A few years ago, Forrester declared that we have entered “the age of the customer” — a fundamental shift of power away from businesses to customers who now have the resources to get what they want, where, when and how they want it.
These empowered customers are changing how business is done, whether companies are ready for it or not. The ability to cater to these customers has put Customer Experience (CX) front and center.
CX is the new competitive battlefield where, according to Forrester, companies have “to keep up with CX leaders, rethinking how they define customer journeys, organize to understand and meet customers’ needs, and measure their ability to deliver satisfying CX. “
This is putting pressure on brands to measure and improve CX, and deliver experiences that customers love.
But what’s a CX professional to do? What are the top challenges that CX professionals are facing? And, how are they tackling these challenges?
Through my years as a CX consultant, I have seen the good, bad, and ugly of CX. In my experience, there are three factors that are required for CX transformation. And the research (see below) backs me up. Nail these and you can win in the age of the customer. If not, you are in for some frustration and woe.
Let’s get started.
1. Getting C-Suite buy-in to CX
CX professionals list getting C-suite buy-in to become customer-centric as a huge challenge.
This is understandable.
If the organization is large or the current culture makes customer centricity a challenge, that means getting an organization to adopt CX will require significant changes.
A myriad of questions tend to pop up.
Do we have the right personnel? Do we have the right technology? How will this change how we do business? How will this impact our financials? The list goes on.
And, becoming customer-centric has to occur before you can even consider planning for and implementing a strong CX program.
It will take a lot of time, energy and resources to get CX implemented when there is no guarantee that an untested program will result in revenue and growth goals being met.
Let’s face it. Change is complex. Even if you are the CEO, you won’t be able to make this happen on your own.
How to nail it:
The golden opportunity I found is in educating a C-Suite that wants to learn.
Some leaders won’t get CX until it is too late, and they’ve lost revenue, customers and market share. They fail to understand that CX-driven companies grow revenue faster than laggards that are slow to change.
Some leaders will get CX and its importance. They listen when Forrester says that CX leaders grow 5X faster than laggards, and will welcome training on how to improve their CX.
So, whatever your role — CEO, Executive Director, CMO — it is your job as champion of CX to educate the rest of the team.
Things that I’ve done to help this training along include:
- Provide case studies of brands in the organization’s sector to show the results it could achieve.
- Provide the C-Suite with statistics from sources they trust on the benefits of CX.
- When educating different functional leaders, share what their peers in the industry are doing and how improvements in CX will support their goals. For example:
What to share with a CIO about the value of CX
When speaking with the CIO, share that according to recent Deloitte research, CIOs of high performing companies (HPC) are more actively implementing technology and establishing partnerships to create compelling experiences. They are building systems that attract new customers and engage existing ones. And, while 66% of HPC CIOs are focused on delivering a seamless CX, only 43% of non-HPC CIOs are doing the same.
What to share with a CRO about the value of CX
When speaking with the CRO, share that, according to Forrester’s CX Index, a one-point gain in the 2015 CX Index was found to be worth $175 million in additional revenue to a wireless provider, $118 million to a luxury automaker, and $65 million to an upscale hotel chain. And, according to Temkin Group, CX leaders have more than a 16 percentage point advantage over CX laggards in consumers’ willingness to buy more, their reluctance to switch business away, and their likelihood to recommend.
What to share with a CFO about the value of CX
When speaking with the CFO, share that according to McKinsey, brands that improve their customer experience see revenues increase by as much as 10 to 15 % while seeing lower costs by 15 to 20% to serve these customers.
Know your “internal customer.” Listen to them. When you know what motivates them, you can frame information in a way that resonates with them.
Midmarket and Enterprise take note: Startups get CX
One segment that I’ve found to have a keen interest in CX is startups.
I see more startups wanting to place the customer at the core of the business. These same startups also want to implement best practices early so they are in place when the startup scales.
SaaS startups, especially, understand the need for growth and want to achieve as much growth as possible. They understand their survival depends on it.
They also understand that recurring revenue must be maximized and churn must be minimized.
And, they realize that CX is the competitive advantage they need to be able to meet their goals.
Here is one example. I worked with an early stage medtech startup to improve its growth efforts. The startup had issues with getting users to start using its product. Acquisitions were respectable but it was having issues with retention. We created and implemented a customer success and CX program that included engaging customers from onboarding through key touch points at every key phase of the customer journey, measuring performance and producing associated playbooks. The improved engagement drove retention and loyalty to a point that got the attention of investors who funded the startup.
2. Cross-functional accountability is the key
Another area of concern for CX professionals is inefficient organizational structure and processes. This leads to lack of support and misalignment between departments.
The result is a disjointed CX, filled with plenty of silos.
To be successful, the CX function must be centralized and thus be championed by the CEO, or the CEO and the Chief Customer Officer (CCO). In fact, the CCO role is gaining steam because organizations are realizing that to become customer-centric requires a new way of thinking and leading.
I can’t tell you how many times I have gone into organizations where Marketing is driving CX. Or attempts to drive it. Typically, this approach doesn’t turn out well.
The fundamental problems are two-fold. First, Marketing is not involved in all phases of the customer journey. Sales and Customer Success/Support are dealing directly with customers. Second, Marketing still puts more emphasis on acquisition than retention, even when it has been proven that growth occurs in the post-purchase phases of retention, loyalty, and advocacy. If CX efforts are siloed in Marketing, the result is often disjointed.
For CX to be successful, it must occur across the organization. Its goal is to provide the framework for an organization to be able to deliver a consistent, personalized experience across all channels and touchpoints.
The entire organization is supposed to ensure that customers receive the experience they want.
That means that every employee – from leadership to the front lines – needs to understand what the organization’s CX vision is, why it is important, how their specific role fits into that plan, and take ownership to generate optimum results.
That’s a wide load for Marketing alone and why in a recent CMO Council and Deloitte study, only 6% of CMO respondents said they are defining routes to revenue across all facets of their business globally.
How to nail it:
The best way for CX to become centralized is to take a cross-functional approach, with either the CCO or other C-suite executive driving it. In this way:
- Focus stays on the customer journey, thus alleviating silos
- More human-designed efforts and decisions are geared towards the customer, which removes any agendas
This is the exact path I took with a company in the online storage space. With backing from the CEO, we established a cross-functional project team and obtained team member buy-in to ensure the team rowed in the same direction. One way we did this was to tap into each team member’s talents so they felt they could be creative and innovative. We also balanced work assignments among team members. Working in this way ensured tasks were completed effectively and on time.
3. Advocacy is what turns CX into revenue
Finally, let’s talk about advocacy — engaging both employees and customers in driving your brand.
Temkin Group found, in its 2016 Employee Engagement Benchmark Study, there was correlation between employee engagement efforts and CX success – “CX leaders have 1.5 times as many engaged employees as do CX laggards.”
Yet, according to Gallup, 87% of global employees are not engaged.
On the flipside, Temkin Group found that 77% of customers of CX leaders would recommend the company to others.
Yet, according to Marketing Charts, only 20% of brands have a formal customer advocacy program.
Advocacy tends to get forgotten.
I find that surprising and disappointing because advocates can help companies grow 2.5 times faster than their competitors.
A study published by The Forum for People Performance Management & Measurement at Northwestern University found that “there is a direct link between employee satisfaction and customer satisfaction, and between customer satisfaction and improved financial performance.”
Advocacy programs help your organization in two key ways:
- customers and employees collaborate on content that will help new and existing customers travel along the customer journey
- customers and employees help drive new sales and additional cross-sells/upsells into the organization
Your advocates are your extended Marketing and Sales team that helps you be more productive.
I find advocacy to be the biggest opportunity for CX professionals to leverage. And, when Marketing and Sales see the benefits, they are more eager to participate.
How to nail it:
Power up advocacy programs that tap the passion of your promoters, be they employees or customers. Find a strategy that is right for your organization.
One way is to develop a single program that engages both. I worked with a mid-level education nonprofit that caters to the K-12 market. The K-12 sector is interesting for CX as school districts are now focusing on career readiness and providing a comprehensive student experience. The nonprofit was not engaging with teachers and students. To move to an engagement model, employees went to the schools and interviewed teachers and students to learn how they were using the nonprofit’s program and materials, and how we could improve their experience. As a result, we implemented a voice of the customer initiative, an aggressive social media program, online chats, and co-created video and blog content. These advocacy activities resulted in a 30% lift in new revenue and 60% increase in existing revenues!
Separate advocacy programs can also work well. My colleague Stacy DePolo runs advocacy at GoDaddy. She says, “At GoDaddy, and at many companies in the tech sector, our employee advocacy program focuses on recruiting, while our customer advocacy program focuses on prospecting. There is linkage because content is shared, but we keep them separate because each serves a different purpose.”
Educate and champion CX
CX leaders must take on the role of educator to have impact. To do so, they must understand what motivates and drives their “internal customer” to be able to align their behavior around CX. As Zig Ziglar notes, “you will get all you want in life if you help enough other people get what they want.”
Sue Duris is Director of Marketing and Customer Experience at M4 Communications, a Palo Alto, CA-based customer experience consultancy that helps startups and nonprofits grow their brands. She writes and speaks often on marketing and customer experience topics.
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