By Helen Peatfield
The economy of x | Feature
What does the X factor say about your company? Wanting to deliver great experiences is one thing but doing it well is quite another. In this section, Helen Peatfield looks at understanding what is driving the X movement and what it means for the mechanics of base business elements.
Consumers and buyers are becoming more fickle by the hour, it seems, regarding their experience with companies, apps and services. Expectations are high, judgement is brutal and fast. If it takes an hour to save a few pennies the inner calculator kicks in, frustration levels go up and we look elsewhere. Traditional loyalty schemes and low prices just aren’t enough any more.
Nan Russell, XM scientist at Qualtrics gave us the details in numbers: “Today, organisations that don’t manage every aspect of the experience they provide struggle to compete. Why? Because in the experience economy, 80 percent of consumers will choose to switch brands due to a poor experience, two-thirds of the workforce is actively disengaged and two million employees turn over every month because of negative experiences in the workplace.” These numbers are alarming. Yet the biggest problem lies with business leaders’ perceptions. Whether it is down to a lack of data or simply looking at the wrong data, CEOs and customers have wildly different opinions on what a superior experience is. Russell described this as The Experience Gap and highlighted that while 80 percent of CEOs believe that they are delivering a superior experience only eight percent of customers agree. That’s a huge gap in understanding the true picture.
Whatever kind of business you operate there will always be a competitor close by and companies cannot win a race based purely on price. Neither can they win without differentiators that matter to their ideal customers. Today that differentiator is experience. At Drift’s Hypergrowth London event, Brian Halligan the CEO at HubSpot told a packed conference hall: “It’s not enough to be a tech disruptor any more. Now you have to be an experience disruptor.”
Are you ready for all manner of X-data sources?
We are busier than ever before and whether we want to order a pizza, open a bank account or procure materials for our manufacturing plant, we are inclined to follow the path of least resistance so that we can focus on the next task. It is no longer enough to look at operational data to see if business is keeping up with demands. Failing to listen, understand and respond to changing customer behaviour can be devastating; product launches can fail, revenue can fall fast, and employees head for the door leaving you in an empty office wondering what happened. Alex Love, managing director at customer experience consultancy, Enigen UK said: “Consumers are on the move all the time. They have so many channels and apps, actually they just want to get things done quickly. It’s all about speed and value. Price isn’t always top priority either, people often choose experience over cost.”
Just as an ERP system is built to enable business strategy, CX apps are here to support a people centric approach. Without looking inward to see what you need to improve you cannot select the right tools for the job. Love explained the strategy that underpins a winning customer experience model. “CX is a way of designing and improving the way you interact with your customer. That could be through your front office. It could be through marketing, sales and even back-office functions like PO (purchase order) and invoicing processing. CX is about standardising your approach so that customers get the same message through any interaction.” He urges the need to look at all channels from a customer’s perspective: Are the right communication strategies in place? Can customers access your services through the channels they prefer with the speed and value they have come to expect? “Technology should enable customers to interact with your brand more easily. You need to design your CX with the right customer journey so that customers find it easy to engage with your business,” said Love.
Merging the Experience Effort
The 2017 Gartner’s Customer Experience in Marketing Survey revealed that 81 percent of the marketing leader respondents expected to ‘mostly’ or ‘completely’ compete on the basis of CX (customer experience) at the end of 2019. Tick tock. The thing is, while marketers have had their fingers on the experience pulse for a while now it is not their sole responsibility. You can have the best salespeople, help-desk, and marketing minds at work but if back-office processes such as procurement, logistics, and finance are not aligned with demand, and if the data being collected is not shared you can never deliver frictionless interactions, let alone sumptuous experiences. Love described the shift from department-level CX programmes to a company-wide approach. “As recently as three years ago business departments were talking about CX in silos. In reality, you can’t drive experience in silos. You need to break down those internal boundaries and look at CX holistically. Departments need to talk together to build and implement a joined-up strategy.”
Thankfully a helpful raft of fixes, from heavy hitting software names as well as SaaS start-ups, are keen to demonstrate how their wares can help businesses achieve experience excellence. Consolidation in the market is also gaining momentum. For example, the Qualtrics IPO became an $8bn (£6.33bn) cash acquisition by SAP in January this year. Qualtrics’ experience management (XM) offering combined with operational data capabilities from SAP software (O-data) should provide businesses with the means to deliver exceptional customer, employee, product and brand experiences; as well as better manage supply chains, networks and core processes. Hot on the heels of the SAP Qualtrics deal, Adobe announced its partnership with ServiceNow. Integration between the two platforms promises to enable better experiences for their mutual customers such as streamlining work between teams and building rich, real-time customer profiles. ServiceNow’s digital workflows, knowledge management and service catalogues will be integrated into a personalised engagement layer through Adobe’s Experience Platform to create consistent, contextual experiences and services.
The X Factor for Customers
Today, if a business isn’t able to deliver the right service or product through the right channel, customers will find one that can. This power shift is what has become known as ‘the experience economy’.
A successful experience strategy must be founded on research, empathy and a commitment to continuous improvement.
Companies that fail to keep up with modern consumers could find themselves in the same boat as the retail giants that have floated down the liquidation river. Not only can CX help to keep existing customers happy, it can boost growth on a large scale. The insurance industry isn’t the first to spring to mind when thinking about ‘delightful’ experiences but, for industries like ecommerce and travel, insurance options offer an additional revenue stream. It is here where satisfaction or frustration levels can rise or lower; and therein lies an opportunity to exploit the experience gap left by large, mature businesses. Angus McDonald, CEO of InsureTech company Cover Genius explained this a little more for us: “Policies that require a law degree to understand, slow approvals and even slower payouts all leave consumers frustrated.” The company’s business model is based on improving the customer journey. “Cover Genius was built from the ground up on an experience management model. With easy-to-digest policies and instant payouts our partners experience NPS scores exceeding 65 with one travel giant reporting 25 percent year on year growth in policies sold.”
Love echoed the sentiment in terms of what it takes to build a successful experience management strategy. “The way that we work with our customers is to identify their overall objectives, understand more about their customers, and then build them a roadmap of change – typically over a three year period. Then over that three year period we underpin some of that change with different modules or tools from the Oracle CX suite to deliver it.” One of Enigen UK’s customers, H&T Pawnbrokers has 182 stores around the UK. The company wanted to change the face of pawnbroking and how it interacted with people in order to better offer the right services to customers. For example, when it comes to financial products that businesses like H&T offer, it could be very frustrating for someone to be offered a loan only to find out later that they will not actually be approved for it. “At that moment, their customer strategy was based by store. If you went into one store, that store would know you and have your information. But if you went into one of their stores in the next town they wouldn’t know anything about you. Obviously, that’s not great customer experience,” said Love. But now H&T has the strategy and tech in place to deliver a smoother, happier experience across every branch.
A SUCCESSFUL EXPERIENCE STRATEGY MUST BE FOUNDED ON RESEARCH, EMPATHY AND A COMMITMENT TO CONTINUOUS IMPROVEMENT.
ALEX LOVE – ENIGEN
X + O for measuring the feedback economy
Customers rate services on independent review sites, a brand’s social media page and through word of mouth both online and offline. Gathering, analysing and benchmarking CX successfully means pulling together swathes of qualitative and quantitative data. ERP systems are great at gathering operational data (O-data) from sales, finance, HR systems, inventory levels and the supply chain. But on its own it does not answer the ‘why’. To get the full picture, businesses must look deeper and delve into the tricky world of human behaviour and motivations.
Qualtrics’ Russell describes X-data as, “the beliefs, emotions, and intentions that tell you why things are happening, and what to do about it. X-data comes from things like customer feedback, purchase intent, Net Promoter Score, product satisfaction, brand sentiment, or employee engagement. O-data tells you what is happening. X-data tells you why it’s happening.”
“To succeed in the experience economy, companies have to embed X-data into their operational systems and business processes. This means combining X-data with the organised schemas of operational data in order to make decisions and take the actions that lead to customers who stay longer, buy more, and tell friends and employees who deliver more, build a positive culture, and advocate for your brand,” said Russell.
Employee experience is just as important
A disgruntled employee can be just as damaging as a bad customer experience review as well as expensive in terms of frequent recruitment drives. High employment levels and skills gaps have created a candidate’s market but these days competing for talent takes more than brightly coloured beanbags and a pool table. There are simply not enough cupcakes to quell a stressful or mundane work life – nor stimulate loyalty.
From an HR perspective the importance of monitoring experiences isn’t new at all. It’s the way that we track, measure and respond to it that has changed. If productivity is low, is it really the human at fault? Before telling an employee that ‘bad workers blame their tools’, first look inwards. How many applications and people does it take to get an order processed from sale to delivery? Understand where the sticking points are. Be ready to hear and respond to hard truths. Again, this is reflected in EX.
More and more is expected of us in our working week, largely per-
O-DATA TELLS YOU WHAT IS HAPPENING. X-DATA TELLS YOU WHY IT’S HAPPENING.
NAN RUSSELL – QUALTRICS
haps because there is an assumption that the tools a business gives its staff are reducing workload. Mike Ettling, CEO at Unit4 said that the entire leadership team is responsible for employee experience. But as the pressures of cloud migrations settle, he would like to see the role of the “CIO stake a claim, and make its fame again, on being the owner of employee experience.” Russell said that while individuals or functions can kick-start an XM transformation “long-term success depends on empowering people around the business and embedding XM within your organisation’s operating fabric,” later saying: “In the EX space, people teams can get things off the ground, but improving experience across the employee life cycle – from recruitment to exit – means involving a vast cross-section of a company from the c-suite and mid-level managers, to the employees themselves.” Technology has given people the power to switch allegiance, advocate or criticise brands to vast audiences with a few touches on a smartphone. So it falls to businesses to improve how they interact with their greatest human assets: their staff and their customers. And the new breed of ‘experience officers’ in place at businesses all around the world need to be supported by a company-wide strategy to at very least satisfy; better still would be to exceed and become absolute champions in the effort to attract revenue-generating repeat business.