Gartner VP: Why CMOs and CIOs must band together to make CX a discipline
- 25 June, 2019 06:54
Don Scheibenreif, Gartner
CX is not the same as customer service, nor is it another name for user experience, CRM, technology or digital transformation, according to Gartner VP distinguished analyst, Don Scheibenreif.
“Think of it as a discipline to drive customer satisfaction, loyalty and advocacy,” he said at the recent Gartner CX and Technologies Summit in Sydney.
What’s more, CX can is no longer as a nice-to have, it’s a core part of business and within the top five priorities for every person sitting on the c-suite. Which means it’s an imperative for both CMOs and CIOs, he said.
With this in mind, CMO caught up with Scheibenreif to talk about the trappings of a solid CX discipline, digital transformation in a world led by experience, and where the CMO and CIO fit in this picture.
You positioned CX as a discipline on stage, but how many organisations do you realistically believe see it this way today?
Scheibenreif: Once you get to the middle stage of CX maturity – in other words, you’re not starting and you’re not an expert – that’s when you start to recognised customer experience as a discipline. That’s where you have a lot of different departments with an organisation viewing the customer the same way. There is a single view of the customer, and there is focus and direction. And certainly at the mature levels, it’s recognised as a discipline as well.
In CMO’s recent State of the CMO research, one in five respondents told us there’s still no CX owner in their organisations. Do you see that as a problem?
Definitely. Even if it’s a self-governed group with a leader, that’s still a step in the right direction. Our research shows CX is a top priority for almost every role in the c-suite. But if one person isn’t leading this, how do you get that type of single view of what needs to be done? That’s why you have so much siloed activity.
Some organisations are dealing with it by appointing a chief customer officer. In other organisations, it’s the CMO, or sales chief overseeing it.
You mentioned CX as the third-highest priority for Australian CIOs. Is the CIO’s interpretation of what CX is the same as the rest of the c-suite and CMOs? Or is there still misalignment?
It’s true one of the big issues is people define CX differently. Which is why on stage I articulated what it’s not. In the absence of even a common definition, you’re going to have that kind of disconnect and uncoordinated activities.
It’s key to have a common view of what CX is. It may not be Gartner’s definition, but you need to know what CX means for your organisation. That definition is an essential part of moving in one direction. And if there’s an absence of a chief customer officer, then perhaps it’s the marketing chief who leads a CX council, or the head of customer service. A lot depends on who wants to take on that lateral leadership responsibility.
When I used to work for Grainger, a large B2B distributor in the US, I reported to the VP of marketing. One of my peers was head of customer experience, but more focused on customer service. That’s where it commonly gets segregated. Once you see CX as a broader, bigger idea, then it’s easier for a c-suite leader to take it on.
Another thing I’ve learned studying this is the prevalence of digital channels makes it harder to make experiences consistent. Equally, it’s easier to measure what’s happening. We’re in an in-between period now of tackling this.
Gartner’s CX maturity model shows most organisations sitting in stages one and two. Is there a common stumbling block to moving to stages three and four?
I’d say it’s the maturity of how you’re measuring CX. Generally, in getting from stage two to three, there’s more money and organisational alignment required. If you can’t demonstrate the value you’re driving at least initially from projects, getting more money and resources become problematic.
My colleague, Michael Chiu, has shown only 12 per cent of organisations are able to measure the ROI of CX, which is an indicator of how far there is to go. In most organisations we talk to, money has a lot to do with it. It may not be an ROI measure – it may just be some measure of moving in the right direction. That, to me, is a big stumbling block.
How much of demonstrating CX is external versus internal measurement?
That’s going to vary. My feeling is very service-intensive businesses have to place much more emphasis on employee engagement. The people are the primary delivery vehicle for the brand proposition. In contrast, if it’s more a product-oriented business, it’s becomes more about the quality metrics.
Gartner has built a hierarchy of metrics, almost like Maslow’s hierarchy, where you pick one or two at the executive level, plus a couple at the operational level, then a few more tactical measures, as a way to balance things out. I do believe everything we’re seeing is that CX improvement measurable. It takes effort but you can do it.
After money, the other stumbling block is culture. We know from our CIO Survey research, that the biggest barrier to digital transformation is culture. Getting people to think they can deliver a better experience just isn’t getting the focus.
CX shouldn’t be confused with digital transformation of a business. How should digital transformation should be considered today?
Our definition of digital business is the creation of a business that would otherwise not exist without information and technology. Digital transformation is that process of becoming a digital business using the latest technologies. It’s overused as an example, but Uber can’t exist without digital technology; taxis, however, do exist.
When we as Gartner talk about transformation, we’re talking about moving beyond technology to optimise or make what you do better, and using it to create entirely new business models. People are confusing this is because every consulting group and technology company is calling every product ‘digital transformation’. Very few people are transforming; most are optimising.
Do organisations start by optimising, then progress to transformation?
I think it is, although there are a couple of industries, like automotive, where you have to be doing both. Ford for instance, is cutting the majority of its passenger cars down to two models - that’s an optimisation exercise that can then fund transformation activities. Most industries are still safe in the optimisation zone, but if someone like Amazon decides to enter their market, they have to think differently about it.
What we recommend is a ‘digital ambition discussion’ – what does digital mean for the future of this enterprise? This requires the CEO and direct reports to be in the same room, hashing it out. If they don’t come to some type of tacit agreement, then every department will interpret it differently. Then the CIO is, rightly or wrongly, at the mercy of the wishes of different departments around the executive table. It’s difficult as people are struggling with change.
In the absence of a c-suite level discussion, you have the CIO and CMO thinking differently about what digital means for their organisations. I’ve seen it work when both are at the table with their peers and CEO and work through it. That’s the leap.
How do you position digital transformation against the CX story we’re all talking now?
CX strategy has to be an outgrowth of the corporate digital strategy. CX is not the same as digital strategy. Certainly, CX has to be aligned to the corporate digital strategy but as I’ve just mentioned, most organisations don’t have that; they have a collection of projects. Organisations with a digital corporate strategy that connect CX into it are fine. Those still operating in silos remain a mess. Financial services and healthcare have been at the forefront here.
What technologies are you particularly excited about on the CX front?
The most exciting for me are the conversational platforms – Cortana, Alexa, Amelia, and the idea of virtual personal assistants. The bigger issue is the fact these technologies are adapting to us, versus us adapting to these technologies. It sounds very Star Trek, but it’s a very exciting development in our relationship with technology.
When I think about CX, I think about the role these assistants play in our lives and how we make decisions as customers. When I ask Alexa to do something for me, it creates a piece of information that can then be leveraged to do something different. And as people get more comfortable with these types of technologies, they get smarter.
The future step is what happens when ‘things’ become customers? The evidence is there that more and more things, backed up by intelligent systems, are taking up the behaviours of us as customers. The question for us all then becomes: How do you market to a thing?
While humans make decisions based on emotion, things don’t have emotions, so how do you deal with that? We have been exploring those aspects of how CX changes when you customer is a thing. For CE manufacturers, for example, you may end up with the unique opportunity of manufacturing your own customers.
In light of these forces, what advice would you give CMOs to help progress their CX approach?
I’d work really hard to build a relationship with the CIO. Find common ground and things you can work on together, where you each bring new skills to the party. A big part is having the right liaisons, such as the right IT person being part of the CMO’s management team. It’s an easy thing to do and helps drive alignment.
Then you could focus on process improvement, the website, customer data or analytics – pick one to start and develop a cross-team relationship and approach. You can come up with different metrics to govern the relationship, but I think if you have both an enlightened CMO and CIO, you’re halfway there.
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