Customer Experience Strategy: 4 Overlooked Competencies

Updated: May 24, 2010

1) Share a Consistent & Vivid Image of Target Customers

If you want to be a customer-centric company, you must set yourself up for success in revolving around the customer's well-being. A thorough understanding of the customer's world is the foundation for customer-centricity.

What is the customer's world? It's much more than recommendation rates or features and benefits of your products and services. The customer's world is the larger context of why and how they're using your products and services:

• What are they trying to achieve?
• Are there different circumstances that shape their processes and expected outcomes?
• Are there other products and services and internal elements that are combined with yours as a solution to the overall objective?
• What are their pressures, challenges, frustrations and triumphs relating to that overall objective?
• What are the customer's work-arounds for missing or complex elements of the solution?
• What does the customer consider to be excessive or unnecessary among the solution elements?
• How does the customer prioritize importance and frustration levels of the solution elements?
The goal in exploring the customer's world is to discover opportunities for making it easier and nicer for customers to get and use the solutions they're seeking.

Keep your ear to the ground. A thorough understanding of the customer's world is a moving target. Arrogance has been the undoing of many a leader. Despite compelling evidence of customer retention's impact on revenue and profit, nearly two-thirds of companies do not have a formal voice-of-customer program in place.³ So it's no wonder that 69% of companies have not provided customer-facing personnel with customer insights.⁴ Yet, customer-facing personnel can be customer-centric only to the extent that your business processes, policies, and attitudes of all other employees throughout the company allow them to be.

Your payroll dollars are made possible by satisfied customers. This message on my bi-weekly payroll stub, at semiconductor equipment-maker Applied Materials, stood out to me as a stark reminder of the role of customers in my job. A wide array of sensitizers is necessary to keep the customer's world front-and-center for executives and employees. Use every opportunity to provide everyone with a consistent and vivid image of your target customers: post customer stories as articles, podcasts, and video on bulletin boards, intranet sites, newsletters, executive messages, and in staff meetings. Make the customer's world personal to employees by streaming relevant voice-of-customer data to every corner of your organization. Conduct workshops to help all employees identify their jobs' link to customers' well-being, and to involve them in ways to act on customer sentiment data streams.⁵

2) Emphasize the Customer's Well-Being in All Decision-Making

Decision-making can be complex, with multiple constituencies to consider: customers, shareholders, competition, executives, peers, personal career path, etc. Hence, it's all too easy to fall into the trap of compromising customer relationship strength by favoring another constituency in tactical and/or strategic decisions, at all levels of the company. Only 60% of companies regularly consider how a proposed action increases or decreases customer trust when making decisions, despite widespread agreement that customer trust is tied to the financial success of the business.² The primary reason for consistently putting customers first is that they do indeed make payroll possible. Typically, when priorities are aligned with customers first, and other constituencies secondarily, the intended outcomes for other constituencies follow naturally, and more healthily for all involved.

Imagine Customer Presence. There's a common saying that applies to customer-centricity: out of sight, out of mind. What better way to transform your culture to truly customer-centric ways of thinking and doing, than to invite your customer to attend all your discussions? This has long been a practice at Amazon, since founder Jeff Bezos once started an executive meeting by announcing that an empty chair at the table represented "the customer". Throughout the meeting, the executives were compelled to include the customer in their thought process, and to consider their comments' implications on the customer, as if "he/she" were present.⁶

This practice became a habit at Amazon, part of their corporate culture. CTO Werner Vogels explains: "It's very important to have a culture where everybody understands what the core values of the company are. New starters are often surprised at how important focusing on the customer is to us and how good Amazon is at doing that. ... We often have meetings where we start off with a 'customer voice' - a success story, even sometimes a negative story, of a customer's experience of buying on Amazon - and use those stories to drive our services to become better. ... We want to be the most customer-centric company on the planet."⁷

Do customers confirm your customer-centricity? The elusiveness of true customer-focus is evident in several studies, such as Accenture's Delivering the Promise study, where 75% of surveyed executives viewed their customer service as above-average, while 59% of their customers reported their experience with these companies' service as somewhat to extremely dissatisfying. Another example is CMO Council's Customer Affinity study where half of companies said they're extremely customer-centric, but when customers of those companies were asked, only a tenth of them said those companies were extremely customer-centric, but when customers of those companies were asked, only a tenth of them said those companies were extremely customer-centric.

Weave customer-focused decisions into your culture. To what extent do you emphasize customer-focused decision-making in your processes for annual operating plans, operations reviews, staff meetings, performance reviews, and other rituals in your company? Make a concerted effort to incorporate customer-first thinking and discussions in all of these business processes, and you'll see a monumental increase in customer-focused employee engagement. Audit your customer programs to identify what's-in-it-for-me (WIIFM) from the customers' perspective. Create a ratio of WIIFM for your company versus WIIFM for customers, both short-term and long-term, and make adjustments that strengthen the customer relationship from the customer's perspective.

Challenge your organization to follow their examples. Invite your "customer" (even in your imagination) to attend all your discussions company-wide, and see what a difference it makes in transitioning to outside-in thinking that results in actions your customers would agree are in their best interest. In the meantime you'll be building customer affinity that translates to sustainable market leadership.

3) Monitor the Quality of Customer Interactions

While surveys have long been in place for most companies, only 31% of marketing executives report that their company takes customer listening seriously, and just 38% of companies are gathering customer insight from customer engagement situations.⁸ This means that companies willing to adopt a disciplined approach to customer experience management may enjoy significant competitive advantages by being first and best at monitoring and improving the quality of customer interactions.

Monitor the customer's world. A customer satisfaction survey typically provides essential yet insufficient insight on the quality of customer interactions. Some surveys focus on the overall relationship, while others measure the effectiveness of transactions. User groups and advisory boards often focus on future offerings. There may be multiple influencers on purchase decisions, and the sentiment of each influencer should be monitored, to paint the whole picture of your status with customers. Social media monitoring provides a window to customer interaction quality among those who are vocal. Call center logs and complaint lines are also very important sources of customer experience feedback, yet not often used company-wide.

In nearly every case, these feedback mechanisms and forums are designed around the company's world, rather than the customer's world. "For any given job [i.e. purchase], customers collectively apply 50 to 150 metrics to measure how well the job is getting done", says Anthony Ulwick in his book, What Customers Want. Hence, the best way to monitor the quality of customer interactions is to use customers' inherent measurements of goodness rather than the company's measures of goodness.

Embrace constructive feedback. Many firms that measure customer satisfaction emphasize the positive and de-emphasize the negative responses. Lack of processes and comfort levels for digesting and acting on constructive feedback can leave a company vulnerable to severe consequences. One out of two companies (44%) acknowledge that high-profile negative customer experiences have at some time compromised their brand, yet only 29% have high ability to handle and resolve customer complaints.⁴ Make it safe for executives and employees to receive less than stellar results - as long as they diligently improve. A motto such as this one may be useful in establishing curiosity rather than fear: Good news is no news; no news is bad news; bad news is good news.⁹ Make it part of your culture to look at negative feedback from customers as early warning signals, and, as the old saying goes, turn lemons into lemonade.

Virgin Mobile measures call center customer satisfaction on a five-point scale and looks at the top-two box (4-5) and bottom-two box (1-2) scores, with emphasis on the latter. Dennis Weikle, Vice President of Customer Care, explains: "When customers are satisfied, that's great, and we certainly work to continue doing what we're doing well. We've found the bottom box is indicative of churn and negative word-of-mouth, so we built a customer advisory group to look at survey results on a real-time basis, hour by hour, to identify what went wrong, and turn the wrong into a right. We also categorize feedback by call center skill issues and by business operations issues, and drive improvements accordingly. We call customers to acknowledge the issue when a poor rating is given, and find that people are surprised and pleased with the personal attention and commitment to resolution. We're fortunate to have good customer experience commitment across the business groups to take action immediately. We are consumer champions, and that's how we hire and orient employees, with tops-down and bottoms-up walk-the-talk. We try in everything we do to anticipate impact on the customer, and over the past year we've seen the bottom-box volume shrink in half."¹⁰

Transparency spurs employee engagement. It's common for survey results to be shared with a select set of executives and employees. Remember, out of sight, out of mind. Let every employee see their impact on customer experience. Only 42% of companies use a dashboard of commonly-agreed-to metrics that define success. And just 24% have created a multi-year set of agreed-to-metrics to assist executives in measuring & monitoring customer satisfaction, retention and profitability.¹¹ These low statistics indicate differentiation opportunities for companies that decide to stand out from the crowd by implementing holistic, highly visible, and readily accessible measures of customer interaction quality.

Focus on leading indicators. Survey results measure what the customer already experienced, so they are lagging indicators. Teams can improve the quality of customer interactions only by focusing on metrics tracking the progress of their survey results action plans. These action plan metrics are leading indicators of customer sentiment and business results because they can be observed and constructively managed by teams before customers have a chance to evaluate the results of the action plans. Well-aligned leading indicators can be predictive of future customer sentiment and market performance.

4) Recognize Employees for Improving the Experience

Humans, as well as all living things, align their behaviors with the rewards in their environment. For example, only 42% of companies agree that they can do what is right for customers despite the pressure to make current-period financial numbers. Interestingly, the same number of companies are actually using customer metrics to evaluate organizational performance.¹² To engage executives and employees in customer experience management, walk the talk, and put your money where your mouth is.

Most rewards we respond to are invisible. There is a wide spectrum of influencers on human behavior, spanning a simple smile of approval, to a sixth sense of what gets you ahead or penalizes you, to fabulous attention and monetary increases. All of these influencers should be included in a change management strategy for employee engagement for superior customer experiences. Intrinsic rewards (e.g. meaningfulness, choice, competence, progress) are much more powerful than extrinsic rewards (e.g. prizes, money) in our contemporary society. As Colin Shaw points out in his book, The DNA of Customer Experience, emotions account for over 50% of an experience.

You get what you reward. Only 30% of companies are using customer metrics (e.g. profitability, campaign response) to evaluate individual performance. The same number of companies align incentive compensation to customer metrics.¹¹ Among those companies that do tie compensation to customer experience, employee behavior often does not match what was intended. For example, using customer satisfaction surveys as a basis for the employee bonus program often leads employees to coach customers to help them get their bonus by giving them a highly satisfied rating. When the survey results are reported, how much confidence can the company have that the survey is valid? Coaching negates the value of the survey, and of the bonus program as well, making them largely a waste of effort, time and money for all parties involved. Instead of tying compensation heavily to survey results, tie it primarily to leading indicators: action plan progress metrics.

Let employees toot their own horn. At Applied Materials I managed a self-reporting team recognition program, which guided employees in expressing their achievements according to established categories and criteria designed to strengthen customer focus in the company culture. Both formal and grass-roots teams get constructive feedback from a panel of executives, which enriches their projects and team satisfaction, and has resulted in thousands of hours and millions of dollars in savings for the company and customers alike. An online user interface gives employees worldwide easy access and visibility to lessons learned for synergy and knowledge management. The program is evaluated by company-wide participation and participant satisfaction, with continual improvement over the years, evolving from a variety of problem resolution categories to exclusive focus on problem prevention for superior customer experience.

Recognize desired behaviors and outcomes incessantly. To weave employee engagement for superior customer experiences into the fabric of your culture, don't wait for end-of-quarter opportunities to express gratitude for stellar performance. Help your employees make CEM a habit by reinforcing what you like when you see it. Be sincere. Be creative in expressing your appreciation. Involve employees in recognizing their peers. Recognition can be contagious and buoyant.