Companies plan to invest heavily in customer experience (CX) in the next few years. In fact, according to a recent study, 60 percent of marketers already increased their CX budget this year.
Money alone, however, won’t improve the experience customers have with your brand. Operationalizing CX and measuring its impact to the bottom line are important steps to scaling CX programs and accelerating buy-in.
For concrete ideas on how companies can scale their CX programs, we recently sat down with Kia Puhm, a Toronto-based executive with over 22 years of experience in customer success, marketing and software engineering. Puhm’s leadership experience includes stints at Oracle, Eloqua and Adobe. She is now the principal of K!A CX Consulting.
During our chat, Puhm talked about the role of customer experience, the steps to developing profitable business models, and the impact of customer intelligence on the overall customer journey.
As a CX pro, what gets you out of bed in the morning and what keeps you up at night?
What gets me out of bed in the morning is figuring out how to create the win-win-win business model: customers winning through results with the product (driving loyalty), company winning through growth (via retention and then expansion), and employees winning through increased job satisfaction and career development (by being successful with clients). I love creating multi-win situations and the elegant solutions that make them possible.
In my previous roles as chief customer officer, what kept me up at night was figuring out how to improve retention and scale elegantly, which was all about determining how to be more proactive, automated and smarter about understanding the customer and their journey.
What does the CX organization look like? Who owns CX?
The CX function is part market research (understanding the customer), sales (retention & expansion by making them successful), services, education, support and ongoing success (customer success and account management). It is also about driving change within the company to become customer-centric and ensuring that other departments are aligned to the customer journey for efficiency and scale.
An organization should reflect a structure that will successfully support customers through their journey. So for example, if a vendor is selling to a well-established industry and the product is very intuitive and easy to use, a CX organization may slant more to an industry/sales-led type approach and consist more of account managers and industry experts that help operationalize the software within the business. If a vendor is defining a new market and needs to evangelize a new way of doing business, then the CX organization will need visionary-type customer success managers that can help customers operate in a new and yet undefined manner.
That said, a typical CX organizational structure consists of the post-sales functions that drive initial and ongoing adoption of the product: professional services (onboarding as well as post onboarding), education, customer success, support and customer enablement and marketing. It’s good practice to include account management within CX and have the chief customer officer own all retention as well as expansion revenue in the known install base.
What does success look like in CX and how is it measured?
Ultimately, success looks like healthy revenue growth, which is typically a balance between retention, net dollar renewal (expansion, NPS) and customer satisfaction, together with operational efficiency (to ensure that the company is not just “buying” revenue through an army of resources).
An organization needs to have a repeatable, disciplined and scalable approach to driving revenue, otherwise it will not succeed in the long run. Organizations need to build customer centric, agile business models that can respond and adapt to their evolving customers. This is the work I do with my client base: I help them build business models that are tightly aligned to the customer and their journey so that they are set for scaling, and as disruption-proof as possible.
Where does customer intelligence factor into CX decision making and budget?
Customer intelligence factors greatly into CX. Understanding your customers, how they operationalize your product, how they use it, and what does and does not work is the required input into a customer-centric business model. This model facilitates the informed decision-making needed to adapt operations that efficiently and proactively serve an ever-evolving customer base.
Can you give us three predictions for the future of CX?
Three things come to mind. First, CX will be a requirement for business, not a nice to have. Companies that do not understand their customers will not survive. It will no longer be a competitive differentiator but table stakes to stay in the game. CX will be required to thwart the threat of churn and disruption (which will increase).
CX will continue to be more about business solutions and outcomes than the product. Software vendors will be responsible for delivering business practices that drive their customer’s results, vs a product that customers need to learn how to operationalize within their environment.
Companies delivering the best customer experiences will have figured out how to use customer intelligence in such a way that they will operate in a solely proactive manner. They will recognize when customers are heading off the rails and intervene early to get them back on track.
Our thanks to Kia for this very insightful information.