Blog

“Customer Experience is not just about

passion. It is about profitable results.”

~Lior Arussy

Are you sitting at the kids’ table?

Posted: Feb 20, 2014 by Michael Starr

Co-written by David Jackson, Clicktools CEO, & Michael Starr, Principal, Strativity

Remember those family events where the adults sit at one table and discuss grownup subjects, while the kids sit at another table chatting about entirely different things? This is natural. What interests kids and adults are poles apart and, as anyone with teenage kids knows well, the two groups speak a different language. Attempts to get the two groups to share a conversation often fail.

Picturing the classic, age-segregated tables works well as a metaphor for the situation many businesses face where advocates of customer experience struggle to converse with many C-Suite post-holders.

Customer experience is a challenge for many senior executives. Delivering a successful  customer experience crosses departmental boundaries and customers haven’t, nor should have, any interest in how the company is organized. Nor do they care about processes and rules that get in the way of them getting what they want or approvals that cause delays. A successful customer experience, like beauty, is in the eye of the beholder; it is individual, emotional, and cannot be determined by internal metrics.

This mindset difference causes some senior executives to doubt the validity of tracking, measuring, and otherwise paying attention to customer experience – period. Others get it but doubt the financial case, often because it fails to address the issues they face. Any attempt at dialogue ends up as two monologues each coming from a very different perspective, illustrated in the table below.

While recognizing this gap is the first step, bridging it is a greater but not impossible challenge. Like any dialogue, someone has to speak first. The responsibility for this falls with the customer experience advocates. They have to convince the C-Suite of the case for and the steps needed to achieve a winning customer experience. To twist our metaphor, the kids have to learn to speak adult.

The good news is that the two tables are complementary; a winning customer experience can deliver profitability and competitive advantage. There are many examples and generic research that outlines the business case in financial terms but of course the skeptics respond, quite rightly, that our organization is different. And they are right.

The only way to convince the skeptics is to build the business case unique to your organization.

Here are Strativity’s ”Five Ps” to consider when building your case:

  • Preference: How likely are you to win a new customer?  (Win/Loss ratio)
  • Portion: What share of customers’ spend on your product/service do you own? (Market or customer share)
  • Premium: How much more can you charge for your product/service as a result of a superior customer experience? (Price premium versus competitors)
  • Promotion: What is the value of referrals and endorsements? (Advocacy rate x lifetime value)
  • Permanence: What is the lifetime value of a customer? (Average sales value/Churn)

The key to this exercise is to generate a debate and get consensus on the assumptions that underpin the values you assign to these variables, both currently and what might be with an improved customer experience. Data is often available to support the current values but even here many companies struggle with multiple versions of the truth. Generating this debate is itself a useful exercise.

Extending the debate to how the values of the Five Ps might change with an improved customer experience is where the business case is made. Here again, it is important to gain a consensus; the debates (arguments) about these values often stem from misunderstandings around customer experience and they certainly surface the real-politique of the company.  A good facilitator helps considerably in bringing diverse views together.

Getting the adults and the kids to sit at the same table speaking the same language is an essential first step in building a comprehensive customer experience strategy.

Note: This idea for this blog began in a discussion on converting customer experience skeptics in the boardroom during a Clicktools training program led by Strativity.