“A very small increase in customer retention can yield a huge impact on profitability.” Today’s guest, Rob Markey, reminds us of this important concept which he attributes to Fred Reichheld — both of whom co-authored the book, The Ultimate Question 2.0, How Net Promoter Companies Thrive in a Customer-Driven World. Rob Markey is a partner at Bain & Company and leads the customer strategy and marketing practice.
In this episode, we talk about the evolution of both customer experience as a holistic experience and of the chief experience officer and chief customer officer roles over the past few decades. Additionally, we chat about what we look forward to seeing in the future of CX and how this should affect your company’s growth and leadership.
7 Customer Experience Insights You Can Apply to Your Organization
Like myself, Rob has seen the evolution of customer experience grow from the initial perception of customer service to a more holistic view of customer experience, inclusive of employee experience. As a leading CX practitioner, Rob shares some general wisdom and advice based on his own observations from being in the field.
Here are some key takeaways and insights that we discussed regarding CX evolution:
- Employee experience is CX. Finally, customer experience and employee experience is starting to be looked at as a holistic experience that should be delivered by people who are energetic, enthusiastic, and creative about what they can do on behalf of customers.
- There are methods to prove the ROI of CX investments, find a method that works for your company. Applying science to customer service and experience can help you yield a huge impact on profitability. Unfortunately, in some places, there’s still a lack of trust in the metrics and cost-benefit analysis that experience officers are putting against investments they’re proposing to the C-Suite. There’s still a need to raise the game on the science.
- Spend time determining your customer lifetime value. Once you decide to invest in understanding your customer lifetime value, you’ll be more informed of how your customers became your customers and the elements of the journey that they went through to make their first purchase or develop a relationship. This type of information will help you put together the narrative around your brand’s CX.
- Metrics tools are great but don’t forget about the human element. As business leaders and practitioners, we tend to get fascinated with a tool, metric, or approach and lose the purpose behind what we’re doing. A holistic approach is required to get real results. There’s a human at the end of all of the decisions and interactions we’re making, and though we have tools to help us, it’s still the human element and thoughtfulness that helps us connect to our customers and provide a worthwhile experience.
- Social media has ushered in urgency. The advent of social media has expedited the need to implement better customer experience and service for many organizations. Customers now have a megaphone in their hand and can easily leave negative reviews or comments on social media. They can also use these platforms to just as easily sing your praises.
- The CXO or CCO should be an active, senior role that sits at the table with the CEO. For those who consistently listen to my podcast, you may have heard about the lucky instances in which the CEO recognizes the need for hiring a CCO or CXO and has this person report to them directly, but as Rob explains, this is not always the case in a lot of large organizations. The CEO should be willing to put their weight behind the role, the decisions, and investments to make this a successful position for the company.
Understand How to Develop Customer Loyalty
In this conversation, Rob also addresses the importance of leadership believing that earning the loyalty of customers and employees is central to the strategy of the business. If those who are leading the transformation work don’t believe that there’s both economic and strategic value to earning loyalty, there won’t be much movement in the process. It will ultimately become a very frustrating experience for the team.
Rob breaks down a formula for building a roadmap to help your organization build customer loyalty:
Roadmap to Loyalty Leadership:
- Establish the baseline of the economic value of improving relative to the competition.
- Clarify what actions will be required as an organization to close the gap versus the aspiration.
- How much of this is improving price?
- How much of it is improving product features and benefits?
- How much of it is delivering better service?
- Be clear on how far away you are from your aspiration, what it would be worth to achieve it and what are the most important actions you can take over the next 3-5 years to get there.
- Determine what capabilities you’ll need, the people, the skills, and even partnerships that can help you deliver against your actions to achieve your aspiration.
Overall, you need to get a real understanding of where your company stands versus competition in the eyes of customers. You need to know the worth of the duration of customer relationships, the share of wallet of those customers that you capture, the number of occasions you capture, and the value of the recommendations that they make to their friends. And, don’t forget this – you should know the value of the reduced cost to serve that comes from having happy customers who aren’t encountering problems. If you don’t have a clear leadership team perspective on what it could be worth to achieve much higher levels of customer and employee loyalty, you will have a hard time getting them to invest behind the things necessary to get there. Proving there’s a growth strategy is a fundamental portion of this work.Proving there’s a growth strategy is a fundamental portion of leading customer experience work. - @rgmarkey #CX #CustExp Click To Tweet
What Do You Know Now That You Wish You Knew Then?
Rob shares some responses from leaders who were at an NPS Loyalty Forum event (I was in attendance as well), where Rob asked the same question. Here, he shares some of the responses he received:
- I wish that we had put more into establishing the economic value of improving … our leadership team said that they believed, but then when it came time to put money behind it, or when we hit the next downturn or the next economic blip, it was one of the first things cut.
- I wish that I’d had my CFO lead the analysis instead of trying to present it to them.
- Instead of just focusing on my own customers, I wish that I had instituted some form of competitive benchmarking.
- Focus more on your own people and teams. Focus on clarity of communication and giving employees a voice and ability to exercise their own judgment in serving customers.
Lastly, Rob leaves us with this nice little reminder that you shouldn’t let perfect get in the way of good. CX transformation is something that affects the whole organization and will take time – it won’t just happen overnight, so spend some time being okay with doing good and making improvements along the way.
About Rob Markey
As head of the firm’s Customer Strategy and Marketing practice, Mr. Markey is an expert in customer and employee loyalty, new product development and customer service strategies. He has extensive experience with direct marketing, new customer acquisition and cost reduction for clients in the retail banking, credit card and insurance businesses.
Mr. Markey leads the NPS Loyalty Forum, a group of approximately 45 senior executives from loyalty-leading companies around the world, such as The Vanguard Group, American Express, Telstra, LEGO, PwC and Intuit. He has published numerous articles on various aspects of customer experience and loyalty in publications such as the Harvard Business Review. He is the co-author of The Ultimate Question 2.0: How Net Promoter Companies Thrive in a Customer-Driven World, by Harvard Business Review Press, a New York Times and Wall Street Journal bestseller.
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