“Today’s fast-changing business environment demands a new approach for identifying tomorrow’s winners,” writes Martin Reeves in Fortune’s 11/1/17 article, “In Search of ‘Vital’ Companies.” If you are looking for a model of a big company that retains the dynamism of a start-up, Amazon.com is a good place to start, writes Reeves. Why? In part because CEO Jeff Bezos knows that successful companies must nourish and retain one characteristic above all others: vitality.
In a joint research project to identify the “Future 50” top growth companies, Boston Consulting Group (BCG) examined 2300 public companies to determine which had the market potential, strategy, technology and investment, people, and structure to achieve sustained growth. Perhaps not surprising, top 25 companies in the >$20B market value included Salesforce, Tesla, Facebook, Netflix, Activision, Google, Amazon, and Priceline….all of whom transformed their categories through exceptional customer experience as well as innovative products and services.
As legacy brands and corporations are being increasingly challenged by disruptors from outside their categories, in virtually every sector we are working with CEOs and CMOs to pivot and transform their companies from a product-centric to customer-centric approach. This change represents a challenge on many levels – marketing and sales, operations and organization/culture, technology and infrastructure, and financial. CEOs in many cases are hiring Chief Customer Officers, one of the newest C-suite positions, to work across the enterprise to lead long-term customer experience transformation.
As part of EC’s continuing investment and growing practice in the area of Customer Experience transformation, we recently added Darcy Bevelacqua as a Managing Director leading the Customer Experience, CRM & Analytics practice areas. Darcy is a former Accenture partner and a well-respected expert in all of these functional areas. Darcy has written this month’s headline article titled, “Why Companies Fail At Customer Experience,” and we trust her comments and insights will resonate with our clients and connections. And when you are addressing customer experience transformation challenges, pls. call us to arrange a complimentary consultation.
As always, we welcome your comments and feedback. And we send our best wishes to everyone for a Happy Thanksgiving season!
Jeff Gundersen, Founder & CEO
Why Companies Fail at Customer Experience – by Darcy Bevelacqua, Managing Director – Executive Connections LLC
Almost every year companies declare that Customer Experience is their top priority, and they want to improve the experience to drive loyalty and better customer life-time value. However, most companies can’t seem to achieve the results in spite of the fact that improving the experience will have a positive impact on the bottom line. According to Bain & Co., “80% of companies say they deliver ‘superior’ customer service; however, only 8% of people think these same companies deliver ‘superior’ customer service.”
McKinsey says “Maximizing satisfaction with customer journeys has the potential not only to increase customer satisfaction by 20% but also to lift revenue by up to 15% while lowering the cost of serving customers by as much as 20%.”
Why do companies fail to achieve these goals when they know there will be significant bottom line impact?
- Customer Experience is a real-time, omni-channel challenge. In this new “Customer in Charge” era, with mobile devices as the new “first screen,” customer experience needs to be designed and delivered consistently on an omni-channel basis, wherever and whenever the customer chooses to engage with the brand. However, most companies are still organized in product-centric siloes or divisions, and this results in customers receiving conflicting or inconsistent brand experiences across the enterprise that diminishes brand loyalty and retention.
- Customer Experience needs to focus on what the customer wants. Not what the business wants. Too many businesses use customer surveys or call center data or company “myths” to understand their customers. They assume they know their customers and what they want. All the transaction data in the world will only tell you how customers behave –not what they want. In order to understand the customer, you must get out of your office, talk to real customers, use personalized ethnographic research and observation and maintain continuous testing and prototyping. Start looking at the end-to-end customer journey to help you focus on where you need to transform and always ask what would the customer want to do?
- Competition doesn’t come from where it used to be. Most companies are trying to keep up with their competitors defined as others in their industry. Frankly, disruption most likely won’t come from companies in their industry but from startups they may not know about. Airbnb wasn’t in the hotel industry, but they have certainly affected the hotel reservation business. Uber wasn’t in the taxi service business, Stitch Fix wasn’t in the retail clothing business, and Netflix wasn’t in the TV business, but they have all disrupted their categories because they were able to think like the customer to understand what the customer might need and then deliver it.
- Employees must be part of the Customer Experience solution. You can’t expect your employees to deliver great service and value to your customers unless you value them. Too many companies think they can fix customer experience with some “training” or incentives. Frankly, it takes an organizational mindset change and strong leadership to transform your company. Think about your brand promise and how it applies to your employees and then to your customers. If your employees understand and value the brand they will take care of your customers.
- Execution must be flawless. Customer’s expectations have changed and they expect you to be as good as their latest transaction with Amazon. Improving the customer experience requires you to adjust the way the company works. Therefore, your teams, processes and technologies need to be capable of delivering to meet the client expectations. Organizations must change from the inside out to be more flexible and agile and adjust to the changing economic pressures.
- Customer Experience is a long-term objective. Companies can’t expect to achieve results in a month or even a quarter. Companies need to think beyond today’s survival. They need to plan for long-term growth and build the foundation for continuous improvement in customer experience over time. When a company is concerned about meeting their quarterly numbers they frequently make short term decisions that may have a positive impact on this month’s numbers but may destroy the brand value and trust in the long run. We are not going back to simpler times where things were slower and less connected. Instead, we are speeding up, things are more connected, and we need to plan how the organization will transform.
As a chief marketer, you need to have a Customer Experience transformation plan, and the right resources to help you implement. Getting started isn’t going to be easy, but the alternatives may mean lagging business results and an invitation for a competitor to disrupt the marketplace.
Open Career Opportunities: