The following is an excerpt from A Diamond In The Rough: Over 100 Specific Tips To Build A Strong Customer Culture, a new book on customer culture by Steven Van Belleghem. It is reprinted with permission from the author. The book is available now on Amazon.
Do you have it too? The PowerPoint slide in your presentation where customer focus is described as one of your objectives? This theme has, no doubt, been presented several times to your employees as well. This is a good intention, but one that does not often go beyond the slide.
Companies can convince themselves that they offer excellent customer service and be quite shocked at customer research that demonstrates that this is not the case. A statistic that has become a classic in the world of customer centricity is: 80% of CEOs think their company is customer-centric, but only 8% of customers agree. There is a huge gap between what companies think they achieve and how effectively it comes across to customers.
There can even be a big difference in perception between a company’s management and employees. I chatted briefly with the CEO of a large e-commerce company to fine-tune a presentation I was about to make at one of their events. ‘Steven,’ he said, ‘in terms of customer experience, we are doing very well.’ As I prepared my computer for the presentation, the IT team came by to help me with the technology. A member of the team asked, ‘What is the topic of your presentation?’ ‘Customer focus,’ I replied. ‘That’s very good, we still have a lot to learn about customer focus. It goes completely haywire here so often.’
The Diamond in the Rough
Do you recognize this paradox? Your company has the will to become customer-centric. Your company has made plans to become customer-centric, yet your company fails to excel in customer-centricity.
This problem is the great paradox in the world of customer centricity: just about every company has good intentions, but most of the time the execution is only average in quality. Most companies are a diamond in the rough when it comes to customer experience. The goal of my new book is to transform diamond in the rough companies into beautiful shiny diamonds.
The Peter Principle was described by Dr. Laurence J. Peter in his 1969 book, The Peter Principle: Why Things Always Go Wrong. The Peter Principle is the observation that in a fixed hierarchy, people are promoted until they reach their level of incompetence. In other words, people are promoted based on success in their existing role into a new role for which they may not have sufficient competences. I believe the Peter Principle can be applied to many technologies.
Technology is Not a Shortcut to Enhanced Customer Experience
For example, many people (I plead guilty in part) believed that technology would offer shortcuts to higher customer satisfaction. ‘If we buy technology X or Y, satisfaction will increase.’ But the promise of some new technologies has been overestimated. They have been promoted for uses that are beyond their capacity.
Artificial intelligence, augmented and virtual reality (metaverse), crypto, NFT, Web3, Blockchain, and other technologies have unique applications and strong stories that excite many people. Many of them have been promoted as having a high potential to also improve the customer experience, but their success rates are low. Investing in technology is a necessity, but this alone will not transform companies into shining diamonds: there is no shortcut to a great customer experience.
Of the various technologies that have emerged over the past decade, only mobile technology and e-commerce have demonstrated success in improving the customer experience. Indeed, technology devoid of a mobile component now seems unthinkable. Mobile technology has clear benefits that enhance the quality of the customer experience. It increases service speed, enables high-quality self-service, and permits personalization and new communication options. All these benefits have become standard features of the company/customer interface. The same applies to e-commerce. The convenience of finding almost any product online and receiving it at home the next day has increased convenience for many consumers. The amount of time an average family can save thanks to e-commerce is incredible. And now artificial intelligence will be without any doubt another game changer to increase personalisation and efficiency in the customer relation.
Many other technologies can be described by the Peter Principle. Consider the role of voice assistants, for example. In my 2017 book, Customers the Day After Tomorrow, I wrote enthusiastically about their potential. By 2018, this technology was working at 80% of its theoretical potential, allowing me to envision various customer experience possibilities. As I write this book in 2023, this technology has achieved only 10% more of its potential. It has not yet delivered on its promise. With the AI boost currently happening this may change, but we are not there yet.
The same can be said about self-driving cars. In 2014, I was convinced that our eldest son Siebe would no longer need a driving license. The car would pick him up and bring him back later. Now we are nine years on (Siebe is 14) and it is 100% certain that he will have to drive the car himself when he reaches driving age. The concept of self-driving cars still captures my imagination, but until the technology achieves a 100% safety level, the transition will not happen. For example, if planes could only make a successful landing 99% of the time, there would be about 1,000 plane crashes a day.
In short, we expect too much from technology too soon, making it incompetent for the task at hand. Another demonstration that there is no shortcut for improving the company-client relationship..
What if Technology Reaches the 99% Standard?
In late 2022, the world got to know ChatGPT – an AI chatbot developed by Open AI. The enthusiasm was enormous. In just two months, the platform had more than 100 million active users. That makes ChatGPT the fastest adopted software tool ever in history. In comparison, TikTok took nine months to reach 100 million users and Instagram 30 months. The reason for the enthusiasm is easy to explain: ChatGPT produces useful output in seconds.
Related: How To Use ChatGPT To Enhance Your Customer Experience (written by ChatGPT)
Have you also had the ChatGPT conversation with your children? How are we going to use this technology for school? Will your kids be allowed to use it? For which tasks will its use be permitted and for which tasks not? Does your school have a policy on this? Perhaps by [the end of] 2023, every student will have submitted a task created with this AI homework assistant and then waited anxiously to see if the teacher would catch on. I think we are all secretly jealous. If only we had such a tool during our student days, right?
Was there a ChatGPT conversation during Q1 2023 in your company too? Were there discussions about which tasks to use it for and how to apply it? For example, junior copywriters questioned the survival of their jobs as the AI content output is at least as good as what some entry-level copywriters produce. ChatGPT will not replace top journalism, but it could very well replace authors with average writing ability.
The potential of ChatGPT has revived enthusiasm for artificial intelligence because it offers tangible proof of AI’s potential and, thus, provides added value. It excels at the job it was designed for, so it does not fit the Peter Principle. It is generally accepted that ChatGPT still sometimes generates errors, yet these are seen as acceptable shortcomings in view of its potential. So, the question arises: can this kind of technology take the customer experience to the next level once it becomes 99% error-free? The answer is clear: of course. Just as the smartphone has brought new experiences and possibilities, artificial intelligence will undoubtedly do the same.
Artificial intelligence will increase personalization, make communication between internal and external people more efficient and in doing so open the door to more proactive services. These are all elements that customers value. However, new technologies require ongoing investment to succeed in meeting the requirements of the modern customer.
Can This High-Performance AI Be Enough To Transform Your Business?
Customer culture is the basis for shining diamonds. Rien Brus, a customer experience (CX) consultant responsible for customer-driven transformation at pension administrator APG, made the following important point during a recent conversation: ‘Every time I see a new technology, I can be so impressed by it. After a few months, there is no longer astonishment, it has become a normal part of life. Sometimes I even expect more from it and those expectations are not met. However, when I meet a company with a genuine customer culture where you feel how people are genuinely interested in their customers, well, that never becomes normal. That never gets boring. That continues to make me feel good every time.’
In the first 20 years of the new millennium, we were overly optimistic about the potential for new technology to enhance customer satisfaction. Despite the benefits of new technologies, they are not enough to make a sustainable difference in customer satisfaction. After all, ChatGPT is available for every company in the world. Initially, one company may be able to use the technology more effectively than another, but this is advantage will erode very quickly. The technology will become necessary for success but like most technologies, it will very quickly become a minimum requirement and not a sustainable differentiator for success.
Creating A Customer Culture
It is becoming increasingly clear that the only sustainable way to make customers truly satisfied is by creating a culture where the customer is truly at the center. This is an environment where both the leaders and employees of an organization are imbued with customer centricity. This is a culture where everyone realizes that a satisfied customer is the guarantee of future success. It is a culture that is willing to suffer short-term pain to ensure long-term success. And do not get me wrong: being profitable and achieving solid financial results are obviously part of that. It is necessary to be able to make customers happy and continue to invest in your customer experience.
Pieter Zwart, founder and CEO of Dutch e-commerce company Coolblue, expresses it well: ‘When I started Coolblue, I had two goals. I very much wanted to become a multimillionaire and I very much wanted to have the most satisfied customers. That’s why the finance director and customer satisfaction director are the two most important people in the company. Meanwhile, I can say that both objectives have been achieved.’
To become a shining diamond, it is necessary to see customer focus as an ongoing, long-term philosophy of your company. In the first few months after the COVID pandemic, it became very painfully clear that customer experience does not work like a Christmas tree. You cannot just turn your customer-centricity on and off when it suits you. Thirty-two percent of consumers feel that customer service is lower after the pandemic than before. Forty percent of US consumers sense a drop in productivity and responsiveness of contact centers compared to the period before the pandemic.
The chaos at European airports during the summer of 2022 was the ultimate proof. The airline industry had put its customer experience on hold for almost two years. The travel restarted very rapidly after the corona crisis, but the industry failed to restart its focus on customer experience with equal speed. Again, managing the customer experience is not like throwing lights on a Christmas tree and switching them on and off when it suits you. It requires a stable vision and excellent execution.
The Benefits Of Customer Culture
A strong customer culture leads to a spiral of positive effects:
- A strong customer experience: If a company has a strong customer culture, employees are trained to put the customer first. Moreover, they have the freedom to decide what is best for each specific customer. As a result, the customer gets a strong and personalized experience.
- Higher customer loyalty: A better customer experience leads to higher customer loyalty. Eighty-three percent of customers say they change suppliers because of poor customer service, and more than half of customers are even willing to pay more for a company with excellent service.
- A positive reputation: A strong customer culture leads to a stronger brand reputation, as customers are more likely to talk positively about a customer-centric company.
- Competitive advantage: Customers today have more choice than ever. Moreover, the barrier to switching suppliers is lower than ever. A strong customer experience and good reputation make customers more likely to buy your products and services, leading to better financial results.
The faster this customer culture spirals within your organization, the faster you can drive away from competitors.
Why Customer Culture Matters
In a recent study by Salesforce, one of the key conclusions was that 88% of people value the product as much as the experience. The well-known marketing strategist, Seth Godin, jokingly commented on this study saying, ‘Perhaps those other 12% didn’t understand the question properly.’ Of course, a good product is essential, but the importance of customer experience in making a purchase can be variable; but it is on the rise as Enrico Ceriani, AGC Glass Europe VP, pointed out in a recent presentation: ‘Our products and even our innovation will not differentiate us in the coming years. When we innovate, it usually provides a temporary advantage. The competition has become very good at copying our innovations quickly. The only thing that can give us a long-term competitive advantage is our customer culture. Our customer culture will ensure that we remain profitable in the long run.’
A strong customer culture is the key to transforming your organization from a diamond in the rough to a shining diamond. It is this aspect of a company’s strength that is the hardest to copy.
Steven Van Belleghem is a customer experience enthusiast, six-time author, and keynote speaker. He is the co-founder of nexxworks, an innovation consultancy. His new book, A Diamond In The Rough: Over 100 Specific Tips To Build A Strong Customer Culture, is available now on Amazon. For more, visit Steven’s website. Please note: Additional subheads were added for digital readability.