Last evening while reflecting on certain business ideas connected to my area of interest with my co- enthusiast, who happens to be a senior-level professional engaged with one of India’s top three IT consulting firm, we stumbled onto a very widely discussed, yet partially unfathomable area of business so far, the area of customer experience.
We deliberated a bit on a strategic approach for creating distinctive or unparalleled customer experiences. The experiences that do not fade from memory over time. The experiences that are cherished, and the experiences that do not demand a continuous deliberate effort from marketers, brands, or enterprises for making them sticky. Also, the experiences which have created brag-worthiness and hence, have established an inextricable relationship with the brand or the enterprise leading to a natural choice for customers.
What is Customer Experience Management?
Customer experience (CX) management is an exponentially evolving area of interest for enterprises across the world as it is considered to be the primary element of the entrepreneurial playbook responsible for retaining customers and driving growth.
As stated provocatively by Linda Dauriz, Director of the customer experience and corporate development at Hugo Boss, the Luxury fashion company with revenues of $3 Billion, “experiences are the new products”.
In an interview with McKinsey’s Dennis Spillecke, Linda elaborates that the creation of experiences is imperative. Even for a hardcore product company as, they become an integral part of an individual’s life and transforms into a habit.
Interestingly, Linda’s way of looking into customer experience creation deeply resonated with our line of thoughts. There is a significant number of articles in recent times, written by practitioners and researchers, highlighting the growing importance of customer experience creation.
One such recent Harvard article emphasized the advantage of leveraging contemporary technologies like AI, ML, and big data in creating rich experiences, which sometimes appear magical to customers. For example, Disney’s Magic Band, which is a wrist band powered by RFID technology, enables visitors to make an entry to the park, get priority access to rides, purchase food and merchandise, unlock their hotel rooms, and much more.
However, even a colossal amount of investment in R&D, market research, and automation technologies to create extraordinary customer experiences are unable to warrant a brand’s lifetime relationship with the customers.
Every day we were saying, ‘How can we keep this customer happy?’ How can we get ahead in innovation by doing this, because if we don’t, somebody else will.Bill Gates
Customer lifetime value
Customer lifetime value (CLTV) is an indisputably accepted and used concept in business. It helps to understand the obvious benefits of retaining customers, which ensures a stream of revenue and profit reciprocated by the customer to the company for investing in retaining him/her by creating an amazing experience.
Business leaders therefore have focused primarily and perpetually on technology to create such an engaging experience for customers. And with more and more enterprises transforming into platform-based businesses, the perceived role of technology in creating and sustaining experiences has largely been accepted uncritically.
In fact, out of few fundamental pillars of creating customer experiences today, ‘technology’ is considered to be the most critical one, which is evident from the fact that a large number of published articles and research papers have focused and solidified the correlation of these two.
‘Organizational culture’ has also been considered playing a dominant role in creating customer experiences by being strong support or complement to ubiquitous technology. Indeed, culture is truly found to be bolstering the impact of technology in experience creation by inducing a sense of customer centricity and customer-first attitude among the employees.
Enterprises today, are well cognizant of the fact that an appropriate organizational culture is a precursor to the creation of customer experience.
Celebrated authors and thought leaders like Simon Sinek have been emphasizing the cascading effect of building care and trust oriented culture in an organization.
A contented employee can only help in creating an extraordinary customer experience. So, by and large, ‘technology’ and ‘culture’ have been considered as the core elements for creating superior customer experiences.
Creating a More Sustainable Customer Experience
I have a key concern here, and that is, I find ‘Customer journey’ to be a more holistic, inclusive and sustainable term to describe the life long experience of customers with a brand or an enterprise.
It would rather be more precise to rephrase that a successful customer journey, leading to the high lifetime value of a customer, is the cumulative effect of a chain of experiences that a customer has with the brand or the enterprise.
However, the Herculean job for brands and enterprises today is to constantly struggle to create experiences, which are based on customer value chain adjacencies. To build a consistently synergistic effect through experiences, which are unique and complementary, is itself an unending challenge.
Compounding this is the wide variety of alternatives that customers have access to and fading loyalty across industries.
The pressure of innovation to appear new, every time there is an encounter between the customer and the brand, to create an enduring moment of truth, is mounting to an unbelievable level. It is pertinent to think about how to create a perpetually delightful journey for customers, which is self-sustaining and does not apprehend organizational resources only for this purpose.
The Road Less Taken
In this context, I would like to draw the attention of readers towards an element that is relatively less spoken and highlighted in the context of customer experience creation. This element is underrated because of the fact that it is difficult to establish a direct association of it with the experience creation. The element I am trying to highlight is the ‘Organizational structure’.
Instead of beating around the bush, let us address this with logic.
The Chinese electronic goliath, Haier, is considered to be the largest electronic company in the world in terms of revenue. It is extremely interesting to discover that Haier is actually structured internally into 4000 micro-enterprises.
These micro-enterprises have their own P&L statements and function as independent entities. A team of ten to fifteen individuals forms a micro-enterprise. They are provided with the autonomy to conduct experiments in their respective domains, however, maintaining positive cash flow. The micro-enterprises can collaborate with each other the way businesses collaborate in the market. They can seek and provide assistance to each other and even share resources.
Haier is organized around agility and experience. It has an enabling organization structure for fast innovation, quick response, modularity, and above all, a delightful customer journey. There is absolutely no scope and requirement for micromanagement. Once the micro-enterprises are created, they learn the skill and art to thrive. The strategic team can then focus on broader and more important issues.
T Mobile: Case Study on Customer Experience through Call Centers
Another analogy can be drawn with the American T Mobile company. It’s a company that underwent a paradigm shift from the way its call center business was organized when Callie Field took over as Vice President of customer care.
Usually call centers are like factory floors, where representatives sit in rows with their headsets and scripts, with a single goal of to minimize handle time. They work under strict surveillance and any deviation could lead to job loss.
Hence, the turnover rates for customer service workers are amongst the highest in the business world. The job is extremely mundane, recognition is inadequate and the career path is obscured. Expecting enthusiasm and committed performance to create a superior customer experience would be an utter absurdity in this kind of inflexible ambiance.
As an outcome, customers were frustrated too as they had to navigate computerized call trees and often treated mechanically.
With ambition and purpose to create a delightful customer journey, Callie Field embarked on a thoughtful reorganization process of the T- Mobile call center.
She was well cognizant of the fact that empowered employees can only create extraordinary experiences for customers. Accordingly, she made the representatives sit together in a shared space called ‘pods’. These pods were collaborating openly and were trained and encouraged to solve customer issues as they deem fit.
Each team managed a specific pool of customer accounts, just like an independent business. Released from the shackle of poor and irrelevant performance matrices, a culture of collaboration and help was fostered. Customers were delighted as they knew how to reach their dedicated teams without going through a call tree.
As Joseph Schumpeter defines, “innovation is the novelty in the way value is created”. So, there is no reason to restrict the idea of innovation and value creation to only technology and products. It can also be a novel way of organizing the workforce which provides an impetus to a self-sustaining process (Nirmalya Kumar).
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