What is customer outcome management and could it improve CX?
Without considering outcome, does the concept of customer experience help you reveal enough about your customers' wants and needs?
Anybody who is in a customer experience leadership role knows their job is hard. Too much lip service. Too little action. Recommendations not getting rubber-stamped. Lack of support when it’s most needed. Disinterested employees. There are plenty of others. COVID-19, obviously.
It’s not the same for everybody - a truly supportive CEO can do wonders in making the customer take centre stage. The problem is if the leadership is driven by profit, operational excellence or sales performance, it makes the creation of a truly customer-centric company almost impossible.
Is there a way around it? Actually – yes – it requires one single step. It’s a pretty big step and one the CEO would probably have to initiate but if it is made it changes the way a company operates forever. It is all to do with structure.
The traditional organisation chart has been with us for around 250 years and is dedicated to doing one thing: Create, market, deliver, sell and support a product or service. The sales-driven CEO is likely to have originated from a sales background. The operational excellence-driven CEO focused at one time on that function.
This isn’t to say there is no understanding of the importance of other functions, but it does explain the difficulty in getting a common agreed focus. Think about it. Our companies are a collection of different functions and the ultimate commander and controller will have a favourite function that in their world offers more critical impact than others.
The enlightened CEO could tear up that definition and create a 180-degree change in emphasis by defining the company with Desired Customer Outcome at the top.
The concept of segregation of labour is maintained but every function within the organisation has a customer outcome alignment.
The implementation of this is not as complex as it might appear. Companies cannot change their functions and processes overnight – that is far too revolutionary. What can be done is to define the outcome-driven company structure and make that the centre of everything the company does. This means everybody who is hired will have customer outcome as their driving focus – customer facing or otherwise. This means reward becomes customer outcome driven and everybody has accountability in their own job.
Companies cannot change their functions and processes overnight – that is far too revolutionary.
Change the backbone and the focus and you change everything. It will take time for a company to adjust, but adjust it will.
What is outcome-based thinking?
Outcome-based thinking is best illustrated by an example of a product that will be familiar to almost everybody.
Go back to Macworld 2007, when Steve Jobs introduced the first version of what we know as the iPhone. He started by saying that this was going to be a revolutionary year for Apple. He started by telling the Apple employee audience he was introducing three revolutionary products. A revolutionary wide-screen iPod with touch controls, a revolutionary mobile phone and a breakthrough internet communications device. He said it twice again. An ipod, a phone and an internet communications device. An iPod, a phone and an internet communications device. Then he asked the Apple audience “are you now getting it”. This was not three separate devices – this was one device!
That was the moment that he took his customers to a completely different outcome. He had moved them from mobile telephony into a much wider domain around lifestyle management. The customer could now use the iPhone to read articles. They could check the weather. They could send emails. They could play games. Of course, this has been hugely enhanced to what we now do with it today. Had he invented the concept? Of course not. The origins of bringing the concept of PDA and telephony together had been introduced 13 or 14 years previously.
What he had done was to create not only a lifestyle management outcome which others were flirting with, but part of the big step forward was making it incredibly easy.
It seems so obvious now because we have been living with device-driven lifestyle management for years. What Apple had done, at the time, was to create a massively enhanced package of outcomes, re-defining “ease of use” and “convenience” along the way. This was way in advance of what was already out there. Sure, the customer had a great experience, but it was the outcomes that made that massive difference and helped to revolutionise communications into what it is today.
This is why I used the analogy of customer experience being akin to icing on a cake. The concept of customer experience without considering outcome does not change things anywhere near enough, which is why we focus on outcomes first and experience associated with those outcomes second. We are now in the era of 'customer outcome management'.
Innovators naturally look at opportunity from a completely different direction. Part of this is looking at what a customer needs and wants, and working backwards. Not from a capability perspective and working forward.
Think of the customer outcome framework as akin to peeling an onion. Your understanding deepens as you peel layer after layer. All this thinking is easily learnable, but I believe it goes way beyond customer experience as it is currently practiced.
A more formal definition now probably makes a bit more sense.
Customer outcome management is the process of aligning everything you do to the successful customer outcomes plus the experience associated with each outcomes:
- For those outcomes that you have chosen to deliver at a particular time point (this evolves so you competitively stay ahead).
- That maximises the P&L, ROI and every important KPI of the organisation.
- That aligns/harmonises customer to employee outcome, stakeholder outcomes (could be internal or external), social agenda and company outcome (P&L).
This concept impacts how you research, how you develop, what products you build, how you drive your processes and how you define your structures.
This is completely different from how we have worked with customer experience up until now. This is a 180-degree shift from where you typically start change.
If the desired outcomes and experience associated with those outcomes is better than any of your competition – guess what – potential customers are going to seek you out, rather than them.
This approach impacts revenue, cost, service, ROI and every single performance indicator important to the organisation.
The bad news is that traditional customer experience tools and techniques will not help you achieve this.
This article adapted from original articles that featured on The CXSA Middle East blog page.