Customer engagement: The past, present and future
- 03 July, 2015 09:40
The future of customer engagement will see roles such as director of sales and marketing removed in favour of cross-functional teams and empowered employees that deliver ‘digihuman’ experiences, according to Bain and Company’s customer experience expert.
Speaking at The Holla Agency’s Sydney event this week entitled ‘Customer Experience: The New Marketing Agenda’, Bain and Company manager, Stanford Swinton, detailed the past, present and future of customer experience, and its progression from a front-line system to a whole-of-business discipline.
Historically, most of the debate was around the “metric wars” and whether effort or satisfaction was a better measurement over NPS, he said.
“Over time, there came standardisation,” Swinton said. “Customer experience also used to a service experience, and was focused on getting those naughty contact centre staff to do the right thing. In terms of the market understanding, measurement and insight, it was housed and maintained by market research.”
Today, customer experience is accepted as a commitment to the customer being the most valuable asset not on your balance sheet, Swinton said. It’s increasingly being accepted both by organisations as well as stakeholders and analysts studying the market, who recognise customer advocacy as impacting long-term profitability.
“We’ve moved from a metric to a system, and connecting that through to continuous impact,” he said. “It’s no longer just a front-line role, and advocacy leaders are extending through the organisation, creating line-of-sight so all employees can see their impact on the customer. You also see the rise of the chief customer officer and an organisation within the organisation that keeps the company honest. “It is also informing investment on offer of the business and advocacy.”
Swinton noted the number of ASX-listed company CEOs now positioning customer advocacy as central to their strategy and success of future business, including Telstra’s David Thodey, NAB’s Andrew Thorburn and AMP’s Craig Meller. According to Bain and Company research from December 2013, 70 per cent of Fortune 500 companies in the US were also reporting customer metrics. And increasingly, the linkage between customer experience and the economics are there to prove the point, he said.
“The current battleground is how you win in this space today, and really it’s about creating robust systems for improving customer experience,” Swinton continued.
The four key ingredients to achieve this are: Unambiguous leadership commitment to better customer experience, with the leadership team on the hook for some sort of customer metric; continuous improvement capability; motivated and supported employees; and strategy in uncertainty.
Read more: Bain and Company: Treat customer advocacy as a management system
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The future of customer experience is all about employee empowerment and cross-functional collaboration, Swinton said.
“Employees are your number one untapped resource you have and there’s a lot of latent potential, particularly as millennials take over in the workforce,” he said. “We will see more employee empowerment introduced to drive innovation.
“Secondly, there will be an organisational overhaul realigned to the customer needs. You won’t have a director of sales or of marketing in the future, you need to reorient the way you do works and your teams need to be cross-functional.”
Organisations will also have far richer and experiential data, such as location-based retail data combined with financial services data, Swinton said.
“Trends will also no longer be the predictor of future performance – you can’t rely on five-year data, two-year data; the change is going to be that quick,” he said. “And there will be digital compression of the customer experience – the awareness, explore, convert, buy and get set-up to use a product is being compressed down to a few clicks on an app. That will again challenges the organisational alignment around these silos of the customer lifecycle.
“The competitive advantage is in your ability to respond quicker to customer expectations,” he added. “You have to embed the customer experience into the DNA of your company.”
Swinton also advised organisations focus on a few select battles to win. “What we see is clients struggling with the pace of change and the ability to cut through to the few that really matter to their core business, and focus on those differentially,” he said.
“You can’t find the wave of customer expectations….and make sure you provide ‘digihuman’ experiences – the efficiency of the digital experience with the quality of a human interaction.”
Foundations to propel your customer-centric plans forward
Swinton said the ticket to play today is having customer clearly established as a priority for your business, with senior leadership sharing accountability and ownership for that strategic priority, and cascading those values down into line management.
“That means having a performance culture that will enable you to be more customer-centric over time,” he said. “You also need to have a track record of being able to commit to and sustain long-term change over your organisation.
“Customer experience is not a project or program, it’s a new management discipline and way of working that needs to persist in an organisation, so ongoing commitment is very important. And you need an organisation that accepts challenge and the need to change, and can make those tough decisions between short-term profitability and long-term customer advocacy. That’s where we see many companies fall over.”
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