Marketing Oops! Customer Experience and Marketing Tech Summit 2020 kicked off in Bangkok last week and our CEO and co-founder, Andreas Holmer, was the opening speaker on the CX stage.
The topic of the speech was the future of CX (Customer Experience). Andreas took a deep dive into the challenges currently facing businesses and how we need to rethink current practices around CX to ensure we meet the needs of the customer.
Let’s dig in.
“The wheel of change is turning fast. Over the next 5–10 years, customer experience (CX) will become the through line that keeps brand purpose and customer relationships stable amid unprecedented upheaval.”
– Forrester’s, The Future of CX
Volatility, Uncertainty, Complexity, Ambiguity (VUCA)
Now is a time of unprecedented disruption and change. The current market landscape shifts rapidly and many businesses have struggled to meet this challenge.
At the beginning of his talk, Andreas introduced the concept of VUCA. He stated that while business longevity (the amount of time businesses are active in the market) has gone down, the time it takes for companies to hit a $1 billion market cap, for “tech” companies, has also gone down.
This demonstrates the volatility, uncertainty but also the opportunities that exist for today’s companies.
Andreas then directly related this to where things stand in CX today.
He said that “Customer Experience is the sum total of all the interactions that customers have with our products and services. And crucially, it’s about perceptions; perceptions that are deeply rooted in customer needs.”
Andreas referred to some research from Google that isolated the 6 key needs that drive people to search. Your organization’s needs will be different from the needs outlined in Google’s research. But, your organization should be very clear on your own customer’s needs. Fulfilling these needs is how we can ensure that CX always delivers for the customer, despite the volatile landscape that we have found ourselves in.
Part of the process of transformation is setting current conditions, envisioning target conditions and creating roadmaps to our goals. But Andreas mentions an obvious flaw in this process.
CX maps expire, and they expire quickly.
CX maps expire, and they expire quickly.
So how can we future proof our CX in such turbulent times?
How do we design and create great experiences when things constantly change?
Andreas mentions that typically CX has been designed but then, essentially, left in a state of stasis within a business’s larger offering. So, if that is the case, how can we ensure that our CX is viable in an ever shifting landscape? How can we sense and respond to changes in customer habits and perceptions when they appear?
Andreas said that there are at least 3 things that businesses can do to ensure their CX remains fit for purpose.
1. Think In Systems
Andreas began this part of his talk with some examples of how successful companies have managed to turn insights into models.
The above example comes from Uber. They mapped out exactly what they knew their customers needed from their service and turned these insights into a business model. These insights were all based on customer need and it enabled them to create a platform and experience that helped them fulfils that need.
Andreas said if we think back to the six core needs that Google mentioned, you can apply those needs directly to your customer experience. They give a valuable insight into how your business can keep their CX fit for purpose in this time of disruption.
He states that “the world’s most successful companies don’t think of their CX as journeys from point A to point B. They think of them as “Flywheels” — self-reinforcing feedback loops in which each step — each interaction — reinforces the next. It’s how they harness the stabilizing and compounding effect of complex adaptive systems. And it offers the rest of us a chance to understand the meteoric rise of companies like Amazon, Uber, and Netflix.”
By adopting systems thinking and thinking in terms of feedback loops, businesses can really continuously evolve their customer experiences, rather than keeping them in a fixed and unmoving from A to B.
2. Validate With Experiments
Andreas then spoke about the need for companies to experiment to enhance their customer experiences.
He used the graph above to illustrate the stages that businesses go through when they start to use experiments more frequently.
Every business starts at the “skeptic” stage and gradually moves up the curve towards becoming “practitioners” and “adopters”. To reach the “market makers” stage is beyond the scope of most companies. Netflix, for example, runs thousands of experiments per year. Google also does the same, with an estimated 100,000 experiments per year. But Andreas looked at how all digital businesses can use this approach to experimentation to continuously improve their customer experiences.
“[When we approach] our work as if it were a series of experiments, it really frees up our thinking and allows us to try more innovative ideas, crazy ideas, and maybe even stupid ideas – but in a small scale contained way first, to really understand what the effects are of what we’re doing, before we invest in building that at scale for 125 million Netflix customers.”
– Navin Iyengar, Netflix
3. Organize For Agility – Structuring For Experimentation
Andreas starts talking about structural agility, in relation to experimentation by talking about Booking Holdings, the company that owns well-known hotel and flight portals such as booking.com and Agoda.
He says that “Booking.com runs an estimated 30,000 experiments per year. It’s a super power that few competitors can match. Because it’s not just about technical acumen. It’s a mindset that permeates the entire organization.”
According to Andreas, this mindset requires a shift in how businesses structure their customer experience teams.
He states that often teams tend to work in a structure similar to the graphic above. This can stifle experimentation as people do not have the freedom to experiment in a culture of control, with fixed strategies.
The graphic above shows how teams can restructure themselves to be able to experiment, sense customer needs and respond to these needs in a rapid, agile fashion. Andreas states that the predict and control model that many businesses use simply cannot experiment at the scale of organizations that use a structure similar to the above. Companies like Google, Facebook and Booking.com all give their teams a level of autonomy, trust, and alignment that a predict and control style structure cannot provide.
Changing culture and structure can produce an environment that encourages experimentation and customer experience innovation.
Conclusions & Takeaways
Andreas mentions how typical CX transformation focuses on the same things, such as identifying potential problems, gaps, or blocks that customers may encounter when interacting with a digital business. And the result is typically used to inform a Transformation Roadmap for the next N months.
But Andreas makes the point that organisations tend to forget that “your CX maps have an expiry date”. What was once amazing might be obsolete in 12 months’ time. The three principles that Andreas outlined in his talk, systems thinking, validating with experiments and organizing for agility, are all principles that can help future-proof our customer experiences and respond to customer needs more effectively.
Thank you Marketing Oops Summit 2020 for sharing great photos from the event with us!