From 36 percent to 89 percent. According to Gartner Research, 36 percent of enterprise CEOs in 2011 said customer experience is the dimension on which they are now competing. That number jumped to 89 percent in 2016.
These CEOs of major companies are saying that customer experience is the battlefield, and having a strategy to win on that battlefield is imperative. I suspect that in the next three years, the percentage of CEOs who say that customer experience is their differentiator will rise to 95 percent. But why, and why now? What is happening that providing a customer experience has become so imperative for so many companies? Haven’t they always focused on customer service? Yes, they have. So when they talk about a customer experience strategy as a new competitive dimension, they are talking about embedding the customer perspective into every cell of the company and creating a unified (i.e. whole company) approach to understanding the customer.
The very nature of strategy is that it animates an organization. When you have a unifying vision and strategy and electrify it with the right customer information, your decisions will be different. That sounds simple, but it is where differentiation begins. Your decisions will be different than they would have been had you not adopted the strategy. In other words, if you have not created a unifying customer experience vision and strategy, and you have not adopted the discipline to track and manage its progress, you are getting left behind. You become the guy or gal who is in a highly competitive race but is unaware whether you are running first, last or somewhere in between.
When you consider why there is such a massive push on customer experience, you might come to the conclusion that it is because of the proliferation of social media in all its forms — Yelp, Snapchat, Facebook, Instagram. Pinterest, Google+, etc. — and that these companies want to make sure they look good. Although improving social commentary is a nice outcome, it isn’t the main driver. The drivers are market share, revenue growth, same-store sales, share of wallet, margin and all of the usual suspects. In fact, I would sum up many of these companies’ approaches to social media as “Be a great company on the inside, and it will show on the outside.” Looking good on social media isn’t a driver; it is an outcome.
What business owners are recognizing is the parity in the normal business functions among their competitive set. You better be good at marketing, finance, human resources, etc. You probably wouldn’t be around if you were not good in those areas.
Moreover, all of these normal business functions are operational. This means that they have numbers and metrics that guide the day-to-day and give goals for the future. Someone at the top of the food chain takes ownership of these functions and ensures their success. This is simply the ante to being a good company.
Managing the customer experience is the ante to being a great company, and someone has to decide to make customer experience a strategic objective. That person is the CEO, president or owner in the case of many smaller companies.
Once that decision is made, aggressive action should be taken to break existing inertia. Set big goals — net promoter score (NPS) is a good one — measure and monitor all of the NPS key driver metrics on a day-to-day basis, respond to every single customer that provides feedback, get multiple people involved, establish a company-wide vision with hard edges on understanding when and how you will reach it.
The worst mistake I see is when company leaders take a tactical approach to customer experience. This usually takes the form of testing whether one’s teams are willing to adopt and execute the new operational disciplines that it takes to make a strategy work. If their teams lack the interest in adopting the day-to-day disciplines, then these leaders capitulate. Strategy is not a trial balloon. Strategy is not decided at the front line. It is executed at the front line.
If you are a CEO, president or owner, if you own one club or 100 clubs,you are the strategist, and it is you who will determine whether your strategy gets adopted or fizzles.
There is a race going on. We are all in it, and there is a tremendous opportunity to differentiate your company. We estimate that only 2 to 3 percent of fitness companies are ramped up in their customer experience management discipline.