In this business world of what have you done for me lately, thinking about anything beyond this quarter or this year is a challenging situation for business leaders. Shareholders demand increasing earnings per share, CFO’s want to know where have you cut costs and increased cash flows, COO’s and operations managers are being driven to increase productivity every year and analysts wonder what’s the next innovative product/service you are going to offer this year? It makes it tough to consider what and how businesses will grow over the next 2, 5 or even 10 years. The Japanese used to be masterful at this in their strategic plans, sometimes at least talking about 100 year plans. Today even they have been challenged about the next quarter or yearly results. Although I doubt anyone can be so insightful that they can see 100 years into the future, there is a common theme that does allow businesses to flourish over the long term. That theme is a clear strategy around customer experience.
Regardless of what happens technologically, environmentally, politically or globally a common theme over time in my opinion is the customer. Obviously without customers there is no business. It seems so obvious but sometimes I wonder if companies really understand or focus on this fundamental principle. Companies that are still around after 100 years have obviously been able to identify what their customer’s desire and adapt every aspect of the business to insure they deliver. A few businesses that have been around for close to 100 years have struggled, declined or gone out of business. Many argue that they declined due to lack of innovation and ability to adapt to changing market dynamics. I contend that if they really understood what their customers needed they would have been able to adapt to change and continue to thrive going forward. Only time will tell if the ones currently struggling as well as those thriving will survive another 100 years.
In a previous blog I talked about what it takes to create a culture of customer experience. The best companies have inspirational senior executives and leaders who provide a customer experience oriented strategy, align the organization to the customer and empower and engage employees toward an outstanding customer experience. This culture is critical for companies to provide a product or service that meets the expectations of the customer. But what does it take to ensure that this culture is sustainable over the long term? What happens when inspirational leaders depart, retire or pass away? Does the culture of customer experience remain or does it diminish and the results of the business go down as well? How do businesses adapt to changing market dynamics? How do they know what the customers want? How do they continue to deliver excellence as measured by the customers who buy the products and services the business provides? Sustainability is the key but what makes it up?
There are a number of key elements that can provide a sustainable customer experience culture and allow those that apply it to not only survive but thrive. These elements consist of the following:
• Metrics and Customer Analytics
• Technology and Information Systems
• Customer Involvement/Engagement
• Operations Focus
Let’s cover each of these briefly.
I have read many articles and participated in a number of blogs/postings that identify metrics as something that are most critical to measuring the experience of customers. While I agree measures are critical, again it’s the culture that is most critical to the overall customer experience strategy of a business. Metrics reinforce or help you sustain the customer experience assuming you have a measurement process focused on the experience of the customer. Many people confuse surveys like customer satisfaction (Csat), Net Promoter Score (NPS), Customer Effort Score (CES) and others as the measurement for customer experience. Over the last 10 year I have been involved in a variety of measurement initiatives, surveys and programs. These at times, depending on who you talk to, become almost spiritual or political in their intensity. People become disciples and/or heretics depending on which side of the measurement aisle you come from. I have seen all of these work and fail. It really comes down to how you use your measures and most importantly what you do with the information you get from them. The focus of your measures and the associated customer analytics need to be:
• The processes you employ to know what is critical to your customers financial success
• Your business goals and measurements that relate directly to the equity/value of your customer
• Visibility of the metrics (internally and externally)
• And most importantly how metrics and customer analytics drive improvement and action in your business
Technology and information systems provide another key element to sustaining the customer experience within the business. In many circumstances IT focuses on financial, back office, logistical and manufacturing functions to enhance the overall productivity of the business. Rarely have I seen the IT organization focus on developing the best customer experience tools for use by internal and external resources. The justification for almost all IT projects invariably deals with reduction of headcount to perform functions, reduction of inventory or improvement in the productivity of the operations side of the business. If the organization has adopted a customer experience strategy then IT’s role is not only to just focus on technology for productivity sake but also to develop the best customer experience tools and systems that support this strategy. Key attributes to accomplish this include:
• Prioritization of investments toward customer experience based benefits. (e.g. customer equity)
• Utilizing a chief customer architect or similar approach in developing systems
• Systems structured to monitor the product/service
• Systems that provide feedback from customer experiences across all business functions
• Ability to monitor future needs of the customers
Without the involvement and engagement of customers the ability to sustain long term positive customer experiences is going to be limited. A key question I like to ask clients is “Who in your company owns the customer?” In B2B companies that I have worked with they typically say, “The sales organization owns the customer.” Sometimes when it’s a B2C business and there is a strong channel in place the end customer is seen to be owned by the service organization. Rarely have I had the experience when someone says everyone owns the customer or if they do it usually is very weak at best. Lawyers, HR and Finance rarely know anything about customer experience and their effect on customers. Again, starting from top of the organization the customer has to have top priority and the message has to be everyone owns the customer no matter what function. Without the customers the business ceases to exist. Now saying that and making it a functional reality are very different. How do you make this part of the sustainability of the business? The key attributes for sustainability in this element must be:
• Developing an advocacy by all functions and personnel for the customer
• Tools, information, hiring, training and reinforcing the customer experience
• Senior leadership’s direct engagement with and integration of the customer experience strategy into the organization
• Systematic and rigorous collection of customer data and sharing across the entire organization
• Monitoring the business trends of your customer’s marketplace
• Customer involvement in product/service innovation
The last element for sustainability is Operations Focus. Operations are usually where the product/service is delivered to the customer and the transactions are validated. When it’s a physical item like a product there are a variety or operations organizations involved. Manufacturing, order management, logistics, shipping, carriers, A/R, service and more are all involved. When it’s a service then direct or indirect service delivery occurs from internal or partner organizations. This can be the case on the product side as well since outsourcing over the last decade or more has put many non-direct partners in direct contact with your customers. Some of the key attributes for sustainability of this element consist of the following:
• Insuring that operational efficiencies do not conflict with delivering the best customer value
• Managing the non-internal operations (e.g. outsources) resources to insure the best customer value
• Measurement of the performance of the operational resources in customer experience
• Extending your operations capabilities to your customers
Sustainability of the culture only comes through the reinforcement of these four key elements. Companies that do a good job in establishing the culture but do not build a sustainable process will eventually lose the ability to deliver the best customer experience over the long term.
For more information on developing a Customer Experience Strategy go to www.servtrans.com.