Basic Questions About Customer Experience
The Business Strategy That Creates Customer Happiness
Why did I write this post?
First and foremost because I love Customer Happiness. I do believe that putting people at the center of every strategic decision(*) is the new frontier of future development and global competition.
(*) Disclaimer: “putting people at the center of every strategic decision” is a statement that applies to any kind of organization, not necessarily to business only.
Second, because last week I had the privilege to be invited in a company to make a presentation about Customer Happiness to a group of executives. I thought that sharing the content of the presentation (without references to the company that invited me) and the sources I used to build it could be useful for those who wish to deepen their knowledge on Customer Happiness.
Why reading my post?
Customer Happiness is the result of the successful implementation of a good Customer Experience strategy and it’s the cutting edge business strategy that can truly help any company to build a solid competitive advantage in today’s business environment.
The post is built around the answers to the following basic questions:
- WHAT is the context?
- WHAT is the concept of CX?
- WHY are we talking about CX?
- HOW can we approach CX?
- WHO works on CX?
- WHERE are the CX main obstacles?
Furthermore the post suggests four direct questions to help starting the discussion about Customer Experience and a short check list to focus on what needs to be done to lead CX improvement efforts.
WHAT is the context?
“Love your customers.”
In a context where:
- market boundaries are blurring and overlapping,
- competitors are changing,
- the most dangerous among them come from different markets,
- consumers have become digital customers,
- the progress pace is exponential,
it makes business sense for a company to focus not just on customers, but to make its customers happy.
Putting people first in the last years has become the wisest attitude for successful companies that care about their business relevance: focus on customers is broadly considered the most important strategic priority to enable profitable and sustainable long-term growth.
It has become even more important to focus on a broader category, which represents the most valuable and competitive advantage for any company: people. Focus on people makes even more sense because its meaning includes all: employees, partners, stakeholders, suppliers and also customers, friends, brand advocates, community, fans, followers …
The following two evidences reflect exactly how successful companies are managing the relations with their customers.
The first is a remarkable statement and also the first of the ten commandments of the new marketing by Philip Kotler:
“Love your customers and respect your competitors”. (Marketing 3.0)
The second are the 4 Ps of the new marketing mix created by Laurence MacCahill and Carlos Saba at The Happy Startup School (find them here on Medium) suggesting a very simple, natural sequence from Passion to Purpose, People and Profits. It’s a new marketing paradigm where companies are competing to become the best for the people, not simply the largest, the biggest or the richest.
People sharing the same passion and the same values are attracted by the same purpose and are led to achieve common results, not necessarily measurable only in terms of economic value.
There are many concrete examples showing that the best companies for people can eventually become bigger, but the current bigger or larger companies aren’t always the best for the people (and for the environment).
However according to a number of researches, these two evidences do not align with a rather common situation illustrated below.
Somehow these information describe the picture of a disconnection between what companies are thinking and knowing about their customers.
This disconnection is a business concern which has been well framed by recent Accenture’s studies. They show how the evolution of the digital Customer and its frequent hopping from one supplier to another due to poor CX, has created a market space of a huge size (they name it “switching economy”). The dimension valued in more than 6 trillion suggests that an unrepeatable opportunity is there for businesses.
WHAT is the concept of CX?
“Today product innovation is no longer enough.”
As a premise to the CX’s concept it’s worth to mention a quote by Bernard Charlès (CEO of Dassault Systèmes):
“Today product innovation is no longer enough.”
A multinational tech company commits its growing strategy of the next five years to become a company that designs experiences for their customers. It’s not just another remarkable statement, it clearly shows a consolidated business trend.
The definition of the Customer Experience includes all interactions occurring between an individual an any organization before, during and after any transaction. The crucial point is that if only one interaction goes wrong, the complete experience with that company or brand will get negatively affected.
The best way to see the Customer Experience is to consider it as the container which makes sense of all the efforts to care about the customers, the business strategy which connects the dots between:
- customer service,
- customer satisfaction,
- user experience,
- hugging and kissing customers.
There is a paradigm shift between customer satisfaction and CX. The Customer Satisfaction focus on the product or service, while the Customer Experience focus on the Customer and it aims at building an ecosphere where people are getting seamless, repeatable and good experiences at each contact point with the company or with the brand.
WHY do we talk about CX?
“CX drives more revenues.”
Because it’s been proven that Customer Experience drives greater loyalty and it’s widely acknowledged that loyalty drives more revenues.
At Forrester Research they have been studied CX for the last ten years and they built a CX index which shows how the CX champions are outperforming the best of the Standard & Poors 500 index.
So, clearly CX isn’t a bumper sticker, but an effective business strategy that already allowed Adobe, Mercedes Benz USA, LEGO, E.ON, JetBlue and many more companies around the world, to save millions.
With the CX there are three integrated benefits:
- additional sales, because loyal customers buy more frequently,
- avoiding the costs of losing customers, because more loyal customers means less customers defection,
- driving new sales with a wider word of mouth.
When competitors, markets, consumers, technology are changing continuously, focusing on the existing customers becomes the top strategic priority for every business.
HOW can the CX be approached?
“You need your customers more than they need you.”
Harley Manney of Forrester Group and author of “Outside in”, illustrates a practical method which includes six business disciplines to successfully implement Customer Experience strategy within any organization.
- Define the strategy (the CX to provide) and make sure to align it with the corporate and the brand strategy. Share it with the entire ecosphere and with the stakeholders.
- Know your customers and avoid the mistake so many companies are doing. Use customer service information, define the customer personas based on documents and data, share this knowledge with the ecosphere.
- Design the experience in a way that it is relevant to the customer, seamless, consistent, customizable, scalable on media.
- Measure the progress by defining “what” “how” “when” to measure. Make sure to connect CX performances to already existing company KPIs. Collect the information, create a dashboard to share with the ecosphere.
- Define the governance to make sure good practices and lessons learned are not lost and that good results are repeatable.
- Create the culture by defining a set of shared values focused on CX and share them with the ecosphere.
Colin Shaw a CX thought leader suggests some of the following questions to start the discussion about CX.
- What the CX you are trying to deliver? If you write down the CX you’re providing and you show it to different people within different departments, what kind of picture do you think you’ll get?
- Because decisions have a 50% component of feelings and emotions, what are those you want to evoke with your CX?
- Is your current CX deliberate? Did you plan it or is it relying on the good will of the people working with the customers?
- What are the emotional connections that you provide to compel customers to repeat the experience?
From a more practical point of view this is a quick roadmap before starting the implementation process of the Customer Experience strategy.
- Assess the current CX level.
- Define the CX strategy to provide.
- Assign resources and people to CX.
- Make sure CX projects are cross functional.
- Prove the benefits of the first project.
- Create a business case out of it and share it with the ecosphere.
An actionable approach used to assess the current CX level and some great tools.
- The design of the customer journey map is an useful tool to assess the current CX level. Mapping the different steps of the journey against each touchpoint (brand, company, service, …) is helping to create the “As Is” picture to compare against the “As It Should Be” in the future and therefore to identify what needs to be done in order to close this gap. The customer journey map is a powerful continuous improvement tool and its goal isn’t just about collecting data from customers, but to translate these information into valuable and useful CX focused actions.
- Another actionable approach is to identify the persona of the customer so as to provide her/him with the highest value. The value proposition canvas is ideal to find the perfect alignment between the customer jobs and the value provided with the service or product. The combination between the framework of the four actions from the Blue Ocean Strategy with the business model canvas, is helping to find where to create more value by reducing costs at the same time.
- The most impactful of the actionable approaches is the creation of experiences as engagement. It means providing a meaningful experience aligned with the customer expectation and building an emotional connection that compels her/him to repeat the experience.
Translated into concrete actions it means:
- making sure to listen to the customers,
- empathize with them,
- give them relevant value at each touch point
- make them happy with a consistent good experience.
When companies act always like this they show commitment, competence, skills, generosity their love for the community: this attitude inspires positive values towards the brand (trust, reliability, authenticity).
Furthermore the consistent creation of value provided at each touchpoint easily translates into a quantity of content which gets ranked in the search engines and if properly tagged, indexed with relevant keywords searches, it will inevitably contribute to keep the company among the first organic search results at zero costs. With all the benefits you can imagine.
The context created with such valuable content becomes the company’s compelling story to tell which is directly connected to its purpose and fueled by empowered people (employees, partners, friends, suppliers, customers, …) aligned with the company and brand values.
In other words, the story reflects the company ID to such an extent that competitors can even copy the service or the product, but they will never be able to copy the story because it’s rooted within the company deepest DNA. It simply shows how strategically important is the story.
WHO works on CX?
“No good marketing solution can fix a customer experience that sucks.”
Consider that positions in the executives board haven’t been always as we know them today. They evolved and followed pretty much the main technology cornerstones.
The Radio and TV boom in the ’50s created the need for a new position that didn’t exist before: the Chief Marketing Officer.
The same happened for the position of the Chief Information Officer: it didn’t exist before the ’70s and it was brought by the transistors revolution which paved the way to the computer age.
Today a company without these two positions in the executives board is unthinkable.
According to Forrester Research in the era of the customer, it’s time for companies to have their Chief Customer Happiness Officer. The position is helping to define and implement the CX strategy, to design meaningful experiences, to build emotional connections with customers, to build a compelling story which is relevant to the customers. Ultimately the CCHO helps to connect the dots between all the efforts to care about the customer.
CX projects are developed with the most cross-functional collaborative approach.
Specific CX teams are created to work closely with HR, marketing, project management, product management, customer service and financial departments.
WHERE are the main CX obstacles?
“Experience is the new brand.” (Brian Solis)
By definition CX is a cross-functional business strategy highly interconnected with every company department and it simply could not exist or score any positive result if left to work alone on customer happiness.
This short definition already describes the main obstacle to a successful CX: the culture.
A not CX friendly culture can derive from one or more of the following:
- a product or service driven approach,
- being excessively focused on process efficiency,
- giving priority to “how” things get done (tactics) over the “why” (strategy),
- considering technology (not people) the real competitive advantage,
- a weak or non existing authentic leadership,
- giving priority to short term results (profits) over long term strategy,
- misalignment of values between company and people (employees and customers).
To better understand the impact of a wrong company culture to a successful CX implementation consider this: the Customer Experience approach will never underestimate the value of your service or product, whereas by definition, the service or product driven approach will ignore the value of the Customer Experience.
In today’s business environment, the second approach sucks.
Short CX check list to focus on what needs to be done to lead CX improvement efforts:
- Define a clear CX strategy and vision.
- Share it with all stakeholders and the ecosphere.
- Define the commitment and the milestones.
- Create a compelling company culture and leadership that motivate people.
- Evaluate all the touch points between customers and brand.
- Translate the customer journey map into CX focused actions.
- Make the journey map easy to understand for everybody in the ecosphere.
- Measure the CX.
- Connect CX project results to already existing KPIs to incentivate its adoption.
- Setup best practices.
The bottom line
“CX needs to be guided, not simply managed.”
The CX is a long-term business strategy that follows the same gradual maturity path in every organization and its bottom line is to build a profitable and sustainable platform which:
- drives greater loyalty (additional sales),
- reduces customer defection (reduced costs),
- creates a great place to work where to live great experiences,
- has a positive impact on the larger community (happiness),
- allows the company to fulfill the responsibility to build a better future.
Customer Experience is ultimately the perfect leverage for any organization to build a legacy.