Welcome to M4 Communications’ Five Customer Experience Trends for 2020 To Watch. This has become an annual event here at M4. But before we dive in, let’s take a look at where we are with Customer Experience.
The Current State of Customer Experience
So, where are we with Customer Experience (CX)?
The answer to the question is “it depends”. And it lies at the heels of CX maturity in organizations.
Temkin Group (now part of Qualtrics known as XM Institute) devised six stages of CX Maturity. They include:
Stage 1 – Ignore – companies don’t view CX as crucial.
Stage 2 – Explore – executives become interested in the idea of CX so companies explore it to determine how it can work for them. An ad-hoc group is usually created to ascertain what a company needs to do to improve its CX.
Stage 3 – Mobilize – senior execs are on board with CX and they typically lead the effort to build a full-time CX staff. At this point, companies are investing in VoC programs, journey mapping, and attempting to improve CX.
Stage 4 – Operationalize – a CX team and cross-functional governance is in place, and processes are being improved or redesigned with the help of customer insights. CX and operational metrics are key to measure and improve CX performance.
Stage 5 – Align – at this stage, CX is becoming the norm and it is being embedded in other processes such as HR to reinforce good CX behavior across the organization.
Stage 6 – Embed – at this final stage, companies have integrated CX into everyday decisions and practices. CX is the mindset. As XM Institute notes, “these companies are capable of delivering great CX because they have articulated and fulfilled their brand promises to customers and have clearly expressed their organizational purpose to both employees and customers.”
This is important because according to Forrester’s Predictions 2020, “customer experience professionals will either quantify their business impact and reach new levels of influence . . . or find themselves in a tenuous position.”
The level of CX maturity will make or break CX, and ultimately, growth.
In the CEO’s mind, growth continues to be the holy grail, and if CX initiatives are not proving themselves, then execs could throw in the towel on CX and pivot away from it as a key differentiator.
This is not too different from what we heard last year – that companies may revert back to old tactics, like competing on price, while trying not to get worse, to grow. However, that is costly as it destroys resources businesses need to improve.
As I opined last year, the key to CX maturity and success has always been crystal clear – tie investments to business outcomes, tie customer and operational metrics to drive growth.
Measurement, metrics, and analytics will become critical to the success of CX initiatives. But it has to be the right metrics. Customer metrics and operational metrics must align, and organizations must act on those insights to grow and sustain that growth.
Organizations must improve their CX maturity.
In 2019, XM Institute found that only six percent of 212 respondent companies with at least $500 million in annual revenues, were in the top two stages of CX maturity. In 2018, that number was thirteen percent.
So, as a result, a company’s CX headcount will radically shift up or down. Firms that have done the least with CX will cut their programs in frustration. Companies that have started to realize CX’s benefits, will “double-down”.
As Forrester predicts, one in four CX professionals will lose their job. Paradoxically, the number of CX executives will grow twenty-five percent.
It still seems puzzling why companies who desperately want to grow wouldn’t dive into CX headfirst. Consider these data points from XM Institute’s State of Customer Experience 2019 report. CX leaders:
–Enjoy stronger financial results. Seventy-one percent of CX leaders report that their CX efforts had a positive impact on their financial performance over the previous year, while only thirty-eight percent of CX laggards report the same.
–Have more senior executive support. Fifty-seven percent of CX leaders consider their most senior leader to be a “strong” or “very strong” champion of CX, compared with only thirty-eight percent of CX laggards.
–Have more coordinated CX programs. Sixty-four percent of CX leaders report having significant CX efforts underway across the company with significant coordination across these efforts, compared to only twenty-six percent of CX laggards.
–Foster a more empathetic culture. Eighty percent of CX leaders agreed, while only thirty-seven percent of CX laggards agreed.
–Deliver better digital experiences. CX leaders report delivering a higher percentage of “good” and “very good” experiences across every interaction channel examined in the study. Leaders and laggards diverge most when it comes to the experience they deliver in mobile apps, online self-service, and online chats.
It continues to remain a mystery to see so few brands differentiating themselves in a positive way on CX when so many of them have cited CX as a top priority.
What does that mean for us in 2020?
I still believe CX’s best days are in front of it. But we have to be smart.
What can we do?
For us to significantly move the needle on CX, three things need to happen.
-Be crystal clear on what CX is
Unfortunately, everything, including the kitchen sink, is being dumped into the CX bucket.
Know what CX is and what CX is not.
Believe me, if you can get solid on this, this is half the battle to obtaining buy-in.
-Realize buy-in is multi-directional
The C-Suite – whether that is the CEO, CCO, or other executive designee – must understand CX in order to champion it, communicate the vision, and drive the vision.
We, as CX professionals, can’t treat each member of the C-suite the same. Each has their own agenda, pains, motivations, etc. Use the language they use that resonates with them when you communicate with them.
We must become great storytellers. We must understand what the organization’s north star is, why it is important for the organization, and how to achieve goals as quickly and effectively as possible. If we can paint a picture on the benefits of CX using data as support that resonates with the C-suite, they will buy into it. Even when educating different functional leaders, share what their peers in the industry are doing and how improvements in CX will support their goals.
Then, the C-suite can champion CX across the organization. This includes onboarding employees, helping them grow through meaningful employee development programs, giving them a sense of purpose, and creating an effective VoE program and acting on the feedback provided.
Brands must focus on creating quality experiences for employees. When you improve the employee experience, you get more engaged employees. An engaged employee is enthusiastic about and committed to their work and workplace. They take positive action to further the organization’s reputation and interests. In addition, they advocate the organization to others.
It then becomes much easier to get employees to buy into the CX vision.
In fact, engaged employees can actually help incentivize leaders to buy into CX.
-Ensure that CX drives desired business outcomes
CX investments must align customer and operational metrics to drive outcomes. And brands must act on insights from the feedback their customers provide.
Aligning CX metrics with operational metrics to drive business outcomes is a must.
It’s not just a case of wanting to do it. It’s a case of having the resources to do this. In a recent Harvard Business Review Analytic Services study, it found that eighty-seven percent of executives surveyed said it’s essential to have the data necessary if they want to improve outcomes. Yet three-fourths of respondents said they don’t have the appropriate access to be able to provide the data. So it comes down to not only the strategy but the tools to implement the strategy to drive business outcomes.
Don’t start investing in technology.
First, ask yourself three questions:
What is my purpose? Why is CX important?
What is the business problem I’m trying to solve?
How will this help my customers to be successful?
Understanding this will help you have a strategy on what you need to do, and the technology you’ll need to help you get there.
So what do we need to do to improve on CX maturity?
Let’s take a look at the five customer experience trends in 2020 to watch.
Five Customer Experience Trends for 2020
The following five key customer experience trends for 2020 can help brands drive customer experience and growth.
Brands will continue to align Employee Experience and Customer Experience
There is no shortage of data that shows engaged employees drive the bottom line. And there’s no shortage of data that shows that Employee Experience (EX) and CX are linked. I’ve discussed that highly engaged employees are more productive, better-performing companies have more engaged employees, and CX leaders have more engaged employees.
In fact, CX and EX make sense together. XM Institute found that seventy-two percent of respondents felt that it was at least moderately important to improve EX while they are improving CX.
Gallup has been the trailblazer in keeping tabs on employee engagement and producing reports on the subject. In its State of the American Workplace report, Gallup proposed that engaging employees is a competitive advantage. It showed how employee engagement impacts the bottom line.
There is a hierarchy to employee engagement
It’s important to differentiate between employee experience, engaged employees, and employee engagement and how the hierarchy aligns.
Employee Experience is the sum of the interactions and perceptions of those interactions employees have about the organization in which they work. When you improve the employee experience, you get more engaged employees.
An engaged employee is enthusiastic about and committed to their work and workplace. They take positive action to further the organization’s reputation and interests. In addition, they advocate the organization to others.
Employee Engagement is the desired outcome you achieve when you optimize the employee experience and engage employees through a strategy that drives improved performance.
For employee engagement to be genuinely effective, it must be a shared responsibility across the organization – between senior leadership, HR, team managers, and employees.
For employee experience to stay the course, companies must understand the KPI’s that drive employee experience and engagement, measure them, and work to improve on them. That’s why it is just as vital to conduct employee journey mapping as it is to conduct customer journey mapping. That includes everything that goes with it – mapping journeys and validating with employees, having solid feedback mechanisms, and data and insights to improve, improving, and circling back with employees. Closed-loop feedback is just as vital with employees as it is with customers.
Great employees are being recruited away. To ensure they stay, companies need to ensure the EX is top-notch. In effect, the EX must become a competitive advantage and that means creating a culture that entices employees to stay.
Employees that have a great experience at work want to stay at the company, want to give their all to their work, promote their companies, and ensure customers have great experiences.
Companies are starting to understand that to grow they must align culture, EX, and CX. But they also must understand what the EX drivers are to be able to optimize the employee experience.
There will be a merging of the minds with Customer Experience and Customer Success
In 2018, I suggested Customer Experience and Customer Success converge.
I got challenged on it.
Apparently, I was onto something. Converging wasn’t the word. Merging was.
We’ve already had our first taste of that with Medallia acquiring Strikedeck in 2019.
So, I’m doubling down on it because there is going to be much more merging occur.
We need to understand that Customer Success is vital for onboarding and advocacy and the tighter we can get Customer Success interwoven into Customer Experience the better our customer journeys and the quicker the delivery on customer outcomes will be.
For the CMO to survive, collaboration is a must.
In my Five Key Customer Experience Trends for 2019 post, I suggested that for Marketing to own the CX, it would have to shift from outbound methods to more customer-led ones around the customer journey in an effort to marry CX and marketing initiatives. In the past, this has especially been problematic for Marketing because the CMO has had relatively little insight into the customer. I’ve seen culture be the biggest culprit to that. And the by-product is silos. While the CMO has wanted to own CX, they have had limited visibility into the entire journey to be able to be effective and drive growth. They had limited access to what the customer was experiencing and feeling and to data to measure customer and operational metrics.
The CMO role can no longer be all about brand-building. It has to change. The average CMO tenure is once again dropping, to 43 months, according to a 2019 Spencer Stuart study. To add value, the CMO role must evolve. They must be a data analyst to be able to measure performance. And they must be agile enough to spot trends and make adjustments based on those trends. Of course, to do both, Marketing must be aligned with every other team in the organization. The CMO will, in essence, need to create an ecosystem that unites EX, CX, brand, creative, and technology. When the CMO can deliver value in this way, they will be able to drive growth.
It’s Intelligence Time for AI
The dust is settling, AI is starting to play a crucial role as a CX augmentor.
Gartner predicted that by 2020, eighty-five percent of all customer interactions would be handled with a human agent. Chances would be good that those interactions would be at the hands of a chatbot, since according to Aspect, seventy percent of respondents preferred to interact with chatbots for simple to moderate interactions and transactions.
But here’s the rub, when you engage with a chatbot for an answer, how often are you met with an FAQ response that doesn’t address the question you just asked? I know I have. And that seems to be the rule rather than the exception.
The trouble is in the intelligence.
Companies tend to have the knowledge data needed but it’s siloed throughout the organization.
Making sure AI is using one complete, centralized knowledge base is paramount. Companies must have some type of tool to gather this information into one central location so all stakeholders have access and can improve customer interactions and the overall CX. Companies must also continue to improve the knowledge base as its information repository grows. Missing pieces of a knowledge base will hurt the experience you provide to customers.
But having a centralized knowledge base is not enough.
Chatbots have to evolve into conversational AI. It’s a no-brainer really, where a chatbot falls short, conversational AI picks up. Chatbots need to work with other digital technologies to create an intelligent layer so they can dive deeper into what makes for an intelligent, personalized customer experience while driving productivity.
For AI to help drive the CX train, the time is now to make it more intelligent so it can make a bigger impact on CX.
Data is the Drug
Metrics and the right metrics will become more important than ever.
Companies will have to merge their data to create one centralized repository. Data must be centralized to drive sound digital transformation. Digital transformation drives strong digital experiences. And having the appropriate data at our fingertips is necessary to continue to improve on personalizing experiences.
Brands win when they deliver relevant, effortless, and convenient experiences that simplify customers’ lives. And, when customers perceive this value, they trust the brand, and reward it. And, growth ensues.
2020 will be the year of going all-in on CX maturity. It’s mandatory for growth. And either a company will get that and enjoy success or not, and be left in the dust.
What are your five customer experience trends for 2020 to watch? Let us know in the comments.