Hitting the CX sweet spot
What do Apple, Hilti and the hip organic grocery store on the corner all have in common? They apparently play on different fields in almost every aspect. However, they share a specific perspective on their market and target customers. They do not just sell products and services, they aim at providing superior experiences. They are very aware of their customers’ urge not to buy something but to make use of something – to satisfy a need that simply cannot be met by product or service specifications only. They connect with their customers and design their offering in such a way that it enables their customers to fulfil their underlying desires.
There is solid evidence that proves the benefits of a strong focus on customer experience (CX). Companies that are leaders in CX outpace their competitors and strengthen their market position. According to the Forrester CX Index 2016, they substantially outperform laggards in revenue growth (17% vs 3% CAGR in 2010-15). But all too often, this comes at a high price. Delighting customers regularly turns out to be expensive because new requirements, designed and promised by the commercial department, cannot be met in an efficient way. Executives in charge of managing the value chain for CX are aware of this delivery problem. The goal should not be to offer the best experience possible.
What if we could hit the sweet spot of CX by using an integrated approach, supported by the entire management team?
The CX value proposition must reflect and balance long-term growth perspectives and short-term cost implications. The place we strive for is a sweet spot: Delivering market-leading experiences at the lowest cost possible, relying on a customer focus and efficiently running operations. Unifying the commercial and operational arms of the company in a joint CX delivery initiative is vital if we want to hit this sweet spot.
However, this is not as simple as it sounds. Why is CX all too often designed by marketing and then delegated to operations for delivery? Why do two thirds of companies map customer journeys, but only 40% of middle managers act on the customer insight gained from this in their daily work? Why are 95% of companies collecting customer data, yet only 10% claim to use customer feedback to drive operational change? The list of questions goes on …
What if we could hit the sweet spot of CX by using an integrated approach, supported by the entire management team? Based on Implement’s broad experience with cross-organisational CX projects, we suggest a framework to design and deliver CX without sacrificing efficiency.
A framework that directs us to the sweet spot of CX needs to cover many different aspects. We have identified six fields of action that make leading companies stand out from the crowd.
First and foremost, they have focused customer intelligence. When superior CX is the goal, precise knowledge on customer needs and behaviour is an essential precondition and a strong competitive asset. CX leaders systematically learn about customers. They acquire, organise and utilise relevant knowledge, very often by relying on a designated business function.
Second, it is important to aim at best-in-class customer journeys. Based on the knowledge we have about our (potential) customers, finding a CX value proposition is crucial. Without defining the level of CX that we are aiming at, we cannot effectively design customer journeys. When we have the right journey design, we must also directly link the journeys to the organisational units needed to deliver them. Supportive operational standards are one of the most valuable tools to ensure this.
Third, we need to build and leverage enabling digital capabilities. Smart and extensive use of digitisation will be a key driver to efficiently deliver CX. More and more touchpoints are digital or digitally supported. This includes within the organisation – as many interactions as possible should be digitised in a smart way, and a disruptive perspective might lead to new insights on how to get there. Implementing new ideas is best supported by overcoming the slow release cycles of heavy IT tools by consciously using “speedboat” applications.
Fourth, it is crucial to ensure engaging leadership. Why? When it comes to experiences, the desired outcome often heavily depends on employee behaviour. Neither standards nor digital tools can guarantee that your frontline staff will act respectfully and responsively towards your customers. Working on this requires leadership and employee development. It is important to anchor the “big why” of delivering superior CX, to focus on employee experience and to coach employees in their daily work.
Fifth, we also have to emphasise end-to-end performance management. Working on leadership and employee behaviour can be cumbersome when rigid KPI systems and siloed targets lead to adverse incentives. Therefore, CX leaders use cross-functional KPIs and make them relevant at all levels of the organisation. They succeed in cascading relevant targets down and bringing the customer perspective to the “shop floor”.
Sixth, as customer preferences and behaviour constantly change, development is perceived best in the form of agile impact cycles. CX leaders focus on the impact they create on the market, with speed being a prerequisite for this. The best among them use dedicated cross-functional teams that continuously work on the optimisation of the customer journey they contribute to.
Working with CX does not mean having to fight every battle at the same time. Not even the best CX leaders are masters in every field of action. But they are aware of the importance of all of them. If you’d like to learn more about the six must-win battles and how to fight them successfully, please contact one of the authors of this article at the top of the page.
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