Investment in customer experience management has increased or remained stable since 2005 for 88% of business-to-business companies, according to the 2010 ClearAction Business-to-Business Customer Experience Benchmarking Study. As the first global B2B analysis of best practices in customer experience management (CEM), this study provides insights on the growing role of customer experience in corporations.
Three out of four participating companies say their customer satisfaction scores meet or exceed their goals; net promoter scores meet or exceed the goals of 54% of firms. A third of B2B firms say their goals are being met for market share, referral rates, differentiation, and loyalty, and half of the respondents say it’s too early to determine CEM’s impact on these goals.
Four out of five B2B firms assign overall responsibility for customer experience initiatives to a vice president or director-level executive, and one in five companies treats customer experience inputs as a determinant of corporate strategy.
The potential power of CEM is under-utilized: although more than half of company executives say that CEM is a competitive differentiator, only 24% use CEM as an influencer of major business decisions, and 20% treat CEM as a formal business process.
For more information on acheivements of B2B firms, see the full study at www.clearaction.biz/benchmarking. For the purpose of highlighting opportunities for leap-frogging current industry performance, the remainder of this article emphasizes opportunities for improvement in CEM practices.
Generally, CEM is focused on revenue-oriented programs, and it is implemented company-wide by less than half of B2B companies. For example, less than one in four companies has company-wide implementation of these best practices:
- Identifying all buying influencers within customer companies
- Analyzing lost sales
- Calculating lifetime value of customers
- Basing front-line decisions on customer experience or customer lifetime value
- Segmenting customers by lifetime value or customer experience parameters
Most implementations are within a functional area. The Service organization typically drives most of the customer well-being programs, such as complaint resolution, voice of the customer, customer touch points, and customer experience improvement. Marketing is usually the organization that drives customer intelligence, references, advocacy, loyalty, and internal branding.
Lack of cross-organizational cooperation is cited as the number one obstacle to CEM success, followed by lack of CEM strategy and weak follow-through on strategy. These issues have a greater bearing on success than resource constraints such as budget and bandwidth. With a focus on revenue-oriented programs, 60% of survey participants who manage customer experience in their companies have followed a marketing or service career path. Although CEM has its roots in total quality management (TQM), participants say that ISO 9000 / quality goals have low relevance to their CEM programs. (Semantics may have a role in this finding, as in-depth discussions with selected participants acknowledged “six sigma” relevance to their CEM programs.) Under-utilized TQM tools known to increase initiative momentum include systems thinking, internal branding, incentive pay, change management, organizational learning, quality tools, and relationship skill training among non-front-line employees.
New Mindset is Needed
Ten characteristics differentiate CEM from the common knowledge of former initiatives such as customer satisfaction, loyalty or customer relationship management. The level of understanding of these characteristics among executives company-wide was assessed in the 2010 ClearAction B2B CEM Benchmarking Study. The best understood tenets of CEM (top half of graph below) reflect aspects of customer perception measurement. The lesser known tenets describe the customer’s high degree of control in characterizing customer experience, and the need for organizations to maintain insatiable curiosity and uncanny adaptability for delivering superior customer experiences.
Here are the ten ways that customer experience is unique from customer satisfaction:
1. Perspective: customer experience is defined entirely by the customer, not the solution provider.
2. Preventive: customer experience gravitates toward the easiest and nicest methods to get and use solutions that address customers’ needs.
3. Duration: customer experience encompasses the point from which customers become aware they have a need until they say that need is extinct.
4. Dynamic: customer experience evolves with the customer’s context — the purpose and circumstances of their need, and overall experience reference points.
5. Choice: customer experience is built on trust and mutual respect for variety; share of budget is more important than loyalty.
6. Multi-faceted: customer experience is measured by functional and emotional (social and personal) judgments related to the customers’ expectations.
7. Operational: customer experience is shaped by all the contributors to an organization’s processes, policies and culture, in addition to the physical product or service associated with the customer’s need.
8. Integrative: customer experience is impacted by the degree of alignment among departments, technologies, channels, etc.
9. Anticipatory: customer experience is ongoing, where the present and future are equally or more important than the past.
10. Transparent: customer experience sees through the solution provider’s motives and intentions, and favors genuine sincerity for the customer’s well-being.
Customer experience management is a dedication to serving customer needs from their perspective. Customers make paychecks possible, so businesses exist to serve a customer need that results in a profitable revenue stream. As the dynamics in the customer’s world are constantly evolving, an insatiable curiosity about customers is a key to success. Company-wide alignment with customers prevents waste (improves profit) and prevents customer hassles (improves organic revenue growth). Marketing Operations can be a pivotal key to realizing this potential.
by Lynn Hunsaker, President of Marketing Operations Partners and Customer Experience Strategist at ClearAction