Wayne Lockwood: Digital Transformation 2.0: Customer Experience Management

Customer experience management (CXM) is the next stage of the customer-centric business transformation. It is a grand orchestration of customer experiences (CX) involving everyone in the C-suite—CIOs, CMOs, chief digital officers, among other customer-facing functions.

“CXM is the next category in the brand evolution,” said Augie Ray, vice president analyst at Gartner. “Whereas 20 years ago much of brand strategy was focused on positioning and communication strategy, today we use the tools and processes of CXM to understand how experiences—what our brand does and not just what it says—help to craft the brand perception in the mind of the customer.”

These days, consumers move through the customer journey at the speed of light, making the seamless and real-time management of those experiences a must. And for good reason: Organizations that classify themselves as “very advanced” at CX are almost three times more likely than their peers to have exceeded their top 2018 business goals by a significant margin, according to research. An effective CXM strategy plays a huge role in this success.

According to John Zealley, senior managing director and global function lead for the Customer Insight & Growth practice at Accenture, CXM isn’t a new idea. The reason it’s been gaining popularity over the last few years is because companies now have the tools at hand to “fundamentally change their relationship and engagement with the consumer,” he told CMO.com.

CXM’s 6 Competencies

To succeed at CXM, companies first need to orient people, processes, and technologies in service of the customer experience. According to Rick Parrish, principal analyst at Forrester, there are six “competencies” to the right CXM framework. They are customer research, prioritization, design, enablement, measurement, and culture. Each part of the framework comes into play for each competency.
“So, for example, let’s take the enablement competency,” Parrish said. “Enablement is about making sure that your employees have the resources they need to provide the experiences that you’ve designed. People comes into play there, since you have to make sure your people have the right training, the right skills, and the right information. Process also comes into play since your people need processes that allow them to create good experiences. And, of course, you’ve got to have the right technologies to provide customers with the right information at the right time.”

Getting CXM right starts with data and insight into the customer journey, said Gartner’s Ray, adding that customer feedback is also key to a strong CX foundation. The most successful brands, he added, have a test-and-learn culture that relies on qualitative research to inform both decisions and processes.

Accenture’s Zealley echoed Ray’s sentiment: “Organizations that want to get CXM right need to be much more open to the power of data,” he told CMO.com.

Historically, marketing leaned more on gut, Zealley said. Yes, some data was available, but it was typically retrospective or project-based. In today’s fast-paced, digital world, that won’t cut it, he said. Investing in the data and building that much-talked-about single view of the customer is going to be key to CXM, he said.

“That’s the fundamental change because once you get into the skin of understanding the power of real-time data, then you can certainly open your mind to a whole set of innovations that you previously thought were sort of wonderful but impossible to address to the market,” Zealley said.

That granularity of insight, he added, is imperative.

Indeed, companies that want to provide truly transformative CX need customer data that is real-time, intelligent, and predictive. That makes choosing the right marketing technology crucial for successful CXM execution.

Meet The Customer Experience Manager

Who leads CXM? According to Gartner’s Ray, the role is still up for grabs in many organizations, though CMOs are well-positioned to step up to the plate.
“CX is still developing in many organizations,” Ray said. “We see CX being led in a variety of ways, sometimes reporting into the CMO, sometimes as part of sales or customer care, and sometimes as a standalone team under the COO or CEO. But I think of CX as the CMO’s game to lose. … The marketing department is in the best position to know the customer, to collect and use their data, and to understand how different touch points impact brand perception.”

Recent research by Forrester Consulting, commissioned by Accenture, states that while companies understand that they compete with one another today based on customer experience, nearly 87% of organizations agreed that traditional experiences are no longer enough to satisfy their customers.

This changing landscape is an opportunity for CMOs to grow their roles to become architects of the customer experience, and also to drive growth, Accenture’s Zealley said. Forrester research from September 2018 found that CX impacts a company’s bottom line. In fact, just one-point increases in CX scores, Forrester found, can translate into approximately $10 million to $100 million in annual revenue.

And since 90% of organizations see the CMO as the connective tissue between the different lines of the business, “it’s never been a better time to be a CMO,” Zealley said.

Everybody On Board

For a CXM strategy to be effective, it must be a top-down, cross-company initiative, Forrester’s Parrish said.
Companies that do this really well, he added, have built active and strong CX executive committees or councils that involve IT, HR, marketing, sales, and other disciplines, Parrish said. This senior group of cross-functional executives work together to manage the customer experience in a cross-disciplinary way.

In addition, according to Gartner’s Ray, they prioritize training employees, encourage appropriate customer relationships, and provide processes, career and financial rewards, and systems that help them do their jobs better.

One brand that has taken this approach to CXM is 24 Hour Fitness, which formed a “transformation office” that comprises business stakeholders from various functions in the organization. This is a critical part of getting the entire organization motivated around customer-centric thinking, he said. One of the transformation office’s key areas of focus is to help identify, from every angle, all the ways the fitness brand can help its members.

“Whether you’re an individual employee, customer-facing, behind-the-scenes, or you’re a C-suite executive, if you don’t see how you contribute to one of those six competencies [customer research, prioritization, design, enablement, measurement, and culture] in a way that affects the quality of the customer experience, don’t tell anybody,” he said, “because it turns out your job is pointless and should probably be eliminated.”

This post originally appeared on CMO.com March 13, 2019.

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