Time to Appoint a Chief Customer Experience Officer?

This week, I’m at my first-ever Gartner event — the Gartner CRM Summit just outside Washington, DC. After five years as a Forrester analyst, I’m enjoying seeing how the other half lives. According to Gartner, there are over 600 attendees representing 25 countries at this interesting little enclave. I have to say, the venue is reminiscent of “The Truman Show.”

My favorite Gartner speaker so far is Ed Thompson, who presented the opening keynote, “Improving the Customer Experience.” Thompson warned that he would speak quickly and accelerate as he went on, and he did.

Thompson’s opening line was, “Why should you care about customer experience? The boss says you have to.” That certainly jives with my experience that customer experience is a top initiative in most companies these days, but, as Thompson aptly points out, few companies have a clear, consistent definition for what they mean by “customer experience.” Depending on which group you talk to within an organization, you can get several definitions. Different groups also measure customer experience in different ways. For instance, customer service groups might measure customer satisfaction, while marketing measures retention, and engineering measures quality. All that’s OK. In fact, it’s a good thing. But before you embark on a customer-experience initiative, bring all the groups together to clearly define your objectives, the tactics for achieving those objectives, and how you will measure success.

In fact, Thompson says, lots of companies give up before they see the improvement. Many companies have applied the Kano model to customer-experience projects.

Thompson’s pointers:

  • Get the basics right.
  • Focus on moving above average before, during, and after the experience. Plan to move some investment to setting customer expectations, getting more customer feedback, and reacting to the feedback.
  • Stay on top and avoid the middle ground by excelling in one of three dimensions:
    • Product leadership (e.g., Apple)
    • Customer intimacy (e.g., USAA)
    • Operational efficiency (e.g., Southwest Airlines)

To the investment point, I was disappointed, although not terribly surprised, to hear the results of a Gartner study revealing that while 95 percent of firms survey customers to get feedback, a paltry 10 percent do anything with that feedback.

Thompson also talked about the large number of companies creating executive-level positions focused on customer experience (e.g., vice president of customer experience). Unlike some industry pundits who espouse “customer experience officer” C-level positions, I was happy to hear Thompson indicate that, in his experience, he typically sees this position reporting to the CMO. Is the customer experience executive a fad role? “No,” says Thompson. “If European companies are adopting it, it couldn’t just be a fad started in California” (this elicited another chuckle from me).

Finally, I was happy to hear Thompson fire a few bullets at the Net Promoter Score (NPS), a metric established by Satmetrix to gauge whether a business will grow based on what its customers are saying about it. He said the metric isn’t a silver bullet because more than one question — the basis of this particular metric — is necessary. (The question is: How likely is it that you would recommend Company X to a friend or colleague?) Also, NPS doesn’t help companies with causal analysis.

NPS, he said, is useful in some industries some of the time, but not in all channels. And it isn’t a great metric across all company types (e.g., business-to-business firms). The best use of NPS? Give it to your board of directors, but don’t stop analyzing and measuring lots of other things.

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