Transforming Customer Experience With A CXO

With customer experience becoming more critical, what steps should companies take in order to ensure future success?

The answer maybe to hire a Chief Experience Officer (CXO).

CXO is an evolving executive role. The definition of a CXO is elusive.

• It is not a generic abbreviation for any C-level position (CxO)
• It is definitely not the stock symbol for Rancho Resource (CXO)

As early as 2006, the term described a variety of non-traditional roles. But today, the answer is more complex.

A quick search (LinkedIn and Gartner’s recent conference) finds individuals with a CXO title across multiple departments.

Just like industrial companies hiring a new executive position (CDO) to drive digital transformation, a CXO drives customer experience transformation. Products and value propositions will also change. Deploying new applications, and integrations with existing applications is inevitable. In other words, hiring a CXO is a significant cultural and operational change.

So, companies who want to transform their customer engagements, answer the following questions to help ensure a successful CXO hire:

• What problem(s) are you solving? (The Problem)
• What is the value of solving the problem? (The Value)
• How will this position solve the problem? (The Role)
• How will you measure success? (The Success)
• What type of person is best suited for this role? (The Hire)

The Problem — Information and process silos with outdated customer metrics

No single function currently manages all customer touch points. As technology becomes more pervasive so does the number of touch points.

This results in siloed (functional-specific) applications, process management gaps, plus huge volume of unmanaged and uncoordinated information. Lacking a CXO, organizations have limited ability to capture, rank and act on this information.

Traditional organizations structures and personnel have proven ineffective for digital transformations. Similarly, a customer experience transformation requires a new approach.

…outcomes tend to diminish when marketing or any other single department attempts to lead and execute ..

Outdated metrics worsen the problem.

Since 2003, Net Promoter Score (NPS) is the de facto standard for customer satisfaction. Other measures such as customer satisfaction index (CSI) or CSAT are also commonplace. Customer effort score (CES) and customer engagement index (CEI) are similarly popular.

But, these approaches fall short because they are:

• Lagging indicators (after the fact) that limit actionable value in real-time
• Not directly integrated with customer journey-related processes or applications
• Individual inputs are not account-based which is important for B2B SaaS offerings
• Not directly tied back to the buyer personas responsible to for renewals

Ultimately, the quality of a user’s experience is a much better leading indicator of churn and other customer engagement metrics. But unfortunately, one that seems to get consistently overlooked.

The Value — Improved enterprise and customer lifetime value

Customer experience can be drag or an accelerator of business results. Information silos, gaps in process management, and outdated metrics have measurable negative impacts including:

• Pilots that go on forever or do not convert (aka “pilot hell”).
• Elongated and aborted deployments
• Churn and low net renewal rates
• Lower customer lifetime value
• Decreased channel effectiveness
• Increased cost of support and acquisition
• Higher incidents of negative online reviews and social media comments
• Less referrals

It also has less obvious impacts. Employee dissatisfaction is one.

For instance, it is very frustrating when deployments do wrong. Employee stress levels increase. Being defensive about product issues can cause internal and external conflicts. This creates employee satisfaction, retention issues and productivity related cost increases.

On a positive note, recent studies highlight the benefits of improving customer experience:

• 55% of consumers are willing to pay more for a guaranteed good experience (ThinkJar)
• 84% of organizations working to improve CX report an increase in revenue (Dimension Data)
• 79% of consumers want brands to demonstrate they care before considering a purchase (Wunderman)
• Organizations with a poor omnichannel strategy retain just 33% of customers. Brands with effective omnichannel engagement programs keep 89% of customers (Aberdeen Group)
• 59% of companies see their turnover [revenue] increase faster when they prioritize investment in the customer experience (The Economist Intelligence Unit)
• Every US$1 spent on developing a CX strategy, organizations are seeing a $3 return and a boost in revenue by 19% (Avanade and Sitecore)

By lifting satisfaction, loyalty, and advocacy you deliver better business returns to the organization, such as higher customer lifetime value, improved up- and cross-sell, lower churn, greater positive share of voice, increased referral volume, and improved inbound traffic.

The Role — Orchestrator, Champion, Catalyst, Designer, Guide

Hiring a CXO is a shift away from product-centric strategies and toward customer outcomes.

Strategic Horizons describes the CXO’s customer experience transformation role as:

• (Catalyst) Bringing a “spark of energy, excitement, and action among people throughout the company” that steers culture to focus on experiences rather than products.
• (Designer) Capturing the capabilities and value of the company “ to shape them into experience offerings” (new features, products, markets and value propositions).
• (Orchestrator) Defining a holistic view of the customer experience that aligns the organization into a cohesive customer-focused whole.
• (Champion) Being the ultimate voice of the customer to advocate “for the needs, wants, and desires of customers” and to ensure that the company’s offerings deliver value on their behalf.

Customer Journey and Definitions

To achieve this, the CXO must rally the company around a clear definition of following based on the customer’s journey:

• Who (target segments and buyer/user personas)
• What (solution, business model and value proposition)
• Where (channels, providers, etc.)
• How (deployment, on-boarding, training, support, and billing)
• Why (measuring success for you and your customers)

Capturing and Measuring Success

The CXO should find the internal and external success metrics, along with the data needed to support them.

These deliverables and metrics should:

• Tie to company objectives
• Relate to each process within the customer journey
• Reflect audience segmentation as well as buyers and user personas
• Include NPS and other lagging indicator
• Introduce real-time dashboards

Dashboards allow for course corrections during the customer journey, rather than waiting to report on a fait accompli.

Finally, insights using artificial intelligence and machine learning will also prove very powerful overtime.

By 2020 more than 40% of all data analytics projects will relate to an aspect of customer experience. Artificial intelligence will be a mainstream customer experience investment in the next couple of years. ( Gartner )

Data Sources

Data will come from a wide range of sources — from internal applications to external websites. Each function produces critical information throughout the customer experience journey. Marketing and sales force automation as well as customer relationship management contribute key data points. Product usage analytics are also critical.

The Success — Phased roadmap to create, implement and manage customer experience outcomes

While there are many things to measure, defining a CXO’s success should be “Objective and Key Results” (OKR) based. The OKRs will evolve, in phases, overtime as the company assimilates this new role.

Each phase should be time constrained. Product complexity, customers, company size, and your prioritized customer experience roadmap will also drive phasing.

Phase 1

Create the customer experience framework and launch customer experience MVP.

Phase 2

Deliver a phased roadmap of prioritized capabilities, experiences and metrics based on the above.

Functional Support

Each functional group should have OKRs that support customer experience transformation. For instance, customer service should establish OKRs related to deployments. Include average time to deploy. Establish “30–60–90 day” checkpoints and other account management metrics.

Critical Success Factors

The Hire — More Like A CEO Than Functional Manager

As a new position, it will also be difficult to find candidates with specific CXO experience. Early CXO incarnations were marketing or product design leaders. But the ideal person would be more like a CEO than a specific functional leader. The best individual will bring a mix of functional and business talents to the table.

Likely, this is a hire from outside your company or even your industry. Dropping preconceptions is critical to asking the right questions and uncovering key insights.

…[companies that] bring in new leadership and make the organizational enhancements to power new digital customer relationships will be the ones that rise above the fray.

Look for individuals with experience balancing strategic and tactical activities. It is helpful if they experienced fast-paced, complex business setting at various stages of a company’s growth. Candidates with different industries bring fresh perspectives. The ideal CXO is passionate and naturally curious with strong analytical skills.

… being able to think outside the box, or at least differently from others is critical…it’s increasingly difficult to define what domain expertise…hire for outcomes …

Candidates should quickly understand and assimilate information. They should be conversant in technologies, industries, and business models. Operational experience allows them to “talk the talk” with other members of the executive team. Being able to collaborate and influence their peer is table stakes. Someone who leads by example will gain immediate credibility.

Building Your Foundation For Customer Experience Transformation

Businesses who want to improve enterprise and customer lifetime value through enhanced customer experiences, hiring a Customer Experience Officer is a great approach. But, there is ambiguity around the role of a CXO. It is new and evolving position. For many, the required organizational and culture changes are frightening.

Yet for those wanting to take on the next frontier of business growth, a successful hire will come by:

1. Clearly understanding your customers’ experience journey
2. Overcoming the information and process silos as well as outdated metrics
3. Defining customer engagement success for the CXO and the rest of the company
4. Hiring an experienced executive who looks more like a “CEO” than a functional leader
5. Implementing a phased approach with clear outcomes and results

Good luck!!