Transforming the Customer Experience — An Introduction
The customer experience (CX) can make or break a business in this age of digital disruption. Customer loyalty isn’t what it used to be. An unhappy customer can jump ship at any moment, resulting in lost revenue for the business and increased costs for new customer acquisition. Thus, creating a positive CX is a critical success factor. It can provide the competitive edge needed not only to survive, but to thrive — and to retain long-standing customers and win new ones.
With the rise of social media, big data, and the heightened emphasis on the customer experience, it is more important than ever to build an organizational leadership team committed and laser-focused on implementing the necessary behaviors and orienting business operations to continuously improve CX. The challenging piece of this objective is that when continuous improvement of CX is neglected, the organization can end up with a program or project rather than a transformation. For example, customer-focused efforts are often initiated in response to survey results, or to an executive getting direct customer feedback, or to criticism posted on some social media site. Information is delivered, the leadership silos react, and the cycle repeats. Sustainable change will occur only when the processes that drive customer satisfaction go from reactive to proactive, are valued and considered critical to driving growth, and become ingrained in organizational culture. Organizations must evolve from project plan movement to customer life improvement.
Therefore, it is essential to develop a customer-driven growth engine that not only shows a clear and simple connection to ROI but requires engagement of both the executive team and the entire organization to make it a success. My Five Customer Leadership Competencies system will help build your customer-driven growth engine. These competencies deliver constantly updated information to keep leaders apprised of the most impactful customer priorities, and they shift attitudes from chasing survey results to caring about and improving the CX journey.
The five competencies define the behavior of organizations focused on customers and employees. The competencies greatly impact how these organizations grow and how they identify and resolve issues, and they unite leaders in investing in the most impactful priorities to drive a “one-company” focus on CX. By engaging the organization in building these five customer leadership competencies, the organization can unite, understand, and care about customers’ lives and pool resources to focus on what is most important in creating an outstanding customer experience.
The Five Customer Leadership Competencies
Competency 1: Honor and manage customers as assets. Know the metrics around growth or loss of customers and care about the “Why?”
Customer asset management is knowing exactly what the customers do to impact business growth or loss versus what they say they might do via survey results. Examples include: how many new customers were brought in this quarter, by volume and value; how many customers were lost; how many increased their purchases; and how many reduced their level of engagement with you. The key is to express these outcomes in whole numbers, not retention rates, so the full impact is understood. These numbers represent the lives of customers joining or leaving your company.
This information helps executives understand the shifting behavior within the customer base and indicates whether customer loyalty is growing or shrinking. And, importantly, it’s about engaging executives in caring about the “Why.” Why did customers stay or leave, or buy or actively use products or services more or less often?
Competency 2: Align around experience. Give leaders a framework for guiding the organization. Unite accountability so customers experience your organization as a whole, not just as silos.
This competency develops a one-company version of the customer journey. To achieve this, it is necessary to facilitate the framework across silos to unify the leaders and the organization in the development and understanding of the entire customer journey, versus the silo-based processes that dictate the CX (e.g., sales, marketing acquisition). To this end, conversations regarding the CX journey should change from silo-driven to collaborative. This will ultimately help drive performance along the customer journey and associate accountability with the stages of the full journey, not only down silos.
As a result, questions about silo and project performance will shift to include accountability for customer life improvement. Your customer journey framework will provide a disciplined one-company diagnosis into the reasons behind customer asset growth or loss. And it will establish rigor in understanding and caring about priorities in customers’ lives (the real power in journey mapping.)
Competency 3: Build a customer listening path. Seek input and customer understanding aligned to critical points along the customer journey.
This competency enables your organization to build a one-company listening system constantly refreshed to tell the story of your customers’ experience, guided by the customer journey framework. Voluntary and survey feedback from customers, social media comments, ethnography, and other sources of gathered input are assembled into one complete picture, presenting customer perception and value, stage by stage. This alignment of feedback galvanizes the organization to focus on key areas of improvement connected to customer growth, moving the company to CX storytelling and prompting caring about customers’ lives.
Competency 4: Proactively build experience reliability and innovation. Know before customers tell you of unreliable experiences. Deliver consistent and desired experiences.
This competency builds out the “revenue-erosion, early-warning process.” Leaders need to care about operational performance in processes that impact priority moments in the customer journey. These are the intersection points that impact customer decisions to stay, leave, buy, and recommend. This is where you build your discipline to know before customers tell you if your operation is reliable or unreliable in experience delivery. It will alert your organization of any interruptions in customers’ lives, enabling you to simplify how your products or services are delivered and facilitating a one-company response to key operational performance areas. This will enable you to build a deliberate process for CX improvement that rivals the clarity and processes that most companies have for product development.
Competency 5: Establish leadership, accountability, and culture. Embed leadership behaviors that steer the company toward customer-driven growth. Enable employees to deliver value.
This is your “prove it to me” competency. For CX improvement to be transformative and stick, it must be more than a customer manifesto. Leadership must build the consistent behaviors, decision making, and company engagement — the culture — that proves to the organization that leaders are united in their commitment to earn the right to customer-driven growth. That commitment must be translated to actions that people understand and can emulate. Culture must be proven with decisions and operational actions that are deliberate in steering how a company will and will not treat customers and employees. This competency puts into practice united leadership behaviors to enable and earn sustainable customer asset growth and focuses leaders on what they will and will not do to grow the business. Ultimately, leaders must show customers that they have conﬁdence in their own people and trust their decisions (e.g., by giving account managers the authority to make decisions about solving customer issues without having to seek approval from higher-ups).
When these five competencies become embedded into the processes and culture of an organization and are supported and enabled by a committed leadership team, delivering an optimal customer journey becomes second nature. In this manner, there is no difference between “customer” work and “real” work. The five competencies connect to growth, and they shift attitudes to caring about and improving customers’ lives.
In This Issue
The elements necessary in creating an excellent CX are changing as rapidly as the context and digital environment in which today’s organizations exist. This issue’s six articles present varying views on what constitutes CX. Our starting point is with Cutter Consortium Senior Consultant Paul Clermont’s exploration of what exactly CX is, the danger of complacency around CX quality, and what organizations, including brick-and-mortar shops, must do to assess and address vulnerabilities. He notes that improving the customer experience requires more than technology and process; attitude is key.
Our second article, from Karlene Cousins, Pouyan Esmaeilzadeh, George Marakas, and Richard Klein, focuses on merchant mobile payment applications. “Frictionless commerce” enables customers to buy products and services on demand, whenever and wherever they wish, with a minimum of clicks or steps, thereby vastly improving CX. The authors examine five factors driving frictionless commerce: context awareness (of the customer’s location, activities, environments, and so on, to predict and personalize offerings), utility (the application’s ease of use and provision of tangible benefits to the customer), software and UI design (novel and innovative design that works seamlessly and consistently across multiple platforms and locations, including globally), merchant reputation (customer confidence in the trustworthiness and honesty of merchants), and rewards (financial and social rewards for customers using mobile payment).
The inability to predict financial outcomes through CX metrics has long frustrated CX practitioners. In our next article, Luke Williams examines the metrics around the customer experience to deliver financial results. He presents the Wallet Allocation Rule, which allows organizations to see how customers spend money at the point of sale. This measure of wallet share goes beyond traditional CX KPIs, which focus on the “home brand,” to a customer-centric view that encompasses the number of brands a customer uses for products/services that can be obtained from the home brand (market fragmentation) and the relative rank of those brands (market superiority).
Next, Jaco Viljoen identifies five distinct levels of CX that correspond to digital business ecosystems. As each level progressively improves business capabilities, so too does the customer experience. Viljoen discusses each level, from waterfall to hybrid Agile to regular delivery to continuous delivery and finally to continuous exploration, and the CX that is possible with each level’s flow or lifecycle capability and product delivery capability.
In our fifth piece, Vikas Mukhi provides an industry-specific examination of the customer experience. Today’s utilities must increasingly deal with distributed energy resources (DERs), such as residential solar, that add cogeneration and two-way power flow to existing electric utility grids. DER systems change the utility-customer relationship, making demand management a priority for utilities and self-service options a key driver of customer satisfaction. Enhancing the CX helps utilities save money, smooth peak loads, and remain competitive.
Finally, Cousins and Esmaeilzadeh return with their take on how the perception of “coolness” drives a user’s decision to adopt a mobile app. They analyze the Uber app from the service industry and the Starbucks Mobile Order & Pay app from the retail industry to identify the dimensions of the coolness factor. Incorporating the three attributes of the coolness factor — application design, application symbolism, and application utility — into the customer experience can help mobile apps gain competitive advantage.
As you read through the articles in this month’s issue, we invite you to consider the customer experience that your organization provides and what lessons our authors offer for improving CX and making it great.
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