Delivering A Superior Customer Experience Is A Team Sport

Why CX Initiatives Need Better Coaching, Rules, Scoring, And Playing Fields To Win the Customer

I recently led several executive panels at the Customer Experience West Summit where we discussed how growing customer value has become a digital and data-driven team sport. The key message from every panel was this: The revenue team that connects the most dots wins the customer.

This notion of Customer Success (CX) as a team sport is especially true for hyper-growth businesses with “As a Service” business models and consumption-based and recurring revenue streams. But it also applies to omnichannel retailers, business services and industrial businesses that have complex buyer journeys, valuable customers, and many different customer touch points.

To win, the most innovative organizations are aligning their revenue teams – and the operations, systems, data and processes that support them – to deliver a superior customer experience and grow the lifetime value of their customers. This has led to the emergence of Customer Success as a C-suite function and made Revenue Operations the fastest growing professional job in North America. And it is a big reason why over 90% of organizations are restructuring the way they are organizing and leading their revenue teams according to the book Revenue Operations.

Unfortunately, most organizations will need much better coaching, rules, scoring and playing fields to get their commercial teams to manage the many “moments that matter” along the modern customer buying journey and build customer lifetime value. This is because despite the board level focus on customer centricity and the elevation of Net Recurring Revenues and Customer Lifetime Value as key investor evaluation criteria – the articulated goal of customer centricity is far out in front of the operational practice of customer success. A variety of practical obstacles have stunted the operational maturity of customer success programs and initiatives. The biggest culprit is the fragmented nature of functional leadership, customer data, engagement channels, systems, operations and revenue teams. This lack of maturity, combined with the absence of a strong C-level customer success function, means commercial operations are increasingly out of sync with the customer journey they support. This makes it difficult to protect, manage, fund and develop the largest commercial asset (customer equity) and growth lever (customer led growth) in the business.

So what can front line customer success leaders do to get their commercial teams playing the game the right way in the face of these structural obstacles? The executives presenting at the CX West Conference were taking practical steps to foster the teamwork and alignment required to grow customer lifetime value within their span of control. These include:

Better coaching. The problem starts at the top. With the coach. Few organizations have a C-suite leader responsible for orchestrating the teams, customer data, and systems that support the entire customer journey and protect and grow customer equity. Functional sales, marketing and customer service leaders in a traditional “functional stovepipe model” control less than half of the levers and touchpoints that impact the customer. So without a C-Suite leader responsible for the Customer Experience, there’s no executive with the authority to align the teams, operations and processes along the entire revenue cycle. And there is no single “throat to choke” accountable for the many points of failure, friction, leakage, and delight along it. “Leadership buy in from the top for customer success is essential to doing our job because most of the teams in the matrix have different priorities,” says Talar Ozcanian, the Director of CX at CAE, a global leader in providing training and simulation solutions. “Culture eats strategy for breakfast, and lunch, and dinner,” she adds. “Culture and strategy complement and nurture each other and should be created simultaneously, making sure they are perfectly aligned. And nowhere is that more evident than in executing on the commitment to becoming customer centric and making it more than just words.”

A better scorecard for success. The second fundamental issue is how to keep score. Few organizations can calculate, measure, track and manage both the value and profit contribution of customers. From a value perspective, few CFOs or accountants include customer equity in their financial reporting, even though it has been proven to be causal of increases or decreases in firm value by academic research. CFOs have a handle on physical assets like cash, buildings, inventory and equipment – which are dwarfed in size and impact by the financial value of customer equity. Academic research by Katherine Lemon and Roland Rust has shown loyalty currencies are a fair proxy for the value of the firm. For example, the loyalty databases of airlines like American Airlines and United can exceed the value of the firms (including the planes). And dozens of research studies have quantified the impact of customer equity on share price using value elasticities. A 10% increase in customer equity leads to a 7.2% increase in the share price of the firm.

Quantifying the health and value of the individual customer relationships that add up to customer equity is another issue. The fragmented nature of the “360 degree customer data” required to calculate customer lifetime value, account health and customer profitability makes this extremely difficult. But without placing a hard value on a customer – commercial teams can’t optimally allocate resources, set customer expansion goals, and prioritize investment against the most valuable customers. The biggest challenge here is that every function that touches the customer has a different idea of what it means to “score a goal”. Service teams often have tactical measures of first call resolution or call time. Success teams are measured by onboarding, adoption or renewal metrics. Sales and retail channels are paid to close individual transactions. CFOs are on the hook to deliver Net Recurring Revenues. CEOs tell their boards they are maximizing customer lifetime value through cross sell, expansion and margin improvement.

To overcome this issue, many of the leaders at the CX West conference were adapting their performance metrics to reflect the true economics of growing customer value. All of them were tracking the many specific “moments that matter” in the customer journey to avoid revenue leakage, relationship abrasion, cross channel friction and service delivery failures that can destroy customer equity. For example, several CX leaders were instituting advanced customer metrics like the Customer Effort Score and Net Trust Factor that reflect the true goals of building an “effortless” customer experience. Talar Ozcanian at CAE was using voice of the customer feedback from very specific customer satisfaction surveys to measure the dozens of “moments that matter” along the customer journey. Her team uses this information to try to better educate all of the stakeholders in the process and make them more accountable for CX by providing them dashboards, KPIs and recognition.

Defining the field of play. Another issue is the playing field poorly defined. In fact it’s often cut into different pieces. The reason is that most of the CX leaders I spoke with have accountability for managing the customer journey of specific customer segments –pilots seeking training or vacation travelers planning trips – but little authority over the revenue teams that support those journeys. All of these leaders were taking “responsibility” for the key points of failure, friction, and delight along the entire customer journey that determine the value and relationship with that customer. But none of them had any real control over the many players that engaged and supported customers in those moments. Nor did they share common incentives, objectives, and KPI with these cross functional teams. As a consequence, most CX teams only play on half the field (or a portion of the customer revenue cycle). For example, organizations with SaaS and subscription service revenue streams will focus on customer success, service, and account management teams that largely play defense. These teams support the back half of the field (revenue cycle) after the booking with a more narrow focus on onboarding, problem resolution, adoption, and loyalty or retention. However, in most organizations these “back end” teams have different incentives, processes and managers – and consequently don’t work well with the front office to expand and grow accounts. On the other hand, fast growing or “hyper growth” firms focus their go-to-market teams on playing offense (the front facing half of the field). These marketing and business development teams prioritize new account acquisition and sales, but don’t really have an incentive to get bogged down into post transaction activities important to protecting and growing customer lifetime value and enhancing the customer experience.

Specifying roles and rules. According to the CX leaders on my panels, the right way to play the game is to have players in the right roles and positions who can operate across the entire field (or the front half and back half of the customer journey). This is a lot like how the Italian defensive fullback Leonardo Spinnazzola attacked aggressively at the right times to lead Italy to the 2020 European Cup soccer championship. In the context of CX, this means Account Based Marketing, Key Account Teams or cross functional account “pods.” Account Based Marketing programs target every persona on the buying team within the account at every stage of the revenue cycle. Key Account Teams are responsible for customer expansion. “Sales Pods” are hybrid selling teams that combine service, success and sales to ensure all the moments that matter in the revenue cycle are addressed by one team. These advanced structures rival the Dutch concept of Total Soccer, or “positionless soccer” (popularized by Ted Lasso) where every member of the team, regardless of position, can adapt their role to do what is needed in the moment to score (or grow customer lifetime value).

Aligning systems and data. A variety of sales, marketing, and customer success systems support the revenue cycle as the customer moves from consideration to education, purchase, consumption, adoption and loyalty. All of the executives I spoke with were actively reconfiguring the many systems that support the customer journey with the goal of simplifying the seller experience (in the contact center) and simplifying user experience (in digital channels) which both translate directly to a better customer experience. This pressure to align systems with the revenue cycle is forcing the evolution of customer success software; The most progressive of these are expanding beyond siloed solutions that support customer onboarding, service and adoption in the back end of the revenue cycle. The best are building out more holistic customer growth platforms that support commercial teams across the entire revenue cycle to maximize customer lifetime value. A good example of this is the recent merger between customer success leader Totango with Catalyst, a leading customer growth platform. This combination allows go-to-market team members at the front of the customer journey to collaborate with customer success teams focused on supporting the post sales revenue lifecycle to work together and share information in ways that prove value, guide advance workflows, inform actions that expand revenues, and deliver a more intuitive customer experience. “Customer expansion can’t be an afterthought – it’s a boardroom imperative and the best growth path in the current economic environment,” according to Christopher Gaffney, Managing Director at Great Hill Partners, who helped engineer the vision for the Totango-Catalyst merger. It also takes a “360 degree” view of customer data to create measures and metrics required to value and size customer relationships, assess customer health, allocate resources and effort to the most important customers, manage points of failure and leakage, and measure the performance of account teams. For example, a significant benefit of the more holistic customer growth platform approach taken by Totango is the system generates empirical measures of both the asset value (account health score) and profit contribution (ROI Scores) of customer relationships. This is important because the ability to capture and share information from across the revenue cycle, and turn it into actionable insights that inform customer actions and the allocation of effort and resources has value. For example, a comprehensive analysis of over 100 academic research studies by the Marketing Science Institute (MSI) found that a ten percent improvement in organizational competence – defined as the generation of, dissemination of and responsiveness to marketing intelligence across the company will drive an increase in firm value of over five percent. The ability to align and share data about the customer is particularly important given the rapidly changing way customers behave across digital and physical channels, according to Gail Banack, SVP of Merchandising at an Omnichannel Retailer Indigo. “It’s more important than ever to double down on insights that get you closer to the customer,” says Banack. She encourages organizations to use all the signals they have – including social, unstructured customer conversations, and first party data from marketing systems – to get a better picture of the response function and demand and to use those insights that inform planning, programs and resource allocation.