An output is something you produce; an Outcome is a result of what you produce. “I have answered the customer query” is an output, “I have solved the customer problem” is an outcome. Here’s another… “We have made 10 cars today” is an output, “I have sold 10 cars today” is an outcome. As Steve Jobs said in 1997, “You have to start with the Customer Experience (and their successful outcome) and work backwards.”
Unfortunately, most organizations focus on outputs and correspondingly can get really good at doing dumb things. Think of the call center and the major typical KPI of Average Handle Time (AHT). That is an output measure. But what is the actual Outcome achieved from the customer contact? If your primary focus is the AHT, that’s what will drive the behaviors of the people as a priority over everything else; no matter how much you talk of customer-centricity, if you pay them for great AHT, that is what they will focus on.
A model that we use to help us connect the dots is the Customer Performance Landscape.
It is a fantastic tool for creating the linkages between everyone and everything to ensure we are all aligned to Successful Customers and grow shareholder value. You can experience this in our ACX Master program.
Strategic positioning of customer experience is now widely recognized as a key to business success.
If you’re customer-first and do it in a smart way, then it can help the company.
Unfortunately, the majority of many well-intended CX initiatives become a victim of organization inertia and bureaucracy and sink to the level of metrics on dashboards buried in functional departments.
At best these failing efforts deliver small incremental performance improvements rather than providing the customer and business insights necessary to strategic success.
We have identified five major errors and causes of failure
1. Top teams have unreasonable expectations of CX success
2. Customers needs are not clearly defined from the Outside-In
3. CX Initiatives are not implemented with transformation in mind.
4. CX Initiatives focus on the wrong measures, rather than successful customer outcomes.
5. CX Initiatives go way down deep into functional complexity
👉Error #1: Top teams anticipate CX Success without understanding the enterprise was never designed to do this stuff.
Talking about customer experience and implementing the changes necessary to delivering CX success are two quite distinct things. Many organizations brief their senior people with the importance of the business transformations underway, why a focus on the customer is essential to survive and thrive, and why it is necessary that the dots are connected from every activity to the customer experience. Fair enough. However, Top teams then anticipate internal leadership towards customer centricity but at the same time do not enable the underlying functions to realign to achieve successful customer outcomes.
The organization structure, rewards systems and technology were never designed to deliver great customer experiences
The realization that the organization structure, rewards systems and technology were never designed to deliver great customer experiences, they were in fact originally designed with an industrial age mindset to achieve industrial age goals. To achieve strategic CX success, it is necessary to understand the limitations imposed by inside-out thinking (getting better at doing stuff faster) and help the organization migrate to Outside-In thinking and practices (alignment to delivering Successful Customer Outcomes)
👉Error #2: Customers needs are not clearly articulated and underpinned by smart Outside-In metrics
The challenge here is two-fold. Do we understand who our customers are, and what success looks like from their perspective?
It is frequently observed that 80% of profit comes from 20% of customers however organizations are especially fickle when it comes to understanding where they should focus limited resource to get the maximum sustained return from the appropriate customers.
Good discipline here is about identifying the categories of customer and prioritizing them in terms of needs and success. That can mean migrating away from undesirable customers. Intrinsic in this failure is arbitrarily segmenting customers by circumstance (where they are based, the length of relationship, immediate spend available etc.) rather than categorizing customers based on their needs.
Needs assessment is NOT about asking customers what they want.
Needs assessment is NOT about asking customers what they want. If you asked your kids what they want for dinner, don’t be too surprised if they say burgers, ice cream, chocolate and gummy bears, on one plate. That question is just plain stupid. So why go asking customers what they want?
Smart CX companies figure out their customer needs even when the customer doesn’t know them. Case in point would be the launch of the iPhone more than a decade ago.
Apple’s genius was in understanding the new customer and getting ahead of the game to design products and services that met, at the point of launch, something customers could never have articulated.
This is not, however, an excuse to stop listening to customers, that is more essential than ever before. Just stop asking them dumb questions which may cause you to do the wrong things (rather like Nokia did).
👉Error #3: For CX initiatives delivering success will require change and transformation
This is a very common problem and is rooted in the idea that CX initiatives are just another thing to integrate into the existing ways of working. This couldn’t be further from the truth. A fundamental of successful CX initiatives is identifying and implementing the ongoing change required across the enterprise to align everything to Successful Customer Outcomes.
align everything to Successful Customer Outcomes.
Once the customer needs are articulated work backward to recraft the appropriate structures that will guide the enterprise progressively towards success. That will, of course, require potentially significant changes to the shape and technology of how work gets done. It will reach into every nook and cranny of the business. Ultimately the organization may look quite different from the industrial age model and will become shaped to achieve the ongoing change brought about by the digital revolution.
👉Error #4: CX Initiatives focus on the wrong measures, rather than successful customer outcomes.
The Successful Customer Outcome is like the beacon on the hill; everyone should be aligned and progressively moving in that direction. If your metrics are not contributing to that alignment, you may be getting better at doing the wrong things (in the context of delivering an optimized CX).
There is a remarkable lack of science in this sphere of CX Initiatives.
Here’s a good question to ask anyone in the business “is everything you are doing aligned to delivering a successful customer outcome?” and if the answer comes back with anything other than “yes, 100%” you may be doing dumb stuff really well. The why of that is easy to understand – you get what you measure, and frequently companies excessively measure outputs (what is produced) rather than business outcomes (what is delivered).
If you task people to measure outputs and reward them for improving those outputs, there is often a repeated disconnect between the work performed and the end customer delivery. Getting a balance right here is essential.
There is a remarkable lack of science in this sphere of CX Initiatives. Reliance on simplistic measurement systems, with ‘one question rules them all’ approaches is not only misleading but may cause you to do precisely the wrong things.
👉Error #5. CX Initiatives go way down deep into functional complexity
CX Initiatives have lofty visions but all too often become bogged down in organization politics and the natural resistance to change. Often the local leadership pays lip service to the customer experience ‘it is not my job after all’ and this resulting crawl ultimately thwarts the CX initiative.
focus on winning the triple crown – simultaneously improving the Customer Experience, Reducing Costs and Growing Revenues
To deliver and ensure ongoing success, the guiding light of the Successful Customer Outcome and it is associated focus on winning the triple crown – simultaneously improving the Customer Experience, Reducing Costs and Growing Revenues – should be on every agenda in the business. Linking the triple crown across the departments and divisions dispels the practical objections as everyone becomes accountable for demonstrating their substantial triple crown contribution. This, in turn, ensures a significant contribution to delivering the ROI for the CX Initiative.
There are many bear traps and blind alleys to avoid on the journey to delivering CX success however an understanding of the most common errors will ensure a greater chance of success. After all the goal is to deliver strategic Successful Customer Outcomes that result in terrific and rewarding customer experiences.
Do you want to embrace advanced Customer Centric thinking and become Outside-In?
Complexity is an insidious thing. Humans seem unable to keep things simple and will add rules, reporting lines, and complications seemingly for the fun of it. And process people take it to a whole new level.
Why is that so? There is a simple answer, but many people don’t like it, or don’t want to admit it; if you pay people for doing dumb stuff they get really smart at it.
Politicians are especially good at creating fiefdoms and empires, and the ones really clever at that rise above the rest, making the problem progressively worse by in-turn recruiting like minded people.
Now as much as humans have traditionally done this, there is a new kid on the block. And this new kid is defining a whole new way of being, one that is built and operated with the customer at the center of everything.
Don’t get me wrong, it isn’t that people haven’t talked about the customer before, just this time it is very different. The new game is all about customer experience management (CEM).
Here are a few of the meaningful stats that back this up.
According to Gartner, 89% of all businesses will compete on customer experience this year.
Another 89% believe customer experience will be their main differentiator by 2022.
The Temkin Group found that companies that earn $1 billion annually can expect to earn, on average, an additional $700 million within 3 years of investing in customer experience.
84% of companies who claim to be customer-centric are now focusing on the mobile customer experience.97% of global consumers cite customer service as important in their brand choice and loyalty.
CX also influences on-the-spot purchasing, too – as 49% of buyers have made impulse purchases after receiving a more personalized experience.
BPG Research 2021
And for those organizations effectively embracing the customer experience CEM is much more than journey mapping and the surface experience. For the leading companies, CEM is the opportunity to connect everything they do, from the customer interaction, right through to individual task, activity, and systems that support them.
Interestingly this eradicates unnecessary complexity and creates a virtuous circle. You figure out what a successful customer outcome looks like, you align everything you do to achieve it, the customer ‘gets it’ and comes back for more, and you evolve the customer experience to be even better next time.
It is a bit like a fitness regime as you get fitter, you get faster, you become better, and what was once difficult becomes easy.
👑 Those who Get It Win the Triple Crown
Not surprisingly great CEM drives down the cost of delivery, improves service and grows revenue. This triple crown of deliverables becomes the tangible measure of success for Customer Experience Management.
And as if this wasn’t motivation itself to do more CEM the work environment is simplified; we can increasingly reward each other for delivering results and outcomes (doing the right thing), rather than just measuring and rewarding what we do (doing things right).
That is what I mean when we say ‘let’s get more scientific about the customer experience’
Do you want to know more?
Do you want to embrace advanced Customer Centric thinking and become Outside-In?
London, England Mar 11, 2021 / PRNewswire / — BP GROUP seals new African Partnership with The CX Group
As the Customer Experience begins to dominate the attention of global leaders BP Group, leaders in business transformation and Outside-In thinking and practice announced today their official partnership with The CX Group based in South Africa.
Yugeshree Frylinck, founder and Chief Experience Officer at The CX Group, confirmed that they have signed the partnership deal with BP Group to serve customers in Africa seeking to grow their Customer Experience and Process Management competencies.
The CX Group is well known across Africa and operates within private and government institutions, offering training and consultancy services delivered by a team of globally recognized CX consultants acknowledged as specialists in customer experience and realignment to meet the challenges of the 21st century.
Eldon Phukuile, The CX Group Director of Customer Experience, explained that they decided to partner with BP Group as global leaders in the Customer Experience and Business Process industry with long term clients in 124 countries and another 29 partners across all continents. “The potential benefits of the partnership will be our incorporation of the Next Practice approaches”, said Eldon, “into medium and large traditional institutions needing to upskill and meet the increasing challenges presented by the shifts brought about by both the pandemic, evolving customer and opportunities of the digital age”.
Steve Towers, BP Group CEO, welcomed their newest partners. “Since 1992 we have led the way with the battle tested proven methods and approaches to help corporations and government institutions realise the benefits of delivering Successful Customer Outcomes”. He added, “we very much look forward to now supporting The CX Group in bringing progressive approaches to the African region and beyond. We are pleased to strike this partnership agreement as the CX Group is active in helping the complete CX community, through a number of associations including the CXPA, CXSA and CXCOP embrace progressive approaches to elevate CX into key strategic and operational roles.”
James Dodkins, CEO of Rockstar CX and BP Group Senior Partner, added “CX has come so far in the last few years and it is especially refreshing to see such explosive community growth across Africa. With this new exciting partnership, we will assist in growing the professionalism of individuals and organisations alike.”
The BP Group https://www.bpgroup.org/ (established in 1992) is founded by Steve Towers https://www.stevetowers.com/, a global thought leader in customer-centricity and process excellence. With a network of global partners to deliver coaching, training and consultancy in CEMMethod®, BPG’s vision is to make transformations a reality for clients and reap the benefits of improved service, lower costs and higher revenues.
Disruption Rules… For more than eleven decades, Gillette ruled the world of shaving. In 2010 it had a 70% market share, now today (2021) it is around 54%. The emergent market leaders are a pair of start-ups, Harry’s and Dollar Shave Club.
The newcomers’ secret includes understanding changing customer needs, a narrow product line, incisive data analytics coupled with social media savvy, no middlemen, right sourced manufacturing, and lower prices than Gillette.
It is happening everywhere, with previous industrial giants being displaced across many business categories, including Casper in mattresses, Barnabas in men’s clothing, Allbirds shoes and trainers, and Warby Parker in eyeglasses.
Direct to consumer brands captured an estimated 20% of all online retail sales in the US in 2020. Established brands, consumer or industrial, are under more significant attack than ever. New entrants face lower entry barriers and have no baggage of past business models and industrial age thinking.
Customers have become ‘enlightened’ through social media and learn about new trends and better products and experiences at lightning speed. Through the pandemic, customers expectations rose, they have become more choosey and rebellious. In fact, you could say customers have become prosumers.
Coupling these trends and increasing aspirations necessitates companies to become progressively Customer Obsessed if they wish to stay in the game. This requires an unending exploration and understanding of customer needs (even when customers themselves may not be aware of them) and an ability to act on those needs. The objective is to actively listen to 100% of interactions 100% of the time to understand micro trends and undertake next level research to deliver increased personalization.
Customers reject the one size fits all industrial age companies in favor of agile, immediate, and empathetic organizations. Mass customization is now achievable at a decreasing cost, allowing companies to offer specific personalized experiences and stay connected at every customer journey stage.
This extreme alignment of everyone and everything towards successful customer outcomes is the hallmark of companies like Adidas. They have established speed factory facilities in Europe and the US, with an ability to measure each individual customers stride, speed, and gait. From that information, use 3D printing, AI, and automated manufacturing to compact the time from order to delivery. This hyper-personalization is welcome so much that customers are prepared to pay significantly more for their unique product.
Adidas is just one example. Cast your eyes over all industry sectors’ leaders, and you will see customer obsession in every aspect of their systems, processes, and experiences right across the complete supply chain.
How aligned is your company?
Time is short
Those companies that are unable or unwilling to make the changes necessary to move from industrial silo thinking to customer obsession face an imminent existential crisis brought about by these shifting business models. If they cannot evolve quickly, they will go the way of the Blockbusters, Kodaks, Nokia, Circuit City, Borders, and so many others.
Put the theory into practice and join us for the online, the live and interactive Certified Outside-In Master® program.
Most successful CX organizations do these things to lift their game. Let’s review their winning approaches. Then Model your own strategy based on these leading CX ‘next’ practices.
The article is a build on terrific feedback from my recent ‘5 Critical Failures of 80% of Customer Experience initiatives’. (You can see that here: http://bit.ly/5CriticalFailures)
“Success does not consist in never making mistakes but in never making the same one a second time.”
George Bernard Shaw
So with that in mind, let’s move beyond the mistakes and uncover the winning strategies and how best can we implement those insightful approaches?
Based on our recent work and research my report from the CX front line should help you rethink your approach in our collective endeavor to get more scientific about the customer experience.
In the earlier article, we identified five major errors and causes of failure. Let’s review how winning CX companies reframe those into successful strategies.
1. Top teams understand CX success and get out of the way of their people to let them get on with it.
To achieve strategic CX success, it is necessary to understand the limitations imposed by industrial age thinking (getting better at doing the wrong stuff faster, functional specialisms, outdated reward systems) and help the organization migrate to Outside-In thinking and practices. At Zappos, for instance, it is more important to meet the customer (see Zappos hits the road.. http://bit.ly/Zappos2021) and gather insights, and provide input to reshaping the organization.
The top team is actually out there “We want to shake the customers hands, give them really big high fives and meet their friends — delivering happiness and memorable experiences along the way,” said Kristin Richmer, Senior Brand Marketing Manager, Zappos.
The task then is not overlaying the new insights onto an industrial age siloed world. It is actually to reshape the organization, its people, the reward systems, processes and systems to better deliver successful customer outcomes.
Tony Hsieh reinforced this feed forward approach “we actually want to talk with customers more as 70% of our business are repeat buys. Hiding our contact details and making it difficult to talk is not our way” http://bit.ly/TonyHseih
2. Customer needs are understood and developed to create the organizational alignment towards successful customer outcomes.
Leading CX Companies have developed an a-b-c strategy when boiled down includes (a) stop asking customers what they wantl (b) get your head around current customer expectations, and (c) articulate customer needs even when the customer doesn’t know what they are.
This effort is not a ‘one and done’, it is about continual learning and then development of services and products that anticipate customer needs, rather than following the outdated mantra of those organizations seeking more and more (often meaningless) feedback. And Disney provides a demonstration of this a-b-c approach.
Disney World Orlando, is about 43 square miles, about twice the size of Manhattan. (pre pandemic) 30 million guests per year enjoy 4 theme parks: the Magic Kingdom, the Hollywood Studios, Epcot and the Animal Kingdom.
You can navigate to these parks by car, bus, monorail, boats and a ferry depending on your hotel – and that in itself includes over 20 themed for your delight. Coupled with Disneys wearable “Magic Bands” (see http://bit.ly/MagicBand) you receive a smooth personalized experience where ever you are.
This collection of entertainment is a dynamic living system focused on successful customer outcomes. With digital real-time feedback, Disney offers an integrated experience built around a co-ordinated set of business and customer outcomes, from the time you think of a trip, to the time you are back home with the kids.
3. Being customer-centric isn’t about projects – it is a state of mind.
A great mistake of many is approaching customer experience as an initiative, something with a clearly defined start and end point. Appreciating CX is a state of mind for the whole company is a major differentiator and allows successful organizations to continually tweak and evolve, rather than live in a permanent state of project stop-start crisis. The guiding principle is, at the heart of CX, change is desirable, welcomed and systematic. It impacts everyone and everything all the time.
4. Successful CX transcends measures and implements a rigorous feedback/feed forward framework.
A recent analysis in the banking industry suggested that more than 85% of the total key performance indicators measured outputs – things that get produced from activities. Successful CX companies however, have a very different profile and focus, their attention is on measuring outcomes – the result of what is produced. To these companies this is not a semantic distinction, it underpins the total CX strategy. As a result, the measurement systems are simplified, and the focus on results rather than activity moves the dial towards customer centricity so much more quickly.
Programs such as Disney’s True North set a direction with supporting metrics, and rather than measure everything that moves they focus on the results and outcomes that need to be delivered to achieve successful customer outcomes. In this context, more than 75% of measures are ‘Outcomes’ with less than 25% outputs.
Test this for yourself in the contact center.
What are your top ten measurements, are they output oriented or outcome based? The former (outputs) would be things like average handle time, abandon rates, downtime and so on. The latter (outcomes) would be the delivery of customer need, queries completely resolved (not the piece mean partial interim ‘first call resolution’ type things measured with a functional bias). In summary, CX leaders have fewer measures and the majority are now Outcome-focused.
5. CX is both the strategy and the operational objective to overcome needless complexity.
A Forrester survey says 81% of CX professionals are mapping experiences from the customers perspective but only 21% are mapping the ecosystem (processes, people, technology). In this context there are two opportunities that successful CX companies exploit:
i. CX can only be successful if you build a complete CX ecosystem. This is a process of creating alignment from Customer Experience strategy to execution and connects the frontline who deliver the customer experience with those people and systems who provide the means of delivery. Amazon refer to this aspect as ‘North Start Alignment’
ii. CX Current state crisis. Successful CX companies can clearly articulate the what and how the organization should be doing to deliver great experiences.
They do not become mired in the exercise of mapping all the current external and internal processes and systems (which can take years to complete and provides little in the way of direction for what should exist.)
These companies understand the reality that the current structure and systems were never created with excellent CX in mind but were in fact designed around an industrial age, production system based model.
Hence, next practice is to utilize design principles that envision what should be, and then progressively mature and migrate the organization to that vision.
To conclude CX success doesn’t come from wishful thinking.
It is a deliberate and sustained effort to understand and articulate the ever changing customer. To build a new trust with them that goes beyond the platitudes of the past.
In the near term it is about becoming more scientific about the customer experience. In the longer term it is a guarantee of business success. We have codified these CX next practice approaches into the CEMMethod (now version 13). You can access that as a resource with others below.