It is time to wake up to the fact that the way companies business and financial planning for the delivery of their customer experience and how they appraise customer experience initiatives is out of date and is actually having a negative impact on potential sales, revenue and cost reduction.
In my new book ‘The Customer Experience Book’ I begin to explore some of the reasons why customer experience initiatives so often fail to really crystallize in terms of their impact on both the culture and business results.
Well there are a number of factors that are slowing or acting as a drag on companies ambitions in the Customer Experience space. Whilst intuitively leaders know it is the right thing to do and indeed surveys going back to the early 2000’s have cited CE as a business critical if not THE critical driver that they need to rally around – it continues be hugely variable in terms of actual change achieved.
Let’s look at the financial/business planning impacts – in short the world of financial and business planning has failed to adapt to the rise of Customer Experience – ask yourself the question do you have a line in the annual business plan, with $/£’s attached to it that is specifically headed Customer Experience as you do for Advertising, Marketing, Operations, IT, Finance and so on…my experience says most likely not. But you may well say we have it but it is distributed across various budget holders, that may be true but you will also know that in year it is then difficult to amalgamate those budgets behind a common CE theme. What happens then is that CE is seen as a Project often without a well defined outcome and budget has to be bid for and is an easy target for cuts when the inevitable half year review demands reductions in spend. On the flip side a CE team could be charged with reducing business costs as well as promoting and supporting revenue targets – but they have little or no direct influence over the budgets that could be impacted and come across the political fights that then ensue.
Let’s look at an example of how current thinking makes advances in Customer Experience more difficult than they should be – if there is no built in budget then the requirement is to bid for what might be viewed as discretionary spend and that can – depending on the business – mean writing a business case with a clear ROI. The challenge that creates is that a ‘CE project’ is usually seen in isolation and the wider business impacts are harder to engage with. Let me give you an example of how that would come to life – if you took the Apple retail business and insisted that it MUST make a standalone return of X% and only give small weight to the potential for wider less tangible returns it would never have been born in it’s current format – effectively they changed the game in retailing tech products and how you measure tis value. Apple is not a retailer it does not have to make its profits from a retail format but could very easily have been constrained by ‘standard retail formulas’ and investment criteria. We all know that the huge levels of staffing in the in Apple stores would not survive a standard retail approach – but instead the stores are seen as a key part of the Apple customer experience (remember the Brit who lasted just a few months as the Head of Retail after he decided to cut staffing levels to improve profitability and was ousted effectively by a social media storm of loyalist Apple protesters opposing the idea), it is an opportunity to engage with customers, to expose the nuances of the technology, to showcase the commitment to customers.
So when reviewing customer experience from a financial perspective you need to take a different view and use a different lens – in effect the Apple store is an extension or part of the brand/advertising budget and how often do you do an ROI assessment of those lines in the plan they are simply seen as business essentials!
So you might ask if we made the first move forward and committed to the addition of a CE line in the plan where would the cash come from and what might we do with the spend. In terms of where does it come from it need not necessarily be incremental – look hard at taking a % of your existing Brand/Advertising/Marketing would it not make sense to ensure that what you are spending money on in terms of creating a customer expectation is delivered in order to crystallise the maximum return from that spend? The Customer Experience budget should be used to ensure that the expectation created by the Brand team is turned into deliverable executions and in an ideal world will in time provide the Brand with stories based on real customer experiences that can become campaignable creative executions themselves. That means designing key experiences, identifying what is needed in terms of ‘props’, ‘scripts’, training, recruiting, processes and motivating your team to deliver a consistently on brand experience.
#thinkdifferently
