When digital technology broke into the music industry, it seemed revolutionary: A person without musical training could create beautiful orchestrations with the push of a button. People talked about the easy mastery of musical instruments and all kinds of possibilities. "Everyone" could now make music; people could buy their way into art. But the market quickly came to a different conclusion—Technology couldn't turn a person into a musician. The new capabilities mostly benefitted people who were already talented and committed to making music.
Competitors can easily duplicate 'what we do,' but they cannot duplicate 'who we are.'
A few months ago, when the CIO of a Fortune 500 company told me he was deploying a CRM system to improve customer experience, I instantly thought of the music technology experience. A CRM system cannot transform an organization into a customer-centric organization.
All too often, we imagine that technology can transform the way an organization does business. The reality is, technology rarely makes an organization into something it's not already committed to become; instead,technology tends to magnify the organization's true nature.
So why does management still expect technology to solve problems without much policy, process and behavioral change? The simple answer is that everyone likes improvements but few like changes.
We like to believe that technology is "magic", a black box that makes things right. The CIO can thus feel pressured to perform magic—to create improvement in a vacuum, despite tight deadlines, inflexible processes, insufficient training, and reluctance to impose behavioral changes. CIOs and their teams thus often find themselves running implementations they fear will not work, because the business is committed to improvement but not to change.
Customer experience management requires that we address the customer's point of view and change our approaches to respond to their needs and values. It's more of a mindset than a project and requires a long-term commitment to ongoing improvements as the market and customer values change.
Why should we manage customer experience?
In commoditized industries, where companies find it difficult to differentiate their products and services from their competitors', most turn to some form of price reduction. They call it increased value, but it's generally a price-to-feature strategy that simply gives customers more for less. Although this may be effective in the short term, it does not create lasting brand differentiation and hurts the bottom line.
The days when that worked are gone. Now, we need to increase customer loyalty and thereby maximize the lifetime value of our brand. The IT division has an opportunity to help management understand the mechanisms that create loyalty and to offer better approaches.
Too many management teams believe that customer satisfaction (giving customers what they want) is the key to loyalty. However, satisfaction and loyalty are quite different things. The most important difference is that satisfaction is rational—the comparison of expectations with outcome—while loyalty is emotional.
In order to differentiate our brands and products, we must concentrate more on experience—experience that includes a spark of positive emotion. That is the door to loyalty.
We need to understand the anatomy of the customer experience.
To help us judge the potential of a technology, we can look at its impact on four components of the customer experience.
Accessibility: How does it help the customer to reach the best person, system, or location to address their needs?
Effectiveness: How does it help the employee, system, or location be more effective in addressing these needs?
Empowerment: How does it help the organization to take quick and decisive action to effectively serve the customer?
Emotion: How does it help us to create a positive emotional experience?
To deliver these benefits, the new technology must be accompanied by a willingness to adjust processes, policies, and delivery mechanisms in all four areas. Technology teams can use this breakdown to show that benefits come from a tight collaboration between technology and business practices.
But to truly gain long-term support for a customer experience deployment, we need to look a little more closely at customer loyalty.
We need to understand customer loyalty.
Customer loyalty has two distinct levels, ordinary Loyalty and Raving Loyalty, which is critical to long-term differentiation, viral benefits, and customer representation of the brand.
To go from Loyalty to Raving Loyalty, customers must experience three things:
1. They must feel they understand the driving purpose of the brand.
2. They must feel, through their experience, that the brand is authentically trying to achieve that driving purpose.
3. They must feel they share meaningful values with the brand.
At that point, they will feel that the brand represents them and that they represent the brand. The relationship has advanced from bonding to kinship.
The purpose of a company is relatively constant. However, staying authentic to that purpose in a competitive environment is an ongoing labor of love, one that relies on technology and openness to reinventing business practices over the long term. It is a way of being.
Great customer-centric organizations, the ones loved by their customers for who they are, are always searching for the next experience differentiator, to show their authenticity to their and their customers' values. It's in their DNA. Authenticity is an unbeatable differentiation. Competitors can easily duplicate "what we do," but they cannot duplicate "who we are."
The CIO plays a critical role in differentiation.
Marketing and advertising tell a story, but the IT division provides the structure for living the story out. CIOs must therefore be included in the conversation about story—not simply about implementation, but about purpose and values and emotions.
The drivers of technological change are the frontline executives. The IT division is usually asked to solve technical problems; they are rarely involved in the softer areas of marketing, branding, and customer relationships. However, authenticity requires their deeper involvement, in finding technology to help us express the company's identity, engage employees, and mobilize cultures towards a way of being.
When IT professionals are unaware of the customer experience goals, they become reactive to requests to quickly meet or exceed competitors' capabilities. Unreasonable requests for technology, timelines, and resources leads to cutting corners. Reactive and hurried implementations are rarely successful.
The role of the CIO is critical, not just in solving problems, but in differentiating the brand. Marketing and advertising tell stories about who we are, but the IT division builds the structure that lets the organization "walk its talk."