“What is now proved was once only imagined – William Blake”
Recently, my team and I—Stef Knaepkens—had a conversation with a Project Manager in a leading bank who refused to quantify the cost of service outages for their business in an important business case. The focus was on cost savings, and in particular on project and maintenance costs. But the customer was not part of the equation, let alone the customer value. We found this shocking, but sadly, this is still common practice in many organizations. But it’s time to wake up! Organizations need to start calculating the value of Customer Experience (CX). Here’s the reason why.
The situation at the bank is a textbook example of inside-out, siloed thinking, and very much the opposite of what we need to innovate. It’s also a kind of industrial age thinking, similar to the business model of the man with his ice cream vending car. On a sunny day, he stocks his ice cream vending car in the morning and drives through neighborhoods in search for customers. If he runs out of strawberry flavor, the customer has to pick another one. It’s a supply-driven, product-centric approach. The customer has to go with whatever is on offer. If his favorite flavor is sold out, the customer has to come back another day.
The days of the man with the ice cream vending car are over. In today’s business, the abundance of supply has made it easier for customers to switch brands. Markets have become buyers’ markets, where traditional businesses struggle in red oceans and ultimately, disappear. It’s easy to calculate savings in difficult times, but those are only temporary solutions. Market pressure is always there. The really successful businesses focus on customer retention and customer profitability. They differentiate, create value and thrive. This is a proven recipe for success. In a recent article in the Harvard Business Review of January 2020, Bob Markey proposed a powerful model to valuate customers. His research shows that “loyalty leaders grow revenues roughly 2,5 times as fast as their industry peers and deliver two to five times the shareholder returns over the next 10 years”. Wow! Companies that are successful in building customer loyalty are always focused on the customer. They design services with the customer in mind, tailoring their business towards customer’s needs opposed to their own capabilities. All of their efforts are geared towards customer success. It’s a proven source of revenue growth. Bob Markey even proposes a calculation model for this.
Calculating the value of Customer Experience is a step in the right direction, but acting on it is just as important. This especially holds true for the situation we’re in—a full-blown pandemic where change will be constant. We don’t know in what direction customer needs will change, nor do we know if our customers will still act the same by September. However, we do need to anticipate on major shifts in customer needs in the months to come. But how do you do that?
ServiceNow has great capabilities that help you improve customer interaction. Today, customers want to be in control. They want to consume your services when they need it. And if it doesn’t work the way they expect it, they want help, on the spot, immediately, and to the point. They want it everywhere and always. They want it on their smartphones, because that’s their gate to the world. And it’s the easiest, most convenient way to do things. Everything a service provider needs in order to offer world-class service is in the box. And you can have it now!
Some organizations fear that an improved Customer Experience will lead to higher volumes of work. The opposite is true. Smart leaders introduce self-service for customers, reducing the workload for the business. In addition, the automation capabilities of ServiceNow help organizations to be more effective. By automating customer request processing for example, you give service teams more time to focus on designing even better experiences. Once this process of relentless and fierce customer experience focus is ongoing, there is no limit to outperforming the competition.
Despite numerous success stories, Customer Experience is still perceived as a vague concept and a language that only few people understand. My contact at the Belgian bank shared this thought. He reminded me of the famous quote of John Wanamaker: “Half the money I spend on advertising is wasted; the trouble is, I don’t know which half.” This is definitely not true for an investment in the ServiceNow platform. With advanced metrics and measurements on customer experience outcomes, the business of “experience” becomes more tangible than ever. Traditional economics is about the cost and value of resources like land, production systems and raw materials. Todays’ economics is about customer portfolio valuation. Therefore, the value of Customer Experience is the most forward-looking metric imaginable in a fast-changing world.
The good news is, Customer Experience solutions are within reach of all service organizations. So, don’t wait any longer with investing. The right moment is now!
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