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Why so many companies still fail at Customer Experience

by Rob van Herpen | September 04, 2019

In today's business world, you’d be hard-pressed to find someone who does not agree that Customer Experience is an essential aspect when building and maintaining a profitable business. The reports support this statement. For example, a recent PWC publication shows that one in three consumers (32%) say they will walk away from a brand they love after just one bad experience. The same report states that “speed, convenience, helpful employees and friendly service matter most, each hitting over 70% in importance to consumers”.

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Similarly, Gartner’s Customer Experience survey indicates that CX is the new marketing battlefront. More than two-thirds of marketers responsible for CX say their companies compete mostly on the basis of CX, and they expect this to grow towards an astonishing 90% in the upcoming years.

Taking this into account, why do so many companies fail to deliver good customer service? Throughout my career, I’ve spoken with hundreds of companies about their CS strategy, from start-ups to enterprises, all over the globe. Very few companies got customer service right from the start and, unsurprisingly, I’ve seen the ones that did become more and more successful over the years.

I’ll share my vision on why most companies fail, and which issues you should solve if you really want to compete on CX.

 

1. Lack of customer-centricity at executive level

Too often, business decisions are taken based on short term revenue optimization or efficiency gains. More and more companies are appointing a CCO, but in most boardrooms, the customer does not yet have a seat at the table. This often leads to decisions which do not take into account what customers really want. Moreover, at most companies, the CS department is still seen as a cost center, while CS is often the only department in the company that talks to customers every single day. Listening to the voice of the customer and analyzing & acting upon the huge dataset that CS sits on is highly undervalued.

 

2. Lack of long-term vision by CS leadership

Partially impacted by the fact that CS is considered a cost center, some CS leaders lack vision. Instead of convincing their board of the added value CS can bring, they tend to be reactive, mostly focusing on putting out fires. Many CS managers have risen through the ranks or have coincidentally ended up in CS. While this does not automatically mean that they can’t be visionary leaders, they often simply aren't. Too little time is spent on finding structural solutions to root cause issues, and there is too little drive to innovate. If you want your CX to rock, you better make sure the CS manager you hire is an A-Player, which will level up your entire CS organization as they tend to surround themselves with other A-Players.

 

3. Agents are not empowered to solve issues

A lot of time and effort goes into recruiting for the right profiles, agent training, and making sure that contacts are handled as fast as possible. This is all pretty much useless if your agents are not empowered to solve issues. Real CS leaders identify bottlenecks, which could be processes, tools, or a combination of both, and build an internal business case to convince internal stakeholders to tackle these bottlenecks. Agents who are not empowered feel frustrated, which drives up attrition. For customers, one of the most annoying things about CS is to go back and forth on a case to get it resolved. First Contact Resolution (FCR) is clearly linked to better CSAT, so make sure to tackle these bothersome processes and invest in the right tools.

 

4. Lack of centralized analytics to take informed decisions

While CS sits on a huge pile of extremely useful data, there’s often no real-time, centralized view on important KPIs, contact drivers, nor bottlenecks impacting customer satisfaction. Native, built-in analytics mostly provide isolated insights and have very limited customization options. Most companies I have spoken with use a variety of different tools and have a combination of in-house and outsourced teams (and often different vendors). What they really need is cross-channel, cross-system, cross-vendor analytics. Building such a system takes an enormous amount of time, resources, and money. Bringing in a third-party expert, like 5CA, enables companies to leverage analytics as a service and gain valuable insights to improve CX across the board, from CS processes to product development.

 

5. Outsourcing still seen as a cost savings exercise

Historically, customer service outsourcing has always been a highly cost-driven exercise. Offshore locations like India and The Philippines have been (and still are) very popular. However, with the increasing role technology plays in our industry and self-service becoming a more dominant channel assisted by technology to provide customers with personalized, relevant information, there’s less and less need for script-based thinkers. I recently published an article in which I advocate for hiring critical thinkers instead. In my opinion, outsourcing should be primarily focused on the added value a partner can bring. Obviously, agent rates will always play a role, but finding a real partner who can help fill knowledge gaps and proactively comes up with suggestions and tools to improve is much more valuable than saving 20% on your hourly rate. The fact is that many BPOs are still mainly focused on selling seats. They bury their heads in the sand and still believe that a good partnership is simply executing whatever their client is asking them to do, at the lowest possible rate. Luckily there are real partners out there who challenge the status quo, use innovative service delivery models and partner with their clients on optimizing CX, even if this means that the amount of seats is reduced.

On a positive note, more and more companies do get it. They invest in CS, have the long-term vision, and aim to build strategic partnerships. It’s a real pleasure to be working with such companies, and I can’t wait for others to join.

Rob van Herpen

Rob van Herpen

Rob is Chief Customer Officer at 5CA, responsible for everything related to our clients and always thinking of how we can optimize our customer experience. He’s located in sunny California, where he heads up 5CA’s USA offices. Most of his free time is spent on his wife and kids, but he can also be found frequently in the gym and enjoys cooking a good meal.

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