Why the majority of customer experience efforts will fail

The entire ethos of this blog is to take a questioning look at the Customer field.  On that basis, I confidently predict that the majority of customer experience efforts will follow the CRM cycle and fail to deliver on the promise of higher customer satisfaction, loyalty, revenues and profits.  Why?

The theory is fine

Is there something wrong with the theory?  Not that I can see.  The theory is robust  in that the companies that consistently create superior value for customers tend to do well in the long run.  These companies tend to companies that have put good profits – those made by creating value for the customer – at the heart of their business models.  And behind this business model lies a distinct ethos: that of not taking advantage of, exploiting and letting down their customers.  It is an ethos that gets that trust and loyalty is earned by being trustworthy and being loyal.

The critical importance of ethos and culture

Before we go further it is worth defining ethos:  the guiding beliefs or ideals that characterize a community, a nation or an ideology.  Ethos gives rise to culture.  Specifically, the taken for granted attitudes, values, priorities, thinking and behaviours.  I like to think of cultures in terms of natural landscapes: mountains, deserts, jungles, rainforests, savannah…Each culture supports certain types of people, certain types of behaviour and rules out many others.

All customer experience initiatives are embedded within a specific cultural landscape.  And most of them are busy working on eliciting customer feedback, redesigning customer interactions, redesigning business processes, changing systems and working on the front line staff who interact/serve customers.  Very few are paying any attention to the cultural aspects – of the organisation or the wider society.

How does culture play out?

When Katrina struck the USA the enterprising American business folks got busy on making money out of the misery of their fellow americans.  So motel and hotel room prices doubled, tripled, quadrupled.  So did the prices of food and drink and so forth.  This behaviour is a direct result of the American culture and particularly the business culture.

When financial services industry was deregulated in the UK, the financial services folks got busy on working out clever ways of exploiting the ignorance of  non-financial people be they business folks or consumers.  And frankly, it was culturally OK – after all the motto is “Buyer beware” – the responsiblity is for the buyer to make sure that the seller is not taking him for a ride.

Now compare that with what is happening in Japan right now.  The north of the country is devastated and thus the Japanese have an opportunity to enrich themselves at the expense of the fellow countrymen who are suffering and in no position to take care of themselves.  Yet, there is no looting.  Nor are the Japanese businessmen taking advantage of their countrymen.  On the contrary, supermarkets are cutting prices and vending machine owners giving out free drinks.  You can read more here.

Why the majority of Customer Experience efforts will fail

The majority of Customer Experience efforts will fail especially in the USA and the UK.  Why?  Because Customer Experience efforts can only take hold and flourish in cultures where loyalty and the long term is valued both by society at large, by businesses and by customers.  This may be the case in Japan (and hence no looting and price hikes), it is definitely not the case in the USA and the UK.  Here only growth and profits matter.  Why bother to go the extra mile to make ‘good profits’ when you can take the short cut and make ‘bad profits’?  Put differently, we have Katrina, we have folks who are desperate for our products, so it would be stupid of us not to double, triple, quadruple our prices!

What I find really puzzling is that companies are busy taking actions that will, in the longer term, result in poorer customer service.  Yet, somehow, the companies persuade themselves that they are improving the customer experience.  When I look at it, I see cost reduction disguised as customer experience improvement.  Which reminds me of the way that the UK government is spinning the massive cost cutting: ‘savings’ and ‘efficiencies’.

If you disagree then please comment and share your perspective.  I am open to being challenged, to being shown the error of my ways.

PS: Here is the Forrester Perspective

Paul Hagen wrote an interesting post on the gulf between the hype and the reality.  Click here to read it.