How to get your new boss to buy into your CX visionby
Like with the US presidency, the arrival of a new leader often heralds fresh beliefs & priorities. Therefore, in some cases a new leader may need convincing that your customer experience programme is worthy of investment - or that CX should be a focus at all.
As a new US president is sworn in, a new chapter in American history begins. As is so often the case with an appointment of a new leader, President Biden will bring his own set of ideas and values to the role, and that he will want to immediately set about actioning and implementing.
Some of his predecessor’s programmes may well be kept ticking along as they were before. But it is likely that some will be changed or even thrown out altogether.
For this reason, the arrival of a new leader can be a preturbing time for staff. And for those running the customer experience programme, it may well be the case that they’ll need to not only demonstrate why the current CX strategies are the right ones - but why CX should be a focus at all.
The situation is complicated by the prevailing conditions, with the pandemic and the accompanying economic challenges meaning that cost-cutting can be an attractive strategy.
Peter Dorrington, founder of XMplify Consulting, explains: “Even before the outbreak of COVID-19, there was a significant existential debate underway about the future of customer experience as a profession. Analysts like Forrester were already saying that ‘…to continue succeeding, CX leaders must prove the ROI of CX investments.'
“But that was in an economic and business climate that no longer exists - it is much worse now. Today, the pressure is really on. There can be little doubt that we are facing the deepest recession in living memory. Money is going to be in short supply, including public and private sector finance, as well as the disposable income of consumers. What’s more, business and consumer confidence is at an all-time low.
“At a time when there has probably never been a greater need for a customer-centric focus, there is a real danger that CX programmes and staff will be dramatically affected by a drive to cut costs across the board.”
How then do you make your case to the new leader? With so much on his/her agenda as they step into the role, how do you convince them that continued (even increased) investment in customer experience is a sound business and financial strategy?
Here are some tips.
View the CEO as an internal customer
Jack Springman, associate partner at Optima Partners, suggests that interactions with the new leader should be viewed in a similar way as customers are.
“It is understandable that customer experience professionals should see their domain as being the most powerful source of differentiation (I certainly do); and therefore the most effective way to generate organic growth and most deserving of management attention and corporate funding. The trouble is that other functional managers will believe the same about their own areas,” he notes. “The internal competition for time and money is tough.
“The advantage that customer experience managers have is that the necessary response – treating the CEO as a customer – should come naturally. As with any customer, it is important to see things from his or her perspective – seek to understand what he/she is trying to achieve, his/her pain points and the opportunities that are ‘hot buttons’.
“To win the CEO’s support, what is required is a compelling case for investment – both in absolute terms and relative to other initiatives competing for funding – and that requires really understanding the pay-offs that the CEO is seeking by walking in his/her shoes.”
Ensure you have the support of the rest of the board
If your CX programme is to secure its long-term future, it will need the support of the whole board.
Peter Dorrington explains: "Get to know every member of the board and what they care about - it’s your job to ‘connect the dots’ for them: explain how what you do can positively influence the things they are measured on."
Here some examples from Peter:
The COO - "The COO will be focussing on the transition back to ‘normal’ operations. They will want to know that your CX strategy won’t disrupt that transition and, ideally, may even be an enabler – for example, how the new technologies and a Voice of the Customer programme could act as an early warning system for emerging operational issues."
The CMO - "Many CMOs are currently thinking about how to reengage with a customer base which has new needs and new priorities. They are also probably thinking about how to identify and reach new customer segments. CMOs have long understood the value of good customer experience, but perhaps not fully appreciated how much valuable data such programmes can produce."
The CSO - "The CSO is going to want to reboot sales campaigns – they will want to know which customer types are still buying and why, what features matter to customers (and which don’t) and how best to sell to them. Your CX programme can help with that, especially if you can help find a sales opportunity within a customer service journey."
The CFO - "To be frank, CFOs are all about the numbers and especially the money. With money in short supply, they are currently having to make some very uncomfortable decisions and many will be actively seeking to reduce spending on anything that does not deliver significant and quantifiable value to the business. You should actively enlist the help of the CFO in preparing a revised value-based business case – if your CX programme is seen as a non-essential cost, it will be cut, so help them understand where the value of CX lies."
Align CX with how the new leader articulates their strategy
Customer experience needs to be seen as a key component of delivering the business’ strategy and reinforcing its sources of differentiation. Businesses can generally differentiate themselves in how they create value for customers in one of three ways – through offering the best products (product leader), offering the lowest prices (cost leader) or delivering the best overall solution (often described as being most customer intimate).
In the case of the last one, customer experience is critical – it is the differentiator.
Jack Springman explains: "Differentiating on superior customer intimacy is arguably the most powerful of all three. But it is also the most difficult, requiring a greater outside-in perspective than the others to ensure that the superior experience genuinely delivers value for customers. And it also requires high capability levels to ensure that the superior experience can be delivered consistently; (capability levels being a function of the processes in place, the system-enablement of those processes, organisation design, roles definition and performance management, competencies and culture).
"But even with a strategy of cost or product leadership, the customer experience needs to be designed. Its strategic importance will be slightly less, but it still needs to align with how the business tries to create value for customers and capture value for itself. So for a cost leader, the customer experience strategy may focus on offering the best self-service experience. A product leader may choose to design its experience so as to provide industry-leading technical support. Customers still have an experience whether that has been consciously designed or is a random product of service evolution. So it is far better to manage it than not. And most important of all, it needs to be strategically aligned."
However, the three main sources of differentiation are primarily a means for categorisation and most CEOs are unlikely to articulate their strategy using such terms. But CX managers need to align customer experience against the language the new CEO uses, and how he/she describes how the business will differentiate itself.
Springman continues: "For example, if the CEO is stating that the business will increase its value addition to customers to differentiate against commodity offerings (e.g. imports from low cost countries), showing how investing in customer experience, for example by enabling greater service pro-activity and customisation, is supportive of this provides strategic justification for it. Equally it is necessary to show how a programme to improve customer experience will fit with existing initiatives – showing how it will enhance without delaying, derailing or devaluing them."
Demonstrate the financial ROI of your CX programme
For CX leaders to win the support of their new leader, they are going to have to show how their investments in improving customer experience are resulting in quantifiable business outcomes and a positive ROI, for example, by:
Increasing topline growth – with higher sales values, increased cross-sales, etc.
Reducing costs – by reducing waste and improving efficiency & effectiveness.
Generating higher lifetime value (LTV) – by decreasing customer churn and increasing lifetime economic activity.
So how do we go about calculating a robust return on customer experience (RoCX)? Peter Dorrington recommends that CX managers:
Determine what your measure(s) of success will be – it should not just be the common CX measures, even though these are often correlated to overall business performance. The economic purpose of business is to create value for their stakeholders. Most business executives are used to thinking about data, numbers and business cases, so focus on how your CX investments specifically will do that – pick a business KPI.
Objectively benchmark where are you are today – in any ROI equation, calculating the investment is relatively straightforward, but you cannot quantify a return unless you know what the ‘as is’ value is (or is predicted to be). Whilst not getting bogged down in too much detail, avoid overly-simplistic cost allocations – ‘averages’ can hide a lot detail.
Use analytics – in the world of CX, too many organisations restrict their use of analytics to operational management, simple explanations of past results and progress against predefined customer journeys, or for measuring outcomes that are not directly related to financial metrics. Yet, there is more on offer – the ability to predict customer behaviour, optimise the next best action, make automation more intelligent, and even become more proactive. Ultimately, this means that models can be build that show the causal links between an action and an effect - if you do ‘X’, the customer will do ‘Y’ - and each has a cost or value attached to it.
Focus on what is driving the measure, not the measure itself – whilst some organisations focus on ‘moving the needle’ of their chosen CX measure (often because someone’s bonus is tied to it), many have started to try to understand what is driving those changes. However, be wary of just focusing attention on drivers of things like customer satisfaction – these do not always tell the whole story of what contributes to business results. Ensure that your analyses can be linked directly to your chosen business KPI, using CX measures to help tell the story, not be the story.
Neil Davey is the managing editor of MyCustomer. An experienced business journalist and editor, Neil has worked on a variety of newspapers, magazines and websites over the past 20 years, including Internet Works, CXO magazine and Business Management. He joined MyCustomer in 2007.