Customer Experience Outlook For 2011: Lopsided Battle For Differentiation

We recently published the results of our annual survey of the members of our customer experience professionals peer research group. The group is interesting in that they’re pros: They all work to improve the customer experience delivered by their organizations.

This year, their responses are encouraging — but also very sobering.

Here are some of the encouraging data points. A whopping 86% said that customer experience is a top strategic priority at their company. More than half work at companies that already have a single set of customer experience metrics in place across the entire company, and another 20% said that their firms are considering this move. What’s more, almost as many respondents said that their companies have a voice of the customer program in place, and another 29% said that their firms are actively considering a voice of the customer (VoC) program.

At this point I’m thinking, “Fantastic! Their companies care about customer experience, and they are implementing mission-critical programs that will help them succeed!”

Plus they’re coming from a good place. When we asked our panelists how they’d describe their executive team’s goal for customer experience, 63% of respondents said that their senior executives want to be the best in their industry, while another 13% said that their execs shoot higher and want to be seen as a customer experience leader across all industries.

Once again, fantastic! These executives understand that customer experience is strategic — it’s an opportunity to win market share by differentiating!

So what’s the sobering part? It boils down to a gap between aspirations and the business discipline needed to turn those aspirations into reality. For example, only 30% of respondents said that their firm has a dedicated budget for customer experience projects, and just 25% said that employees at their firms are rewarded for delivering a great customer experience. Not to be flip, but you get what you pay for — so if you don’t pay for customer experience projects and you don’t pay for people to deliver a great customer experience . . . well, you get the picture.

The root cause of the problem starts at the top of our respondents’ organizations. More than half say that their companies don’t have a clear customer experience strategy. Like a lack of a dedicated budget, that’s a clear sign that executives haven’t taken the tangible next steps needed to make a differentiated customer experience a reality.

Where does that leave us as we enter 2011? We can confidently expect a few things.

First, companies that have a centralized customer experience team in place will move ahead of their competitors who lack such teams. Our research shows that companies with centralized teams are more likely to have a customer experience strategy, a dedicated budget, and cooperation across the organization — critical hurdles for getting to differentiation.

Second, companies with chief customer officers (CCOs) are also more likely to win out. We see that firms with CCOs are also more likely to have strategies, budgets, and alignment despite the fact that the CCO role is relatively new even at the companies that have adopted it.

So if you’re one of the companies that’s girding for battle over customer experience in your industry, here’s my parting tip: Show up for the fight with the right weapons. Those most definitely include a centralized customer experience team with a dedicated budget. And if you’ve gone as far as those armaments will take you, consider calling in the big guns by appointing a CCO.

Comments

A strategy without a budget is just hot air.

Harley, thanks for exposing the truth about what many executives label "strategic priorities." I suppose most executives (roughly 56%, in fact) will say that any worthy initiative is a strategic priority, regardless of its funding.

Your carefully directed research helps us to see the reality. And hopefully, will encourage more CEO's to make the Customer Experience a true reality!

Thanks for shining the light.

Jim

http://jlwatsonconsulting.typepad.com/my-blog/
www.jlwatsonconsulting.com

Thanks, Jim!

You got my day off to a great start!

You're spot on in that there is a lot more talking the talk than walking the walk. Hopefully that will change as we see more Chief Customer Officers appointed.

Bulls Eye!

Very Well said Harley.. The Aspirations and the Business Discipline is so symbiotic and we often tend to miss out on it and then talk about Strategic incompetencies and executions..