Experience transformation through better Customer Experience Management
Welcome to the Experience Economy. Pine and Gilmore1 who coined the term argue that it describes the latest stage in the progression of economic value, from the first stage of deriving value from extracting commodities, the market has evolved to where the greatest value for both businesses & consumers lie in the staging of “experiences”. In an effort to defend and grow their market share, businesses are now striving to transform their Customer Experience (CX) to compete with growing consumer demand, as well as defending against increased challenges from new market disruptors. Businesses who have managed to deliver a successful CX platform have seen uplift in, retention/loyalty, share of wallet, advocacy and reduced cost to serve2.
Why is CX so hard to deliver?
According to Forrester’s Australia CX index 20193 , there are no clear CX leaders. Australian businesses have yet risen to the excellent category. The majority of Australian businesses (68%) were in the OK category with only 13% in the Good category. Most businesses struggle not with the design of the CX but with the ability to deliver it from an end-to-end perspective. Over investment in customer facing platforms without the support and integration of back office platforms have seen many businesses being able to make promises to customers but not being able to keep those promises. Deloitte’s Customer Experience Management (CXM) framework, detailed below helps businesses deliver on their CX vision.
Who owns CX?
There is a general lack of accountability for the full CX. Departments will own certain aspects but will not be accountable for the full experience. Businesses who are on the transformation journey have also quickly realised that it is not only the customer facing aspects they need to take care of but the internal, back office people and processes as well. A retailer which has invested in redesigning its online experience can quickly erode all goodwill if the fulfilment and delivery experience don’t live up to the customer’s expectation, leaving the customer with a final disappointing experience. Delivering on CX requires the entire business to play the one role, from a customer’s point of view they are dealing with the one brand/business. This is a complex task and the larger the business the more dots need to be connected.
What is CX?
Peter Drucker has been famously quoted as saying “you can’t manage what you can’t measure”.
Why is CX hard to manage? Because it is hard to measure. Why is CX hard to measure? Because it is such a broad term, depending on who you ask you will get a different answer. Ask someone from Marketing and they could talk about NPS or CSAT scores, ask a developer and they might describe it as the way a customer interacts with the various interfaces in the eCommerce application. Holistic CX, the interactions direct and in-direct of a customer is invisible to most businesses. Defining what we mean by CX for the business moves us closer to being able to manage it. The management of CX requires a metric that is standardised and applicable across all departments. For example, if a business was wanting to manage how they are performing financially, a profit and loss report from each department could quickly give management a quick point of view of the situation. No single framework is available, if we wanted to get a quick view of how different departments are performing with regards to delivering CX4.
Knowing your customer journey
Designing an outstanding CX platform requires businesses to have visibility across the entire customer’s journey. There are barriers which prevent the full tracking to occur, some are technological and some are procedural. The rise in focus of consumer data rights and looming regulations demand businesses need to be more transparent with regards to the collection and use of consumer data. Businesses need to communicate the value obtained from this insight but also enable customers to control their consent and uses of their data. Understanding and identifying the moments that matter from a customer’s point of view is paramount and these listening posts need to be set in place if the customer agrees.
CX traceability across departments need to be enabled. As we have said, CX requires a holistic approach, therefore departments need a seamless transfer of data to enable them to stitch separate customer journeys under a unified orchestrated customer experience. A retail CX map example could be seamless visibility across marketing - sales - warehouse - finance - delivery - customer support. Gaps in the CX journey can lead the business to be only reactive to experiences rather than proactive, the loss opportunity for dynamic real-time adjustments to a particular CX. These real-time inceptions can change a potentially bad experience to an excellent one, delivering great outcomes for both customer and valuable insights for the business.
Working in silos
The siloed nature of most businesses leads to the delivery of inconsistent CX. The segmentation and incentivisation of responsibility by departments and the lack of shared insights results in a loss of opportunity to deliver a unified brand experience supported by a superior CX.
In summary, businesses struggle to deliver truly outstanding CX because it requires a truly holistic approach. So far only the customer facing platforms have been engaged to address the CX opportunity – marketing automation, CRM, eCommerce shop fronts. What is required now is the orchestration of the entire enterprise ecosystem, both front end platforms as well as the traditional ERP back end platforms. For most businesses, Digital transformation is well underway, the next wave facing businesses will be Experience Transformation.
Welcome to the rise of Customer Experience Management (CXM)
Managing your CX system
For businesses to sustain and deliver a successful CX program a framework is required that allows businesses to tackle this complex orchestration. Delivering both value to the customer as well as the business.
Customer Experience Management (CXM) is, the management of the combined efforts of a business to design and deliver a distinctive branded experience for the customer across all direct and indirect touchpoints.
- CXM is standardised measure that helps businesses deliver a unified CX program. The CXM score and framework allows businesses to have the same conversation across all departments. The CXM score allows businesses to create internal standardised benchmarks across all departments.
- CXM recognises the importance of empowering the employees and all departments and functions in the common goal of delivering an outstanding CX. CXM helps view CX from an OUT/IN and IN/OUT perspective, ensuring that the business can view how the front and back end of the experience ecosystem is functioning.
Key phases for CXM
At the heart of the framework is a diagnostic tool providing a unified metric which facilitates CX Strategy, which in turn informs the next phase of CX Implementation & Optimisation. CXM is a closed loop and continually improves with each iteration.
CXM looks at the ability for a business to deliver a true End-to-End Customer Experience, from a technology, process and people perspective. There are 4 core capabilities identified that are required to deliver CX, and the CXM score is calculated based on the business’ ability to deliver on each of them.
- Listen.
How well does the enterprise listen to its customers, staff, partners? What are the critical moments that matter, do we have the full journey tracked? Are we gathering the feedback at the right time. What is giving us the best insight so we can deliver better experiences, NPS, CSAT, CES, ART, FCR, VOC, do we have all the relevant drivers across all channels and states? - Understand.
Most enterprises have vast amounts of data across all their business units. How well does the enterprise understand what is happening, from a CX point of view? Does the enterprise understand what experiences are positive, which ones are negative and critical, which ones are missing? How accessible are data reports, analysis and insights available across the business? What are the AI/ML/predictive/prescriptive capabilities that help design and deliver a better customer experience? - Act.
How capable is the business to deliver on its promises? Having listened and understood what the customer wants what are the processes and platforms in place that will deliver the actions - Connected.
Key to the delivery of CX is the ability of various systems to operate in concert. How well is information and insight shared across the various departments and platforms across the entire business?
CXM enables you to move:
As businesses seek to compete in the “Experience Economy” focus needs to be directed to how they can orchestrate the complete CX vision. As the digital transformation looked to transform the way business processes were conducted, experience transformation will look to processes that deliver function and experience.
Take our free online diagnostic CXM lite and see how well your business is set up to deliver truly outstanding Customer Experience that sets you apart in the market.
