"Customer behavior is being greatly influenced by the speed at which customers have access to information, access to networking with their peers over social channels and access to anywhere/anytime information with mobile devices."
— Vinay Iyer
Key take away points in the discussion with Thought Leader Vinay Iyer:
- Customer Experience Management (CXM) has historically been described as the sum of all experiences a customer has with a supplier of goods or services, over the duration of their relationship. However, Vinay points out that defining CX is an evolving process, and today it includes not just the interactions between a customer and supplier, but also the interactions among customers themselves and among the wider brand, product or service ecosystem.
- A CX is complex. A customer's perception is based on conscious and unconscious events, rational and emotional behaviors, and on interactions across multiple channels – making the strategy and execution to achieve a consistent, positive and measurable CX challenging. Vinay cites two additional sources of CX challenges as the speed by which customers consume information and the anytime/anywhere extended reach via mobile devices.
- Customer behaviors are influenced and altered by the speed at which they consume information from social channels, CRM videos, peers and friends and by the real-time or on-demand nature of information using mobile devices. These rapidly changing dynamics make tracking the preferences of customers more difficult.
While the benefits of CX programs include repeat business, increased share of wallet, customer loyalty, customer advocacy and other meaningful paybacks, the reality is that implementing Customer Experience strategies and technologies is not just a function of profit motives, but a matter of survival in increasingly competitive markets. To survive, many companies must center the customer in front of all else and design products, services and operations around the customer perspective.
- An interesting CX research study demonstrated that CXM program performance directly correlates with improvement in four key business areas – market share, customer retention, profitability, and customer satisfaction. While CX experience objectives tend not to vary by company size, industry or global region, customers themselves may be unique among customer segments, industries or geographies, and therefore, smart companies listen to their customers and adapt the CX strategies based on the unique characteristics of their customer markets.
- CXM has made its way to the top of the CEO agenda—but why now? An IBM Global CEO Study cited "getting closer to customers" as the #1 priority for CEOs in the next 5 years. Similarly, a Bloomberg Businessweek survey discovered that "delivering a great customer experience" has become the new imperative—with 80% of the companies polled rating customer experience as a top strategic objective. While the concept of CXM is well over a decade old, Vinay suggests that the dual impact of the global economic slowdown and the rise of social customers have collectively accelerated the strategic need for Customer Experience corporate objectives.
- Despite being a top strategic objective of a great many companies, Vinay's research identified that only about 20% of these companies believe that they are actually doing a good job with CX. Vinay describes the challenge as a gap between a company's vision as declared by its board or leaders, and the company's execution as defined by its departmental makeup and continuous pursuit of operating efficiencies and maximizing output. To remedy the situation, companies must rearchitect their operating lines of business to pursue customer centricity objectives. Vinay also notes that too often CX objectives are delegated to a departmental leader, such as the contact center manager or CMO, who are not empowered or incentivized to act beyond their own departmental boundaries. The end result is a very limited impact. Vinay cites successful companies as having implemented organizational change by creating cross-departmental teams with a reporting relationship to the CEO, COO or other executive sponsor. The team is empowered to look across lines of business and implement initiatives that cross departmental boundaries.
- To achieve CXM and move customers from satisfied to loyal and then from loyal to advocates, companies must commit to an enterprise-wide focus and organizational change. Accordingly, organizational change requires top executive sponsorship. Vinay suggests that most companies should charge the CEO with leading this corporate mandate along with the COO for leading changes to operational processes.
- Most companies are internally-focused, with cultures, business practices and reward systems that promote operational efficiencies, cost savings, growing revenues and increased profits. To succeed with CX, these companies must append or restructure their organizational cultures and reward systems either before or in parallel to rolling out a CX program.
- In his book, The Customer Experience Edge, Vinay acknowledges something we don't hear too often – that it is as dangerous to throw too many resources at the CX without giving enough thought to sustaining the experience and profiting from your investment as it is to put too little into the CX.
- From a software technology enabling perspective, SAP believes CX is achieved from much more than just CRM software, and in fact requires integrated applications and end to end business process support. To commit inventory availability, product delivery dates and other customer promises, customer facing staff must have access to more than just front office data.
- Vinay has developed a four pillar CX framework—consisting of reliability (the ability to keep your customer promises), relevance (promoting relevant products or delivering relevant messages to customers), responsiveness (timeliness and follow-through) and convenience (engaging with customers in the (social) channels they prefer).These four factors form the cornerstones of a CX strategy.
The next podcast discussion is with customer experience thought leader Lior Arussy.