricing.” – Bruce Temkin, co-founder of CXPA

CX is about the entire experience that a customer has. Therefore this includes pricing, product and anything else.”Colin Shaw, founder of Beyond Philosophy

Figure 1: Emotion Curve of the Starbucks In-Store Experience

As early as 2006, when I mapped the Emotion Curve [note 1] for the Starbucks in-store experience, price and coffee are included as shown in figure 1.

Customers echo.

Figure 2: What do you like the least about the Starbucks in-store experience?

In a global research [note 2], 3,865 repeat customers answered an open question stated in figure 2. ‘Price’ is the factor they like least about Starbucks.

In the customers’ mind, price is clearly an indispensable element in an experience, on top of the product itself (coffee). We have similar findings in other research [note 3].

Hence, a Real CX would never leave out ‘product’ and ‘pricing’.

Conventional CX is “Service-in-Disguise”

By 2020 customer experience will overtake price and product as the key brand differentiator.”

What’s wrong with this statement?

As CX includes pricing and product, it’s logically impossible for customer experience to compete with price and product. Makes no sense. Literally, that ‘experience’ isn’t experience but some ‘other’ thing. Bob Thompson responded:

In the earlier days of the CX movement, “experience” meant “interaction.” Something other than product or price. 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.”

In the Harvard Business Review article Know the Difference between Customer Service and Customer Experience, Disney Institute’s senior programming director Bruce Jones stated in the summary paragraph:

Customer experience is about much more than just customer service. It is about fostering employee engagement. It is about truly understanding your customer, architecting a plan for delivering exceptional customer service, and then empowering employees to deliver it.”

Throughout the article, ‘product’ is barely mentioned and ‘pricing’ is completely forgotten. ‘Customer experience’ is by and large the expansion of ‘service’ – from a pure service environment branched out to cover every customer interaction, ranging from customer service staff to all personnel interactions with customers. Its core nevertheless is “Serve Customers Better.” Approaches similar to Disney Institute’s are commonly found everywhere in the CX industry.

No matter what we call this – an expanded version of ‘service’, or customer interaction management (CIM) – it is anything but a Real CX without ‘product’ and ‘pricing’.

* This is the first article of the “Stop Practicing the Conventional Customer Experience Management” series. There is a total of five articles in this series.

    1. Stop Practicing the Conventional Customer Experience Management – Part 1
    2. Stop Practicing the Conventional Customer Experience Management – Part 2
    3. Stop Practicing the Conventional Customer Experience Management – Part 3
    4. Stop Practicing the Conventional Customer Experience Management – Part 4
    5. Stop Practicing the Conventional Customer Experience Management – Part 5

A reminder to the audience: I run a CX certification program which may have conflict of interest with other CX training providers. Readers are advised to take this fact into consideration when judging the objectivity of my arguments presented in this article.

NOTES

1. An Emotion Curve is mapped by linking all the satisfaction levels of the sub-processes (touch-point experiences) and attributes that are encountered or perceived by customers and affect their emotions in a natural time sequence during a touch-point experience (total customer experience). I created the Emotion Curve in 2006. See Sampson Lee, One Cup of Coffee, 20 Experiences: Take a Tip From Starbucks (Customerthink.com, 4 June 2006).

2. Global Starbucks In-store Customer Experience Research, Global CEM and CustomerThink (U.S.), September-October 2007.

3. Global IKEA In-store Customer Experience Research, Global CEM, CustomerThink (U.S.) and TOTE-M (Netherlands), December 2008-February 2009; Global Louis Vuitton In-store Customer Experience Research, Global CEM and CustomerThink (U.S.), October 2008.

15 COMMENTS

  1. Sampson, one of the first CX books was written by Pine and Gilmore: The Experience Economy in 1999. If you haven’t read it, I suggest you do so. Because it will explain why the CX industry is so confused.

    Actually, you can get the essence from this 1998 HBR review article: https://hbr.org/1998/07/welcome-to-the-experience-economy. Here’s an instructive quote:

    “An experience is not an amorphous construct; it is as real an offering as any service, good, or commodity. In today’s service economy, many companies simply wrap experiences around their traditional offerings to sell them better. To realize the full benefit of staging experiences, however, businesses must deliberately design engaging experiences that command a fee. This transition from selling services to selling experiences will be no easier for established companies to undertake and weather than the last great economic shift, from the industrial to the service economy. Unless companies want to be in a commoditized business, however, they will be compelled to upgrade their offerings to the next stage of economic value.”

    The thrust of the article and the book is to differentiate based on more “engaging” experiences, so you can charge a higher price. Products are “props on a stage” for Pine/Gilmore.

    Read Moments of Truth by Jan Carlzon and you’ll see much the same. He argued that it was the service interactions (moments of truth) that mattered more than the plane itself, or pricing. Or read my interview: http://customerthink.com/jan_carlzon_moments_of_truth/.

    What you call “conventional” CX is actually the roots of CX. And it is in fact based on better service, not better products or lower prices. That’s why we see statements like “differentiate based on experiences instead of products or pricing.”

    You are correct that “better service” is not the right answer for all brands. But CX as currently practiced is mostly about service improvements, not the full value proposition you advocate.

    I think we’re going to need another term for competing based on the complete value proposition. Any ideas?

  2. Hi Bob,

    Thanks for your response and the rich information about the history and development of CX.

    I am glad that you agree with me that “better service” is not the right answer for all brands.

    However, I am not sure if I agree with you that “we need another term for competing based on the complete value proposition.”

    Personally, I feel that you jumped to this conclusion a bit earlier. I would suggest that we have some good and thorough discussions on this subject matter before we consider to create a new name for the Real CX.

    To me, “CX as currently practiced is mostly about service improvements” is not a sufficient and convincing reason to tolerate the Conventional CX to hijack the term ‘CX’ any longer.

    Because it does nothing constructive to help improving the high failure rate of CX if we keep on using or expecting CIM (customer interaction management) to perform the duties of CXM. It just won’t work.

    I have completed the Part 4 of this article series and am now finalizing the Part 5. I trust that the arguments presented in these five articles would contribute something for our discussion here.

    I will come back soon will a full answer to your suggestion.

  3. I hope you have better luck than I did trying to differentiate “Real CRM” from tech CRM. We even published a “Guide to Real CRM” in 2003 and gave it to members.
    https://is.muni.cz/el/1456/podzim2005/PHMA2/um/813230/guide_CRM.pdf

    But it didn’t work. People kept practicing the fake (tech) CRM until it became CRM.

    This time could be different, because there are many like you who advocate CX = more than interactions. We’ll have to see how much experts shape opinion vs. common practice. I’m not saying we should tolerate anything. Just giving a reality check that world does not always bow to the desires of experts.

    I disagree that a focus on interactions won’t work. In fact, it could work just fine if focused on industries and companies where interactions were the main differentiator, not product or price. The problem is, as you’ve pointed out, when companies use the service improvement “hammer” on every “nail” they see.

    I’m not convinced that this is the major cause of failed or stalled CX initiatives. For sure some are misplaced efforts to improve service. But a more general problem seems to be difficulty connecting the CX program to real business value.

  4. Hi Bob,

    CX is originally supposed to be necessary and good for all companies. Shall we close the door of CX to those companies whose brand promises or competitive edges are not about ‘service’? To be responsible, should the Conventional CX inform the interested companies this fact before they jump onto the CX bandwagon too quickly?

    If ‘pricing’ and ‘product’ are not included, most CX initiatives become a pure service improvement project. The “difficulty connecting the CX program to real business value” would hardly be solved as two important business drivers are permanently missed. Then how can you tackle “the major cause of failed or stalled CX initiatives”?

    By the way, I am curious to know who are the “many like you who advocate CX = more than interactions.” Would you mind to quote a couple of names?

  5. I’m sorry, where was it written that CX is necessary and good for all companies? I can cite many examples where companies don’t care about customers yet make money anyway due to market domination, contractual lock in, etc.

    This is why CX is failing. It’s being proposed as the cure to all problems. So now everyone is “doing CX” yet when you ask are they winning or getting benefits, 70% are not.

    The CX community say CX includes all loyalty drivers, including product and price. I’m fine with that. Basically, CX is the new name for an old idea — customer loyalty management.

    What I’m saying is that Customer Experience *Management* — the execution of CX initiatives — rarely is concerned with product or price. Look at journey maps (with the exception of yours) and price is never included. Initiatives are mainly focused on improving the interactions around products.

    I’ve been filling out customer feedback surveys for many years — decades — and I can’t remember ever being asked about the price.

    Improving products is a discipline that been around forever. So now when a vendor fixes a bug or adds a new feature we should call it CX?

    Service improvement (or more broadly interaction improvement) is one important facet of CX initiatives. If you can get benefits from that (leaving product and price alone), what’s wrong with that? It’s the loyalty driver that really launched CX, and it’s still what most projects are concerned with. Sometimes narrowing the scope is key to getting value.

    Still, I understand your point that CX *should* include all value drivers. Then maybe we should agree as industry that if you can’t call something a CX strategy unless you include all three areas. What do we call the others — Fake CX?

    In my next CX research study, I’m going to find out more specifics about what companies are focused on, and whether the area of focus (product, price, interactions) has any relationship to success. It will be interesting to compare success rates between Real and Fake CX.

  6. Hi Bob,

    “Customer Experience is at the top of EVERY BUSINESS’ priority list.” – Gartner
    https://www.gartner.com/events/emea/customer-experience

    Statements or messages with similar meaning to Gartner’s are commonly found in the CX industry.

    Should the Conventional CX clarify with those companies whose brand promises or competitive edges are not about ‘service that “CX is not for EVERY BUSINESS”? Or telling them CX is merely the privilege of the members of SERVICE Club?

    Customer Experience is a company’s delivery of its brand promise.” – Jeanne Bliss, co-founder of CXPA
    https://www.usertesting.com/blog/2016/03/09/what-is-cx/

    Brand promises are not only about ‘service. They can be ‘product’ or ‘pricing’. Literally, the CX strategy of any brand can be focusing on ‘service’, ‘product’ or ‘pricing’, but not just limited to ‘service’. Does it make sense to you?

  7. This seems like just another version of “when all you know how to use is a hammer, …”

    In my opinion, CX is failing not because of what people think is included, but rather whether senior leaders and the organization actually cares about the customer and has a desire to improve loyalty. This is the “outside-in” orientation that is the core of CX thinking.

    If a company can succeed / make money without being overly concerned about customer loyalty, they might find efforts better spent on cost optimization, supply chain management, stock buybacks, acquisitions, etc. Not all businesses (or industries) respond equally well to improving CX, and it has a weak relationship with stock value according to new Forrester research.

    CX success rates would improve if we could stop trying to convince every CEO it’s the answer to all their problems. They are now running around saying “CX is a priority” without a real understanding or commitment to execute, which will give the industry a bad name just like CRM.

  8. Hi Bob,

    Thanks for continuing the conversation.

    So, if the Conventional CX is going to succeed, CEOs have to change: They need to care about the customer, have a desire to improve loyalty, real understanding or commitment to execute the Conventional CX. But not just concern about the short-term profits, sales or cost-savings.

    However, after almost a decade for the CX industry trying hard to sell, persuade or influence CEOs, it’s not successful to change their attitude towards the Conventional CX. Even connecting CX to business result is not something new and doesn’t work.

    To me, it does not seem like CEOs would suddenly shift to buy-in the Conventional CX in the coming few years (unless you or other experts, have some brilliant ideas that haven’t voiced out). Then why we continue preaching and practicing something – the Conventional CX – that is doomed to fail (or have a high failure rate)?

  9. Sampson, there isn’t any real agreement from the many experts about what CX is, other than it includes “everything.” So it’s not surprising that CEOs are confused.

    I don’t think the CEO issue is about “conventional” CX. It’s about being truly committed to deliver customer value, drive loyalty, and do so in a way that also adds value to the business. CX is trendy, so most CEOs claim it’s important.

    Do some research on CEO comments on CX, and you’ll see that most do think of it as what you call conventional CX — “experiences” are an alternative to focus on products and pricing. For companies that have solid products and good pricing, and want to differentiate based on interactions, it can work even if not “optimal” in your view. At least, if service interactions are “broken” then a CX program can give some short-term relief (although it won’t change competitive position in my view).

    I have no idea how to change this perception, because it’s deeply engrained. As I’ve commented, it started with the formation of the CX industry, and most consultants and vendors are focused on improving service/interactions, not products or pricing. You and others that disagree should get together and figure out how to change this perception.

  10. Bob,

    That’s the reason why I have written this article series to change that perception – CX includes not just ‘service’, but also ‘products’ and ‘pricing’.

    Although there are a dozen industry experts agreed that CX should include ‘pricing’ and ‘product’:
    http://customerthink.com/does-customer-experience-management-include-products-or-pricing/

    I don’t see on any occasions other than that these experts (except Shaun Smith) are advocating, preaching or practicing a CX that includes ‘pricing’ and ‘product’.

    For example, as you said in another post: “See if you can find product or pricing mentioned in the CXPA’s exam blueprint”: http://www.ccxp.org/exam-resources/exam-blueprint/. It’s just the Conventional CX.

    In your recent post “An Inconvenient Truth: 93% of Customer Experience Initiatives are Failing…”:
    http://customerthink.com/an-inconvenient-truth-93-of-customer-experience-initiatives-are-failing/

    Numerous CX experts have responded to your invitation to suggest solutions to improve CX successful rate. I don’t observe anyone who shared any ideas close to “CX should include ‘pricing’ and ‘product’.

    I’m keen to know who are the “many like you (me) who advocate CX = more than interactions”. Would you mind to tell us?

  11. While all the CX experts say CX includes everything, CXManagement (in practice) does not. CXM, just like CRM, is defined by what people are actually doing, not blog posts.

    I fear it is much too late. And, I’m not convinced that not including products or pricing is the reason for CX failure. Maybe it is, I’ll have new research later this year to find out.

    There’s no question that product and pricing are important. In fact, I’ve run surveys for nearly 15 years that find companies and customers largely agree that product and interactions are about equally important (roughly 40% weight each) in driving loyalty. Price is the remaining 20%.

    This is a crude measure of what people think, and of course every industry and company is different in terms of loyalty drivers. But the big picture is simple that all three were, and are, important.

    What’s happened is that the CX industry has chosen to focus on interactions — what most people think of when you use the word “experiences.” This despite proclamations that CX includes everything.

    I raised this issue in 2015 in “Does Customer Experience Management include Products? Pricing?”
    http://customerthink.com/does-customer-experience-management-include-products-or-pricing/

    As you know, the answer was yes. Bruce Temkin summed up for most everyone: “Yes, CX management does encompass products and pricing. CX should be a consideration in defining, creating, enhancing, and eliminating all of your products.”

    I said: “Yet as the industry has grown, I almost never hear or read anyone talking about products (or pricing) in the context of CEM. Instead, CX/CEM is constantly promoted as the savior for companies who can no longer differentiate based on products or pricing. ”

    Jim Tincher: “Product is certainly part of the experience – it’s just not the part of the equation that typically needs additional focus.”

    And I sum up with: “… from a practical standpoint when you say “differentiate based on customer experience” you mean interactions with the company *other* than product or price.”

    And Maz Iqbal astutely observes: “You assertion is correct. As practiced folks doing CX and (their CX gurus, advisors, consultants) do not include significant elements of the customer experience: product, price, packaging, the look+feel of the store, the reputation of the brand/co etc..”

    And my conclusion: “If the strategic view of CX = everything is to prevail, thought leaders need to share more about how CXM deals with products and pricing, and other parts of perceived value (like brand reputation). So I’m hoping to see something from Colin and others to help open eyes. ”

    Three years later, I’m still looking for examples. The few that exist are buried in the avalanche of content focused on service/interaction improvement — what you call Conventional CX.

  12. Hi Bob,

    Why CEOs don’t buy-in CX:

    1. When the Conventional CX excludes ‘pricing’ and ‘product’, to many CEOs, it just looks like another “make customers happier” project. What kind of CEOs would put this type of initiative on their priority list?

    2. The mission of CX is to deliver brand promise. However, different brands have different brand promises. How can the Conventional CX help companies whose brand promises aren’t about ‘service’ to objectively assess and create a branded customer experience?
    http://customerthink.com/stop-practicing-the-conventional-customer-experience-management-part-2/

    3. The ONE prescription of the Conventional CX – the full-scale and company-wide “Serve Customers Better” approach – doesn’t fit every company. Sensible CEOs wouldn’t take risk to deploy this singular solution to solve their different CX challenges.
    http://customerthink.com/stop-practicing-the-conventional-customer-experience-management-part-3/

    4. When ‘pricing’ and ‘product’ are absent on customer journey maps, the purpose of identifying the business drivers has lost. Because all remaining drivers are ‘service’ or service-related. It would be enhancing service instead of driving business results.

    5. CX includes everything doesn’t mean that it has to do everything. If services have to be improved then leave it to CS. If products or pricing are in troubles, let the marketing folks to handle. The role of CX shouldn’t be functional. It ought to be strategic and monitoring. A wise CEO would never add CX on top of CS.

    Therefore, based on the above five arguments, the Conventional CX is “purely” about ‘service’ is the major reason for CX failure, i.e. why CEOs don’t buy-in CX.

    Your thoughts?

  13. You make a very good argument for why CEOs don’t engage. They know that product and pricing matter, yet CX programs don’t really focus there.

    The goal of CX to “deliver the brand promise” should engage CEOs. I wonder how many CX programs are really set up with this as their main objective.

    Perhaps CEOs that *do* engage with “serve customer better” are in industries where service interactions are a bigger part of the value. Those where product/price still dominant don’t see a reason to care.

    Your point 5 gets to another issue I’ve noticed. Many operational jobs (especially in customer service) are being relabeled as CX. I think the CX industry should clearly define what is really a CX job vs. a current job that contributes to the experience.

    You may have identified a root cause for lack of CEO buy-in to CX. Not sure it’s the only reason, but it’s a plausible explanation for why CEOs say they support CX but in practice don’t fully commit themselves or the organization.

    However, to change this, the CX industry will have to actually start doing more of complete job of delivering the brand promise. How do you propose doing that?

  14. I received a notice about a new CX report.

    >>>
    PwC released its new Consumer Intelligence Series survey of 15,000 consumers from across the globe on their attitudes towards customer experience. The report found that customers are looking for more human interaction, not less, and bad customer experience is driving people away quickly.

    Customer experience is increasingly important as many stores have shut their doors in the past few months, unable to compete with online retailers. For companies that get customer experience right, the payoffs are tangible:
    • Consumers are willing to pay up to an 18% price premium on products and services from companies that provide a positive experience.
    • 65% of U.S. customers find a positive experience with a brand to be more influential than great advertising.
    • Respondents said that positive experience influences purchasing decisions in healthcare, banking, restaurants and hotels.
    >>

    You can download the report here: https://www.pwc.com/future-of-cx

    The message is clear: CX is something *other* than the product or price. CX is a way to increase the price on the products/services you’re already selling.

    For example:

    “Nearly 80% of American consumers point to speed, convenience,
    knowledgeable help and friendly service as the most important elements
    of a positive customer experience.”

    “Price and quality remain top of mind for customers as they make
    purchasing choices. But when customers think about their interactions,
    positive experiences influences purchasing decisions in almost every
    industry, but are particularly influential in healthcare (78%), banking (75%),
    restaurants (74%) and hotels (74%).”

    So, this is similar to other messages that “CX will overtake product and price” as a differentiator.

    Sorry, I know this is probably depressing to you, but this sort of research influences what people think CX means.

  15. Bob,

    Thanks for the PwC survey.

    Change is uncomfortable and difficult for everyone. CX experts, consulting firms and research houses are no exceptions. They won’t change unless they have to.

    It reminds me about CES (customer effort score).

    My article “Stop Trying to Eliminate Customer Effort” http://customerthink.com/stop-trying-to-eliminate-customer-effort/, I believe, to a certain extent, drives people to rethink if CES is really good for them for all situations (100% of touch-point experiences) and to every company (what if companies’ brand promises are unrelated to ‘fast and easy’). CES used to be a key metric that many companies widely adopt without a doubt. More people are beginning to alert its limitations.

    Similarly, what we need is to influence CX professionals and companies to rethink if the Conventional CX is really good for most situations and companies, as promoted by organization like PwC.

    Hopefully, my latest post “Why a Wise CEO would Never Buy-in CX” http://customerthink.com/stop-practicing-the-conventional-customer-experience-management-part-5/ is a good start to induce some changes to the CX industry.

    Doing nothing, nothing will change. Start doing something, something unexpected may happen. Let’s do something. Shall we?

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