In my earlier conversations, I shared some insights on the 8 major things that, in my opinion, companies need to do differently when executing CX initiatives. Do also take a quick look at my findings from CX interviews with Design Heads of over fifty Fortune 500 companies.
Here, I offer my opinion on the major change management processes needed to build an effective CX strategy within organizations. The challenge in most large businesses today is that the different departments work in silos. Each have their own metrics to define success. But guess what, your customers do not view their relationship with your brand based on micro interactions with specific departments — it is a holistic experience that they care about.
Working in silos could cause a host of problems — product teams not getting important customer feedback to refine/relook at features, customers having to fill in the same data multiple times, billing/finance departments ignoring commitments made by the sales team, service support teams not relayed important information communicated to a call agent — all of which can adversely affect your brand image.
While there is no one single (magical) metric to effectively measure CX, here are a few things (outside of the usual CSAT, NPS, and employee satisfaction surveys) that organizations can begin to do. In my experience of working with multiple Fortune 500 companies in their CX roadmap, driving some of the below change management initiatives have been indispensable in gaining a better insight into customers and transforming decision making from traditional, hierarchy driven models to a data driven culture.
1. Track, Track, Track
I cannot stress this enough. Here are a few additional metrics that could be beneficial in driving your CX strategy
- Customer effort score (CES)
This will give you a sense of how simple and effortless it was to get a task done (be it to resolve or service ticket or complete a task on an application). - Cost of Customer Acquisition: This is the total cost involved in acquiring a customer — starting with your marketing campaigns, to brand building activities, sales costs, travel, discounts, and so on. Very few companies have an integrated cross-department view on what it takes to acquire a customer. Understanding this will help you track the effectiveness of your CX initiatives. Better the CX, lower the acquisition costs over time.
- Customer Lifetime Value: How much is a customer worth to your business over their entire lifetime? Very few businesses calculate this but in today’s digital age with the power of influencers and positive/negative reviews, tracking this lifetime value will help you effectively track the ROI of your CX programs.
- Time for Resolution (TTR): The #1 thing that annoys customers the most is long resolution times to their issues. This is responsible for a lot of customer churn. While the benchmarks may vary from industry to industry, study your customers who moved over to competition. What is the TTR of your competition? What about your customer base that has been loyal to you and given great feedback? Can you get slices of data to understand their TTR metrics?
- Another important metric to target is First Contact Resolution (FCR) — resolving a customer’s issue during first contact. According to SQM Group Research, “for 1% improvement in FCR, you reduce operating cost by 1%”, and for “every 1% improvement in FCR, there is a 1% improvement in customer satisfaction. This, when compounded over time, can be huge.
- Track Your Churn: Track your customer churn rate across multiple time periods — monthly, quarterly, annually. The fact is that customers are unlikely to leave you if they are having a great experience. Measuring churn will help you qualify the impact of your CX initiatives.
As part of a CX initiative done for an industrial automation customer, we began diligently tracking the Time for Resolution and Customer Effort Scores. Our goal was to bring down TTRs by 20% and enhance CES by 15%.
By achieving this objective, the customer found, to their delight, that revenue for the specific product line was up 12% and the CSAT scores showed a significant uptake in the range of 23%.
2. Don’t Wait for It to be Perfect
How often have you seen a big organization wait inordinately for every single element of an idea or concept to be absolutely perfect before launching it to the market? This can so very often be counter-productive, as by the time they get every element of the product in place, market dynamics would have changed, and customers would most likely have moved onto something else.
A 60% ready product today is much more impactful than 100%-ready product 12 months from now. Based on my experience, customers have begun to truly appreciate beta products as it gives them the opportunity to try out a new concept and give feedback that can be readily incorporated into a product that is still evolving.
Interestingly, one of our transportation customers had a very dated website. So much so that their brand value has taken a massive plunge due to slow load times and complex navigation menus. Our suggestion to this customer was to get started with a quick revamp that would fix most of the glaring issues, while doing a deep-dive later to tackle the less obvious ones. Alas, this suggestion was not taken.
End-result — it took 5 years to revamp the website. During this time, this customer experienced website bounce rates of over 70% which, in hindsight, was a huge opportunity cost.
3. A/B Test Your New Ideas
In a large organization, there are bound to be multiple great ideas. Don’t let hierarchy or biases define which ones to implement. Create several different options and then A/B test them. Let data speak and define your roadmap!
While designing a service support dashboard for a telecom operator, our customer was absolutely sure that service technicians only prefer blue and white color schemes, and that the dashboard had to have all the metrics displayed in a long, scrolling page. After all, this is the way things had been for over a decade, and there was no sound reason to change it (or so our customers felt).
We created four different versions of the dashboard design and tested it with service support teams across different parts of the globe. The testing was done across multiple parameters including speed, efficiency, ease of search, propensity for errors, and user delight. Much to our customer’s surprise, the traditional dashboard design that they were gunning for came in at third place. It ranked right at the bottom for speed and ease of search.
Had we not put our biases to the ‘litmus test’, a great opportunity to help service technicians do their work faster and better would have been lost.
4. Run Quick (& Dirty) Pilot Programs
I have witnessed how difficult it can be in large organizations to secure funding for a new concept. New ideas and plans can often get lost in the maze of inter-departmental conflicts and slow decision-making processes.
A more effective way to get around this is by implementing small scale pilot programs. Such pilot programs can be implemented much quicker, come with very minimal risk, and require a significantly smaller investment.
Once you can show some positive outcomes from the pilot program, the leadership would be much more willing to back-up you up for a larger investment.
We have set up a digital advisory council for one of our large electrical automation customers where we look at the entire business and identify areas that need immediate attention. Rather than proposing a full blown out solution, our team goes in and executes a quick pilot program, with minimal investments and without disturbing the status quo. Such quick wins have been instrumental in instituting change management and driving digital transformation within the organization.
5. Be Ready for (Short) Periodic Revamps
With technology and customer expectations evolving rapidly, I have seen significant shifts in user behaviors and needs every 12–18 months. Research indicates that this applies as much to the engineering world, as it does to end-consumer market.
Product teams, therefore, need to plan for shorter and more regular development/upgrade cycles.
We helped a global boat engine provider go digital by transforming their engine offering to a lifestyle product for the entire boating community. The customer was delighted and felt that we could sit back and focus on operations for the next 4–5 years.
Much to their shock, a UX study done 15 months post the initial launch indicated several new demands and expectations from end-consumers. The product feature list had to be relooked at and revamped — we had a version 2.0 released a few months later.
6. What Works for Competition May Not Work for You
5 of every 10 conversations we have with customers would go something like this: “Look at our competitor. They came up with this awesome feature that is working well. Let’s implement it too”.
While it is certainly useful to study competition and draw inspiration from the work they do, companies today need to understand that each product or service is unique and what works well in one, may not work in another. Look at social media stories for instance — they are very popular on Instagram but absolutely tanked on LinkedIn and Twitter (at the time that I am writing this, in 2021).
My suggestion is to A/B test competition features that you believe will be a great addition to your product. But be willing to completely junk it if the A/B testing data isn’t flattering. Force-fitting features into your product and then brainstorming on use-cases that could apply to them is a sure-fire recipe for disaster.
7. Listen to Your Community
Forums, interest/fan communities, and focused groups can be a great source to understand pain-points and new feature requests. It is amazing how creative and innovative your customer community can be use. In my CX projects, about 50- 60% of fresh ideas have been identified from community posts and reviews, engaging with customers on forums, and analyzing service support tickets.
When working in the manufacturing space, closely studying the service support tickets gave us insights and context that never showed up in user research workshops or surveys. We could understand specific pain-points of end-users with the right context — all of which went into defining the fresh feature roadmap of the product.
8. And Finally, Listen to Your People
The one challenge I have noticed in most organizations is that customer facing staff are most often only reviewed on numbers and performance metrics. Very little time is spent on understanding their take on customer pain-points.
Since these employees spend the maximum time with customers, include hearing feedback from them as part of your operational process and organizational culture. You’ll be surprised to hear insights that might never have been captured anywhere else.
Conclusion
As with life, CX is a journey — not a destination. There is no one size fits all template that will work for all businesses. Everything depends on the context and the dynamics in your specific industry, which is continuously evolving. Take baby steps and use DATA AS YOUR COMPASS — helping guide and refine your course at each step.
The most important aspect though is to inculcate a CX driven culture in your organization. Once that is established, most of the other elements in the puzzle will automatically fall into place.
