I recently spoke with Jack Springman about the state of CX, why customer-centricity isn't helpful or actionable and the value of technology in customer experience.Jack is a consultant with experience in customer strategy, data enablement and innovation. He specializes in helping organizations increase the value they create for customers and translating that into better business outcomes.
Jarrod: In the past, you've talked about being customer-curious v.s. centric. What are the key differences you see between these and how is curiosity more measurable than centricity. They sound equally abstract.
Jack: The most popular definition of customer-centricity is ‘putting the customer at the heart of everything you do’. I struggle to see how that can be actioned.
Customer curiosity is about seeking to understand whatever you can about customers. You see it with businesses putting senior staff on the frontline - in stores or at the end of phones - so they engage with people buying their products and understand their challenges. You see it in B2B sales people wanting to understand why a prospect has asked a particular question that seems a bit left field. You see it in marketers wanting to understand why a customer is using a service to complete a job-to-be-done that it wasn’t designed for.
Curiosity is more measurable than centricity - though whether you would want to do so is questionable as it could drive the wrong behaviours. For example, it could be measurable in terms of the number of questions you ask in customer interactions - though that could lead to customers feeling bombarded - or in the talk-listen ratio in your customer interactions, but this could lead to excessive passivity.
You could measure its impacts in terms of the number of ideas generated and new services introduced and the success of those services. Ultimately curiosity fuels knowledge and as Unimyra will know, measuring the quality and richness of a company’s knowledge base is tricky but you know that continual improvement is important.
So measuring curiosity is a difficult challenge but not impossible. But most importantly it can be actioned and justified with a clear causal hypothesis that the more you know about customers, the more you can create value for them.
Jarrod: How do you feel about the idea of whole company support? Is it a step in the right direction, or a short-lived gimmick? Where does it fit in your idea of being customer curious?
Jack: As highlighted above, I think it fits very well. It enables those in senior positions to have direct contact with those that they are seeking to serve. Of course they must want to make the most of that opportunity and be in questioning mode the whole time - asking themselves (and, when appropriate, the customer) the full range of who, why, what, where, when and how-type questions.
For example, who is our best type of customer and why? Why has a customer asked that? What is their desired outcome? What are the jobs-to-be-done they need to complete to achieve their desired outcome - both those that we meet and associated ones? Where else do they go for support when trying to achieve their desired outcome? When do they most need help?
Jarrod: You’ve criticized the idea of personalization and how it can be customer-centric but still backfire. I'm thinking of a famous example of Target sending a woman baby related marketing materials because their algorithm correctly guessed she was pregnant despite her not having announced it. Given how popular the idea of hyper personalization is, can you elaborate a bit more? When is it a good idea and when not?
Jack: My first question is how well can companies really personalise given they see only a small part of your life. Supermarkets like Target can do a better job than most as our weekly shop reveals a lot about us. But outside of big grocery stores, the depth of understanding to enable personalisation is much more limited. Having reviewed what Google and Facebook know about me and what they think I am interested in, I would argue that even these two behemoths lack the contextual understanding behind some of my likes and searches to be able to personalise effectively.
For a fashion retailer it is even harder, I might be a candidate for a new jacket, but unless a company is privy to all my clothes purchases, they won’t know whether I have already bought one and am now in the market to buy some shirts to go with it. For that reason we are seeing the emergence of services such as Dressipi that enable consumers to share purchases across retailers to improve the quality of recommendations they receive.
My second question is about what is being personalised - marketing and messaging or personalisation of the actual service being delivered. The risk with marketing personalisation is that it becomes about extracting value from customers rather than creating value for them - we recommend something because it has the best chance of driving a sale. It doesn’t have to be that way - if a customer curious company has sufficient understanding of me to understand the information challenges I have on my journey to my desired outcome, then they can help me overcome them by providing me with relevant information just as I need it. But this is marketing-as-a-service thinking, which is more often an exception rather than the norm.
Where I believe we will see hyper-personalisation play out is in the development of services that are unique to me. We are already seeing this in the world of insurance where highly customised policies are gaining a foothold, for example the on-demand and bespoke services provided by the likes of Trov. I think we will see this spread to a number of other sectors as the idea of an annual contract for insurance, energy, mobile phones, broadband - everything you go to a comparison site like CompareTheMarket in the UK or Verivox in Germany to buy - becomes a thing of the past. That will be a huge challenge for existing businesses as their business models and IT systems are all geared to an annual renewal cycle, but it won’t be a problem for new entrants.
Of course not everyone will want a hyper-personalised service, as the paradox of choice research undertaken by Barry Schwartz highlighted. But increasingly there will be tools available to help consumers make the most of hyper personalisation opportunities and save money while receiving the exact service they desire. These will reduce cognitive load while enabling value realisation.
Jarrod: The obsession with new technology and innovation can sometimes border on fetishism. Do you think organizations nowadays are too focused on choosing the right technology over say improving their people? I’m thinking specifically of agent experience.
Jack: It is understandable that companies are seeking to automate as much of the customer experience as possible. For most people being able to self-serve is the most convenient solution - as long as they are able to understand the options available to them and make an informed choice between them.
But all aspects of the operating model - people, organisation and culture as well as process, technology and data - need to be considered. Because there are times when more support is needed - typically at a moment of truth when a customer has a lot of emotion invested in the outcome. This could be before they make a significant purchase and need reassurance that they have taken everything relevant into account. Or it could be when something has gone badly wrong and help is required to resolve it. This is when agents are critically important to delivering a great experience.
A problem occurs in such instances if investment in processes and technology are seen as an alternative to having high quality agents. Of course technology investment should lead to a reduction in the number of agents - but the quality of those that remain need to be higher as they will be dealing with more complex problems.
Related to this, these agents need to be empowered to do the right thing. With more and more investment in technology, it could become easier for agents to hide behind processes and procedures rather than do the right thing. I think training customer service representatives in ethics - so that they do the right thing irrespective of what the procedures manual states and can justify actions on an ethical basis - will become a priority for companies that see trustworthiness as a differentiator.
Jarrod: Some CX advocates argue CX should be a C-level KPI. But for that to be true, there'd have to be an agreed upon method of measuring it. Do you think CX should be a C-level KPI and if so, what data should go into measuring it?
Jack: I definitely think that value creation for customers and the value generated in return should be C-level KPIs. It requires three steps - define how value created for customers can be measured (relative price or product performance metrics, internal process performance at a customer level), measure the outcomes (in terms of customer satisfaction or NPS at a customer level) and then track that through to the core measures of customer acquisition, retention, growth, cost to serve and profitability - again at the individual level.
How much of this you would want to share at C-Level is a fair question - you would likely just share the high level value exchange measures. But unless you have a clear understanding of the underlying drivers and hypotheses about causal relationships, your ability to change the performance on those high level measures is limited.
But I think there is broader learning that customer strategy can bring to C-Level reporting. The approach outlined above could be applied to other stakeholders such as employees, suppliers and partners. With each group you would measure and monitor the value exchange - how well value was being created and how well that value creation was being monetised for the company’s benefit. The outcome would be a stakeholder scorecard that would complement existing financial and regulatory monitoring covering shareholders and government - the stakeholders that current C-Level reporting is most focused on.
The intention with the approach outlined above is two-fold - firstly it is holistic and ensures that all dimensions of performance are being tracked. Secondly it supports causal inference - if we pull on this lever, we can reasonably predict what the outcome will be.
CX-focused reporting at C Level is important, but as CX professionals we need to be able to justify that within a broader set of measures. This is what the stakeholder scorecard approach enables. Otherwise we are just another function talking up our own importance while being blinkered to the importance and value created by the rest of the company.