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“At Least We’re Making Our Numbers”
If that's the case, do we really need to change?
For the rest of the July 2008 issue of CRM magazine please click here
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I recently spoke at a customer experience conference, and as I was listening to the other presentations, the theme was very consistent:

  • "Customer experience is key to the company’s success."
  • "No organization can afford to not do it."
  • "The rewards are significant."

I began wondering: If that’s the case, why haven’t more companies committed to a customer experience strategy? When it was my turn to speak, I presented that question to the audience. If it’s obvious that focusing on the customer and improving the experience is such a critical strategy, why is management not supporting it more vigorously? Why aren’t all customer experience practitioners showered with resources to do the right thing? The response I received ranged from cynical comments to reluctant avoidance of the question.

So why is it that the customer experience strategy is not addressed with a clear sense of urgency? After all, it’s what will provide your company’s competitive advantage moving forward -- as those themes I quoted above suggest. The sad answer to the question is that most top executives, no matter the amount of lip service they pay to the ideal, do not really believe in it.

"But we are making our numbers" is the typical comment executives will rely on while justifying minimal to no investment in the customer experience. "It can’t be that bad!" they’ll insist. "We’re selling to customers and customers pay for our product," the resisting internal voice will say. The reason why customer experience does not hold its rightful place in the corporate agenda and budget is simple: Despite all the "voice of the customer" studies revealing a growing price sensitivity among consumers, executives remain in denial. Companies continue to make their numbers, but only by traveling in hazardous territory: discounts. Margins are eroding as they chase quarterly financial targets. Satisfaction with merely "making the numbers" blinds management to the urgent need that would otherwise be clearly visible. They learn to accept discounts and price sensitivity as part of doing business and not as a warning that customers see a deteriorating value they will refuse to pay "full" price for.

We refuse to invest properly in the customer experience because we insist on avoiding the price of change -- while hoping to delay the inevitable just a little bit longer. Another reason why companies still make their numbers is that the competition is often no better. All the surrounding competitors are operating under the same assumption, focusing on the product or service instead of on the complete experience. As such, the typical customers don’t have any rosier options elsewhere -- so they stay. [See this month's Pint of View column for more on customer inertia. -Ed.]

But this is a risky argument to lean on. The risk of a new competitor coming along to change the ground rules is ever-present. Just think of the companies that were manufacturing MP3 players in the pre-iPod era: Each of them seemed to think that all of the others were in basically the same boat -- so no risk was looming. Today, many of them are manufacturing for (and all of them have lost ground to) Apple.

Denial -- and benefiting from your competition’s failure to excel -- is not a strategy for growth. Executives who believe in making the numbers while hardly investing in the customer experience are taking a major risk. Their gamble is likely to fail. It’s just a matter of time. Creating differentiated, innovative, complete customer experience is not merely an option. It’s also not an exercise in incremental changes. The messages I heard at the conference were all true. It’s just that executives are trying -- consciously or not -- to avoid believing in them.

Making the numbers in the short term is not an indication of future success. Investing in the customer experience is. It’s time to stop the denial and start balancing the short-term goals against the necessity of that investment. Let’s build the organization around making the numbers for the long run.

Lior Arussy (lior@strativity.com) is the founder and president of Strativity Group (www.strativity.com). He is the author of several books, including Excellence Every Day (Information Today, Inc., 2008), his most recent, an excerpt of which appeared in CRM’s May 2008 issue. To learn more about customer strategies, sign up for his newsletter at Strativity Group's homepage.

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