Winning customers for life as a pathway to sustainable and organic growth is the Holy Grail for marketers, but as legend has it, the Holy Grail has become something of a myth. As a consequence, companies spend more effort acquiring new customers rather than nurturing and sustaining existing relationships.
This does not mean the search for the Holy Grail is pointless. Designing and then embedding a customer experience can do more for a company than simply trying to develop lifelong customers.
It can influence employee productivity, improve operational efficiencies and reduce the cost to serve customers who may then act as brand advocates.
The journey almost always begins in the boardroom. Typically, with any new customer initiative being tabled, there has to be a business case that demonstrates a clear link between enhancing the customer experience and improving organic growth.
Customer experience journey from the boardroom
Net promoter economics has been used by a number of leading organisations as an effective way to quantify the potential ‘size of the prize’ for organisations wishing to improve customer loyalty. But getting the mandate from senior stakeholders involves more than showcasing data. Board members need to eliminate risk from major investments and as a consequence implementing a successful customer experience strategy means delivering a credible pilot project to prove it resonates with customers and has the internal buy-in from those responsible for managing day to day service delivery.
A pilot might begin with a company’s subsidiary, a local branch or a separate business unit willing to explore how to bring the customer closer to their operation as a source of potential growth. During a pilot, it is critical to identify and recruit a number of customer experience champions who are willing to shape the program. Selecting and then building a champions network requires both time and investment but once on board, their testing of new tools and experimenting with different approaches will lay the foundations for a wider roll-out.
Sir Terry Leahy. Picture by Policy Network – Flickr.
Tesco’s Loyalty Card is one of the best examples and was the brainchild of Terry Leahy when he was marketing director for the company (a good ten years before being made CEO). While he believed in loyalty schemes, his board were yet to be convinced.
So Tesco Clubcard began with tests in Dartford, Sidcup and Wisbech. By 1994, 11 more stores were added to the pilot programme. When Terry went back to the board, with Clive Humby of Dunnhumby by his side, the response from the chairman was emphatic: “What scares me about this, is that you know more about my customers after three months, than I know after 30 years.”
The Tesco Clubcard is now a huge part of the business. But don’t think a commitment to a loyalty programme on this scale is necessary for a customer experience initiative to be worthwhile. Earlier this year, the customer experience research and consulting firm, Temkin Group, found that even a modest increase in customer experience can generate an average of USD823 million in additional revenue, over three years, for a USD1 billion company.
Setting Up a Pilot Programme
There are three critical considerations that TribeCX recommends when setting up a pilot programme:
- Listening to customers across selected key episodes and touch-points. Then aligning a scope of work that is sufficient in scale to create tangible proof points that can be taken back to the board. Any listening system needs to capture, analyse and consolidate customer insight from all surveys, complaints and media channels, ensuring the data is fed back in a way to turn insight into action.
- Collecting and analysing customer data to determine the most effective drivers of short term value creation during the pilot project. To instil a culture of continuous learning, Tim Hughes, head of Customer Excellence at HSBC says you need to “give employees the tools and techniques to understand what customers really want and allow them to make the changes necessary to improve the customer experience. Creating self-managed teams and giving them the P&L responsibility to determine what they invest in and over what timescale creates collaborative behaviours and a culture of long term learning”.
- Acting on any insight that provides a business case for improvement. This will also require CX leaders and the local champions to actively engage with front-line teams conversing with customers, supporting them to build a process of continuous improvement and a clear plan for escalating bottlenecks or recurring issues.
Richard Stollery, Customer Experience professional and author of ‘Now to Wow!’ says that “if you want true culture change to be sustained you need to involve your frontline teams in the process. Everyone needs to be excited by the goal, the part they can play and to know what’s in it for them”.
This means your internal ambassadors need to be supported by the right governance systems at a local and group level to effect real change, and ultimately represent the many different ways customer experience is evidenced in a business.
Life after a pilot programme
The CXO needs to consolidate the learning from these pilots and document how customer insight has generated business impact. Assuming that all goes according to plan, and a new customer experience culture has been embedded into the operation of a company, then its continual success relies on the delivery by an ever-changing workforce.
And here our journey comes full circle. One of the biggest changes a company can make is re-evaluating its employee engagement approach, so that every person in the organisation is supported and equipped to become a brand ambassador.
It is not news that engaged and motivated employees, who have great leaders supporting them, deliver discretionary effort which in turn has the potential to create customers for life. The opportunity for organisations is therefore to create great employee experiences that in turn generates employee advocates who are able to, want to and are allowed to improve the customer experience.
Suddenly, when you consider this, perhaps the search for the Holy Grail is not so elusive if you can make a strong customer experience strategy stick internally first and foremost.