One Reason Your CX Strategy Is Not Working
When it comes to creating a truly omni-channel customer experience, do traditional department divisions in companies still make sense?
You’ve likely seen the quotes: “The customer experience is everyone’s responsibility.” This can be an incredible asset to a company if a real effort is made to permeate this through the entire business. If they invest in training each employee on how they can bring this into their daily work flows.
But is it so easy?
The problem faced right now
A recent study revealed that only 9% of CMOs view themselves as owners of the customer experience, and only 7% of sales people thought the same. (Source)
A diffusion of responsibility seems immediately apparent. The common behavior in a group of people, and increasing in larger numbers stemming from the thought of “Someone else will step forward.”
Another incredibly surprising finding revealed that more than 75% of companies say their number one priority was to improve customer experience (Source). Hm. Then there’s obviously an issue of execution.
It comes then as no surprise that only around 1% of brands are delivering an “excellent” experience and 26% a “good” experience, with a whopping 81% of firms having an immature customer experience program. (Source)
So what action can be taken?
A closer, collaborative working style between departments, particularly between sales and marketing teams with a clear understanding that all share the responsibility of a great customer experience.
Let’s take a look at this approach more closely, with some real-world examples.
A company — particularly management — might be quite content with the way their business is performing cost-wise, and/or shy away from a drastic change at the risk of failure.
While this is completely understandable, if they really want to begin competing on customer experience — which according to some of the greatest minds in business strategy “is the new competitive battleground” (Gartner) — they should be going all-in with their efforts.
This doesn’t necessarily mean simply throwing money at it, but dedicating time to it and genuinely believing the benefits will be worth the effort.
Supporting companies on this journey each day here at LHBS has lead us to a tried-and-tested method for making customer experience everyone’s job.
A simple overview of this method goes like this:
Discover — In-depth customer research to know exactly who your audience is, what they need and how they want their relationship with your company to be.
Define — Definitively deciding on a customer experience strategy, your company’s core ambition, your value proposition and what it is that sets you apart from the rest.
Develop — Begin taking everything one step further and — before rolling out — apply all the work developed so far to create real, tangible action-steps.
Deploy — The big roll-out. This is where you need to also take care by rolling out all your hard work so it has the most effect, and doesn’t get swept under the rug as just another C-suite announcement. Think about informing, aligning and involving key teams in a well thought out process.
Brands who made CX everyone’s job
Here’s just a small handful of ways we’ve seen the customer experience successfully brought into employees’ roles:
Giving employees more stake in meeting customer needs and expectations (Publix), and treating them more like equals (John Lewis).
Facilitating department-focused training to give each and every employee action points to bring customer experience activity into their daily workflow (Cleveland Clinic).
Smoothing out communications between departments for quick responses to create unique customer experience moments (Brand24). Here’s just a small story from Brand24 to demonstrate the kind of potential that easier communication can have.
A Brand24 team member was once traveling on a train from Kraków to Warsaw, when he noticed another passenger browsing the pricing page of the Brand24 website.
He promptly let the CEO know, and within a few minutes, the programmers had added an announcement bar to the pricing tab saying “The man traveling by train Smok Wawelski Kraków -> Warsaw, seat 23, car 18, gets a 15% discount on any subscription plan”.
It was of course widely shared as an awesome example of quick decision making and communication to make just one potential customer smile.
The FAVI case
Here, we have a pretty incredible example of a CEO who really went ahead with the all-or-nothing mindset, and completely transformed an entire company as a result of his unwavering belief in the power of an exceptional customer experience.
Jean-François Zobrist took over FAVI — a 600-person French automotive components manufacturer — in 1983, and the next day went to the factory and gathered all employees. He said:
“tomorrow when you come to work, you do not work for me or for a boss. You work for your customer. I don’t pay you. They do. Every customer has its own factory now. You do what is needed for the customer.”
His first move was bricking up the large window overlooking the production floor, immediately instilling a trust in his employees on the ground. He then went on to abolish the personnel, product development and purchasing departments. He removed time-clocking systems and bonus systems, unlocked storage rooms and cabinets, made all beverages in vending machines free and halted the annual managers-only annual lunch.
Instead, multiple smaller teams were formed within the company, or “mini-factories” each comprising of around 25 to 30 people from each departments. Each “mini-factory” also has it’s own leader, just one, and each are dedicated to a different client. This meant every client essentially had an entire company working for them, and didn’t have to share them with any competitors.
Instead of a never ending hierarchy of operators, supervisors, assistant managers, managers, senior managers, C-Suite etc. FAVI was reduced to just two levels. Operators and leaders.
Performance soared. Trust between employees and leaders was at an all time high and employee turnover at an all time low. Average production time for main products decreased from 11 days to 1 day. Nothing was ever late to the client and prices were never raised. They gained a yearly 20% net cash flow (minimum!) which was maintained for 25 years. They gained 50% of the European automotive market share.
Things were good to say the least. All because the customer was truly at the heart of the business, and employees were motivated by them instead of by promotions and bonus schemes.
Things unfortunately slipped back into a more “ordered” manner when Zobrist left the company in 2009, due to new shareholders who insisted on a more structured way of running things.
Though his successor strived to maintain the culture built up by Zobrist, efforts failed. Their once famous 20% net cash flow dropped to 15%, then 10%, 5% and is making its way towards the big 0, with shareholders increasing control as the number falls. Zobrist commented on this sad turnaround, saying that
“Subsequently, the increased control led to unhappy workers leading to poor results. It’s a vicious circle. To me this is the prove that there is a direct relation between the happiness of productive people and the net cash flow. Happy workers make happy customers who make happy shareholders.”
The Telstra case
Dive deeper with our Telstra research report
Instead of a cultural shift within the company, some businesses have begun by first implementing software solutions. A great example of this can be seen at Telstra. While they did also begin to roll out customer experience as being every employee’s job, they began by creating a more efficient and effortless customer experience using technology solutions before focusing on the mindset of the business.
Some examples of the changes they made include:
- Created a single source service which led them to begin gathering feedback of over 30,000 customers each day to improve the customer experience.
- Began sending around 80,000 messages each day to customers who had interacted with their customer service team with the representative’s name and contact details.
- Launched an app for 24/7 access to support including a live chat, and easy account management.
Their internal “Snap App” was downloaded by all employees and enabled them to fast-track anyone they liked to the priority service center. Most often this is their friends and family, or someone who has a high likelihood of complaining publicly or leaving the company due to their complaint.
Was this perhaps because of the company’s size? Is it that easy to roll out a new company culture in such a well-established business?
Haier certainly managed this.
The Haier case
One of Haier’s most dramatic changes occurred in the 2000s, and saw the reorganization of the company from a top-down to a bottom-up structure. This meant the introduction of self-managing teams leading all decision making.
An influencer of Zhang Ruimin (CEO and chairman of Haier) was management writer Peter Drucker, who believed meeting customer needs is the priority of any business, even above making money.
How did Zhang shift this focus of his employees from money-making to quality and value for customers? One way can be seen in one of his most famous episodes in his career, which occurred soon after he took up the post of CEO back in the 80s. He read a customer complaint letter about a faulty refrigerator, and in his own words:
“I called people from quality control down to the warehouse with me. We had just over 400 refrigerators in the warehouse. We inspected them one by one. If they had any problem whatsoever, we pulled them out. We ended up pulling out 76 problem fridges. I had to change the perception [of our quality]: If products left the factory, they should be first rate.”
These refrigerators were then lined up outside the factory, and employees were encouraged to publicly destroy them with sledgehammers, sending a clear message to everyone.
This most recent change was brought about by Zhang’s desire that every employee felt closer to the customer. Switching from the traditional top-down to a bottom-up structure saw the creation of ZZJYTs, an abbreviation for zi zhu jing ying ti, which translates to independent operating unit.
Each unit consists of around 10–20 people from various functional roles and come together for a specific mission, and employees are able to apply for whichever peaks their interest. Each unit has their own accounting systems and responsibility for hiring and firing, setting rules surrounding expenses and bonuses and making operational decisions.
Each set of units are then divided into three tiers. The first is customer-facing, tasked with understanding customer needs and providing the right products.They consist of sales, R&D, marketing and finance people. The second supports the first tier with guidance and resources and the third are made up of business division and functional managers who set corporate strategies and direction for the entire group.
This setup minimized the number of decisions that had to be made by higher-level staff, enabling the company as a whole to become more responsive to emerging and high-potential market needs.
The result is autonomous teams who are all passionate about the projects they work on, who have a huge degree of accountability and knowledge of their end customer with minimal barriers to achieving their goal of delivering customer value.
Fu Haining, chairman of LongLongigo group who operates Haier retail stores in China commented on this system of not simply offering employees jobs, but a continuous series of opportunities to find jobs, saying:
“In the beginning, it can be a little painful, because the culture of constant challenge can make you feel like what you’ve done, what you’ve achieved, isn’t recognized. Later, you come to realize that this is what it takes to stay ahead in an extremely competitive market.”
While these accounts may seem like special cases and incomparable to your own business, we’re hearing more and more just like them each day we conduct our research of brand innovations and transformations.
In just a few years, the focus of executive managers is shifting, with the majority now acknowledging customer experience as the real differentiator from competitors in the not-so-distant future.
Have an inspiring story for us about your own business changes? Big or small? We’d love to hear about it!
For now i’ll leave you with a wise quote by Anatole France:
“When a thing has been said and said well, have no scruple. Take it and copy it.”