The Secrets of Great Customer Experience Organizations are not so Secret

When a new business buzz makes headlines, a new buzz of how to’s follows.  Customer Experience Management (CEM) is no different.  But, to me, Customer Experience Management is mostly a new theatre for existing skills, not a new set of skills.

Forrester does good research but in this recent article: Three Secrets Of Success For Customer Experience Organizations, they may be looking for problems that do not exist and finding solutions that are generic.

The three Customer Experience Organisation secrets they uncover boil down to: good leadership, collaborative teams and enough resources to deliver.  These are not the special and unique secrets of success for Customer Experience Organisations.  They are the secrets to success for every non-line management support organisation.

That is not to say that there is no specialisation required to design and build great customer experiences.  There are indeed a range of domain specialist skills needed when running a customer experience management organisations.  These include a knowledge of the key customer focused tools/concepts such as Net Promoter Score and Moments of Truth. It is also important to understand and be able to apply techniques such as Touch Point Mapping.

Also, a working knowledge of how customers respond in different situations is important.  Understanding that customers don’t necessarily make rational (or even conscious) decisions about what is most important to them in a specific customer experience setting is an important, non-obvious, insight.

To be successful in CEM staff must care about making a difference in the customer experience.  They must also have an intuitive understanding that a great customer experience is not just great for the customer but also great for the bottom line of the company.  Designing an experience that customers will come back for is not as important designing one that customers like and meets the commercial goals of the company.

Beyond these domain specific skills, however, the skills required of the customer Experience Management team can be found in traditional quality management approaches and their later incarnations such as Six Sigma and Lean Six Sigma.

In fact many of the “lead from the middle” attributes of successful business improvement teams can, and should be, found in the Customer Experience organisation.  Rarely does the customer Experience management team have a line management role; it is more often deployed across business units as an enabler, inspirer and facilitator to the business.

In this deployment, the cross-functional coordination skills of the team members are important, as is clear CEM leadership from senior line management.  Again these are not special Customer Experience attributes– they are attributes required for any non-line management enabler team.

Before I close, there is one specific item that I will disagree with from this paper and it has to do with resources:

Their own budget. When customer experience projects must compete with projects from operations and product management, they often fall below the funding line because those groups’ goals — like revenue generation — carry more weight.

In the Customer Experience Management work that we do we ensure that business cases are created to support all changes.  To be successful long term, CEM must stand head to head with the other areas of the business  in generating shareholder returns.  If it is treated as a “special case” it will never get an equal seat at the table with sales, marketing, operations and the other areas of the business.  And, as we know, “special cases” only last as long as they are fashionable.

If you’d like to learn more about Customer Experience Management download our 4 Steps to Customer Experience Management whitepaper.  It examines the process of determining the value, designing and executing Customer Experience Management (CEM) programmes.

By Adam Ramshaw

Customer relationships: When to communicate for maximum impact

Deciding when and how to contact your customers is an ongoing task for every organisation.  Getting the delicate balance between too much contact and not enough contact is difficult and you need to focus on it every day to get it right.

Right up front you should invest some time and effort in developing and mapping an effective customer lifecycle journey for each type of customer.  This gives you a starting point for contacting your customers in an effective manner.

This can start simple and be built out as you go but you need to start with a base line work from.

A good customer lifecycle journey also needs a good customer contact framework to be successful.  A customer contact framework (CCF) is a set of rules and approaches that govern how and when you will contact customers.  It takes into account the customer lifecycle journey map but also adds rules for event based marketing activity and wider business contact rules.

Your wider business rules should include (among other things) areas such as not contacting a customer too often and not contacting customers during high profile holiday or public events because the response rates will drop substantially.

You customer contact map should take into account the following broad areas as a minimum:

Customer Onboarding

Customer onboarding is contacting customer during the initial phase after their first purchase of a product or service.  We know from experience that this is a critical time in building the customer relationship.

If this phase is done correctly you will enjoy longer customer tenure and higher cross-sell and up-sell rates.  We routinely build and prove business cases on this key customer contact showing time and again that it has a very high relative marketing return on investment.

Event based activity

The next step in communicating for maximum impact is to ensure that you track customer activity and intervene when something changes.  If you track the customers sales activity in terms of recency, frequency and size of order (monetary),  called RFM analysis, it will let you know which customers to contact and when.

For instance a customer that buys every month but has gone two months without a purchase: it may be time to contact them with an offer.  Or the customer who suddenly starts purchasing twice the product that they have purchased in the past: it would be a good time to contact them and find out why.

Save teams

Another good, although reactive, time to contact customers is this a Save team. Save teams swing into action when a customer either tells you outright that they want to leave or when you can infer they might be about to leave.

How do you infer a person may be leaving?  You need to think about your business but for example banks use the “loan payout request” as an indicator.  A person calling a bank and requesting this value is probably looking to make a change to their accounts and you need to be there to make sure that you are included in that discussion.

Save teams are a very specific type of customer service team that has special training and access to special customer offers.  We spoken about them before in past posts.

By Adam Ramshaw

Why customer segmentation is not customer strategy

This recent blog article really struck a chord with me:  Why Doesn’t My Market Segmentation Work?

The author makes some good points and I agree completely with them but I wanted to go one step further.  I believe that customer segmentation often “does work” in that the answers you receive are completely, technically, correct.  But in practice it doesn’t work because while it is correct there is often no way for the business to use the information generated.

Recently we started working with a major financial services firm who had just completed a six month multi-hundred thousand dollar segmentation exercise.  At the completion of the segmentation project the organization had a set of statistically perfect groups of customers.  The groups were inventively and aptly named, full sample profiles of each group were generated, and beautiful charts were created that showed the different groups.

The organization had successfully segmented all of their customers into groups of like customer attributes.  The problem was that the marketing group had no way of using this information to improve customer retention, cross-sell and overall customer lifetime value.

They knew which customer was similar to which other customer but they weren’t able to determine a customer strategy from this information.

What they had discovered is that all the segmentation in the world is of no use to you if you don’t have a customer strategy that lets you know what action to take.

My preference is to approach the problem from the other direction.  Determine a good customer strategy (by individual customer) and then use segmentation to help you deliver the message.

We use a customer value based customer strategy approach called cpMAP.  Using this approach gives you a direct way to attribute a primary and secondary customer strategy to each individual customer.  Perhaps the strategy is primary cross-sell and secondary retention or perhaps it is primary retention and secondary product migration.

Customer Value Map

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Now that you know what to do with each customer you can use the segmentation to craft a treatment with the maximum impact.

For example, you’re primary strategy for this customer could be cross-sell of a credit card account.  You then use your segmentation to influence the creative, channel and timing to maximize cut through.  One customer may receive an outbound email with one creative followed up by an SMS, another may receive a different creative via the mail followed by a telephone contact.

With this approach you have a customer plan and you use the segmentation to maximize the effectiveness of that plan.  The segmentation is NOT the plan.

By Adam Ramshaw