The case for a new C level executive: 'customer experience'

The growth on online channels for customer action is dramatically changing the balance of power between companies and their customers: managing the 'customer experience' is becoming a top priority.

Historically organisations that serve the mass market have structured themselves around three main divisions: marketing, sales and customer service.

The customer does not see three divisions. He/she experiences the marketing when he, for example, sees its advertising. He experiences its sales channels when he buys the company's offering and he experiences the company's customer service when he has issues around those offerings.

Time was when that distinction between the company structure and the customer view was largely irrelevant: marketing, sales and customer service used quite separate channels.

Today all that is changing: online is key to marketing; many goods and services are sold online and post-sales interactions increasingly take place online.

According to customer experience research and consultancy firm Fifth Quadrant (formerly callcentres.net) not only are Australian businesses struggling to embrace these new channels, their emergence is leading to a fundamental power shift in the supplier - customer relationship.

"It was a one way relationship where organisations had the power and the customers had to acquiesce to the way organisations wanted to do business," Fifth Quadrant founder and managing director, Catriona Wallace, says. "We are now seeing consumers starting to be empowered. This is the greatest change we are seeing in the landscape."

"As academic theorists we studied military models of organisations. That is why we have CEOs, 2ICs, heads of IT and why when we talk about customers we use military language: they are 'targeted', they are 'segmented' they are 'captive'.

"Now the language we are using in the customer behaviour domain is 'customer experience' and by that we mean any customer interaction from the time they start interacting with marketing and advertising through to sales and post-sales service."

Fifth Quadrant has just published a survey of 520 consumers on their use of alternative, social media channels for contacting businesses - email, web self service, web chat etc. Its conclusion was that most Australian organisations are struggling to effectively engage with their customers using these emerging channels.

Wallace, says that consumers are still concerned about security, privacy and query resolution levels with these new channels, but nevertheless they will become increasingly prevalent.

"The percentage of consumers who use these channels for customer service doubles year on year. Rather, it is a question of how effectively organisations address the supporting business processes and skill levels of social media customer service representatives," it says.

"The challenge for Australian business is that they typically do not consider multi-channel customer experience as a strategy, hence these new channels lack integration, they do not have accurate revenue and cost models and there is poor data analytics. This has resulted in a sub-optimal channel deployment and as the research shows, ultimately, a sub-optimal customer experience."

According to Wallace, organisational structures are ill-suited to delivering a coherent and effective 'multichannel customer experience' strategy.

"I spend a lot of time giving a hard time to CMOs and CIOs who will often drive the development of online self service components of a business where it should really be the head of customer experience doing that," she says.

"Often we will still see someone who is responsible for customer experience in the marketing team but we now know that that skills and capability needed for marketing are entirely different to those needed to sell and to build a relationship with a customer.

"The big disconnect we see is marketing people who are attempting to be competent and capable at delivering the very sophisticated multichannel experience once the customer has bought the product."

Fifth Quadrant estimates that only around 20-25 percent of organisations have someone centrally responsible for customer experience, and then not necessarily at the C level. "What we see is the contact centre manager report to someone who head of customer experience but they would tend to be at middle level," Wallace says.

A company with such a structure would be ill-prepared for the era of the 'empowered-customer' that Wallace envisages. "Clever businesses will provide vendor relationship management tools where consumers own their own profiles and their own data and that help customers choose the organisations they want to do business with," she says.

Any customer that has suffered the frustration of queues, convoluted IVR menus and incomplete issue resolution of a typical call centre interaction must doubt Wallace's theory of a shift in the balance of power. But even if it is partially realised, companies will need to competently and holistically manage the spectrum of how customers interact with them.

To do that they will likely need a CCEO sitting at right hand of the CEO.

This article first appeared on iTWire, Australia's leading independent IT&T news and information source.