Many businesses know that customer experience is their most important battleground. Scan the latest research headlines and organisations tell us that CX transformation is a top strategic priority. Forrester reports that 76% of executives say improving CX is a high or critical priority. Meanwhile, a third of companies that ranked CX investment as a low priority pre-Covid, now plan to spend more, according to MarTech Alliance.
The Institute for Customer Service January 2022 UK Customer Satisfaction Index found that there has been significant growth in the number of people prepared to pay more for better service – up 8.1% since the beginning of the pandemic. Yet there is still a major disconnect between what businesses think they are delivering and what customers experience. From our experience the fault line is strategic.
The state we’re in – expectations vs reality
We are years into the big experience reset. But poor experiences are still pervasive. Especially when it comes to service. NewVoiceMedia reports that UK businesses lose £12 billion every year as a result of bad customer service. The problem is global. A staggering 9 out of 10 customers in US said they experienced poor service in the second half of 2021, according to Replicant. Intent to make meaningful changes is clearly not the same thing as reality.
Getting it right
For organisations that decide to embark on a company-wide CX strategy as a route to competitive advantage, the journey from today to tomorrow will most likely require transformational rather than incremental change.
CX transformation means that every element of your business needs to align with what your customers care about. Success means creating meaningful, memorable experiences that engender emotionally committed relationships that stand the test of time. The reward is a loyal customer base that wants to spend more, stick with you and recommend your brand to their friends and family. Get it right and investment in CX initiatives will translate into dramatically improved business results that sustain over time.
Successful CX transformation – the four pillars
Leadership + Alignment + Capability + Infrastructure
The first step is to align your senior leadership so that they drive an understanding of (and commitment to) the vision, mission and new ways of working. Leaders who are not on board will undermine the change effort – intentionally or unwittingly – by the actions they take, the priorities they set and the behaviour they display. People will know if their leader is rooted in the old and a reluctant participant in the new. Leaders set the tone and mindset. Sea change on this scale requires people throughout the business – at all levels from leadership to the front line – to be equipped to deliver a new and different experience to customers. This will require energy and empowerment. Leadership is critical because it feeds into the other three dimensions that are key to transformational change.
Leaders play a key role in creating organisation-wide buy in and momentum. You can’t have complete alignment if the leadership team is not singing from the same hymn sheet. Effecting change requires understanding, clarity, belief, excitement and commitment to the change. It will not happen if people don’t understand it, appreciate the benefits to them and the organisation, and genuinely believe in it.
Capability is all about the skills and capabilities the organisation needs to make the change and achieve the transformation goals. There are two dimensions here. The first is about the (new) skills the business will need. The second relates to resourcing – the number of people needed to successfully support the transformation. Research by McKinsey showed that these three elements are critical to successful transformation:
- Allocate high-potential line managers to key transformation roles
- Build a fully staffed, centralised organising team to co-ordinate the programme
- Develop a change leadership training and a capability building programme for employees
The focus here is on building the support infrastructure to embed and sustain the new way. This will help to prevent the organisation slipping back to the previous way of operating. Performance management and other HR processes, continuous improvement teams across the business and company-wide communication are just some of the processes that are key to the creation of a performance-driven culture to institute change quickly. These changes will also help to capture improvements, measure the impact and make real time adjustments.
Communication has an outsized impact on success
Of all the actions a business takes to drive transformational change, respondents in the McKinsey research said that open communication about the transformation’s progress and wins – across the organisation by the senior management team – had the biggest impact on success. Open, company-wide communication about how the transformation impacts their people’s day-to-day work came next. Leaders using a consistent change story to align the organisation around the goals of the transformation was also crucial. An internal communications plan is the propellent that drives success across each of the four pillars.
This is what it takes to drive successful CX transformation. Misfire on just one of these four areas and the path to success will be fraught with difficulties. CX teams will limp on and transformation plans will stall or be abandoned. One thing’s for sure, your customers won’t see much – if anything – in the way of improvement.
A way forward …
We outline a three-phased approach to building and implementing a transformation roadmap in an upcoming post. We explore how the four pillars are brought together to build the foundation, develop company-wide capability and embed and sustain customer-driven performance. The article also covers the sequencing for deployment. Be sure to check back.