Tips for getting various corporate functions to agree and work together on CX priorities

Earlier this week I provided some tips on how to successfully engage with your company's leadership team when seeking investments. That post is here. This time, I want to step down a layer or two in the organization to discuss how to engage with the different business and functional teams that may need to work together to improve customer experience.

If you lead corporate strategy, customer experience, or indeed any effort that crosses business and functional lines, you will have seen this phenomenon. Each team wants to define its own priorities, and the priorities are always things that are 100% within their own span of control. Items that cross organizational boundaries never make it onto the ‘Top three priorities’ list for the quarter or the year for an individual BU or function.

Perhaps surprisingly, I am going to say that this is primarily a data problem.

An example of how we have all done things up to now

Let's concentrate on B2B for the time being, and use a product business as the example. You have been running an annual survey to try to understand how your customers feel about you and what they want you to improve. I'll come back to the problem of survey accuracy in a moment. While your NPS is OK for your industry, your customers tell you that they frequently find that products are out of stock or have long lead times when they want to place an order. This may not be news, as your sales people may have been telling you the same thing. The second item on the customer list is that it sometimes takes a long time to get a quotation for a complex deal involving products and services, so some have decided to seek simultaneous quotes from your competitors.

The survey accuracy problem

I've mentioned it, so let me cover this issue briefly. While occasional surveys are desirable, relying on them as the only source of customer-centric data is an obsolete way of thinking. We can do a lot better. Here is a summary of the issues:

How do the various teams involved react to the customer priorities?

The issue here is that the terminology used by customers (and indeed customer experience management teams) does not match internal metrics. Here is how they may react to the two improvement priorities noted above:

1. Products out of stock or with long lead times: The manufacturing team says the product manager does not respect the agreed ordering process and that they are not to blame. The product manager says that demand can be hard to predict and that the manufacturing people need to be more flexible. The procurement people in charge of sourcing products from third parties complain that the corporate cost reduction program of two years ago means they are no longer allowed to order from suppliers with short lead times because they are slightly more expensive. Essentially, all three functions say they are performing perfectly ant that the problem is elsewhere.
2. Complex quotations: The product managers, service managers, and procurement people all say they are doing their best, meeting their metric goals, and that the problem really lies with the pre-sales team. The pre-sales team does not agree.

In short, everyone other than the customer believes they are performing perfectly.

A single customer-calibrated view of the truth

The gap in all of this thinking is a single customer-calibrated view of the truth. This view must come from the IT systems you use to manage your operations. It is true that some metrics may be misleading, and you can address that sort of issue as it comes up. The best example of a potentially misleading metric I can think of is delivery time. The customer starts their clock when they place their order. A company may start its clock after doing a credit check and after verifying that everything is in stock. In this case, the company view is simply wrong and needs to be recalibrated to start when the order arrives in the CRM or ERP system.

Surveys give clues that can help you to prioritize your work on operational metrics. For a business that depends on contract renewals, you should use modern analytic software to work out which trends among your hundreds or thousands of operational metrics have the strongest relationship with non-renewal of contracts. These are what you should be exploring and prioritzing for customers. For a product business, analyze all of the data to see which metrics most strongly relate to order frequency and value. There can be surprises both in the data and in the sources that turn out to be most useful. (Our experience here at OCX Cognition suggests that Salesforce data can be really useful and also provide quite a few surprises, for example.)

Back to our examples

For the sake of the current discussion, let's suppose that the AI analysis confirmed at least some of the survey findings. So, what might this customer-calibrated KPIs look like for the examples provided earlier?

The first priority should be to agree on a customer-centric top-level metric. Agree on operational metrics that come directly from your systems. For stock-outs, it should be simple. Lead times are a little harder in that your metric has to start when the customer places the order, and has to end when they receive the goods. Agreeing a top-level lead time metric may therefore require the addition of two or three existing metrics that cover part of that journey in your systems. For complex quotations, ensure you measure the time from the quotation request to when the quotation is delivered to the customer. After all, it is possible that the procurement people respect the turnaround time to which they have committed, but that they only get asked after other teams have already provided prices.

Once you have agreed the top-level metric, sit with each relevant team leader to agree their contribution to that top-level number and how it should be measured. The measurement should come from the IT systems that team uses every day.

Then work out the relationship between the top-level metrics and customers cancelling their contracts or ordering less. Calculate the value of that happening historically. Cross-reference with your survey data to examine the interrelation between the metrics and customers being Promoters, Passives, or Detractors. This step makes communication easier. “17% of customers who experienced delivery lead times over three weeks became Detractors and stopped ordering with us. An additional 23% became Passives and decreased their average order amounts. This cost us X dollars last year. Here is the team and the investment we need to fix this. Sign here.”

Conclusion

The two posts this week have been about identifying and justifying investments at the business unit and functional level, and those that cross organizational lines. You should think of this overall approach as Customer-Driven Operations. We are using existing operational data to work out which metrics matter most to customers (the Key Performance Indicators), their financial impact, what each team in a company can do to improve, and how to correctly track that improvement.

Organizational engagement is a deep subject, and I will continue to cover it in detail over the coming weeks. As usual, if you believe I am missing something, or am simply wrong, please let me know.

Notes

OCX Cognition predicts customer futures. Our breakthrough SaaS solution, Spectrum AI, lets enterprises transform what’s possible in customer experience. Reduce your customer risk, break down silos, and drive speedy action – when you can see what’s coming, you can change the outcome. Building on more that 15 years of CX-focused expertise, we’ve harnessed today’s advances in AI, elastic computing, and data science to deliver on the promise of customer-driven financial results. Learn more at?www.ocxcognition.com.

Maurice FitzGerald is a retired VP of Customer Experience for HP's $4 billion software business and was previously VP of Strategy and Customer Experience as well as Chief of Staff for HP in EMEA. He and his brother Peter, an Oxford D.Phil in Cognitive Psychology, have written three books on customer experience strategy and NPS, and a fourth book that focuses on Peter's cartoon illustrations for the first three. All are available from Amazon.

The author can be reached here on LinkedIn or [email protected]. Please let me know what you think and what sort of content you would like to see here.