A Look at Customer Experience

This article was first published on 30 May 2012 in the BT Let's Talk GTM Blog

Let’s face it, most organisations can’t afford to hire the smartest people around. So they end up with a few exceptional employees, a percentage that should be doing something else with their lives, and the rest, the majority, sprinkled across the spectrum in between.

So if the majority of employees are “average” but the organization has aspirations of being exceptional, what should it do? Resign itself to mediocrity and see its competitors leave them behind?  Or replace the average Joe and hope the next round of new-hires will miraculously turn out to be star performers? Keep dreaming.

If an organization genuinely wants to deliver great customer experience it must do so by making its existing employees – all of them – shine.

The Moneyball effect made famous in baseball explains how a team with limited resources is forced to find players undervalued by the market.  Then with the right coach on board, it turns average athletes into exceptional performers.

Central to the success of an organization that takes customer experience seriously, but has limited resources, is designing an operating model and creating a culture that compels average employees to deliver excellence as the norm.

In a service business like telecommunications, the operating model consists of the service we offer, the way we manage our employees, and the way we engage with our customers. The culture reinforces the operating model of the organisation: the way we do things around here, whether positive or negative.

A great design won’t work without the right culture to bring it to life. Imagine going to work in a wonderfully ergonomic building, but your boss couldn’t care less about you. All that well thought-out architecture goes to waste and you feel de-motivated and unable to perform as well as you’d like.

According to Frances Frei and Anne Morriss, authors of Uncommon Service, a sustainable operating model is built upon:

  • Service offered: What do customers value most about the service we offer?  How can we excel in the things they value most, whilst focusing less resource and effort on the things they value least? Unless organisations can charge a premium, they can’t be good at everything, so they need to make some tough design choices about where they should excel.
  • Employee system: How can organisations set up their employees to succeed through the right performance management system, training, motivation and incentives?
  • Customer system: How can organizations measure themselves on the customer scoreboard? Are they looking at the right dials on the dashboard?  Or have they got so many dials they can’t separate the important from the unnecessary? Further, how can organisations involve their customers in delivering the service and so reduce their own overall operating cost to serve?
  • Culture: The way we do things around here brings to life the operating model.

If the above sounds like common sense to you, as it does to me, why aren’t more organisations investing in improving their customers’ experience? One of the barriers we often hear from managers responsible for excellence programs is that the business case doesn’t stack up. So how can they justify it to their peers?

Research by Forrester shows that “Better customer experiences drive three types of loyalty: willingness to consider another purchase, likelihood to switch business to a competitor, and likelihood to recommend to a friend or colleague.”

In Forrester’s Customer Experience Index (CxPi), a 10-percentage-point improvement in the index resulted in improved revenues from three areas:

  • Incremental purchase from existing customers in the same year;
  • Revenue saved by lower churn, as customers say they are less likely to take their business elsewhere;
  • New sales driven by word of mouth, as existing customers are more likely to recommend the service provider if they’ve had a good experience.

Furthermore, “Our models estimate that the revenue impact from a 10-percentage-point improvement in a company’s performance, as measured by Forrester’s Customer Experience Index  score, could exceed $1 billion.”

The business case does stack up.

The challenge has more to do with the senior-management ability of an organisation to build a team with “average” employees and make them, like those baseball teams who adopted the Moneyball approach, into winners.

At BT, our Customer Experience story began in earnest around 2006 and since then we’ve challenged ourselves every year to see how we can keep delivering excellence. Our own learning journey has seen us adopt metrics like Right First Time (RFT) and Cycle Time (CT), as well as cross company processes such as Lead2Cash (L2C), Trouble2Resolve (T2R) and Concept2Market (C2R).

At BT Advise, we’ve had the opportunity of introducing these concepts to other telecom operators in international markets – in many cases working on designing a customer-experience programme for them.  These customers have also asked us to implement the programme, run it for a while, and then hand over the learning to their own local team. We believe that our lessons learned have in turn enriched the environment of the operators we support.