| By Chuck Schaeffer
A Review of the CX Business Case, Benefits, Risks, Lessons & How to Get Started
Oracle today released an interesting Customer Experience (CX) research report performed by O’Keeffe & Company. The study interviewed 1,342 senior executives, with the single largest participant role being CEOs, across 18 countries in North America, Latin America, Europe and Asia Pacific.
The research delivers some findings and take-away points that are likely to be helpful for those business leaders evaluating, planning or deploying CX strategies.
The Customer Experience Execution Chasm
The study results first point to an ‘execution chasm’. Business leaders now understand that customers are plugged in 24/7, demand instant access to information and transactional capabilities, are increasingly purchase savvy, and incur fewer barriers and more willingness to replace suppliers that no longer meet their expectations. To this end, 93% of business leaders in the survey say that improving CX is one of the top three priorities for the next two years and 97% state that CX is critical to their business success. They also understand the cost of failure is large—estimated at 20% of their annual revenues.
Despite this recognition of the CX imperative, most executives fail in the execution. While 91% of businesses want to be a CX leader, only 37% are getting started with a formal CX initiative. Interestingly, this survey result is almost identical to a CX survey by IBM about 2 years ago, which further suggests businesses get the vision, but incur great difficulty is creating and executing the plan. And because customer expectations are exceeding their supplier capabilities, and social media will only further exacerbate this trend, both the ROI and cost of failure will continue to grow significantly.
There’s also a Customer Experience perception chasm. The research found that 49% of executives believe customers will switch brands due to a poor CX, while 89% of customers say they have switched brands because of a poor CX. Recognize these customers did not report that they may or would switch brands based on a poor CX, but they actually did. Customers are clearly beyond idle threats and have more options that at any time prior.
Beyond just keeping your customers, the survey data also points to a significant Customer Experience upside. 44% of executives believe customers are willing to pay for great CX—while 86% of customers say they are already paying a premium for great CX, and are willing to continue to do so.
Customer Experience Obstacles
I’ve often said that CX is nearly opposite CRM in terms of vision and execution. While CRM adopters often skip vision and go right to execution (normally installing CRM software, and then wondering why their CRM investment doesn’t go so well), CX adopters understand and can generally articulate the vision well, but then really struggle with the execution. Having worked with several CEOs in crafting CX strategies, I’ve found that unlike CRM, these business leaders are fully capable of defining CX strategy and rallying the staff for the needed cultural changes, but become hamstrung when trying to implement the CX business processes and enabling technologies to support the CX business strategy. Customer experience obstacles include the following:
When further considering enabling technologies, business leaders identify the following planned investments.
Technology is also an enabler of measuring the most important performance metrics. But first the most meaningful metrics must be identified. While many businesses use Customer Satisfaction (CSAT) scores to measure CX impact, traditional metrics such as brand awareness are more popular than evolving CX metrics such as Customer Experience Index or Customer Effort Scores.
I’m also an advocate that frequently preaches i) what gets measured gets done and ii) measures directly aligned with revenue and profits stand the test of time. The prior measures from the survey are good starting points, but IMHO, measures such as CLV (Customer Lifetime Value), Customer Share, Customer Up-Sell Rate and other measures which show direct correlation between CX and Net Income are critical in maintaining support for the CX program.
CX Lessons Learned
Among business leaders that consider their CX program “advanced”, the most successful create a program that integrates people, processes and technology, and identify the following three initiatives as keys to their success.
Build a training program and incentives for employees to offer a great experience (35%)
Updating company core values to include the need to provide the most appropriate customer experience to all our customers (32%)
Implement specific technology to enable process automation and improve customer service (29%)
Certainly there are many additional activities—such as using VOC (voice of the customer) tools to establish your CX baseline, creating customer journey maps to solidify customer interaction points and objectives, developing a communication and training program so employees understand and deliver the company’s meaning of CX, and most importantly, beginning with a customer advisory panel.
So Where To Improve First?
Once the business imperative is clear, the risk factors mitigated, and the lessons from prior pioneers understood, CX savvy business leaders can look within to understand where they fall short in delivering a rewarding CX. Veteran business leaders know in fixing the problem they must start with a comprehensive plan, but prioritize and progress incrementally. Here are some of the top processes executives plan to capitalize on.
In the research and buying process:
- Personalizing communications with relevant offers/information based on customer segments/preferences (49%)
- Enabling customers to start a purchase transaction in one channel and seamlessly continue the transaction in another (35%)
- Providing agents with real-time visibility into a customer's current shopping cart and recent behavior on the web or mobile (26%)
- Empowering customers to help themselves on any channel (41%)
- Providing service and support through mobile and tablet devices (39%)
- Integrating social media with services processes (35%)
- Capturing/maintaining a single view of customer behavior, interactions, product, and services transactions to understand customer needs, patterns, and preferences (28%)
The prior points are a small sampling for sure, but if done well offer potentially big payback and a solid stepping stone path for further gains.
Categories: Customer Experience software
Tags: CEM, CXM, CX research
Author: Chuck Schaeffer