On October 7, 2014, Customer Experience (CX) professionals celebrated #CXDay for the second year in a row.
The event, put on by The Customer Experience Professionals Association (CXPA), is an all day celebration of Customer Experience around the globe. It brings together companies and people that are creating great experiences for customers.
Where Does Customer Experience Fit?
CX initiatives haven’t quite made their way into the mainstream yet. CX is moving there through a variety of efforts, such as
- organizations moving to a customer-focused business model
- organizations establishing a Chief Customer Officer (CCO) position
- organizations creating stand-alone CX departments
- organizations increasing investment in CX tools and resources
While CX may be new to some (CXPA wasn’t formed until 2011), CX’s origins are not.
CX has been around for years in one form or another. Its foundations are in retention marketing, which explains, in part, why CX isn’t in the mainstream…yet.
Case in point, look at most marketing publications or blogs. Pick 10 articles and nine of those articles will discuss best practices on how to acquire a customer.
This isn’t surprising. Consider Kissmetrics’ 2012 retention marketing poll, where it found nearly two-thirds of marketers felt that customer acquisition was their most important goal.
What about retaining a customer? Unfortunately, many marketing and sales teams treat it as an after-thought. Their thought process is “we’ve converted them to a customer, our work is done”.
But, take a look at these stats:
- It costs 6-7 times more to acquire a new customer than retain an existing one. (Bain and Company)
- The probability of selling to a new prospect is 10-30%. The probability of selling to an existing customer is 60-70%. (Marketing Metrics)
- 80% of your future profits will come from just 20% of your existing customers. (Gartner)
- Increasing customer retention rates by 5% increases profits by 25-95%. (Bain & Company)
- Customer churn is attributed to the poor quality of customer service (Accenture) and 89% of consumers have stopped doing business with a company after experiencing poor customer service. (RightNow) Would you be surprised to learn that the majority of those churns occur during the first year of doing business?
It is good business sense for organizations to focus on retention efforts.
What about CX?
These stats paint a bright picture for CX:
- 55% of consumers would pay more for a better customer experience. (Defaqto Research)
- 70% of buying experiences are based on how the customer feels they are being treated. (McKinsey)
- By 2020, customer experience will overtake price and product as the key brand differentiator. (Customers 2020 Report)
- 51% of companies plan to increase the staffing of their centralized customer experience team in 2014. (Temkin Group)
- Executive dashboards and customer journey mapping are the two customer experience activities that had the largest increase in focus since last year. (Temkin Group)
Customer experience is on the rise. In fact, many are forecasting 2014 as the year CX hits the mainstream.
There is a moral, though. There must be a purpose to implementing CX efforts. And any CX effort must be clear and consistent. Otherwise, both you and your customer lose.
We must all think different about CX. CX is not a destination or journey. It is a mindset.
Consider this map of a customer’s journey:
Pre-Awareness > Awareness > Familiarity > Consider > Purchase > Post-Purchase Experience > On-boarding > Varying Levels of Use (Initial User, Active User) > Additional Purchases along the way > Loyalty > Brand Advocate > Lifetime Customer
Our goal should always be to develop and nurture lifetime customers. In that regard, CX should be injected into every step of the customer journey.
Why should organizations adopt a customer experience mindset?
Customer Experience is all about the customer, and to have happy and empowered customers, organizations must tie their systems and ways of doing business to that objective.
Keys to Adopting a Healthy Customer Experience Mindset
-Adopting a customer experience mindset starts at the top.
The C-suite must champion and drive the CX engine. The executive team and entire organization must buy into the change to a customer-driven organization and adopt CX initiatives that support it. Ownership and accountability start at the top. And, for CX to work well, shared goals and processes must be in every corner of the organization.
In addition, the CX team must be its own entity reporting to the CCO or some other member of the C-suite, whoever is championing the effort.
CX touches and collaborates with just about every department in an organization, including Marketing, PR, Sales, Product, Customer Service, et al. Therefore, setting CX as its own group with a C-suite champion is more effective than positioning it inside a department, such as Marketing.
When CX is positioned this way within the organization, so that it functions across the company (instead of within a department), it enables communication, trust, consistency, teamwork and corporate growth, and ensures silos are not created.
A top-down integration will serve to bust any existing silos and prevent new ones from forming.
-Healthy CX initiatives are always all about the customer.
The customer should always be in the driver seat. The journey begins and ends with the customer. Knowing the customer before they start their journey is key. This information can be obtained through talking to your customer-facing departments, reviewing win-loss analyses and other customer feedback, interviewing your customers, and doing a lot of listening and engagement on social channels, online forums, at events, etc. Based on this information, you can create personas.
When it is time to interact with these potential customers, you should come from a place of empathy. It is not enough to understand their pains, needs and motivators, organizations must communicate with and respond to customers in a genuine way that resonates with them.
Organizations need to keep in mind that they need to change their efforts to fit the needs of customers. Not the other way around. Organizations should always be in a growth mode, trying to improve on what they deliver to the customer, so they are always meeting their customers’ needs.
–For CX to work effectively, all departments and systems must be aligned.
All departments must be aligned to support each other in CX efforts.
It’s not enough for departments to align to connect strategy and operations. Each department must share knowledge with the others, understand and breathe a consistent brand message, be able to coordinate across the organization and then be able to understand the customer and meet their needs in the way they want. While people need to be aligned, systems need to be aligned as well. Operational data, CRM and customer feedback must all be integrated to create a closed loop to serve the customer.
–CX activities must be aligned at every step of the buyer and customer journey.
CX efforts must be initiated at the beginning of the buyer’s journey and continued throughout the customer journey. And, CX efforts must be aligned to every step of a customer’s journey. A lot of the intelligence work here can be obtained through customer interviews, asking questions of customers and your customer-facing teams, as well as listening to and observing customers .
You must be willing to take the journey with your customer, understand their experience at every phase of the journey, and be willing to improve on their experience and make it easy from them to travel to the next phase of their journey.
– Include customers in the success of your CX efforts.
To create brand advocates and lifetime customers, organizations must incentivize customers to take ownership in the customer experience process. This can occur through encouraging customers to provide user generated content, encouraging participation in a customer-only forum or loyalty program, or participation on a customer council to help the organization enhance its CX program, being the subject of a case study to help other customers, etc.
What companies do you think provide an excellent customer experience? What customer experience efforts have you implemented that will help you sustain CX? Let us know in the comments.
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