Why McKinsey Says Link the Customer Experience to Value


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Many customer-experience transformations stall because leaders can’t show how these efforts create value. Patiently building a business case can fund them, secure buy-in, and build momentum.
— McKinsey

Joel Maynes and Alex Rawson, Partner at McKinsey go on to say:

  • “The road to failed customer-experience programs is paved with good intentions. Executives are quick to see the end-game benefits of a customer-centric strategy: more satisfied customers, increased loyalty, a lower cost to serve, and more engaged employees. But they often fail to understand clearly what a superior customer experience is worth and exactly how it will generate value.”
  • “Without a quantified link to value and a sound business case, such efforts often can’t show early gains, build momentum among functional executives, and earn a seat at the strategy table. They stall before they ever really get going. When establishing a link to value is done well, it provides a clear view of what matters to customers, where to focus, and how to keep the customer experience high on the list of strategic priorities.”

Lyn Hunsaker in CustomerThink said Customer experience value creation occurs when you empower customers to achieve their goals with greater satisfaction in a win-win approach

I said in CustomerThink, CX is one aspect of creating value. But in the case of a CVA (Customer Value Added) measurement, the questions are asked of the decision maker, not the user who has been in the transaction. The decision maker may not have had transactional experience, but he has an impression of the difference between competing offers. And the decision maker makes the decision.

Michael Hinshaw in CMO Magazine states for the past several years, improving customer experience (CX) has been rightfully viewed as one of the most important things any organization can do to drive value. And Jim Carrass of Customer Value Creation International (CustomerValueCreation.org) sent a link to me about Customer Value Creation, making me think about Customer Value (CV).

  • CV tells us why people buy, and why they do not buy from our company
  • Creating better Customer Value will increase your market share. Delivering a great experience should give you a bigger market share. Is your company getting a larger market share with the experience it is delivering? If not, ask why not?
  • Customer Value tells you how to create value faster/better than competitors, a core idea that is missing in CX. You cannot just increase CX for your customers. Your company’s CX has to be better than the CX competition provides to its customers
  • Customer Value gives you implied weights of what is important to the Customer
  • How companies are able to get out in front of their competitors and stay there
  • Customer Value is inclusive. It includes CX, Customer success, Customer effort, customer journey, Value Proposition and so on. It includes cost, benefits, experience, emotions. Great CX enhances Customer Value

Sometimes, we do not have an experience with a product or service, but we still buy it on the basis of the value it delivers. Often we do not notice the experience because it remains embedded. Take salt, we do not directly experience it. We experience it when it is missing, or in excess.

The goal of many organisations is to create value for the customer. Service-dominant logic‘s specific goal is to co-create value for the customer. The goal of the Customer Success Association is to Create Customer Value. Customer Experience impacts customer value and so is very important. Customer experience seeks to increase value through every interaction. Annette Franz, Founder/CEO, CX Journey Inc. states the value that CXPA offers resides in both education and networking.

CXPA says that companies recognize the importance of value as a key ingredient in building and maintaining customer loyalty. CXPA does not mention experience as a key benefit to members.

CX is also a key ingredient in creating Customer Value

Let me give you an example of a pesticide company which had excellent satisfaction scores, and were working on improved customer experience. Over two years, while scores increased, market share and sales did not increase. They then embarked on a Customer Value creation program and started a courtesy system (where their employees started to be courteous to each other in the office). Along with the courtesy system, they started customer circles for frontline people to align them to the customer and deliver greater value. They also started an evening meeting to pick up and discuss issues that customers faced during the day, opportunities with customers and possible new accounts. They found that those people who were setting up appointments for the field staff were not noting down complete addresses, and were haphazard about ensuring that field staff did not have to criss-cross the town to get from one customer to another.

After 3 months, they found sales call per field person had increased from 3 per day to 5 per day; sales per salesperson had increased by 30%; market share had gone up because of new acquisitions; on time support had improved. All this because of a customer value focus on customers, and starting customer circles for frontline people. The customer value-added score before and after the 3 month period had improved considerably. The satisfaction score had improved marginally because of on-time service improvement.

This is exactly what Mckinsey had suggested at the beginning of this article would happen with a greater focus on customers: more satisfied customers, increased loyalty, a lower cost to serve, and more engaged employees.

What should business people and companies do?

  • Continue to deliver great experience and satisfaction to your Customers
  • Give a great experience to your employees and partners. Recognise Customer Experience is one aspect of Customer Value
  • Recognise that this is not enough. You have to be better than your competition — You must deliver more customer value to your customers than your competition delivers to its customers.
  • Remember relative Customer Value Added relates to business results. Customer Value includes the image of the company, the company people, the relationship, the product, and the costs (both price and non-price)
Gautam Mahajan
Gautam Mahajan, President of Customer Value Foundation is the leading global leader in Customer Value Management. Mr Mahajan worked for a Fortune 50 company in the USA for 17 years and had hand-on experience in consulting, training of leaders, professionals, managers and CEOs from numerous MNCs and local conglomerates like Tata, Birla and Godrej groups. He is also the author of widely acclaimed books "Customer Value Investment: Formula for Sustained Business Success" and "Total Customer Value Management: Transforming Business Thinking." He is Founder Editor of the Journal of Creating Value (jcv.sagepub.com) and runs the global conference on Creating Value (https://goo.gl/4f56PX).


  1. Great post, Gautam. However, I would be a bit more careful with the term ‘delivering an experience’. What the companies that you cited did, was changing and improving their engagements. The goal, of course, is that the recipient of this engagement has a positive experience out of it. But then they probably don’t. An experience is a perception. And how something is perceived is often outside the ‘control’ of the engaging party. The recipient might just be in a bad mood.

    So, I’d say, deliver great engagements that add value in the eyes of the customer.

    Just my two cent


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