Customer Experience (CX)

“You can’t manage what you can’t measure.” – “The customer is always right.”
– “Lowest price wins!”

We’ve all heard the tried and true adages that govern our business environment. These knowledge nuggets have been around for decades, and continue to be quite widely accepted as “truth.” Yet, the business environment we experience today bears very little – if any – resemblance to that of the previous millennium when these insights were initially shared.

Believe me, I’m not yearning for the good old days. The technological transformation we experienced in the last several decades is nothing short of incredible and brings so many new opportunities within reach that we would never have thought possible. These new opportunities bring more change rendering the “status quo” an outdated concept.

CEOs and their leadership teams constantly shift, adjust and move on to the next great idea, next competitive threat, or next innovative approach. Clients regularly tell us that the speed of change is breathtaking and that teams today work harder, faster AND smarter, yet barely seem to keep up with the changing environment and shifting client expectations.

So, change is our new norm. Why, therefore, do we so often fall back onto “conventional wisdom” when examining our business and contemplating strategic initiatives for the year ahead? What do I mean? Here are a few examples.

“If you can’t measure it, you can’t manage it”

As a trained economist and someone who believes vehemently in goals, action plans and tracking for accountability, this particular conventional piece of wisdom should be my favorite quote. This is one of those classic business “truisms” that is indeed true for many aspects of operations, quality control, and financial processes. Unfortunately, this concept has been extrapolated by some (many?) to mean “if you cannot measure it, it isn’t happening.”

We deal with C-level executives who understandably need to know the potential outcome of their investment in their people. Sure we can, and should, measure business results and remain extremely focused on outcomes. However, those tricky “soft skills” (and that even more elusive “attitude” element) will always and forever remain key to success and very, very hard to measure. We know we have succeeded in our work when senior executives tell us that they can “feel” the change in the environment, and they can “sense” the enthusiasm of their team. By definition, these are outcomes you cannot measure, but you surely do try to manage because these “soft skills” significantly affect measurable outcomes.

“Customer satisfaction is key.”

More truisms with great validity – up to a point. But if interpreted literally, these can profoundly limit organizational growth. For example, if the goal is to deliver exactly what the client expects on time and within budget, do you get a satisfied customer? Yes. A loyal repeat customer? Not necessarily. Ensuring teams go to the next level, lead with value and truly exceed expectations is how to develop truly loyal customers – those who keep coming back and continually refer you into a new client base.

In our view, loyalty is a huge differentiator that creates an engine of growth that protects a company from their competition and secures their spot on the leader board for years to come.

“Lowest price wins!”

Sales is full of “truisms.” My least favorite is “Lowest price wins.” There is no argument that having a lower price helps you close in most situations, but in today’s environment where time is one of the of the most precious commodities – who out there can afford to re-do a project if the “lowest bidder” fails to do the job right the first time. Come on – we’ve all been there. Have you ever hired the cheapest contractor to fix the basement, and then had to hire the higher priced contractor anyway? If you truly believe “lowest price wins,” then how do you explain success phenomena like Starbucks, Apple, the Red Door Spa, or more locally – the Inn at Little Washington? In our experience, customers want the highest value possible, and that is a combination of price and outcomes (both measurable and unmeasurable).

Isn’t it time to shift the conversation beyond “conventional” wisdom and think creatively about the current environment we face (challenges and opportunities) then develop some new absolute truths to guide our decision making for today’s ever changing environment?

“Customer experience (CX), customer loyalty… honestly Lesley I cannot keep track of the buzz phrases. Isn’t this just customer satisfaction presented with different language?” This was a question posed to me recently from the CEO of a growing government contracting firm who was genuinely convinced that the management consulting practitioners had created yet another “paradigm” to capture the essence of what we already know. Fair enough – there is no shortage of old ideas dressed up as new insights when it comes to business advice!

But sometimes the language really does matter. Listening to senior leaders from Oracle and Sprint at a recent CXPA* conference in Atlanta further underscored that conviction. Jeb Dasteel (Oracle’s Senior Vice President and Chief Customer Officer) shared fascinating analysis that demonstrated exactly how a strategic focus on the quality of the customer relationships has led to a significantly higher customer spend – 8 times higher to be precise. How did they do this? “Relentless focus” on customer and employee engagement, truly understanding what drives your customer’s loyalty and engaging directly with your customers were just a few of his keys to success. (Reach out if you would like to hear more about the “how” – it was a rich discussion.)

And if significant revenue increase is not sufficient justification for investing in strengthening customer experience and customer loyalty, listen to what Bob Johnson, the President of Sprint Retail, had to add. By focusing on customer experience (and in Sprint’s case – intense focus on first call issue resolution as opposed to “hold while I transfer you to my colleague), 74 call centers have become 40, operating expenses have been reduced 50%, and Sprint has saved roughly $1B annually since 2009. Using a motto of “serve, solve, satisfy”, Sprint is realizing enormous financial returns without even taking into account the reduced “churn” of customers and the positive impact that is having on their bottom line.

In our experience, the difference between satisfied and loyal customers can represent millions of dollars in revenue, reduced sales and marketing costs, and lower operational/customer service expenses. Understanding why is the simple part – stronger customer relationships results in more repeat business, new sales into existing customer accounts and last but never least – referrals to new customers. That is not a new insight for senior management and executive teams. Where it gets interesting is when you transfer that knowledge down into your organization and ask the teams who actually deal with the customers on a daily basis – “How do you provide value to our customers, and how can we strengthen those customer relationships?” Sprint and Oracle are deservedly proud of their CX turnaround – what are you doing to shift from good to great, and create loyal lifelong customers? We’d love to hear.

*CXPA – Customer Experience Professionals Association (yes – there is even an association now…)

Conventional Wisdom: Truly Wise or Dated Advice?

Customer Experience and Customer Loyalty – $B Dollar Insights from Oracle and Sprint