There is something interesting happening in companies across the globe. Let me draw upon Malcolm Gladwell’s book, The Tipping Point: How Little Things Can Make a Big Difference to illustrate what I’m talking about. In 2000, Gladwell outlined how a “tipping point” can emerge from an idea, cultural trend or behavior to change perceptions, create a new trend, and even modify behavior.
Today, in boardrooms of companies large and small, senior leadership teams are at a tipping point on how personally engaged they are in their company’s customer experience (CX) initiatives. It’s one thing to care or be concerned about something; it’s an entirely different thing to be the one making decisions about it. And this self-reflection is making all the difference in whether a company underperforms or outperforms the market.
Recently, the Economist Intelligence Unit wrapped up research looking at the importance C-suite executives placed on CX. Sponsored by Genesys, the study of more than 500 executives at global companies in 21 countries explored four questions:
- What importance does the C-suite attach to CX within companies?
- Who leads CX initiatives?
- How is the success of CX initiatives measured?
- Which CX channels are most favored?
The research reveals a clear connection between C-level CX engagement and business performance. Specifically, revenue growth, profitability and customer retention perform better when the C-suite engages. Not surprisingly, the research found that those same companies were planning a 10% increase in future CX investment, and were more likely to measure the success of their CX initiatives.
How things have changed in the last 30 years. In the 1990s CX was largely about cost containment. Back in those days, CEOs had to choose either to invest in CX for the hopeful return of customer loyalty (but without a good way to measure it) or take a low-cost approach for what they could measure: automation, outsourcing, limited hours of operation and employee productivity tools to maximize utilization. As a result, organizations saw more negative sentiment from customers and lost more customers than ever before.
In early 2000 the environment changed radically based on two macro trends. The impact of deregulation in key industries gave consumers more choice than ever, and at the same time a digital revolution shifted the power to manage brands from the company to the consumer. These two trends exposed companies that had been skimping on CX while their customers were switching brands like never before.
Today, with a trend that began starting in 2010, we are seeing another tipping point when companies understand that CX is good business – which this research validates. It’s no longer about a choice between cost containment or satisfying customers. Successful companies are realizing that CX is a core part of the business strategy, and that CX investments can be low cost, but highly satisfying to customers if implemented correctly.
Does this new research signal a seminal moment or tipping point for CX investment in the industry? Perhaps. But the answer to that question is in how aggressively the C-suite makes CX the foundation of their business strategy.
Download the complete report When The Suite Is In Charge of Customer Experience Initiatives, Business Performance Thrives featuring the complete global results conducted by the Economist Research Unit here.