Opinion

Customer Experience Is Not What You Think.

There are various reasons organizations embark on Customer Experience, or CX, but most tie back to driving growth. Or trying to understand why your company is not growing through the perspective of the customer. At its worst use case, CX is employed when a company is already experiencing customer dissatisfaction, most often measured through churn.

CHALLENGE

The core misunderstanding is that Customer Experience attempts to take what should be a common-sense business model foundation, and turns it into an opportunity for “category creation”. This essentially means taking common problems, and dreaming up a new class of premium products and services to solve them. Consider Sara Blakely’s creation of Spanx and Kevin Plank’s creation of Under Armour, now $1 billion brands that have effectively reinvented the way consumers think about girdles and T-shirts.

Customer experience (or success, or insights) is similar in that in promises ‘better performance’ without examining the core elements needed to achieve.

Two-thirds of companies compete based on customer experience.
73% of customers agree that customer experience helps to drive their buying decision.
60% of customers say they trust the reviews that come from friends, family, and other customers.

So What Exactly Is Customer Experience?

The core elements of CX.

Understanding the building blocks.

One of the key challenges with CX lies within the taxonomy itself; Customer Experience, Voice of the Customer, Customer Success, etc. often are often conflated to mean the same thing, and can sound a little a lot like a bumper-sticker to a C-suite ready for bottom-line results.

Customer Experience Customer Success Customer Insights
Purpose  

Context

 

Execution

 

Measure

Overview

Customer experience broadly covers the customer’s entire journey and their satisfaction using your product to achieve their goals.

Customer Success engages through various touchpoints and engagements, to drive product adoption, identify opportunities and risks.

Customer insights is a method of determining performance,  satisfaction, insights, and impact based on customer analytics measured results.

Attributes

  • Value Model
  • Customer Personas
  • Journey Maps

  • CSM
  • Call-to-Actions 
  • Success Stages

  • Voice of Customer (VOC)
  • Net Promoter Score
  • Customer Segmentation

Outputs
  • CX Governance
  • OKR alignment
  • Improvement Roadmaps

  • CTA Performance
  • Account Health
  • Renewal / Attrition Rate

  • Listening Architecture
  • Key Driver Analysis
  • CSAT / NPS

So said a simpler way, CX assess and defines how customers feel and interact with your brand and products and Customer Success operationalizes and reinforces this interaction. And intuitively, Customer Insights measures the effectiveness of these efforts.

As you research CX you perhaps by now have discovered two aspirational organizations that represent excellence in Customer Experience; Ritz Carlton, and Disney. Ironically, these companies created customer-first culture and branding long before CX was even a thing.

The Ritz-Carlton, for example, has a long-held motto that sets the tone for employee loyalty and engagement: “We are Ladies and Gentlemen serving Ladies and Gentlemen.” This classy motto is more than a clever twist on words; it’s at the core of how Ritz-Carlton views its staff and customers. Disney, the “Happiest Place on Earth,” is widely recognized for its magical customer experience approach. Today, both Ritz-Carlton and Disney are the gold standard of excellent customer experience. Both companies ironically now contribute to the CX “categorization economy” through the Ritz Carlton Leadership Center and the Disney Institute.

Perhaps the biggest irony is that both of these gold-standard companies build their product around experience vs. adding CX principles as an afterthought (imagine adding the yeast after your bread has baked?). In other words, these companies have an intrinsic customer experience program.

CX is more of a business model

I recall attending a Customer Experience conference where they discussed the importance of creating a “CX listening analytics platform” that could assess customer satisfaction and risk throughout the customer journey. Of course, accomplishing this would require their software, an initial VOC (voice of customer) analysis, multiple consulting engagements, post-implementation support, etc.

I couldn’t help but wonder what sort of crappy business models (or poor results) were the people in the audience hoping to correct with “a fresh coat of CX.” For some reason, this all hit me like an old MTV episode of “Pimp My Ride.” If you are not familiar with PMR, it ran on MTV in the early 2000s and consisted of taking crappy cars in poor condition and customizing them. And was I guilty of the same hopeful expectation?

But as the pitch droned on, I just couldn’t stop thinking about that damn car show; “can any amount of aftermarket customizations turn a beat-up ’98 Honda Accord into a new Mercedes”? And when you consider that upwards of 73% of CX initiatives fail, it further suggested that an aftermarket approach is not practical. Additionally, the same study found that “only 30% of respondents said that key stakeholders were truly invested in the goals of the program.”

 

To be fair, CX’s genesis as a strategic initiative was customer feedback that panned buying and post-sales experiences. However, customer feedback typically does not attribute the cause to a particular problem like product failure or service breakdowns. The message: overall, the experience of dealing with Company X is simply crappy. Companies correctly interpreted many of these complaints are systemic, cross-departmental problems and attempt to solve them under the CX umbrella.

 

I think part of the problem lies in the fact that:

(1) CX results can look good or bad because typically the wrong things are measured. Incorrect CX measurement is especially a problem in manufacturing and sales. For example to improve manufacturing outcomes, it may make more sense to focus on quality rather than traditional throughput metrics. And in sales, It wasn’t until companies looked at the Lifetime Value of customers rather than simple revenue achievement did companies achieve better growth and higher profitability.

(2) And perhaps more importantly, does CX really need to be a thing in the first place? When a company is doing its job delivering value and in the customer’s interests doesn’t CX take care of itself?

So what is the easiest way to think of Customer Experience?

 

A simple approach I developed to explain customer experience to senior leaders is “5-P” (Purpose, Promise, Products, Price, Proof). Companies that have alignment across these domains typically have an intrinsic customer experience and superior brand loyalty. Let’s examine these dimensions using Amazon as an example.

Purpose

I want the ability to buy almost anything from anywhere through an intuitive to use, single omni-channel experience.

Promise

We are constantly innovating with new customer products, one-day shipping, easy returns, and unparalleled support.

Product

Amazon combines AI and a Google-like ability to search with an ability to sort by Brand, Reviews, Price, and availability.

Price

Amazon itself is free, but for another $100 per year Prime offers free expedited shipping, music, movies, and more!

Proof

On average Amazon Prime members, even using only a fraction of the benefits, save approximately $1000 to $1400 a year.

Now let’s image these elements as a wheel; when everything is aligned the experience wheel rolls smoothly. This is good customer experience and loyalty. But what would happen to this wheel if Amazon decided to no longer innovate its platform and products? How does the experience wheel roll now? The purpose of CX software, programs, and consulting is not patch the wheel, but to identify the areas it is “leaking”.

I have learned the hard way that CX is not a “brand-aid.” It is not an accessory that you can bolt on to your business (“Pimp My Product”). The only way you will see a positive ROI is to integrate CX into the DNA of who you are and what you do. Like that MTV show, no amount of customization can turn an old Camry into a Mercedes; an “aftermarket CX program” will not turn a poor product experience into loyalty and retention.

Ultimately what makes Ritz Carlton and Disney so amazing (and rare) is that great customer experience is intrinsic to the product.

Intrinsic CX is whole different ball-game. It’s not about creating an ‘after-market’ CX program by improving customer support, or driving use and adoption program. The most loyal brands have embedded experience in to the core of their brand. Consider the loyalty score of Apple vs. Lenovo. Both companies offer comparable consumer tech products, yet Apple enjoys a significantly higher NPS score.

Apple’s loyalty (and high NPS) is not a coincidence. It is the result of an incredible focus on delivering a great product and an exceptional experience to customers – something Apple, as the world’s largest tech company, has turned into a streamlined process. Apple’s Net Promoter Score is very high for a company in its industry, but it’s not unattainable for other brands. By understanding why and how Apple achieves high customer loyalty you start to understand why superior CX while not impossible, is very hard to achieve as an afterthought.

Steven Grant

Stephen is a 26 year old tech-savvy software developer.
He is passionate about new technology trends and news and
is a big fan of Apple, Google, and Facebook. He prefers
clean intuitive interfaces, and he will quickly delete an
app if not immediately useful.

What's important to Steven?

Innovation

Experience

Design

Ecosystem

Apple's approach to loyalty.

Step 1.

Problem

Technology should not be frustrating, we strive to make it simple.

Step 2

Promise

We make technology so simple that everyone feels smarter.

Step 3

Product

Surprising leapfrog technology based around simplicity.

Step 4

Price

Premium, but allow customers to touch, feel, try. Launch hysteria.

Step 5

Proof

Ecosystem that allows customers to get the most from their Apple.

Less than 1% of companies has CX intrinsic to their brand and products.

Conclusion

Companies Brands where CX is intrinsic

The bottom line is that CX software and consultancies often hold-up companies with intrinsic CX brands as the power and promise of CX. In reality your company will never reach that level of CX Maturity (and ROI); and this is where CX has jumped the shark. That said, some level of CX Maturity is very important to all companies. It is a matter of choosing the right level of maturity to target and establishing an appropriate budget to reach that goal.

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