Innovation is complex and so is customer experience. Bringing the two together to drive business results is a critically important task if you want to stay ahead of competitors — the vast majority of whom believe that customer experience is the most important source of differentiation in the market. I just spent a week in San Diego at our Gartner Digital Marketing Conference and innovation in customer experience was a hot topic with clients in my one-on-one sessions. Here’s a synopsis of some of the questions.
Question 1: You have data that says that marketing leaders have specific budgets for innovation. What does that mean for CX?
Yes, business leaders are demanding and funding marketing innovation. Our Gartner CMO Spend Survey 2015-2016 highlights innovation as the fastest growing executive expectation of marketing leaders and, on average, a full 10% of their marketing budget is allocated to innovation. How the funding is being managed and used is not so clear. There are many ways to define innovation and almost as many ways to manage it. In our research, innovation is defined as the creation of new experiences, interaction models, technologies or other products and services, but does not include to improvements – or optimizations — to existing products, programs, channels, technologies. In CX, however, I usually include both disruptive innovations and optimizations as important opportunities to improve customer experience.
In a majority of broad-based innovation initiatives — where new ideas are sourced from customer, partner, employees and others — idea management is an enormous challenge. How do you collect, evaluate and identify winners from among the myriad ideas and opportunities submitted. In the end, only a limited few are worth the time, energy, and investment to become a reality. While the same is largely true with CX, it feels more well-bounded to me. There are the low-hanging fruit opportunities — moments in the customer journey that either create or destroy value for the customer. Using our definition of innovation, these would fall into the category of “optimizations” for me — extremely important problems to solve and opportunities to take but not new experiences or interaction models.
Question 2: I saw Augie Ray present on the Buy/Own/Advocate cycle. Could I use that as a framework for thinking about CX innovation?
When I look how they are approaching innovation in a customer experience context, I think that many are playing a crazy game of whack-a-mole, putting out fires and conducting useful but somewhat random and disconnected experiments. Its not for a lack of vision or desire, but mostly a lack of a consistent process built on compelling metrics and organizational diffusion when it comes to accountability for customer experience. I really believe that you need to create a framework to organize your ideas and communicate consistently about the progress you are making. It helps people across the company and up and down the hierarchy of leadership see things in a common way and have a better chance of staying aligned and on task.
Augie’s Buy/Own/Advocate model is an excellent framework for organizing around in general. He’s applied it to aligning CX with marketing operations teams and he’s published research applying the model to social too. I believe its an equally great fit for organizing ideas around CX innovation (Note to self: Convince Augie to write this note soon!). The Buy cycle begins with prospects discovering your product or service and ends with a new customer. This cycle reflects the traditional marketing funnel, it is today powered not just with brand communication but also with trusted, peer-to-peer word of mouth. The Own cycle begins at the point of purchase and continues above and beyond customer satisfaction to the point where customers love your product or service. The Advocate cycle plans for the ways in which loyal customers are turned into advocates who positively impact others’ awareness, consideration and purchase. Two vital junctures bind these three customer journey cycles to each other — Purchase, when prospects transition to customers and Love, where your brand creates its most loyal customers and its most vocal supporters.
Just stare at this elegant model for a few minutes and I have no doubt that you will easily identify opportunities to optimize or innovate around your customer journey. By the way, if you have access to our research, read Augie’s report, Use Social Media To Power The Entire Customer Experience, to see how to apply the model to the complexities of social media marketing. You can use the step-by-step approach described in that report for innovation too.
Question 3: What are the biggest challenges in making CX innovation work in our firm?
As noted earlier — and largely supported by the data that we collect from marketing leaders — diffusion of accountability is a major stumbling block. Everyone has a stake in customer experience, but few want to take ownership of the whole thing without being given the mandate and the authority to institute change. But we are starting to see some important organizational changes develop that should give everyone hope.
First, our latest study reveals that for 67% of the companies in our survey, the marketing organization plays primary or significant role in setting overall corporate strategy. No longer just the bullhorn for the brand, it’s becoming increasingly clear that marketing is riding shotgun when it comes to business strategy. What an opportunity to lead and drive innovation.
Second, someone needs to take a leadership role for customer experience and we see that responsibility increasingly being offered to Marketing. Take it and take the opportunity to advance the entire company’s CX strategy using the Gartner Customer Experience Maturity model.
We’d love to hear your thoughts on CX and innovation and how you are making these two powerful forces of business success work together. We welcome your comments below.