This is an edited transcript from my presentation for CustomerThink’s Customer Experience Thought Leader Forum webinar on B2B Customer Experience Management, conducted February 21, 2013.
The ClearAction Business-to-Business Customer Experience Management Best Practices Study has been conducted for three years now. It was established in 2010 with an emphasis on understanding which functional areas were driving customer experience management and the scope of deployment within each company. In 2011, we continued the core set of questions along with an in-depth exploration of B2B voice of the customer practices, and we explored customer experience management success factors seem to be driving business results. And in 2012, we continued with that core set of questions and emphasized success stories of companies’ progress in their customer experience management, as well as showing three-year trends.
CEM Practices in Top-Performing Businesses
First of all, we wanted to identify which companies had the strongest business results. For example, some companies attributed customer experience management to their financial progress, such as 200 percent increase in market share over the past four years or 20 percent improvement in revenue over the past year. Some companies mentioned figures such as 15 percent reduction in churn and so forth.
Secondly, among the companies with strong business results, we identified which ones also had strong performance of at least 20 percentage points advantage in most of the other best practices in the study. It turned out that there were six of those practices that had such strong correlations, and that’s what we’re going to be talking about today.
To illustrate, when managers of various customer experience activities coordinate their work by reporting to a single department or to a committee or executive, or meeting quarterly or more often for coordination purposes, their companies are at least 20 percentage points more likely to collect voice of the customer from all influencers in the purchase decision, to capture front line employees’ observations, and to capture customer complaints. There were also many other best practices that correlated with this coordination of communication among managers of customer experience activities. This gives you the idea of what we mean by having a more holistic customer experience management effort on these six success factors.
Success Factor 1: Coordination Among Managers of CEM Methods
For the first success factor, coordination among managers of customer experience methods, an interesting example is TW Telecom. When the economic downturn occurred, TW Telecom was in the midst of acquiring about 20,000 small and medium business accounts and yet, they were able to reduce churn by 27 percent and outperform their competition by 20 percent in most of their customer management processes.
They did this by setting up a customer operations team comprised of people from strategy, operations, marketing and service, and it’s positioned as the company’s customer conscience. They have very vocal roles in the business units and help the company to evolve their customer experience management to a more organized, cross-functional mode that even adapts the company, itself, to the customers’ needs. Other companies are doing work like this with customer champions in every business unit: Symantec and JD Uniphase are examples that come to mind. Others are coordinating managers of surveys, advisory boards, customer references, contact centers, loyalty, and so forth.
Success Factor 2: CEM is a Determinant of Corporate Strategy
The second success factor is viewing customer experience management (CEM) as a determinant of corporate strategy. When companies have this view, rather than viewing CEM as a sub-set of corporate strategy or irrelevant to it, these companies tend to have stronger business results and more comprehensive customer experience management.
During the economic downturn, SunTrust realized it needed to go back to the drawing board and make sure that they could earn their clients’ trust. They reworked their enterprise guiding principles to focus on the client first and everything that they do in their business. They set out to change the way they include voice of the customer in their decision-making process. They migrated from a product focus to a client focus through a massive cultural change that included people asking in meetings, “Do we believe X because we’ve been bankers for so many years or because the clients told us?”
This changed the way they sought customer input and how every employee, regardless of their role, viewed their job. Essentially, they saw voice of the customer as a part of their larger business transformation and how they’re leading, using insights, prescribing action, holding people accountable, and communicating the value of keeping clients first. Despite the fact that only about one in five companies is using customer experience to determine corporate strategy, those who are, are reaping greater benefits.
Success Factor 3: Presentation of Survey Results to All Employees
The third success factor is presentation of survey results to all employees.
At Applied Materials, their decentralized culture and matrix organization structure caused them to create more than 50 reports of their customer surveys so that each business unit and every sales office and functional area across the company could see their own impact on customer experience. They also conducted “train the trainer” sessions through a video conference with the champions in each location, who then presented the results locally to ensure common interpretations, answer questions and discuss the implications. These presentations included an action-planning workshop to digest customer comments and make a difference for customers.
Success Factor 3: Calculation of Customer Lifetime Value
The fourth success factor is calculating customer lifetime value. There are many ways to do that — very thorough methods and other approaches to just create a number that is helpful. When companies do such calculations, they tend to have stronger business results and broader deployment of their customer experience management.
Citrix is a great example where they’ve mapped their customer contract values to the ratings for likelihood to recommend the brand. By setting up listening posts from brand awareness to brand advocacy, they’ve been able to gain valuable insights about the functionality that could have increased positive word of mouth and specific revenue lost or gained as a result. After product trials and contract periods, they asked, “What could we have done differently that could have led you to buy?”
A customer insights team created a business case model that uses this data to help managers prioritize product changes, based on their impact on keeping customers, as well as acquiring new customers. Because this is a quantified approach that helps all of the internal stakeholders to make decisions, it has been embraced as a methodology that they use on a regular basis. While few companies actually perform some type of customer lifetime value — generally about one in four or one in five companies — they see more success in establishing a single view of the customer across the company, using customer feedback to guide their annual operating plan, and many other customer experience management practices that go hand-in-hand with this one.
Success Factor 5: Action on Survey Results by Owners of Key CX Drivers
The fifth area of customer success is action on survey results by owners of key drivers of customer experience. The companies that do this have not only better business results, but also a more holistic approach to their customer experience management.
One example I’d like to share is from LexisNexis. They have done a variety of voice of the customer efforts, including a spontaneous customer feedback opportunity where customers could e-mail their concerns right away, and a customer experience manager routed those messages internally and thanked the customer, whether it was positive or negative. People who were receiving these were expected to make improvements, as well as provide feedback that could be shared with the customers.
Additionally, when the regular survey is being done on an ongoing basis at a division in LexisNexis, they have a closed-loop process where managers in the company have to contact the customers directly. Initially, many of the back office employees did not feel very comfortable with that, but as they began to do it, they started realizing that this whole process not only brings the voice of the customer to life, but it actually inspires their own action to make improvements. And, therefore, they’re seeing better business results because of this approach.
Success Factor 6: Funding of Cross-Organizational CEM Collaboration
Finally, the sixth success factor is funding of cross-organizational collaboration for customer experience management.
One of the examples I really like is from Maersk, a freight company that realized that businesses made of people and, therefore, they need to be people-oriented in the way that they pursue customer experience management. And they knew that in order to earn the trust of their customers, they needed to earn the trust of their employees. And so, they involved human resources and many other functions to work together in helping everybody become aware that they all have a role to play — not just the customer-facing people, as front-line staff are only as good as the rest of the company internally enables them to be, by resolving and preventing issues. Otherwise, nobody wins.
Maersk set out to help their employees understand customer experience by reflecting on how they, as consumers, feel about their experiences. They held a three-day session with managers across the company where they presented a playbook of 24 solutions ranging from very simple things such as how to talk to customers without using jargon, and putting customers’ pictures on the wall so that they could connect to customers more personally, to other more sophisticated things. They kept a score card, which emphasized that the countries with the best success were the ones that were embracing cross-functional collaboration. Other parts of the company jumped on board and now they’re seeing upward trends globally.
In summary, the success factors for customer experience management include:
- Coordinating customer experience management across the people who are in charge of the various activities for customer experience in the company.
- Making customer experience a strong input to your corporate strategy and not an adjunct to it.
- Presenting the results of your customer surveys to all employees.
- Using customer lifetime value.
- Expecting actions to be taken on the customer surveys by all employees, especially all the ones who are owners of the key drivers of customer experience.
- Collaborating cross-functionally to improve customer experience.
You can view the complete CX Forum webinar recording and download resources on Customer Experience Success Factors.
Customer-centricity is about priorities. The key is to clearly state your priorities to executives, employees and affiliates. Then reinforce these priorities in daily decision-making criteria and rituals such as annual operating plans, operations reviews, staff meeting agendas, recognition and incentives, performance reviews, etc. Johnson & Johnson has an excellent way of communicating their customer-centric priorities, as follows: 1) doctors, nurses, patients, parents; 2) employees; 3) communities; 4) stockholders.
Our Credo — Johnson & Johnson:
"We believe our first responsibility is to the doctors, nurses and patients, to mothers and fathers and all others who use our products and services. In meeting their Read more…
You're a customer, so you're a perfect judge of logic when it comes to the ways companies are trying to get ahead with customers. First of all, let's face it: when you buy something you want it to be easy to get, function flawlessly, and allow you to move forward in your life or business. That encapsulates what customer experience management is all about: companies that can make it easier and nicer to get what you need in life/business are the companies you'll say good things about and come back to. If you agree that this is your outlook on being a customer, then we've got a good foundation for properly defining the role of technology in customer experience management (CEM).
Customer Relationship Management
As a customer you hope you don't have to repeat your story every time you interact with a company. Just like in personal relationships, you expect to be valuable enough to the other party that they remember what you did together before, so that they might anticipate what would be appropriate going forward.
CEM Lessons:
- CRM as a technology is a tool to nurture relationships that anticipate what a customer would appreciate, in the right way, at the right time. (Not a self-serving tool to push unwanted stuff with contrived urgency, essentially eroding rather than nurturing the customer relationship.)
- Use Marketing Automation and Sales Intelligence tools to Read more…
In any journey, it pays to have an expert guide — and that's particularly true in any company's ongoing journey toward superior customer experience. Some companies have appointed a Chief Customer Officer as their expert guide, to ensure that they take the high road, stay on-course, and accelerate results along the way.
"Showing the path and where we are on that path — kind of like the map at the mall: 'you are here' — gives everyone an idea of how far we've come and how far we yet need to go," explained Milista Anderson, Chief Customer Officer at risk management software firm Sungard's Energy and Commodities division. "I'm part change agent and also part customer advocate. I think there's a need for a healthy balance of both. If there's an issue in day-to-day operations, I'm interested in the process that got us there to begin with. And as a change agent, I'm trying to broker the best interests for customers along with the best efforts from our employees."
Voice of the Customer as a Pivot Point
As a guest on the Customer Experience Optimization online talk show that I host, Milista said she uses survey data as a conversation starter, to get people's attention. "One way we Read more…
Customer-focus in satisfaction/loyalty surveys may be the lynchpin to higher response rates and to linking customer experience management (CEM) to business results as well. "Aren’t surveys already customer-focused?" you may be thinking. Well, whenever you're the recipient of a survey, how often do you feel like the questions are focused on what you care about, versus what the surveying company cares about? And, accordingly, do you feel like the surveying company is really getting the best information from you that they can through their current surveys? For me, the answers to these questions are: not much and no. Let's face it: there's room for improvement in making voice of the customer (VoC) efforts truly customer-focused.
The perennial dilemma for survey designers is finding the balance between asking too much or too little, affecting respondent fatigue and response rate levels. But take a look at your call center logs and other customer-initiated feedback. When customers talk about things they're passionate about, there's essentially no such thing as respondent fatigue or asking too much. The real dilemma at-hand is not so much finding the right survey length, but rather, finding the right customer-focus that opens up customers' passions related to what your products, services, and experiences do for them.
How to Discover Your Customers' Passion Buttons for Your Brand
Contrary to popular belief, doing what everyone else is doing might be the exact wrong thing to do, as described in Read more…
"Businesses are made up of people, and people have emotions." This focus on people has guided the customer experience strategy of industrial freight provider Maersk Line and many other business-to-business companies. Rene Bomholt, former head of customer experience at Maersk Line, shared these stories for the 3rd Annual ClearAction Business-to-Business Customer Experience Management Best Practices Study:
CX Strategy & Deployment
Customer Trust: With 50-some country organizations around the world, everyone on the front line at Maersk Line was working to please customers according to their own interpretation, but not really with a common goal of how to do it. A session was held with top management to determine the kind of emotions they want to invoke, tying into company values and history. They wanted customers to feel trust, cared for and pleased in every interaction. That became the mantra which provided a common aspiration for customer experience success.
Playbook: Showing people what a customer experience means makes them reflect on how they as consumers act on their own experiences. In 3-day sessions held by Maersk Line, managers received a playbook of 24 solutions that each country organization could pick and choose from. The playbook included simple Read more…
Financials and customer experience management (CEM) go hand-in-hand, whether it’s a matter of identifying financial results from CEM efforts, or a matter of financing CEM to begin with. New insights to this conundrum are seen in the 2012 CleaAction Annual Business-to-Business Customer Experience Management Best Practices Study, where more than half of participants said that difficulty correlating CEM to business results is one of their top five obstacles to CEM success. While budget restrictions were cited less often as one of the top two obstacles in 2012 compared to 2011, still more than half of participants named budget restrictions as one of their top five obstacles in 2012. (Note: the obstacles list in the 2011 survey did not include big data or correlation of CEM to business results among the selection set.)
Top 5 Obstacles to Customer Experience Management Success in 2012
Customer Experience Management Investment
Uncertainty in the 2012 business climate may have been a factor in reduced investment levels of 35-60% as compared to 2011 and 2010. Interestingly, in 2010, shortly after the major global economic crisis, CEM investment increased for the majority of participating B2B firms. This appeared to be evidence of management's recognition of CEM as an essential building block toward revenue and profit goals. Read more…
Stories of business customer experience management practices and successes are featured in the 3rd Annual ClearAction Business-to-Business Customer Experience Management Best Practices Study. Examples span across voice-of-the-customer, employee engagement in CEM, customer-focused culture, customer experience profitability, and more.
Business CEM stories are rare relative to consumer-focused examples, despite the fact that business customer experience can be much more challenging, with high involvement of numerous influencers of the purchase decision, high stakes purchases with lengthy sales cycles, reciprocal buyer/supplier relationships, and complex touch‐points across functional areas, managerial levels, and products, among other factors unique to B2B environments.
An enterprise customer experience manager at telecom provider Orange, Emilie Smith, said: “In B2B there’s an even bigger argument for CEM linkage to revenue and profitability because often the products and services for businesses are a lot more sophisticated and cost a lot more for the company to provide them. For one account, millions may be at stake.” The head of customer experience at freight provider Maersk Line, Rene Bomholt, said: “Businesses are made up of people, and people have emotions. Close relationships with customers matter a lot.”
As the sole global B2B CEM survey, this research provides inspiration to Read more…
Every one of us is a customer, so "Customer-Centricity" should be a very simple topic to understand. What do you, as a customer, think it means for those you buy from to be customer-centric? For me, it means they "get me" to the extent that I can easily access and use their offering that helps me do something in my life/business. Just stick with that statement and the gems are there:
- "Easily" typically means without much cost as burdens in time, worry, effort and financial aspects
- "Access and use" typically means both finding the solution that helps me get something done and using to get something done (pre-purchase and post-purchase)
- "Helps me get something done" typically means that whatever I buy is a means to an end. I’m just trying to live my life and run my business.
Note that as a customer it’s all about me. Sure, I may like to provide feedback to my suppliers, but typically because I hope it will help me in the future — or at least help a fellow human being not experience the pain that I might have experienced. And this is the foundational fallacy of most CRM/CEM/NPS/C-Sat/etc. endeavors: companies tend to ask questions from their perspective, to map the customer journey from the company’s perspective, to incent employees from the company’s perspective, and on and on — NOT from the customer’s perspective.
To be customer-centric, companies need to simply see things the way customers see them, and center their daily decision-making accordingly, with all other aspirations being secondary to — or within the context of — seeing things the way customers see them.
Customer-Centricity ROI
Why would it behoove a company to be customer-centric? Because customers enable the monetary machine. Read more…
“Our client-centric banking approach is driving momentum in our core business fundamentals,” said William H. Rogers, Jr., chairman and chief executive officer of SunTrust Banks, Inc. Business results for SunTrust are on a steady growth path, which the company attributes largely to renewed emphasis on Client First as a guiding principle. In my online talk show interview with Jeff VanDeVelde, Senior Vice President of Client Experience and Loyalty at SunTrust, he explained: “As our executives were re-writing our enterprise guiding principles, we determined the need to put more focus on being client 1st as a guiding principle, and especially the need to change way we include client voice in our decision-making process.”
What Does Client First Mean?
“One of the biggest challenges of people who do this work is they think that client experience and client loyalty is something that front-line people do,” said VanDeVelde. “We’ve tried to help people understand Client 1st is really everybody’s job, whether you’re doing item processing or deciding where to put your ATMs, or anything else. It means you’re using client input to inform all your decisions, not just when the client is in front of you. We engage our non-client-facing teammates by having them ask “Is this what the client would want as I design this process, or make this effort?”
Customer-Focus in Place of Product-Focus
Migrating from product-focus to customer-focus is a massive cultural change. “Part of our Read more…
Open your mind to new ideas for improving customer experience. It’s a fast-paced highly competitive world, so continual improvement — and occasional breakthroughs — are imperatives for consistently delivering superior customer experience.
Every person has creative capability. “There’s this common perception among managers that some people are creative, and most aren’t. That’s just not true,” says Teresa Amabile, head of Entrepreneurial Management at Harvard Business School. “As a leader, you don’t want to ghettoize creativity; you want everyone in your organization producing novel and useful ideas, including your financial people. The fact is, almost all of the research in this field shows that anyone with normal intelligence is capable of doing some degree of creative work.”
Fool around with the vast Read more…
When a customer asks you a question, do you double-check your assumptions about their intended outcome? So often we take customer inquiries at face value, or simply assume we know what is meant. No matter what your job, you have customers, and clarifying your customers’ intended outcome is smart business.
Examining Customer’s Intended Outcomes
An intended outcome may be quite different from the words a person chooses to make a request or to give you feedback. Different personality types shape our phrasing as well as our hearing. Have you ever played Boggle? It’s a letter-scramble game that challenges players to identify as many words as possible, and typically, it’s quite surprising to see that another player has a completely different point of view and hence, a unique list of words. Similarly, every interaction we have with a customer poses the possibility of mis-matched speaking and hearing.
Furthermore, the big picture may be unclear initially. It’s like the story of Read more…
Are some customers just difficult people? Is there such a thing as a difficult person, anyway? Not really. The accurate viewpoint is it’s a difficult situation or a difficult interaction — not a difficult person per se.
Why do difficult situations or interactions occur? Quite simply, people get impatient because of a situation not meeting their expectations. The root causes of resistance to just about any issue are:
a) Concern that their needs will not be understood or met
b) Concern about loss of control or self-esteem
Knowing this can help you de-personalize uncomfortable situations and let go of your natural fight or flight reactions. Let go of your initial emotion to handle the situation from a neutral position.
A customer service rep who attended one of my recent classes said she’s feeling much happier in her job by conscientiously following the 4 steps to managing resistance:
1) Identify the issues causing the resistance
2) Understand the underlying factors of the issues Read more…
Whether you’ve got external or internal customers, they expect you to ‘do the whole job’! Show that you care about your customer … after all, if your customer decides he or she no longer needs you, you may be out of a job. To do the whole job in customer experience management, go beyond lip-service, anticipate customer expectations, carry the ball, and double-check the customer’s perspective.
Customer Care Beyond Lip-Service
It’s easy enough to talk about commitment to customers, but what does it really mean? Whether you make an offer to a customer, or the customer makes a request to you, your sincerity is obvious to the degree that you do the whole job. That means standing behind your word, demonstrating your word of honor. In previous Read more…
Is there any job that doesn’t have a customer? If you work directly with paying customers, you obviously impact customer experience.
If you don’t work directly with paying customers:
(1) Eventually, the job you do ripples to those employees who do work directly with customers — don’t drop the baton!
(2) Inside your company, the job you do has internal customers — figure out how to make their experience excellent!
What everyone in a company does can be reduced to one of two functions: to serve the customer or serve someone who does. (Dr. W. Edwards Deming) Think of the purpose of your job — why is it worthwhile for the company to fund your position? To answer this, big-picture thinking is needed. Ultimately, what you do in your job must be important in some way to the needs of paying customers. Your answer is the beginning of customer-centric thinking.
Customer-centric employees always keep in mind their purpose from the perspective of paying customers. First and foremost, what do Read more…
Every person in an organization is needed for customer experience innovation. That’s because customer expectations and competitive offerings are always on the rise. Your processes, policies, skills, and motivations have a lot to do with keeping customers coming back — and even more to do with customers deciding not to come back.
Think of your own situation as a customer — whenever you’ve decided not to go back to a certain product or service or place, it was usually because you were turned off by a process, policy, skill, or motivation, right?
For example, at Procter & Gamble — the company that Read more…
You’ve heard of garbage-in, garbage out, right? It’s amazing how often work teams put up with substandard inputs “thrown over the fence” from groups they rely on for information or materials to do their work. Faulty inputs lead to imperfect outputs and inconsistent customer experience.
Everything that external customers receive is the result of business processes. Interestingly, many customer experience management efforts are focused only on the front-line employees and customer touch-points. However, every business process is typically deployed by several departments or a sub-process of a bigger process that delivers value to external customers.
In other words, a business process involves a value chain of internal suppliers and internal customers. Help your internal suppliers help you deliver better customer experiences — analyze your business processes and proactively communicate with your internal suppliers.
Timeliness and quality of handoffs throughout this internal value chain snowball exponentially toward revenue-generating customers — for better or worse. The key is to work backwards from Read more…
Customer loyalty is important to business success. Profitability of customer retention is pretty much common knowledge. So companies do a lot to encourage customer behavior that favors their brand, to increase:
- Purchase frequency and volume
- Involvement and structural ties
- Recommendations of the brand.
Yet, like most things in life, loyalty is a two-way street. Who are you loyal to? “Loyalty by its very nature demands that we commit ourselves to a person, group, or cause,” explain Timothy Keiningham and Lerzan Aksoy in their book Why Loyalty Matters. “We suppress our Read more…
In everyday life a compass (also known as GPS or global positioning system or map) may be integrated in nearly everything you do – whether you’re driving, flying or hiking. Imagine such a tool for Marketing, Sales and Customer Care for collectively navigating the journey of prospective buyers and customers across the entire customer life cycle. A step further than the typical customer touch-point map or customer journey map, this type of compass would clarify roles and collaboration to align your company with what’s needed for a great customer experience that results in higher revenue and customer retention with lower costs of marketing, sales and customer care. At a recent customer management conference I heard Christine Crandell, CEO of New Business Strategies, explain her Sellers’ CompassTM methodology, and learned some much-needed new perspectives on ways that Marketing, Sales and Customer Care can improve the customer experience.
Where Does the Customer Experience Begin?
Consider the new reality of the buyer’s process (pre-sales and post-sales): with all the online and peer resources available today buyers often have already completed their Define, Search and Evaluate phases prior to your Marketing and Sales radar registering an official touch-point. This fact is a weakness Read more…
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…
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