The total impossibility of customer experience management

The Total Impossibility of Customer
Experience Management
JBoye15| 4 November 2015
Tim
Walters
|
Co-‐Founder

twi5er:
7m_walters

twalters@digitalclaritygroup.com

www.digitalclaritygroup.com

About Digital Clarity Group
We work with:
§  Digital leaders
§  Technology vendors
§  Service providers
We offer:
§  Consultancy
§  Research
§  Thought Leadership
Digital Clarity Group helps business leaders navigate the digital
transformation and turn digital disruption into competitive advantage.
“Digital
Clarity
is
composed
of

smart,
free-‐thinking,
experienced

analysts
who
follow
their
gut
and

provide
tailored
guidance.”

1.  Darkness
2.  Despair
3.  Guilt
4.  Theory
5.  Glimmer of Hope
3

Agenda

PART
ONE

in
which

Shit happens

5

65
Million
Years
Ago

10
@7m_walters

The
Four
Horsemen
of
Digital
Disrup7on

Social,
Mobile,
Analy7cs,
Cloud

11

44%
Of
the
global
Facebook
popula7on

accesses
it
exclusively
via
mobile.

12

335,000

years
per

month

In
the
U.S.
,
people
spend

on
Facebook
via
mobile.

The
iPhone
A8
chip
has

625x

more
transistors
than

a
1995
Pen7um
chip

Source:
Ben
Evans,
h5p://ben-‐evans.com/benedictevans/2014/10/28/presenta7on-‐mobile-‐is-‐ea7ng-‐the-‐world
@7m_walters

“Mobile [means] that you free people from
having to decide which device to use. If you
sit in your office, mobile means using your
laptop. If you sit at home, mobile means
using whatever device happens to be within
reach. If you sit on the bus, mobile means
using what’s in your hand.”
-- Thomas Baekdal
16

Source:
h5p://www.baekdal.com/insights/deﬁning-‐a-‐market-‐in-‐the-‐connected-‐world-‐you-‐are-‐not-‐in-‐kansas-‐anymore

Mobile means ubiquity

FROM SCARCITY TO ADUNDANCE
Information access is immediate, because it is mobile.
It is limitless, because it is connected.
It is trustworthy, because it is social.
Information monopolies are destroyed.

18

A cycle of ubiquitous content consumption
@7m_walters

“As
the
industrial
revolu7on

was
defined
by
radical

efficiency
in
produc7on,
the

digital
revolu7on
is
defined

by
radical
efficiency
in

informa7on
transmission.”

-‐
Mike
Arauz

Source:
h5p://www.slideshare.net/mikearauz/mikearauz-‐on-‐digitaltransforma7onmay2014prez

20

Whereas
the
Chicxulub
impact
produced
darkness,
the

mobile
shie
produces
light,
and
enlightenment.
Whereas
the

impact
released
debris
that
blocked
out
the
sun,
mobility

(especially
combined
with
social)
releases
knowledge
that

parts
the
clouds.

Whereas
the
ﬁrst
interrupted
and

eﬀec7vely
destroyed
the
food
chain,
causing
the
interrelated

and
dependent
species
to
topple
like
one
domino
aeer

another,
the
second
enriches
and
extends
the
en7re

ecosystem,
due
largely
to
a
far
more
profound
dynamic
of

interdependence,
networking,
and
sharing.

Due
to
this
sudden
abundance
of
informa7on,
the

environment
we
occupy
has
been
fundamentally

transformed.

@7m_walters

§  Mobile Shift
§  Deep Impact
§  Ubiquitous Computing
§  Empowered Consumers
§  Customer Experience Management
To summarize:

23

This and other DCG research
is available at no cost on
www.digitalclaritygroup.com

24

What
is
na7ve

adver7sing?

Is CEM an extinction level event?

PART
TWO

in
which

We all need a stiff drink
@7m_walters

26

Now
that’s
a
poten7ally
insul7ng
ques7on.
The
very

existence
of
this
conference
–
and
of
the
thousands
of

other
similar
but
less
impressive
conferences
is
proof

that
we
take
CEM
seriously.

“We”
–
analysts,
vendors,
service
providers,
so-‐called

end
users
–we
are
gathered
on
a
great
ba5leﬁeld
of
the

war
to
improve
customer
experience,
and
we
are,
as

something
like
the
CEM
industry,
dedicated
to
the

proposi7on
that
experience
ma0ers
above
all
else.

There
is
a
lot
of
other
evidence
to
indicate
that
we’re

doing
what
it
takes
to
survive:

27

Source:
Repor7ng
on
Accenture’s
Digital
Transforma7on
in
the
Age
of
the
Customer
report,
2015.

That
damn
Sco5
Brinker

exponen7al
marke7ng

technology
slide.

@7m_walters

Also,
we
know
that
spending
on
CEM-‐related

technologies
has
exploded.
(Or,
at
least
the

investments
by
VCs
in
companies
that
would
like
to

beneﬁt
from
an
explosion
in
spending
on
CEM
has

exploded.)

Also

89%

of
N.A.
marketers
said
they

expect
to
compete
“mostly
on
the

basis
of
customer
experience”
by

2016.

(That’s
seven
weeks
from
now.)

Source:
Gartner,
2015
Marke7ng
Spending
Survey
@7m_walters

30

Source:
h5ps://experiencema5ers.wordpress.com/2007/11/27/forresters-‐2007-‐customer-‐experience-‐rankings/

Also

We’ve
been
at
it
for
years.

31

So,
how
are
we
doing?

81%

of
ﬁrms
in
global
survey
have

seen
CX
ini7a7ves
fail
in
the
last

three
years.

Source:
Avaya
global
survey
2014,
see
h5p://www.avaya.com/usa/about-‐avaya/newsroom/news-‐releases/2014/pr-‐140429/

16,000 customers in 32 countries
§  CX index declines from 2013-2015
§  Gen Y most dissatisfied demographic
§  8 out of 10 with high increases in
negative ratings in EU, 5 of these
increased more than 10%
§  WW increased likelihood to switch
37

CapGemini World Retail Banking
Report
Source:
h5ps://www.worldretailbankingreport.com/#report-‐highlights

30,000+ consumers worldwide
§  2013: “no CX metric has improved
consistently in the last five years”
§  Every metric declined 2012-13
§  2015: in insurance sector, loyalty
declines, only 29% are “highly satisfied,”
15% are sure to buy from incumbent
provider, $470b in “switching economy”
38

Accenture Global Consumer Survey
Source:
Accenture:
Customer
2020:
Are
You
Future-‐Ready
or
Reliving
the
Past?

39

Excellent
Good
OK (aka “mediocre”)
Poor
Very Poor
Consumers rate brands on effectiveness,
ease, and emotion
Forrester CX Index – How it Works
Source:
h5p://www.slideshare.net/JonathanBrowne/jb-‐iqpc-‐18feb2014

USA: 45,000+ consumers, 299 brands
§  From Q1 to Q3 2015 “good” rating
declines from 26% to 15%
§  In that period, 2.3% get better,
28.5% get worse
§  1% of US brands rate “excellent”
40

Forrester CX Index, Q3 2015
Source:
h5p://blogs.forrester.com/michael_gazala/15-‐10-‐06-‐
forresters_customer_experience_index_q3_2015_its_hard_being_an_op7mist;
h5p://blogs.forrester.com/
joana_van_den_brink_quintanilha/15-‐09-‐28-‐
which_french_german_and_uk_brands_create_the_most_loyalty_with_their_customer_expe

FR, UK, DE: 14,000+ consumers, 203
brands
§  In UK, 87% are mediocre or worse
§  In DE 84% are mediocre or worse
§  In FR, 60% are poor or very poor
§  In FR, 0% are (even) “good”
41

Forrester CX Index, Q3 2015
Source:

42

§  1% (or less!) offer “excellent” CX
§  “Mediocre or worse”
– USA: 84%
– Germany: 84%
– UK: 87%
– France: 100%
Did I mention we suck?
Source:

PART
THREE

in
which

There is ranting
@7m_walters

45

The Great Reluctance?
The Collective Ineptitude?
A Conspiracy of Failure?
La grande illusion?
Four possible reasons for . . . what
shall we call it?

46

§  A “strategic priority” . . . but no
budget
§  Inadequate/insufficient skills
§  Self-delusion: 78% say “we try to
differentiate via CX”
1. We don’t do enough
Source:
(Econsultancy/Adobe
survey,
2015.
n=2363)

h5p://www.elas7cpath.com/resources/get-‐elas7c-‐blog/what%E2%80%99s-‐wrong-‐customer-‐experience-‐strategy

47

§  CEM as “digitally supercharged
marketing”
§  Industrial legacy: More efficient
processing of prospects/customers
§  CX concepts bastardized
§  Unrealistic scenarios
§  F*#ked up incentives
2. We do too much – of the wrong
things

Source:
h5ps://www.worldretailbankingreport.com/#report-‐highlights.
“Six
lessons
you
can
learn
from
Amazon’s
killer
email
marke7ng

We think tracking a consumer across devices and
interrupting her evening with an email is the
height of personalized engagement.
In the name of customer experience

49

We are incented to collect/acquire as
much data on consumers as possible.
Source:
h5ps://www.visioncri7cal.de/big-‐data-‐collec7on-‐and-‐privacy-‐concerns/

50

We are incented to display ads that
consumers ignore.
Average display ad CTR: 0.06%
Google Doubleclick, April 2015
Source:
h5p://www.smar7nsights.com/internet-‐adver7sing/internet-‐adver7sing-‐analy7cs/display-‐adver7sing-‐clickthrough-‐rates/

51

Ads that are hostile to the user
experience.
Source:
h5p://betanews.com/2015/08/25/ad-‐blocker-‐crystal-‐massively-‐reduces-‐bandwidth-‐usage-‐and-‐page-‐load-‐7mes-‐in-‐ios-‐9/

52

Ads which consumers are incented to
avoid.
Source:
h5p://fortune.com/2015/09/21/apple-‐adblock-‐stats/

53

Source:
h5p://www.thewire.com/business/2011/06/you-‐are-‐more-‐likely-‐survive-‐plane-‐crash-‐click-‐banner-‐ad/39429/

You’re
more
likely
to:

• Get
a
full
house
playing
poker

• Give
birth
to
twins

• Summit
Mt.
Everest

• Get
admi5ed
into
MIT

• Become
a
Navy
SEAL

.
.
.
than
to
click
on
a
banner
ad

Ads which have become a joke.

54

Source:
h5ps://www.capgemini-‐consul7ng.com/resource-‐ﬁle-‐access/resource/pdf/privacy-‐vs-‐personaliza7on_0.pdf

Similar excesses and ineptitude
threaten a personalization backlash

55

Source:
h5p://marke7ngland.com/study-‐ﬁnds-‐both-‐widespread-‐programma7c-‐adop7on-‐and-‐lack-‐of-‐understanding-‐how-‐it-‐works-‐143723

In
other
words
.
.
.

56

Half of the virgins we sacrifice don’t
help the crop.
Trouble is, we don’t know which half.

We
prac7ce
customer

experience
management
with

too
li5le
a5en7on
to
the

customer’s
experience

#apostrophesma5er

@7m_walters

In short . . .

PART
FOUR

in
which

The Professor speaks
@7m_walters

60

In
episode
157
of
his
Cri7cal
Path
podcast,
Horace
Dediu

says
that
the
Apple/IBM
partnership
will
not
cause

either
company
to
change
their
priori6es,
processes,
or

culture.
Why?
Because,
he
argues,
it
is
virtually

impossible
for
any
company
to
ever
fundamentally

change
their
P,
P,
or
C.

I
asked
him
if
this
meant
that
most
organiza7ons
will
fail

to
adapt
to
and
thrive
in
the
radical
new
business

environment
created
by
consumer
empowerment.

His
complete
response:

61

Dediu
isn’t
a
cynic
or
curmudgeon.
He’s
a

student
(and
now
colleague)
of
Clayton

Christensen,
and
he’s
drawing
on
this
2000

ar7cle
in
the
Harvard
Business
Review.

Here’s
a
way
to
understand
the
argument
by
(over

simplified)
analogy.
When
a
company
is
young,
it
is
like

pliable
po5ery
clay.
The
founders
create
a
shape,
find
it

inadequate,
squish
the
clay
together
and
start
over
again,

shaping
and
reshaping.

If
the
company
does
not
fail,
it
eventually
finds
the

“correct”
shape
–
i.e.
product/market
fit.
The
task
is
then

to
regularize
and
ins7tu7onalize
that
shape
–
e.g.
to
make

it
reliably
repeatable
in
a
efficient
manner.

Priori7es,
processes,
and
culture
develop
(purposefully
or

subconsciously)
to
enable,
ensure,
and
sustain
the

repeatable
execu7on
of
the
shape.
When
they
are
in
place,

trying
to
force
a
change
will
break
the
pot.

(Again:
My
analogy.
There
is
no
clay
in
Clay’s
argument.)

62

Organiza7ons
are
hard
to

change
because
they
are

organized.
They
are

intended
to
express
and

execute
a
certain
form
or

(business)
model.

In short . . .

63

Buy
a
diﬀerent
pot:

•  “Acquire
a
diﬀerent
organiza7on
whose
processes
and

values
closely
match
the
requirements
of
the
new
task.”

Start
the
throwing
anew

•  “Spin
out
an
independent
organiza7on
from
the
exis7ng

organiza7on
and
develop
within
it
the
new
processes
and

values
required
to
solve
the
new
problem.”

Create
a
new
pot
with
the
fragments
of
the
old

•  “Create
new
organiza7onal
structures
within
corporate

boundaries
in
which
new
processes
can
be
developed.”

The (only) three ways to change
(an inadequate pot)
Source:
h5ps://hbr.org/2000/03/mee7ng-‐the-‐challenge-‐of-‐disrup7ve-‐change/ar/1

64

A new structure from old fragments.
How would that work?
And is it a (or the only) way to
avoid CEM extinction?

PART
FOUR

in
which

The Journey Begins
@7m_walters

66

“Understanding
a
problem
is

the
most
crucial
step
in

solving
it.”

Clayton
Christensen
&
Michael
Overdorf

4. We’re trying to solve the wrong
problem
Source:
h5ps://hbr.org/2000/03/mee7ng-‐the-‐challenge-‐of-‐disrup7ve-‐change/ar/1

We know what CX is:
“A
customer’s
percep7on
of
a

company
or
brand,
based
on
all
of

their
interac7ons
during
the

customer
lifecycle.”

@7m_walters

So CEM must be:
“Managing
a
customer’s
percep7on

of
a
company
or
brand,
based
on
all

of
their
interac7ons
during
the

customer
lifecycle.”

Right?

@7m_walters

Source:
h5ps://willscullypower.wordpress.com/2013/10/23/customer-‐lifecycle-‐channel-‐touches/

The comprehensive “customer
lifecycle”

Source:
h5p://blog.evergegroup.com/?p=1177

Inﬁnity . . . and beyond!

So, all we need to so is manage . . .
1000s
of
individual

interac7ons

Over
decades

For
every
one
of
your

customers
(and
prospects!)

Across
n
number
of
segments,
languages,
locales

At
every
stage
of
the
en6re
customer
lifecycle

And,
oh
by
the
way,
make
that
not
only
mul7channel
but

transparently
omnichannel

@7m_walters

So, all we need to so is manage . . .
1000s
of
individual

interac7ons

Over
decades

For
every
one
of
your

customers
(and
prospects!)

Across
n
number
of
segments,
languages,
locales

At
every
stage
of
the
en6re
customer
lifecycle

And,
oh
by
the
way,
make
that
not
only
mul7channel
but

transparently
omnichannel

And
it
culminates

in
an
individual’s

percep7on,
i.e.,

a
mental
state.

@7m_walters

In
short,
the
commonly
accepted

deﬁni7on
of
CEM
leads
to
an

inescapable
conclusion:

CEM
is

IMPOSSIBLE

@7m_walters

There
is
a

be5er
way.

Instead
of
the
total
and
totalizing

(and
poten7ally
totalitarian)

customer
lifecycle,
look
at
discrete,

self-‐contained
customer
journeys

76

77

Selected journeys (McKinsey)
Source:
h5p://www.slideshare.net/McK_CMSOForum/customer-‐experience-‐journey-‐webinar-‐v10-‐091713

78

High
value
journeys

“Indiﬀerence”

The
journeys
are
high
value
because
they
account

for
the
lion’s
share
of
revenue,
as
well
as

harboring
most
of
the
opportuni7es
to
inﬂuence

customer
experiences
(emo7ons,
memories)
and

build
loyalty.

A new (and better) visualization of CX

Cable on-boarding journey
•  Customer
makes
decision,
completes
online

form.
(website)

•  Receives
email
with
instruc7ons
for

installa7on
(email)

•  Calls
to
make
appointment
(call
center)

•  Equipment
installed
(ﬁeld
team)

•  Issues
with
set-‐up
(website,
call
center)

•  Receives
and
pays
ﬁrst
bill
(billing,
CRM)

79

Retail Banking Journeys
•  New
account
onboarding

•  Payments
and
transfers

•  Statements
and
fees

•  Loan
applica7on/approval/payback

•  Managing
credit
cards

•  Investment
advice/performance

80

Higher Education Journeys
•  Researching
and
selec7ng

•  Applica7on
(essays,
etc)

•  Financial
aid
(parental
journey)

•  Arrival/star7ng
studies

•  Changing
major

•  Study
abroad

•  Transi7on
to
work

•  Alumni
rela7on$
(advocacy)

(Orange
=
poten7ally
USA
speciﬁc)

81

82

Manage the “hotspots”
Journeys
harbor
the
value

in
the
customer
lifecycle.

Hotspots
are
the

“moments
of
truth”

within
a
journey
that

most
inﬂuence
emo7on,

memory,
and
loyalty

“It’s
crucial
to
iden7fy
and
select
the
hotspots
that
really
aﬀect
customers’

experience,
both
posi7vely
and
nega7vely.”

-‐-‐
Larvans
Løvlie,
Liveworks

Source:
h5p://liveworkstudio.com/the-‐customer-‐blah/the-‐changing-‐nature-‐of-‐service-‐experience-‐design/

Customer

Lifecycle

§  Traditional isolated touchpoint
management is too small to have an
impact on CEM.
§  Totalized lifecyle management is too big.
(And pointless. And impossible.) And it
still relies on touchpoints!
§  Customer journey management is just
right.
(Too bad if you don’t know about
Goldilocks and the Three Bears.)83

@7m_walters

The right driver for CX improvements

§  Bring together the resources, skills,
data, systems, workflows,
infrastructure, insights, strategy, etc.
to support, improve, and extend a CJ.
§  This is “Creating a new organizational
structures within corporate boundaries
in which new processes can be
developed.” A new pot from old
fragments.
84

@7m_walters

Change is possible

Beneﬁts of CJM
§  Limited
in
number

§  Cross-‐func7onal

§  Measurable
business
impacts

§  Manageable

§  Provides
framework,
business
jus7ﬁca7on,

and
requirements
that
have
been

desperately
needed
by
intranet,
enterprise

social,
and
managerial
change
ini7a7ves.

85

Beneﬁts of CJM
§  Mapping
a
CJ
determines
where

personaliza7on
is
useful
and
what
kind
of

data
is
needed.

§  Data-‐for-‐relevance
transac7ons
are
well

deﬁned
and
easier
to
demonstrate
to

consumers.

86

•  Informa7on
revolu7on
empowers
consumers.

•  Resul7ng
demand
for
improved
CX
an
ELE.

•  Resistance
is
fu7le
(if
you
want
to
live)
–
but
so
is

a5emp7ng
to
manage
the
en7re
customer

lifecycle.

•  CJ(HS)M
shies
a5en7on
to
the
interac7ons
that

ma5er
most
–
and
provide
the
missing
driver
for

organiza7onal
change.

•  Focus
on
journeys
is
not
a
“start
small,”
“baby

steps”
strategy.
It
is
precisely
what
you
should
be

doing
–
and
you
can
do
it
today.

Summary
87

P.S. Look on the bright side of extinction
88

Tim Walters, Ph.D.
twalters@digitalclaritygroup.com | @tim_walters

The total impossibility of customer experience management

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The total impossibility of customer experience management