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Some Business Effects of Customer Experience
Mar 23, 2005
One of the most common questions I get about customer experience is how to see its results within the organization. Sure, the stakeholders have bought into the concept - focus on the customer! But how will the team know when it's succeeding?
Fortunately, customer experience is achieving some visibility in the mainstream business press. I refer you to two articles (thanks to my business partner Phil Terry for pointing them out) that have some ideas.
First, a recent MIT Technology Review article on "multi-channeling" [1] is worth a look. Consider this quote:
"...for every $1 consumers spend online, they spend $6 dollars
offline as a result of research conducted on the Internet."
Notice the "multiplier effect" - the leverage that a good online customer experience has on the offline business. One obvious conclusion to draw is that it's more important than ever to make sure the website is fast, easy, clear, and a great experience overall.
More importantly, though, consider the broader conclusion: it's no longer effective to run the organization as a collection of separate silos. Customers don't care that their research and eventual transaction cut across all kinds of silos and channels - they just want to get their work done!
So, think: is there a multiplier effect in your business? If so, how could the silos be organized (or trained) differently to make the most of that leverage?
Now, the second item.
In this week's Business Week, there's an article [2] about GE and CEO Immelt's decision to link bonuses to new ideas and - get this - customer satisfaction.
"20% of 2005 bonuses will come from meeting pre-established
measures of how well a business is improving its ability to meet
customer needs."
Did you get that? GE links executive compensation to the customer experience. Does your company? Should it?
The article explains why GE is making this move:
"With a slower-growing domestic economy, less tolerance among
investors for buying your way to growth, and more global
competitors, Immelt, like many of his peers, has been forced to
shift the emphasis from deals and cost-cutting to new products,
services, and markets."
Consider our provocative hypothesis: long-term investments in the customer experience will be to business in the 21st century what short-term thinking (much advertising, M&A, etc.) was in the 20th. And kudos to GE for taking some leadership.
[1] E-Commerce Gets Smarter, by Robert Buderi. Technology Review, April 2005.
[2] The Immelt Revolution: He's turning GE's culture upside down, demanding far more risk and innovation. Business Week, March 28, 2005:
http://tinyurl.com/65cgw (premium subscription req'd)
that's terrific news about GE and a fascinating article about REI.
hopefully government will work more for who their customers really are too. the tax payers. by seamlessly creating transparency, opening up all lines of communication - maybe they can build the trust they've lost over the years. whether it's city, state or the federal govt.
what does this have to do with customer experience? by improving relationships with their customers/tax payers... government will move more naturally toward taking care of their customers thanks to more involvement from them.
Well I think this is an excelent idea, and GE could use a great deal of this, from personal experience in the oil industry with GE buying up Bently Nevada, a very costomercentric company, everyone figured that BN would go to hell because of GEs poor performance as far as costumer satisfaction goes. Many BN employees figured the same and left for employment elswhare. We will see what becomes of this, eventhough BN is just a very small part of GE it will be interesting to see if there is any effect.
If you are looking at how to measure customer satisfaction, I recommend the excellent article by Frederick Reichheld, "The One Number You Need to Grow." It ascribes superior corporate performance to the willingness of consumers to recommend that business.
In short, the "best predictor of top-line growth can usually be captured in a single survey question: Would you recommend this company to a friend?" And the only way to get an extreme supporter of this is to constantly monitor and improve the experience of your customers.
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