Reestablishing the Customer Experience Discipline

In the last five years, the concept of customer experience (CX) has become overused. It's meaning has become diluted. Customer experience is now synonymous with surveys, customer service, customer support, customer success, and even sales and marketing. 

Customer Experience is the perception of customers having of an organization, one that is formed based on interactions across all touchpoints, channels, people, and processes over time. Thus, Customer Experience is a strategic pillar in an organization equally as important as finance, marketing, or product management. CX manages the customer value metric, equivalent to revenue metrics. Its head department is the Chief Experience Officer, who bridging the silos.

Customer Experience manages the Customer Value metric

Who is a Chief Experience Officer (CXO)?[1,2]

The CXO helps the organization drive the entire customer experience, where experience encompasses organization's products to how it delivers services. They are tasked with ensuring that each aspect of the business contributes towards a positive engagement between the brand and customers. They bring value by bridging organizational silos and aligning an organization culture to deliver differentiated experiences.

Elevate the visibility and advocate CEOs to bring the Chief Experience Officer on board to unify the experience delivery.

A CXO's Main Objectives

1. Develop knowledge and understanding of customers across the organization
2. Drive deliberate, disciplined design and delivery of experiences to customers and employees
3. Reveal the customer perspective and make sure it is considered for all topics and projects of the organization
4. Measure the impact of customer experience on employees, the impact of employee experience on customers, and the impact of both on the company's KPIs
5. Create connections between customer experience and employee experience by promoting the culture of customer orientation internally

The Five Practices of Customer Experience

Experience Design 

The notion of the customer journey is overused and has lost its effectiveness because it has been adopted generically. In order to truly capitalize on the individuality of each customer, we must move from using generic customer journey mapping to a more personalized system that considers customer needs, habits, and economic value. With the understanding of customers' particular needs and behaviors, a personalized experience can be created. This becomes a vast improvement from the one size fits all approach. Designers will be equipped with customer data and intelligence to design experiences tailored specifically to customer needs and values. [My article - 3Stages of Experience]

It is a daunting task to try to achieve that level of detail and illustrate the steps customers take to interact with your organization through all avenues of physical, digital, and virtual channels. You need to manage all different multi-layer hierarchies' journeys and episodes and the interconnecting pieces of the experience(s). Marc Stickdorn coined the term operationalized journey in his latest workshops.

Experience design work is not a one-time act. Rather, it is a journey of continuous improvement and maintenance to ensure the experiences are executed as designed and success is measured. According to Kerry Bodine, roles like dedicated Journey Managers are trending in the market whose sole responsibility is to manage these specific journeys.

Operational CX  

Strategy only functions as such with proper execution. Setting up a customer experience system that brings customer feedback into the decision-making process is a critical factor for successful execution and to drive the strategy forward.

Six Main Pillars for CX Operations:

• Collect: A collection system is one that can gather all types of feedback from your customers from any channel that is used by a customer to interact with your business or brand. Surveys are becoming a thing of the past, as now there are many other ways to collect customer sentiment and feedback. These other avenues include conducting interviews, observing how customers interact with your products and services, reading social media and site reviews, and capturing customer engagement and communications with your organization. You don't need to ask your customer how they feel. You want to ask them what relationship they want from your brand and how their values align with your brand value.
• Analyze: Customer data and their feedback can be used to systematically discover what is working, what is not, and to highlight problem areas to do a deeper root cause analysis. Ensure that your data is reliable. Avoid analysis paralysis by checking periodically if what you are collecting is substantive and aligns with your business strategies too.
• Close-the-loop: A critical action of every successful system is closing the loop with your customers. This occurs when your employees responsible with interfacing with the customer communicates the process to set the right expectation on bringing an issue or potential issue to a conclusion.  
• Act on the feedback: Ensure through the analysis of the customer feedback that it is actionable for teams across the organization to make meaningful change. During the analysis, it is common to find areas of immediate or tactical change and those areas which require more strategy and long-term commitments.
• Communicate Be transparent so all employees are well-informed of the CX operations and the customer feedback. Clear and honest communication is also key for your customers and partners, so they are aware of the investment your business is making in this relationship.
• Create a Governance Structure You want to have teeth in your execution, and each department must know they have skin in the game. This ensures there is no deflection of responsibility to another department or the VoC team. Membership should consist of people in each department with the authority to make decisions, is accountable for enacting the change, and can address the roadblocks that inhibit the organization from moving forward.

The best practice that I have seen so far is demonstrated by Bain & Co. NPS System that lays out the fundamentals and is rooted in both adaptability and accountability. https://www.bain.com/insights/from-feedback-to-action

Successful systems must be updated every 18 to 24 months as changes are continually occurring in the customer, market, employees, management, and processes. Updates will ensure system robustness, put your customer at the center of everything you do, and continuously drive improvements and actions on their behalf.

Measurement & Insights

What gets measured gets done. It is essential to define what you are trying to achieve from a set of metrics you want to use, what you want to improve, and to understand the operating model in your organization.

Types of Customer Measurement:

Strategic Measurement: measures the organization's strategic objectives and those KPIs that everyone in the organization rally around them. And there are two primary measurements. 

• Benchmark measures the organization with its brand value among its competitors in the market. 
• Loyalty & Relationship measures the holistic experience of the customer relationship.

Metric Examples:

• Customer Lifetime Value: Customer retention refers to an organization's ability to retain its customers over some specified period
• Brand Reputation: Brand reputation refers to how others view a particular brand. A favorable brand reputation means consumers trust the company and feel good about purchasing their goods or services.
• Customer Loyalty: Customer loyalty is the result of a company consistently meeting and exceeding customer expectations. Customers that trust the companies they do business with will be more likely to purchase again in the future.

Touchpoint, Journey, or Episodic Measurement: measures crucial touchpoint experiences or episode milestones that customers go through during their journey with an organization.

Metric Examples:

• Customer Adoption: A customer is successfully using products and services to achieve customer business goals.
• Customer Delight: Surprising a customer by exceeding his or her expectations and thus creating a positive emotional reaction. This emotional reaction leads to word of mouth. You can't delight a customer unless the baseline of the expected experience has already been met.
• Customer Happiness: When a customer is completely content with products and services and has no issue with it or its involvement with their business.

Transaction or Event-Driven Measurement: measures the experience following a specific event or interaction with an organization.

Metric Example:

• Customer Effort: How much effort a customer has to exert to resolve a request, a request fulfilled, a product purchased/returned, or a question answered.
• Customer Satisfaction: Measures the short-term of how products and services supplied by an organization meet or surpass customer expectation. It targets a "here and now" reaction to a specific interaction, product, or event.

Social Measurement: measures what customers are saying in a public forum via social media channels. 

Metric Example:

• Customer Advocacy: Customers who turn into a spokesperson advocating your products, services, and brand; usually are the most loyal.
• Word of Mouth: An unpaid form of promotion in which satisfied customers tell other people how much they like a business, product, or service.

After you define the type of measurement, you want to identify the right metric or set of metrics that are relevant to where the customers are in their journey with your organization. Ensure you are setting up your measurement to capture both qualitative and quantitative measures to analyze and build your insights to identify trends and drivers. This is where correlation with other metrics, both customer and corporate, provide the insights and reveal the state of your customers. The goal is to take those insights and address them with your governing body. 

Customer Data & Analytics 

Organizations seem to be collecting an extraordinary amount of data these days. Why has it not materialized to knowing the customer well enough to go beyond targeted advertising? This is because collecting is the easy part; cohesively putting it together and productively analyzing it has proven to be difficult.

While a few organizations are investing in the right resources to execute this comprehensive strategy, most seem to be only annoying their customers.

Four types of common customer data collected today:

1. Basic or Identity Data: Refers to basic, personal, and demographic information.
2. Interaction or Engagement Data: The data that gets collected from many of the touchpoints that customers have with your organization. Think clicks on your ads, visits to your website, or scrolling through a blog.
3. Behavioral Data: Associated with the product and services usage and transaction data collected during the purchase of service or subscription.
4. Attitudinal Data: Related to the customer's perception of your product and services, which includes customer feedback, reviews, opinion, sentiment, desirability, and motivation.

Data stacks are burdensome and need to be carefully managed. Customer data architecture reveals customer profile information, transactions, operations, history usage, and what customers like and dislike from their past interactions with an organization, as well as other behavior that customers share with their brands. While you want to have your customers' permission to collect their data - let them have control to adjust their preferences when they want to. This allows you to know when it is appropriate to use the information on their experiences with your organization. 

Above the customer data stack is the decision system stack, which includes artificial intelligence (AI) and machine learning (ML). These features enable your organization to generate intelligence, highlight trends, and insights and even predict the next action. 

In the not so distant future, the data analytics role won't just be about simply collecting data and analyzing customer feedback in order to create appealing metrics and data correlations. Rather, it will be a combination of data science and psychology. Teams will be expected to use AI to analyze a complex and large set of data and then correlate it with a set of personalized habits and behaviors, which feed into the personalized experience design.

Culture of the Organization 

To enable customer focus is to have the organization align its values to its actions. Big, fancy slogans become just words if a company is not acting on its promises.

In order to deliver personalized experiences, you need to have a culture and mindset to deliver those deliberate experiences. Employees should be aligned with your brand's mission and core corporate values. Those that are will demonstrate that alignment in their behavior and actions. To be a customer-centric organization, you want to connect employee behavior and daily work to the outcome, which will inspire them to strive for higher levels of performance. 

Last year, I was invited to speak on a panel at an employee forum in a company. It was invigorating to hear how every employee was committed to their customers. This company was able to build a corporate culture that truly focused on the customer. They attributed this to how they have related customer NPS feedback to each employee's job. It was no longer just the frontline employees' sole purpose to make a positive experience for the customer; the back-office employees were just as integral in delivering the right experience for a customer. Going beyond the score to the verbatim allows the employee to build empathy for their customer — and it humanizes why we do what we do. 

Author Jeanne Bliss captures the importance of humanizing the process in her latest book, Would You Do That to Your Mother? “High tech without a human connection may make interactions more efficient, but it's important to know when to blend humanity and caring into the customer experience”

The Value of Customer Experience

Customer experience is a strategic function that is imperative for your organization. It means putting customers at the center of the organization in order to generate value for customers and your organization.  

The customer value metric is becoming one of the top performance indicators for organizations and investors. According to Bain & Company’s Rob Markey in a recent Harvard Business Review focus on customer loyalty, customer value is the total lifetime value (LTV) of a company’s customer base. 

In Summary

As the experience economy becomes global mainstream, the urgency to reestablishing customer experience discipline is apparent. And having a CXO role in the organization will drive further alignment across your organization from sales, marketing, and services to product and finance to drive personalized experiences that generate value to customers as well as to your shareholders.

References:

[1] HBR: Why Every Company Needs a Chief Experience Officer, Denise Lee Yohn https://hbr.org/2019/06/why-every-company-needs-a-chief-experience-officer

 [2] AMA: The Roles of the chief Experience Officer, B. Joseph Pine II and James H. Gilmore https://strategichorizons.com/wp-content/uploads/AMA-The-Roles-of-the-Chief-Experience-Officer.pdf