CX, Customer Experience, is all the rage these days. Got an old CRM (customer relationship management) product? Re-brand it CX and watch sales skyrocket! Or, so, that’s what software vendors would like to see happen. Methinks, it will be a tough sell – here’s why.
CX attempts to be more true to the ‘customer’ focus than CRM products ever were. Most CRM tools were never intended to really understand a customer. No, they were intended to codify knowledge of specific buyers and firms with the intent of selling them something else. These solutions had one and only one purpose: help firms cram more sales into the customer base or channel.
Later, Marketing Automation solutions arrived. These solutions primarily track the evolution of a raw sales prospect into a highly qualified sales lead. Again, the focus was on driving sales – not understanding or helping the customer.
A true customer focused solution would seek to know everything about a customer. I’m not sure the current crop of CX products are fully vested in this yet. But, I’m getting ahead of myself.
Vendors have no trouble selling CRM solutions. That’s because most every firm has a head of sales or a chief operating officer. Either of those executives is on a short tether. Every month they have to deliver ever better sales numbers or they get sacked. A sales force automation or CRM tool helps them track leads and conversions. This is a motivated software buyer who really needs this tool. But, this software only cares about a customer only as far as this customer is a good prospect to buy something else from his firm this sales month. Otherwise, that customer can go take a flying leap. Likewise, software vendors can find lots of chief marketing officers to peddle marketing automation tools. These tools give marketers the data, scoring mechanisms, etc. to understand where a prospect exists in the prospect education to sales qualification funnel. Along the way, marketers get a wealth of data that helps them track and evaluate the effectiveness of different campaigns. Lots of CMOs means lots of sales here, too.
There are even corporate buyers for call center solutions, too. These tools help these executives quickly evaluate which call center people can closeout in-bound calls in record short times. The focus of too many call centers hasn’t been to delight customers and their experience with the company or its product. No, these tools help firms manage down support costs first and if a customer lucks out and gets their problem resolved – BONUS!
CX is supposed to help top executives understand and monitor how well their firm is meeting or exceeding customer expectations across numerous corporate processes, sales/distribution channels, demographic segments, feedback mechanisms and more.
In response, software firms have rushed to add “social listening” to their CRM/CX offerings. This bolt-on to older CRM solutions creates a pseudo-CX and there’s a problem with that. The product is still a CRM, sales-oriented solution. It’s not a real customer (but a prospect) focused solution.
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Social listening is helpful but it alone isn’t enough to create a real CX solution. Social listening is more apt to trap the sentiment of customers who may be perpetual complainers, shakedown artists, youthful social media fans or genuinely disaffected customers. What it doesn’t capture is even more eye-opening.
For example, how many of you get so feed up with a company or product that you just quit buying it. You don’t tweet about it. You don’t blog this. You just avoid ever buying it again. The company has no idea why you quit buying and they never will as most firms are deaf. That’s right: deaf. You can tell a hundred friends about a bad company experience but how often will you ever hear from the company? Never?
Airlines are doing the active listening but to no viable end. They won’t change. They ‘hear’ you but they don’t do anything about it. Recently, I tweeted that “Vegas called – said the odds of me getting upgraded @AmericanAir this Thurs are 0.000001%”. They listened all right and responded that I should keep hopeful. Well, American, there were 31 people trying to escape coach that night. I was #18 on the list. I think Vegas was right. Will American ever add more first class seats or quit giving away frequent flier miles to non-flyers? No, I don’t they will as the people who manage the sales of their miles to mortgage firms, online florists, etc. aren’t measured by how well their deals adversely impact the flying public. Active listening that doesn’t produce change is insulting to the customer. I’d rather get no response from a firm than get some pat form response “Thank you for contacting ___. Your feedback is important to us.” Prove its importance and then we’ll believe your firm is serious about CX.
There’s something sinister about companies that actively listen but don’t do anything about the knowledge they collect. Active listening is simply replacing the call to the call center where some contract worker listens to you but never forwards ANY of your suggestions to the company that hired them to listen to us carp about their poor products or service.
CX is in trouble on three fronts.
First, software vendors are going to continue to sell CX solutions in pieces. They’ll sell individual CRM, marketing automation, etc. solutions because there is an identified executive buyer with budget for each of these products. How many firms actually have a Chief Customer Experience Officer? Not many. And, worse, few of these actually sit on the Executive Committee. Who’s going to buy the full CX suite? Not many people for now.
Second, the initial focus of these systems seems to be on identifying the “next best sales opportunity” vis-à-vis a specific customer. Software vendors are totally spinning CX as a more powerful CRM or a CRM with great active/social listening metrics. Aaargh! Somehow, they’re forgetting the customer all over again.
One vendor executive recently objected to this observation but when I used (another) airline example, he saw my point. Sometimes, I take 6-9 month vacations from American Airlines. In fact, I’m not flying them to Austria this month! When I take these sabbaticals from their firm, I don’t even get so much as a get well card from them. They don’t even notice that a 3+ million miler of theirs just fell out of the system. Instead of understanding and salvaging the customers they have, they’d rather run a sale and try to lure in net-new customers. Anyone in Sales knows this is an expensive way to grow the top line.
Copyright 2013 – TechVentive, Inc. – All Rights Reserved
Businesses desperately need to understand their customers: deep, personal, profound understanding. If you think I’m going to learn boatloads of deep insights about my consulting clients from 140 character tweets, I’d disagree. I pick up the phone. I meet with them for lunch. I go to their facilities. I invest hours and hours into these relationships. And, I don’t treat a client or prospect like it’s a sheep that needs to be fleeced. If you want to actively listen to the ‘voice of the customer’, then get out there and talk with them.
This leads to the third adoption issue for CX: companies would not only have to care about customers, they would have to be willing to change (materially). New tech alone won’t make your firm a CX superstar. CX excellence will trigger big structural changes in companies if it is to take hold and produce lasting results.
If companies cared about CX they would:
- Know when you bought something, frequently check in on you and see how you’re liking it. Some firms actually do this but I’m still waiting for the day a major appliance vendor calls to see if I’ll be in the market soon for a new washing machine and how well is the old one performing. I know they know I’m a customer because I mailed in my warranty card 6 years ago – and – still they won’t call!
- Look inwardly first. Use new analytics tools to detect patterns in customer consumption. Just do this one test. Compare year over year revenue changes of each customer to their buying history from your firm. If they’re growing but your share of wallet with them is declining, you need to get over there fast to find out why. Analytics should become your best friend.
- Mine your historical data. Most firms only look back a month or quarter. If you want to truly understand a customer, look at their total history (inception to today) and ask yourself why their patterns change and what were the actions that triggered these changes?
- Do the social listening but don’t do it to the exclusion of other mechanisms to really understand a customer’s experience.
Finally, if a company really wants to get serious about CX, then these more radical changes are required:
- Treat customers like an asset of the firm. Rogers and Peppers (insert link) even developed a mechanism for evaluating the current worth of a company’s customers. In essence, you need to monetize the net present value of future customer purchases but also discount this valuation by non-customer friendly actions (e.g., too many sales calls) that cause customers to reduce or halt buying from your firm.
- If you finally see customers as an asset of the company, then some top executive (with real clout) needs to be able to stop bad processes, sales campaigns, activities, etc. Just because the Sales VP wants to make his/her numbers for the month, doesn’t mean the sales team should badger long-term loyal customers into buying more. The customers might help the short-term numbers push but will start to look for a better supplier that treats them more respectfully.
- Forward all feedback from customers (from written, phone or digital means) directly to the process owner(s) in charge of that process. Make them respond to each and every suggestion with their specific action items to ensure it never happens again. “Listening” without a closed feedback loop is worthless.
- Cross-process conflicts need to be brought to the attention of the Chief Customer Experience Officer (and maybe even the Executive Committee). If your firm is a command and control firm, these last two points will be your undoing. CX firms must be flat, fast and malleable. That’s everything a bureaucratic, starchy, slow moving command and control organization isn’t. CX will always fail in these entities because every employee believes “it’s not my job”.
My job, I guess, is to point out these kinds of things.
(Cross-posted @ ZDNet | Software and Services Safari Blog)