Customers have been “experiencing” business since the ancient Romans browsed the Forum for produce, pottery and leather goods. But digitization has radically recalibrated the buyer-seller dynamic, fueling the rise of one of the most talked-about industry acronyms: CX (customer experience).
Part paradigm, part category and part multibillion-dollar market, CX is a broad term used across a myriad of contexts. But great CX boils down to delighting every customer on an emotional level, anytime and anywhere a business interaction takes place.
Great CX boils down to delighting every customer on an emotional level, anytime and anywhere a business interaction takes place.
Optimizing CX requires a sophisticated tool stack. Customer behavior should be tracked, their needs must be understood, and opportunities to engage proactively must be identified. Wall Street, for one, is taking note: Qualtrics, the creator of “XM” (experience management) as a category, was spun-out from SAP and IPO’d in January, and Sprinklr, a social media listening solution that has expanded into a “Digital CXM” platform, recently filed to go public.
Thinking critically about customer experience is hardly a new concept, but a few factors are spurring an inflection point in investment by enterprises and VCs.
Firstly, brands are now expected to create a consistent, cohesive experience across multiple channels, both online and offline, with an ever-increasing focus on the former. Customer experience and the digital customer experience are rapidly becoming synonymous.
The sheer volume of customer data has also reached new heights. As a McKinsey report put it, “Today, companies can regularly, lawfully, and seamlessly collect smartphone and interaction data from across their customer, financial, and operations systems, yielding deep insights about their customers … These companies can better understand their interactions with customers and even preempt problems in customer journeys. Their customers are reaping benefits: Think quick compensation for a flight delay, or outreach from an insurance company when a patient is having trouble resolving a problem.”
Moreover, the app economy continues to raise the bar on user experience, and end users have less patience than ever before. Each time Netflix displays just the right movie, Instagram recommends just the right shoes, or TikTok plays just the right dog video, people are being trained to demand just a bit more magic.
The net result is that customer-centricity has evolved from being an aspiration to an expectation. CX has transformed from an overlooked, supporting role (often confused with post-purchase customer support) to a real, strategic revenue driver. According to the Digital Trends 2021 report by EConsultancy and Adobe, more than 70% of CX leaders — organizations that have shown a strategic commitment to CX in the past five years — were three times more likely to have “significantly outpaced” their sectors than mainstream organizations.
Companies that have upped their CX game tend to have four common attributes:
Commitment at the very top
Unless senior executives rally the company around the customer perspective as a leadership objective, building a culture of customer empathy won’t happen.
CX can’t be thought of as a special project or the responsibility of a single function, such as user research. It needs to be a way of life. Everyone who works on developing, marketing, selling and supporting products should commit to learning what customers actually think and contribute to a virtuous cycle in which customers become the sole source of truth.
Stewart Butterfield, CEO and co-founder of Slack, captured this sentiment in a Medium post in 2014. “Understanding what people think they want and then translating the value of Slack into their terms is something we all work on,” he wrote. “It is the sum of the exercise of all our crafts.”
Recognizing that data is necessary, but insufficient
Though today’s businesses are swimming in customer data, they often don’t know how to best use it. Most know little about where all this information resides and how to break down silos across the enterprise to extract actionable insights. Collecting data — clicks, conversion stats, email response rates, NPS, etc. — is only the first step in telling the story of customer needs and wants.
It is critical for companies to understand that aggregated data is merely one window into the customer experience. Contextual tactics that yield human insights, such as watching videos of customers using a product, are invaluable in understanding and enhancing CX.
Knowing when to build or buy
Companies at the lower end of the CX maturity curve tend to think that they can start to move faster by building in-house CX tooling. “We own the data,” the thinking goes, “so why can’t we build the tooling?”
A company can spin too many cycles with that approach, despite the fact that many SaaS companies have emerged with helpful solutions for this effort. Why not use them?
Hunger to test and learn — quickly
Not only will consumer expectations keep evolving, they will keep evolving at an accelerating pace. Mistakes are therefore inevitable. Instead of moving slowly to avoid making mistakes, companies should be prepared for those mistakes by implementing the tools and processes required to capture and digest feedback in real time, on an ongoing basis. Nailing CX is an inherently iterative process.
These four qualities can go a long way toward helping businesses establish a CX mindset and execution strategy that makes customers feel loved. Companies not up to the task will likely go the way of the Roman Empire.