Ian McVey, UK Director, Qualtrics
Customer experience (CX) is all about feedback, so we make it our mission to talk to our customers and understand their outcomes when using our software. Every day we see the unexpected business benefits that spring from customer connectivity. But we also see why some CX programmes fail.
When a CX programme is broken, the reasons are broadly similar. Whether you work for a cafe or a conglomerate, CX is about people and CX programmes are living, breathing entities. Programmes are either in a state of growth, shooting for peak productivity, or they are in decline. If you aren’t confidently moving through the problem, you might be wasting valuable energy trying to figure out where you’re going wrong.
Customer Tracking is not a Strategy
We often see customer experience programmes that have been poorly conceived. They are simply not designed to achieve change or inspire innovation. A sure fire way to check is to ask yourself about the purpose of the program. If the answer is anything other than a clear “So we can make intelligent changes that benefit the customer and the business,” think again.
CX programmes must invite and welcome change. Of course they are important in tracking performance over time, but they are imperative because their goal is to improve over time. Start by prioritizing the importance of what you measure. Effective CX programs prioritize the importance of what gets measured and stacks those data against your desired outcomes—what’s called “driver analyses.” Good driver analyses unlock the method for having the most change in the fewest possible moves. While executing driver analyses enables change, it’s not actual change. It’s just more data until you do something with it.
Don’t fall victim to reporting paralysis, which occurs when teams are so wrapped up in distributing data, ensuring its quality and reporting on its insights that they forget what it’s meant to achieve. ‘Measuring everything and reporting everywhere’ is not a strategy.
Most importantly, buy yourself time to think. Before you embark on the process of measuring, manufacturing and distributing data, reflect on its implications. That’s when you’ll start to see the big picture coming together and can plan for change.
Armed with a measure of clarity and confidence in what you’ve learned, the next step is to map out your collaboration. CX Professionals are at their best when motivating other departments and stakeholders to push the agenda for customer-focused improvement. As the instigator of the CX programme, from its inception to its consequence, you own the customer. Nobody is better placed to advocate on the customer’s behalf, or has the analysis with which to make CX a business strategy.
A satisfied customer is not necessarily a profitable one
When seeking to influence colleagues, a second key failing we see is the disconnect between soft metrics and business goals. For the CX analysis to achieve corporate change, it must reflect business KPIs. Resist the temptation to rely on the tracking measures assigned to a CX programme as benchmarks of success or failure, erroneously using them as evidence of innovation and improvement. Focus instead on these four key business metrics.
Cost to Acquire and Serve a Customer (CAC and CSC): The better you understand your customers and prospects, the better the experiences you build, the lower your CAC and CSC should be. Customer Churn: Successful CX programmes reduce boost loyalty, and reduce defection. Customer Penetration and Share: Study the drivers and barriers of both these KPIs to understand the relationship between increasing customer numbers and how their spending patterns at the point of sale. Customer Lifetime Value: This is the net present value of all future customer revenues, accounting for customer attrition and your discount rate. The most complex measure to achieve, it is a crucial metric.
When setting KPIs for a CX campaign in collaboration with your leadership teams, be sure to request specific input. NPS scores are valuable barometers, but a rise in scores is not a guarantee of a rise in net revenue.
Defining CX Leadership
Lack of leadership is a big contributor to failed programmes. Without it, big goals can evolve into score improvements and incrementalism instead of gleaning useful insights that allow change with confidence. Time passes slowly, data continues to mount and paralysis sets in. A lack of momentum and sluggishness can spell curtains to a CX programme.
True CX leadership comes from a mixture of ownership, expertise, resources and empowerment. This is easier to define than to achieve. You own the customer relationship and are empowered with the resource and responsibility to build on it. You need not know everything about research methodology or the organisation, but you do recognise the need for speed. You are also the first to notice if even the most methodologically sound programme starts to become bogged down by a lack of momentum.
That’s why it falls to you, the customers’ champion, to make your case and assume a leadership role. Knowledge, after all, is power. As a profession, Customer Engagement is still as new as the software on which it depends. Management consultants and others still strive to define it. There might be few precedents to the work you do, but there are no boundaries either.