Companies cannot control how their customers perceive their experiences with their products and services. However, they can and they must optimize their processes to deliver the best experiences from their customers perspective, profitably. Some would argue that doing this is critical to a company’s longevity.
In developed markets the quality of customer experience quickly becomes the primary competitive differentiator. Recent studies found that 90% of executives say that customer experience is central to their strategies, and 80% want to use it as a form of differentiation. The problem is that 86% of these executives do not expect to see a significant uplift in business resulting from it. As long as this is the case, nothing will change, and the customer experience mantra will remain just empty words, while their companies continue to compete on price on the race to the bottom.
This will linger on as long as business leaders put the interests of short term share traders ahead of the interests of customers, employees and investors. The focus on quarterly growth of earnings per share benefits only day traders and corporate raiders. All the while the company’s longevity is being compromised. Companies exist to serve customers profitably. The executives, that cannot see “a significant uplift in business results” from customer experience investment, should closely examine what business results they pursue and a time frame they expect the results to occur.
The business results to be expected as a return on customer experience investment made skillfully include, but not limited to:
- increase in revenue per customer
- growth of customer lifetime value
- increase in their market share
- decline in marketing costs
- decline in customer support/service costs
However, these gains typically start to make impact on the earnings per share (EPS) two or three years after the first round of the customer experience investment was executed successfully.
Customer Experience Management (CEM or CXM) is a relatively new discipline. A Google search of the term finds the first relevant reference on the second page as the very vague Gartner definition:
” the practice of designing and reacting to customer interactions to meet or exceed customer expectations and, thus, increase customer satisfaction, loyalty and advocacy.”
Given the association of Gartner with the software industry, and the most of subsequent search results point to technology companies, it is easy to assume that customer experience management investment means buying and implementing technology. Nothing can be further from the truth. In fact, technology is never the solution to your customer experience management challenge. The solution is an investment of effort and money into the rethinking of your business processes and practices from your customer perspective. Only after this is accomplished, modeled and tested, may you want to use a technology to speed the proliferation of the results throughout the company.
Specific methodologies and best practices for successful customer experience strategy implementations are very hard to find. Each success came after multiple failed attempts and is unique to the market in which the company operates. When a company considers customer experience to be a competitive differentiator, the last thing it wants to do is to share their hard earned customer competency with their competitors. Over 90% of our clients insist on strict non-disclose conditions before we start any work with them. This experience is not unique.
That is why successful implementations of marginal technology solutions will be publicized and imitated ad nauseum. The successful implementation of customer centricity strategy may see a lot of publicity, but its specifics would always be left for public guesswork and folklore.