What is Missing in Customer Experience Today?

Customer Experience is failing. According to Forrester, US Consumer Perceptions of CX quality are at an historic low. Post-COVID the quality of customer experience eroded every year across the three Forrester categories: effectiveness, ease, and emotion. That means organizations operate inefficiently, underutilize technology, and fail to invest in frontline leadership training. In other words, there is no customer experience leadership with funding and influence in corporate America.

We see this trend in The Petrova Experience as well. Our clients do not come in search of customer experience strategy. Instead, they engage us to cover parts of the customer journey. Never addressing the root causes of customer painpoints and their executive-level solutions. Our colleagues see it, too. The situation is so bad competitors like Bain & Company and Qualtrics are teaming up to issue global customer experience standards this year! For customer experience professionals and US consumers, the experience pandemic is here now.

Who is to Blame?

The need for standards to combat low executive buy-in on customer experience programs has been a long time coming. Just last year, Forrester estimated “80% of companies have not made CX a part of their brand identity.” They dubbed 2023 “a year of reckoning for customer experience programs as companies struggle to focus on customers.” And Forrester is not the only one talking about the lack of leadership commitment to customer experience.

For five years, my editor Elizabeth Eames and I have been publishing articles on the same topic. We call for executive involvement and accountability. We call for uninterrupted time for the executive team necessary to build a unified, inter-departmental experience strategy.? A customer experience strategy that intentionally shifts power across leaders with customer satisfaction as a central, shared goal. We call for a clear, agreed upon path to implementation, with structural decisions empowering seamless customer experience and realization of ROI.

Often when we meet with client teams, we discover someone who reports under sales would be better positioned under customer support. We find funding is lacking in technology for customer support. Too many times, we see NPS not implemented across the customer journey, but collected at one touchpoint. We see surveys that are not robust enough to capture the customer feedback that drives good decisions.

It’s Not Lack of Money

During our executive report outs, many on the leadership team agree with our findings. And then… nothing happens. When we call for an agreed upon path to implementation, what we call for is executives to take action on the findings of customer experience engagements. Leverage those customer experience findings for funding prioritization and budget allocation. Money is not lacking. The importance of the customer experience is.

Simply put, we want executives to play well together and not be territorial about executive power and influence. Breaking down the leadership siloes is the first step to securing meaningful funding, the right human capital, and levels of influence for customer experience.

We have written articles about customer-centric leadership, including the need for leaders to travel to spend more than 1% of their time with customers.? In addition to all the insights from Harvard Business Review and Gartner, we also have shared success stories like those from Barnes & Nobles, T-Mobile, and most recently, Walmart. Turnaround stories, stories of 3x revenue growth when Customer Experience Leadership is present and engaged.

Those may be your competitor’s stories.

CX Leadership Deserts

Despite all this, CEOs continue to ask companies like ours to solve tactical organizational problems while we face CX leadership deserts in their organizations. They relegate customer experience program design and management to junior employees. And even those employees often have other core responsibilities. CX is an add-on, outside of their primary function and disconnected from their compensation structure. As a result, we often hear, “I do not know anything about customer experience.” Then, “Where should I begin?”

The approach is wrong from the start. In the absence of a unified commitment to – and understanding of – customer experience on the part of ALL leadership, CX programs are built to fail. Bring the consultants in to interface directly with leadership, and you will have the path to 3x returns. Bring them in to explain customer experience best practices to an unfunded, junior person with another day job and no executive influence, and your CX program will fail.

Siloed HR

This begs the question, where is HR? Organizations universally understand customer-centric culture is the foundation for customer-centricity. We also know traditional corporate org design makes HR the only function that touches every employee. Naturally, customer experience leadership must include the HR leader. However, we never see those leaders. CEOs do not include them as part of the customer experience work. And when we ask for them, we are told it is too complex to involve HR leaders who are taxed with other projects.

That widens the desert. It is only possible to create enterprise-level change by integrating and empowering HR throughout the process. And enterprise-level change (in fact, enterprise level alignment) is exactly how you build and sustain customer experience that drives returns. Think about this tactically. How do you train your organization on hospitality standards without Learning & Development? How do you change compensation goals and embed NPS as a Leadership goal without bringing in your HR leaders? The answer is, you don’t.

Siloed customer experience consultant scope and siloed departments all precipitate weak CX programs. The solution is now clear. Executive alignment around CX principles guided by intentional customer experience practices and a unified commitment to implementation and maintenance foster CX programs that drive returns.

What is Customer Experience Leadership?

That is achieved through Customer Experience Leadership. When we say customer experience leadership, we include every leader in the traditional organization structure.

There are two approaches to Customer Experience Leadership. One does not involve a dedicated Customer Experience Leader. The other does. Ten years ago, many CEOs decided to create the position of CXO – Chief Customer Experience Officer. I still remember being interviewed by Executive Search companies about the best place to position this new role internally. I told them, but it does not look like this input got to the CEOs. Instead, they instructed the newly created CXOs, “you need to manage through influencing others.” In translation: ” You will not have a dedicated budget or a big team. And, you will need to spend the next two years crusading the organization alone, trying to convince people who have other goals and priorities to prioritize their budget for customer experience initiatives.

This approach works only if the CEO creates a CXO-led Customer Experience Governance and is constantly and publicly elevating the CXO. If that CXO presents to the Board every quarter and all the other leaders with budgets don not, then perhaps that CXO will compensate for the missing team and budgets with political power. Without that CEO-led PR, the CXO role will remain a silent player with minimal impact on the organization.

Back to the CX Governance Committee. An effective committee can guide successful customer experience programs whether or not there is a CXO at the top – or in the organization at all. The essential factor for success across approaches is customer experience leadership that aligns all executives around shared knowledge about customer experience and its role in the organization’s mission and operation. And a unified approach to embedding customer experience across the organization. With delivery on CX goals tied to compensation across functions.

Customer Experience Governance Committee

Let’s take a closer look at the shape and impact of the Customer Experience Governance Committee.? If the CEO is engaged that means every leader attends every meeting. If someone cannot make it, the meeting is rescheduled. At these meetings, the CEO reinforces to the executive team that customer experience is a top priority of the entire organization and that strategy decisions will be made based on what is best for the customer. In other words, customer experience trumps organizational design constraints.

For example, imagine sales is failing to provide sufficient information to customer service. As a result, the customer cannot be onboarded well. In this scenario, the Customer Experience Governance Committee can decide to move groups from sales to customer service even when sales and customer service sit under two difference executives! Are you seeing the one-team one-dream connection, here?

Further, imagine the Committee finds no one owns the end-to-end customer journey. This is an all-too-common setup for broken experiences. Once the Committee discovers this, they can make changes. They assign individual ownership of the end-to-end journey. Then, they give that person access and matrix control over employees under multiple executives. This requires the Committee and each executive member to relinquish some level of power for the common good of the customer. This is customer experience leadership alignment and influence in action.

Customer Experience Knowledge Taken for Granted

Corporate Customer Experience Programs are not delivering the desired ROI because customer experience leadership is failing. Part of this is due to an assumption of expertise related to customer experience. The “sure, I know what CX is… the customer matters and we need them to keep our doors open” mentality does not work. But it is all too prevalent. Even when CEOs articulate it less overtly.

To be an effective customer experience leadership team (and we have established that effectiveness requires the participation of the entire leadership team), leaders must check their egos, commit to building and maintaining a customer experience knowledge base, and integrate CX roles and responsibilities across all executive leadership. The why, what, and how of customer experience program design and execution cannot be taken for granted. Weak CX performance proves this.

We know, it is hard for a CEO to admit that they don’t understand all the dimensions of something. Especially something as essential to their organization as the happiness of their customers. So much of customer experience – at least the concept of it – feels intuitive to the individual who leads their organization. But it is time to admit that the scope and impact of customer experience have exceeded the range of even the most accomplished CEO’s intuition.

Real Challenges

Because the landscape of customer experience (and the needs and expectations of customers) is changing at a significant pace, CX requires investments in leadership education and expert resources as a starting off point. Let’s consider a parallel. AI is a wide open landscape that offers a range of benefits and opportunities. It also requires significant education, investment, and change management to maximize those benefits. So, rightly, leaders are investing in AI (look at all the upcoming conferences across industries, and AI is on their agenda!).

It is relatively easy to invest in AI. It is also acceptable to admit we don’t know all there is to know about it. It is harder to admit that about something as fundamental to your business as customer experience.

So, let us give you permission to admit that. We have worked with companies around the world, for years, all of whom have a commitment to customer experience (that’s why they come to us!). None have it all figured out. We are the first to say customer experience is one of the most complex fields in business management. Precisely for that reason, it has the impact it does. CX involves psychology, process efficiency, brand management, and change management. Not to mention the additional, painstaking need to travel and to create authentic connections with every member of your leadership team, and to win over one employee at a time.

As a leader, when you build and implement customer experience programs and the employee experience programs that support them, you must be vulnerable to criticism. You must listen, guide, support, and adapt to the feedback you get from employees and customers. These are the hardest things any leader can ever do!

CX is harder than AI because it is HUMAN.

What is Next?

So, what is the path forward? Unfortunately, the answer is to ask for the one thing executives don’t have. Time. We need you to give time to engage with companies like ours. Block 1-2 days of uninterrupted focus where we collectively reflect on the meaning of customer experience in your organization. And the ideal organizational setup to achieve CX goals.

It is amazing what a dedicated executive team can do once they align on what makes the best customer experience. From this position, they can deliver on brand promises. And they can move beyond the function-level thinking that stagnates CX programs. Make no mistake. We understand we are proposing you think very differently about leadership across your organization.

Historically, we had those siloed pillars of executive orgs that rarely depended on each other. However, today that no longer works. Customers are buying journeys. Journeys are unified, integrated, consistent, and clear. So, leadership must think and work this way.

That means a CFO today is not only responsible for financial control, payroll, and regulatory filings. Your CFO will have dedicated analysts helping with the build out of customer experience business cases. They will oversee approaches to connect business results data with customer feedback data. Further, the finance team will have a continuous improvement group solely dedicated to improving vendor experience, management efficiency, and invoice payments, etc.

Board Members must begin to ask the question: “how is customer experience funded and organized in the organization?” All of this is disruptive. So let’s get CEOs and Board Members to understand customer experience extremely well in order to lead transformation. Because when our leaders connect with the complexity and the value of impactful customer experience programs, they can become the evangelists of those programs. They can generate buy-in from all executive leaders and start building for 3X results and beyond.

How Do We Get CEOs There?

Many CEOs state they believe in the business case for customer experience. Then, when they are presented with the upfront costs of millions of dollars and a return horizon of three years, they panic. And investments are killed before they get off the ground. Again, this is largely due to the customer experience knowledge gap at the executive level.

To help get CEOs to invest confidently in transformative customer experience programs, start by acknowledging investments in customer experience are strategic in nature. But you’re not there yet. So, it is hard to prove a business case without the appropriate investment.

For example, if, as the CEO, you are looking for a CX initiative’s impact on customer loyalty, but you know the organizational systems are NOT organized by customer, then you are not supporting the business case of Customer Experience as the CEO. In other words, we should not ask for a proof that does not exist and that is part of the funding needs.? In this scenario, you likely need to fund up to a million dollars (depending on? size) just to restructure your data systems to report information per customer.

The first step, then, is to invest in customer experience without the traditional financial proof, because you do not have it. YET. Second, recognize that the customer experience job is first and foremost, your job as CEO. Be visible in the organization. Include HR and finance in CX Governance. And be present, active, and consistent on the CX Governance Committee. It is one meeting you cannot miss or reschedule. Because it is incumbent upon you to signal that CX is not the flavor of the month. It is directly tied to your organization’s future.

So when tough structural decisions come to the table, you have support from your executives and their teams. That support starts with your guidance. And your guidance starts with your CX knowledge and commitment. Still struggling to see the connection? When Doug McMillon took over as CEO of Walmart twelve years ago, the retailer had an annual revenue of $486 billion. Now, it is $648 billion. And every one of those twelve years under McMillon, Walmart has earned the Number 1 spot on the Fortune 500 list of America’s biggest companies.

McMillon affirms the importance of customer and employee experience as a driver of that kind of growth. He also acknowledges he had a lot of learning to do. In describing his experience to Forbes, he notes, “I didn’t anticipate how much change needed to happen in the way we think and work, in learning to make decisions differently.”

Empower yourself to learn – and to think and work differently. It pays off.

Finally, engage with firms like ours. Attend the CX Strategy Conference with other executives who share your challenges and objectives. And who, like you, do not have time to spare, and cannot lose more time to failed customer experience.

Put yourself in the position to know more about CX than anyone on your executive team so you can be the CX evangelist they need. Now, teach them the building blocks of customer experience with expert guidance, and lead them through transformation. Be the leader who takes your organization out of the failed CX pandemic.

This article was originally published on The Petrova Experience Blog.