Does the CX industry need saving? I say yes.
At an industry level, Forrester’s CX research finds “widespread stagnation“. Furthermore, CustomerThink’s study found just 25% of CX initiatives (funded and staffed) claim quantifiable business value or competitive advantage.
The majority of the rest are stuck in a “developing” stage doing good work in most cases, but not seeing the results necessary to justify future investment. And mark my words, most CEOs are not true believers in CX — they want to see how CX investments lead to a better business.
Here is the executive summary of the report, with the five major conclusions:
Since publishing this research early this year, I’ve been thinking about possible “fixes” for CX industry woes. I think the root cause of CX performance issues is too much attention on fixing problems and streamlining processes, and not enough on strategy and culture.
For this article, I’d like to propose a rethink of CX to focus more on “customer success” — helping customers achieve their goals, not just complete a process or interaction “effortlessly.”
Nearly four years ago I wrote an article “Customer Success Management: Training Wheels for CXM?” which concluded:
Customer Experience Management (CXM) … has become an all-singing-all-dancing Theory of Everything. As CXM proponents keep expanding and redefining what it means, it could scare off some executives wanting to take more practical steps with a clear ROI.
So, maybe CSM will be training wheels for a full CX transformation (a multi-year effort). That’s not all bad, you have to start somewhere. I just hope that companies start with a clear understanding that customer success should be defined in customer terms.
It’s easy to say that CSM is a subset of CXM. Because if you take the grand and glorious definitions of CXM literally, everything is a subset of CXM.
But as my study revealed, CX execution hasn’t matched CX proclamations. I’m now thinking that business leaders would be wise to organize their CX efforts around the concept of “customer success.” That’s really what being customer-centric is all about, and would help CX pros get out of the find/fix paradigm driven by surveys.
Customer Success (CS) started with a focus on B2B customer retention with SaaS vendors. In the past four years, however, CS has expanded to include B2C and other industries. Gopal Srinivasan, Deloitte Partner and Customer Success practice leader, says CS interest is growing for non-tech companies, although it may be called different names.
A new Deloitte study (“2019 Enterprise Customer Success (CS) Study and Outlook“) found 30% of CS leaders in non-SaaS tech (hardware and semiconductor) firms. The study concluded that CS was going “mainstream” and “driving tangible value,” with over half of the 50 respondents reporting at least 10% higher up-sell and cross-sell revenue, renewal rates, and annual recurring revenue.
One key insight: “CS is a developing mindset and needs to be infused across the enterprise.”
A CS mindset exists where a constant focus on the customer is maintained throughout all touchpoints and value creation stages. However, survey results indicate that CS functions have been largely focused on working with customers only once a transaction is completed.
Here’s a breakdown of time spent, showing the skew to post-sale activities.
Srinivasan believes CS vendors are ahead of traditional survey-focused EFM providers, because “you can’t rely on customers responding to a survey.” CSM solutions (more on that in a moment) were designed from the start to analyze a variety of data from product/service usage, transactional systems, surveys, and even social/public sources. For CS success, he advocates:
I agree. People and systems are the keys to great execution of any strategy. But you must start with the right mindset.
It’s hard to imagine doing a Customer Experience initiative without a survey. The problem is that many companies never get out of the survey rut. Surveys help find problems which stimulate fixes — all good and necessary work for sure — but there never seems to be time to process all the other customer data.
CSM pioneer Gainsight flips the script to focus on customer data first. Mike Berger, VP of Product Marketing, says the platform has involved considerably in recent years, thanks to $160M in VC funding with a priority on product development. The company just announced the Customer Cloud, a suite of products that includes Gainsight CX to capture, analyze, and act on customer feedback. So now companies don’t have to go elsewhere for a survey solution. Other capabilities include a Customer Data Platform, an in-app Product Experience solution, and a new Revenue Optimization solution to help drive renewals.
Not to be outdone, Totango offers a DNA-CX Customer Centered Data Platform which can process a variety of customer signals, including usage, logins, CRM data, support tickets, and yes, surveys too. Totango CEO and co-founder Guy Nirpaz hinted that they may offer a survey solution too. He positions CSM as a kind of “customer operating system” that helps identify customers at-risk for churn and drive action. He touts SAP as their largest customer and sees expansion into the broader tech space, with budding interest in other industries such as healthcare, financial services, and manufacturing.
Enterprise Feedback Management (EFM) vendors are not standing still. Medallia acquired CS vendor Strikedeckrecently, giving it strong capabilities for both B2C and B2B companies. Together they will provide a “360-degree views on customer account health,” analyzing customer data on usage, adoption, billing, and more. Other vendors, such as Clarabridge, InMoment, MaritzCX, and Verint are moving in the direction of an integrated “VoC command center” as discussed in my recent article on advanced VoC analytics.
And that’s not all. Specialized vendors are popping up to help the cause. Like Brightback, launched in early 2018 by Guy Marion to “personalize the cancellation process at scale.” When the personal touch of a CS rep is not feasible, a cancellation request can trigger a personalized offer to reconsider. Marion says they’ve seen a 15% average save rate across multiple clients.
Buzzwords don’t matter to customers. You can call your company’s customer-focused efforts CXM, CSM, CVM, or even CRM — so long as you’re attending to customer needs and helping them succeed.
For example, I’ve written before about outsourcer TELUS International, which describes itself as a “customer experience innovator.” However, a conversation with CEO Jeffrey Puritt revealed they have a Customer Success mindset, coupled with strong execution.
Puritt says the firm starts with a goal of doing more than just supplying clients with “bums in seats,” to see “where we can offer assistance to help them achieve their objectives.” They have an “excellence team” to help with onboarding, and track success with a “health check audit” on every program and customer. Accounts are ranked on a scale of 0 to 3, where the top end of the scale means the client is using multiple solutions and considers TELUS International a trusted advisor. For example, one client started with simple in-app support for an online game but eventually was receptive to using other data analytics services that drove better success metrics.
So, back to my question. Could a “customer success” mindset help improve the odds of CX success? Please share your views in the comments.
Disclosure: Examples in this article were drawn from discussions I’ve had with vendors who reached out to me in recent weeks with briefing requests. They are not necessarily representative of all the industry activity nor should companies mentioned be considered an endorsement. Some vendors have been sponsors of CustomerThink.
Originally published in CustomerThink