10 Questions About Customer Experience

The Business Strategy That Creates Customer Happiness

I love Customer Happiness: putting people at the center of every strategic decision is the new frontier of future development and global competition. Customer Happiness is the result of the successful implementation of a good Customer Experience (CX), the cutting edge business strategy to build the competitive differentiator in today’s business environment.

• WHAT is the CX context?
• WHAT is the concept of CX?
• WHY are we talking about CX?
• HOW can we approach CX?
• WHO works on CX?
• WHERE are the CX main obstacles?

Furthermore the post suggests 4 direct questions to help starting the discussion about Customer Experience.

Last week I had the privilege to be invited in a company to make a presentation to a group of executives about Customer Happiness. I thought that sharing the content of the presentation and the sources I used to build it could be useful for the community. So let's get started ...

WHAT is the CX context?

“Love your customers.”

In a context where market boundaries are blurring and overlapping, competitors are changing, the most dangerous among them come from different markets, consumers have become digital customers, the progress pace is exponential, it makes business sense for a company to focus not just on customers, but to make customers happy.

Focusing on customers is broadly considered the most important strategic priority to enable profitable and sustainable long-term growth. But focusing on people makes even more sense because its meaning includes all: employees, partners, stakeholders, suppliers and also customers, friends, brand advocates, community, fans, followers …

The following two evidences reflect exactly how successful companies are managing the relations with their customers.

The first is a remarkable statement and also the first of the ten commandments of the new marketing by Philip Kotler:

“Love your customers and respect your competitors.” (Marketing 3.0)

The second are the 4 Ps of the new marketing mix created by Laurence MacCahill and Carlos Saba at The Happy Startup School suggesting a very simple, natural sequence from Passion to Purpose, People and Profits. It’s a new marketing paradigm where companies are competing to become the best for the people, not simply the largest, the biggest or the richest.

People sharing the same passion and the same values are attracted by the same purpose and are led to achieve common results, not necessarily measurable only in terms of economic value.

There are many concrete examples showing that the best companies for people can eventually become bigger, but the current bigger companies aren’t always the best for the people and for the environment. (Image credits below: The Happy Startup School)

However according to a number of researches, the following to evidences do not align with a rather common situation illustrated below.

Somehow these information describe the picture of a disconnection between what companies are thinking and knowing about their customers.

This disconnection is a business concern which has been well framed by recent Accenture’s studies. They show how the evolution of the digital Customer and its frequent hopping from one supplier to another due to poor CX, has created a market space of a huge size (they name it “switching economy”). The dimension valued in more than 6 trillion suggests that an unrepeatable opportunity is there for businesses.

WHAT is the concept of CX?

“Today product innovation is no longer enough.”

As a premise to the CX’s concept it’s worth to mention a quote by Bernard Charlès (CEO of Dassault Systèmes):

“Today product innovation is no longer enough.”

A multinational tech company commits its growing strategy of the next five years to become a company that designs experiences for their customers. It’s not just another remarkable statement, it clearly shows a consolidated business trend.

The definition of the Customer Experience includes all interactions occurring between an individual an any organization before, during and after any transaction. The crucial point is that if only one interaction goes wrong, the complete experience with that company or brand will get negatively affected.

The best way to see the Customer Experience is to consider it as the container which makes sense of all the efforts to care about the customers, the business strategy which connects the dots between:

• customer service,
• customer satisfaction,
• user experience,
• hugging and kissing customers.

While the Customer Satisfaction focus is the product or service, the Customer Experience focus is the Customer and it aims at building an ecosphere where people are getting seamless, repeatable and good experiences at each contact point with the company or with the brand.

WHY do we talk about CX?

“CX drives more revenues.”

Because it’s been proven that Customer Experience drives greater loyalty and it’s widely acknowledged that loyalty drives more revenues.

At Forrester Research they have been studied CX for the last ten years and they built a CX index which shows how the CX champions are outperforming the best of the Standard & Poors 500 index. (Image credits: Forrester report: Business Impact of CX - slide 5)

So, clearly CX isn’t a bumper sticker, but an effective business strategy that already allowed Adobe, Mercedes Benz USA, LEGO, E.ON, JetBlue and many more companies around the world, to save millions.

The CX brings three integrated benefits:

1. additional sales, because loyal customers buy more frequently,
2. avoiding the costs of losing customers, because more loyal customers means less customers defection,
3. driving new sales with a broader word of mouth.

HOW can the CX be approached?

“You need your customers more than they need you.”

Harley Manney of Forrester Group and author of “Outside in”, illustrates a practical method which includes six business disciplines to successfully implement Customer Experience strategy within any organization.

1. Define the strategy (the CX to provide) and make sure to align it with the corporate and the brand strategy. Share it with the entire ecosphere and with the stakeholders.
2. Know your customers and avoid the mistake so many companies are doing. Use customer service information, define the customer personas based on documents and data, share this knowledge with the ecosphere.
3. Design the experience in a way that it is relevant to the customer, seamless, consistent, customizable, scalable on media.
4. Measure the progress by defining “what” “how” “when” to measure. Make sure to connect CX performances to already existing company KPIs. Collect the information, create a dashboard to share with the ecosphere.
5. Define the governance to make sure good practices and lessons learned are not lost and that good results are repeatable.
6. Create the culture by defining a set of shared values focused on CX and share them with the ecosphere.

From a more practical point of view this is a quick roadmap that I'd suggest to adopt before starting the implementation process of the Customer Experience strategy.

• Assess the current CX level.
• Define the CX strategy to provide.
• Assign resources and people to CX.
• Make sure CX projects are cross functional.
• Prove the benefits of the first project.
• Create a business case out of it and share it with the ecosphere.

WHO works on CX?

“No good marketing solution can fix a customer experience that sucks.”

Consider that positions in the executives board haven’t been always as we know them today. They evolved and followed pretty much the main technology cornerstones.

The Radio and TV boom in the ’50s created the need for a new position that didn’t exist before: the Chief Marketing Officer.

The same happened for the position of the Chief Information Officer: it didn’t exist before the ’70s and it was brought by the transistors revolution which paved the way to the computer age.

Today a company without these two positions in the executives board is unthinkable.

According to Forrester Research in the era of the customer, it’s time for companies to have their Chief Customer Happiness Officer. (Image credits: Forrester Report The Business Impact of CX - slide 3)

The position is helping to connect the dots between current company efforts to care about the customers, to support different departments in their efforts:

• to listen to the customers,
• to empathize with them, 
• to design meaningful experiences,
• to build emotional connections with customers,
• to build a compelling and valuable story.  

CX projects are developed with the most cross-functional collaborative approach. Specific CX teams are created to work closely with HR, marketing, project management, product management, customer service and financial departments.

WHERE are the main CX obstacles?

“Experience is the new brand.” (Brian Solis)

By definition CX is a cross-functional business strategy highly interconnected with every company department and it simply could not exist or score any positive result if left to work alone on customer happiness.

This short definition already describes the main obstacle to a successful CX: the culture.

A not CX friendly culture can derive from one or more of the following:

• a product or service driven approach,
• being excessively focused on process efficiency,
• giving priority to “how” things get done (tactics) over the “why” (strategy),
• considering technology (not people) the real competitive advantage,
• a weak or non existing authentic leadership,
• giving priority to short term results (profits) over long term strategy,
• misalignment of values between company and people (employees and customers).

To better understand the impact of a wrong company culture to a successful CX implementation consider this:

The Customer Experience approach will never underestimate the value of your service or product, whereas by definition, the service or product driven approach will ignore the value of the Customer Experience.

In today’s business environment, the second approach sucks.

Open the CX discussion

There are also four useful questions to start the discussion about CX inspired by Colin Shaw, a CX thought leader.

1. What the CX you are trying to deliver? If you write down the CX you’re providing and you show it to different people within different departments, what kind of picture do you think you’ll get?
2. Because decisions have a 50% component of feelings and emotions, what are those you want to evoke with your CX?
3. Is your current CX deliberate? Did you plan it or is it relying on the good will of the people working with the customers?
4. What are the emotional connections that you provide to compel customers to repeat the experience?

The bottom line

“CX needs to be guided, not simply managed.”

The CX is a long-term business strategy that follows the same gradual maturity path in every organization and its bottom line is to build a profitable and sustainable platform which:

• drives greater loyalty (additional sales),
• reduces customer defection (reduced costs),
• creates a great place to work where to live great experiences,
• has a positive impact on the larger community (happiness),
• allows the company to fulfill the responsibility to build a better future.

Customer Experience ultimately is the perfect leverage for any organization to build a legacy.

What’s the legacy your company is committed to build? How do you think the CX is going to be your competitive differentiator?

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