Getting ahead in differentiating your business is an ongoing quest. Benchmarking studies can be a great tool to monitor and maintain your edge — if you know how to maximize your value from them. Here are 8 paths to gaining value from best practices studies:
1) Participate! By investing a portion of an hour to answer the study questions you’ll likely pick up an idea or two for tweaking your perspective or approach for greater success. Every study has its own theme, so there’s always potential for picking up something new from each one. (Even if you’re on the agency side and may not qualify for a certain study, encourage your clients to participate — they’re less likely to be complacent as a result, and complacency is not a great thing for an agency.) What else only takes 15-30 minutes and gives you a possible new model, big-picture view, and/or tickler for taking your programs to the next level?
2) Accept the offer — whether it’s a donation to charity or a free copy of the report or something else, enjoy the token of appreciation. A complimentary report typically saves hundreds of dollars in your budget. Conducting your own Read more…
Present voice of the customer to all employees, and you will be more likely to reap financial benefits and manage customer experience holistically, according to the 2011 Business-to-Business Customer Experience Management Benchmarking Study.
Although only a third of companies are presenting customer feedback to all employees, those who do reported at least 20 percentage points advantage in the performance of holistic customer experience management, as shown by the gaps in blue and red bar graphs below. Examples of business results attributed to customer experience management efforts include:
Companies with managers (of their top five methods to achieve CEM goals) who meet together quarterly or more often for coordination purposes, or have dotted-line reporting to a single executive or committee tend to enjoy advantages* in the following areas:
Role of CEM: Top management’s day-to-day activities indicating that customer experience is a competitive differentiator, CEM is a formal business process, and CEM is an influencer of major business decisions.
Voice of Customer: Identify and collect voice of the customer form all Read more…
The 2nd Annual ClearAction Business-to-Business Customer Experience Management (CEM) Benchmarking Study has identified six best practices for strong market performance and customer experience excellence:
Coordination among managers of CEM methods.
CEM as a determinant of corporate strategy.
Presentation of survey results to all employees.
Calculation of customer lifetime value (CLV).
Action on survey results by owners of customer experience key drivers.
Funding of cross-organizational collaboration.
These findings may be instrumental to the future of customer experience as the majority of companies have not yet implemented the above practices. Among the firms that are implementing most or all of these best practices, CEM-related business performance is much stronger and other CEM best practices are also more abundant.
Examples of business results attributed to customer experience management efforts include:
200% growth in profit over the past 4 years. (Chemicals)
200% increase in market share over the past 4 years. (Semiconductors)
Customer Value Management (CVM) is widely undervalued in the way we practice customer experience management (CEM). Excellent resources on the CVM topic abound, yet few executives — and even few CEM professionals — are aware of them. Sometimes CVM seems too quantitative or difficult to grasp or implement, but the companies that have distilled customer value management principles are certainly reaping higher value for their stakeholders, especially customers! In addition to step-by-step calculations for customer lifetime value, return on customer, customer equity, customer value-added, and other essential metrics, CVM literature provides practical advice that is absolutely necessary for managing customer experience right.
Firms of Endearment (by Sisodia, Sheth & Wolfe) explains how "endearing companies tend to be enduring companies". By asking a broad sample of people which companies they love, and then working backward to identify those companies’ collective, distinctive set of core values, policies, and operating attributes — and then their return on equity — amazing findings resulted. The firms of endearment (FoE) list includes the usual suspects, and then some: Amazon, BMW, Caterpillar, Google, Harley Davidson, IDEO, IKEA, JetBlue, Johnson & Johnson, LL Bean, REI, Trader Joe’s, UPS — to name a few. "They actively align the interests of all stakeholder groups, not just balance them … and can do seemingly contradictory things such as pay high wages, charge low prices, and get higher profitability." Indeed, the financials seal the deal: " the public FoEs returned 1,026 percent for investors over the 10 years ending June 30, 2006, compared to 122 percent for the S&P 500; that’s more than a 8-to-1 ratio! Over a 10-year horizon, FoEs outperformed the Good to Great companies by a 3.1-to-1 ratio." Read more…
Value creation is perhaps the single most important aspect of any executive’s job. As such, crystal clarity on what it is and how it’s done should certainly be top of mind. Shareholder value is fueled by customer value; shareholders leave when customers leave, not the other way around. Customer value is an ambiguous term, as it can be used either from the company’s or the customer’s perspective. Few companies know the lifetime value of their customers, or collective customer equity, and more importantly, fewer still know how much customers value their brand, and why.
Why care about how much customers value your brand? Because the customer view of the company’s value is a predictor of market share and shareholder value. Vodafone’s Graham Maher, Managing Director, says “The Customer Value Management (CVM) score is a leading indicator of Vodafone’s market share. We were able to predict market share a quarter out using CVM data, to within 1% accuracy! In fact, the Finance Director said the CVM score is more robust than any of our financial Read more…
Guest Blog by Peggy Carlaw
A sizeable percentage of customers who are displeased with service, or irritated, never provide feedback about their experiences, according to the BusinessWeek article titled Blind Spots in Customer Service, citing recent research drawn from the customer service data of financial institutions. Say you have a customer who is frustrated but not fuming—in other words, not upset enough to take the time and energy to contact you about the level of service received (and keep in mind—some people who are upset will never contact you). It takes energy and time—a precious resource for most of us—to let a company know we’re dissatisfied. Many people choose to say nothing at all and may instead quietly take their business elsewhere.
Do you consider a month with reduced customer complaints a success? Like many businesses that rely on customer service satisfaction (CSAT) rate and attempt to make changes to reduce the amount of complaints received, it’s easy to focus on the feedback you’re receiving. The challenge is to uncover what you’re not hearing. Oftentimes, it’s the lack of feedback that will ultimately erode your CSAT rates—not your low complaint numbers.
How Many Unhappy Customers Are Out There?Read more…
Are customers or employees the number one priority of management’s decision-making hierarchy? … Or perhaps investors trump all? These questions may be in the consciousness of most customer experience practitioners. The title of this recently published book Employees First, Customers Second emphasized this stakeholder hierarchy notion. The book chronicles the CEO’s efforts at HCL Technologies to re-align his company with customers’ changing priorities: “The increased complexity of the customer’s business, combined with the increasing complexity of solutions (usually sourced from multiple vendors), made it necessary for customers to focus on execution and implementation.” From various customer interactions he came to realize that “our biggest problem with the organization structure was that it did not support the people in what we call the value zone: the place where value is truly created for customers. In a services company in a knowledge economy, this zone lays in the interface between the customer and the employee. … So, to shift our focus to the value zone, we turned the organization upside down and Read more…
Sunnyvale, CA — May 11, 2011 The role of customers in business-to-business companies is being explored in the Second Annual ClearAction Business-to-Business Customer Experience Benchmarking Study. As the only global analysis of best practices to create excellent business customer experiences, this research effort provides insights to executives who want to maximize value for their stakeholders and clients alike.
This comprehensive survey answers these questions: Who in the organization has overall responsibility for driving customer experience improvement? What are the primary goals, motivations, and obstacles for customer experience excellence? And to what extent does the company strive to understand customer perspectives, build customer-centricity, and create customer value?
Business-to-business (B2B) scenarios are underemphasized in other customer experience studies, which tend to highlight Read more…
This article describes the 5th of 10 unique characteristics of customer experience relative to more well-known concepts such as customer satisfaction and retention. The characteristic defined in this article is: Choice — Customer experience is built on trust and mutual respect for variety; share of budget is more important than loyalty.
So you want a relationship with your customer? If one of your greatest hopes is for your brand to be loved by your customers, think about what it takes for your personal relationships to thrive. Since customers (even B2B) are people, they tend to have similar responses to relationship strengths and weaknesses whether the relationship is personal or with a brand. As you know from your own experiences, trust and respect for your choices are at the root of relationship failure or success. Yet, customers’ trust of companies is steadily eroding! In fact, U.S. consumers’ trust dropped a whopping 8 points from 2010 to 2011 in the Edelman Trust Barometer study1, and U.S. and U.K. firms rank 8th and 9th in trustworthiness, behind Brazil, India, Italy, China, Germany, and France.
Astoundingly, trust of banks dropped 46 points in the U.S. and 30 points in the U.K over the past 3 years. Only one in four people in these countries feel they can trust banks to do what is right. In 2008, U.S. automobiles were the lowest ranking industry, but they have managed to bounce back with a 17 point gain. Hindsight may be a great teacher here, as we’ve observed self-centeredness in these industries in recent times. In the interest of maximizing short-term financial performance, these companies seem to have forgotten that relationships are a two-way street. Once trust is eroded, any amount of advertising and sweet-talking tends to have little effect. For Read more…
What do you think of this theory: As customer-centricity of an organization increases, customer experience management return on investment also increases.
Exploring the Theory
This theory originated as an observation of my own experience as a customer and results of studies that contrast top management’s ratings of their own customer-centricity against the perceptions of those executives’ customers. Typically five times as many executives think theyre customer centric relative to the number of customers who agree. Recently I explored this theory with customer centricity experts Jeanne Bliss1, Jill Griffin2, and Dick Lee3 in a roundtable discussion that was recorded live on Focus.com. Here are the highlights of our conversation:
Defining Customer Centricity How do you define customer-centricity?
The orientation of a company to the needs and behaviors of its customers rather than internal drivers such as short-term profit, cost-cutting, operational metrics, etc. (Griffin; Wikipedia)
The degree of alignment between the company’s metrics (what people are rewarded and recognized for) and processes with official statements about customer Read more…
Customer satisfaction as a business concept has been around for more than 20 years — but customer experience management (CEM) has only been discussed over the past several years. So it’s no wonder that CEM is often equated with earlier concepts. The articles listed below can be instrumental in clarifying customer experience as a unique set of truths, essential for business success with 21st century customers.
1. Perspective: customer experience is defined entirely by the customer, not the solution provider.
by Lynn Hunsaker, Head of ClearAction Customer Experience Optimization
"If we had a choice to buy from someone else, we would!" said the president of the world’s largest semiconductor company at a customer conference. "But we are still buying from you because nobody else is offering these leading technologies right now.", This was a startling wakeup call to equipment-maker Applied Materials, well-known for being first-to-market with new technology, and listed among the 10 leading companies in Silicon Valley, with twice the revenue of its nearest competitor.
Customer Satisfaction Manager
To implement a worldwide customer survey that would help the company overcome this deep-seated negative customer sentiment, the company created a new role: Vice President of Customer Satisfaction. I was hired at Applied Materials as Voice of the Customer Manager based on my prior experience of launching the customer satisfaction program at Sonoco Products Company, and my track record of speaking at national conferences on the unique methodologies my company used. In Sonoco’s Strategic Planning department, I visited hundreds of customers’ sites nationwide (e.g. AT&T, Chevron, Del Monte, Franzia, Kroger, Owens-Corning, P&G, Weyerhauser, Wilson Sporting Goods) to conduct in-depth interviews with purchasing managers, plant managers, and other influencers of buying decisions. When the company launched its Total Quality Management program in 1991, I was asked to lead the Customer Satisfaction Read more…
This article is 5th in a series describing 10 unique characteristics of customer experience relative to more well-known concepts such as customer satisfaction and retention. The characteristic defined in this article is: Duration — Customer experience encompasses the point from which customers become aware they have a need until they say that need is extinct.
Customer engagement is really what many of us think of when we use the phrase customer experience management. During the past 15 years, customer-focus efforts have largely emphasized service excellence in contact centers, up-selling in CRM, or affinity-building in NPS or communities or references. While these customer engagement endeavors are subsets of customer experience management (CEM), they are often more revenue-oriented than customer well-being oriented, and hence, fall short of goals for superior customer experience and accompanying expectations for strong business results.
Return on Investment
For customer engagement to generate revenue, constant investment in campaigns, service, and technology are necessary. Alternatively, initial investment in CEM organically generates customer engagement for growth in revenue, and simultaneously reduces costs, for growth in profits. CEM is a dedication to serving customer needs from the customer’s perspective. By aligning the entire company with the customer’s perspective, CEM eradicates non-value-add activities and attitudes within a company, preventing hassles and minimizing waste. When customers enjoy hassle-free experiences, they’re naturally motivated to Read more…
Investment in customer experience management has increased or remained stable since 2005 for 88% of business-to-business companies, according to the 2010 ClearAction Business-to-Business Customer Experience Benchmarking Study. As the first global B2B analysis of best practices in customer experience management (CEM), this study provides insights on the growing role of customer experience in corporations. Four out of five B2B firms assign overall responsibility for customer experience initiatives to a vice president or director-level executive, and one in five companies treats customer experience inputs as a determinant of corporate strategy.
The study equally represents both large (more than 10,000 employees) and medium-sized companies (between 1,000 and 10,000 employees) headquartered in North America, Europe, Asia, and the Middle East. Industries represented include equipment, financial services, insurance, legal, medical, manufacturing, publishing, telecommunications, technology, and transportation. Half of the participants have been in a CEM job role for at least five years.
Goal Achievement
Three out of four participating companies say their customer satisfaction scores meet or exceed their goals; net promoter scores meet or exceed the goals of 54% of firms. A third of B2B firms say their goals are being met for market share, referral rates, differentiation, and loyalty, and half of the respondents say it’s too early to determine CEM’s impact on these goals.
Under-Utilized Role
The potential power of CEM is under-utilized: although more than half of company executives say that CEM is a competitive differentiator, only 24% use CEM as an influencer of major business decisions, and 20% treat CEM as a formal business process.
For more information on acheivements of B2B firms, see the full study at http://www.clearaction.biz/benchmarking. For the purpose of highlighting opportunities for leapfrogging current industry performance, the remainder of this article emphasizes opportunities for improvement in CEM practices.
Narrow Implementation
Generally, CEM is focused on Read more…
This article is 4th in a series describing 10 unique characteristics of customer experience relative to more well-known concepts such as customer satisfaction and retention. The characteristic defined in this article is: Preventive — Customer experience gravitates toward the easiest and nicest methods to get and use solutions that address customers’ needs.
“Just talk to your customers” was the resounding answer to: “What’s the best way to learn best practices for customer experience management?” — a question I posted on several business-focused social media sites. Yet less than 60% of companies have a formal voice of the customer program.1 Why? Because we often assume we already know what customers think, or what they “should” think. Somehow it seems straightforward to cater to whoever is enabling our paycheck — everyone knows it’s foolish to do otherwise. In reality, though, this catering may be uncommon sense: have we forgotten that it’s actually customers — not supervisors or the stock market — that enable our paychecks? Maybe you’re thinking “Of course we remember it’s all about the customer!” But how can that be true when only 31% of companies say they have a high commitment to customer listening?2 As a result, typically one-fifth as many customers will say you’re customer-centric, compared to the number you may expect.3
Motives Determine Customer-Centricity:
Motives are at the heart of Read more…
This article is 3rd in a series describing 10 unique characteristics of customer experience relative to more well-known concepts such as customer satisfaction and retention. The characteristic defined in this article is: Dynamic – Customer experience evolves with the customers’ context — the purpose and circumstances of their need, and overall experience reference points.
What happens when you fall in love with your customers? Aside from the typical starry-eyed craze, someone who is wildly in love has insatiable curiosity and uncanny adaptability. For an organization, this means customer-centric listening and customer-focused decisions, which result in winning customers’ hearts and budgets. Greater sincerity in love more likely leads to longer-lasting happiness, i.e. self-sustaining business results.
Insatiable Curiosity: Customer-Centric Listening
More vivid than traditional surveys: The last time you asked a new friend what they thought of something you did, you probably were intent on Read more…
This article is 2nd in a series describing 10 unique characteristics of customer experience relative to more well-known concepts such as customer satisfaction and retention. The characteristic defined in this article is: Perspective – Customer experience is defined entirely by the customer, not the solution provider.
Customers make paychecks possible, so businesses exist to serve a customer need that results in a profitable revenue stream. Customer experience management is a dedication to serving customer needs from their perspective.
Customer experience is defined entirely by customers, but the solution provider defines customer experience management (CEM). The customer is the judge of whether the experience was acceptable or stellar, or not; the customer defines the duration of their experience, as well as the context and the criteria. Therefore, CEM seeks to understand the gap between desired and current experience as seen from the customer’s viewpoint (not just the competitive performance gap, per se). Then CEM solves the gap holistically and anticipates the evolving needs of the customer to prevent future gaps.
Mis-Matched Priorities
Ironically, most strategic planning templates, consultants’ models, and business and marketing textbooks begin with other topics and address serving a customer need much later in their prescription for success. While I strongly admire and advocate these organizations’ thought leadership, I beg to differ Read more…
This article is 1st in a series describing 10 unique characteristics of customer experience relative to more well-known concepts such as customer satisfaction and retention.
You’ve seen the ads depicting crazy business policies that dampen customer experience and make customers cynical. I’m a big fan of free enterprise, but have to admit that self-serving practices have eroded trust and the joy of being a customer.
As each one of us is a customer ourselves, we should understand customer experience management like the back of our hand. Yet, somehow customer experience seems a bit mysterious, and certainly has myriad definitions. Ultimately, customers make paychecks possible, so businesses exist to serve a customer need that results in a profitable revenue stream. Customer experience management is a dedication to serving customer needs from their perspective.
While I can’t vouch for the advertiser of the above video actually practicing what they’re preaching, I’ll bet you as a customer would agree that customer experience management must have these 10 qualities in order to consistently win your heart and a share of your wallet:
Perspective:customer experience is defined entirely by the customer, not the solution provider.
Preventive:customer experience gravitates toward the easiest and nicest methods to get and use solutions that address customers’ needs.
Duration:customer experience encompasses the point from which customers become aware they have a need until they say that need is extinct.
One of the most powerful ways to keep your customers talking to you is to show that you really read and digest their feedback, and show that you have followed their advice in making improvements. At Symantec, Motorola, and Boeing, the Vice President of Customer Experience posts online the results of their latest feedback from customers, as well as what they’re doing to address that feedback.
By closing the loop with customers, you can re-set their perceptions, so they don’t feel compelled to carry around negative baggage of past experiences. They can re-set their perceptions to better meet your current realities of improved policies, business processes, and customer experiences. Symantec takes this a step further with a feedback form on their website – enabling anyone anytime to either vent their frustrations or express appreciation for a job well done.
Anytime customers share feedback — whether solicited via survey or unsolicited via complaint or casual comments to front-line employees — it’s important to acknowledge the customers’ view and thank them, with assurance you’re working on solutions. Don’t let them feel like they’re hanging on a cliff waiting for advice they offered to make a difference!
At Boeing, a top executive writes an open letter to all customers, explaining what they company heard from the most recent customer survey, and detailing the company’s achievements Read more…
Customer Experience Optimization is enterprise-wide alignment with customer priorities, to prevent hassles for customers, reduce waste, increase organic customer enthusiasm, and grow both revenue and profit sustainably.
Customer Experience Management is enterprise-wide dedication to serving customer needs from their perspective. CEM recognizes that businesses exist to serve customer needs, which results in revenue for paychecks and budgets and shareholder value.
Customer Experience includes all of a customer's experiences with a solution from realization of a need until the need no longer exists. Hence, it is broader than touch-points, deeper than user experience, and its duration and components are determined entirely by the customer.
Getting ahead in differentiating your business is an ongoing quest. Benchmarking studies can be a great tool to monitor and maintain your edge — if you know how to maximize your value from them. Here are 8 paths to gaining value from best practices studies:
"If we had a choice to buy from someone else, we would!" said the president of the world’s largest semiconductor company at a customer conference. "But we are still buying from you because nobody else is offering these leading technologies right now.", This was a startling wakeup call to equipment-maker Applied Materials, well-known for being first-to-market with new technology, and listed among the 10 leading companies in Silicon Valley, with twice the revenue of its nearest competitor.
Customer Experience Optimization is enterprise-wide alignment with customer priorities, to prevent hassles for customers, reduce waste, increase organic customer enthusiasm, and grow both revenue and profit sustainably. 
