Customer And Employee Experience Are Crucial For Your Business: Here’s Why

The following is an edited excerpt from the book, It’s All about CEX!: The Essential Guide to Customer and Employee Experience, by Jason S. Bradshaw.

If you do a Google search for the term customer experience, you will get over a billion results. If you search for employee experience, you’ll get around 460 million results. Clearly, many people like to talk about these subjects, but somehow, organizations continue to struggle with them.

Read the annual report of any top-twenty company in any market, and you’ll see periods in which they talked about transforming their business by focusing on customer experience. You’ll also see that these conversations usually go on for two or three years before leaders stop talking about it. Short-term goals often distract leaders from the long-term experience playbook. I sympathize with this struggle. Having spent most of my adult life in the corporate world, I know how tough it can be to juggle the demands of this quarter, half, or year with the long-term strategy of experience.

Rather than trying to make sudden, dramatic company-wide changes, adopt the simple approach of being a little bit better every day.

What’s The Problem?

In this book, we will explore why experience matters and why it’s such a struggle. Through the examples of successful companies, you will see how a relentless focus on delivering better experiences creates sustainable improvements to your business.

Forrester Research released a report in 2017 called “ROI for CX Transformation,” based on research into the impact an investment in CX makes on a business. Their conclusion is that in the American market, a one-point improvement in a company’s CX index would result in an $873 million increase in revenue for a company in the automotive market, $244 million for a big-box retailer, and $124 million for a traditional bank.

All of this from a one-point improvement in customer experience. What would a 1 percent improvement deliver in your industry?

Think about your organization. Unless you’re the leader in your industry, there are no doubt many ways you could improve the experience you deliver to both customers and employees. You are potentially leaving a lot of revenue on the table for your competitors to scoop up.

If you knew for a fact there was more revenue you could potentially capture, how much would the number need to be to get your attention? Ten percent of your current profit? Would $1 million, $5 million, or $100 million be enough? What amount would inspire your team or business to reach the next level? To capture an unfair share of the market opportunity, you just have to move faster than your competitors in delivering a consistently better experience.

Improving customer experience will not only prove profitable today, but it can also sustain your business during times of struggle. If you create raving fans, they will be more likely to stick with you if you experience a catastrophic problem in your business, industry, or economy.

The same holds true for employees.

Research reveals that the cost of losing an employee is at least half their annual wage, due to the expense of recruiting a replacement and training them to become effective in the role. That number is probably understated. Either way, it is money that is better on your bottom line. When you deliver a better experience for your current team, people will want to stick around, which saves you time and money. I also believe that the experience you create for employees has a direct impact on the experience you deliver to customers, so the two are inextricably linked.

Think about the last time you were having a bad day. How hard was it to appear positive to everyone around you? If employees have a negative attitude because of their employment experience that day, week, month, or year, it’s going to spill over into the experiences of others.

If you want to allocate resources into one area that will have the broadest and most profound impact on the success of your business at every level, focus on improving experience. Begin by focusing on the experience of your team members. When you create a more fulfilled, satisfied team of committed employees, that will translate into improvements for your customers, and in the end, you will transform your overall business in ways you’d never imagined.

Focus On The Bottom Line

Some managers think experience is the “fluffy stuff,” because chief customer experience officers don’t always take a commercial view of the work they do. Historically, the focus has been on creating individual touchpoints with customers, such as greetings. While these kinds of moments are important, they fail to view experience as a primary factor in helping a business grow and remain profitable.

As CX and EX professionals (or, as I like to call it, XM: eXperience Management), we must begin to link our work to the commercial outcome of our organizations. When you do that, you not only reinforce the work you do, but you also ensure you have a legitimate seat at the executive table by contributing to along-term business result that makes shareholders happy. Customer and employee experience provides a massive return on investment if done in a sustainable way that grows repeat and referral business.

Of course, everything you do in customer experience doesn’t have to create an immediate commercial impact, but you have to be able to demonstrate ROI. When you can show that customer experience delivers a positive impact to the brand and balance sheet, you will be able to ask for more investment.

When executives understand the ROI you deliver, they will be more willing to provide the resources you need to accelerate your programs even further. I would love to give every new recruit in my organization free lunch for a month or the latest shiny object that we sell, but the return wouldn’t necessarily justify the investment. Having said that, of course, providing ways for new recruits to connect with the brand, its heritage, its future, and its products is important. Later in this book, we will explore how a company can do this — and yes, sometimes it includes a free lunch.

Another trap XM professionals fall into is believing their own press, convinced that their program is always right. We must always look critically at our programs and tweak them so they continue to deliver results. Doing this constantly reinforces the notion that what we do contributes to the bottom line.

Then again, even some of the softer skills of customer experience, such as the way you greet people or manage communication, are important and difficult to deliver sustainably. Like everything else, improvements must be rolled out in a commercially sensible way.

Unusual And Outrageous Ideas

As products and services become more global, organizations are becoming more similar, making it increasingly important to create a differentiated experience for employees and customers. Some companies are trying concepts and ideas that previous generations would have considered unusual or even outrageous. For example, it is widely reported that Google provides employees with the freedom to spend up to 20 percent of their working time on so-called side projects. These side projects don’t need leadership approval and can be big or small. Some of them have led to products we now use every day, most notably Gmail. That’s the kind of differentiation that makes them stand out as an employer.

Many companies are doing great work in humanizing the customer experience during times of devastation, such as financial companies forgiving loan payments when a loved one has passed away or phone companies providing free mobile services during a natural disaster. These organizations understand that the experience they deliver will create long-lasting memories that will sustain them in a way they can feel proud of.

Consider Zappos, the well-known American shoe and apparel retailer. They’ve become famous around the world for their customer experience. In fact, if you do a Google search for “Zappos’s customer experience,” you will get more than 2.7 million responses, the vast majority from customers gushing about their interactions with the company. The CEO of Zappos, Tony Hsieh, has talked at length about their success, which he attributes largely to the culture they’ve created in the organization.

During an interview with Micah Solomon at Forbes, Hsieh emphasized the effort they’ve made to create and sustain a culture obsessed with customers. Famously, they pay employees to leave the company if they aren’t fully on board with the culture. That speaks to the power of the organization, and they have enjoyed years of significant growth, resulting in their acquisition by Amazon.

As a testimony to the strength of their culture, they’ve managed to keep it intact even after becoming part of a larger organization. In fact, even though I live in Australia, I wait until my trips to the United States to buy shoes from Zappos because I know I can trust the experience. They have earned my loyalty in everything they do. The consistency of the experience they deliver means that even in countries such as Australia, where they don’t operate, they are still routinely referred to at customer experience conferences as a case study.

I visited Zappos for the first time in 2008, but I’d already spoken to them beforehand through their Twitter account. On Twitter, they gave me hotel recommendations. Can you imagine? A shoe company giving me hotel recommendations on social media! While I was writing this book, I decided to test them again, so I tweeted at them, told them I would be staying at the Ritz-Carlton in Marina del Rey, and mentioned that I needed a haircut. True to form, Zappos’s Twitter account gave me three recommendations for places to get a good haircut. Of course, they aren’t experts in the haircut industry, and they probably used Yelp to find their recommendations. Still, they demonstrated their focus on creating and maintaining an ongoing connection with me. This approach speaks to how deeply ingrained their customer-oriented culture is in every part of their organization.

In 2018, I was urgently in need of a particular style and color of Nike shoe for an upcoming event. I sent the company a tweet, and they replied that they didn’t carry that particular item. However, they told me they had located what I was looking for at another store, a competitor, and they offered me directions.

They understood that a friendly gesture, even if it sent me to a competitor, would contribute to my sense of loyalty and advocacy. After all, here I am praising Zappos rather than the competitor I ultimately bought that pair of shoes from.

Can your company, can your team, can you become this obsessed in helping customers achieve success?

Which-50, an Australian news service, interviewed me recently and asked, “When it comes to customer experience, whose responsibility is it?” The answer is clear. It’s the responsibility of every single person at the organization to ensure that the experience they deliver both internally and externally consistently aligns with the culture. Every interaction with a customer at every level matters.

Ten to fifteen years ago, organizations were furiously debating about the necessity of customer service. Some wanted to sideline it because they saw customer service as a cost center rather than a change agent in the business. Since then, there’s been a significant push to make customer service, and the long-lasting memories an experience creates, at the forefront — a trail blazed by pioneers such as Jeanne Bliss, who in many respects created the chief customer officer (CCO) role.

For a CCO, customer experience ensures that the company grows through repeat and referral business. After all, word of mouth is the cheapest and loudest form of marketing.

Thinking Long Term

United Airlines provides a clear example of what happens when an organization fails to maintain a long-term focus on customer experience. In 2017, the airline gained international attention when a customer was aggressively removed from a seat he had legally purchased. Video footage of airport security dragging him off the plane went viral and led to widespread condemnation.

In May 2017, the CEO publicly vowed that United Airlines would become more customer-focused, but in 2018, the airline hit the news again when a family pet died in transit, allegedly as a result of its handling by the company. This goes to show how challenging it can be to transform customer experience. As I said, it takes a commitment at every level of an organization.

I’m not suggesting that companies have to maintain a perfect track record. Every organization is run by people, and people are bound to make mistakes from time to time. However, two very public, very negative customer interactions in two years is cause for alarm, especially because the CEO had already publicly committed to focusing more on customers.

This is what happens when you don’t invest enough in experience starting at the senior level. By the time the neglect becomes apparent, the damage is done, and it can’t be fixed overnight. In the case of United Airlines, it created the appearance that a promise was made and broken, which is calamitous for customer loyalty. Of course, I believe that any company has the ability to transform over time and become famous for the (positive) experiences they deliver.

On the opposite end of the spectrum, we have the example of Southwest Airlines, a company that has been relentless in delivering a phenomenal customer experience from day one. Southwest was established in 1967, and they are the only long-term airline in the continental United States to make a profit every single year, even though they are a value-based airline. They’ve accomplished this feat by focusing on, first, delivering an excellent experience for their employees and, second, translating that into a high-quality consistent for customers.

Weathering Missteps

It’s important to remember that being obsessed with customer and employee experience isn’t about always getting it right. There is great value in learning from failures. When a company is truly obsessed with customer and employee experience, they build a reputation that allows them to weather the occasional misstep. Southwest has had their own missteps and public criticism. There is even a Twitter account, @Southwest_sux, where people regularly share their frustrations about the airline. In an example of a misstep, Inc.com reports that Southwest Airlines landed at the wrong airport, seven miles away from its intended destination. As a result, they are being sued for $74,999. Despite this misstep and others, the brand has established itself as a leader in customer experience among low-cost carriers.

In 2018, they were rated highest in customer satisfaction in the J.D. Power 2018 North America Airline Satisfaction Study. In the same year, they also won the TripAdvisor Traveler’s Choice Award for airlines. The company’s enduring focus on customer and employee experience allows them to continue to grow and, importantly, overcome their missteps.

Southwest might not be the airline for everyone, but it doesn’t have to be. All they have to do is keep the promises they make to customers and employees by maintaining a crystal-clear focus on the experience, constantly communicating it throughout the organization.

Investing In The Community

For an Australian example, we can look to the home improvement store Bunnings Warehouse, which is by far the biggest hardware store in the nation, similar to Home Depot in the United States. Bunnings has had a number of competitors, including Masters, a joint venture of Woolworths and Lowe’s. Masters was founded in 2011 but closed its doors in 2016. Although a number of factors contributed to the failure of Masters, one of the clear differentiators at Bunnings was the customer experience. Team members at Bunnings are easily recognizable, and a customer can always approach them to ask for help. Team members will either point the way or lead the customer directly to the item they need. On the other hand, Masters has more of a self-service model. In my numerous trips to the store, I never once saw a team member leading a customer to an item. While the self-service model might seem appealing, it also makes customers feel less appreciated.

Bunnings invested in a better customer experience, an experience based on consistency and ease. At the same time, taking a page out of Ace Hardware’s playbook, they embedded themselves in the community, serving in various ways in the cities where they are located. It’s not just about the friendly greeting you give when customers walk through the door. It’s also about the ways you interact with the community around your business. It’s about becoming more than merely a retailer.

Every Bunnings across the nation offers space for charity groups to have barbecue fund-raisers, where they can cook the typical sausages and onions while raising money for their cause. In fact, it has become an Australian tradition to go to Bunnings for a sausage to support the charity of the week. They have created a powerful touchpoint with Australian communities that strengthens the brand, doing far more to create customer loyalty than competitive pricing alone could ever achieve.

Of course, Bunnings is not without its competition. They still have to contend with companies such as Home Timber & Hardware and Mitre 10. While Bunnings is arguably the most recognizable home improvement retail brand in Australia, they don’t rest on their laurels. They remain passionate about their customers.

Customer satisfaction benchmarking completed by Roy Morgan in 2017 showed that Bunnings is number one in customer satisfaction, with a score of 89 percent, an increase of 0.1 percent from the previous year.

Even though 0.1 percent might not seem like much, it shouldn’t be scoffed at. Most companies would love to have a customer satisfaction score of 80 percent or more, but Bunnings clearly continued to tweak and improve their approach. At the same time, Home Timber & Hardware dropped 0.4 percent.

The home improvement market is a tough one that requires consistent elevating focus, and Bunnings has become the market leader not simply because of their products but also because people trust them to provide a good experience with every interaction.

Disrupt Yourself

Customer experience, sales, service, and business thought leader Scott McKain, on his Project Distinct podcast, reminds us about another company that has suffered as a result of disruption: Gillette. The pioneers in disposable razors, Gillette enjoyed market leader advantage for many years. However, their focus drifted away from the customer, which paved the way for a surge of disrupters such as Dollar Shave Club.

Although they are the founders of the disposable razor, Gillette has been losing market share in the very product they invented because they’ve made it difficult for customers to obtain the product. When you walk into a supermarket, Gillette razors are often locked in a display case so they won’t be stolen.

These disruptors looked at the friction points of the typical retail disposable-razor product and removed as many negative interactions as possible. To buy a humble disposable Gillette razor, you often have to find someone with a key to the cabinet they are stored in, or battle a safety mechanism to remove it from the shelf.

Compare that to Dollar Shave Club, which has not only made their razors affordable but also ships the product right to the customer’s door every month at the same time. Whether or not the product is superior to the Gillette product, they’ve delivered an experience that is a huge differentiator, making ease of access their primary concern.

If you identify friction points with your products or services faster than your competitors, you can act quickly to disrupt yourself before anyone else gets the chance. Doing this safeguards your business against disruptors.

Think about your own company. Is there a different angle you can take on the experience of acquiring your product? The subscription model of Dollar Shave Club might not be right for you, but is there another way you could make it easier for customers to get it?

The taxi industry provides another example of what happens when nothing is done to address friction points in the customer experience. As a result, Uber, Didi Chuxing, and Lyft have created a completely different experience by embracing the sharing economy. Like taxis, they still get people from point A to point B, but they use mobile devices to make it easier and more convenient. The opportunity existed because the taxi industry, despite having plenty of drivers who were great at their jobs, stopped focusing on the customer experience.

Uber, Didi Chuxing, and Lyft also improved the payment process. No longer did customers have to pull out cash or a credit card, because payment is handled entirely through apps. Not only is this more convenient for customers, but it’s also safer for drivers, who no longer have to carry cash in their vehicles to make change.

Friction is the enemy of positive word of mouth. If you fail to take advantage of opportunities to eliminate friction points, there’s a good chance a competitor will. Consider how the news and newspapers have been disrupted by social media. Consider how major airlines have been disrupted by JetBlue and Southwest.

Take a step back and look at your own company and industry. Find ways to deliver from a different angle; consider ways to remove friction points. If you can do that, you will stand out from the pack. Customers will notice and begin to tell your story.

For more improving your customer and employee experience, pick up It’s All about CEX!: The Essential Guide to Customer and Employee Experience, by Jason S. Bradshaw.