Business leaders are nowadays talking about the need to be customer-centric, or the urgency to improve the customer experience. While customer experience (CX) was a buzzword even before the pandemic, it had never been at the top of the chief executive officer’s (CEO) agenda until now.
Indeed, the pandemic accelerated the migration of consumers and customers to digital channels. However, it also drove them to demand seamless interactions across digital as well as non-digital touchpoints. Consequently, it exposed many gaps along the customer journey.
One example is when I wrote in 2021 about my Generation Z son’s having to physically go to a branch of one of the largest banks in the Philippines to reopen an account, only because his previous account — which he had held for several years — had been automatically closed because he placed all his money in an investment portfolio in the same bank. My son detested the experience and promised that he would eventually move his money to another bank that didn’t have the same hassle.
This is why CX, previously in the purview of marketing and CX practitioners, now holds the top spot in CEO priority lists based on global and local surveys. In one C-level event we organized recently, more than 90 percent of the participants indicated CX as their top priority.
According to Adobe Research, “companies that prioritized and effectively managed customer experience were three times as likely than their peers to have significantly exceeded their top business goals” in the prior year. In addition, Adobe recently found that companies with the strongest omni-channel customer engagement strategies enjoyed 10-percent year-on-year growth, a 10-percent increase in average order value, and a 25-percent increase in close rates.
CX now occupies a strategic place in the agenda of the CEO and that is why we call this CX transformation. It is a set of strategic actions to transform the organization’s values, competencies, structures, operations, product offerings and culture by leveraging on digital technologies to streamline sales, marketing and service processes within the business to improve customer interactions with the brand.
In our consulting work, we have developed a framework to identify tactical areas that organizations can change or innovate in order to transform CX. There are five building blocks that are key to implementing CX transformation.
The first is the organization’s vision. Crafted by the CEO with his/her business leaders, the vision statement states the difference the organization members will create in their customers’ lives. The vision should inspire people inside the organization to strive to provide the best customer experience.
The second is the operations building block. This involves the revenue model — how the customer pays for the product or service, be it subscription or outright purchase, structure — the alignment of the organization’s talents and assets, and processes — the signature and superior methods for doing work. These should be aligned with the vision and to provide superior CX.
Third is the offering — both product performance and product system. Customers should only be using the distinguishing features and functionality of the product or service that satisfies their needs.
The fourth is customer engagement, which consists of four parts. Service comprises the support and enhancements surrounding the offering. Channel is how the offerings are delivered to customers and users. Brand is the representation of the organization’s offerings and business. Finally, there is customer engagement itself: all the distinctive interactions the organization fosters with its customers such as user community groups or simplified experiences.
The last building block is the people and culture of the organization. Employee competencies and skills should be aligned to providing excellent CX. The values of the organization should be aligned to serving customers well, such as service-orientation, agility, empathy, innovation and excellence.
Technology is a critical enabler in all four building blocks such as using automation tools to streamline customer processes or using performance management systems to make sure that employees’ key performance indicators are aligned to CX objectives and are regularly reviewed and updated. These building blocks impact the customer journey across all touchpoints: awareness, consideration, decision to purchase, delivery and use of the offering, and loyalty and advocacy.
It is opportune that we, together with Microsoft and Adobe, are organizing a business leaders’ roundtable on “Strategies for Delivering a Transformative CX,” happening on Oct. 20, 2022. We will unpack what the strategies are in delivering a transformative digital customer experience and how we can extract the best out of our tech platforms. Key areas we will share learnings and best practices on are the building blocks of a transformative digital CX, critical metrics for measuring success of CX transformation, and enabling deployment and execution.
The author is the founder and CEO of Hungry Workhorse, a digital and culture transformation consulting firm. He is a fellow at the US-based Institute for Digital Transformation. He teaches strategic management in the MBA Program of De La Salle University. The author may be emailed at email@example.com.