Associate Partner Optima Partners
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More myths and misconceptions undermining CX managers

Jack Springman busts more myths that are putting the future of customer experience in peril. 

15th May 2020
Associate Partner Optima Partners
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Customer service skills
istock

In the previous article I explained how misleading advice has proliferated in the customer experience arena, and that CX leaders who have listened to this flawed advice will be the ones who risk being unemployed.

But I also noted that it’s not to late for CX leaders to modify their beliefs and change their behaviours.

With that in mind, I've decided to bust four of the most popular customer experience myths - two of which appeared in the previous article, while the final two feature below. 

3. You can only deliver a great experience if you are customer-centric

In 2017 I wrote an article arguing that customer centricity was a false grail for CX professionals. Despite being over three years old, the article has been re-publicised on a number of occasions recently – evidence that the tide is turning against this deeply flawed belief. But it is still worth highlighting its deficiencies.  

In this article, I argued that customer centricity couldn’t be clearly defined, couldn’t be measured and therefore you couldn’t track whether effective execution was having an impact on KPIs such as customer acquisition, customer retention and customer growth. 

Further the idea that you can only deliver a good customer experience by making the customer central to everything you do is flawed.  Traditional CX thinking would suggest that only a strategy of customer intimacy – to use Treacy and Wiersema’s categorisation – can deliver an excellent customer experience. But this ignores the importance of customers’ expectations in determining whether they have had a good experience or not.

For example, if you check into a five-star hotel and receive what you perceive to be five-star service, your expectations will have been met. But if you check into a three-star hotel and receive four-star service, they will have been exceeded.  Which is the better customer experience? Which hotel is the customer is more likely to return to? 

As Sampson Lee, President of Global CEM, has argued, what counts is how the business creates value and the articulation of that via the brand promise. He makes the critical point that successfully delivering very high value on some dimensions requires compromises on others – pleasure on some dimensions requires pain on others.  He cites the likes of Ryanair and IKEA as examples of companies who have a brand promise that delivers great value to their customers and have historically delivered good returns to shareholders (recent events not withstanding).

These companies practice the opposite of customer-centricity. Tracey and Wiersema would call both masters of operational excellence. But these businesses have created a brand promise that is both attractive and sets expectations which they consistently meet or exceed. That encapsulates an excellent customer experience – one that will have customers coming back time and time again. By contrast, it is not clever to deliver exceptional service on one occasion if you can’t sustain it. You are setting an expectation and if you don’t meet the same level of service on the next occasion, the customer will be disappointed.

I experienced a great lesson in expectation management on a recent easyJet flight to Edinburgh from London. Noticing my elongated frame looking slightly cramped in a standard seat, the head steward offered me the opportunity to move to a row with more legroom because they always need at least two people next to the emergency exit. Towards the end of the flight, the same gentleman made it clear in the nicest possible way that I should not expect such largesse every time I flew with easyJet. It was a one-off and I should not reset my expectation.

IKEA, Ryanair and easyJet have delivered great value to shareholders by delivering great value to customers. By contrast the new economy customer centricity darlings Airbnb, WeWork and Uber have never made a profit, were not even forecasting a profit in the near future and, as the linked articles highlight, may not survive the current crisis. The financial problem with customer centricity is that if too much of the value created goes to customers, there is not enough value for the other stakeholders. Either shareholders or employees or partners suffer – or all of them do. The model is simply not sustainable.  

This highlights another point I made in a previous article – that the whole notion of centricity is flawed from an organisational point of view. CEOs have multiple stakeholders to look after – customers, employees, shareholders, regulators, partners and suppliers. To say they should be centric to any one is plainly ridiculous.

When CX professionals enthuse about customer centricity, all they are really showing is that the customer experience profession is CX-centric – with those working in it trapped in a filter bubble where they only hear people talking about CX being a differentiator, the importance of customer centricity and the implied importance of the role played by CX professionals.

But outside that echo chamber, commercial realities intervene. And while CEOs may have indulged the notions of customer centricity during good times, imagine trying to have that conversation amid the current crisis with a stressed CEO, and an inverted pastiche of the famous “what have the Romans ever done for us?” scene in the Life of Brian springs to mind.

 

CX Director: “We need to be even more customer-centric at times like now!”

CEO: “What about our staff, don’t you think our priority should be to keep them safe?”

CX Director: “Oh yes, well of course we need to keep our staff safe! We need them to look after our customers.”

CEO: “So we need to be employee-centric rather customer-centric?”

CX Director: “We need to be employee-centric so we can be customer-centric.”

CEO: “Isn’t that a little contradictory? What about our shareholders, are you suggesting we de-prioritise them? Not something I am keen to do as it would lose me my job.”

CX Director: “We are employee-centric so that we can be customer-centric which enables us to be shareholder-centric”

CEO: “Surely it is not possible to be multi-centric? Then of course there are our regulatory commitments, are you suggesting that we de-prioritise regulators?”

CX Director: “No, no of course not. Regulators exist to protect customers, so if we are regulator-centric we are actually being customer-centric.”

CEO: “What about our partners? They are important for ensuring our customers achieve their desired outcomes. Shouldn’t we focus on them as well?”

CX Director: “Well of course our partners are important …” 

CEO: “Then there are our suppliers – a number of them are struggling at this time and without them we wouldn’t even be able to make our products?”

CX Director: “yes, our suppliers are very important too…”

 

Multi-centricity is not really a thing, unless you are talking about cancer (not a great analogy). So unless, you are looking to channel John Cleese, it would be a good idea to excise the word 'centricity' from your vocabulary.  

4. NPS is what you should be focusing on

For the CX industry, the NPS is its guiding light – with raising it the raison d’être for many customer experience professionals.  Like CSAT scores, NPS is an example of the quantification of qualitative feelings simply so that an average can be created. Far more valuable than the score itself are any explanations provided as they provide concrete evidence as to how the experience can be improved.

With the score itself, there are multiple problems. Firstly it lacks intellectual and scientific rigour – the idea that NPS is the best indicator of future growth is spurious.  

Secondly the score provided is not a strong indicator of future behaviour (see here and here). Thirdly it can be fudged (e.g. only ask happy customers to take the survey) or bad behaviours incentivised (e.g. bribing customers to give a good score with giveaways). As Ron Shevlin of Cornerstone Advisors points out, a far better measure would be one that captures the number of customers who actually referred a new customer or increased the depth of their relationship (e.g. by adding an additional product). This is the opposite way of thinking - rather than infer future behaviour from stated attitudes, infer attitudes from data on actual behaviour.

That is not to say NPS or CSAT scores should be ignored, but they need to be part of measurement system that reflects how value is created.

The first element is tracking how effectively the value proposition to customers is being delivered – the elements where delivery can be objectively measured. This will encompass product and service metrics as well as those that are within the domain of the CX team (such as digital completion rates, first contact resolution, response times, etc.)  The next element is an attitudinal score such as NPS or CSAT.

The final element are the core metrics that capture acquisition, retention, growth and profitability. By tracking these elements at a customer level, it becomes possible to better understand what creates value for customers and the business and what doesn’t. (See this MyCustomer article for a more detailed explanation. It was written in 2014, prior to the most recent developments in data science and AI, but the key points remain the same.) 

I could go on - there are a number of other tropes that I believe performance-oriented CX professionals should disavow.  But they would just substantiate the same point – that the CX industry needs to take a long, hard, and commercial look at some of its core beliefs if its credibility is to survive the current downturn.

Reading between the lines of Forrester’s predictions, a credibility deficit was already emerging before the COVID-19 crisis with respect to how CX delivers returns to the business.  The downturn will accelerate that reckoning.

These two articles have focused on what CX leaders should stop thinking doing. To counterbalance that, my next one will highlight the disciplines or capabilities required to deliver customer engagement during a downturn.

 

In the meantime, if anyone wants to challenge the points made in this article, I would be happy to take part in a MyCustomer-hosted online debate.

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