It doesn’t matter what you sell (products or services, widgets or what’s-its), how you sell (direct or through a third party, online or in-person), or to whom you sell (B2B, B2C, or B2B2C), your real business boils down to one thing: you are in the business of influencing customer behavior. More specifically, you are in the business of urging/motivating/cajoling customers to engage in loyalty behaviors, those behaviors that create value for your company.
You may not be in the “customer experience business” per se; few firms are in the business of selling experiences, visits to Disney and hot air balloon rides notwithstanding. It’s far more likely that you sell more traditional products and services. You may not be selling experiences, but customer experience for your company is a key component in your strategy of trying to influence customers to pursue those loyalty behaviors.
The behaviors are no secret: customers create value for your firm by buying what you are selling — and buying more of it, more frequently; continuing to buy; buying a wider variety and more expensive options; recommending your firm and helping to influence others to become customers. The only question is: What prompts customers to behave this way? The answer to that question is the keystone to your overall strategy for organic growth.
This is the science of CX.
- Measuring how customers perceive and react to the host of experiences your firm offers, everything from the product, the brand, and company reputation to the buying and using process to interacting with employees, the website, the app . . .
- to develop an understanding of what aspects of those experiences have the greatest impact and how much impact on customer behaviors and perceptions
- so the company can curate, design, and deliver those experiences that have the greatest likelihood of motivating loyalty behaviors on the part of customers…
- to drive increased value to the company.
Value is derived from customers. Value to the company is best measured in terms of the current and future cash flows from customers, not your market cap. These cash flows are the cumulative result of these loyalty behaviors.
Measure. Understand. Design. Implement.
While easier said than done, this is the not-so-secret formula for an effective customer experience strategy. Unless you are a visionary seer akin to Steve Jobs or Bill Gates, the foundational component is measuring customer perceptions and behaviors. If that foundation isn’t solid, everything you build on it will be shaky.
Measurement is the raw material for analysis to develop insights and understanding. That is, what do the numbers mean for your company in your business context relative to competitors, the business environment, the market, and your customers? Is there any low-hanging fruit? How long and at what investment will it take to address the challenges/opportunities?
Decisions made regarding what aspects of the customer experience to improve, the question of “how” to implement the fix remains. There almost always are multiple options, each with different pros and cons in terms of cost, effectiveness, ease of implementation, speed, and other factors.
While perhaps seemingly obvious, all of the measurement, understanding, and design are inert without taking action to implement the solution(s). Great intentions do not lead to better experiences that drive value to the company. That requires harnessing all the pre-work and implementing change.
Two Opposing Case Studies
- Changing front-line employee behavior drove retailer turnaround
A retail client knew their feedback measurement system was broken. Leadership didn’t trust the scores (and rightfully so). So we rebuilt everything from the ground up: new feedback tools, a questionnaire, new metrics, new sampling, and new analytics. We linked customer feedback to customer behavior to determine what mattered in shaping their perceptions and behavior.
We found some easy, low-cost wins, including website design modifications, but the biggest yield required changes on the front line. Changing employee behavior is a slow, costly process, but the leadership was committed. Store-level managers were given incentives to deliver store-level changes. All employee communications around customer experience — what it means, why it matters, and what customers expect — were institutionalized in multiple formats on a continuous and frequent basis. Employee recognition and incentives were also revamped and highlighted.
These changes took time to implement, but CX performance improved and, in tandem, the company’s share of wallet and average customer spend increased as well.
2. Resistance to change left tech firm mired in poor performance
But we also have seen the flipside. A B2B tech client had miserable CX ratings. Customer complaints were rampant. Their feedback system was an absolute mess: surveys were too long, target audiences were ill-defined, questions and variables were murky, and analysis was weak. They spent a boatload of money on global measurements that were unreliable. Instead of analysis, the CX team offered descriptions of the data. As such, the product, strategy, and marketing folks had no clue as to what the underlying problems were, other than that customers weren’t happy.
We proposed an overhaul but were given the “you can’t change anything because of trendlines” stonewall. (That’s bad enough when the data is sound, but sacred trendlines of unreliable data?) OK, let’s at least trim and realign the questionnaires and introduce new analyses. We did, but the client’s measurement team even balked at these proposed changes. So nothing changed in their CX measurement, understanding, strategy, or delivery.
Their wishful thinking notwithstanding, this firm’s CX performance continues to languish to this day, along with its market share and financial performance.
Are You Willing to Challenge the Status Quo?
If you continue to do what you have always done, any changes in customer behaviors will be the byproduct of the market and competitive pressures. Changing the customer experience, be it for better or for worse, will lead to changes in customer perceptions and behaviors.
The science of CX is a blueprint for companies to intentionally create changes that will deliver those experiences that will yield better operational and financial outcomes for your firm, the fruit of those loyalty behaviors.
