Before I turn this over to Thomas, I want to tell you something about him. Not his bio; I covered that in a previous guest post of his that you can read here. This is a bit more, ummm, right brained.
Thomas is a remarkably astute both consultant and analyst who would be a lot better known to the tech world as an influencer if he lived in the U.S. He happens to live in New Zealand which is a beautiful part of the world but doesn't get him the exposure that living here would have gotten him. That's a shame. Because he is one of the singularly most insightful people I know as you will see in this post on customer experience management. Each time I read something of his, I come away with insights that were not even germinal to me before I read him. Additionally, when he interprets what I write, I think "wow, I'm smarter than I thought" because he delves deeper than I did into what I already wrote and susses out things I didn't know I was thinking. :-) .And, to add to all of this, he is a truly nice person. And experienced in the tech world. And he can write.
Everyone, read carefully and see what this guy is saying. You will learn something...as I always do.
Thomas, sorry to put such a burden on you, but the floor is now yours. And I'm not really sorry, either.
By Thomas Wieberneit
In the recent months I found more and more articles like this one or this one that talk about the importance of continually exceeding customer expectations to be able to deliver a positive customer experience. Only this way, companies get advised, will they achieve customer loyalty and advocacy.
I, frankly, find this more than a bit disconcerting. Placing the sole focus of Customer Experience Management on continually exceeding customers' expectations seems to be a very wrong objective to me. Minimally it is a very short sighted objective; actually it is just wrong.
Not to be misunderstood. As a customer I like my expectations being exceeded, too.
Why is the objective wrong, then?
Where we are at
For a starter, and that may be true for many other customers, consumers as well as business customers, we have grown to expect very little. Customers' expectations are often low right from the outset. This is probably following many disappointing encounters where already the basics went very wrong.
I am talking about basic customer experience failures like:
- Being 'targeted' by and served with irrelevant marketing e-mails, or plainly with too many of them
- Complicated onboarding processes
- Unavailable, uninterested, or plainly overly busy in-store personnel, or the personnel not having information at their hands
- Long wait times in the customer service lines, even in chats
- Inadequate solutions to problems, or none at all
- Different experiences when using different channels
- The necessity of repeating information that was provided before
- Delivery windows for purchases that span a whole day
- Information about delays not being provided
- Confirmations that differ from the agreement
- Privacy policies that almost need a law degree, are very long and that put the customer on the back foot
- Loyalty programs that clearly rather serve the company than offering value to the customers, too
It is plainly impossible to consistently exceed customer expectations for the simple reason that their expectations rise at least as fast as the ability of a company to deliver on them.
In a 2014 report consultancy EY concluded that poor customer experience costs around $40 billion per year.
I am not saying that these failures are always the company's fault, as e.g. customers regularly ask for the lowest possible price. A very low price comes at a cost, too. And this price very well can relate to customer experience in one way or the other.
As you see this incomplete list of issues stretches throughout all phases of the customer life cycle, starting from marketing and going right through customer service, and explicitly including loyalty schemes.
Fixing some, or all, of them, surely would get me excited. My expectations would be exceeded.
And then I would take the new status for granted.
I am excited no more and my expectations are merely met. And justifiably so. After all I was talking about basics; so maybe even my excitement would be fairly muted.
Once the basics are covered there will be the next level of things that I expect. This is not only human nature but also because of technology advances. What is hardly possible this year will be a piece of cake - a basic - next year.
From here on we are starting to run into a vicious circle, caused by a running target. It is plainly impossible to consistently exceed customer expectations for the simple reason that their expectations rise at least as fast as the ability of a company to deliver on them.
After accepting this as a fact one can ask the question whether customers really do expect that their expectations get exceeded or whether they just want value. Are customer expectations towards a discounter the same as towards a luxury brand?
No, they aren't.
On top of that companies have financial restrictions. Let's face it: Companies need to make a profit for their owners. Last but not least companies are not necessarily interested in treating every customer equal, not even thinking of treating them equally impressive.
In summary: Customer Experience Management is not about consistently exceeding customer expectations.
Then what is Customer Experience Management about?
Let's start with defining Customer Experience. In the words of Paul Greenberg, Customer Experience is "how a customer feels about a company over time." Bruce Temkin defines it as "the perception that customers have of their interactions with an organization."Wikipedia defines it as "the product of an interaction between an organization and a customer over the duration of their relationship."
What they all have in common is two things: A notion of a time period and that it is about the perception of the customer. So no need for a definition war here although one might argue that single experiences are part of customer experience, too.
Why does Customer Experience matter?
It correlates with the likelihood of repeat purchases, as a recent Temkin Group report shows. It also opens the chance of creating ambassadors out of customers, which further increases their value by what I would call 'referral value'. In summary: Good customer experience increases the value of their customers for a company by increasing the services and products of the company for the customers.
Customer Experience Management then, according to Paul "is a business science that has the purpose of determining the strategy and programs that can make the customer feel good enough about the company to want to continue to do business with the company" (emphasis by me).
There are some important keywords in this definition: "Strategy", "programs", and "good enough". Especially "good enough"!
And on a second look this definition is a lot harder than consistently exceeding customer expectations. It describes far less of a scattergun approach but involves a thoughtful approach to what needs to and shall be done - and in what order. It describes a continuous improvement process that also involves thinking big while acting small. It certainly includes getting clarity of a customer experience objective. This objective can, for example, be laid out in (target) customer journey maps, which can be compared to 'current state' customer journey maps. The customer experience difference or gap between these maps can then be used as input to define programs and projects to get towards the target.
But mind you, the target is still a running target!
An approach like this avoids "wowing" a customer in an area that he/she is utterly uninterested in. There is no need for this. It is wasted effort.
Paul's definition also implicitly requires leveraging the solutions that are brought in place with the programs. A program in itself does not deliver value; value is created only through the constant use of what got delivered by a program/project. And here we are possibly talking about culture change.
Therefore Customer Experience Management needs to start with a thorough analysis of what the company itself stands for, whether its culture supports this, and with constantly keeping an ear on what is important for the customers and where their moments of truth lie in their individual journey.
The Moments of Truth
Following research by Google, findings by P&G, and Brian Solis, who describes this in his book "X: The Experience When Business Meets Design" there are four important Moments of Truth, which are also called micro moments. Let me quote Brian:
Zero Moment of Truth (ZMOT): Introduced by Google; this is the moment when people are searching for what they want
First Moment of Truth (FMOT): This concept was introduced by P&G and is the moment when people see your product and form first impressions about it.
Second Moment of Truth (SMOT): This is actually more than a moment; it's the collection of moments when people feel, think, see hear, touch, smell and (sometimes) taste as they experience your product. It's also how your company supports them in their efforts throughout the relationship.
Ultimate Moment of Truth (UMOT): This is the instant when a customer creates content based on an experience with your product or service and publishes online, in apps, on YouTube, Amazon, and so on, in their social communities and networks for others to find.
Each and every of these micro moments are encountered by customers one or several times, in an arbitrary order, at different touch points, using different channels.
The customer journey is not linear.
Operationalizing Paul's definition, Customer Experience Management as a business discipline - as opposed to science - is about providing a menu of integrated touch points that are consistent enough to minimally make the customer return and to ideally convert the customer into an ambassador. These touch points need to be designed in a way that they gather relevant information to use by other, likely downstream, touch points, and consume relevant information gathered before. Their objective is to improve the customer experience where it matters, provide the customers with the right information and experience at the right time. And this experience includes touching and using the product/service.
Creating the Experience, or: How to get there?
Key is to deliver on promise. And the promise is given by the brand- and marketing messages - which need to be aligned, too; and lived, just think of the Volkswagen 'Dieselgate' or the Wells Fargo fake account disasters, and how they are handled.
Assuming that the company's culture is customer oriented enough to support customer experience management initiatives at all, the starting point is an honest as-is analysis so that the current state can get mapped against the desired state. This is an across the board exercise that in my eyes has the CIO in the driver's seat and the board, including the CEO, as the steering committee.
There is a lot of 'digital' involved here and the CIO should be in charge of enabling an agile business by providing the infrastructure for it. That puts the CIO plainly into the driver's seat.
The board and CEO supervise, as the whole topic is covering the whole business and because C-level engagement needs to be demonstrated in order to be successful.
On a high level the process works like this:
Assess and plan. State where one is in respect to where one wants to be. Having an objective = destination is only half of any road map. One also needs a starting point to chart a course and to not suffer shipwreck on the way. This includes not in the least to get a good overview on the menu of customer touch points (yes, menu, not the prescribed customer road map) and the main journeys used by the customers.
Select the right stakeholders from the relevant departments. It is important to cover business- and service units, including IT. Some of them might be a given but be mindful: The right people are not necessarily the department heads; there often are people on the ground who have a very good overview on what is good, what not so, and, even more importantly, who can act as influencers when it comes to implementation. Be sure that these stakeholders are empowered and not just bodies that are sent into useless meetings - else the exercise will become useless
Collect data to identify the pain points and get an overview on where in the organisation they are, and how much they affect different parts of it. This can be achieved as simple as having every stakeholder rank the individual pain points individually. The sum over the departments then is a measure of the organisational pain. This identifies potential initiatives that mitigate the identified issues, follow corporate-, departmental, and IT strategy and can get pursued. Price them! It is important to know their gains as well as their cost
Categorize the identified initiatives, e.g. Into strategic, growth, compliance, or efficiency projects. This can be done by assessing them according to project risk and economic climate. The hunger for risk decreases with weakening economic climate. Strategic projects e.g. tend to be more risky and thus often are started only in stronger environments, whereas efficiency or compliance projects are more interesting in weaker times
Prioritize! This is an important and often forgotten step. Use a transparent process for this and don't just go for some influencer's pet project. Tools that one can use for this step are for example business value indicators, IT efficiency index and many more. Yet, it is a good idea to map an IT index over a business index as this helps to get mutual understanding and agreement. After all IT- and business departments are not always fully aligned ...
After this step we have a good portfolio of project candidates that can get kicked off if needed
- Build a road map that corresponds to the current priorities and budgets with these project candidates
- Rinse and repeat! Regularly, often.
Business priorities change, technology advances, customer priorities change, too. With this the priorities of the customer experience initiative change as well. Having an organization in place that is mature yet nimble enough to constantly improve their customers' experiences, starting from the basics, and continuing with a strong sense of priorities is what brings success.
This is what is important for Customer Experience Management. Not to wow customers.