Impact Partner Content: Absa / by Tina Playne, Managing Executive: Sectors and Segments, Private & Business Banking, Absa Retail and Business Bank
By 2016, 89% of companies expect to compete mostly on the basis of customer experience.” Gartner, 2014
…and that was four years ago! Why has it not materialised?
There is a marriage made in heaven between two practices that have been around for a while, and it is time to formally unite them. Welcome to the merger of Customer Experience (CX) and Agile management practices.
Customer Experience, also known as Cx, is your customers’ holistic perception of their experience with your business or brand. It results from every interaction a customer has with your business, from navigating your website to service. Everything impacts your customers’ perceptions and their decisions to come back or not and great customer experience is your key to success.
Agile relates to a method of project management, used especially for software development that is characterized by the division of tasks into short phases of work and frequent reassessment and adaptation of plans.
What’s Wrong With Cx?
Why has the global billion dollar Cx industry not resulted in happy customers all over? Why are businesses struggling to win the hearts and minds of their customers?
Perhaps a clue for this lies in the approach businesses take in managing Cx. In most businesses you will find a Head of Customer Experience. Ironically, Cx is NOT a department, nor is it customer service or complaints management. It includes every touchpoint the customer uses to interact with the business or the brand, by whichever channel from before they even realise they are considering a purchase. And it is the experience customers receive across ALL touchpoints that determines the success of any business.
Creating a customer-centric business that focuses on driving better CX is not easy and it’s not quick, but it is critical in achieving success in today’s competitive markets. Fundamental to the success of a great Cx strategy are (1) a leadership shift from driving profit to placing customers at the centre; and (2) deep employee engagement.
The History of Cx
The CX movement is about 20 years old. Actually, you could start the CX clock even 10 years earlier, with Jan Carlzon’s 1987 book Moments of Truth. This is a great read for all of us still today describing how he turned around ailing airlines… essentially, he says that the customer-oriented company is one that is organized for consistent change.
Then more recently, Cx proponents like Jeanne Bliss and Bruce Temkin established the Cx professionals association in 2011, with nearly 4,000 certified professionals today, driving the customer agenda in business. On Customer websites there are literally thousands of articles from the brightest Cx minds across the globe. The themes are similar: personalization, customer insights, user experience design and complaints management, forming the pillars of an effective CX capability.
At the end of 2017, CRM was the largest of all software markets worldwide ($39.5 billion). In 2018, CRM software revenue will continue to lead of all software markets with a growth rate of 16%.
The Disappointing Results of Cx
Alarmingly, recent research has proven that only 30% of senior executives claim success in terms of tangible benefits that deliver competitive advantage or measurable returns of their Cx programmes. This means that less than a third of their Cx initiatives are successful, suggesting that a huge number of companies are not getting real value from their Cx programmes.
On the flipside of the coin, is it really a great time to be a customer? Are the experiences we have in 2020 radically better to the experiences we had in 2008? Or 1998? Are businesses really changing the way they treat their employees and customers?
If you search “Customer Satisfaction”, you will see 100’s of sad tales of declining satisfaction in banks, retail, airlines… even Facebook, Starbucks and Amazon! So, whilst we continue to invest heavily in service delivery, our customers don’t believe most of us are that much better. The problem in most industries is that someone else has moved the baseline that has become the new “normal”. Good service is no guarantee that customers will remain loyal. Customers are trying new things as we face new and more interesting options every time we log on. The term “loyalty” today means remaining the same and not exploring alternatives… and not exploring alternatives is like putting your head in the sand and missing the party!
It’s More Than Customer Satisfaction
Don’t make the mistake of thinking that a high Customer Satisfaction score is an indication of my loyalty. I may rate your business positively today, but rate a competitor exactly the same tomorrow. My rating does not represent loyalty, ongoing financial benefit, nor provide any information of what tickles me.
If you have good data on your customers, you may begin to understand loyalty drivers. You should know which customers are likely to buy soon and which customers are trending to leave and need to be incentivized to stay. Loyalty measurements are critical to develop individually relevant campaigns, because relevance improves relationships, and this connectedness results in long-term mutual benefits.
Impact of Technology and Transformational Growth
By putting the word “Customer” on your Values Charter does not guarantee sustainable results in today’s digital world. Cx needs to be ingrained in everyone and not just sales staff, the complaints guys or the design team.
How prepared, or how “Agile,” are you to move quickly enough to meet the changing needs of your customers who are on a technology-fueled high-speed train? Technology is most likely THE biggest reason for the rise in customer expectations.
The top two leading indicators of Cx success are “closing the loop from customer feedback to action” and “continuous innovation”. Yet, most businesses appear to be continually stuck in fixing the basics, slow to respond to customer feedback, slow to land new things and not able to unlock the value of Cx. There is no single silver bullet but at the heart of it is a different approach.
Transformational growth for most businesses will come from widespread adoption of Agile Cx to execute faster. By organizing teams differently (cross-functional teams), proper digital enablement (quick and responsive) and better use of data a cultural identity can be built around the customer.
The ability to quickly adapt is a top strategic priority for most businesses, and Agile project management practices are becoming the norm. An Agile approach means businesses can manage changing priorities better, deliver to market faster and be more relevant. The most Agile companies in any specific industry are, on average, 2.7 times more successful than their peer group. Imagine unlocking 2.7 x on your businesses’ performance! So make sure you understand the principles for Agile management.
Assets for Agile
Agile Cx poses a big opportunity for doing things differently, but it is an opportunity for competitors too – most of them identify Agility as a success strategy. So, with all our best intentions to deliver great Cx, why is there a gap between what we all want to deliver and what we are delivering? It’s complex, but in my professional role in various Customer functions, I have identified three areas that need to be unlocked to enable Agile Cx.
PEOPLE: Recruitment, training and retention practices are all a part of creating tech-savvy customer-centric people. HR has to approach hiring differently. With fluid, Agile teams who are vested and skilled to promote a customer culture in everything they do, innovation, iterative improvement, personal empowerment, collaboration and the right customer outcomes are delivered.
DELIVER DIGITALLY: Your customers are digital - from browsing for the next purchase to in-store research, to post-purchase surveying and customer service follow ups. Focusing on Cx involves a lot of digital and businesses can only succeed if all functions are digitally integrated.
UNDERSTAND CUSTOMER DATA: The new world is centered around a data-driven customer-centric culture. This shift is taking place whether you are on board or not. Every touchpoint and micro-moment must be analyzed and optimized to turn insights into sustainable growth.
Taking It Further: Co-Design
Most Agile design does not include the Voice of the Customer and businesses must incorporate the customer voice far better at every step to ensure customer value is delivered. By being more innovative and enabling design thinking, cross-functional governance and the use of insights through deeper inclusion of the customer, measurable returns will be gained.
There are many new techniques to do so: tracking online customer behavior, digital surveys and trend analyses, social media analytics and experience software. Not all customer research takes many months and heavy investment! All the great examples of Cx best practice, from Apple to Disney, and from Experience Architecture to Experience Economy, are based on co-creation and co-design with the customer. A shift to Agile Cx co-creation can build customer-centric processes deep in the heart of any business.
Organisational Design
Businesses that are designed based on yesterday’s strategies, yesterday’s customers and yesterday’s technologies will at best retain yesterday’s hero’s. Globally, organizations have moved from being product-centric to functional-centric. This requires flatter constructs, enabling a shared culture focused on delivering to the customer. The benefits are that it allows employees to take initiative without multiple layers of approvals and hoops to jump through; more collaboration as they are free to re-organize according to tasks; more engaged people and a healthier learning culture; and better communication on brand goals and customer-centered activities.
Conclusion
In conclusion, if you want to adopt an Agile Cx approach in your business you will need to:
Improve access to rich customer data for intelligent insights that enable actions delivering more customer value;
Tune in to the customer’s emotional experience with deep empathy;
Align and prioritise efforts around what really matters to customers through ongoing contact, not that once-a-decade piece of research that informs propositions for years to come;
Execute quickly and tweak ongoing, balancing short-term improvements and future innovation – delivered beats perfect; and
Engage all employees to deliver CX as part of the business DNA.
The ideal match is Agile Cx, including co-creation, design thinking, test-and-learn, cross-functional teams and ongoing rapid delivery. Culture sits at the heart of it. Why? Because you can’t focus on the customer in any way that has real meaning and ongoing impact unless everyone’s on board and doing it from the heart.