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Why CX is stagnating

CX transformation projects can take years and cost millions of dollars. Though the potential benefits are enormous, CEOs can come under immense pressure to justify the costs. According to the Forrester CX Index 2018, little progress has been made in the last few years – brands simply aren’t doing enough to innovate and differentiate themselves from their competitors.

Whatever improvements most corporates do make are quickly overtaken by the increasing expectations of customers. Most brands are left falling behind or treading water. Brad Meehan, the Managing Director of Strativity Group in Australia, notes in a recent whitepaper, “Things often start with much hype and investment, but after two to three years there are only moderate improvements in satisfaction and key customer metrics (if at all) that deliver an underwhelming ROI”.

Meehan adds, “As customer expectations rise, sometimes satisfaction even goes backwards. In other instances, micro improvements in the experience and culture are trumped by macro trends and new offerings”. Forrester predicts that in 2019 up to 20% of companies will throw in the towel and give up trying to differentiate on the basis of CX. Instead, they will just try to not get worse and resort to price cuts to grow. 

Libby Dale, from customer retention specialists, SmartMeasures, believes, “Brands need to deploy strategies and processes that allow for the continuous improvement of the customer experience. Companies need to look at areas where they can innovate and radically change how they operate to continuously add value and benefit to their customers. Unfortunately, very few are have the skills, capacity or perspective to make these things happen”. 

Some hard facts to accept and problems to face

Companies that are unable to compete and differentiate themselves on customer experience will only compete on price. According to the Forrester CX Index 62% brands will fall into this category. The few that can differentiate themselves and add value to the customer experience will widen the gap between themselves and their competitors.

Meehan comments, “Customer experience enhancement and innovation offers the potential for extraordinary profitability and competitive advantage, but most organisations are ill-equipped to successfully navigate the journey and capture the value on offer. For most organisations, a customer experience strategy should be a component of their competitive strategy focused on differentiation and competitive advantage and deployed in areas where disproportional value creation is possible. This is rarely the case”.

The problems start at the leadership team level. Meehan from Strativity identifies 5 core problems:

  1. An incorrect framing of the opportunity that customer experience differentiation represents
  2. The tendency to confuse research and analysis for change and impact. This is perhaps the most significant challenge. Most customer experience activity seems to be focused on research, analysis and design which rarely, or only slowly, translates into a reality that has a measurable impact.
  3. An inability to consider all the possible approaches that can be used to enhance customer centricity and improve/innovate the customer experience based on unique organisational context and proven results.
  4. The inclination to appoint an inexperienced leader to determine the approach
  5. An inability to adequately define customer centricity across different contexts

Getting ahead of the curve

Many of our existing management systems and tools that are used to manage and grow a business can actually be an impediment to progress. Libby Dale highlights, “There is no single solution or set of generic principles that can be applied. By its very nature exceptional customer experience needs to be contextualised. Rather than creating value for customers through innovation, many organisations simply end up playing a catch-up game with competitors”.

There is, however, a few things every organisation needs to be successful at customer experience. Dale highlights the following critical elements:

  1. Lack of fear to be different or go against conventional wisdom. To stand head and shoulders above your competitors means doing something substantially different to add value to your customers.
  2. The ability to consistently define customer centricity through out the various levels of the organisation.

Collaboration across all teams to generate and test new ideas and innovations.

Mark Atterby

Mark Atterby has 18 years media, publishing and content marketing experience.