Customer experience (CX) practitioners have often debated the right reporting line for a CX function with strong opinions on where the function fits and whether it matters at all. All opinions are probably right because where an organization places their CX function reflects the level of customer-centric maturity of the organization. Customer Attuned uses the below framework to assess maturity which I will base my opinion on.
Most organisations will start their transformation to customer-centricity with either a measurement function in the Marketing or Servicing team. Measurement is a good place to start as it provides a baseline or at least some insights on where to start fixing the basics and adding value quickly. Usually the organisations are still product-focused and have the view that if they told a better story to their clients or improved the service they provided, customers will buy more. These organizations are transitioning from product-focused to service-focused but are still thinking about what they do as an organization rather than what outcomes the client is looking for and the organisation’s role in helping the client fulfil their goal.
Marketing builds a perception which is key to setting expectations with clients or potential clients. Starting here helps the CX team understand the positioning of the brand. The organization must however deliver according to the expectation but often the rest of the organization is not aligned and the client perceptions get worse rather than improve. Servicing on the other hand is the last step of the client’s journey and often is focused on a reactive approach to what the rest of the organization is doing. Starting here provides the CX team with a view of what is going wrong and the client response to organizational failure. It often sparks tactical initiatives to fix the problems but this is not systemic and therefore the issues do tend to repeat themselves.
Organisations that are moving from service-focused to customer aware have started focusing on creating an understanding of the client activities and specifically which clients provide more value to the organization. These organisations will usually start to focus on client analytics and the story the numbers are telling; perception vs. real client behaviour. They still have a significant inside-out approach to fulfilling the client’s objectives but that lens starts to incorporate some outside-in thinking. Customer awareness leads the organization to position the CX function in a client engagement area. They shift their view of client from a product view to a client view. Often budgets are still held by the product teams which makes it difficult for the CX function to be effective however the activities to change the CX have begun and may include CX measurement, client analytics and a lot of sales and servicing focused initiatives that improve the experience at a tactical level.
Irrespective of where the organization started the client centric transformation journey, tactical initiatives should lead to a realization that a more systemic approach is required. Organisations that reach the customer-enabled point will start to look at enablers that will be required to create this sustainability. These could range from data management, process re-engineering, technology and training initiatives. Where there is leadership commitment, some structural changes will take place as the organization gears itself to deliver to changing client expectations. At this level, the CX function may remain in the client engagement area but for really progressive organizations and for effectiveness, discussions on building CX capabilities that can be decentralized have kicked off. They will have a clear governance structure in place, ensuring ongoing alignment and will have overcome the siloed approach to servicing clients.
Mature organisations have embedded CX activities across the whole organization. The client lifetime value is understood across the organization and it drives customer management and budgets. Resources are allocated based on the alignment of organization strategic drivers and customer lifetime value maximisation. The organization does not spend resources on off-target customer initiatives. They have the role of Chief Customer Officer that reports to the Chief Executive and has mandate to drive customer-centric change across the whole organisation.
This role has the following objectives:
- Enable leaders to earn the right to growth by improving customers’ lives and honouring employees.
- Maximise customer value by being the architect of the customer-driven growth engine
- Unite the organisation leadership around the customer
- Support leaders in their role as cultural leaders in the transformation journey.
Customer-centricity requires that the whole organization is aligned in delivering to customers. The following SCHEMA Customer Management Framework developed by The Customer Framework provides a view of the capabilities that provide a systemic approach to client-centricity. It provides an indication of the reason the whole organization should be involved and the requirement for leadership commitment.
The capabilities are split into:
- Foundations – This layer underpins good customer management, requires huge investments in time and money and usually takes long to mature. This layer has the fundamental building blocks that support or limit transformation ability. These capability areas require broad-based input and alignment, without which the operationalization of a customer-centric business model is almost impossible
- Enablers –These components support the ability to implement the chosen customer strategies. They are dependent on the foundations building blocks and can be planned within the current business cycle for implementation in the next budget cycle.
- Execution – This layer includes the capabilities control levers required to maximise customer value. These are capabilities that can be optimized in the short term.
To be effective, the CX function should be a central function in the organization. Client-centric maturity is however a long-term journey and should therefore start where there is early adoption with the intention of a continuously growing alignment in the organization which leads to higher levels of maturity.
Where does the CX function fit in your organization and what is it telling you about the focus of the function today?