Architecting the business for customer experience competitiveness

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.

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.

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.

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.

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.

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.