Creating a great customer experience (CX) is often cited as one of the most important executive strategies today. In fact, if you observe how most start-up companies operate today their strategy is designed entirely around customer centricity. Why do so many established companies find it difficult to develop a customer strategy that works and delivers a great CX?
Largely it is because evaluating what is required, implementing those plans, and optimising the changes to any existing strategy are not easy. You need to look across your entire organisation to find every possible interaction with a customer, organise these processes more efficiently, and find a way to measure and evaluate the improvement.
If you are starting fresh, with just an idea, then it’s much easier to build a customer-centric business. You just design the customer experience exactly the way you want it to be and then build the product. This is why FinTech (Financial Technology) start-up companies have such a great CX advantage over established banks. They can build processes, such as applying for a loan, using app-based tools in a way that customers respond to and enjoy, unrestricted by decades of process, tradition, and a branch network.
For this reason, customer strategy matters even more to established companies. When a company delivers a customer experience that the customer notices and enjoys, the company is creating a competitive advantage. This focus on CX improves your brand reputation and grows revenue. In a 2016 research paper Forrester Research found that companies with a focus on CX improvement increased their revenue by around 17% year on year, compared to just 3% growth for those without a strategic CX focus.
In a video focused on transforming organisations to be more customer focused, PwC argues that there are seven key steps required:
1. How to design and implement a customer-centric operating model and the cultural change required to achieve this;
2. Measuring customer value over the entire lifetime of a relationship, not just measuring purchases;
3. Designing a way to segment customers into various groups;
4. Creating a strategy to directly improve the CX and how this can be implemented;
5. Starting to use human-centered design and design-thinking for the creation of all new processes and products;
6. Creating customer journey maps accepting that this may need to be co-created with customers as not all journeys can be measured inside the organisation;
7. Developing a new value proposition strategy for the entire business.
This seven-step plan can be split into several more distinct steps and processes and is a good initial guide for the steps that are required. Careful management and planning are required though. This is really a change management process for established organisations – you may need to completely change the way your processes are managed to create an organisation that is designed around the customer rather than the products.
Aberdeen Group research documents that a lack of focus is the number one reason why organisations fail to deliver on strategies designed to improve the customer experience. The bottom line is that most organisations were originally designed around the products they create or services they deliver. If you want to rebuild your strategy to focus on how the customer experiences your organisation, then several changes may be required.
However, as Forrester Research outlined, for an organisation to succeed in the present-day customer-focused business environment there really is no alternative to a strategic focus on CX. Improving your CX is not just about growing revenue; it’s also about long-term survival.