Customer Experience as a Corporate Strategy
By Richard Owen,
While I’m no stranger to blogging, the first piece for any new audience provides a uniquely reflective opportunity. An opening argument for the prosecution if you like. So bear with me, I’d like to make the case for customer experience as a corporate strategy, revisited some 20 years into its revolution.
20 years into the Customer Experience Revolution, Africa has the opportunity to outperform.
In 2003 my team, in collaboration with Fred Reichheld, created the Net Promoter Score (NPS). For many people today, NPS is synonymous with the idea of a survey question: “would you recommend our product or service…” but I still maintain that this misses the point. NPS was an insight into the economic behaviour of customers.
NPS divides your customers into three groups. The first, promoters, will likely generate all the growth and profits for your business over the coming years. The second you can think of as customers that choose you through lack of alternatives, passives. The implication is that a better offer will easily swing them to an alternative offering. And the third, is detractors, a group that dislikes your company and is statistically likely to cost you more to service than they generate revenues. Once you understand the ratio of these three groups, you understand the health of your business for future growth and profits.
Surveying was a convenient way to have customers self-identify as one group or the other, but it’s a very poor source of data; few customers respond, there is bias in their response, and they often provide inadequate information on why they chose their status. There are far better approaches today, but that’s not the point of this article. The point was that this simple economic insight succeeded primarily in engaging a generation of corporate leadership in customer experience as a strategy.
Corporate leadership needs mechanisms for creating focus and performance across the enterprise. They look for metrics that can be used to hold organizations accountable, beyond financial measures. Perhaps more importantly, they seek metrics that counter the backwards-looking, short-term focus of the profit and loss account; NPS hits all of those marks. It’s no surprise that in the prior 20 years most global corporations adopted NPS as a core metric.
But like any other management tool, implementation and results have been patchy. Many companies don’t measure NPS correctly, sometimes out of lack of expertise but all too often through an organisational desire to game the outcome at the expense of clarity. Management is often unaware of the degree to which methodology, technology and incentives impact the numbers they look at. The range of techniques is so great that you can literally generate any number you want to through the application of different methodologies. It takes the kind of discipline applied to financial metrics to create honest numbers.
Even when the measurement is executed well, accountability for improvement can be lacking, data skills within the enterprise in short supply, or the ability to implement cross-functional change a significant barrier. Nobody said it was easy to be a leader in customer experience, but often boards and management fail to grasp the degree of effort required and don’t set themselves up for any kind of success.
Africa, coming late to the NPS party, has a great opportunity to change that dynamic. From my, albeit limited experience on the continent, I can see several reasons to be optimistic.
Did you know that in addition to providing businesses with real-time NPS- based feedback, Ajua also provides Quarterly Customer Loyalty Industry Benchmark Reports? Download the Q2 2022 Benchmark Report here.
Ways Africa is switching things up
First, African enterprises can stand on the shoulders of their predecessors. There is a vast accumulation of experience in implementing NPS in just about every industry around the globe. Best practices have been established; lessons learnt. There is no need to repeat the mistakes of others. A cautionary note here; best practices are evolving rapidly and there are plenty of “experts” who derive their techniques from approaches they witnessed 10 or 15 years ago. As it’s often remarked, the best thing about standards is that there are so many to choose from, and leadership would be wise to question the credentials of experts offering best practices. This is a field where innovation is vital to success, and innovators are rare. Experience is priceless but needs to inform new insights and direction. Nevertheless, no need to reinvent a well-chiselled wheel.
Second, Africa can leapfrog in terms of technology. Of course, the classic example of this is mobile commerce. The infrastructure and applications to serve businesses and consumers through mobile applications in Africa outstrip the adoption in most other parts of the world. This creates brand new opportunities for communication, measurement, and engagement, although for me the most exciting aspect of this is adoption. The chance for most of the African population to get access to capabilities faster and cheaper than in other first mover continents.
Third, culture. There is an enthusiasm for growth and business transformation that is often missing in the highly developed nations of the world. Employees and customers rally to the corporation’s purpose and seek professional advancement and economic growth. For sure, this can be mitigated by some questionable business practices and old habits, but I choose to see the optimistic side of African business culture. Enthusiasm translates into a demand for new thinking, better ideas, and more aggressive implementation of change. And customer experience is a north star for such efforts.
So, the challenge for corporations in Africa is to outperform their predecessors in the adoption and execution of customer experience strategies. This will take ambition, for sure, but there is no reason to set the bar low, no reason to fail to aspire to better outcomes than I see here in the USA. I can’t wait to see how you all step up to the challenge.
About the Author
Richard Owen is one of the best-known thought leaders in the Customer Experience industry. While CEO at Satmetrix, his team led the development of the Net Promoter Score methodology with Fred Reichheld, which created the most widely used approach to measuring customer experience in the world. Today he is the founder and CEO of OCX Cognition, a software and data science company using machine learning to create real time NPS and customer health performance data. An active venture investor, he most recently joined the board of Ajua, an innovative pioneer in customer data based in Nairobi, Kenya.
To learn more about Ajua’s NPS-based Q2 2022 Customer Loyalty Benchmark Report and the best performers in various Industries, download the full report here Ajua’s Quarter 2 2022 Customer Loyalty Benchmark Report .