What does the economic climate mean for customer experience leaders?by
Will more attention be focused on costs and cost reduction than on growth? And if so, how can CX work be positioned as a source of efficiency and effectiveness?
These times are challenging for many companies, and indeed for many families. In this article, I want to clarify the situation I see in Europe and in the USA. I believe much of what follows applies to other countries and regions as well, though some things may be less extreme.
Jumping ahead, my central point is that the leadership focus for most companies in most industries is likely to be on efficiency and effectiveness in the short-term. This means cost, and of course, cost reduction. I believe more attention will be focused here than on growth. As customer experience leaders, we have never tried to position ourselves as efficiency leaders. This needs to change immediately.
What is the current economic situation?
Here is what the Q2 earnings announcements made in July showed for the S&P 500:
Unsurprisingly, the energy and utilities sectors have been passing greater price increases to businesses and consumers than their cost increases. Life is looking great for them, and CX leaders here don't have anything to worry about. Not so for every other sector. And things are slightly worse in Western Europe, where electricity charges are shooting up. Here where I live, we have just been told to expect a 47% increase in our electricity bills. And we are lucky, compared to some.
Well, if you are working for a utility or in the energy industry, you can probably stop reading now. For the rest of us, it's not a great situation. Companies will be looking to cut costs and you could of course be one of those costs. I have to say that I believe CX teams that report to Marketing may be more at risk than the average. After all, the mission of marketing is demand generation and sales support. CX work is then perceived as interesting but non-essential market research. Marketing leaders that have to reduce costs will have to cut either people or demand generation programs, so watch out!
In this external environment, CX work needs to be positioned as a source of efficiency and effectiveness. We need to be pushing prevention, rather than cure. Our focus should move away from things like pushing for everyone to close the loop with Detractors. That's expensive.
We need to be able to prove that a small number of short-term investments will prevent customers becoming Detractors, greatly decreasing the need for expensive reactive loop-closing. (I was thinking of saying that we need to be providing vaccinations, rather than artificial respirators, but that might be offensive to some, so I won't say it... Oops.)
Those who understand what I have been writing recently will expect me to say that you need AI software to analyse the operational data, and so on. But in the short-term, meaning in the next few weeks or months, you probably need to get moving and don't have time to source and implement a complete solution. Here is what you can do to get started with Excel, with a little bit of effort:
- Get your latest relationship survey results. If you are in B2B, segment results by size of customer. If, for example, your top 30 customers provide half of your revenue, look at them separately. If you have prior year survey results for some or all of these customers, compare them to establish trends. Work out which part of the customer journey seems to be the most problematic, meaning which seems to be driving Promoters to become Passives and Passives to become Detractors.
- Get a data extract from the main operational system that is used for the most problematic customer journey step. I am talking about systems like Salesforce, Microsoft Dynamics, Zendesk, Oracle, Workday, ServiceNow, Clarizen, Engagio, and others. Use comments given by customers in relationship surveys (NOT transactional surveys) to help you to priortise, If it turns out to be a gigantic effort, you could try to do it manually for your top 50 or 100 customers.
- Run regression analysis between the survey results and the system data to see which data points correlate most strongly to a customer being a Promoter, Passive, or Detractor.
- Possibly starting with just the top three data predictors by NPS category, examine the operational data for the 80%+ of customers who did not take your survey. Do this to determine the probable Promoter, Passive, and Detractor status for each.
- Even if it is not perfect, use what you have found to propose and secure funding to address these operational issues. If this process turns out to be worth the effort for the first problematic journey step, do it again for the second one on your list.
Expect one technical obstacle
It should be relatively easy to get the necessary people to agree to this concept. Everyone understands that dealing with Detractors that have only been identified via surveys is costly and happens later than you would like.
Some companies, particularly those that have grown through mergers, will find a single technical obstacle, and that is the lack of a common customer ID between the various systems. Customer names may even have variations, and you may have to use some simple lookup tables in your workbook to sort this out.
It's worth the effort
You should be able to do this first manual exercise reasonably quickly. And the results should provide you a way of proving that you can contribute to your company's efficiency efforts. This is a low-cost way of preventing customer defection, often at a point where the customer has not yet expressed any dissatisfaction. Try it and see! It is probably not worth the effort of doing this manually for all stages of the customer journey.
You will need machine learning software for that. And of course (hint, hint) you know where to go if you are a B2B company and want your leaders to be able to see and use complete lifecycle analysis on a monthly or weekly basis.
This article adapted from a piece that was originally posted by Maurice Fitzgerald on LinkedIn.