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Importance of Customer Experience Management (Part 1): Questions for the CEO, Operations & Marketing

Excellent Customer Experience is critical to every organization. Customers are a business’ livelihood and no matter how great the product is or how competitive the pricing, customers will leave when they feel frustrated or ignored. So, how do organizations ensure their customer experience is effectively representing their brand? Who is responsible for making customer experience great? The answer: everyone in the organization.

A few of The Northridge Group’s leaders sat down to give us the different perspectives on the topic of customer experience: Therese Fauerbach, CEO; Tamara Solarich, CMO; and Pam Plyler, Executive Practice Lead, Customer Experience. The following is the first excerpt in a two-part series of that discussion (slightly edited for length and clarity).

  1. What inhibits companies from achieving Customer Experience excellence?

why customer experience management is importantFauerbach: Customer Experience management is challenging as it requires an organization to seamlessly and effectively deliver across the different business units and a multitude of channel options in order to achieve Customer Experience excellence. As much as Customer Experience groups may want to break down processes and start over, they have constraints to work through to get the answer. To make significant improvements in process and experience, businesses must be guided to look at their organization from an “outside in” view and leverage data analytics to see where pain resides within and across the functional silos.

excellent customer experience examplesPlyler: Some companies have figured out the importance of managing the Customer Experience across business units, and yet they don’t get the authority to lead across the silos or run into technology barriers to deliver. Customer Experience leaders need to collaborate with their business unit partners who all collectively have the authority to make critical decisions and represent the interests of the customer. Some companies have even gone so far as to leave a symbolic empty seat at the table in meetings to represent the customer and their needs.

importance of customer experience managementSolarich: It’s definitely hard work to achieve Customer Experience excellence, but great brands are in fact finding success in this arena. With an increase in channel diversity and greater consumer expectations overall, it has made the management of customer experience more challenging than ever.

 

  1. What are the critical metrics on the customer experience scorecard? Are they different for each of you?

Plyler: You need the right combination of metrics and a balanced scorecard to have a clear line of sight to what truly matters to the customer and how you are delivering against it. Often, companies can focus too much on one metric like Net Promoter Score, Customer Loyalty Scores, etc.  These scores are definitely invaluable but need to be combined with other metrics to identify the drivers of that experience.  It is important to also include a balance of internal and external data on your scorecard that describes the lifetime value and holistic customer journey, such as the frequency and quality of touch points within and across various business units and channels. These metrics should help you to evaluate the effectiveness of your company’s end-to-end service model.

Fauerbach: Companies are not analyzing the richest customer information they have from voice, social, and the web. There is a wealth of data that isn’t analyzed. People can be focused solely on interactions between the representative and the customer without considering all of the touch points along the way.  It is rare that a customer contacts the service department without having first received some material from the company or visited their website; however, that end-to-end experience is rarely considered in the analytical process. The company is made up of all those silos and those customer service representatives carry the weight of the world on their shoulders trying to solve all those issues, so they have a wealth of insights on the customer pain points and how to solve them.  As Pam mentioned earlier regarding the empty seat at the table for the customer, I’d suggest that you regularly invite a representative to those meetings, too!

On top of that, I believe leadership should review customer interactions across multiple customer contact channels for at least one hour per month and come back with the critical insights from that experience. Diverse functional leaders will pick up on different things. Product Management should be listening to understand how their products are meeting the needs of their customers. The Business Process team should be listening for what policies, procedures, and processes are causing the most frustration with the customers. Legal should be listening for compliance issues that put the business at risk. Businesses will be amazed at the insights they can glean from these interactions when listening with the right ear of the customer and applying those insights to their specific business function.

Solarich: There is a clear distinction between a reactive and proactive customer experience. The better that you understand your customer and the more planning you do to anticipate and best serve their needs, the fewer hoops companies will have to jump through reactively to deliver a positive experience. Once your organization learns and addresses the majority of the current pain points in your operation, you can then focus on how to deliver proactive and differentiated service.

The Northridge Group just conducted consumer research – The State of Customer Service Experience 2015 – that found 61 percent of consumers must interact with a company on more than one channel to resolve a customer service issue. By creating a robust customer journey map with all the various touch points, pain points and moments of truth, brands can provide a consistent and seamless experience, and reduce the number of repeat interactions.

  1. Customer Service has evolved to Customer Experience. Why do you think that trend has changed? Answer: Many companies are seeing that Customer Experience is their differentiator.

Plyler: To build on what Tamara said, we must all remember that customer service is reactive and customer experience is proactive. The Customer Experience should be built by designing all of your processes, policies and procedures around your value proposition in the marketplace. This process should be repeated across all business units, cross-functional groups and channels to ensure you are effectively delivering the desired Customer Experience effectively and seamlessly. For example, if companies have strong online self-service and understand where breakage occurs, they can quickly close the loop on these process issues, improve customer experience and decrease cost. Companies who are leaders in Customer Experience truly understand customers’ needs and behaviors through analysis of all the unstructured data from disparate sources and channels and then fully leverage those insights to drive their business.

  1. So, it all goes back to the data. How does that data help make customer experience decisions?

Plyler: Companies have a wealth of information at their finger tips and are taking their data analysis to the next level in an effort to better understand and deliver upon the desired customer experience. If you bring a list of customer pain points with the supporting data to the table for discussion, no one argues them and it can effectively drive cross-functional alignment toward a common vision. What companies struggle with most is driving the transformational change in a culture where everyone is focused on their own piece of the puzzle and not working cross functionally to solve the issues. The key is to center everything on the customer and focus on their journey, the related business insights, change management and cross-functional collaboration.

Fauerbach: It is critical to leverage the available data to make better, more informed decisions. My number one concern is that people create band-aid solutions that can even make the problem worse. More often than not, you have to make really tough decisions to get this right. This requires a Customer Experience advocate in the organization that partners well with all business and functional leaders to drive the necessary change. There is clear evidence that there is a correlation between customer experience and revenue, so companies that figure this out will not only provide a great experience but will also win in the marketplace.

Plyler: I would even take that a step further to profitability. Delivering an outstanding Customer Experience impacts both levers – revenue and cost. Having a more customer-centric business model eliminates unnecessary contacts, reduces repeat calls, increases customer retention and improves employee engagement which will significantly improve your overall profit.

Solarich: Also, an excellent Customer Experience helps to drive loyalty. Today, more than ever before it seems, with so much competition in the marketplace, the name of the game is differentiation. It’s about being chosen, not only the first time, but time and time again. And now, consumers’ experiences, both positive and negative, are further amplified by social media.

Plyler: The more you enable your organization to focus on the customer, the better your ability will be to drive growth, customer service excellence and loyalty.

In part two of this discussion, we will be discussing how Customer Experience affects cost, how to prioritize your efforts, and how social media has changed the game.