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Four irrefutable facts about customer experience management that you must know!

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8th Jun 2011
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Can you handle the truth? CEM guru Bruce Temkin delivers the truth, the whole truth, and nothing but the truth, about customer experience - including KPIs, culture and technology.

The proliferation of job roles such as chief experience officer, and chief customer officer, tells us two things about companies. Firstly, it demonstrates that organisations now tacitly acknowledge that customer experience is important, and that there is a connection between how they treat the customer and loyalty. And secondly, it also reveals that businesses recognise that they aren’t very good at it!
So says Bruce Temkin, chief customer transformist at The Temkin Group, former VP and principal analyst at Forrester Research, and all-round customer experience management guru, having packed in more research into the field of CEM than just about anybody else.
After delivering a keynote session at the recent European Customer Experience World event in London, Bruce sat down with MyCustomer.com to discuss some of the basic tenets of customer experience, ranging from KPIs to culture. Here are the key takeaways.
 

Fact 1: CEM demands a systematic approach

"You have to take a systematic approach. Historically, when people have thought about customer experience they have thought about the interaction – so they have thought that they can just change the interaction when they adjust the experience. Yes you can do that, but companies are systems and the people who work in companies are systems, and so the experience ultimately changes to conform to whatever the system does. We can push our agents to be really friendly but that will only last a couple of days if the supporting environment around them isn’t providing the tools they need, and the managers aren’t supporting the right behaviours and there aren’t the right metrics. Therefore, we have to think about companies and organisations as systems.
"In order to change the system you have to look at all the elements that go into that system. I talk about measurement, incentives and celebrations – employees do what is measured, incented and celebrated. Those are the key dynamics around the system. And if you do that then you can create an environment where great experiences can happen consistently as opposed to trying to throw experiences onto a bad system.
"For instance, with voice of the customer programmes, if they are done right they are attempts to try and embed customer insight within a larger group of decisions that are being made, that are attacking the system, rather than just trying to get pieces of information to understand improvement."
 

Fact 2: CEM is technology agnostic

"The notion of customer-centric design is the core of customer experience management. It is way more important than any technology. The ability to understand the needs of customers, understand how you are delivering against those needs, and then how to hypothesise, design and deliver solutions that meet their needs, is the core capability. It has nothing to do with any technology on earth.
"Having said that, there are technologies that can support a lot of those. There is the growing area of what used to be called ‘enterprise feedback management’, for example, which I refer to as ‘customer insight and action platforms’ as this is what I believe the platforms will ultimately be – managing insight and then taking action off of that. That is certainly a potential tool in helping to understand customers better.
"There are other tools that are more concrete. Adobe has its customer experience management software, and it does a reasonably good job of piecing together processes that tie together some core data sets with lots of channels. And there is RightNow Technologies that calls itself ‘the customer experience platform’ and does a lot of things in contact centres and self-service that can improve the experience.
"But all of those technologies are absolutely useless if there is not somebody that has this customer-centric design thinking, and has the ability to figure out what we need to do for customers to make sure that we meet their needs."
 

Fact 3: CEM KPIs must be aligned to business goals

"The KPIs need to be consistent with the business. Customer experience is one of many elements that drive business success and we all need to be aligned around what that business success is. Start with what our business goals are and then our business goals should translate into a set of attitudes and behaviours for each customer segment. So if Walmart is going to dominate repeat business at low-cost products, then the behaviours it needs is customers coming back to Walmart to buy things that they need, that it carries, and the attitude that they need to have is that they believe that Walmart is the low-cost provider. So we would take our business goals, translate behaviours and attitudes into the groups of segments of customers that we need to have and then put metrics around those. We need to track the behaviours and attitudes.
"Now you can’t always do that effectively, so what companies do is they oftentimes create what I call ‘intermediate KPIs’ – such as satisfaction, Net Promoter Score (NPS) and customer effort metrics. And those are fine as long as we continue to make sure that they correlate with the attitudes and behaviours that we’re really trying to drive. Because at the end of the day, it doesn’t do your business any good if you are driving to a higher NPS score but NPS isn’t correlated with the business results that you’re aiming for.
"The good news is that in the early days if you improve a lot of those measures then you nearly always improve your business results. But you run into problems after that first kick of improvement, and then you have to make sure that your metrics are much more aligned to the business."
 

Fact 4: Establishing a customer-centric culture demands multiple competencies

"Southwest Airlines and Zappos are organisations that grew up having a focus on customers. It was in their DNA. And so while we can learn things from what I call ‘cultural pureplays’ – companies that have grown up with a good customer-centric culture and have kept it - they are very hard to replicate. The work I try to do is to understand how large organisations that didn’t grow up with that DNA can create more of a customer-centric DNA. And our research has revealed that when they’re good at it, they are good at four independent competencies, and you have to have all four to build a customer-centric organisation.
  • Purposeful leadership – the senior management team have to be clear about what their objectives are and communicate in a way that the entire organisation understands what they are doing.
  • Compelling brand values – the brand has to be articulated as a set of promises that they are making to customers, and everyone across the organisation has to understand those, because it is the brand, not the logo and design, but the actual promises that will be made to customers that align us all around a set of decisions.
  • Employee engagement – we have to be respectful of our employees and empower them with training, skills and knowledge in an environment that supports them behaving in a way that treats customers well.
  • Customer-connectedness – how do we actually infuse customer insight into the decisions that we make?
"You need to balance these four and figure out at all times which is the weakest of the four because you are only as strong as your weakest link. We’re doing a lot of work with many large organisations on how to push the button on each one of these four and to recognise when to invest of one of the others. The area that we find the weakest links lately have been employee engagement and compelling brand values. And so oftentimes that is the place to start."

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