What do you think, boss? How to gain board support for your Customer Experience (CX) program (and other marketing-led strategies)

BBS  Philipp Klaus 1A copyBy Phil Klaus

According to our most recent research, CX Management, for better or worse, is firmly allocated in the firm’s marketing function. This association, however, triggers multiple challenges for CX managers, or, to be more precise, CMOs worldwide. The most prevalent challenge is the CEOs’ and boardroom members’ unfavorable perception of both marketing-led strategies and CMOs.(2) For decades, marketers have been trying to be more accountable and elevate marketing from a purely functional and tactical to a strategic level. Yet marketing, once the darling of executives’ strategic efforts, remains heavily criticized for its inability to present compelling evidence of the effectiveness of the huge sums it directs to promotion and brand building. This perceived lack of accountability is reducing marketing’s influence on strategic decision-making, and is a cause of other functions.

In addition, CX is often used in the same sentence with other marketing-driven strategic initiatives, such as CRM, which managers do not see as an investment delivering the value it promised. Paradoxically, despite the increase of CX and the voice-of-the-customer programs, marketing’s strategic role is in decline. Our global study highlights that CEOs do not believe that marketers, and their CX initiatives, can be an integral part of strategy development for three main reasons:

  1. the lack of financial accountability,
  2. marketers’ fascination with and focus on new technologies, tools, and frameworks without establishing that they generate consumer demand for the firm’s offerings in a quantifiable way, and
  3. the resulting lack of trust towards marketers’ capabilities and towards marketing in general.

These themes cannot be viewed in isolation. They reflect the heterogeneous nature of the current status of, or lack of, marketing in the firm’s strategy planning and execution. I could make the point that CEOs and/or the firms’ boards are as responsible for the fall of the CMO and marketing from the strategic agenda as marketers themselves. This discussion, however, will not add any value. CMO/CXOs work for the CEOs, not the other way around. My contribution is to acknowledge and learn from these developments in order to put marketing and CX management back on the CEO’s strategic agenda.(3)

If marketing is disconnected from the firm’s strategy, then the firm’s strategy would be expected to become less adapted to market needs. Taken to its logical conclusion, this should result in eroding profits and vulnerability to competition. Therefore, there is an overriding need for marketing, and, in particular CX, to become a key component of the firm’s strategy. (When we refer to “marketing” we mean what company management recognizes as such, and not what scholars and businesses put forward as part of marketing.)

As a result, in today’s business environment, marketing is relinquishing ground to other functions rather than expanding its role. If CX or VOC are (partially or completely) not under marketing, the CEO and board will never consider it to be marketing. Moreover, the business units that take over these marketing tasks consider them to be part of “their” function (e.g., operations, information systems, etc.) and not part of marketing. Therefore, for marketing to succeed in these efforts, CMOs must garner support from all stakeholders: in particular the CEO and the firm’s board. This can be achieved by converting existing main challenges into opportunities, such as:

  • Augmenting traditional sales indicators presented to senior management (e.g., conversions, revenue, etc.) with clear defined customer demand-related indicators, developing tangible links. For example, by delivering evidence for the positive relationships between abstract constructs such as customer experience5 and word-of-mouth on customers’ buying behaviors, CMOs will have a significantly better chance of demonstrating the strategic impact of their actions. Another way to achieve that is by using mid-range metrics, such as real-time tracking linked to revenue generation, to demonstrate accountability. For example, CMOs can introduce segment level reporting that includes P&Ls by brand, market, product, distribution channels, and end customers.(1)
  •  Take ownership of a variety of activities within and outside of what is considered their core functional area, such as marketing related IT and IS initiatives. This would allow CMOs to demonstrate, for example, the possible impact of new media as a supportive tool (with an emphasis on “supportive”) in crafting winning strategies (and by winning we mean generating quantifiable customer demand).

Thus, the job description of a CMO becomes closer to that of a CEO. In a literal sense, CMOs must see themselves as the Marketing CEO. This means running CX, and all marketing activities in a manner that parallels that of the CEO in the running the firm.  This requires that CMOs shift their perspective to that of a holistic business leader from simply being a manager of the marketing function.  As such, it requires a CEO’s mindset of seeking to maximize value in a tangible way that can garner the support of the board of directors and shareholders.(4)

The following Figure summarizes the main steps that we believe are necessary to put CX on the CEO’s strategic agenda by using actions to convert challenges into results that will be appreciated by the CEO and other board members.(1)

How to gain 'board support' for your CX program In this series we now discussed which CX strategies are most profitable, explored how these strategies are converted into a successful multichannel strategy, outlined the crucial role customer-facing (direct and indirect) employees play in managing the CX, and elaborated on how executives can gain support from the boardroom in order to compete successfully on the new competitive battleground – the customer experience. I hope these series delivers useful insights into how to manage and measure the most profitable customer experiences, and am looking forward to your CX questions that I will answer during the Center for Services Leadership podcast.

________

Dtwitterr linkedinPhil Klaus is Professor of Customer Experience and Marketing Strategy and holds multiple visiting professorships around the globe. His multiple award-winning research has appeared in a wide range of academic and managerial journals. Phil is a frequent keynote speaker at public and in-company seminars and conferences around the world. He has an active, international portfolio of Blue-Chip clients, for whom he advises on customer experience strategy and profit enhancement.

References:

  1. Klaus, Ph. (2014), Measuring Customer Experience – How to Develop and Execute the Most Profitable Customer Experience Strategies, Palgrave-Macmillan.
  2. Klaus, Ph., Keiningham, T., Edvardsson, B., and Gruber, T. (2014), “Getting in with the “In” crowd: how to put marketing back on the CEO’s agenda,” Journal of Service Management, Vol. 25, No. 2, pp. 195-212.
  3. Klaus, Ph. and Edvardsson, B. (2014), “The road back to relevance – how to put marketing (and marketing scholars) back on the Top Managements’ agendas,” Journal of Service Management, Vol. 25, No. 2, pp. 166-170.
  4. Klaus, Ph., Gorgoglione, M., Pannelio, U., Buonamassa, D. and Nguyen, B. (2013), “Are you providing the ‘right’ experiences? The case of Banca Popolare di Bari,” International Journal of Bank Marketing, Vol. 31, No. 7, pp. 506-28.
  5. Klaus, Ph. and Maklan, S. (2013), “Towards a better measure of customer experience,” International Journal of Market Research, Vol. 55, No. 2, pp. 227-46.

Examining Amazon.Com’s Relentless Customer Advocacy

Center for Services Leadership:

Bruce Temkin, one of the speakers at the Compete Through Service Symposium, shares his takeaways from the presentation by Mike Gathright, Director of Americas Customer Services at Amazon.com

Originally posted on Customer Experience Matters:

Last week I attended the Arizona State University, Center for Services Leadership (CSL) Compete Through Service Symposium. It was an excellent event. I was impressed by what the CSL is doing to equip future customer service/experience leaders.

One of the speakers was Mike Gathright, Director Americas Customer Services at Amazon.com. He describe Amazon.com as “The Earth’s Most Customer-Centric Company,” or just EMC3. It’s no accident that Amazon.com scores so consistently high in the Temkin Experience Ratings and Temkin Customer Service Ratings. The company works on it.

I really love one of the company’s tenets, Relentlessly advocate for customers. It sounds like something that all companies should strive to do.

Gathright explained that Amazon.com has three key priorities:

  • Empower your people
  • Listen to customers
  • Invent for customers

To deliver on those priorities, the company uses a number of internal quality processes including Kaizen (continuous improvement) and Genba walk (seeing and observing the actual process or…

View original 291 more words

Welcome to Compete Through Service Symposium 2014!

25th Annual Compete Through Service Symposium Recap in Pictures

Thank you everyone who attended the 25th Compete Through Service Symposium and made this event truly great! We’ll be sharing highlights from the event, interviews with participants and speakers on this blog. Make sure to subscribe to our blog to receive these updates. If you missed the event, you can check the event brochure HERE Hope to see you next year!

Meet the Center for Services Leadership Team

To kick off the 2014 Compete Through Service symposium, we would like to introduce you to our team. We look forward to connecting with you this week at the symposium!

Mary Jo PicMeet Mary Jo Bitner:

  1. What is your favorite place to visit in Arizona?  

Flagstaff, in the summer or fall.

  1. Other than ASU, what college team do you root for? 

University of Washington, Huskies, my alma mater.

  1. How long have you been with the CSL and what is your current role? 

I have been with CSL since 1987 and am currently the Executive Director.

  1. What excites you the most about working for the CSL? 

I love working with our member companies and seeing the interaction/shared learning between our board and faculty network.  I love seeing the tremendous growth in knowledge and practice over the years.

  1. What is a great example of customer service?

Amazon in general. And Amazon Prime, specifically – I love it and use it all the time! Continue reading

The Next Wave of Service Delivery: Success Accelerators!

 

randy-wootton-headshotBy Randy Wootton

The Challenge

Today, more and more companies depend on software as a service (SaaS) to operate essential parts of their business, such as managing their relationships with customers, driving sales performance, and maintaining employee communication. As the industry and surrounding ecosystem that delivers these services matures, it faces a growing demand for accountability and results.

This is driven by many factors. As the global economy has emerged from recession, there is an increased focus on cost control and accountability. The shift in accounting for technology spending from capital expenses to operating expenses requires quicker results from technology investments–often within a single fiscal year. And the growing sophistication and utility of the services themselves makes them an indispensable ingredient in any company’s success – shining a spotlight on how they are implemented, deployed and used. Continue reading

Listen to your Customers: The Story of how Great Clips Changed the Salon Industry

ray-barton-headshotInterviewed by Donna Stone

Ray Barton is the Chairman and former CEO of Great Clips. I had the opportunity to talk to him about how he built Great Clips into the world’s largest salon brand. Here are some of the key takeaways from our conversation. You can hear more of Ray’s insights at the Compete Through Service Symposium on November 7th.

You have been very successful building a huge national franchise business. How would you describe your personal work ethic, and how has it been instrumental to the growth of Great Clips?

I have five sisters and we all learned very early that we had to work for what we wanted. That carried over to the business. It was easy for me to make the commitment of time and energy it took to build a business. Building Great Clips was fun–it never felt like work . . . it was always exciting and challenging. The work ethic came naturally–it was part of who we were.

What else would you attribute to your success in the service industry?

Great Clips led the change in the salon industry. We changed the way customers were served. When we started the industry was organized around the stylist. Continue reading

The forgotten asset – the crucial role of the employee in delivering great Customer Experience (CX)

BBS  Philipp Klaus 1A copyBy Phil Klaus

The employee, the forgotten asset? Forgotten is a day and age when the consumer calls the shots and consumer to consumer (C2C) interactions seemingly rule the business world (Klaus 2013a; 2013b)? Or, has the tide turned again, and managers do recognize that employee retention is crucial from both a primary (think cost of hiring, training, and possible loss of productivity by hiring a new employee), and secondary cost factor (e.g., disengagement, customer service and errors, and a negative cultural impact caused by high turnover)? Let’s start out investigating the ‘status quo’ of employees in today’s business environment, with a special focus on services. Continue reading