Why 80% of Customer Experience Programs Fail
While most brands are aware of the value that a Customer Experience program can provide, there is a striking disparity between this vision and the results of the programs. Like most aspects of a business, a well-designed and executed Customer Experience program can be thrown together without the proper amount of resources, time and expertise. Brands that attempt to complete this journey without outside help will often times find that they are not garnering the results they expected. Learn more about this discrepancy in Jon Picoult’s piece for CustomerThink. You can access the piece by clicking here, or by reading below:
This piece was originally published by CustomerThink on March 28, 2017.
“Faced with increasingly commoditized markets, more and more companies are launching customer experience improvement programs to differentiate themselves. However, there’s something many of these companies don’t yet realize: the vast majority of their programs will fail.
In a survey of over one thousand companies by communications provider Avaya, an astounding 81% indicated that their customer experience improvement programs had failed to deliver results.
Those are a lot of companies wasting a lot of time and a lot of money on something that isn’t working.
What’s worse, given how these failures typically play out, companies end up losing more than just their investment in a better customer experience. They lose credibility – in the eyes of their employees, and potentially even their customers.
Launched with great fanfare, most of these programs are left to die a slow death, starved for funding and attention.
What remains strong, however, is the signal that sends to their workforce – confirming the staff’s suspicions that customer experience really wasn’t that important to the company. These programs become yet another casualty in the long line of corporate transformational changes that, in reality, just turn out to be the “initiative du jour.”
Given how that realization can take the wind out of an organization’s sails, many companies are probably better off never launching a customer experience program in the first place, as opposed to pursuing one halfheartedly and letting it wither over time.
With so many of these programs cratering, it’s no surprise that one of the most common questions companies ask about these initiatives is “what’s the number one driver of success?” I love that question because the answer is so clear and unambiguous: it’s executive commitment.
Having witnessed many organizations tread the customer experience strategic path, there’s no doubt in my mind that the unflinching commitment of a company’s senior leadership is the single greatest predictor of success for these programs.
That’s not to suggest that a compelling vision, flawless execution and skillful change management aren’t critical to the journey. They absolutely are. But it all has to start with a level of executive commitment that goes beyond mere sponsorship for the customer experience cause.
To be among the 19% of companies that succeed on this journey, what does that required level of commitment involve? Here are three markers to look for:
If you view customer experience improvement as a project like any other, with a defined beginning and end, then you may want to reconsider this path.
Companies that succeed in this realm recognize the need to embed customer experience in their DNA, to make it an integral and enduring part of how they do business. That work never ends. Customer expectations and preferences will always evolve, as will a firm’s products and services. As a result, fixing, polishing and tuning the customer experience is an ongoing task.
If yours is an organization that easily gets distracted by the “next big thing” – whether it’s Big Data, predictive analytics, AI, or some other shiny object – then that may foreshadow problems down the road. When it comes to building an effective customer experience improvement program, the importance of consistency – in organizational focus and executive messaging – cannot be overstated.
#2: Appreciation of Scope
Some business leaders think customer experience initiatives are about a good tagline or a clever marketing campaign. Others think it’s about sending satisfaction surveys to customers, or putting staff through soft-skills training.
These may be components of a customer experience improvement effort, but they alone hardly constitute a robust one.
Executive support for these programs tends to wane once business leaders realize how comprehensive this work can be.
Creating an environment that cultivates customer-centricity requires setting a myriad of organizational switches and dials in just the right position: hiring and training practices, performance measurement and recognition programs, compensation and incentive systems, IT infrastructure and business processes, customer research and feedback instruments… just to name a few.
This is precisely why a superior customer experience accords sustainable competitive advantage – because it’s not as simple as making an advertising shift, revising a training program or installing a new CRM system. It requires much more holistic change, involving not just customer-facing activities, but employee-facing ones, as well. Do it right and it can be very difficult for competitors to replicate.
The unfortunate reality, however, is that most organizations don’t have an appetite for such sweeping change. And that ultimately fuels the demise of many customer experience programs.
#3: Receptiveness to a New Economic Calculus
Not unlike the customer experience itself, the benefits from these improvement programs tend to cut across organizational silos.
For example, enhancements in the clarity and readability of customer communications (such as contracts, correspondence or bills) may appear, based on traditional business accounting, to drive a net increase in expenses. What traditional accounting doesn’t easily account for, however, are the savings associated with reduced inquiries from less confused customers.
Effective customer experience design frequently involves upstream improvements that pay dividends downstream, often in a totally different organizational unit, cost center and time period. That economic calculus can be unsettling for some organizations that are more accustomed to the clear-cut ROIs of office consolidations, lease renegotiations and distribution expansions.
That doesn’t mean the ROI of customer experience improvements is any less compelling (see this research if you need convincing). It does, however, require a more thoughtful, holistic and long-tailed approach to benefit quantification.
Without executive openness to that kind of economic calculus, it’s likely that an organization’s customer experience projects will be subordinated to other business endeavors, sowing the seeds for the program’s downfall.
Customer experience differentiation is hardly a waste of money. In a highly competitive marketplace, it is perhaps the best and only way for companies to stand out from the crowd.
Investments in this area, however, do become wasteful – and potentially even harmful – when companies underestimate the commitment and fortitude needed to shape a truly customer-centric organization.
Before embarking on a customer experience improvement program, executives should engage in some soul-searching, looking for those three markers to gauge their personal commitment to this journey.
And if those markers aren’t present, then perhaps the best thing those business leaders can do for their organizations… is to focus on something else.”
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