What is the starting point for customer experience strategy success?

Posted by Lynn Hunsaker in Customer experience

In the second of her series describing 10 essential characteristics of customer experience, Lynn Hunsaker looks at strategic planning templates, consultants’ models, and business and marketing textbooks for the correct first step.

Ironically, most strategic planning templates, consultants’ models, and business and marketing textbooks begin with other topics and address serving a customer need much later in their prescription for success.

Customers make paychecks possible, so businesses exist to serve a customer need that results in a profitable revenue stream. Customer experience management iis a dedication to serving customer needs from their perspective.

Customer experience is defined entirely by customers, but the solution provider defines customer experience management (CEM). The customer is the judge of whether their experience was acceptable or stellar, or not; the customer defines the duration of their experience, as well as the context and the criteria. Therefore, CEM seeks to understand the gap between desired and current experience as seen from the customer’s viewpoint (not just the competitive performance gap, per se). Then CEM solves the gap holistically and anticipates the evolving needs of the customer to prevent future gaps.

Mis-matched priorities

While I strongly admire and advocate these organisations’ thought leadership, I beg to differ with their starting point for customer experience success. For example:

• The Marketing Leadership Council’s five steps describing world class marketing capabilities are: 1) developing strategy and planning, 2) defining brand strategy and managing the brand, 3) understanding customers, 4) managing the marketing function, 5) executing the marketing plan. My view: How do you know the strategy and brand are right until you know your customer? A deep understanding of the customer drives better segmentation, SWOT (strengths, weaknesses, opportunities, strengths) analysis, and branding.
• In the landmark book Managing the Customer Experience (2002) by Shaun Smith & Joe Wheeler, the first steps are to determine "how do our customers need to behave to achieve our key growth plans" and "develop and maintain a differentiated point of view that is credible and relevant to customers". My view: How do we need the company to behave in order to achieve alignment with customers that naturally results in desired growth?
• In a more recent book with great CEM advice, Customer Experience Strategy (2010) by Lior Arussy, the first step is "understanding the brand and its impact on the customer". My view: I agree with obtaining a deep understanding of the gap between the brand promise and reality from the customer’s perspective, and the resulting impact on customers. This leads to adapting the brand as needed to serve the customer’s need.

First things first

Why not start with the customer? What do they want? What is their reality? Some managers reply that the customer doesn’t really know; they’re not expert in the sophisticated product or service they buy. Some managers point out that what customers say they want and what they actually buy are often two different things. Other managers admit that they never thought about that because they assumed the purpose of a business is to create profit, and therefore, customers should automatically appreciate the offering or perhaps customers must be educated on why the organisation’s offering is desirable and superior. All of these hesitations to listen intently to customers can be overcome with the right approach to CEM.

 

I’m reminded of cake recipes that advocate mixing the dry ingredients first; while the end-product is edible when this advice is not followed, it’s less likely to win first prize at the county fair. Likewise, businesses that start with understanding the customer, rather than the other way around, become well rewarded financially for superior customer-centricity.

The famed professor Philip Kotler’s more recent textbooks such as Marketing: An Introduction, 9th Edition (2009), now put the customer first: chapter 1) Creating & Capturing Customer Value, chapter 2) Partnering to Build Customer Relationships, chapter 3) Analyzing the Marketing Environment, etc.

Paradigm shift

Some organisations do place voice of the customer as the starting point for their innovations, business processes, management attention, and resource allocation. As the diagram above depicts, certification to the international quality standard ISO 9001:2008 indicates which companies "demonstrate ability to consistently provide product that meets customer … requirements and aim to enhance customer satisfaction through the effective application of the system, including processes for continual improvement of the system and the assurance of conformity to customer … requirements".

Think differently! "To figure out what customers want and to successfully innovate, companies must think about customer requirements very differently", advises Anthony Ulwick in What Customers Want (2005). As innovation thought leaders have advocated since the late 1990s, Ulwick states: "Companies must be able to know, well in advance, what criteria customers are going to use to judge a product’s value and dutifully design a product that ensures those criteria are met."

This approach has been adopted for product innovations such as the Bosch CS20 circular saw, Motorola radios installed in vehicles, J.R. Simplot french fries, Pratt & Whitney jet engines, and many others. Ethnography, or observation research, is particularly useful in gaining a pure understanding of the customer’s world. Metaphors are also very useful for expanding your organisation’s customer-centricity. It’s time for customer experience management community to adopt the thinking that the innovation community has espoused for the past decade.

I wholeheartedly agree with Ulwick: "With the proper inputs in hand, companies dramatically improve their ability to execute all other downstream activities in the innovation process, including their ability to identify opportunities for growth, segment markets, conduct competitive analysis, generate and evaluate ideas, communicate value to customers, and measure customer satisfaction." Re-examine your customer surveys to be sure you are allowing the customer to define the experience, and using their input for enterprise-wide CEM.

This post is second in a series describing 10 essential characteristics of customer experience.

Lynn Hunsaker is customer experience strategist and founder of ClearAction, which helps organisations get more value from customer feedback by applying it to daily decisions and processes enterprise-wide. Her specialties include customer experience innovation, customer-centric employee engagement, and customer relationship skill-building. She is author of three e-handbooks: Customer Experience Improvement Momentum, Metrics You Can Manage For Success, and Innovating Superior Customer Experience.