Category Archives: Customer Value

Customer Experience Jenga

customer experience strategyDo we manage customer experience strategy like playing Jenga? (Jenga is the game with a stack of blocks where players take turns to remove one and balance it on top.) The game is supposed to start with a robust foundation, and in the quest to rise to new heights, holes are made to re-allocate resources, weakening the structure until it topples over.

In managing customer experience (CX), new heights are attempted by betting the farm on shiny silver bullets such as Continue reading

Customer-Centricity Goes Beyond Customer Experience Management

customer-centric customer experienceCustomer experience management is necessary, yet insufficient. Traditionally, organizations have managed customer experience with a mindset of how the company is doing, in order to grow revenue. Consequently, surveys tend to ask more about the company than about the buyer, and customer programs typically emphasize excitement and urgency for new purchases and positive word-of-mouth. While attempting to be customer-centric, this mindset is generally centered more on the company's, rather than the buyer's, well-being.

Alternatively, customer experience optimization seeks to Continue reading

B2B Customer Experience Managment: 6 Success Factors for World-Class Performance

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 Annual 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 Continue reading

Customer Centric Leadership

CX LeadershipCustomer-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. Continue reading

Increasing Customer-Focus in Voice of the Customer for Business Results

customer-focusCustomer-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 Continue reading

Investment Patterns in B2B Customer Experience Management

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. Continue reading

Business Customer Experience Management Stories Highlighted in 3rd Annual B2B CEM Study

Customer Experience Best PracticesStories 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.”

Inspiring stories about the progress of business customer experience management can be found throughout the 2012 best practices study, featuring companies such as Ciena, Citrix, LexisNexis, Orange, SunTrust, Symantec, tw telecom, and others in business services, building materials, remarketing, and semiconductor industries.

As the sole global B2B CEM survey, this research provides inspiration to Continue reading

6 Success Factors for Customer Experience Excellence

Business Customer ExperienceThe 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)
  • Continue reading

Valuing Customer Value Management

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 &#8212 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." Continue reading

Customer Value Creation Essentials

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 Continue reading

Customers First, or Employees First?

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 Continue reading

10 Customer Experience Characteristics

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.

ROI Opportunities in B2B Customer Experience Management

Business Customer ExperienceInvestment 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.

Narrow Implementation
Generally, CEM is focused on Continue reading

Customer Experience Management is Uncommon Sense

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.

customer experience best practices“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 Continue reading

Customer Experience Data Integration for 360-Degree View

You’ve probably heard of the blind men who touched part of an elephant and were adamant about their interpretations. Businesses are in the same predicament without customer data integration for a panoramic viewpoint. In my interview with Swati Saxena, Customer Intelligence Manager at Hewlett-Packard, she outlined some of the benefits of integrating customer data:

  • Better prediction and understanding of what drives customer loyalty.
  • Identifying which products to sell to customers most profitably.
  • Prioritizing customers to target with specific offers.
  • Using the most effective messaging and communication channels, etc.
  • Reducing waste for customers and the company, for improved customer experience management.

Better Strategies from a Holistic View
“Customer data integration is akin to the parable of six blind men who were brought to an elephant and asked to touch it and describe what it was,” she explained. “One touched the elephant’s trunk and said ‘this is a snake’; one touched the tail and said ‘this is a rope’; still another touched the ear and said ‘this is a fan’. Each viewpoint was useful from a narrow perspective, but none of them were accurate about the big picture. Similarly, Continue reading

Customer Experience Data: Untapped Gold Mines

“More companies are getting to the point of putting the customer at the central part of their data collection systems, and managing from outside-in. That’s when you know you’re working to optimize customer experience.”

This theme emerged in my recent online interview with Theresa Kushner, Director of Strategic Marketing Customer Intelligence at Cisco Systems. Theresa is co-author of the book, Managing Your Business Data: From Chaos to Confidence. Her team at Cisco received the National Council for Database Marketing Award for Analytics and Modeling, as well as The Data Warehouse Institute Best Practice Award, for Cisco’s new customer intelligence center initiative that integrates customer data for sales, marketing and financial applications. This initiative assisted in correlating over $500 million in customer bookings.

Customer Experience ManagementTheresa explained how to go after the gold in your customer data, avoid fool’s gold, and refine your customer data gold to make a difference in your business growth and profitability. Untapped opportunities exist in:
*Making use of unstructured data, such as customer inquiries
*Connecting data systems such as order-entry and sales
*Helping Sales, Service, Finance, and the whole company see the customer in totality
*Allowing customer-facing people easy access to combined customer/company data
*Enabling customers to define their profile and why they’re interested in the company
*Demonstrating to customers you can move with them as a partner
*Avoiding pitfalls of fools’ gold, such as Continue reading

Customer-Centricity by Discerning Customer Satisfaction Outcomes vs. Enablers

What’s the difference between the way customers volunteer feedback versus the way they’re requested to give feedback? One revolves around outcomes in the customer’s world, whereas the other revolves around customer satisfaction enablers in the company’s world. True customer-centricity requires primary focus and decision motivations be centered on the customer’s world, rather than the company’s.

What Are “Outcomes” in the Customer’s World?
The concept of customers’ desired outcomes throughout the customer experience originated in innovation literature when Clayton Christensen wrote his book, The Innovator’s Dilemma, explaining that customers “hire” a product or service to get something done for them. When we understand the circumstances motivating the customer to hire a product or service, then we gain insight into the customer’s jobs-to-be-done.

A great way to identify customers’ desired outcomes throughout the customer experience is to Continue reading

What’s Your Customer Experience Value Quotient?

Customer ValueIf value is defined as benefits versus costs, what’s your company's customer experience value ratio? Superior value is the objective of customers and marketers alike. And since customers hold the purse strings, marketers are compelled to view value as customers do. In the customer experience value ratio, the numerator includes product and service value, as well as image and personal value. We may often overlook or be unaware of some of the cost dimensions in the denominator: money … plus time, energy and psychic costs.

In managing customer experience, the challenge is not only to maximize the numerator, but also to minimize the denominator. Touch-point analysis can be very helpful, but make sure Continue reading

Customer Retention Begins With Trust

Why is it hard to retain customers? Of course there’s the ongoing battle with competitors. They may make highly attractive offers to your customers that are hard for them to refuse, and their brand affinity may have strong appeal to your customers – brand affinity here is positive association built through cause marketing, perceived social status and so forth.

Over-focus on customer acquisition teaches customers to switch brands. For example, the brand switching rate, called customer churn, is 40% for the mobile phone industry, compared to a 7% customer churn rate for the insurance and financial services industries. As growth slows in acquiring new customers – either due to the economy or to shrinking technological gaps with competitors, more companies are pursuing customer retention as a vital corporate strategy.

Not Planning or Funding Retention
Most executives and marketers can quote the well-known universal statistics on customer retention – that a small improvement in the number of customers retained can Continue reading

Measure Customer Value the Customer’s Way

Customers automatically use 50 or more metrics for any customer experience, according to author Anthony Ulwick, in his book What Customers Want. We may be re-inventing the wheel as we strive to come up with customer metrics that spell success. Looking at things from the customer viewpoint we've got to admit that customers really do know what outcomes they want.

"It's easy to portray customers as emotional, illogical individuals who are incapable of knowing or communicating what they want", says Ulwick. "This is a convenient way to avoid taking actions that are inconsistent with one's own thinking, intuition and personal motivations." Despite financial pressures to take our focus off direct inputs from customers, it’s essential to avoid Continue reading