Lots of organizations are jumping on the customer experience (CX) bandwagon. In the Temkin Group report, The State of Customer Experience Management, 2014, we found that nearly six out of 10 large companies want to be their industry's CX leader within three years.
In many cases, that level of ambition is warranted. Our research shows that customers who encounter a good experience are much more valuable than those who have a poor one. Looking across 19 industries, we found that those with the better experiences are almost six times more likely to buy more form a company, nine times as likely to recommend a company to a friend or relative, and five times as likely to forgive a company if it delivers a bad experience in the future.
But, what does it take to deliver and sustain industry leading CX? A lot more than just jumping on a bandwagon. And it often requires more significant changes than what companies are committed to making.
The Six Stages of CX Maturity
Companies can improve CX by making some superficial changes, but sooner or later those improvements disappear. Why? Because the experiences that a company delivers is a reflection of how the entire organization operates. If you don't change how your company operates, than most changes will only be temporary.
We've found that companies go through six stages of CX maturity on their paths to building a customer-centric organization:
- Stage 1: Ignore. Not every company has been bitten by the CX bug. In this stage of maturity, companies don't view CX as a strategic imperative. Key obstacle to advancement: Generating awareness and interest.
- Stage 2: Explore. Companies typically start their journey when a senior executive decides that CX is important to their business success. This initial stage of CX activity usually starts with the establishment of an ad-hoc group to understand what the company needs to focus on. Key obstacle to advancement: Gaining alignment of key executives across the organization.
- Stage 3: Mobilize. Once companies make a commitment to CX, they typically appoint a senior executive to run their CX efforts and begin to build a full-time CX staff. In this stage of maturity, companies often invest in customer journey maps and build voice of the customer programs. Key obstacle to advancement: Making trade-offs against other competing priorities.
- Stage 4: Operationalize. With a CX organization and cross-functional governance in place, companies begin to redesign their operating processes and make widespread changes to how the business runs. In this stage of maturity, firms develop CX metrics and actively communicate with employees. Key obstacle to advancement: Overcoming inertia of middle managers.
- Stage 5: Align. As a company takes on customer-centric behaviors, it needs to put in place structures to reinforce and sustain them. In this advanced stage of CX maturity, companies develop strong CX measurements and develop HR practices that reinforce the good CX behaviors. Key obstacle to advancement: Staying focused on customers as other priorities and issues arise.
- Stage 6: Embed. In the final stage of CX maturity, companies don't focus on CX as an independent activity. Great CX is a byproduct of the company delivering on its strong brand mission. Key obstacle to advancement: Maintaining and renewing the brand identity as the company evolves.
The Chasm Between Fluff and Tough
More than three-quarters of large organizations that we studied are still in the first three stages of CX maturity.
One of the key reasons for the lack of advancement is a chasm between the lower levels and higher of CX maturity, what I call the difference between fluff and tough.
The early stages of maturity (fluff) focus on CX improvements around the business without addressing underlying operational and cultural issues. The higher stages of maturity (tough) are about changing how the company operates and creating a more customer-centric culture.
There's nothing wrong with theflufflevels of maturity, but many companies will not have the commitment and fortitude to take on thetoughactivities. To make the move up to the tough levels of maturity, companies need to make changes to their organizations across what Temkin Group calls the four CX core competencies:
- Purposeful Leadership: Operate consistently with a clear set of values.
- Employee Engagement: Align employees with the goals of the organization.
- Compelling Brand Values: Deliver on your brand promises to customers.
- Customer Connectedness: Infuse customer insight across the organization.
If you want to be a CX leader in your organization, then you will need to make the jump from fluff to tough.