CX Demystified

What is Customer Experience, why is it important and how does it relate to your everyday work, even when you’re not customer facing?

Customer Experience is everything. I know it’s not a helpful statement when we like to divide business up into functions and silos but as we shift to systems thinking and a better understanding of organization as organism, it becomes clear that customer experience is your end to endless dialogue with the customer around the value you create.

And while Customer Experience as functions within organizations may be a relatively new (since 2010) phenomenon, the desire for a seamless, connected experience has been around since antiquity. Take the internet’s favourite meme as proof. As the viral Forbes article says, ‘Meet the worst businessman of 18th century BC’ https://www.forbes.com/sites/kristinakillgrove/2018/05/11/meet-the-worst-businessman-of-the-18th-century/?sh=16a3780b2d5d and see the first recorded complaint letter. You’ve got to be pretty dissatisfied to hammer your dissatisfaction out on stone, right?

And yet, let’s take a step back. In this post industrialized era, I believe that Customer Experience is the opportunity for organizations large and small. The customer needs to be at the center of all decision making within the organization. And yet, how should one define and think of Customer Experience? And harder still, how to embed customer centricity and critical customer value creation thinking at the heart of everything you do?

As defined by Gartner, Customer Experience (CX) is the practice of designing and reacting to customer interactions to meet or exceed customer expectations and, thus, increase customer satisfaction, loyalty and advocacy. The better the customer’s experiences, the higher the effectiveness of the CX design [1].

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CX as make or break for your business

In today’s VUCA (Volatility, Uncertainty, Complexity & Ambiguity) world, I also encourage executives of all levels to think of Customer Experience (CX) as a make-or-break factor in business performance. No longer are companies competing only on the basis of solution, product or price. Instead fluid, consistent, coordinated experiences and critical thinking strategic partnerships that add value are key.

Organizations – and brands - that are successful today have a better understanding of their customers’ needs and wants. Often these organizations have been founder led start ups where the originator is the Chief Customer Officer who has founded their organization around real customer needs and pain points. And yet, irrespective of size and scale, the impact of Customer Experience speaks for itself. For example:

• 1 in 3 customers?will leave a brand they love after just one bad experience,
• Customers are willing?to pay a price premium of up to 13%?(and as high as 18%) for luxury and indulgence services, simply by?receiving?a great customer experience,
• 49% of buyers?have made impulse purchases?after receiving a more personalized?customer experience.
• Customers that rate companies with a high customer experience score (i.e. 10/10)?spend 140% more?and?remain loyal for up to 6 years[2].

While the examples above are predominantly drawn from consumer businesses, the same story is true for business to business and, in fact, organizations of all shapes and forms.

Why? Because customers expect and, in many instances, demand a great experience when interacting with companies. And B2B or B2C, in the end you deal with the same people, albeit in different roles. Consequently, delivering a great experience is not the role of one function. Instead, to truly be successful, customer experience needs to be a deeply ingrained philosophy that must exist enterprise-wide. Ideally the CEO should be the customer’s biggest champion.

Customer Experience as the growth hack

Companies that are able to create a unique customer experience can drive growth (retain customers, increase share of wallet etc.) and reduce the cost to serve. These organizations also understand that the days of monologue are over and customers across all markets and domains expect to interact with the company and brand, taking control over their choices and pathways.

The Marketing Week CX50 forum has found that when CX is a core part of an organization’s strategy, it brings tangible benefits[3], while research by Accenture reveals that the leading 20% of companies are 2.5 times more likely than their peers to say they’re able to establish and manage a brand promise that connects directly to customer experiences.?

Indeed, a recent report from Adobe highlighted that organizations that report being “very advanced” in CX are over 3.5 times more likely to have exceeded their top 2018 business goal, in comparison to companies lacking CX maturity (61% vs. 17%). Additionally, experience is the primary way respondents cite their organization will set themselves apart from the competition over the next five years (25%), ranked above product quality (20%), innovation (13%), mobile (3%), and price (2%).

And if we consider that businesses lose a whopping €75 billion each year due to bad customer experience, is it any wonder that customer experience (CX) has become such a hot topic?[4] Despite CX being a hot top and priority KPI of most international businesses, why is there still so often a disconnect between words and actions, intent and impact?

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I believe the struggles companies today face in prioritizing and effectively embedding CX across their organizations is a combination of several key factors:

1.???? Misunderstanding what CX is and where it starts and stops – everyone in your organization should understand who their customer is but also appreciate that Customer Experience exists across the value chain. It doesn’t stop at sales. Instead, it should deepen and continue, growing to become a long-term partnership.

2.???? Thinking that CX is only for customer-facing staff - Everyone is customer facing, even if you never see a customer. From supply chain to brand, Customer experience needs to be a key consideration in everything you do. Every person is every organization is touching our customers somehow, somewhere. It has to be a mindset.? Mindful of this, organizations should realize that their people are their biggest Customer Experience asset and, ergo, employee experience is inextricably linked to customer experience. Happy employees go hand in hand with happy customers and consumers.

3.???? Lack of volume from leadership on the importance of CX – As I mentioned earlier, I believe that Customer Experience quality is possible when it’s an Exco priority. Your CEO should be your customer’s biggest champion and operate as a defector Chief Customer Officer.

4.???? Difficulty in defining where to start and how to make an impact – with such a nebulous reach, it can be hard to work out where and how to start with your Customer Experience but starting and defining your CX strategy whereever you sit in your organization is vital. I’ll write more in future articles about customer journey mapping and value stream mapping but the tips to get started below should help. Additionally utilize data and insights to see where you can make most impact while you also build in the basics. For example, this can often be found by improving customer communication. Customers will cut you some slack even if you face supply chain issues so long as you communicate in a timely and friendly fashion. Sounds simple, doesn’t it but it’s so often not the case and is an increasing problem as we continue to digitize.

And so, while I don’t want to boil the ocean, here is some advice on how to be a CX movement maker within your own role and organization.

Tip 1: Think CX as central to effective and good modern business practice.

Just as you now consider Sustainability and Purpose as central to your work, train yourself to always apply the right level of customer critical thinking to your work. Are you centralising the customer’s needs and pain points, have you built and understanding of your customer and customer experience into your strategy and delivery plan at every stage? Do you challenge yourself to see the facts and reality rather than what you’d like to see? There’s a lot of Kool Aid drunk instead of deep customer understanding and obsession and we can each take responsibility for changing this by realising that every single person in the business has a responsibility to the customer, no matter what they do. Even if you never meet a customer, you can ensure their voice helps guide what you do and why.

I often encourage people at Philips as seeing their customer as “your main KPI”.

Tip 2: Create a daily ritual that places the customer front and center

Rituals are actions that a person or group does repeatedly, following a similar pattern or script in which they've imbued symbolism and meaning. I recommend creating a daily ritual that reminds you exactly why you’re doing the job you’re doing. ?

At Philips this means that in most staff meetings, we start and have a ritual around the customer, and we start with either a patient story or a customer story again, to remind each and every one of us of why we're here every day. Starting meetings in this way really puts everyone in the right mindset, and also helps us to prioritize and work projects that are impactful for customers and patients

Customer rituals can be any form of getting closer to the customer or patient, such as:

• Starting a meeting with a short, personal story you’re comfortable to share
• Video featuring a customer/patient.
• Starting a project with customer feedback
• NPS presentations
• Result of a Customer Problem Solving session
• Monthly Customer Hour sessions with your team

Tip 3: Commit to being an active listener

We’re each predisposed to think of ourselves before others plus its easy to lose focus when navigating a variety of priorities that are sometimes conflicting. If there's one thing I’ve learned, though, it’s that if we are listen actively first then we really start to ‘hear’ and sort the signals from the noise. Only by actively listening to our customers are we properly able to articulate challenges, problems or opportunities through the eyes of our customers, all those internal complexities or politics evaporate.”?

Tip 4: Actions need to follow words

Being a customer champion and excelling in Customer Experience has a moral aspect to it and I can’t stress enough the importance of integrity; that actions and words need to match and that all roles and responsibilities must prioritize the customer.

Tip 5: Make sure the voice of the customer is always in the room

It’s hard to deliver the perfect customer experience but you can start very simply. Make sure that the voice of the customer is always present loud and clear - and is listened to - in every room and in every important decision we make. This can either be directly from the customer, indirectly through someone who really understands the customer very well or simply by using the tools like the Medallia Customer Voices app, which makes it possible to have survey feedback in your pocket 24/7. And for every project and action you’re deciding on, question how it impacts your customers.

Advocating for the customer’s voice is a massively important commitment to make. Their voice needs to be in the room and, to my earlier point, actively acknowledged. I always recommend that people challenge themselves critically, asking ‘is that really what my customer said or is it what I want to think they said.’ Listening to the voice of the customer used to be much more difficult but now we have the relationships, the technology and the data to always be a proactive, customer-centric company.”

Tip 6: Be obsessed with your customer’s likes, wants, needs, hopes.

Practicing empathy means researching and investing time in understanding your customer’s hopes and needs. This takes work but it’s fun work. Spend time wherever you can in their shoes, visiting the places they visit, read insight reports, share examples and personal stories.

Don’t make assumptions, make experiences. Remember who buys your products, pays your wages and helps you achieve your purpose. You’re only here because of your customers and you need to invest time each and every day in understanding them better.

Enjoyed my first passion piece on customer experience? Share and follow me to find out more and you’re welcome to slide into my DMs with questions, topics you’d like me to cover and your own customer experience stories. Thanks for reading and I hope you found it useful!

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[1] DeMere, N. E. (2017, May 14). 8 innovative ways to use CX metrics to create unbeatable customer experience. Retrieved from Wootric.com : https://www.wootric.com/blog/cx-metrics-8-innovative-ways-to-create-unbeatable-customer-experience/

[2] CX Maturity Correlates To Strong Business Performance, Adobe study, 2020

[3] https://www.marketingweek.com/cx50-2022-list/

[4] Forbes, https://www.forbes.com/sites/shephyken/2018/05/17/businesses-lose-75-billion-due-to-poor-customer-service/?sh=6333dbe116f9