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Explaining Why Customer Experience needs to evolve to the next level

Understanding accepted definitions

The Customer Experience Professionals Association (CXPA) defines customer experience as:

“The sum of all interactions across all channels, shaped by an organization’s culture. This culture is created by front-end and back-end processes and experiences that ultimately influence customer perceptions. These perceptions either strengthen or detract from our relationship with our customers and our brand consideration in the market.”

CX consulting firm Temkin Group uses a more succinct definition:

“The perception that customers have of their interactions with an organization”

Forrester agrees, defining CX:

“How customers perceive their interactions with your company.”

We are not questioning that the definitions above define Customer Experience, but suggesting that CX only delivers a partial customer centric ethos.

There is a gap explained by the way companies are structured.

At the start of the industrial revolution Scottish economist Adam Smith introduced the division of labour philosophy which effectively created the product and service centric mentality that defines how we think about our organisations today.

Division of labour has created the specialisations where traditional marketing, sales, delivery, finance, administration etc sit.

Where does the customer figure in this structure? It doesn't! The customer is serviced through the different interfaces and the experiences at each interface is where the term Customer Experience originated from. The theory is if a

FedEx_Organizational_Structure

company understands the emotions at the interfaces and improves them then the overall experience improves. That is true but it does not create the business busting improvements studies originally claimed.

Every single Moment of Truth or Customer Interaction needs to be created by the company. Improving the interaction involves changing the process immediately surrounding the Moment of Truth but wider process structures are largely unaffected.

Spirit airlines

Real life examples demonstrating CX gaps

Ryanair has long endured a reputation of not offering great customer experience or service. The company started to improve its reputation in 2014 but publicly announced this was only to the level of acceptability it needed to.

US Airline Spirit makes Ryanair look like "lobster and champagne". It has a reputation of one of the worst customer experience airline brands in the world and regularly close to the bottom of the Temkin survey of 300 odd brands in the US.

India's Kingfisher airlines conversely enjoyed a reputation as one of the best customer experience brands in the region.

So why has Spirit and Ryanair not only thrived but enjoyed amongst the highest profitability of any airline in the world despite it low CX ratings?

Why has Kingfisher gone bust despite sky-high CX?

What makes customers buy and return to buy again goes beyond what customer experience tells us.

Understanding Voice of Customer gaps

Data driven Voice of Customer is now widely adopted as a means of understanding customer wants and needs. Technology and data scraping & analysis methods from social channels is becoming increasingly sophisticated. There are surveys, focus groups, qualification exercises. Most companies have 5 or more going on simultaneously.

You would have every right to question data insight and extrapolation methods as a means of forecasting future events. Why did the analysts get the results of Brexit votes, the UK election and the last US elections so wrong? Data extrapolation is prone to significant error. The issue is not simply technology but in the insights arising from the customer themselves.

Research has shown that when a customer is asked about their wants/needs they answer with 3 levels of focus in their mindset:

  • Who is the person asking the question? What context does he/she ask the question? If you are asked by a car mechanic about your wants/needs you are more likely to talk to talk about transport. People naturally filter their answers to the context the question thats being asked. This misses vital insight.
  • What are the customers most immediate problems? A Ryanair post flight might mention the irritation of having to pay extra for hand baggage but never raise safety. The most immediate issues tends to dominate focus which creates distortion in the overall answer.
  • The natural final step is to extrapolate to "lets articulate to a cheaper, faster, better version of their existing situation".

Research has also shown that customer needs that do not register emotion unless they are absent are often missed or their importance is understated or assumed.

In summary, the VoC approach creates a distorted and ALWAYS filtered therefore incomplete view of customer wants/needs. It does not give the insight required for companies to innovate.

Are there better methods evolving to understand customer to greater insight and detail?

Creating a Customer Culture

Entrepreneur.com defines company culture as “a blend of the values, beliefs, taboos, symbols, rituals and myths all companies develop over time.”

A Columbia University study shows that the likelihood of job turnover at an organization with high company culture is a mere 13.9 percent, whereas the probability of job turnover in low company cultures is 48.4 percent.

Rob Markey’s Harvard Business Review blog post “Transform Your Employees into Passionate Advocates” he states, “Loyal, passionate employees bring a company as much benefit as loyal, passionate customers. They stay longer, work harder, work more creatively, and find ways to go the extra mile.

Gallup's report on the “State of the Global Workplace” shows that 63 percent of employees are not engaged at work and 24 percent are actively disengaged, leaving a mere 13 percent of workers who are engaged in the work that they do.

What is the missing link? Its employee happiness. The Department of Economics at the University of Warwick found that happy workers are 12 percent more productive than the average worker, and unhappy workers are 10 percent less productive. In fact, unhappy employees cost American business over $300 billion each year.

Employee happiness

 

 

To make customers happy, we have to make sure our employees are happy first.”

Zappos

 

Conclusions

For Customer Experience to demonstrate the game changing numbers studies have claimed there needs to be a number of significant improvements:

  • The business management change philosophy needs to evolve to make customer management central to the organisations structure NOT a process of improving experience at the interfaces.
  • New predictive ways of understanding customer are emerging which supersede the data extraopolation methods currently in vogue but subject to incompleteness and distortion.
  • Great tools and techniques only work if there is a customer culture embedded into the organisation. Employee engagement measures show that this is not working and traditional product/service centric thinking predominates.
  • A great culture can only be created if the employee is motivated AND happy. Employee happiness is central to changing a culture and needs considerably greater attention

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