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Article | Finding the ROI of Customer Experience

Mind the Gaps (of Your CX Transformation)

Over the past decade, and specifically in the past three years, companies have enthusiastically embraced the importance of customer experience (CX) as a strategy. Long gone are the days of questioning the business value or question if it was a business fad. Now companies are all in. But despite significant investments in everything from voice-of-the-customer programs, analytics and social, many companies see those investments not meeting the expectations that they were launched with.
 
What is holding CX back?

In our experiences across various industries, a common issue is that many companies continue to invest in disparate and siloed programs. Each function may be focused on its own improvement and customer initiatives without interoperability to those in other functions. Often the overall customer strategy is not clearly and consistently understood across the customer journey, nor deeply within support functions. In fact, support functions often do not see how their actions have any impact on customer experience, so they remain focused on cost and risk mitigation. In addition, it’s not always clear who owns the collective “customer experience” within an organization and can see the forest for the trees. Seldom does the full executive suite see it as their job.

To overcome this dynamic, the best companies are assigning a Chief Customer Experience officer who can cross the organizational boundaries to drive alignment and collaboration.  Organizations that have taken the plunge, such as the Cleveland Clinic with its Chief Patient Experience Officer, see their efforts gain traction and tangible results in customer satisfaction.

Culture also plays an enormous part in the success or failure of both initial and ongoing customer experience transformation. Spending on silver bullets won’t get it done. Companies must invest in the culture over the long term as part of a strategic approach to CX transformation.

Zappos started with culture first, then products second. And Telstra, a leading telecom company in Australia, has undertaken cultural transformation as a priority, trumping other capital-based projects. These examples show that it’s possible and profitable to lead with culture.
 
4 ways to recognize transformation opportunities

Tactically, company leaders and employees must roll up their sleeves and get down in the dirt to fill in the operational gaps and dig out real ROI. We have identified four key success factors:
 
1. Follow the ABCs: Alignment, behavior, communication. Customer experience is not the job of the front office, or of customer-facing departments. An enterprise commitment requires alignment and advocacy from the C-suite. Everything from Lean Six Sigma initiatives to technology and working capital investment decisions must be aligned to the commitment that a superior customer experience drives growth and profitability. This commitment from the senior management must be cascaded down through the organization. Incentives, rewards and recognition must all influence behaviors and actions at every level. Finally, without strong strategic and informal communications delivered continuously to reinforce the commitment, it is easy for a transformation to become the “flavor of the month.”

For large scale transformations this is a well-known requirement for success. Nearly every management guru has espoused this as a primary ingredient and it has proven over and over by companies such as Hubbell, GE, IBM and other large and small companies.
 
2. Think horizontal. Customers don’t experience their relationship with a company in only one silo. Yet many companies take an inside-out approach to their operations, resulting in redundant or even conflicting customer experience initiatives in different areas of the business. Companies must have complete clarity on the full customer journey by individual, not by product or division.

To do this, we recommend leveraging a Lean Six Sigma (LSS) team. Most companies have ones in place already. Every capable LSS expert fully understands the need to document the customer’s experience across functions, as well as how to take into account the “off stage” support functions such as HR, accounting, and legal. Their expertise can be invaluable in moving quickly from siloed thinking to customer-journey thinking.
 
3. Invest in and practice with your people. Deliberate Practice is the implementation of the concept that expert-level performance is primarily the result of expert-level practice. It’s no different for customer experience excellence as it is for becoming a violin virtuoso. Employees must know what they need to start doing and what they need to stop doing to be more customer-centric, then structurally practice it until it becomes second nature. This is not only at the individual level but also at the team and even enterprise level. Companies need to be sure that new skills and knowledge are applied correctly, down to the full orchestration of every touchpoint. Think rehearsal before opening night on Broadway, not traditional train and test.

Companies must make the investment in working with their employees along the way, leveraging that same Lean Six Sigma team to focus on processes and the human capital team to develop training curriculum. In this respect, social knowledge sharing is critical. Most companies fail to make the investment in sharing information such as customer feedback, lessons learned, new processes and practices, and other areas that drive the new capabilities companies need from individuals and teams.

You need look no further than USAA for a company that has developed the capabilities of its teams. USAA not only makes the investment in its own internal people and processes, but also holds its vendor partners to the same standards. Building that level of performance requires a commitment to insuring people and processes, enabled by technology. It creates a highly capable organization in the context of customer experience.
 
4. Continue ongoing governance. Nearly every company uses steering committees for IT organizations and other large-scale initiatives. We see much less of this in customer experience initiatives, but it is a best practice to facilitate continuous improvement. To maintain momentum, we recommend that the CEO be the executive sponsor for the customer experience governance committee. For the most critical transformation initiatives it is the only way to clearly communicate the commitment is real and success is non-negotiable. In addition, the best leaders and best talent must be assigned to the initiative, not junior people without the klout to enable an enterprise vision of customer experience improvements. And relevant measures of success should be nearly real time to allow for immediate feedback on the impact of actions, initiatives and investments.