Find out in this issue the relationship between great Customer Experience and long term success, along with the associated benefits of using SCRUM in our ever increasing digital world.
If you have been following me a bit; you should have a clearer idea of what customer experience is all about, but if not here is a condensed definition:
Customer Experience is all the interactions, feelings and thoughts a customer has while in contact with your company when he discovers, uses, disposes or talks about your products and services.
The relationship between great Customer Experience and long term success.
Why it matters for an organisation to purposely provide a great customer experience to its customers is becoming more and more obvious. With the balance of power and knowledge shifting to the connected customers; companies can no longer hide poor product performances or below par service delivery. Individuals are quick to spread through social media great or appalling service experiences which can literally make or break your brand. Once the trust is gone, the road to recovery can be long and hard with recent examples such as Volkswagen at the end of last year for which both stock market value and sales have dropped for the first since 2007(1) after deceiving its loyal customers with the diesel engine-rigged revelations.
On the upside, companies which have for long invested in satisfying their customers and developed a strong customer culture among its employees or partners, as per Starbucks call them, are ripping the benefits year on year with:
Increased market shares through organic growth (word of mouth) and increased customer loyalty.
Reduced servicing costs through customer education and efficient service channel management.
Increased customer satisfaction through qualitative and relevant products, services and interactions.
These companies go by the name of Amazon, Ventes-Privées, Starbucks, Marks & Spencer, Apple, T-mobile etc. and because their purpose is to satisfy their customers’ higher-objectives; they understand that their frontline staff are crucial in helping their customers reaching their personal goals.
I like this coming example a lot because it illustrates quite well the higher-objective principal: « when you go the DIY shop to buy a 10 mm drill bit for your drill; you are actually buying a 10 mm hole and not only that. You are in fact buying a solution for perhaps redesigning your home to make it prettier or improving storage capacities to increase your comfort in your apartment. »
Executives, leaders and employees within these companies understand that their customers want much more than just the service or product they offer. They therefore align and implement their strategies from top to bottom with a clear and consistent vision and mission in order to fulfil this customer higher-objective through great customer experience.
In terms of figures, Watermark Consulting (2) has been monitoring the stock performance from 2007 to 2014 (8 years in a row) between the Customer Experience leaders, S&P 500 index and the Customer Experience Laggards and they demonstrate the staggering ROI a company can obtain through a consistent and well-orchestrated customer experience. The cumulative return on investment over the 8 year period for the 3 groups goes as follow:
Customer Experience Leaders: +107,5%
S&P 500 index: +72,3%
Customer Experience Laggards: +27,6%
Why being Agile and what are its associated benefits?
Now that leaves us with the “Agility” part of this newsletter and I would like to focus on SCRUM which is one of the several agile approaches. For those who are not so familiar with SCRUM, it is simply a framework made of Values, Roles and Artifacts which aims to bring a better collaboration within a project team, enable faster product or service creation with self-organised and self-learning teams. In essence SCRUM is both a human and customercentric project management approach which fits especially well with complex projects.
For a brief history, SCRUM was initially developed in the early 90’s by Jeff Sutherland and Ken Schwaber for the IT industry and it has now spread in pretty much every sector such as: Banking, Non-for-profit, Governments, Retail, Insurance, Telecommunication and more with the like of ING, Vodafone, Zappos, AXA and many others using this approach. Some of the benefits linked with using SCRUM include:
Faster time to market thanks to accelerated releases.
Inclusion of the customer during the development process for a higher chance of success.
Reduced hierarchy during project lifecycle as we can move away from the classic command and control approach type.
Ability to re-adjust the project scope and requirements if the market conditions or customer needs change.
Reduced development costs through faster learning within the organisation.
As a final word, it is interesting to observe that our current and upcoming generations of both workers and customers (Gen X,Y and Z) are more and more willing to commit and adhere to something that they can relate to, which makes sense to them and which inspires them above all. In order for companies to resonate with these aspirations and win their customers’ hearts, they will need a strong sense of customer understanding, empathy and ability to adapt to fast evolving customer needs. We are talking about long term strategy and vision here where the human being: customer and employee alike are at the centre of the organisation structure, values, processes, technology and HR practices.
This is exactly when Customer Experience meets Agility!
(1) Source: European Automobile Manufacturers Association (ACEA) – Bloomberg.com
(2) Source: The 2015 Customer Experience ROI Study – Watermark Consulting