I was approached recently at a conference and asked, ‘if we are starting out on a customer experience strategy, what are the key pieces of advice you would give a business? It made me think. The lessons we have learnt have ensured we don’t start off on the wrong foot. Having pondered I answered:
- Ensure those responsible for the customer experience have the right experience too
- If it’s the company that wants to be more customer-centric start with them, not the customer
- Understand the potential and the limits of customer experience early on
- Once you are in, you are all in and you are in for the long haul if you intend to profit
- Short cuts exist, resist. Only short lived programmes use them
4. Once you are in, you are all in and you are in for the long haul if you intend to profit
We typically find brands will move through many levels of customer experience improvement (see Branded Customer Improvement Model below) before they really reap the competitive advantage of customer experience investment. Some sectors require lesser effort; such as airlines and retail and some more; such as utilities and telecoms.
Either way it’s something that needs to be explained at board level if you are hoping to see the plan through. Expectations need to be managed. I recall a utility being informed by a major management consultancy return would be seen in 3 months. 3 years later and they are still at the foot of the customer satisfaction leagues.
Working through the levels allows the brand to make connections with the customer at an appropriate level depending on how broken the experience is. It may need to be on a functional level first. This means fixing the stuff that irritates customers the most – issues they probably consider an absolute basic for a business to trade in that sector. With these repaired and hopefully some credibility with customers restored the business can start to fulfill on a rational level (through efficiency and integrity) before ultimately developing an emotional connection with the customer through an enjoyable and differentiating relationship. When we say emotional we mean the brand is fulfilling the customers deep rooted inner drivers in life (such as achievement, growth and legacy); be these every day requirements or more significant purchases.
Understanding what matters most to customers is key in this respect. Functional fulfilment is extremely difficult to sustain a differentiated positioning on, which is why even the latest technology brands move from function to emotional connections.
Diagram: Customer Experience Improvement levels
Aiming low – less intrusion, moderate investment and stay in business
If you are in it to just fix negative feedback then the left hand side of the diagram should be the focus. Focus on replicating what the better practioners do and you will find complaints reduce and NPS scores improve (less detractors and more passives). I’d call this a passive strategy and anyone embarking upon it should point out its limitations to those approving it before you start.
Does it work? Yes – albeit a survival position rather than thrive. But well supported with an employee engagement programme to root out poor internal practices that lead to these low NPS or complaints, and an ongoing PR strategy reaffirming the firms adherence to sector standards for customer experience and you will probably get back what you put in.
If that’s the ambition avoid the right hand side of the diagram otherwise you will over engineer solutions and over invest in quality of customer experience improvements which other parts of the business haven’t signed up to replicating. This leads to an inconsistent experience which means the brand is ultimately compromised.
That might seem like a simple undertaking and whilst we have found functional projects like this that can last just a month when there is a specific problem to fix, there are still unforeseen barriers which take time and investment too. For instance MI may not be available or organised in a way that can be extracted to understand scale of impact and the type of consequential behavioural change in consumers occuring following poor customer experience. In this scenario, at best an analyst locked away for a couple of weeks is needed. More likely it means a small team of analysts, new analytics kit and bids for resource slots on an already over booked IT prioritisation schedule to get traction.
It’s also a challenge to get employees to commit to change if the fix is recommended in isolation of any CX vision. Made all the more challenging if reducing complaints and increasing NPS performance aren’t tied to employee performance.
We have seen industries such as financial services taking this approach when they’ve been needed to adopt new regulation (such as TCF). In these cases what passes for customer experience is that which will keep the business the right side of the regulator. Which is fine, but it’s not optimising the commercial and competitive advantage of customer experience. It also makes it harder to implement later because employees have seen the ‘quick-fix’ option previously employed.
Aiming high – more disruption and greater investment delivering sustainable returns
Setting out to differentiate on customer experience is life changing for a business. It’s a philosophy rather than a project. It also means every single action and intention is directed around a customer vision (key foundation stone for any CX strategy), which means outcomes are invariably built with customer betterment, colleague ease and business benefit baked in. It also means the business understanding what really matters to customers and building an experience which fulfils this is in a meaningful way that differentiates the brand firm it’s competitors. Which means no other can replicate it because it has the essence and the values of the brand baked in.
Each level passed through impacts the entire business. Jumping levels can be fraught with bear traps. For instance, if a third party is controlling a very basic IVR router and you pass over this to get to the call handling, which the business controls, efforts in this area will be undermined if the IVR router creates an initial poor customer experience. It seems obvious but too often businesses will jump to the ‘make a difference’ space without forensically analysing every step in the customer journey. When the cultural mind-set is set to ‘in it for the long haul’ the customer experience team have space to investigate these critical areas. So along with improvements it requires a heavy helping of supporting ‘culture engagement’ and ‘governance’.
If the ideas to improve customer experience are to land as intended and drive customer advocacy and loyalty (which drive the business performance) they also need to energise and inspire internal stakeholders along the way to see the value of putting customers first. This requires investment of time from HR, internal comms, the board, the continuous change team and many more. For the customer experience team to win over these stakeholders they need to demonstrate the business is ‘in it for the long haul’ so that training programmes can be updated, inductions reviewed, internal comms dominated etc etc.
But established, launched and managed correctly, the direction of travel is upwards in terms of reaching and winning business on a ‘differentiating’ model, upwards in terms of NPS and CSAT performance, upwards in terms being known for esteem and value and upwards in terms of Business Value Creation.
Business Value Creation for CX means – Lower cost to serve + attract better quality customers so reduce cost of acquisition + therefore able to divert marketing spend to nurturing, growing and retaining existing business.
Again a significant strategic shifts in thinking is required. Customer Experience challenges conventional business models, so the customers experience team’s proposal must be clear and the board (and all those who are key to delivering an improved customers experience) need to be fully aware of the commitment they will need to make gain the riches. This is a challenge if you haven’t done it before.
So we’d suggest building a Target Operating Model with a few check points and contingency considerations built in (such as extra analytical support required allowance). It’s how we approach a new project (alongside the activities from the other 4 papers on starting a customer experience strategy). It will ensure the CFO, the CEO and the CMO know what they are signing up to and gain their much needed support when you start to make inroads and climb the pyramid.
Posted by Christopher Brooks, Customer Strategy Consultant
We work with brands to attract and retain happy customers | We achieve this by helping them to understand what makes their customers tick, building memorable customer experience strategies and creating engaging customer value propositions.
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