Who leads the customer experience?
How you answer can make a real difference to your company’s business. When done well, customer-experience initiatives can reduce cost, increase profitability and revenues, and improve customer retention. But the bar is getting higher as customer experience crosses multiple channels and formats. At the same time, customer expectations continue to rise–increasing both the opportunity to get it wrong and the impact of doing so.
Who leads the customer experience matters more as traditional product-based value propositions give way to customer experience as the key company differentiator. Eighty-nine percent of companies surveyed by Gartner said they will be competing primarily on the basis of customer experience in 2016, and three-quarters of consumers said they will stop doing business with a company after a bad customer experience, according to a recent study conducted by my colleagues at the Economist Intelligence Unit (EIU).
So who is in charge?
Another recent EIU study put the onus on the very top of the organization: Fifty-eight percent of companies that said they are more profitable than their competitors reported that the CEO is in charge of customer experience, while only 37% of less profitable companies said the same.
But while a correlation between CEO leadership and successful customer experience is clear, so is confusion within organizations. According to the latter EIU study, 72% of CEOs around the world said they think they are in charge, but only 27% of the other executives surveyed–predominantly other C-suite executives–agreed. And when we looked at the other members of the C-suite, things became even more confusing. For example, almost one in three respondents in IT (32%) said the CIO is in charge of customer-experience transformation initiatives, but only 5% in either sales and marketing or general management agreed.
Likewise, 35% of sales and marketing respondents said the CMO is leading initiatives, but only 13% in general management and 6% in operations and production went along. And 19% of those in operations and production said they think the COO is in charge, an opinion shared by only 4% in sales and marketing and 5% in IT. (In North America, 81% of CEOs said they believe they lead customer-experience transformation initiatives, but nearly one-quarter of other executives pointed to the CMO or CIO as leading.)
And, just to add to the confusion, in a third EIU study, 75% of CMOs said they would be leading the customer experience in three to five years–a direction validated by the Gartner study.
What’s going on?
Today’s customer experience must cross multiple channels: the Web, email, SMS, social media, telephone, face-to-face interactions. Getting it right requires collaboration–and leadership–among the entire C-suite. Customers expect a seamless experience as their transactions cross channels, but companies tend to think in terms of individual platforms–and of individual teams focused on those platforms.
Add the technical complexity of creating a coherent experience across platforms, tight budgets, and internal organizational barriers, and you can see why almost two-thirds of companies surveyed by the EIU said they believe that “customer experience is more important than my organization realizes.”
The good news: One in two companies globally will be boosting investment in customer experience by more than 10% over the next three years, the EIU found. And those companies that are investing most in customer experience are seeing the benefits. More than a quarter of companies that said their revenue growth is much stronger than their competitors’ have increased spending on customer experience by more than 25% over the past three years.
Customer experience sits on the outer edge of the new relationship between customers and companies. Seamlessly serving customers can be a wedge to break down internal silos and a path toward increased profitability. But successful transformation requires a new model of leadership, one that is less about internal ownership and more about cross-functional collaboration.
See what the Twitterverse is saying about customer experience: