Blog post

Leadership’s Essential Role in Customer Experience

By Augie Ray | March 27, 2018 | 0 Comments

MarketingCustomer Experience

Many companies are striving to launch customer experience (CX) programs that will improve their growth, margin, and customer retention. In working with our clients, one of the challenges we see is a tendency to view CX as a tactical effort–something designed to seek out and resolve customer annoyances, particularly in customer service interactions. As a result, company’s CX focus can be narrowed to activities like enhancing customer care processes, front-line employee performance, customer care hiring, and call center training. While these are all good and necessary efforts, this sort of myopia misses the point of what CX really is and what it can do for your company.

One financial services client had become frustrated with the lack of CX success. Years of investing in improvements to customer care had yielded little impact to the organization’s overall customer satisfaction scores. Although post-call transactional surveys validated that the customer care group had improved service interactions, the relationship surveys across the entire customer base demonstrated little to no improvement. We worked through the numbers: Only 20% of customers contacted the company for service each year, and 80% of those interactions were routine (such as checking account balances), offering little opportunity for the company and its employees to make a strong and differentiating impression.

This meant that just 4% of the company’s customers had an annual opportunity to be exposed to those sensitive moments that allowed the brand the greatest opportunity to provide a significant and memorable experience–an average customer would experience such an interaction once every 25 years. That did not mean the company had wasted its time–after all, the improvement in the transactional surveys demonstrated that the customer care group was achieving its goals of improving their interactions. Moreover, the brand recognized the value of minimizing negative customer care experiences since each one increases the risk of diminishing or severing a customer relationship. Nonetheless, the brand could not expect to foster a significant and measurable improvement in customer perception across its entire customer base by focusing only on a small set of relatively rare customer touchpoints.

Mature and robust CX programs not only identify and solve points of friction and dissatisfaction for customers, but they also help to foster a more customer-centric culture. This means not just helping front-line employees to provide better experiences on a case-by-case basis but also encouraging and assisting senior leaders to keep the customer in mind as they make decisions that affect the experiences of vast swathes of customers. Changing the structure of a loyalty program can instantly affect far more customers than training hundreds of customer-facing employees. And a change in return policy can anger a much broader set of customers in a shorter period than can an entire call center full of disengaged call center reps.

Changes to loyalty or return policies are just obvious examples of outward-facing executive decisions that impact the CX of large numbers of customers, but leaders also shape the culture and operation of the organization in a plethora of more important and subtle ways. The goals they set, the performance they reward, the way they balance short- and long-term objectives, the spending priorities they create, the customer-centric behaviors they model, and the products they approve all influence how employees act and thus how customers feel and what they say about the brand.

Consider Uber, the company that came seemingly out of nowhere to swamp the established and protected taxi market in a matter of years, just by providing a significantly better customer experience. Uber didn’t win with advertising strategy or content–they won with CX, turning users into advocates. Customers flocked to Uber’s on-demand service thanks to an app that called cars to their location, provided a highly-rated driver, permitted cashless transactions, and did so at a better price. But in 2016, Uber hit a significant roadblock that caused a number of its customers to abandon the service.

Nothing changed with the product–the app worked exactly as it always had and the rider experience remained positive–and yet customers quit the company when its long history of dubious leadership behaviors reached a tipping point that many found too much to stomach. Uber saw reduced customer satisfaction, degraded loyalty, and poor word of mouth, the three core measures of brand CX. Uber’s leaders had built a better mousetrap but failed to account for how their decisions and behaviors could impact customer perception, retention, and advocacy. Uber’s business faltered not because of tactical issues such as rude drivers or poor UI in its app but because leaders made poor decisions–the same advocacy that built Uber began to work against it. (Leaders often forget that advocacy is a two-way street and that brands are as likely to suffer from poor WOM that drags on trust and consideration as they are positive WOM that drives inbound traffic and sales.)

This month, Facebook is facing its own sudden shift in CX as a result of leadership issues. Following news that Cambridge Analytica had improperly taken and used Facebook users’ data, #deletefacebook is trending, Elon Musk pulled down his company’s Facebook pages, and the Facebook’s stock has taken a beating. I don’t expect this to be a major turning point in terms of Facebook’s usage, but it is important to recognize that the company is facing this loss of satisfaction, loyalty and brand reputation not because of any change to its app or service but because leaders set priorities that encouraged revenue growth from advertisers over its customers’ privacy. This was a foreseeable and preventable issue for those paying attention to customer feedback and concerns voiced in social media. More importantly, this issue was not a result of a single decision or lapse but came as a result of years of leadership priorities and behaviors.

In response to the damaging PR and customer anger, Mark Zuckerberg has promised a change, saying “We have a responsibility to protect your data, and if we can’t then we don’t deserve to serve you. I’ve been working to understand exactly what happened and how to make sure this doesn’t happen again.” And he acknowledged that this situation was a “breach of trust between Facebook and the people who share their data with us and expect us to protect it. We need to fix that.” Leadership actions diminished Facebook’s CX, and Zuckerberg (seems to) understand that leadership is needed to recover customers’ satisfaction, loyalty, and advocacy for the social network.

It is easy to recognize the broad and comprehensive impact that leadership has on a brand’s customer experience, but how can a CX leader hope to change and inform the decisions and behaviors of his or her bosses? “Managing up” is a hardly a unique challenge to CX leaders. In fact, helping to influence (rather than be subservient to) the perceptions, actions, and priorities of your boss is a key to leadership success in any job. One of my favorite business quotes comes from leadership advisor and author Annie Mckee, who says, “Once you become a victim, you cease to become a leader.”

It’s vital CX leaders not be victims of bad culture, organizational silos, or leadership attitudes. Below is a list of ways CX leaders can “hit above their weight” and help to influence culture change in peers and bosses. The links provided share more information and research for Gartner clients:

Fixing broken touchpoints is table stakes. If you are like the 81% of respondents in our 2017 CX survey who believe their companies will be competing on the basis of CX in two years, then you must adopt multiple strategies to ensure the commitment to the customer is even greater at the top of the organization than it is for customer-facing employees on your brand’s frontlines.

The Gartner Blog Network provides an opportunity for Gartner analysts to test ideas and move research forward. Because the content posted by Gartner analysts on this site does not undergo our standard editorial review, all comments or opinions expressed hereunder are those of the individual contributors and do not represent the views of Gartner, Inc. or its management.

Leave a Comment