Tag Archives: CSAT

Are you wasting money on Customer Experience?

With 90% of CEO’s prioritising Customer Experience as a leading business practice(1), financial scrutiny on performance will only increase to retain board confidence and commitment. However, 90% of programmes are failing to deliver (2) their potential.

How can you be sure Customer Experience investment is correctly prioritised?

Most manuals and professional CX speakers would advise practioners to fix what’s upsetting customers and move on to making a point of distinction on what they rave about. Which should push up satisfaction and recommendation scores.

However, both these customer experience strategies require investment to succeed. What if there is no budget? Can you ‘hedge’ the required investment against incremental sales/profit this focus will deliver? It’s probably not that safe to do so. Evidence shows that only 1% of share of category can be reliably attributed back to these conventional measures (email me if you want more on why this is).

A more linear approach is to show the reduction in ‘bad demand’ operational costs associated with managing activities creating negative feedback on specific touchpoints. This would show an accountable reduction in costs. Albeit costs created by a bad customer experience in the first place. So should they be classed as a win, or an own goal? Either way, it’s a start.

This gives you the two more common strategies for CX growth pursued:

  1. Improve that which the business is poor at but customer’s value (also known as the ‘Fix’ phase)
  2. Leverage that which the business is good at and customer’s value (also known as ‘Build’ phase)

The shortfall here is that the hit list for these strategies rely on customer’s feeding back about what’s great and what’s not. But what if customers don’t vex about an issue? And why wouldn’t they –  because it’s not on their radar? What if there’s nothing wrong or right about an experience but because it’s not important to customers it never gets raised? With most VoC set ups if you don’t hear about it often it gets considered not worth looking at.

A conventional approach focuses on capturing feedback on customer’s sentiment and intention. But as proved on most voting days, intention and behaviour are often distant relatives. Whereas, understanding actual behaviour caused by Customer Experience is evidence of what customer’s do.

So rather than only asking how satisfied a customer is with an activity or experience, or which activities they are satisfied with or otherwise, understanding how important an activity is to a customer’s share of category commitment brings behavioural based measurement in to CX. Actual behaviour is a significantly more reliable indicator of decision making than intention.

This moves the focus from knowing some of what’s going on, to knowing everything

With fix and build programmes linked to CSAT and NPS inferred scores, there is a read on, ‘what we are good at and what we are not so good at’. By complimenting this with behavioural change insights we are now answering, ‘what customer experiences matters most to a customer’s decision to commit share of category’. This adds the missing commercial dimension to CX performance management and with it reveals two further CX strategies for practioners to pursue. As well as sharpen the purpose of the ‘Improve’ and ‘Leverage’ strategies too:

  1. Monitor and refine/remove CX which the business is poor at and does not impact customer’s decision to commit to us
  2. Improve CX which the business is poor at but impacts customer’s decision to commit to us
  3. Leverage CX which the business is good at impacts customer’s decision to commit to us
  4. Explore the potential in CX Opportunities which the business is good at but does not impact customer’s decision to commit to us

These are shown in Lexden’s MILO matrix below, which enables prioritisation of CX investment.

Lexden’s CX MILO Matrix

The ‘Monitor’ strategy identifies investment which is under-performing and not needed (or as the headline state where a company is ‘wasting money on CX’).

With conventional feedback this insight isn’t unearthed because it’s the customer experience that doesn’t matter to customers, so it rarely gets asked for or feedback provided – whether it’s good or bad. But if this collated less meaningful activity can be refined, reduced or removed and rationalised costs redeployed to the ‘Improve’ and ‘Leverage’ strategies.

Which leaves the ‘Opportunity’ strategy, which provides untapped potential for new areas to consider. These could provide future advantage in a maturing CX-led organisation if reshaped and made important to the customer’s decision making or outcomes fulfilment.

You may be questioning this only works if you know what activities matter in the first place, and their relative degree of importance. If you were starting from scratch that would take longer and cost more to work out than would be of use.

Fortunately, the missing golden insight is already available

Leading CX academic Dr Professor Phil Klaus developed a quality of experience measure which identifies which customer experiences impact customer’s behavioural decisions. In conjunction with Prof Klaus, we work with this leading edge CX insight measure, which means we can now add ‘behavioural change’ insight to existing NPS and CSAT measures to create the missing commercial rigour CX deserves.

With ten years and over 1,000 case studies complete, this award-winning insight informs companies on ‘what matters most’ and ‘what doesn’t matter at all’ when it comes to customer experiences impacting share of category decision making. By identifying the most important 25 customer attributes and experiences (refined from a total of 300), the ‘Experience Quality Measure’ accounts for up to 88% of a customer’s decision making. Making it the most reliable CX measurement available.

Each individual study completed highlights the specific set of activities and their relative importance for that company. No two outcomes are the same making it the unique CX DNA of a company. The principal advantages of this approach are as follows:

  • It doesn’t matter which CX measure you have in place already, or which VoC platform you use, we run a one-off separate study alongside what’s already in place.
  • The volume of customer contacts engaged to arrive at the experience measure is around 125, so it’s a much smaller study all round, than a VoC programme commitment
  • We are now into our third year working with the approach and translating the academic science into a more workable and accessible insight source for clients to prove profitability from CX
  • The measurement won’t shift overnight, because it’s based on actual behaviour change, not just opinion. So, we recommend capturing and tracking progress annually
  • Competitor data is also captured which means we also know 1) who else has your customer’s share of category and 2) what customer experiences attract your customers to them
  • This insight can be identified and the MILO matrix complete within 8 weeks

So, there you have it. The ability to identify what drives share of category rather than just favourable commentary.  The confidence to pull out from your plan those activities which matters least. The insight to keep ahead of your competition in CX. Which means CX leaders can demonstrate to budget holders that CX investment isn’t being wasted. In fact, with all four of the MILO strategies pursed it’s driving profitable growth.

If you’d be interested to see how it works with a case study or how easy it is to add this essential CX insight to the CX governance, please contact christopherbrooks@lexdengroup.com 

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Lexden helps deliver effective customer experience insight, strategy and solutions for clients seeking sustainable profit from customer experience. If you’ve got a CX challenge, see if we can help.

(1) Bain (2) Dr Professor Phil Klaus

Achieve World Class Customer Experience in 3 Steps

Most organisations have invested in a customer experience programme. Some are making a real success of theirs. We’ve had the pleasure of supporting some of these with their endeavours, interviewed CX leaders about their progress, judged winning CX award entries and experienced award success with our own clients.

However, we’ve also seen the evidence of programmes which fail to make the grade. There are a number of reasons for this. Sadly, it often boils down to investment in technology choices, neglecting to bring key stakeholders on the journey and chasing the wrong KPI’s.

But, any company can be transformed into delivering an award winning, world class customer experience which they are recognised for and their customers choose them over other choices for, in three steps. Furthermore, all three steps can be complete with 4 months.

3-steps-pic

Step 1 CX Programmes Profitability Alignment

Make sure the CX Programme activities are aligned to those which are known to drive success

Only 10% of CX programmes achieve their profit potential. It’s not surprising, research conducted in this area has identified there are 47 critical activities, which managed effectively, increase programme profitability by 600%. Now available as an evaluation tool (CXPPA) developed from CX Typology research(1), any organisation can benchmark how they are set up and managing CX against the world’s most successful performing programmes.

This evaluation not only benchmarks, but identifies how programmes compare to the best CX performers, as well as recommends what needs to be improved in which order to increase profitability. This step is achievable in 3 to 4 weeks.

Step 2 Prioritising What Matters Most 

Know what experiences matters most to customer’s decisions to choose one brand over others

Attention should always identify ‘what matters most to customers’ early.

By which we don’t mean, how to ‘make it easy’ or how to ‘personalise the experience’, we mean understanding what drives customer’s behavioural change. This is the most reliable indicator of customer’s decision to choose one organisation over another. In addition, it is a very effective way to understand how to improve both Customer Satisfaction and Net Promoter Scores.

Research conducted(2) into what drivers customer experience behaviour has identified that 25 customer drivers account for over 80% of everything any CX leader needs to know about what customers want fulfilled.

However, many of these 25 drivers have little to no influence on customer decision-making so are surplus to requirements. Which means if you reduce investment in them, performance scores stay the same, but costs can be taken out. Meaning the company is more profitable overall.

In addition, those drivers which are the most influential, are highlighted. This is where a company should focus CX investment to increase NPS, CSAT, profitability and success.

These drivers are known as Experience Quality Measures (EXQ) and are the work of Dr Professor Phil Klaus, world-renowned Customer Experience Academic.

Through Lexden, all companies can now identify their own EXQ set and with it know what to prioritise to improve their NPS and CSAT performance. This step is achievable in 4-6 weeks.

Step 3 Competitor Advantage with Customer Experience

Make sure the brand difference is amplified through the experiences 

The third step, enables a company to achieve competitive advantage through customer experience. Why is this worth noting? Much customer experience efforts are operationally or technologically efficient improvements. These are typically delivered with little consideration of how to build brand distinction. This means competitors can copy the ides and therefore neutralise any brand advantage which could have been achieved. In fairness, brand doesn’t help as the brand architecture is not seen as accessible working tool to apply

However, by designing a Brand Experience Platform, this is overcome and the brand becomes an asset to the customer experience. It is made up of two principal elements:

  • Brand Experience Idea – which acts as a rallying cry for all colleagues to connect the advantage of the brand to the importance of customer experience, in a way which all can understand.
  • Branded Customer Standards – these are the set of drivers (as mentioned in step 2) which matters most to customers, translated into standards the company must deliver to in a way only they can. This is most powerful when standards relate to profitability. These ‘standards’ can then be used universally by the company to design internal practices and ways of working and external delivery and experiences. All employees can then confidently work to deliver consistent experiences, which will further reinforce brand distinction.

Step 3 is about putting a framework in place to ensure consistency and making the most of the brand. Achievable in 6-8 weeks.

So there you have it. Three steps to take any programme from where it is to world-class.

All three programmes are available from Lexden should assistance getting there be needed. We’d be happy to share more with you and see if we can add real value to your endeavours. However, ownership of what you do and why, must stay within the organisation, not leave with the consultancy or customer feedback platform provider (the fourth reason for failure!).

cb2

 

 

 

Lexden delivers effective customer experience solutions for clients serious about sustainable customer relationships.

If you like what you’ve read please sign-up to Lexden’s ‘Customer Experience’ Update for monthly ideas, inspiration and insights to improve your customer strategy endeavours.

(1) CX Typology is the copyright of Prof Dr Phil Klaus.

(2) Experience Quality Measurement (EXQ) focuses on the behavioural change achieved by a brand through customer experience. EXQ is the copyright of Prof Dr Phil Klaus.

Beware of the vanity trap of customer experience – part 1

Beware of the vanity trap of CXI’ve always felt the Greek tragedy of Narcissus would make an excellent addition to the national curriculum. I think the story of the hunter known for his beauty who was trapped into worshipping his own reflection in the river until he died, would be a helpful reminder to those making choices based on looks rather than learning. 

However, I think having seen a few Narcissus moments recently brands could perhaps do well from reading the fable too. 

I am talking about those who spend time promoting their customers satisfaction or net promoter scores. There are a number of shortfalls in this ‘low budget’ marketing stunt which perhaps is lost between the insight team, the CX team and the marketers. That said, i think consumer’s see straight through it.

1. Love me, love me, say that you love me

Customer feedback is the most valuable of commodities. True CX vanguards know it’s not the score, but what contributed to the score that matters. How the company made the customer feel or how they delivered is what mattered most to customers in such a fulfilling way. It is these experiences that keep the company ahead, not the score. All this message is saying, ‘They love me. They Love me’. Memories of John Hurt’s portrayal of The Elephant Man come flooding forward. It’s all very ugly. 

2. Scoring would have been easier

I accept sometimes promoting scores is a corporate comms way of appeasing or impressing regulators and shareholders, respectively. Although someone should mention it to them that customers see (through) this stuff too. However, the shame of it is that there was a message in their which all stakeholders would value. 

Look beneath the veneer of a score and you will find fabulous content. Real customers state why they scored the company higher and how it has changed their behaviours. The caveat here is that these insights will only be forthcoming if real time feedback has been set up with closed loop case management capabilities and customers are informed of benefit of improvements. Which then brings me back to the point of this section. 

Beware of the vanity trap of CX 1

We have worked with brand agencies who find the detail of experience improvements too dull to convert into amazing communications, choosing analogies or celebrities to do the job instead. We work with end customers who are motivated by the former and switch off at the later. As a former brand planner, i know there is a balance. But if you put customer experience as a tick box on your churn or exit survey you will soon see the value of promoting what achieves the 95% rather than promoting the percentage. 

 3. Oops i did it again!

I am always amused by the way some organisations calculate satisfaction. As a paying customer, i have always viewed my definition as the correct one and even as someone who creates, manages and delivers voice of the customer’s programmes as one of the CX services we provide at Lexden, I still default to an elite band of academics who have spent years cultivating the most reliable articulation of customer assessment of experience. They have identified 25 different attributes (not 24 0r 26) which account for over 80% of a customer’s commitment to a brand relationship. This compares to less than 1% accountability or NPS or CSAT. That’s not a typo! (contact me if you need to hear more on this). 

This doesn’t stop companies choosing the slimmest of views, ‘are you satisfied’ or ‘will you recommend us to others’ and putting it on the most senior of dashboards. CEO’s can lose their position when the penny drops for those around him. 

Judging satisfaction based on what you do well rather than what drives customer commitment and contentment is pure vanity. I’ve never judged satisfaction on the number of routes a low cost airline has or the punctuality of planes landing on tarmac. These things have no bearing on my consideration of whether I use that airline again. Yet, I read they are No.1 for satisfaction on these criteria – oh dear. I can’t see that’s healthy for customers or the company either, especially as the experiences which drive true satisfaction under perform. 

CX is not a game, it’s a serious busy model (although ironically, ramification is a good way to get CX embedded in the business) where vanity has no place. Business leaders should look to drive better customer performance rather then chase promoters. 

There are many more points on this topic of CX vanity, so watch out for part 2. 

Posted by Christopher Brooks, Director, Lexden

Lexden is a Customer Experience & Value Proposition Consultancy

We help clients build memorable customer experiences and create engaging customer value propositions.

If you like what you’ve read please sign-up to Lexden’s ‘Customer’s World’ Update for ideas, inspiration and insights to improve your customer strategy endeavours.

For further information contact christopherbrooks@lexdengroup.com or call us on M: +44 (0) 7968 316548 or T: +44 (0)1279 902205. You can also follow us on LinkedIn, Facebook or Twitter or read client testimonials and case studies at http://www.lexdengroup.com.

The triple value from VoC – are you getting yours?

Some quick questions to start – Did you choose when to gather feedback from customers? Did you decide how to collect it? Did you organise this around manageable insights?

If so the chances are the truly enlightening customer insights are probably still out there. These are what we define as the triple value insights.

This can happen when the Voice of the Customer programme is set up to find the evidence to support the hypothesis that certain experiences the customer encounters are not meeting a defined criteria of acceptability determined by the company, its key competitors or the sector. In other words, it’s driven by business prejudices.

However, to extract the triple value a VoC programme can deliver the programme should be constructed with the customer’s potential for commitment to your business in mind.

To do so requires an understanding of the commercial value of customer fulfillment over customer transactions, the psychology of responsive behaviour and an appreciation of how to view brand equity. These are not typically entries which appear on the client brief to the feedback agency, which could explain why we rarely see the triple value exploited.

So what is the triple value. Put simply its interpretation of the ‘what’, ‘how’ and ‘why’ from customer feedback planning.

First layer of value – ‘What’ customers feedback

I demonstrated the importance of this point in a recent workshop designed to help a client redesign a feedback programme which was about to be pulled due to lack of meaningful insights. I handed four attendees a torch each and asked them to lock a fixed beam for a minute on the most important elements in the room which make a workshop run well. They focussed on the coffee, the AV equipment, the air conditioning control and a copy of the workshop notes.

At the end of the session I picked up my feedback sheets which asked what will attendees remember from today – everyone had written down either the outcomes we’d arrived at with them or the facilitator. I asked why they hadn’t locked on these earlier and they said the facilitator was moving and the ideas weren’t formed yet. This helped them understand that whilst it wasn’t possible to shine a light on the facilitator moving about or an idea, that was what mattered and they should have worked out how to achieve it rather than settle for second best.

Feedback systems often measure touch points they can easily track or can get manageable feedback on which can mean the real drivers of behavioural change are missed. Customers can only feedback on what they are asked and when they are asked, so make sure you are shining a light on that which will drive what impacts their commitment and share of wallet.

Beware feedback programmes which don’t offer this flexibility.

Second layer of value – How customers feedback

feedback2On more than one occasion when reviewing a clients key customer issues the ‘feedback’ survey itself has appeared in the top 10 issues. This reflects one of the most undervalued aspects of the VoC programme. Whilst many may think the feedback survey is about a customer journey it is actually a part of that journey. Tone and design must reflect the brand personality. It should blend in. Sadly research companies are not brand specialist and comms agencies aren’t researchers. But with feedback programmes you need the best of both of them.

Read how a Eurostar customer’s high brand experience satisfaction dropped after they received an irritating, poorly branded feedback survey – not what they’d come to expect from Eurostar.

Hold you feedback up alongside you brand manager’s favourite brand activation work – if it doesn’t fit in, you need to rework it.

feedback surveyAlso if your customers have a channel specific way of dealing with you, make sure that’s extended to your feedback survey. If you are famous for phone banking, don’t send a postal questionnaires. If you are a theme park, famous for interactive experiences,  don’t text or email a standard questionnaire.

Bring your brand and your business in to VoC if you want to get a truer reflection and make customers happy to feedback because it’s an extension of the brand experience, rather than a review of it.

Third layer of value – why customers feedback

There is a wonderful misconception that customers’ feedback because they want to help a company improve it’s experiences and for that firm to become preferred by others and ultimately be more profitable. Unsurprisingly, this is not so.

ryanair3Feedback is a release for consumers. It allows consumers to vent the injustice they’ve received versus what they expected or praise what has left a positive impression in their mind or hearts. At it’s best it can even lift a day. To understand the importance of this read Flow by Mihaly Csikszentmihalyi. It explains the role small achievements can play in contributing to more significant ones. It’s great reference material for customer experience managers to better understand the importance a good experience can have on a consumer’s life.

That said there are those who think the ‘why’ means nothing more than to allow a company to score how good (or bad) they are. This example from Ryanair seems to be saying ‘just give us a score, nothing else matters we are not interested in your reason which is why we didn’t ask ‘why’.

if you want to find out more about the ‘why’, take a look at @vexvox. A curious twitter character who re-tweets customer’s gripes but also finds out why the issue mattered to the customer’s life and helps companies understand the emotional impact this has on them. Often companies take profit from the bottom line to repair damage with compensation when all the consumer wanted was understanding and empathy. Emotional context can help prioritise ‘customer importance’ over ‘commercial impact’ which is a big challenge for CX Managers looking to reorder the priority list. Which takes us back to the point of ‘why’ – it’s to help improve the customer’s circumstance.

If you put the customer first, you will release the triple value, which ultimately benefits the company. And success or failure starts with an effective feedback programme.

Lexden provides Customer Experience Strategy and Management support to clients seeking sustainable profit from customer experience.

If you like what you’ve read please sign-up to Lexden’s ‘Customer’s World’ Update for ideas, inspiration and insights to improve your customer strategy endeavours. 

For further information contact on how we can help your customer strategies contact christopherbrooks@lexdengroup.com or call M: +44 (0) 7968 316548 or T: +44 (0)1279 902205.  You can also follow us on LinkedIn, Facebook or Twitter or read client testimonials and case studies at www.lexdengroup.com.

Are your customers starting to suffer from customer feedback fatigue?

A couple of weekends ago I travelled to the New Forest in the South of England for a two night break with my wife and two boys. The trip was focused around a day out at Paulton’s Park as a treat for our three year old. Our seven year old loves hotels so we stayed in two. We ate out a couple of times and overall had a great family time.

What made the stay so good? Well it was the fact that we all get along famously, plus everything worked as it should – because we’d organised it as such and chose brands we could rely upon. Okay, I can’t take all the credit.There were a couple brilliant customer experience moments which added to the occasion such as the yo-yo’s for the boys when we checked in at the Novotel and having the pool at The Best Western all to ourselves.

ikea feedbackOn the way back home we popped in for a typical ‘essentials only’ shop at IKEA Southampton. We won over the boys with the promise of apple flan. £150 later we’d picked up the supposed essentials and headed for some lunch.

As we were eating lunch I noticed a customer feedback machine in the restaurant where people were coming to eat. I asked a member of staff why it was chosen to go there in the restaurant. His response summed it up, “People come here to shop. People come here to eat. Why would they come here to tell us what we should do better? I’ve never seen it being used”.

I think I need a holiday to complete these feedback surveys!

The following morning I was at Waterloo and stopped at Pret’s to get a cup of coffee on the way to work. On the wall was another feedback survey request. My iphone inbox pinged at me with a request from the Novotel to tell them what we thought of their services and facilitates! This was soon followed by Paultons and Best Western.

survey emails

Less than 24 hours since IKEA and I’d been confronted with several feedback surveys! Even as a CX expert with a penchant for interrogating customer feedback to develop differentiating brand experience for clients, I felt worn-out at just the thought of ploughing through the surveys.

nero surveyThe quality across pret surveythese surveys varied wildly. And with some it was clear all they were interested in was a performance score rather than understanding what worked and what could be better. More worryingly not one took time to find out whether my weekend went as planned, was I happy with the jaunt, how their brand fitted into my weekend, which other brands I’d been relying upon that weekend alongside theirs, how their brand compared to those others I’d been pleased with, did they stand out for any reason that had been memorable to any of my party or whether I now saw their brand as a reliable trust agent for just this sort of event or I’d let them into other parts of my life. in fact, the stuff that mattered to me!

Sadly the insight which would richly furnish their understanding of the value of their brand to their customers and the impact the experience had on them was omitted. Instead they asked me questions like:

  • Was it value for money?
  • Would I tell my friends?
  • Was the booking website easy to navigate?
  • Did I speak to a member of staff whose name I can recall and did they exceed my expectations?

I love all the brands I’ve mentioned, with this type of bombardment we will soon see the demise in the value of customer feedback unless a sprinkle of innovation and a large dose of customer relevance is applied.

However, too often customer feedback is seen as a measure rather than a palette to enhance customer’s lives with.

Is this really the best time?

dublin surveyThis example affronted me the moment I’d gone through security at Dublin airport. Now is this a moment I really want to stop and feedback my experience? Perhaps (small ‘p’) if it was less than a great experience AND time is on my side I might. But if time is against, no chance. And would anyone really consider stopping and feeding back on a good security experience?

On two recent commissions I have seen ‘customer feedback’ surveys appear in the top ten issues for a brand in the Voice of The Customer Analysis. One brand was serving ten feedback surveys to customers a year. It seems the survey ‘monkeys’ have forgotten, it’s the customer’s world and we just live in it. To obtain feedback from a customer is a privilege, not a right. We should be mindful of that when asking for it and even more so when considering how to apply it.

Future Trends in Customer Feedback

Feedback systems will continue to be rolled out. But, can brands look forward to customers informing them of their priorities? Or will consumers begin to find their day becoming ever more polluted with feedback requests and drop them from their daily activities.

My prediction is that feedback will be less readily offered in the future. I was reviewing trends in the customer feedback space for an airline conference presentation and noticed two which will mean we might all have to rethink how we engage customers for feedback:

@VexVox The prickly hedgehog listens to tweeters grumbling about brands and brings it to the attention of others as well as engaging the brands affected. As the volume of followers grows vexvox will have not one or two comments to feedback to brands, but acting on behalf of consumers will have hundreds of similar complaints to bring to the brands attention. With such an easy way of jumping the complaints queue and a no hassle way to attain resolution, feed back surveys will become a less attractive route.

The second is still in development so I can’t share the newco’s details just yet. But the principal is this; ‘your data is your property’ – their genie commercialises it for customers. Sources tell me the customer will trade claimed behaviour data for credits. These will increase in value if the ‘claimed’ matches the ‘actual’ behaviour. One aspect is a ‘catch all’ customer feedback survey option which provides back to the brands structured around what matters to the customer. The customer will be discouraged from using any other form of customer feedback.

Don’t get me wrong the health of the feedback survey sector is very much alive. With TripAdvisor we see that the ‘public’ feedback channel is booming. The difference here is it has a commercial model underpinning it. This form of feedback has a future.

Whereas internal feedback systems will be under threat. It’s time to start thinking about the next generation of customer feedback because consumers are getting tired and impatient at a time when business’ are becoming every more reliant.

Posted by Christopher Brooks, Customer Strategy Consultant & Director at Lexden

Lexden is a Customer Strategy Consultancy | Putting your customers at the heart of the decision.
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.

If you like what you’ve read please sign-up to our monthly ‘Putting Customers First’ newsletter. Or for a discussion on how we may be able to help you, contact christopherbrooks@lexdengroup.com or call us on  M: +44 7968 316548. You can also follow us on LinkedIn Facebook and Twitter.

How to start a Customer Experience Strategy: 3/5 Understand the potential and the limits

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 when embarking on a customer experience strategy? I answered:

  1. Ensure those responsible for the customer experience have the right experience too
  2. If it’s the company that wants to be more customer-centric start with them, not the customer
  3. Understand the potential and the limits of customer experience early on
  4. Once you are in, you are all in and you are in for the long haul if you intend to profit
  5. Short cuts exist, resist. Only short lived programmes use them

 

3. Understand the potential and the limits of customer experience early on

It’s important to understand the potential of CX and invest accordingly. Feedback programmes, rewards programmes, continuous improvement resourcing, customer charter communications can all add up very quickly – and typically are coming from new budget lines (or cut from existing ones) because customer experience is relatively new to many budget allocation models, if not the company. Looking at CRM or loyalty models for read across forecasts, which I’ve seen some well established consultancy practices do, may give you a proxy figure (not that I’d accept such a read if I were the CEO) but not an appreciation of the market appetite or the business impact required to achieve the result. It’s impressive that Disney achieves 4 times the lifetime value from Promoters, but if you saw the time and investment behind the scenes you’d agree they’ve earned that.

monorailIt’s essential to assess the return potential before making grand claims to the board. Often there is a ‘no-brainer’ assumption that it’s just what every business should do, isn’t it? And whilst putting customers first should never be out of fashion, just what dividend it pays the business needs to be understood as well.  As a long-time practitioner and long-term server of customer strategies I would probably start at this point. but I also see CX being rolled out as the new shiny marketing toy. It reminds me of the Simpson’s ‘monorail’ episode where the salesman sings, “a monorail, everyone has got to have a monorail”, beware the salesman I say.

Sizing the prize

A value estimate is relatively easy to ascertain in many sectors. For example with hotels, guest experience is now more important than location or price (two former industry stalwart drivers of customer decision making) according to Trip Advisor. In the energy sector switching decisions are twice as likely to be driven by a poor experience as they are price, despite the market being fixated by recruiting customers on price based deals!

In other markets where factors such as product functionality and brand reputation can carry more weight, experience is a driver  but other factors are more influencing. E.g. car batteries, where there’s not much opportunity for experience differentiation there  beyond it ‘works’ (please someone prove me wrong on this one).

And in some sectors customer experience doesn’t typically feature highly as a standard due to overwhelming alternate factors (think lotteries or personal GI lines) or because the experience is actually owned by too many different parties (think airport operators and shopping malls) it may drop down the consideration list as too problematic to unpick and understand.

Whilst the business may wish to commit to the customer, market conditioning may limit the potential. Understanding this first could save face with overambitious forecasts and wasted investment of resources later.

Missing your potential

cx article 3However, experience typically will feature and understanding the potential is important because missing it can be business fatal. This chart highlights a predicament for a low interest category (utilities), where new insight into what matters most for customers (bar on left) exposed the inefficiency of the existing deployment of resource (bar on the right). A seismic shift in culture and process over a period of time, careful redeployment of resources and sensitive discussions with city analysts will be needed if a transition to a customer-centric approach, achieved through service experience and brand experience, is to be successful.

Seeing this most CEO’s might think twice before turning their business upside down. What this chart also highlights is the value of a brand and comms strategy when customer engagement otherwise is low. This creates a positive association between brand (think about the power of positive association from The Olympics bestowed on Visa’s brand) and customer which acts as a positive experience reinforcement when there is limit significant experience (paying for something isn’t a memorable experience consumers overtly associate with the scheme provider). In some markets such as general insurance and utilities, unless something goes wrong, most customers wont experience the brand. Activities including advertising, direct communications, PR and sponsorship become a surrogate so have an inflated value for customers and are therefore a key part of the experience remit. Ensuring they are in scope  and aligned to what matters most to customers is important otherwise the potential for customer experience will be compromised.

Ascertaining the value of customer experience

cx article 3.1CX purists might argue that in order to ascertain the potential value, first you need to find the opportunities for improvement and demonstrate their incremental return against brand equity, market share and revenues. However, you need to travel a long way through a CX programme to get to this point (often an oversight with CX programmes led by researchers), whereas pragmatic CX professionals would suggest to secure investment, resources and sponsorship for all the tools needed a ‘read’ of the potential is required first.

This can be derived from three simple ‘customer-focused’ questions as highlighted in this chart.

Beware the process wolf in customer experience clothing

I recently heard of a company who had identified 700 IT platform defects it needed to fix to deliver a decent customer experience! They also used a process engineering consultancy at diagnostics stage to ascertain the value of customer experience to their business. Unsurprisingly the diagnostics phase identified millions of pounds of operational savings through lean processing techniques, but not one CSAT or NPS benefit from any of the business improvement recommendations. This has resulted in a business re-engineering approach to improvements which reduce business operating costs but is badged as ‘customer transformation’ where the customer is at best a secondary consideration.

So before a programme is undertaken a short period of assessment is needed for an effective audit to provide the insight to assess the potential of customer experience. For this, our advice is to invest in the right expertise to get a sound reading.

If the ambition of the business is, to create a sustainable competitive advantage through understanding customer experience expectation and desires, then the assessment of the potential must be conducted on the same basis too.

Finally, if there is a poor or non-existent sector experience, it may also mean there is a greater opportunity to differentiate that hasn’t been exploited. For example, returning to the hotel industry, Formula 1 in France (and to some extent Premier Inn in the UK) demonstrated how low cost accommodation could still mean a really good night’s sleep. In fact that’s all that was required so that stripped out costs on amenities such as pools and restaurants and invested in sound proofing and quality mattresses’.

I recall working on the brand & comms planning for the Health Lottery. At the time the CMO was fixated on product and pricing – and with good reason – it was what he knew. But the margin of improvement against the competitor on this factor was limited. However, the sector customer experience importance was way below the broader leisure sectors so it was dismissed. A small investment in this area could have forced players to reappraise their preferred lottery provider on new terms, rather than accepting the much smaller slice of player’s wallet the ME2 gaming angle finally achieved. I couldn’t convince them – you can’t win them all.

Posted by Christopher Brooks

Lexden is a Customer Strategy Agency | Putting your customers at the heart of the decision

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.

If you like what you’ve read please sign-up to our monthly ‘Putting Customers First’ newsletter. Or for a discussion on how we may be able to help you, contact christopherbrooks@lexdengroup.com or call us on M:+ 44 (0) 7968 316548You can also follow us on LinkedIn Facebook and Twitter @consultingchris 

How to start a Customer Experience Strategy: 2/5 Start with the company, not the customer

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 when embarking on a customer experience strategy? I answered:

  1. Ensure those responsible for the customer experience have the right experience too
  2. If it’s the company that wants to be more customer-centric, start with them, not the customer
  3. Understand the potential and the limits of customer experience early on
  4. Once you are in, you are all in and you are in for the long haul if you intend to profit
  5. Short cuts exist, resist. Only used by short lived programmes

2. If it’s the company that wants to be more customer-centric start with them, not the customer

When a company decides ‘customer’ should be more central in its decision making we found it has arrived at this conclusion driven by one of four motivations; cause, compliance, commercial or competitive – more detail on meaning and examples available from Lexden.

Knowing where it originated is critical because understanding which motivation drives the decision to be more customer-focused should influence the approach, framework and governance the business should adopt in structuring a customer experience strategy.

Sadly, this is a very early decision point many business’ miss. To think the starting point should be the customer and how they feel is logical. But misguided, or rather too purist for a commercial climate which is demanding of performance based progress overnight and pinpoint tangible evidence of accountability engraved in a silver bullet. Presenting the case is critical. Trying to deliver this by evidencing the state of CSAT scores or negative feedback verbatim won’t cut it with the even the most emotionally accommodating CFO’s.

The customer strategy needs to be presented on a like for like business case comparison with other decision about productivity, growth and investment.

Being passionate about putting customers first still needs a supporting business case to get buy-in

We work across several borders and in many sectors. Everywhere our findings are the same; the starting point is the same;  the commercial value of a customer strategy. To achieve this, when Lexden are engaged to bring to life or improve a client’s customer strategy, we start by diagnosing the following:

Lexden's CX Diagnostics Tool Kit

  1. BUSINESS MOTIVATION | What’s driving the decision to be more customer focused
  2. CURRENT STATE | Where the business is in terms of its journey to being customer focused (culture temperature check*, capability assessment and commitment to customer improvements)
  3. MARKET VALUE | Market expectation, appetite and opportunity for differentiation by experience
  4. FUTURE STATE | What is a realistic ambition (which business performance measure will CX drive upwards)
  5. CX STRATEGY & TOM | From which a CX Target Operating Model is formulated highlighting what needs to be done, in which order and how it should be done to realise the potential

*Additional point – if the business fails to provide a colleague experience which engages enhanced commitment to the brand and advocacy over others, how can the business expect its colleagues to think or behave in a similar way with their customers? Often this proves to be a game changer in terms of adoption of customer-centric thinking within an organisation to miss this point and not build it into the Target Operating Model will undermine the entire strategy.  

The outcome of the diagnosis phase provides a new view to the business on the current state reality, the future state potential of customer focused strategies and a proven development programme to take them there.

It’s from this sound foundation the customer experience strategy should begin if the business is to provide the best possible experience improvements to the advantage of customers, colleagues, the business and the bottom line alike.

In summary, to put customers first, first the business must get its own house in order.

Posted by Christopher Brooks

Lexden is a Customer Strategy Agency | We put customers at the start and the heart of marketing strategy

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.

If you like what you’ve read please sign-up to our monthly ‘Putting Customers First’ newsletter. Or for a discussion on how we may be able to help you, contact christopherbrooks@lexdengroup.com or call us on M:+ 44 (0)7968 316548You can also follow us on LinkedIn Facebook and Twitter @consultingchris