Architecting the business for customer experience competitiveness

15th Jun 2011

Keith Schorah is the founder and CEO of enterprise feedback management and voice of the customer firm SynGro. At the recent European Customer Experience World event, caught up with Keith to discuss how processes and structures are adapting to optimise the use of customer data and drive improvements in the customer experience.

MyC: Has any correlation between customer experience and stock price or financial performance ever been demonstrated?

KS: As far as we know we haven’t seen anything in the market that has tied intangible asset value of a company to customer experience. And we are doing some work on that currently with a university. However, the common sense approach tells you that it has to be. If you have a value of a company which is based on its asset value and that there is a separate multiplier in there looks at the stock market and says this company is worth more than its current set of assets, what is that difference? And it’s often described as the confidence in the market that the company can hit the targets and forecasts that it is setting. Well how is it going to hit the targets and forecasts it is going to set? It’s going to hit those targets and forecasts by acquiring more customers, keeping customers longer, selling more to them and managing its own internal processes to keep the costs down yet at the same time making sure those customers stay with them. So we can categorically, I think, state that intangible asset value is inherently linked to customer value. And customer value is inherently linked to be able to retain customers, which is in turn inherently linked to the customer experience. So yes, intangible asset value of a company does link to customer experience – and as soon as we can prove this with the research that we’re doing, I’ll come back to you.

MyC: Is the growing prevalence of customer experience roles and acknowledgement that firms are taking it more seriously?

KS: I think now a lot of companies have to take customer experience seriously simply because there is a lack of choice between how customers choose products. There is a great similarity of products across many lines of business and unless companies can find a way to differentiate, it becomes increasingly hard for them to compete. So telcos, utilities, FMCG, retail are all key areas where it’s very difficult for you to differentiate your products and it’s more than likely that the best way for you to differentiate based on customer experience. But differentiation on customer experience isn’t very simple. Every single company wants to do it in a different way and what we realise, even working with similar companies in the same industry, is that different companies will take a different approach. However, that’s great for those companies because that’s what provides them with a sustainable competitive advantage on how they are going to compete in the future and make sustainable cash flows as a result of their activities.

MyC: In your experience, how effective are these roles proving?

KS: The first thing is there is an emergence of customer experience directors and chief customer officers being appointed to senior level exec teams in large organisations, so that shows that large organisations are taking it seriously. And it is critical in terms of if a company wants to do something for the customer and put customer front and centre in their business, they obviously need someone to head up that operation. Some companies place it under the marketing director role. But the trend that I’ve seen appear is that the chief customer role, the customer experience VP role, has been very well adopted in the US, and it is starting to become adopted in Europe, we’re dealing with a chief customer officer at an insurance company in Hong Kong currently, and we’re also dealing with emerging markets where that yet has to happen, in Latin America and South Africa. They are still trying to find their feet. They know they want to do it, but they haven’t yet appointed a person and given them the authority and power to be able to transform their companies into being customer-centric.

MyC: How important is it that these roles are cross-departmental?

KS: Customer experience isn’t driven just by sales guys. It isn’t driven just by a call centre. It is actually driven by any touchpoint that the customer has with a business, but also the supporting functions internally that have to support that customer interface to make sure that they can do their job. If you were to phone up BT and ask them to provide a new line in your house because you have moved house, you might speak to a call centre agent, but that agent isn’t going to put the line in! The ability for BT to make sure that they can mobilise Openreach to put that line actually in your house is going to be critical about whether you are happy with BT as a whole, even though you spoke with someone in the call centre. So the back-end processes that link together frontline and operational excellence are the key things about investigating how you are going to drive customer experience and mobilising the whole of your workforce to make sure they are able to do that.

MyC: What customer experience KPIs are proving most insightful?

KS: Customer experience KPIs are many and varied. A lot of companies favour the Net Promoter KPI, some prefer buy again intent, some prefer a customer satisfaction one, some prefer a black box of many mixed together and all weighted. And as a company we don’t really care too much about the KPI as long as it adheres to some strict principles. Principle number one is it must correlate to some operational performance. So we must realise that if customers are more happy becoming more loyal they’re the ones that spend more with our organisation, have a higher lifetime value and stay with our organisation longer and are less likely to churn. And the second criteria which is very very important for a KPI is it’s easy to implement. One of the things in terms of making sure that your workforce  can understand what they need to do and change their behaviour to look after customers is they hold some form of key performance indicator that they are measured against and perhaps rewarded against that has a customer satisfaction element to it. Now unless that correlates to some business growth, some business criteria, they are unlikely to understand it so they won’t do anything about it. But it has got to be easy to implement for them to grasp it and make sure that they are willing to take it on as a KPI target that they are going to be measured against.

MyC: Are there any technologies that you think are key to supporting a robust CEO strategy?

KS: A robust customer experience strategy is one that can over time change a culture of an organisation to be away from product or organisation-led to be customer-led, which means that we can’t stop short at just understanding customer feedback. I think there has been a trend to say let’s understand the customer feedback and put it in a pot. The next trend is to say well let’s not put it in a pot let’s send it out in real-time to people in the organisation that can be accountable for affecting the customer experience. However, we find that it doesn’t stop there. That doesn’t change culture. All that creates is a series of tactical actions that a lot of people are creating on a daily basis without any understanding about what they are learning from these actions and how to share best practice. And so from tactical actions you need to be moving to an environment that creates best practice. So a learning environment, a knowledge share environment, to make sure that if somebody fixes something in Hong Kong, the person in London knows what to do so they know how to fix it too. And so sharing best practice around an organisation is critical. Another element of this is to make sure that you get continual improvement. So having a learning and continual improvement cycle is what actually shifts a culture of an organisation. You have to get the building blocks of understanding what the customers want, and creating some actions, but unless you do it in an improve and learn environment, which is cyclical and carries on going all the time, the cultural change is unlikely to happen.

MyC: What are the biggest challenges when it comes to capitalising on the large volumes of feedback at our disposal?

KS: it’s right that we need to measure and collect information at all points of contact that customers have, and this can be done on a transactional basis when people interact with your organisation, it can also be done on a relationship basis so you can ask them regularly what they want or actually get the feedback from social media sites. But we need to bring that into one big pot of understanding. We need to create the enterprise view of a bit of a customer on a per customer basis. More importantly we need to provide context to that information – by itself it doesn’t mean a great deal unless you can integrate operation and financial data. You need to be able to understand who your most important customers are. You can’t act on all the feedback from all your customers all of the time. You need to prioritise your actions. And so understanding this information in one environment and giving it context allows you to create the right actions out the back of it. And of course that takes some thought, it takes some planning, it takes strategy and it takes the technology infrastructure to allow it to happen.

MyC: Does this come back once more to the importance of having a cross-departmental role to deal with this data?

KS: Making sure that the right people in the organisation get the data specific to them – so if I am a product manager I want to see all the data from all the customers that have used my product – is critical in making sure you are driving the right actions from the information that you collect. It also helps to be what a customer of ours calls being a ‘silo buster’ – it allows you to get production to talk to marketing to talk to logistics to talk to sales. Because customer issues aren’t specific to any one of those necessarily. You need to work as a team across the whole organisation to make sure you are fixing a customer issue. And so having the right information distributed to the right area in terms of allowing a whole organisation to have a customer view. We don’t just want the customer-facing people to have this view – the whole organisation needs to know what is necessary in terms of making customer satisfaction and customer experience, provide them with this competitive advantage that is very important.

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