The CX Leader's Evolution and Business Impact
In 2023, the chief experience officer, or CXO, will continue to play an important role driving business impact. Some organizations use the term chief customer officer, or CCO, instead; the main difference is that CCOs are more common in technology companies and include functions such as customer success. Here too, CCOs will play an important role in 2023.
CEOs will expect these individuals, no matter what they're called, to help their companies evolve and grow culturally, but also drive efficiencies and top-line growth—a formidable challenge for any leader, let alone in a market downturn. CEOs will also look within their organizations to promote these leaders vs. hiring from the outside, given economic headwinds in the coming year. To achieve the impact expected, the CXO role will have to evolve itself, too.
CXOs have traditionally focused on leading customer experience (CX) functions, including voice of the customer (VoC), CX analytics, and change management. Some organizations have expanded the remit of the CXO, adding design, operational teams like the contact center, and, in some cases, employee experience, product, and digital.
In 2023, as the remit continues to expand and include more functions, we will see four main archetypes begin to emerge for CXOs: the technologist, the data architect, the futurist, and the human-centered designer.
The technologist will identify technology needed to capture customer signals across their organizations and drive real-time analytics and automated actions in context and within the customer journey. Consumers have elevated expectations as a result of the pandemic, given the massive investment in technology by leading com[panies. These expectations will only continue to get more intense, and technology will be a key part of enabling the customer journey. We already see this phenomenon most pronounced in financial services, retail, and airlines, where customers are not only digital-first, but increasingly digital-only. For example, in financial services, more customers are using online or in-app functionality for day-to-day banking vs. visiting a branch. According to a 2021 McKinsey study, 40 percent of core retail banking sales originated digitally. This is a record high for the industry.
The Data Architect
CXOs need to understand what data they have, what data they need, and how to use it to effect change inside their organizations and create experiences that drive outcomes that balance business and customer needs. This means architecting a data strategy that every member of the C-suite can stack hands on. If it doesn't exist in your organization today, it will be key to effectively engage with customers. Why? Because having a strategy helps executives align around data quality, security, governance, and efficiency. Moreover, a data strategy helps companies manage the large increase in data volume per the above pillars.
Customer needs can change quickly, and as a result, CXOs will need to peek around corners and deeply investigate, understand, and have a view on what shifts in consumer needs are coming. Taking an end-to-end view of the customer, from demographics and psychographics to emerging trends in generational and population shifts, will be a primary focus. This will enhance their role in the C-suite as a consigliere and not just an advocate for the customer. For example, if today's CXO leads VoC, analytics, and change management, this will be insufficient. CXOs must identify industry strategists who understand being great at change isn't just about business agility. True customer differentiation stems from observation and orientation plus the ability to change through customer-led action.
The Human Centered Designer
Employing an empathy-first, human-centered design (HCD)approach and influencing the organization to drive transformational change will be key with companies taking on a digital-only approach, not just a digital-first one. HCD, as a practice, is about taking the company and its culture from inspiration to ideation to implementation through an iterative process. Take the payments company Venmo as an example. The founders of Venmo came up with the idea when one forgot his wallet while traveling on vacation with the other. He paid back his friend after the vacation by writing a check. Venmo was created specifically with the payments user in mind and the challenges in the payments journey. This will be instrumental to the success of the entire organization, from the mailroom to the boardroom.
Underscoring these archetypes is the new arms race in CX, driven by data and automation that will separate CX leaders from the rest of the pack. To enable these archetypes and drive effectiveness, investment in artificial intelligence (AI) and machine learning (ML) will be required. CX teams today can be highly focused on surveys as their primary source of insight, learning from a fraction of customers and how they feel. However, customers interact with companies all day, outside of surveys, leaving breadcrumbs of insight that can be captured and analyzed with advanced analytics. Leveraging AI/ML to parse through massive amounts of data, identify opportunities, and deliver them to operators in the organization will be critical investments in 2023 and beyond.
These capabilities can also help companies identify specific friction and the business value associated with it via revenue attribution models. How can this be used in your organization? If your product owners are leveraging a CX platform as part of their development process, they can build better user stories that meet the needs of customers, optimize their backlog by prioritizing the highest-value friction points, and optimize their team makeup by bringing in talent with the expertise to solve for the specific friction.
Journey orchestration capabilities can also automate workflows and deliver experiences at scale and in context. For example, perhaps based on browsing behavior, the platform determines that a user doesn't like a specific rate on a financial product reviewed. The next time the user visits that site, a more attractive rate can be surfaced. Additionally, if that user calls into the contact center, a next-best-conversation alert can be delivered right to the agent to more effectively support the customer (or prospect). Because the platform can determine the next-best path based on observed behavior, journey analytics becomes less important as a CX tool.
These advanced capabilities can also integrate financial and operational data, alongside experiential data, to predict business outcomes like risk of customer churn or predict levels of satisfaction based on customer behavior, all without asking a single question of the customer. Not only will you do your customers a favor by delivering fewer surveys in their email inboxes, as a CX leader you can engage a broader segment of your business more effectively with a 360-degree view of the customer.
Finally, as economic pressures continue, expect to see the CXO promoted from within vs. the CEO identifying an external hire. While in the past this might have been the head of the contact center, CEOs will look to their operations organizations for the future CXO—it could even be the current COO. Current employees understand the company culture, and this is a value-add for anyone going into a new role. But operators bring a different level of understanding and skill set: expertise in how the product or service is developed and sold, and thinking that is typically data- and tech-forward, which can influence the broader organization into action. These are all critical skills for any CXO.
Bill Staikos is senior vice president, evangelist, and head of community engagement at Medallia. He is a globally-recognized experience leader with more than 20 years of proven expertise envisioning and executing holistic customer-led strategies. Prior to Medallia, Staikos held executive-level roles at Freddie Mac, JPMorgan Chase, Credit Suisse, and American Express. Staikos also hosts an award-winning podcast, Be Customer Led, with listeners in nearly 100 countries.