It is almost a truism that the focus companies devote to customer experience, cost cutting and growth objectives will vary over time.
Companies at the start of their lifecycle, aiming to capture the market, will usually invest deeply in marketing, product development and in creating excellent customer journeys. Depending upon the ownership structure, they will often be willing to accept losses for an extended period whilst they secure market position, so there may be less focus on the cost base. By contrast companies in mature, competitive, or regulated markets like utilities, may have fewer opportunities to grow the top-line, so the fulcrum of competitiveness will shift to efficiency.
However, if growing companies do not consider their cost base at all, they will become bloated and the path to profits will move further into the horizon (think about some of the dotcom excesses). If companies in mature markets focus exclusively on finding efficiencies and not on improving their customers’ experience, they will become vulnerable to disruptive market entrants (think about the impact of fintech and some of the new entrants to utilities markets) and could churn their customer base, costing even more money.
At any point in the business lifecycle, and in almost any kind of industry, organisations must considerboth their customers’ experience and the sustainability of their cost base. This is often considered a trade-off, as cutting budgets could mean fewer resources available to create excellent products and provide outstanding service. But done correctly, with consideration and precision, customer experience improvements and efficiency savings should mutually reinforce each other. Most obviously because finding cost savings can then be used to fund product and service improvements – but also in more subtle ways.
Here are some ideas for making efficiencies & customer experience concurrent objectives:-
1. Share the accountability. Historically, accountability for controlling the cost base has been held by finance whereas the NPS / CSAT scores were under the remit of product development & customer support. This can create an “us and them” mentality and make any kind of improvements difficult to mobilise. Creating truly balanced objectives for everyone in the organisation, spanning both cost and customer, should help things move faster.
2. Prioritise changes that your customers will like and save you money. Errors, rework and faulty products annoy customers. When contacting your company for support, they usually value having their issues resolved at the first contact, without the need to talk to several people. They may also like to serve themselves through your website, without any need to contact you at all.
3. Design your change roadmap so that it balances both cost and customer objective. This doesn’t just mean that you will have a handful of projects targeting cost and a separate handful targeting customer experience – each and every project should have both sets of objectives included.
The range of “digitally native” organisations that have disrupted whole industries across the last five years are now entering adolescence. Cloud computing and asset-light business models mean the cost base of these companies is altering. Now it’s the turn of these increasingly regulated industries, as they mature and approach saturation, to respond to market forces which dictate they look more closely for efficiencies to remain competitive.
For more on this topic, listen to our joint podcast with Shahzad Saleem on cost transformation and customer experience on Soundcloud, Stitcher or Tunein.