What will drive Customer Experience?
I’ve written quite a bit about customer experience and its central role in a broader customer-centric realignment of modern enterprises. Customer experience is surely a hot topic nowadays both among vendors and consulting companies that consider it one of the last few levers of competitive differentiation.
Customer service, marketing, sales, insights together with their social extensions are clearly affecting the overall customer experience. Even more a focus on providing an excellent customer experience is pushing more and more a convergence, a fusion of customer facing functions. If this holds true and keeping in mind how siloed current organizations are, it is instead a bit less easy to answer to the following questions:
- Who should be in charge of the entire customer experience
- What corporate functions should report into customer experience and how?
- Which other functions should be indirectly impacted by the overall customer experience strategy without formally reporting under it? How?
- What’s the most effective way to rethink and redesign the end-to-end customer experience?
- Is this a once for all task or more of a never-ending ongoing process?
Forrester started publishing a rather comprehensive The Experience-Driven Organization Playbook series with a number of tools for defining, designing, evaluating customer experience with a piece specifically devoted to the emerging role of the Chief Customer Officer based on 165 interviews with CCO in the B2B and B2C sectors.
A few general details about this new role first:
- Yes it is new. 50% of them have spent less than 2 years in the position
- It is a senior position. 1/3 previously covered president or general manager positions. Near the same number is coming from Marketing or from Operations
- They have power. More than 50% of them sit on the executive management team
What is most interesting to me though is at which level Customer Experience is positioned in the organization and the kind of levers Chief Customer Officers have to influence it. Forrester here suggests 3 alternative models mostly based on the maturity of the company’s culture regarding customer experience and change management initiatives:
The 3 structures mean different roles for the CCO, together with different kinds of authority, activities, teams, budgets, strengths and challenges:
- Advisory: the COO is the head of an internal consulting unit, a center of excellence that leverage his own personal reputation and top-down mandate to advice other units while starting to understand what being customer-centric could mean. Budgets are small. The team is small and the short term goal is putting together pilots, business cases and best practices that will help the organization build new core capabilities and momentum for customer centricity. The maturity is low while the risk of the initiative to be perceived only as a nice to have is quite high. Examples are KeyBank and OpenText
- Matrixed: the CCO is a leader with dotted line responsibility over cross-department steering committee, enterprise-wide customer metrics, outbound communications and project planning. Both the budget and the resources still resides in other units that should be culturally ready to invest in customer centricity. The mission of the CCO is putting together a customer experience strategy and mandating accountability for its implementation by business units. Works fine where consensus is more effective than top-down authority. The CX team must keep up with the often growing level of support the departments ask for. Accounting firm Crowe Horwath is an example.
- Operational: the CCO formally control a new restructured organization a number of customer facing departments report into. The focus goes to customer needs more than product lines. Both the budget and the number of resources becomes huge in order to quickly implement radical changes. The organization is transitioning from a product to a service focus. Shared governance is used to influence units not reporting under the CCO. Metrics, processes and incentives are redesigned around the customer while departmental silos starts to blur. USAA is an example
Where is the problem and what does it mean for Social Business?
I’m just starting to reflect about this and please take my words simply as draft ideas shared to stimulate discussion but I still believe Customer experience will have a huge influence on Social Business and viceversa:
- Customer experience and Social. While social channels are rapidly gaining importance both in interacting with customers and in motivating employees to go the proverbial extra mile, at this point in time most channels are not social. The goal cannot end up doing social. The goal should be improving at the same time at all the customer touchpoints and understanding the role social channels will play in it.
- Is then Social Business going to mingle into Customer Experience (or the other way round)? Absolutely not. Social Business and its ability to motivate employees, engage customers / partners and bring all of them together will quickly become a key enabler of a super customer experience by allowing organizations to understand (customer insights), design (employee-customers co-creation), grow (WOM and customer engagement) and refine (crowdsourcing and idea management) what the enterprise is selling. It doesn’t matter if this means products, services, experiences or a combination of them
- Social Business will evolve by more fully embedding research, practices and tools taken from the Customer Experience world. Service design, customer journey and other central constructs already used by professionals that research customer needs, expectations, behaviors will turn upside-down the usual approach to employee collaboration. Still largely disconnected from customer experiences, employee empowerment has extensive influences on it. If “The purpose of a business is to create a customer (P.Drucker)” employees should be focused on that and should be able to see in real-time how their job affects customer facing actions. In the other direction, only understand why, where, when and how the customer hires the organization to get a job done is it possible to tie internal collaboration projects to desirable business outcomes.
- Is having a Chief Customer Officer enough? I think the Chief Customer Officer should influence this change at least for the customer facing part but in a very large acception of the concept. Supply chain is influencing the experience. Retailers or sales people are influencing the experience as well. The CCO won’t probably ever lead those departments. He can surely influence them through dotted lines, steering committees or grand plans but it won’t be enough.
Moving from a goods-dominant logic to a service-dominant logic and including every single individual of the enterprise ecosystem in co-creating vale and benefitting from value in use can only be the mandate of the entire organization. It should inform the vision and permeate every tactical interaction. It should be supported by clear strategy, a well-thought-out system of values and a maniac attention to experience.
Social is a growing part of that experience but, even more, most of the way of co-designing it.