The Truth About Customer Experience Management

CEM_smallGiven the global slowdown and the competitive pressures that are prevalent in all markets, there is has been a rapid shift towards a focus on existing customers and ensuring that these customers enjoy the best possible experience when being serviced by suppliers. Speak to any CEO or read through any annual report and you will find comments along the lines of “maintaining the customer experience is very important to us”.

However, when engaging with many executives, we ask often the question : “How do you know that you are delivering a customer experience that engages your customers and makes sure that they will purchase there next product from your company or will remain a loyalty customer”. The answer is, in most cases, a lot less definitive than the same question asked in the context of financial performance within the company.

My background is that of an operational executive from the insurance industry. In spite of years of experience in operations, when we started inQuba, it took us a good year to answer the simple question “What is the best way to measure and manage customer experience”. The question was not an easy one to answer. My view is that the reason customer experience is not comprehensively measured is that the domain of customer experience management is embryonic and while growing at a rapid rate, many of its subtleties are not understood. However, given the academic and business focus on the domain, more and more intellect is being applied to answer the above question of customer experience measurement and management.

In the recently published article in HBR “The Truth About Customer Experience”, Alex Rawson, Ewan Duncan and Conor Jones very succinctly point out that “many companies excel in individual interactions with customers, but they fail to pay adequate attention to the customer’s complete experience on the way to purchase and after”.  Their insights go on to mention that “companies that excel in journeys have a more distinct advantage than those that excel in touchpoints: In one of the industries we surveyed, the gap between the top- and bottom- quartile companies on journey performance was 50% wider than the gap between top- and bottom-quartile companies on touchpoint performance. Put simply, most companies perform fairly well on touchpoints, but performance on journeys can set a company apart”.

A good way to understand the relationship between loyalty, satisfaction, experiences, transactions and touchpoints is to draw analogies to financial measurement and management. In terms of definitions, loyalty is the long term intention of the client, satisfaction – the overall emotional state of the client relative to your brand, experiences – a set of company interactions that string together to meet a client objective, transactions – a series of interactions with a specific outcome over a short period of time and touchpoints – a single interaction where a company touches a customer. When one considers long term value of a company, the value is reflected in the share price (analogous to  loyalty), this is based on profits (analogous to satisfaction). Profit is a function of different kinds of incomes and expenses (analogous to experiences), which in turn is determined by expense accounts (analogous to transactions) and specific expenses at a point in time (analogous to touchpoints).

In the financial context, the process of managing an organisation is to divide the income responsibility to different departments and have one area, for example, responsible for sales, one department responsible for marketing costs, another responsible for the call centre. In the same way, the only practical way to manage customer experience is to understand the different components that build up to manifest in the overall experience and ultimately loyalty and then to divide up responsibility for delivery of the experience to different departments within the organisation. Customer experience requires a similar approach but it has an additional complexity in that the optimisation of the parts does not necessarily mean an optimisation of the system. The overall customer experience is judged by the customer that is the recipient of the experience and thus even if touchpoints are optimised and expertly delivered, the result may still be a frustrating experience for the customer that ultimately results in low levels of loyalty and a lost customer.

The design of a coherent and integrated customer experience requires a level of intuition that is no different from a good marketing campaign. While it is part art and part science, having an accurate means to measure the different parts of the experience means that art can converge on science. The inQuba VoC solution has been designed to exactly this. The solution models loyalty, satisfaction, experiences, transactions and touchpoints to provide an in depth and real time view of the customer experience. It allows for the distribution of the results to the area of responsibility within an organisation and the active management of the area of responsibility but at the same time provides executives with an overview of the experiences that customers are been offered across the organisation.

The results we have seen have been dramatic. For example, in one client, the overall customer satisfaction has improved from 60% go 87% in a seven month period. While the specifics of the metrics are less important, what is important is that there has been a 45% increase of satisfaction on a comparable basis. This level of improvement can only be achieved through the very active use of a tool that provides continuous feedback so that as remedial actions are put in place, the results of these actions can be judged in terms of their effectiveness and the interventions optimised to meet the objectives of improved customer experience.

 

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