Digital is the age of the customer. CEM-Customer Experience Management is in most of companies’ corporate vocabulary now, however, ‘talk the talk’ is the easy part, very few can walk the talk, how to define CEM strategic proposition, as the balancing act of looking to increase profit while keeping a customer-centric strategy of the business is perhaps tricky sometimes due to the lower business maturity; If customer experience was positioned as cost reduction strategy instead of revenue growth strategy, would more companies act instead of just talk?
The well-run companies are usually looking at both for cost reduction and revenue growth. To that extent, it should not be an ‘either-or’ situation, but finding the appropriate areas to apply CX as a platform of either OpEx reduction, revenue growth or both. It does boil down to the degree to which leadership is "bought in" and can withstand the pressures from the different forces that impact the operation of a business. Interestingly, when all is said and done, the executives will always be looking for ways to making the bottom line better whether "creatively" or through real solutions like CX.
A good CX solution should make better use of resources. The information has to be shared. If you could present a clear rational, linking customer experience to revenue and profits, then a senior leadership team is more likely to take notice. So no matter what you call it, the real challenge is how do you go about taking some subjectivity out of customer experience and inject some objectivity into it. There are a number of business areas that can be transformed by a systematic yet sensitive approach to customer feedback.
The key is to identify the KPIs directly impacted by the CX initiatives. There are many initiatives (systems, people development, process change) which have not been effectively linked to cost reduction or increased profitability- hence, the subjectivity exists. The key is to identify the key metrics directly impacted by the CX initiatives and where possible create a clear ‘before and after’ scenario based on the real data. In the end, all CX pros would agree that there is no magic bullet. It is a journey to get the desired results and not all executives are likely to buy into that journey and will choose other paths to their desired outcomes.
What attracts a management buyer about a cost containment proposition is that she/ he can show the impact in a defined timeframe and in visible ways. Revenue growth, on the contrary, may not happen in the same time window (usually shorter than a quarter); but the flip side is organizations would then be so inward-looking in their approach that focus on Customer may get diluted and eventually hamper Customer Experience negatively.As practitioners, you need to focus on what to do and how to do any improvements in customer service and look at opportunities for both cost reduction and revenue growth, the short-term thinking only based on costs misses the fundamental philosophy of CEM, and organizations also need to cultivate the customer-centric culture which changes people mindset to appreciate that CEM can be a fundamental value driver in the business via well-defined KPIs to make such benefit tangible.