Customer Experience Excellence

The Six Pillars of Growth

Tim Knight, David Conway

• Publisher: Kogan Page
• Year: 2021
• ISBN:
  9781398601048
• Edition: 1
• Topic: Business
• Subtopic: Marketing
• Index: Business

Discover how the world's best brands create outstanding customer experience, engaged teams and market-beating growth with this practical guide, providing a model that will help any organization deliver effective and seamless customer engagement. Customer experience (CX) has been a phrase in business lexicon for over 30 years. Seen by many as the last battleground, where winners will gain competitive advantage and increased market share, there is not a company in the world that is not in some way focused on the quality of the experience they deliver.However, for many businesses, CX is neither a strategic discipline, consistently applied, nor is it a well-trodden path. It's not easy to deliver exceptional customer experience, again and again, and it becomes difficult to have a CX strategy that provides tangible and measurable results. Customer Experience Excellence provides a route map to CX success. Drawing on a vast body of research collated and curated by the global consulting group KPMG, this book shows how the world's most elite organizations have made excellence a habit, by creating authentic, human connections at scale. Whether dealing with external consumers or internal colleagues, learn how to become an enlightened and agile business and 'think customer' at every single touch point.

Part 1

The changing world of customers and employees

01

Understanding excellence

For any organization to be excellent, it must start by understanding its customers. Globally, this has become harder in recent years. A decade of pandemics, digital transformation, political changes and social progress has affected most of humanity, in both subtle and profound ways. Behaviourally, we are interacting with a narrower set of brands, with changed purchasing frequencies and more digitally than ever. Psychologically, the change is more fundamental and interesting, with new attitudes and beliefs redefining how we make decisions, what we value and where we invest our time. A ‘new customer’ has emerged.

The new customer describes each of us: as consumers, social animals, citizens and employees. We are each fraught with complexity and contradiction: slow to trust, but craving integrity and purpose. More digital than ever, but fundamentally motivated to seek authentic human connection, which now transcends previous consumer–brand relationships. Cynical, wise and knowing, yet seeking wonder and escapism more than ever before.

Businesses can become excellent only when they master the new customer. While every part of the business is important, it is only through the customer that the enterprise breathes, grows and thrives. A business will endure a failure in the finance team, can battle through shaky HR processes, absent executives or faltering digital rollouts. But without customers, it is naught. Without meeting its customers’ needs, every business would cease to exist. However, the pace of change in the last decade has meant that most businesses are not ready to understand or meet these needs, with most leaders still struggling to rewire their enterprises to meet yesterday’s challenges.

The genesis of these changes is not hard to identify. In the first half of 2020 alone, a generation of forced evolution occurred in a handful of months of national lockdowns, home working and business adaptation. Satya Nadella, the Microsoft CEO, observed, ‘We have seen two years’ worth of digital transformation in two months’ (Spataro, 2020).

Our behaviour has had to change. We have had to work differently, to consume differently. However, there has been a corresponding global psychological shift in values, beliefs and needs. Existing trends have been accelerated and new ones are emerging all the time. Customers feel more vulnerable, less secure and more pressured than at any point in recent living memory. Values have evolved, with renewed demands that business leaders are champions of social purpose, employee experience, diversity and political change, as well as custodians of shareholder value.

Unsurprisingly, the basis for many customer decisions has shifted. These are the fundamentals that every business is built upon. To compete and grow, every enterprise has been fine-tuned over many years based on assumptions about customers that no longer hold true. CEOs and customer leaders have never faced a challenge of this nature (KPMG, 2020).

Against this backdrop of change, customer insight has become more important than ever. The voice of the customer – the systematic collection of customer sentiment, behaviour and other data – has become a critical management capability. Such data provides an early warning or foresight system that, if used correctly, can positively impact every business decision and enable leaders to maintain agility in times of change.

But is it working? Seemingly not. According to the UK Market Research Society, only 1 in 10 customer-impacting decisions is based on customer insight (MRS, 2016). This implies that the remaining 90 per cent of decisions are based on guesswork or intuition born of experience. Harvard Business Review reaches similar conclusions, suggesting only 11 per cent of marketing decisions (arguably the ones where customers are most central) are made using insights (Hinshaw, 2016). But what happens when that experience or guesswork is no longer relevant or correct? The answer is a stark one: a slow death for previously successful businesses.

Prior to COVID-19, customer experience (CX) was identified as one of the last competitive battlegrounds. Now the challenge is greater – not only for competitive differentiation but to innovate, adapt or perish.

A human or digital revolution?

To compete tomorrow, business leaders must adapt to the new, changing customer more quickly than ever before. But surely customer centricity is nothing new? Is this not a familiar challenge?

It is true that commentators and pundits have written avidly for years about ‘the age of the customer’. Between 2010 and 2020, an entire industry was birthed of customer consultants and CX experts, offering expert advice on how best to transform, optimize or evolve. Most CEOs have written ‘being customer centric’ into their strategy and insisted on reporting on progress, proudly tucking NPS or CSAT (customer satisfaction) measures alongside traditional accounting reports.

Unfortunately, it is not working. If we look at the data from the KPMG Customer Experience Excellence Centre and the level of improvement from 2010 to 2020, we see that from the customer’s perspective this has yielded only minor improvements globally.

Similarly, ‘digital transformation’ has been the biggest spend item for most organizations as they systematically swap out legacy systems and wiring – a $6.8 trillion industry by 2023 (Business Wire, 2020). However, making vast investments in technology does not necessarily result in excellence. For many organizations, digital first was the mantra as they replicated existing processes online. Often these processes existed because of history rather than from a fundamental assessment of how customers might have their problems solved. The result is that only a few companies have really delivered excellent experiences through digital. What is important is that, online or offline, it is how the investments deliver the organization’s purpose and make life easier for customers that determines success.

Now, consider that this languid progress has been achieved pre-pandemic, before COVID re wrote so many rules. If we look to the future, everything suggests that all previous commentary on ‘the age of the customer’ or ‘digital transformation’ will become just a footnote to the change to come. We are not facing an orderly transition to a new age of the customer but a revolution.

So, if the starting point for understanding the new customer is not through the lens of digital transformation, and previous models are not working,...