Guide to Customer Experience Transformation and Management

For over a decade I have been advocating a holistic approach to customer experience management in articles, conferences and workshops. Customer experience management (CEM) is not software or a project. It is the ongoing management of all factors that affect customer experience across the organization including people, policies, processes and culture. To be sustainable, customer experience must be managed internally on an ongoing basis. And one thing I have increasingly emphasized is that this must be a centralized function.

Understanding that customer experience improvements are linked to increased customer loyalty and profitability, many companies are now looking to build or enhance their CEM capabilities. This has led me to speak to a few organizations recently. And one of the most frequent questions I get is: if I were leading this function, where would I start?

To help other organizations create a CEM function or to help those starting in one, I thought I would share my answer.

Based on a framework for total customer experience management, this article provides a high-level action plan for making tangible customer experience improvements in the short and medium terms while setting the stage for making CEM sustainable in the long term.

Prerequisite: customer experience core to the strategy
A prerequisite is that the organization has made the clear decision to put customer experience at the core of its strategy. It must view it as a strategy to increase profitability in the long term by building customer loyalty and advocacy, not only as a tactic focused on acquisition and short-term profits. And this strategic vision must be endorsed and be driven by the CEO.

Defining the role
Everyone is responsible for customer experience, but someone must own it. Another requirement is putting in place function whose responsibility is to view and manage customer experience holistically across the organization.

Whether this role is called Chief Customer Officer, Head of Customer Experience or other does not matter as much as its scope of action. The position needs to have line of sight on customer experience at all channels and be able to influence decisions that affect it across the organization. It cannot be limited in scope to one functional silo like marketing, operations, customer service or HR. And if it is to exert any influence, the position must have the direct support of leadership.

Transformation and Management Overview

If customer experience management is the ongoing practice of managing all factors that affect experience across the organization, then transformation could be defined as the process of setting it up.

This article assumes the context of organizations at early stage of transformation. But the principles in it apply at any stage of adoption. Many of the mechanisms put in place at the beginning of a transformation journey must be maintained over time. And there are always improvement opportunities so you could say transformation is ongoing.

I suggest starting a number of initiatives in parallel. Some are aimed at designing and quickly launching improvements to the way customer experience is delivered. Others, more organizational, are aimed at internal changes to facilitate short and long-term improvements.

Given the broad scope of CEM, there are many potential initiatives. The second question I get most often after giving an overview of my framework is: How would I identify improvement opportunities and how would I prioritize them?

Customer Experience Management Audit

In order to identify and prioritize improvement initiatives, you first conduct a complete analysis of the customer experience and management capabilities thereof. Without trying to coin or trademark a term here, I call this a customer experience management audit. It is a gap analysis of the current state of customer experience and of all the factors that affect it, and of what needs to be done to reach the desired state.

This audit is not merely a customer journey mapping exercise. Customer journey maps can be one of the outcomes of the audit and will be useful later on, but they are simply an objective representation of the customer experience from the customers’ point of view. Prioritizing initiatives requires analyzing opportunities from a business perspective as well.

For example, it’s easy to identify that an account opening process is convoluted. But in order to formulate feasible and cost-effective recommendations you have to go behind the scenes and analyze the internal processes, costs and requirements (regulatory or otherwise).

The customer experience management audit exercise looks at the current customer experience, culture, people, policies, processes and technology. It includes:

• A complete analysis of the customer experience at and between all internal and external touch-points using multiple methods
• Reviewing customer feedback from multiple sources
• Reviewing customer information systems capabilities and usage
• Internal process analysis
• High-level cost-benefit analysis of potential improvement initiatives
• Company culture and employee engagement in it

The end result will inform decisions on multiple initiatives which can start in parallel and provide a roadmap for transformation:

• Which customer interactions to optimize first
• Which cross-departmental gaps need to be filled
• Which existing systems need to be better leveraged or new ones implemented to enhance understanding of the customer
• How to start building, or reinforce, a culture of customer centricity
• How to enhance employee engagement in delivering a better customer experience

Quick Wins

At any given time, especially after conducting an assessment of the total customer experience, a number of improvement opportunities in term of experience design will be on the table. These should be prioritized by cost, time to implement and impact on the customers and the business.

If the company is at early stages of customer experience transformation, priority should be given to quick wins. Quick wins are low-cost, quickly implementable initiatives that have the highest impacts.

There are a few reasons to start with quick wins. First, customer experience is on most companies’ agenda, which means competitors are probably looking into improving theirs. So in competitive markets, it is best to start improving as soon as possible not to be left behind.

Secondly, quick wins can help lower barriers to entry into customer-centricity and accelerate transformation. Especially at early stages of a transformation program, there will be resistance to change. Some people in the organization may be skeptical on the benefits of customer experience improvements, or even cynical (until culture change initiatives change that). This context requires gradually building acceptance of customer experience improvement initiatives and awareness of the associated benefits. Because they are relatively lower cost and easier to implement than more involving initiatives, quick wins will be easier to sell internally. And because they are generally aimed at producing tangible immediate results, they can demonstrate benefits of customer experience more quickly, which in turn helps gain buy-in to other broader change initiatives.

Fixing Issues First

Priority should be given to hygiene factors. This means eliminating unnecessary frustration and dissatisfaction throughout the customer experience lifecycle and addressing root causes of frequent complaints and customer inquiries. Especially if the company is suffering from high customer dissatisfaction, customer churn and negative word of mouth, it should focus on fixing broken customer experiences instead of on enhancing neutral ones.

Creating delightful experiences that go beyond the average (creating “wow” factors) at key moments is important as well. These are great, and companies should strive to create them. They can help differentiate from the competitor and build customer engagement. But you have to learn to walk before you can run, and companies should fix gaping issues before trying to wow the customers. Even if an initiative could temporarily increase customer acquisition or increase sales measurably, there is a reason with deeper implications for focusing on hygiene factors first. It has to do with something core to any type of experience: emotion.

Negative information has a greater effect on people than positive information. In psychology this is known as the negativity bias. Negative emotions are much more noticeable than positive ones. And they are also more memorable. This is just how our brains work. Unfortunately for companies, this means customers notice and remember bad experiences more clearly and for longer than neutral or positive ones.

Various studies in business have also shown that people will share twice as much negative customer experiences with friends and family or at large on social networks than they will positive ones. This results in even greater negative impact on the business.

Without first eliminating breakpoints that create frustration, investments in creating positive experiences risk being wasted. Customers could have had a delightful experience, but eventually encounter a breakpoint which negates the positive experience and results in them leaving and telling others about it.

It’s generally more cost-effective to prevent issues than to fix them. So unless companies are prepared to perform dramatic emotional turnaround service recoveries at every service breakdown, they better fix issues first.

That said, simply providing a frictionless customer experience in areas where competitors usually create frustration can actually become a differentiator - even a wow factor.

Laying the Groundwork

Customer experience improvements are only the visible, externally facing part of CEM. They are the result of much internal coordination of people and culture, policies and processes. In fact most of the work in customer experience management is internally facing.

Making any improvement will require some internal change. In parallel to planning quick wins, some initiatives will be aimed at laying the groundwork for facilitating improvements and making CEM sustainable.

Building Bridges Between Departments

Customer experience is the result of all interactions at, and between, individual channels and touch-points managed by different departments. Managing customer experience effectively requires viewing it from a holistic perspective. It also requires coordinated efforts between departments.

But in most organizations, customer experience is still viewed from, and managed in, organizational silos. And this is one of the biggest barriers to CEM. Without bridging these gaps, creating seamless experiences that span multiple channels will be difficult, let alone making customer experience sustainable in the long term. So it is important to start building bridges as early as possible.

Common View of the Total Customer Experience

It’s important to first establish a common view across the organization of what customer experience is and how everyone contributes to it.

There are many ways to paint this picture but it can start with creating and sharing high-level customer journey maps. These should illustrate all channels and touch-points across the customer experience lifecycle (including third parties) and the paths customers take between them. They should also identify the emotional state customers are likely to be in at different interactions. For example, the likely emotional state of someone receiving a personalized opted-in promotional email is different than that of someone calling a complaint hotline. Giving background on the customers’ state of mind will help take more contextually appropriate approaches to designing the interactions. These journey maps should be updated regularly to reflect changes in the business and customer behavior.

Defining Roles and Responsibilities

Everyone in the organization affects customer experience directly or indirectly from sales, marketing and customer service to IT and human resources. HR for example may not interact or design interactions with customers directly but plays an important role in customer experience. It may be responsible for hiring and training staff toward the company culture. Or it may be involved in the design or management of a recognition program that encourages and rewards desired employee behavior.

 It would be a good idea to create a high-level matrix illustrating different departments’ roles and responsibilities towards the customer experience.

Cross-departmental Collaboration

Building a common view of the total customer experience is the baseline, but improvements will require departments to actually work together. They will need to exchange information to better understand customers and identify improvement opportunities. They will also need to collaborate to implement improvements.

As a simple example, the call center may experience a large volume of questions due to a confusing account statement design or a misleading promotion. How can these issues be corrected if the message is not conveyed to the departments responsible for them in the first place?

Cross-departmental collaboration can start with simply bringing different departments together at the same table in key discussions around the customer experience. This sounds very basic but I have consulted for many organizations in which there was little to no coordination or even communication between departments that were both managing adjacent and related parts of the customer journey. This context often results in severe customer experience inconsistencies and issues.

At early stages of a transformation program, it may be necessary for the function dedicated to customer experience management to act as an intermediary to proactively gather and share relevant information until departments work together out of their own accord.

When planning customer experience improvement tactics or strategies, every department involved or affected need to sit together to contribute and come to an agreement on the experience design, responsibilities and KPIs. This will help increase acceptance of initiatives and decrease risk of unforeseen issues.

Building a Matrix Structure

Improvement initiatives will be ongoing, so the need for this kind of cross-departmental collaboration will be continuous. While collaboration could be managed an on ad hoc project basis, making it sustainable requires building more lasting collaboration model.

One way to make this easier is by creating permanent working groups of people from across the organization or by creating a matrix management structure (on top of the existing organization structure) around customer experience. This matrix structure could be for specific customer journeys that involve multiple departments like in-store purchase or refund experience or on the entirety of the customer experience lifecycle.

Information Management

Another bridge to build will be for information exchange. Different departments have different valuable information about customers and the information is often isolated. Aggregating data can help create a more complete picture of customers and help deliver a more relevant and personalized customer experience.

Technology can help operationalize the gathering, analysis and exchange of otherwise isolated information including customer feedback, customer profiles and interaction history.

The customer experience management audit will have identified opportunities to improve the customer experience by making better use of existing systems, or by implement new ones. But technology itself does not improve the customer experience; it is just an enabler. It’s what you do with it that matters. And investments in technology have to be proportional to the organization’s capacity and intention to use it. There is no point in investing in expensive new systems before the organization is ready and willing to use them to enhance the customer experience. For example if the organization is already not closing the loop on existing customer feedback, there will be little return on investing in an expensive new Voice of the Customer platform.

Cultural Change and Employee Engagement

What do the most admired and loved companies such as Disney, Four Seasons, Southwest, USAA, WestJet and Zappos have in common? They are recognized for providing consistently superior customer service. But that is just the outcome of something else. All of them have a strong company culture with customers at the center.

Any benefit of customer experience improvements initiatives will be short-lived if the company does not cultivate customer-centricity.

Tactical improvements can be quickly imitated and surpassed by competition. And over time, the external and internal contexts in which an initiative was successful may change and the benefits may not be sustained.

Customer attitudes, behaviors and preferences change constantly. Staying relevant requires continuous attention to these changes, proactively identifying improvement opportunities and translating insights into action.

The internal context changes as well. Employees change. Systems and requirements change. New priorities are set. The rationales behind previous initiatives get forgotten. If the customer is not front and center in everyone’s mind and actions, the customer experience takes a back seat again.

The only way to ensure constant and sustained customer experience improvements is making delivering customer value core to the company culture.

When customer centricity is deeply embedded in the corporate culture, initiatives to improve customer experience also happen more organically. Because it is core to their values, employees are more likely to consider the customer experience in every decision they make.

If the company isn’t already customer-centered then culture change initiatives will be necessary. Cultural transformation is not simple and can take years to bear fruit, so it is important to plant the seed early.

A number of initiatives can help set the base for a culture of customer-centricity or help reinforce employee engagement in it.

Defining Valued Behaviors

It’s difficult to align employees with valued behaviors if the values are not clear. So at early stages of cultural changes some initiatives may be on helping more clearly articulate and communicate the organization’s mission, goals and values. These values must then be defined in measurable and observable behavioral terms.

In order to measure improvement over time and help leadership make adjustments, it would be necessary to regularly survey employees’ understanding of, and alignment toward, desired behaviors.

Motivation and Further Engagement

Other initiatives can be aimed at motivating employees in delivering a better customer experience. If the company is already customer-centered, some initiatives can be focused on reinforcing, and further engaging employees in, the company culture. This may be for example by:

• Using customer feedback to motivate employees
• Providing new tools to empower employees to deliver better service
• Starting a new recognition program around service excellence
• Enhancing recruitment and onboarding practices

This suggested approach to customer experience transformation and management involves many concepts and initiatives from journey mapping, process analysis and experience design to KPI setting, Voice of the Customer and employee engagement. It is the customer experience management’s responsibility to understand the individual parts. But more than that, it is also knowing how they fit cohesively together and to design this framework.

That’s the job I am applying for.

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