Customer Experience has moved beyond 'fixing the service' to occupy a strategic role
When one considers how much it costs to win a new customer and the lifetime value of that customer, it’s clear to see why Customer Experience (CX) has become such a hot topic.
Depending on the industry you are in (and where you go for your figures!), the cost of recruiting a new customer can be anything up to 30 times the cost of retaining an existing one, while existing customers spend an average of 67% more than new ones. When you factor in the lifetime value of a customer, it simply makes sense to invest in ensuring that your customer’s experience is as positive as possible.
However, as this discipline grows, we are seeing a wide variation in how it is treated and the calibre of people running Customer Experience.
What exactly is Customer Experience – and where does it sit?
CX is the sum of all experiences a customer has with a supplier of goods and/or services, over the duration of their relationship with that supplier. This can include awareness, discovery, attraction, interaction, purchase, use, cultivation and advocacy. It can also be used to mean an individual experience over one transaction. Given this definition and the implied level of responsibility bestowed upon CX executives, it’s a wonder anyone puts their hand up! The role appears to sit over insight, product development, advertising, promotion, brand awareness, presales service, sales, after sales service and on into satisfaction, dissatisfaction and so on.
The language that has grown up to help bond all this responsibility into a coherent function is similarly complex. Customer Needs, Value Mapping, Advocacy, Design, Framework, Voice of the Customer, Governance, Engagement, Process Flow, Roadmap, Net Promoter Score and Customer Satisfaction. We could go on.
The point is, we are not talking here about sales, marketing, customer service, customer care or operations - we are talking about the glue that binds all these things together so that nothing is left to chance and so that no customers fall between the cracks and slide from Promoters to Passives, let alone to Detractors.
Where is the Customer Experience talent and what does it look like?
Over the last five years or so the major players within mass market B2C sectors such as retail financial services, telecoms, energy, retail and travel/leisure have operated a CX function. However. there are significant variations around
- what CX encompasses
- strategic versus operational focus
- location of the CX function within the organisation
- the calibre of CX professionals
- the packages they command
The Shift to Strategic CX
The trend in recent years is that CX is less about junior and middle managers in Customer Service operations focusing on improved business processes and customer touch points in their lifecycle, and more about a strategic approach that influences Marketing Strategy, Product Development, Channel Strategy etc, as well as Customer Service Strategy. This requires people with competencies such as strategic thinking, excellent influencing and presentation skills, a good networker, high customer focus, flexible and pragmatic, commercial and of high intellect.
Not surprisingly the pool of talent for high performing CX professionals, operating at the more strategic and evangelical level is relatively small (but identifiable) within major B2C organisations. While certain pan-European brands do have senior people with a CX remit, the UK is arguably at the forefront of such talent within Europe. This may be due to the greater Anglo-American emphasis on external stakeholders (i.e. customers and shareholders).
First and foremost, big picture thinkers
Retail financial services and telecoms possess some of the best talent due to the need for strong influencers across complex multiple product sets supplied via multiple channels. These people tend to be highly experienced and will have come across from other parts of the business where they have proved their value as sophisticated communicators able to operate at a high level of influence. They are not simply service fixers. These executives are very likely to have demonstrated their ability to transfer their competence across sectors and therefore be big picture thinkers first and foremost. Those with a breadth of knowledge and experience beyond pure marketing and customer service and who have worked in several companies generally perform most successfully. This is usually reflected in the packages they can command. A strong academic background is common to the majority of these executives. Of all the functional areas from which strong practitioners are likely to come, while there is no definitive path, strategic marketing, brand, insight and analysis are often present. Additionally, a sound understanding of operational delivery and customer service is a great advantage.
A correlation with growth
There appears to be a correlation between organisations who are looking to grow their business through new products and services or through new markets and channels and the emphasis and importance placed on CX. Where organisations resort to cost cutting, the CX function can be an early casualty.
As with the successful development of an individual’s career, where a desire to be the best, to improve oneself and above all to accept feedback in a constructive way is vital, these attitudes seem to be the key to success in Customer Experience too.