Very few business practices get held to more transparent standards than the Customer Experience (CX) field, because what they do affects the daily lives of so many of us—from interactions with the largest to smallest companies. It’s not a pretty picture. Despite the enthusiasm and logic of CX proponents, most people would agree that on average customer service is just okay, supported by the annual American Customer Satisfaction Association survey whose average score in the low 70% range hasn’t changed in a decade. What’s missing is not the methodology, but an awareness by boards and CEOs, of the fundamental economics of customer retention and referrals and the need for a strategic approach with clear ROI measures.
By Bruce Bolger
As ISO (International Organization for Standardization) standards have clearly demonstrated for quality management and dozens of other business practices, a strategic, systematic, and proactive approach with clear purpose and metrics generally wins out over the frequent reactive, bright-shiny-object approach. The fundamental challenge in the world of Customer Experience: return on investment measurement. Unless an organization is run by people who fundamentally believe in the ROI of maximizing the customer experience, or have clear return-on-investment measures, chances are there is a tendency to focus more resources on attracting and selling to new customers—something easily measurable—than on keeping them.
Customer experience suffers from the same deficits as human capital management in general, the same lack of a strategic and systematic approach that hampered quality manufacturing in the last century, when the high levels of quality manufacturing put severe competitive pressures on US brands. This article applies the principles of Enterprise Engagement and ISO 10018 People Engagement standards to Customer Experience. It addresses the fundamental reasons why Customer Experience efforts fail: an unwillingness of CEOs to make the investment due to a fundamental belief that the benefits are nearly impossible to measure.
Here are the steps to success for Customer Experience.
Step 1. Determine clear metrics and return-on-investment measures.
There are in fact reasonably clear measures that can be used to determine the value of investing in the customer experience, including:
•Revenues and costs per customer, customer service employee, and supply chain partner, if applicable.
•Customer retention or turnover.
•Willingness to refer, that is the level of participation in and revenue generated by customer referral programs as well as willingness-to-refer survey results.
•Voice of the Customer data indicating number and degree of green-, yellow-, and red-zone phone calls.
•Human Capital ROI—the return on investment of your people costs.
•Human Capital Value—the extent to which people contribute to bottom-line profits.
•Lawsuits from customers.
•The ratio of positive to negative social media posts or subpar ratings on popular search engines.
While it can often be difficult to get granular data on the relative effectiveness of a particular customer engagement or experience initiative, the above measures provide ample data to establish a benchmark or an ROI for translating positive customer experiences into increased organization performance, most measurably in the form of referral programs.
Unlike advertising, Customer Experience cannot be faked. People know if they are satisfied and choose on their own volition to share their experiences. Whereas in the old days before social media, when the estimate was that one unhappy person told nine people; that can be magnified 10-fold on the Internet. It also remains true that happy customers are less likely to invest time spreading positive comments than unhappy people spend getting revenge.
Step 2. Establish a clear purpose, goals, and objectives, led by the CEO.
Logic and extensive research support the proposition that organizations with a clear promise to customers that is enthusiastically and consistently delivered leads to higher levels of engagement, willingness to recommend, and lower customer acquisition costs. No CX experience will deliver optimized results without a fully engaged CEO.
Step 3. Understand your audiences and use cases.
Depending on the size of your organization, use every practical means to build customer personas and use cases for customers, customer service employees, and, when applicable supply chain partners. Most companies focus most of their efforts on the sales use case, and much less on the after-sales use case, which usually involves a problem. Since companies see problems as a cost-center, they usually under invest in customer service, when in fact problems are usually the best opportunity to “wow” a customer.
Don’t just look at customers, but all stakeholders involved—look at anyone who can directly or indirectly affect the customer, which can include manufacturing, technical operations, logistics, etc. Essential to a proactive approach to CX is understanding everyone who can be affected by it or who can affect it.
The importance of use cases. The key to a proactive approach is understanding why people are contacting you for what. Analytics and artificial intelligence can get the average organization about 80% toward a deep understanding of use cases—the last 20% of insights come from the emotional intelligence of the right human beings on your team who can apply insights more nimbly and rapidly than machines.
Generally speaking, people want to self-serve to the extent possible. Chances are, once people have failed at trying to figure something out on their own, their level of impatience rises quickly: people want a solution now. Increasing numbers of people are satisfied with live chats, if the information provided is useful. Either way, Voice of the Customer data and logic confirm that, at this stage, people want to be able to rapidly each someone able to quickly understand and address the issue.
As many as 90% of companies make it difficult to find a solution. For multiple reasons, it takes far more time to get problems solved as it does to buy something. Without the metrics outlined above, organizations have no way of seeing what happens in the aggregate when the vast majority of people have a bad after-sales experience. The sources of aggravation, well documented in the video clip featured with this article, include:
•The automated customer service bot does not offer the desired option with a clear alternative.
•It takes too long to get a human being who has clear answers, or, the person on the phone is difficult to understand due to language issues.
•There is no “O” to press to get immediate attention.
•Information provided in previous calls isn’t available to a current customer service representative.
•A promise implied at sale or through marketing was not delivered after the sale because of a “fine-print” or related oversight
•Multiple people are required to solve a problem.
All of these sources of ongoing aggravation are easily avoided once organizations understand how great customer experiences create brand ambassadors that reduce customer acquisition costs.
Step 4. Make technology your friend.
The larger the organization in terms of number of customers or complexity of distribution (i.e., through reseller channels), the more technology can help ensure effective communications, measurement, and engagement.
Essential technologies include:
•Customer relationship management (CRM) properly configured for your organization’s sales and after-sale process backed by ongoing training and communications to ensure proper use.
•Enterprise engagement technology that lays a cable into the hearts and minds of every employee through their smart phones, to support surveys, news, gamified learning, referral and loyalty programs, diversity inclusion, collaboration and innovation, and related metrics.
•Voice of the Customer technology that provides real-time feedback on customer experiences in call centers.
•Distributive technology that can direct calls to customer service people equipped with tablets or whatever technology needed wherever they to minimize wait times.
•Virtual video personal assistants for shopping, demonstrations, and events.
Step 5. Apply a strategic approach to communications.
Take a close look at all your audiences, their inter-relationships; the information they need to maximize their experience with your organization from whatever perspective or use case; and the media delivery vehicle most likely to reach them. Today, that almost always means the smart phone.
Communications involves understanding your overall story and then breaking it down into sequential sound bites across different media over time using a “drip” approach in the words of marketing guru Seth Godin.
Remember that the smart phone has become the universal cable into the lives of almost all young adults on up everywhere, so do whatever you can to lay that cable into the smart phones of your stakeholders.
Step 6. Smart job design.
Probably no one has done more to publicize the concept of Job Design than the Harvard Professor Zeynep Ton, whose book, The Good Jobs Strategy, led to the creation of a consulting institute to help organizations create jobs that are more productive and rewarding. The premise behind job design is that organizations can achieve higher quality, productivity, and retention by making jobs as engaging as possible. This can include strategically rotating tasks or skills so that each day gets broken up into different opportunities to learn or interact with different people. Smart job design improves the customer experience by creating a larger community of people with diverse expertise within each community.
Step 7. Learning.
Almost every organization has learning programs; what many lack is a strategic approach that focuses on the effectiveness of learning. In the case of Customer Experience, that means identifying the soft and technical skills required in customer support as well as the organization’s purpose and objectives, and measuring success by how well the organization has enhanced the willingness to refer or improved the frequency of positive call outcomes.
Step 8. Loyalty and referrals.
As with many other engagement tactics, loyalty and referral programs often find themselves siloed from other Customer Experience activities, when in fact they provide an effective platform for capturing feedback and suggestions and reinforcing key values and messages, not to mention new customers.. Everything from the information provided on the web site or e-newsletters or social media platforms should strategically align with and support the organization’s purpose, brand, goals, and objectives, and every organization should have a referral program. Actual referrals are far more meaningful than surveys indicating a willingness to refer.
Step 9. Collaboration and Innovation.
Front-facing customer service employees and the employees who directly or indirectly support them are the first to face customer issues and can provide an invaluable source of ongoing intelligence about customer satisfaction and competitive activities. The Customer Experience executive makes sure that the door is wide open for feedback and actively promotes and rewards suggestions and competitive intelligence. Many employees get excited by being part of the mission to outdo competitors.
Step 10. Diversity inclusion.
Traditionally viewed as a Corporate Responsibility Issue, diversity inclusion in fact is a business opportunity. It opens up potential new markets for customers, talent, supply chain partners, because people by nature want to see people from their own communities represented in the room. Diversity inclusion starts with CEO-level commitment led by people of all communities relevant to an organization’s geographic location.
Step 11. Continuous Improvement.
When managed in a strategic and systematic way, a systematic CX process yields clear metrics based on quantitative and qualitative information that needs to be actively distributed to all stakeholders involved with a management process. The goal is to continually identify relevant information, take action, and publicly reward and recognize, when appropriate, the people who have helped identify or put that information to work.
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• The Engagement Agency at EngagementAgency.net, offering: complete support services for employers, solution providers, and technology firms seeking to profit from formal engagement practices for themselves or their clients, including Brand and Capability audits for solution providers to make sure their products and services are up to date.
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• Speakers Bureau—Select the right speaker on any aspect of engagement for your next event.
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Enterprise Engagement Benchmark Tools: The Enterprise Engagement Alliance offers three tools to help organizations profit from Engagement. Click here to access the tools.
• ROI of Engagement Calculator. Use this tool to determine the potential return-on-investment of an engagement strategy.
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• Gauge Your Personal Level of Engagement. This survey, donated by Horsepower, enables individuals to gauge their own personal levels of engagement.
For more information, contact Bruce Bolger at Bolger@TheEEA.org, 914-591-7600, ext. 230.