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The Three Foundational Elements of Customer Experience Excellence
Coordinated internal infrastructure, cultural alignment, and engaged leadership provide a healthy environment in which customer experience initiatives can thrive.
The customer experience. Many CEOs talk about it. Technology companies offer tools to enhance it. Feedback efforts are designed to improve it. But in reality, many companies are frustrated with a lack of momentum around their customer experience efforts. Companies need to look inward to examine whether their organization is primed to deliver the best customer experience possible. Internal infrastructure and culture are critical when laying the foundation of any customer experience initiative. A commitment from executive leadership is essential, as well.
Customer experience strategy has traditionally centered on tools or processes within individual departments to improve how a customer experiences a brand within certain channels. This approach lacks integrated infrastructure and alignment, says Lior Arussy, president of Strativity Group and author of Customer Experience Strategy. Companies often put customer experience initiatives in the hands of lower-level managers without resources, budget, or the ear of the executive team. In addition, definitions of customer experience still largely deal with fixing problems, not providing proactive service, relevant communications, and differentiation.
When it comes to the customer experience, many companies are "knee-jerk reacting" to competitive pressure, the next app, or social media tools, adds Richard Burdge, CMO of Thunderhead. "Some companies are prepared, but the pace of change and requirements to be flexible mean that many are still struggling to keep up. Very few people are thinking strategically."
The objective is to build and keep momentum for the customer experience. "It's easy for initiatives to lose steam and fall into the 'flavor of the month' category," says Brynn Palmer, principal consultant at Verint. "Most know they need to [make customer experience a priority], but they get distracted by other elements in the organization."
The new model of customer experience requires a disciplined, organizationwide infrastructure to lay the foundation for success. Arussy highlights three internal imperatives to create an environment that will bring customer experience efforts to the next level. These mirror similar recommendations from Forrester Research in its report, "Three Secrets of Success for Customer Experience Organizations." They are:
- Executive commitment
- Organizational alignment and process redesign
- Employee engagement
All three of these elements must work together to create right internal environment. But before any steps can be taken, "businesses need to know what they and their customers get out of the customer experience," Burdge says. Customer experience means different things to different companies, and objectives must be clearly defined at the corporate level to maintain consistency. "It's important to be good, but it's also important to be consistent," adds Jeff Marker, senior vice president of multichannel retail Junction Solutions.
Executive commitment equals financial commitment
What gains C-level attention best? Financials. This is also true of customer experience conversations, says Burdge. "It's all well and good to be talking about making customers feel good, but it really is about the business. It's not a feel-good thing. This drives business results."
Arussy says companies need to identify the financial factors that correlate to the customer experience. They should also understand the price of a poor experience. "What will it cost you not to do it?" he asks.
Verint's Palmer advocates for a Chief Customer Experience Officer or similar position. "There needs to be someone in the organization with a customer experience title at the executive level," she says. This person can get outside the minutia of the business units and look at enterprise-level data and vision without specific agendas. "They can be a good ambassador, standing with the business units and bringing them together," she says, adding that organizations can say they're focused on the customer experience, "but if [they] don't have a strategy to get there with a single leader, it won't work."
And since financial discussions often take precedence, Palmer also recommends that customer experience be discussed in financial terms with the executive level. "The CFO should understand and be as passionate about customer experience as the CMO," she says. "Budget and revenue drives the business."
EMC, for example, brings the customer experience conversation to the company in terms everyone can understand: ROI. An Allegiance customer, the company has had its "Total Customer Experience" (TCE) program in place for six years, and won a Silver Gartner & 1to1 CRM Excellence Award in 2009 for its ability to segment and interact with customers based on explicit and implicit interests. But that wasn't enough for Jim Bampos, vice president of customer quality. He created the TCE Proven program, focusing on the results of customer experience efforts. "We work in a closed-loop process; we collect data, tie it to financial performance of the company and the business unit, and share it with the company," Bampos says. His group created a dashboard containing customer loyalty metrics, scores, and revenues related to the TCE program.
In the customer support group, Bampos discovered that response time, product availability, and knowledge transfer to the customer correlate to higher customer satisfaction and loyalty, for example. "The TCE Proven program was created to demonstrate to internal stakeholders that when you make the right investments you have the right results." Having visibility into the results of customer experience efforts can go a long way to keeping up momentum and executive-level commitment, he says.
Bampos recommends that companies understand the purpose of their customer experience program, create a solid relationship with internal stakeholders, put good measurement and analytics programs in place, and don't underestimate the expense and effort it may take to succeed. "Get stakeholders to have skin in the game," he says. "Get down to details about how to drive loyalty in the business."
Create a collaborative organization
Without a single version of the truth, companies cannot deliver a consistent and proactive customer experience across channels. Getting to that single version of the truth requires collaboration, shared data, and processes that support both.
"Our business model is to provide our customers a positive relationship," says Carolyn Burke, fulfillment and facilities manager at Cable Shopping Network. "Having the infrastructure to provide that relationship is key to being successful." Burke worked with Junction Solutions and Microsoft to coordinate data across the enterprise to create a central foundation. "Our focus, from the top down, is to be able to provide consistent internal and external information to our customers and our staff," she says. "We are able to give our customers up-to-date, consistent information on their accounts and the processing of their orders. It also enables us to make sure that our entire staff sees information real time, no matter which department they may be in."
The consolidated infrastructure allows customers to receive real-time shipment information on their orders, and the network has cut backorders on products from four weeks to two. Shipping times have also decreased from four days to two, and the company's accuracy rate jumped from 93 percent to nearly 97 percent. "Our staff is always working together to ensure that we stay a step ahead of what customers expect," Burke says.
Verint's Palmer echoes the importance of centralized customer data accessible to the entire organization. Disconnected processes, disparate technologies, and data coming in from different sources are heady obstacles to delivering a positive customer experience. "Companies need to look at customers through data that is unified or consolidated into one view," she says. "This then allows them to focus on understanding and acting on the data with a solid plan."
And the plan needs collaboration from the beginning, in the budgeting process. "In most companies, the budgeting process is handled at the business-unit level," Palmer says. "It's segregated within a company. Companies need to start budgeting in a collaborative way," overseen by an executive-level sponsor.
According to Arussy, the biggest obstacle to achieving true collaboration is that most business units are organized around a product or function, not around the customer journey. There is also the perception that customer experience initiatives compete with other initiatives. Yet, if you define customer experience as a value proposition for the company, it becomes the main objective and all other initiatives are tools that help create the right environment to drive that, he says. Everything from organizational hierarchy to business ojectives needs to be customer-centric. "You need to measure success differently," he says.
Culture and the employee point of view
Major strategic changes won't succeed without buy-in from all employees. Customer experience efforts are no different. They will not work via directives from the top without providing real meaning and context to each employee.
Video game retailer GameStop launched a new loyalty program in September 2010, and it would not have been successful without input from store employees, says Jenn McMillen, director of customer loyalty and database marketing. "The field organization loves this program, because they built it and they own it," she told attendees at last week's Loyalty Expo conference.
Having employees involved drove success of the five-month-old loyalty program, which has both free and paid components. The staff suggested welcome perks like "buy two, get one free" on pre-owned games and provide ideas of for sweepstakes prizes and rewards. They have a unique perspective because they are gamers first, and employees second. "We hire for passion for the game," she said. "We can teach the sales skills, but we can't teach passion." The new loyalty program is already self-sustaining with more than 50 percent of members enrolled in the paid version, encouraged by GameStop's frontline, passionate employees.
Not every company's employees are so enthusiastic or empowered. Arussy recommends looking at employee interactions with customers to find out what may hold them back from delivering a good customer experience. Is it technology? Policies? Fear of retribution? Lack of training? Compile a list, prioritize it, and start making changes in how employees are encouraged and empowered to contribute to and deliver a customer experience, he says.
In addition, "people behave on how they're measured," says Marker of Junction Solutions. He recommends that companies look at internal metrics and incentive structure to make sure they're aligned to customer experience objectives.
Prepare for the future
No one knows what the future will hold. Customer expectations change rapidly, and new technology and communication channels are popping up every day. Companies that provide a good customer experience today will not automatically provide one tomorrow. Because of such uncertainty, it's more important than ever to align internal people, processes, and technology to be prepared to meet whatever customer experience obstacles and opportunities may be on the horizon. Coordination leads to flexibility and the ability to adapt quickly. According to Arussy, "The future belongs to those who define [the customer experience] correctly and assign resources to make it happen."