Customer Experience (CX) And Why Australian Businesses Need To Know About It

An interesting term emerged a year or so ago in the tech vernacular, and it's known as Customer Experience, or "CX" to the cool kids. Well, the term isn't in itself that interesting, however how the emphasis in improving CX has grown in recent times is interesting and highly relevant for business owners here in Australia.

Now that the term is sticking, it's time for Australian businesses to become familiar with it.

 

The evolution of CX

A few years ago the big focus was on "UX", or user experience, which you have probably heard of. The intent of UX was to make the experience of using an application (most typically a web site, but really it could be anything at all) as logical, pain free and as pleasant as possible. Done well, UX would be measured and have a positive impact on the metrics that mattered - customer conversions, employee adoption, repeat visitors... and so forth.

Pretty rapidly UX became the domain of web developers and a new breed of marketers, as they were the ones charged with the responsibility of deepening their engagement with people online.

"Digital disruption" became the word of the year for 2015 in many organisations. In many cases, "Digital" also became the name of marketing teams who had decided to control their own destiny rather than leave customer impacting initiatives in the hands of their IT departments, who they perceived to often be bogged down in managing their legacy applications. 

Fast forward to now, the acronym CX eludes to the use of technology in providing a better experience for customers, with a broader lens than just web and application design.

 

Why CX matters, and the challenge it presents

Paraphrasing Accenture's CX report, customer experience and digital disruption is a result of business buyers wanting a similar experience to that when they are acting as consumers.

It wont be a surprise to anyone that all buyers are looking for easy to use and convenient tools available for them from prospective suppliers. After all nowadays we all generally spend a lot of time researching online before shortlisting and engaging them.

And let's be honest - it's not exactly hard either, research is done in bite-sized chunks, most often with a smartphone in hand. To underline this point, more web searches are done from mobile devices than desktops now, according to Google. 

After making their purchase decision, customers want this great experience to continue. And there are a myriad of ways customers can voice their displeasure publicly if they so desire; some would say our expectations have risen in line with our perceived increase in power as consumers.

Using a short example, if you're in the trades industry, it's quite possible customers expect that you will have some sort of internal booking system to allocate staff to jobs that has evolved beyond paper.

With this expectation, they also hope that as a customer they will be proactively informed by you about the status of their booking without needing to call you first - typically via email or SMS, or maybe via a client portal if you are likely to have a continuing engagement with them. 

I selected this industry for a reason - trade services businesses rely heavily on skilled and reliable people to survive, and generally are not seen in technology circles as "big spenders" relative to other industries. It's poignant that as consumers our expectations about what companies should be doing to offer us a great customer experience are much higher than they were a decade of so ago.

To backup this example with some numbers, in the report I linked to above, 71% of 1450 executives globally in businesses that sell to other businesses agreed that consumerisation of the customer experience they provide is important - and it goes without saying that for B2C organisations offering a great consumer-optimised experience has always been the case.

The opportunity for getting this right is huge. Last December, McKinsey released a 120-page report on the digitisation of American businesses, and noted overall the potential upside is USD$2.2 trillion to the country's GDP by 2025.

Why I liked McKinsey's report so much is that it was far more extensive than the remit of most "digital" teams - it really went to the heart of how organisations can leverage technology right across their value chains.

 

The CX challenge for Australian Business

The big challenge with CX however is that aside from start-ups, no business is coming from a standing start. We all have things we are great at, and areas where we have a desire to improve.

From a technology perspective, many established businesses have legacy applications that are pretty inflexible or costly to change, with a mix of new-breed "cloud" applications that are generally regarded as much more flexible.

With cloud computing able to help businesses keep capital requirements to a minimum, it's also a great time to start a new business, as companies with no legacy systems and revenue to cannibalise are commonly biting at the heels of incumbents by differentiating on customer experience. 

Here's McKinsey's perspective:

"Many of these small enterprises have the advantage of being “born digital.” Unburdened by legacy systems, they build digital into their business models from the outset rather than retrofitting it onto existing processes."

 

Distilling CX, and what it means for Australian businesses

In essence, CX really is just an evolution in how companies should be offering a great customer experience. Offering a great customer experience has always been important in business, the only thing that has changed is their rising expectations about what "good" looks like, with an emphasis on technology-supported experiences.

The challenge is the expectations of our customers have gone up massively, and at the same time the barriers for new entrants to compete have fallen away - culminating in CX being a key battlefront for businesses to double-down on.

And so CX is essentially about providing a great customer experience by leveraging technology. This is important because buyer expectations have changed, to the point they expect to have a great experience with your business often hours, days, weeks, and even months before they pick up the phone and call you - or your competitors, if they are the ones offering the better experience.

Looking at your business from a CX perspective means evaluating everything from your customer to your technology stack, to see where you can make improvements without breaking the bank that enable you to step ahead of your competitors, to win their first purchase and retain them as repeat customers and strong brand advocates.

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