Customer experience momentum foreshadows growth. You can see evidence of this in Forrester’s analysis1, where they found that stock price for customer experience (CX) leaders grew 34%, in comparison to 5% for CX laggards and 20% for the S&P 500 during the same time period. As customers are the source of budgets, salaries and dividends, their predisposition toward your brand is a precursor to progress in profits and top-line proceeds.
Heads up! Expecting growth through CX-related programs, departments and tech is actually creating havoc in customer experience momentum. Here’s what’s happening:
- CX quality plateaus in 2017, 2018 and 2019: Numerous studies report lackluster progress — by brand and by industry. Best performers top-out below 75 on a 100-point index2. This is likely due to customers’ expectations rising faster than companies can keep up. Plateaus indicate that business-as-usual is far from sufficient. Shift from touch-point focus to an operationalizing focus.
- Laggard brands’ stock price growth sometimes outperform leader brands: This is likely due to the tactical emphasis of most CX investments. Investing in remedial efforts with narrow impact on the full customer base requires constant funding for status quo returns or upticks. Tactical CX management falls short of enterprise needs for differentiation and growth. Replace narrow, remedial emphasis with strategic, proactive emphasis.
What’s missing in customer experience momentum? 1) strategic operationalization, 2) proactive rewards, and 3) holistic dashboards. Customers are funding everything your company does, including repayment to lenders and investors. For CX as the very source of revenue and profit performance, why limit your potential to skin-deep CX management?
Operationalize Customer Experience
1) The keys to operationalizing customer experience enterprise-wide are outlined in earlier articles in this series. For growth-generating CX strategy, adopt correct definitions:
- Customer experience: Customers’ realities compared to their expectations.
The numerator and denominator comprise cumulative impressions and go beyond interactions (e.g. behind-the-scenes decision-process, product/service usage, plus influence from your enterprise’s non-customer-facing activities and attitudes).
- Customer experience management (as it should be managed): Alignment of the company to customers.
Drive enterprise-wide synchronization with the outcome your core customer segment is pursuing to move forward in their life or business.
2) Start with the senior leadership team:
- Conduct a C-team workshop to analyze what’s really happening in your company versus what’s needed to be in full alignment with your primary target customer segment.
- Every C-suite member must recognize their respective contribution to the company’s intentional CX and adopt CX as their primary context for decision-making.
- CX growth is a balancing act between the short-term and long-term. A 3-5 year horizon is necessary.
— CEO’s Guide to Growth through Customer-Centered Management
3) Align from the top:
- Reframe corporate objectives in this way: “To meet our customers’ expectations for X, our financial stretch goal is Y.” This provides CX context. It simplifies employees’ daily decisions in alignment with corporate strategy.
- Focus attention on customers with greatest potential for generating your firm’s growth.
- Unify the various roles that manage customer experience across your company.
- Show your whole company the path toward CX maturity and how CX management components flow and build upon one another to generate growth.
— CEO’s Guide to Growth through Customer Experience Alignment
3) All hands on-deck:
- It’s a never-ending hamster-wheel to entice engagement. Growth endures when it is earned through trust.
- Every discipline across your company has a ripple-effect on customer experience, like concentric circles rippling from a pebble thrown in a pond.
- Non-customer-facing roles are value-creators (or inhibitors) while customer-facing roles are value-deliverers, in most firms.
- Marketing conveys the value proposition, the brand promise. Your whole company delivers it.
- Make CX a context for all employee roles, rather than an add-on. Embed CX insights as decision criteria throughout your enterprise: in charters and roles and responsibilities, and in agendas, forms and rituals (reviews, planning, promotions, development, rewards, etc.).
- Develop a multi-faceted communication plan that meets employees where they are now, and guides them to greater understanding of what customers expect and how it applies to them in improving the realities that customers experience.
- Establish cadence for cross-organizational collaboration toward ease-of-doing-business and ease-of-work.
—CEO’s Guide to Growth through Customer Experience Engagement
Reward Proactive Customer Experience Management
Heroics are contradictory to consistent alignment of your company to CX as outlined above. Setup your recognition programs and compensation systems to reward employees and partners at these graduated levels:
- Prevent recurrence of pervasive issues that bother customers.
- Prevent occurrence of issues at-odds with your intentional CX.
- Anticipate intentional CX value opportunities.
Establish categories and criteria for each level above and create high visibility among employees and partners to stimulate their proactive participation. Show all employees how it’s relevant to them. Make it possible for them to self-report their progress — otherwise, it’s impossible to know who’s actively preventing what. The more visible this recognition is, the more it will shape your culture and yield high-growth CX achievements.
CX annuities are created by emphasizing these three levels. Precious resources that would otherwise have gone in perpetuity toward remedial management can be forever freed-up toward higher-value opportunities.
CX insurance is also created by minimizing the likelihood of employee decisions that result in costly reputation fiascos.
Monitor Holistic Customer Experience Dashboards
Make it possible for employees at the team level and executives alike to connect the dots between metrics they care about. Get clear on leading and lagging indicators:
- Lagging indicators: stakeholders see it before or when you see it.
- Leading indicators: you see it and can act on it before stakeholders see it.
By definition, surveys capture lagging indicators: you’re trying to understand what customers have already experienced. As such, surveys should (a) inform your enterprise of changes in customers’ expectations (which is typically infrequent and best achieved through qualitative primary research) and (b) confirm your efforts toward aligning to CX (prioritizing moments of truth).
Accurate correlation analysis (aka key driver analysis), Pareto analysis, and root cause analysis will zero-in where teams should focus. As such, you can have confidence that progress at the team level will naturally yield corresponding progress in subsequent levels upward to the big-picture metrics of wallet share, market share, revenue growth and earnings growth.
Focus primarily on what teams can control in their daily work flow (labeled in this diagram as “early warning signals”). CX managers should track their own progress in driving the metrics preceding this: facilitation, involvement, levers.
Create line-of-sight for everyone by showing all metric levels at-a-glance. This connects the dots between strategy and execution. It reveals the natural time lag between what’s achieved at the team level and what results at each successive level of lagging indicators.
You can rise above the norms to enjoy customer experience momentum that truly drives growth. Expecting growth through CX-related programs, departments and tech is falling short of what’s needed. What’s missing today is CX infrastructure embedded throughout your enterprise. You’ll find that all your existing CX investments will then reap greater rewards accordingly. Much of your remedial investments will be able to transition to higher-level endeavors. Go beyond skin-deep to thoroughly weave-in CX context operationally. Keep everyone’s attention on being proactive and holistic in the way they see their contributions to enterprise goals. In these ways you’ll be generating CX insurance, annuities, enduring differentiation and sustained growth.
For More Information, See Customer Experience Growth: CEO’s Guide
1Does CX Quality Affect Stock Performance? Yes, But . . . , Rick Parrish, 2018.
2The US Customer Experience Index 2019: Some Small Gains, Widespread Stagnation, No Real Leaders, Rick Parrish, 2019.
This article is fourth of a six-part series as an exclusive CustomerThink Advisors column: CEO’s Guide to Growth through Customer-Centered Management. This series explores ClearAction Continuum’s Customer Excellence DNATM methodology as introduced in the article What is Customer-Centricity DNA?
Other articles in this series:
4. CEO’s Guide to Growth through Customer Experience Momentum