Thursday, December 12, 2019

Three Things To Know About 2020 Customer Experience Trends

Year-end articles and blog posts about hot trends are popular. People enjoy reading speculative predictions, and writers are happy to collect the clicks earned by lofty and alarming statements about the pace and breadth of change. Since both writers and readers love them, the annual slew of CX predictions are arriving, and you can find plenty of posts and articles about the Customer Experience trends you “must be aware of” and “must get ready for” in 2020. But must you? Really?

I’ll share some observations on CX trends in this blog post, but at the same time, I also want to caution you from taking too much from the flood of similar articles you will see this month. Most organizations do not struggle with CX because they don’t see or execute the buzziest new trends; they struggle because the foundational basics of CX are often neglected. To a CX leader grappling with limited resources and influence, it may seem appealing to chase some talkable new tech rather than encourage customer-centric changes across the enterprise, but focusing on CX blocking and tackling will almost always have a much greater impact.

As you read this year’s crop of articles about the CX trends you absolutely must act upon or risk immediate consequences, keep in mind these three cautions:

1. There is often much less to those “hot” trends than meets the eye

One of the ways to create attention for a dubious trend is to focus on the innovative business model for a well-publicized startup with a rapidly growing private valuation. The eye-catching valuation gives the appearance of success, but we should know by now that private valuations and impressive IPO prices are not an accurate harbinger of future performance. From Theranos to WeWork to Uber to Magic Leap, it should be evident that impressive growth and inordinate financing rounds are no guarantee of sustainable, profitable success.

Take Direct-To-Consumer (DTC) strategies, which were all the buzz earlier this year. I’m not suggesting DTC isn’t right for your brand or won’t be important in the future, but are you aware those well-known envy-inducing DTC brands aren’t actually profitable as of yet? Casper hopes it will become profitable on an EBITDA basis in 2019. Dollar Shave Club wasn’t profitable when Unilever purchased the company, and subscriber growth has slowed since the acquisition. The Honest Company made headlines in 2017 for a down-round that stripped the company of its “unicorn” status, and the CFO recently shared The Honest Company generates half of its total revenue from stores and not DTC. Lastly, SmileDirectClub was one of the five worst IPOs of 2019, with its shares losing over 60% from its September IPO price.

I am not casting aspersions on these brands or the DTC strategy, which may continue to grow more common and profitable in the coming years, but given the deafening level of hype about the DTC trend, you’d be forgiven for thinking these companies were printing money and not struggling to get into the black. By all means, research the value of DTC strategies, but don’t buy into this or any other hot trend simply because some unprofitable, VC-funded companies have gained market share by selling products or services at a loss. If that were a repeatable and scalable recipe for success, we’d all be billionaires.

Real CX Trend: Back to Basics: Corporate websites have been with us for 25 years, mobile apps for 15 years, and social media for more than a decade. Yet, many brands still struggle to offer good, customer-centric experiences on these channels. Focus your efforts on learning the drivers of satisfaction and dissatisfaction you have on today’s widely adopted-platforms and channels rather than racing to launch a technology, platform, or strategy that may (or may not) be the next big thing in 2025. No brand will fail in 2020 because it lacks a Virtual Reality application or Alexa Skill, but many brands are already failing because they cannot deliver the experience customers want and expect in the real world, on desktops, and on mobile phones.

To continue reading the blog post, please click through to my blog on Gartner's website. There, you'll get information on two more CX cautions ("The first focus of CX is on what customers want, need and expect; not on trends, tech or competitors" and "CX trends are not as 'hot' as you probably think") and two CX tips or trends ("The tech that matters most is the tech that helps improve your customer understanding" and "Hold your existing vendors responsible for keeping you up to date on new tech trends.")

Monday, October 21, 2019

Is the Customer the Subject or the Object of Your Customer Experience Efforts?

I often see customer experience (CX) programs that connect point A directly to point B, equating the actions the brand does to the value it derives from those actions. A straightforward example of this is when a martech vendor claims, "We improve the brand's CX by enhancing offers and 'next best actions,' resulting in more clickthroughs and conversions." Or, you might hear an executive say, "We improved our CX by implementing self-service, which reduced call volume and headcount, thus saving us money."

Those are both excellent business outcomes, but is either a CX outcome? In neither of those examples do we know the impact on the customer. Are customers happier? Do they perceive more value? Have we changed their attitude toward the brand or themselves? Are they more likely to be loyal or tell others? We don't know because, in both of those examples, we skipped the customer. If you are doing CX, you cannot go from point A--what we do--to point B--what we get--without going through point C--the customer.

When we skip the customer and tie our "CX" projects only to the value the brand receives, we convert our customers into objects rather than the subjects of our efforts. In your life, objects fit into one of three broad categories: They are tools for you to exploit, barriers for you to overcome, or they are nothing. In those examples, we made the customer a tool (a wallet for us to pluck) and a barrier (an annoyance for us to eliminate). In neither case did we treat customers as people: Human beings with wants, needs, and expectations. Nor did we, in either example, measure (or even care about) the impact on the customer.

To make the customer the subject of what you do and not merely an object that is acted upon to get what your brand wants, go from point A to C to B. That means connecting what you do to how it changes customer perception, and then recognizing how those changes in perception drive behavioral shifts that deliver long-term brand value. That may sound complicated, but it's not. We just have to listen to customer perception and tie that to the loyalty behaviors that drive brand value, such as retention, sales growth, purchase frequency, the cost to serve or retain, and brand advocacy and WOM.



If you start with what you want (more sales or lower costs), develop a plan to enhance your brand's immediate financial outcomes, and measure only brand impact and not how or if customer perception has changed, you may deliver short-term ROI but cannot know if you've provided a better customer experience. More to the point, you cannot know if you've traded improved financial results today for powerful, lasting relationships that drive growth, margin, and profit tomorrow.

To change the customer from an object to the subject of your CX program, start with what customers want and need, develop a plan to lift customer satisfaction, and measure how you improve the customer and their relationship with your brand. Here's how (along with links to relevant research reports for Garter subscribers):

Monday, October 7, 2019

My Hotel Light Switch and the Three Easy Questions to Ask About Customer-Centric Innovation

I checked into a hotel late last night after a long evening of travel. When it came time to go to bed, I was unable to locate the switch for the lamp over my desk. I spent five minutes testing every switch, feeling the underside of the ledge over the desk, and searching behind curtains for hidden switchplates, all in vain. Finally, I made an awkward call to the front desk to ask how to turn off the lights.

The response from the front desk sounded unsurprised and well-practiced. Look for a white button on the desk she told me. The magic button that controls the desk lamp is this:
 


Maybe I should’ve realized this was a light switch. Perhaps not. What I do know is that I am far from alone. The front-desk clerk shared she gets several calls a night from frustrated guests asking the same question. “There are no instructions,” she added, demonstrating a firmer grasp of usability concepts than this hotel chain’s innovation team. (How many guests, I wonder, go to bed with the lights on because they’re too embarrassed to ask.)

This left me pondering why so many brands get innovation so wildly wrong. Just 3% of users who enable Alexa or Google voice apps are active users a mere two weeks later, and 75% of downloaded mobile apps are opened only once. When your brand makes investments into innovative customer experiences, is that the kind of adoption and success you seek?

The problem with too many innovation efforts is that brands focus on the tech, not the customer. By failing to be customer-centric in their thinking, brands end up with “solutions” that do nothing important for customers, leading to depressed usage and disappointing KPIs. It may be fine to pilot new tech simply to gain knowledge, but wouldn’t it be better to achieve that same knowledge while simultaneously creating something customers want?

Customer-centric innovation requires answers to three fundamental questions before committing to development. To learn the questions and explore why this hotel's innovative button fails the customer-centric test, please read the entire blog post on Gartner.com.