Published in Automotive

The Righteous Path to CX Outcomes

“That’s why we hired you!”

The executive from the now defunct automotive brand was clearly agitated and I wasn’t helping things.

“If our scores don’t go up, why would we continue to do business with you?” he bellowed, turning a worrisome shade of red.

A fair question. As a neophyte to the supplier world nearly 20 years ago, I cheerfully explained that the act of measurement, in and of itself, would not result in any meaningful increase. This was clearly not what he wanted to hear.

I pushed on, almost reaching the crescendo of my pedagogy, where I would explain how the client’s proprietary measures (which our firm at the time conducted) were woefully inadequate in predicting the syndicated results he coveted. However, before I could get to that point the account manager kicked me in the shin under the table and shot me a look that would have stopped Donald Trump mid-sentence.

The account manager was right. I should have shut up–and I did. However, I was right too. Just because you measure something doesn’t mean that anything is going to happen. This client just didn’t get that and, maybe as a result, you are now hard-pressed to find that particular logo on North American roads.

Measurement is important, but…

As a career measurer of stuff, I know the importance of measurement. As important business books claim “what isn’t measured can’t be managed.” True enough. However, measurement is a deceitful temptress that makes us feel better, mostly because it is the easiest thing do to–but measurement does nothing by itself.

In fact, results from our recent CXEvolution study of 1,900 organizations globally reveals that there is no relationship between the number of VoC (voice of the customer) sources and business results. Unfocused VoC programs are the equivalent of throwing information at a problem rather than money.

Number of sources in voice of customer program

As a supplier of CX measurement for over two decades, I can predict when some clients suddenly want to “reboot” their VOC measurement system. These initiatives have a curious correlation with the release of industry-syndicated results, freaking executives out in what one client laconically referred to as the “summer surprise.”

Effective CX Programs

So what makes some CX programs effective and others ineffective in impacting the bottom line? According to our research, it starts, unsurprisingly, with culture and senior management support. Without that vision of customer centricity, and at least some commitment from the C-suite, you are at a dead end. Go no further. Turn back! Run!

But a devout belief in the importance of customer centricity is just the beginning. How many people do you know who understand that smoking is bad for them, but continue to smoke regardless? What about those dieters who know that a delicious slice of stuffed crust pepperoni pizza might not be good for their diet, but devour it anyway?

Organizations need the discipline and commitment to do something. Ok, so your senior management is bought in and signed up. Your organization got that gym membership. Now it’s time to get in shape. That’s where the hard work really begins.

What are other characteristics of organizations reaping the financial benefits of their customer experience efforts? What do they do? Loosely based on a body of academic work on organizational design, we looked at five key dimensions among more than 1,900 organizations globally. Those dimensions are:

  • Processes– are customer-handling processes defined? Are they documented? Are they based purely on efficiency, or do they take the customer into account?
  • Structure– is your firm organized to serve the customer effectively? Are you hopelessly siloed? Is there an effective form of governance?
  • Information– what kind of customer data is being gathered? Is it shared? Do people know how to act on it? Is it predictive of behavioral outcomes?
  • People– do you have a systematic selection system in place? Is it based on KSA (acquired hard skills; knowledge, skills, and abilities) or on raw talent? You employees receive training on customer handling? Are reward structures in place?
  • Customer– how does the organization handle customer problems? Does it anticipate and delight customers?

financial return voice of customer

Pfffft. Who Cares?

Now you might say, “nice theory Dave, but I have more theories than the NSF. I need something useful. Is it predictive of financial results?”

The answer to that last question is an unequivocal yes. Based on our research from over 1,900 firms worldwide, organizations that are advanced on these five dimensions perform better on financial and retention outcomes.

How much better? They are more than three times better on year-over-year financial performance, and nearly equally ahead on customer retention, compared to those who are paying little or no attention to these dimensions.

If I could…

If I had a time machine I would travel back to that day with that now-surely-retired automotive executive. I would have a different conversation. Instead of pointing out how measurement isn’t enough, I would point how their organization could move forward, what they could do to improve the customer experience in other dimensions than simple measurement. I am not sure if addressing the problem that way from the outset would have spared that nameplate its place in the trash bin of obsolete nameplates, but at least I would not have suffered that large bruise on my shin.

Learn from my mistakes. Whether you are the CX practitioner looking to avoid bruised shins, or you are just interested in learning more about our CX Maturity model and how to advance your CX program, please join me and Matt Inman for our webinar Thursday, November 12th to learn more.

 

This post was originally published by Dave Fish on Linkedin.