11 CX Flaws that Foretell a Company’s Fatal Future
Fatal CX flaws in thinking and strategy foretell the demise of most companies trying to improve their customers’ experience. Their efforts become an epic comedy of errors to the tune of the 3 Stooges or the Marx Brothers. It is sadly unfortunate.
You see, these companies and their executives are not doing their due diligence. For example, these and other studies demonstrate the power of a superb customer experience.
- According to Harvard Business Review’s Employee-Customer-Profit Chain, a 1.3% improvement in customer satisfaction scores results in a revenue increase of .5%.
- The Profit Impact of Market Strategy’s database found that companies who lead in service have 12 times the profitability and 9% greater growth than poor service providers.
- Bain & Co. found that a 12-point increase in the net-promoter score doubles a company’s growth rate.
- A report by the American Customer Satisfaction Index proved that the leading companies consistently outperformed the market. Customer service leaders outperformed the Dow by 93%, the Fortune 500 by 20% and the NASDAQ by 335%.
Instead, these organizations slip into eleven CX flaws that destroy customer loyalty and their futures.
Which of these CX Flaws Sidetrack Your Company?
Ego’s, arrogance, not invented here, ignorance of CX facts, and poor emotional intelligence skills devour the best intentions for improving CX. Leaders must be willing to learn, make a commitment and get out of the way to transform results.
A major airline responded to customer complaints by notifying customers of their “Customer First” initiative for employees. (The problems were really the management.) The airline went bankrupt and eventually was merged with a larger competitor. According to service gurus, 85-95% of service problems are management related. Research shows that high employee engagement leads to better customer engagement. With employee disengagement at all time negative levels companies are in peril right in the starting gate.
Ignorance is Bliss.
Recently, a company shared with us that they survey their customers twice a year. What if you only looked at sales or profit numbers that often? The company would probably go bankrupt! If you do not measure the customers’ experience regularly and use the data to excel, you cannot manage it. Certainly, the best you can achieve is mediocrity.
Vision Without Vitality
One company President said, “We don’t want to be the biggest company, only the best service provider.” The President gave a five-minute speech everywhere he went; however, no plan or action ever followed. The company floundered. Consequently, his vision had no substance.
The Panacea Approach
One CEO learned how an executive he knew improved his company’s service using a certain method. So, he did it the same way and failed. That is like a doctor giving the same treatment plan and prescription to every patient with a problem. To be effective, you need an approach based on best practices but customized for the specifics of your company.
Do It All and Have It All
One leader happily explained to his team that they had 120 new service change initiatives. Unfortunately, employees were overwhelmed, and business stalled, and performance sank. People can only handle so much. You must focus. Ask, what is most important?
I am a Rock – I am an Island
A $25-billion company we know has tried to improve service for a decade. They have achieved no gains and have settled for low stock prices, profits, and growth. Recently they started selling off parts of the company to survive. Unless a company begins at startup with a zealous customer focus, there is practically no chance for improvement without a consulting partner. Why? Because the company already has serious internal blind spots, a full plate of priorities, and limited expertise in improving CX.
Drive by Training
Training is not the answer– it is only part of the solution. Many leaders send their employees to a class to get “fixed.” You also must work on organizational design, systems, processes, and cross-departmental collaboration. Even though training is a vital pit stop on the way to success, it is not a one-stop solution. The best training effort starts with a vision involving a going commitment to employee development and learning.
The Secret is Technology
Too many companies figure that technology is the key to better service. This is one of the costliest CX flaws. The truth is – it can help, but it is not the answer. First, in today’s age, you need to be cutting edge in technology to be in the game, however, maybe not first. Many new technologies fail to deliver on their promises. One organization spent millions to improve customer retention through technology; unfortunately, their sales growth continued to spiral downward. Second, it is people that make or break a customer experience transformation, rather than technology. Too often, people are an afterthought. Great service is an inside-out process that begins with employee satisfaction and loyalty.
The Tool-Chest Dilemma
Take your pick from new digital technologies, TQM, Six Sigma, GOALS, ISO, Kaizen, and numerous other approaches to get better. Too often, these efforts cannot be executed well because employees are drowning in meetings, data, and paperwork. Experience suggests that the best approach begins with a thoughtful and honest analysis of the customers’ needs and concerns. Next, it requires partnering with employees through a passionate and relentless drive to give customers what they need. This is a science and an art, which must be done with integrity and simplicity.
The Perils of Poor Execution
How often have you implemented a company strategy but failed to achieve the desired result because leadership changed direction or cut back on resources? Poor execution is deadly when attempting to improve the customer experience because it shows a lack of commitment from leaders to invest their time and resources. The promises become false exhortations, which of course demonstrate a lack of integrity. The trust within and around the organization dies. Now, there is an even bigger problem.
Bonus Flaw: The CEO Doesn’t Walk the Talk
CEO’s agree that improving the customer experience gives a company its biggest competitive advantage. 73% of executives identify improving the customer experience as a top three priority. Yet, studies show that less than 13% of companies have strong CX cultures that drive better business results. The rest are mired in these CX flaws. Therefore, it seems everyone is talking about improving, but few are getting anything of substance done.
CX Flaws: Pulling It All Together for Improvement
Quite frankly, to avoid these CX Flaws executive leaders must look in the mirror. Their values, experience and habits are often their own worst enemy. They got to the top with strengths of hard work, drive, and business analytics but it inhibits their vision. All of what they have accomplished may be good. but the game has changed. However, the customer has the power not the CEO, other executives, or board. Competition is global, customers are more discerning, and employees less loyal. Now the emotional intelligence skills of empathy, open mindedness, listening, team building, and innovation are needed.
Finally, CX leadership requires a total company effort led by a committed executive team, you cannot short cut it. Steve Jobs said it brilliantly, “Get closer than ever to your customers. So close that you tell them what they need well before they realize it themselves.”
Also, do you want to enhance your career by increasing the customer experience of your department or organization today? Download this complimentary eBook guide: The Customer has the Power.
In addition, do you want to enhance your leadership skills to drive customer-centered behaviors in employees? If so, check out this eBook, The Great Customer Experience Scam.
Finally, go here for our RealTime Learning & Training leadership and personal development website. Over 130 micro-learning, customer experience, and career development resources at your fingertips!