Customer Experience Redux
Scott Fitzgerald once said there are no second acts in American life but he never knew the software industry or modern business. Today, the story is all about second, third and nth acts. Consider customer experience, for example.
I remember talking about customer experience a lot about ten years ago with Paul Greenberg. Back then — and it is interesting to note that what we mean by customer experience has morphed a bit since then — B. Joseph Pine’s book, The Experience Economy, was the manual that we all looked to for defining just what a customer experience is and how to pursue such a strategy. Pine and his colleagues have done very well on the lecture circuit giving dramatic demonstrations of “experiences” in their talks.
To cut to the chase, Pine defined it principally as the ultimate cultivation of business deliverables best exemplified by, of all things, coffee. You may have heard this. The raw coffee bean is a commodity; a bean roasted, ground up and given a brand and a label is a product; a cup of coffee at a restaurant is a service; and a cup of something steamed, foamed and caramelized is an experience especially when consumed in a comfy chair with nice lighting, your laptop and some cool music in the background. But a customer might also prefer a low cost cup of java and a smile from a familiar face taken to go in the car. CX is like that, it’s in the eye of the beholder.
Everyone wants to provide experiences but few do a good job of it. Not to worry though, it’s time for the second (or possibly third) coming of customer experience with its new moniker, CX.
Customer experience is a great thing for the bottom line. It enables us to charge more than the cost of the underlying commodity would suggest ($4 for a cup of coffee…) and while the deliverables might be very similar to the commodity version of the experience, it costs little to create an experience in a customer’s mind.
What’s interesting to me though is that roughly ten years down the road we don’t appear to have made any progress. Last week, pal Brian Vellmure published this post “Everybody’s talking about Customer Experience. Customers still not getting what they need” Ouch! It quotes a Harvard Business School blog with the provocative title “Stop Listening to Your Customers” by researcher Steve Martin. And on Monday, Oracle released the results of a survey of more than 1,300 executives that showed we still have a very long way to go. What’s going on here?
I think Martin was saying that customer behavior data might reveal something very different from the rationalized answers given on a survey and Oracle collected some interesting data on CX that shows we haven’t progressed very far down the experience path.
Good ideas lead practical implementation sometimes by years and often much longer. The basic understanding of how to launch a moon mission was figured out by the early twentieth century but it took many people including Robert H. Goddard and Wernher von Braun and a world war to work out the technology. The same thing is happening with CX from what I can see. Theory leads practice by a fair piece.
Almost anyone with a little business savvy “knows” the value of generating an experience that customers can resonate with and luxury brands have been doing this forever. But replicating the luxury experience without the high overhead of minions dedicated to the task takes a good deal of technology to get right and that technology wasn’t available even as recently as ten years ago.
But things are changing rapidly. Almost from the beginning of the year it looked like customer experience was going to be a big deal and companies like Oracle appear to be placing strategic bets on some of the software they’ve bought. They’ve been busy hooking together ecommerce, retailing, analytics and other systems to give their large customers the ability to drive CX without the overhead I alluded to. Others like Salesforce continue to improve their social salient into customer service with things like Chatter and the Service Cloud and even at the lower end of the market, desk.com.
As CX ramps up this year I am hoping that other newer technologies like gamification can be used to make service more rewarding for those doing the job. One likely outcome of gamifying service might be incentive compensation models that drive better customer experiences. It’s time to give that a thought.