Published: 18 Oct 2012
Does your organization have a chief customer officer? If not, you’ll most likely want one in the coming months, especially if your company is in a high-touch industry like finance or professional services.
There are about 100,000 customer experience management (CEM) professionals in North America, according to Bruce Temkin, managing partner of the Temkin Group, a Newton, Mass., consulting firm that specializes in the burgeoning customer experience field.
Hail to the chief
What is a chief customer officer, and where does a professional like this come from? In most cases, chief customer officers are cultivated inside the company, experts say.
In a survey of 200-plus large businesses, the Temkin Group found only 7% of companies are truly customer-centric, while most are trying to move toward that goal. Nearly six out of 10 have a senior executive leading customer experience efforts, and the average number of customer experience employees per company is seven.
Bruce Temkin, CEO of the Newton, Mass., consultancy, said customer experience management (CEM) professionals come from many backgrounds, including marketing, customer support, sales and operations.
"The growth of [CEM] professionals is primarily in medium and large companies," Temkin said. "And there are definitely some industries -- retail, financial services, insurance -- where there is a greater focus on customer experience management."
Forrester Research Inc. in Cambridge, Mass., recently asked companies that claim to have customer experience executives about their CEM efforts. The survey found that 30% of the companies used the title "chief customer officer," while 15% employed a "chief client officer" and another 10% a "chief experience officer." The remaining 45% used a wide variety of titles, such as chief customer advocate, chief customer process officer or chief customer success officer.
The most common immediate background for a chief customer officer is division president or general manager; marketing, operations and sales were next in line. Only 10% came from the IT department, and only 9% came from product development, according to Forrester.
Almost 60% of large companies -- those with more than $500 million in annual revenue -- have a senior executive in charge of customer experience efforts, although they may not boast the official-sounding "chief customer officer" title, according to a recent Temkin Group survey.
But even though interest in CEM is clearly on the rise in corporate North America, it has not yet translated into a high level of expertise. For most companies, CEM is still an emerging field in which few organizations excel.
The Temkin Group’s report The State of CX Management, 2012 found that only 7% of North American companies have a strong grasp of CEM today, whereas 35% of companies are in the lowest stage of customer experience maturity. That said, most companies have high ambitions; 59% of respondents state that their company’s goal is to be an industry leader in CEM within three years.
That’s a lot of leaders.
According to the Temkin Group, organizations can call themselves strong CEM practitioners when their performance metrics, employee incentives and corporate cultures are aligned and focused on providing great customer experiences.
Customer experience defined
One basic problem in CEM is this: Companies often struggle to define precisely what customer experience management means or how to determine which aspects of a customer experience are most important.
According to consultant Marc Mandel, director of business development and client strategy at the Strativity Group, a customer experience research and consulting firm in Hackensack, N.J., the goal of CEM is ensuring that customer expectations are continually met or exceeded.
Mandel says that value proposition must be present at "every touch point along the customer journey," starting with first contact to post-sale engagement, future marketing, and sales and service interactions.
Satisfied customers are likely to buy more from you in the short term, tell their friends about your products and become loyal, permanent customers over the long term. But making customers happy requires more than simply addressing complaints. While fixing customer problems is important, it won’t produce customers that love you more than your competitors.
Maria Gendelman, chief culture officer at the North Jersey Community Bank, said consistency is a key attribute of a good customer experience. In her case, that means consistency in bank products, materials, processes and the treatment a client receives.
"To sustain growth we have to ensure consistency [at] our branches, in everything done behind the scenes and in everything related to how we service our customers," Gendelman said.
Consistency and credibility are important aspects of getting customers to commit to a business relationship, agreed Kate Leggett, a customer service strategy analyst at Forrester Research Inc. in Cambridge, Mass.
"CEM is not about delivering a Disneyesque experience. It’s about knowing who and what the company is, and making sure that good experiences are reproducable across all touch points of customer lifecycle [including] researching, purchasing [and] all the interactions you’ve had with the company after you’ve bought the product," Leggett said. "Customers want the same product, the same conversation [and they] want the company to know who they are."
For more on customer experience management strategy
Read why higher wages lead to good CEM
Learn how an effective CEM strategy boosts sales
For an online retail company, a good customer experience might mean a uniquely entertaining and easy-to-navigate website or a generous return policy. For an insurance firm, it could mean knowledgeable, friendly service reps, a website that provides prompt status updates of claims being processed and extras like complementary snacks and videos to watch while waiting -- maybe even a free car wash and wax with every renewal.
"Customer experience is turning what you already do into an experience," said Denis Pombriant, CEO of Beagle Research Group, a Stoughton, Mass., consulting firm. "Look at Dunkin’ Donuts and Starbucks. Both sell good products, innovative coffee drinks, but Starbucks is selling experience. It has nicer tables [and] Wi-Fi."
Unlike CRM, CEM goes beyond the marketing, sales and customer service interactions with a customer to include the entire customer lifecycle.
"Customer experience management aims to define how the customer, from his point of view, experiences an end-to-end relationship with a company," said Jeanne Bliss, founder of CustomerBliss, a Los Angeles-based customer engagement consultancy.
But companies have trouble creating an end-to-end relationship, the business-consumer bond that crosses many departments and territorial boundaries.
Each of those departments has its own categories and taxonomies for defining a customer experience, its own processes for dealing with problems, distinct IT systems (often with their own databases), separate management hierarchies and usually a sense of territorial infringement when forced to work with other departments.
"If a customer calls the contact center with a problem that originated in the back office, the contact center may say, 'Hey, it’s not customer service’s fault. It’s the back office,' " said Art Hall, manager of business consulting for Alvarez & Marsal in Atlanta. "But the customer just sees it as one company."
Rewiring all of the IT and business processes as well as integrating data and employee teams is a huge challenge, especially for large companies that must focus resources on integrating their existing enterprise, social media and contact center applications and databases. While CRM software was intended to integrate marketing, sales and customer service, CRM applications have instead become silos themselves, with little linkage to other IT systems, according to Bliss.
"CRM often leads to conflicting messages," she said. "For instance, an insurance agency [sends] out a pitch to a customer to upgrade their policy while on the same day another part of the agency sends that same customer a notice of late payment and policy cancellation."
To integrate processes and increase collaboration between departments, CEM experts recommend assembling a cross-departmental team of people charged with focusing on customer experience and breaking down those silos. Those employees can provide the diversity of backgrounds and perspectives as well as the connections to the other departments that are needed to do real collaboration.