Over the last ten years (writes Alan Pennington), I have seen many attempts by teams to engage with their company’s customer experience and witnessed how they have failed.
The discipline, emerging as it is, is still being dominated by old thinking: ‘wow’ your customer, be ‘customer centric’, ‘transform’ your business . . . none of which are achievable – or desirable in some cases – in the real world.
Here are a few examples of my thinking that has developed over many years of client engagement around the world.
Let’s start by looking at the sound-bite that is Customer Centricity: businesses that focus on Customer Centricity rather than Customer Experience are using the wrong questions and wrong language to measure the success of their business, and are contributing to their own failure to deliver results.
Being customer centric is not the same as providing a customer experience
They are misinterpreting what they want to, and can, achieve. Customer Centricity is not Customer Experience, yet many people use them as if they are interchangeable. True, Customer Centricity talks about the customer being at the heart of everything a business does, with a policy that nothing happens within a company without their involvement. It’s a lovely dream, but is not practical or commercial viable, and rarely, if ever, works in large, established corporations that typically try to adopt it!
What is this about wanting to ‘wow’ customers? By definition, what is delivered when someone is wowed is going to be unexpected and well beyond expectation. If you set out to wow all your customers, then quickly it becomes the de facto norm and you are quickly at a loss to continue. Delivering consistently at or just above your customers’ expectations would be enough to impress in a world where we are consistently underwhelmed by the experiences we have as customers.
Transformation of an established business is an almost impossible goal to achieve, yet we see almost every day how another global company is going to become Customer Centric through a huge customer-based transformational programme. How many can you think of that have ever come close to succeeding? So why set yourself up for failure in the first place? What companies need to do is to ‘dial up’ the customer component of their value proposition to the level that is appropriate for that company.
It is time to wake up! Companies’ business and financial planning for the delivery of their Customer Experience and how they appraise those initiatives are out of date – and are actually having a negative impact on potential sales, revenue and cost reduction.
In my new book The Customer Experience Book I begin to explore some of the reasons why Customer Experience initiatives so often fail to crystalise in terms of their impact on both the culture and business results.
There are a number of factors that are slowing or acting as a drag on companies’ ambitions in the Customer Experience (CE) space. While leaders intuitively know it is the right thing to do (and, indeed, surveys going back to the early 2000s have cited CE as a business-critical if not THE critical driver that they need to rally around), it continues be hugely variable in terms of actual change achieved.
One of the key reasons why Customer Experience programmes fail is because they are exactly that: they are seen as programmes and, by definition, have a start and end. The customer experience is not stitched into the fabric of the business, either in terms of the organisational design or the finances. Let’s look at the financial/business planning impacts. In short, the world of financial and business planning has failed to adapt to the rise of Customer Experience – ask yourself the question: do you have a line in the annual business plan, with $/£s attached to it that is specifically headed Customer Experience as you do for Advertising, Marketing, Operations, IT, Finance and so on?
My experience says most likely not. You may well say we have it, but it is distributed across various budget holders. That may be true, but you will also know that in a year it is then difficult to amalgamate those budgets behind a common CE theme. What happens then is that CE is seen as a project, often without a well defined outcome and a budget that has to be bid for, which makes it an easy target for cuts when the inevitable half-year review demands reductions in spend. On the flip side, a CE team could be charged with reducing business costs as well as promoting and supporting revenue targets – but they have little or no direct influence over the budgets that could be impacted and come across the political fights that then ensue.
Let’s look at an example of how current thinking makes advances in Customer Experience more difficult than they should be. If there is no built-in budget, then the requirement is to bid for what might be viewed as discretionary spend and that can – depending on the business – mean writing a business case with a clear ROI. The challenge that creates is that a ‘CE project’ is usually seen in isolation and the wider business impacts are harder to engage with.
Apple changed the customer experience game
Let me give you an example of how that would come to life: if you took the Apple retail business and insisted that it MUST make a standalone return of X% and only give small weight to the potential for wider, less tangible returns, it would never have been born in its current format; effectively they changed the game in retailing tech products and how you measure its value. Apple is not a retailer, it does not have to make its profits from a retail format, but could very easily have been constrained by ‘standard retail formulas’ and investment criteria. We all know that the huge levels of staffing in the Apple stores would not survive a standard retail approach, but instead the stores are seen as a key part of the Apple customer experience (remember the Brit who lasted just a few months as the Head of Retail after he decided to cut staffing levels to improve profitability and was ousted effectively by a social media storm of loyalist Apple protesters opposing the idea). It is an opportunity to engage with customers, to expose the nuances of the technology, to showcase the commitment to customers.
So, when reviewing Customer Experience from a financial perspective, you need to take a different view, using a different lens: in effect, the Apple store is an extension or part of the brand/advertising budget… and how often you do an ROI assessment of those lines in the plan, they are simply seen as business essentials!
In summary, what you are looking to do is to think differently in order to elevate the Customer Experience, but not at the cost of other components of the business strategy. You are not trying to impose the customer agenda, rather integrate it by hundreds of tiny and manageable interventions that positively impact the culture and ability to deliver.
The Customer Experience Book by Alan Pennington is on sale now.
