How do you delight customers in a connected world where everyone expects instant and personalized solutions to their problems? That’s an $80 billion question, judging by how much companies are expected to invest in customer relationship management (CRM) software by 2025, according to Grand View Research.
Understanding what defines—and how to create—great customer experience today is the underlying question that Bruce Temkin has devoted most of his career to. In an age of 24/7 connectivity, it’s a much more complex discipline than it was just 10 years ago. Workflow sat down with Temkin, head of the XM Institute at Qualtrics and author of the Experience Matters blog, about how he defines and measures customer experience, and how companies can improve their CX game.
How do you define customer experience, and how has it changed over the years?
Customer experience is simply the perception that customers have of their interactions with an organization. Customer experience has existed forever. But it’s become a discipline, more of a focus that professionals understand and are able to apply practices against, similar to what you’d see in engineering, accounting, and marketing. They all have specialized expertise that they apply to situations in a repeatable fashion so they can have repeatable results.
Disengaged employees can’t create engaged customers.
What’s really new is that it’s become a repeatable discipline. How we treat it is new. How we think about it is new.
What are the biggest customer experience challenges facing companies today?
The notion of repeatability is the biggest challenge. Many times, companies look at the customer experience and say “OK, we can improve that experience,” but they don’t put in place an environment where you can do that continuously.
What many companies do is try to fix an experience problem as opposed to building those capabilities—not thinking about this as a set of capabilities an organization needs to have, and just focusing on trying to fix or improve isolated experiences.
How important is segmentation so you can design customer experiences with more granularity and personalization?
The better we can be at understanding the experience we’re delivering for specific customer segments during specific journeys, the more effective we’ll be at creating great experiences.
For example, with measurements like Net Promoter Score (NPS), if we don’t understand what an NPS score is for a particular type of customer, and we just have an average across all of them, then we really don’t have the insight to understand and fix things.
The better companies can be at understanding the specific experience that we’re delivering for specific segments during specific journeys, the more effective they will be at creating great experiences.
What’s the best way to show a tough-minded CIO or CFO the value of great customer experiences and the investments they require?
The more you focus on journey-based approaches, the tighter the link is between the investment and the return on investment. If we invest in the journey, we’ll better understand what the NPS improvement will be and how to invest in making that journey better. As we get tighter on that, we get a better linkage between the investment and the ultimate ROI.
What other metrics should companies use to measure success?
It’s based on what you want to achieve. Customers have a perception of their experience, which leads to attitudes, which lead to future behaviors. NPS is not a good measurement of perceptions, but satisfaction tends to be a pretty decent one. We have the Temkin Experience Index, which we published for eight years, and now we’re calling it the Qualtrics XM Institute Experience rating. That measures success, effort, and emotion, which are the three components of perception.
How do you instill a culture of customer experience with employees?
This goes back to repeatability of the system for delivering customer experience. The “system” isn’t just a CRM or CSM solution. It also includes employees, stakeholders, and a lot of other people who, if they think of customer experience as some sort of black box, they can’t be a part of it.
Execs have to be able to explain it to employees so they can support it, and we have to be able to design experience around them so they’re meaningful for the actual customers. Disengaged employees can’t create engaged customers. That’s why we see lots of links between the customer experience and the employee experience. I would challenge you to find a place where there’s a great customer experience but a poor employee experience.
Also, companies that have really good customer experiences tend to be purpose-driven organizations. If you look at a company that’s leading in customer experience, I’ll bet you that the leaders aren’t spending all of their time talking about revenue growth and profitability. They’re talking about how important it is for their organization to deliver something that’s much more meaningful.