Greg Kihlstrom:
It's hard, but not impossible, to draw that line to the bottom line from CX Investments, but it just takes time. And the onus is on the employees and the CX leaders to make that happen as quickly as possible, but it does require a little bit of patience to get those things in place.
VO:
Flourish CX, the only show helping CX leaders do one thing, empower their customers. Each episode democratizes best practices while leaving you feeling both inspired and equipped to take action. Let's get to it.
Ciaran Doyle:
In today's episode, I'll be talking to Greg Kihlstrom, bestselling author, speaker, and advisor to top companies on customer experience, employee experience, and digital transformation initiatives, as well as Principal and Chief Strategist for GK5A. I'm Ciaran Doyle, your host for this episode of Flourish CX. And as you listen today, ask yourself, if you can't tie investment in CX to business value, how are all the top companies known for best in class experience also the most valuable brands? So, Greg, thank you for joining the podcast today.
Greg Kihlstrom:
Thanks so much. Looking forward to talking with you.
Ciaran Doyle:
Why don't you tell our audience a little bit about you and what you do?
Greg Kihlstrom:
I am a consultant that works with mostly Fortune 500 companies, but in that realm, I work with organizations on basically managing change, and so it relates to a number of different things. Customer experience is always part of the mix. Marketing operations, technology, and other related things often come into the mix as well. I also have written a few books, most recently, a book called Meaningful Measure of the Customer Experience. And I also do some speaking, and keynotes, and workshops, and things like that to help organizations really just understand this stuff better, think through it, and manage change better.
Ciaran Doyle:
So, one fun question we like to ask at the beginning, get to know a little bit more about you is, if you weren't an author, if you weren't the host of the Agile Brand podcast, and if you weren't a CX expert, what would you be doing?
Greg Kihlstrom:
I think I'd probably be making music. I did that a fair amount in the beginning of my career and dropped off. I do it a little bit, but yeah, I think I'd be doing that.
Ciaran Doyle:
So, what's driving you crazy about customer experience right now, either with your professional lens or with your personal lens on?
Greg Kihlstrom:
I started out in the marketing realm. So, I owned a digital marketing agency, sold it about five years ago. Everybody comes to CX from different perspectives and I always find it definitely shapes your thoughts on CX, depending on where you've originated from. So, there's the customer service folks that come at it from that angle. I'm coming from marketing, and there's a lot of people that come from marketing into CX as well. And what I find challenging and then sometimes frustrating is false walls between different areas of an organization. I think a CX department in a company can make sense, but there's a lot of things that marketing and customer support, even technology, and not even to get into HR and the employee experience relationship, but all of these things, they're so closely related, that it's really hard to put up a false distinction between, "Okay, well, who's going to own customer experience?"
Greg Kihlstrom:
It just doesn't really work like that. Even if someone's ultimately responsible for CX being done well, like a CXO, makes tons of sense to have one. But to try to say that one small area of an organization can really own it, it's very difficult to do, and it never really works like that in real life.
Ciaran Doyle:
So, I guess the question is, in the companies that you've spoken to and advised, what role does CX have in the organization and who should own it, should there be an owner? From what you're saying, it's no, there shouldn't be an owner. So, how do you do that?
Greg Kihlstrom:
I do think someone needs to own it. If we look at the RACI chart of an organization, someone must be accountable and responsible for CX. And I think a Chief Experience Officer, that's a great way to do that. That doesn't always happen. Sometimes it is given to the CMO or even somebody in charge of customer support. I do think someone needs to own it, but I don't think that they can get very far without a lot of friends within the organization. So, that's where another one of my books is called the Center of Experience, and it outlines how to create a center of excellence around CX within an organization, which from my standpoint, and with working with a lot of organizations, it's really beneficial to think of it that way, where there's a group, a governing body, of this is how CX is done across data, across technology, across how employees are even onboarded into an organization, all of these different areas, yet there may be a CXO that is ultimately responsible or accountable for CX being done.
Greg Kihlstrom:
I guess one other thing that I'll just say along those lines is that it also depends on the maturity of the organization, and that's another thing that I do quite a bit. I've built my own CX maturity model. There's plenty out there that already exists as well, to just figure out, you can't start on day one and expect yourself to be like Southwest Airlines or these other examples that we always throw out when we're talking about good CX. You've got to start where you are and build a plan to get to where you want to be.
Ciaran Doyle:
So, maybe we should start off by just defining what you believe CX is. What is customer experience? Because I think that's also where people get a little bit lost, that they're trying to change one thing, and they end up not having the impact that they're trying to achieve.
Greg Kihlstrom:
Maybe to make this worse, CX is the sum of every experience that a consumer has, whether it's online, offline, whether it's on the website, on Twitter, on whatever channel that they use, keeping in mind that consumers are more and more what I would call device agnostic. They're channel switching, to throw a lot of buzzwords into my answer, but they're not taking into account what the company wants them to communicate with them on.
Greg Kihlstrom:
They're just like, "I've got my phone in front of me. I'm going to Tweet at this company and get a response," or they're in front of their laptop. They use what's most comfortable to them in the moment, and that changes moment by moment. And so, customer experience is really, it is the sum of all of those interactions. And if they're inconsistent, if they have a bad experience, it might be enough to change their minds on the entire org. If they're a long standing customer, maybe not. But I mean, it happens. There's stats that show one bad experience makes a big difference.
Ciaran Doyle:
And I mean, to throw some buzz words back at you, omnichannel was supposed to solve all this 20 years ago, or digital transformation, again, a 20 year old term that is finally coming to fruition. And I know self-service is one of those other areas where everyone should just be like, yes, go, but it's still one of those areas that's a little bit contentious too. And maybe it's the gap between what customers expect themselves to be able to do and what they can actually do. But some organizations are still like, "My customers don't want to self serve." And I mean, in my opinion, that's an essential part of the customer experience, but I'd be interested to hear, should there be a balance or is this just what customers expect, so we should put everything into it?
Greg Kihlstrom:
A couple things there. I think that customers do more and more often want to self serve, even subjectively. And personally, I don't want to talk to anybody on the phone. That's just my MO in life. I know not everyone is like me, but I would much prefer to self-serve and many, many others do. And I think one thing here is sometimes companies don't really know how to get out of their own way. And you mentioned that someone in an org says, "Well, our customers don't really want to do that." Well, have you really determined that, and how have you really determined that?
Greg Kihlstrom:
And in CX circles, there's often this idea of everything has to be this let's delight the customer. And by no means am I saying that's a bad thing, but sometimes I know I just want to solve a problem as quickly and easily as possible, and that doesn't mean having a delightful phone interaction with someone, or going into a store and having a delightful experience. It means two minutes I'm in and out and do it myself, and I'm on with my day. Sometimes a great customer experience is letting me, as the customer, actually get on with my life, as opposed to trying to make some big fancy experience, if that makes sense.
Ciaran Doyle:
No, that makes total sense. And actually a few episodes ago, you were speaking earlier about how customer success and customer service all have different perspectives. One of the guests we had on was speaking about how they can be delighted. They can be so happy, but they won't renew with you. So, there's this gap between what they're telling you and what the experience is superficially, and what the customer activity is. So, I guess that gets to the next question I have, which is if customer experience is this very decentralized and has democratized ownership in an organization, how exactly do you measure that?
Greg Kihlstrom:
This is where I spend quite a bit of time in my book talking about different ways to do this. And so, to summarize this as quickly as I can, without restating my book, I think that there's some flaws with the way that organizations are currently measuring things, and if they're really using one primary metric. And that could be NPS, that could be CES, that could be CSAC, sorry for all the acronyms. But the qualitative lagging indicators is the way that I characterize that. And if you've been using net promoter score for 20 years as an organization, that is incredibly valuable to use, but it doesn't really tell the full picture. First of all, to what you were just saying, just because I have a good experience, or even if I say I might recommend something to my friend, it doesn't necessarily mean I'm going to buy your service again.
Greg Kihlstrom:
It just means in that moment that you asked me that question, I was feeling positively about things. And I may have had a terrible experience early on in the, let's call it the buying process, that I personally subjectively glossed over in my mind because it wasn't that important to me, but someone else comes along and has a terrible experience. In other words, the survey qualitative questions, they can show us trends over time, and they're really valuable in doing that. But what I recommend doing is actually looking at four different categories of measurements and then prioritizing them. And so, there are qualitative measures, like net promoter score. There are quantitative ones where we're flooded with quantitative, whether that's purchases, repeat purchases, anything that you can quantify, basically, there are product measures, which are things like we have an SLA with our eCommerce vendor, let's say, but we have [99.59s 00:11:38] uptime. But let's say it goes down right around the holiday shopping season, all of a sudden, that .001% is really, really bad, as opposed to it being at 3:00 AM some night during off season or whatever.
Greg Kihlstrom:
So, product measurements become really important, and then process measurement. And I'm a very process-oriented person. I'm a Lean Six Sigma Black Belt. All that stuff is really important to organizations. I don't think processes are improved or even measured enough. And that's a very internal measurement, but it's a really key thing to help organizations not only do good CX, but do it better, and improve, and things like that. And then I guess to summarize it, okay, now you've got four categories instead of one. How in the world do you make sense of what to prioritize? So, I go through ways to do that, because you don't want 100 KPIs. You want a handful of KPIs, but they need to draw from all of these different categories, or you're not really seeing the full picture.
Ciaran Doyle:
One trap that I see organizations falling into is focusing on improving the customer experience metrics, but it doesn't have an impact on the customer experience or provide the organization itself a value. Yes, if you've been using NPS for 20 years, fantastic. That's great to look over time. But if you're starting over or starting from scratch, how do you determine which
metrics will tie back and showcase value to you as an organization and to your customer?
Greg Kihlstrom:
I don't think you should put something in front of stakeholders, executives, or the like, unless they tie to strategic business KPIs. And so, if you can't draw a line between NPS and the bottom line, I don't think you should put that in [inaudible 00:13:30]. Maybe measure it, if you have a CX team, by all means, keep measuring that, show it internally so you can see dips and things like that. But if it means nothing to the CEO, don't put it in front of that CEO to look at and say it's important, when they can't tie it to the bottom line. And so, that again, there's a wealth of potential metrics out there. One of the key things to prioritize measuring those things is yeah, what is that direct line to something that is going to be really valuable to the executive team?
Ciaran Doyle:
When you're talking to organizations and advising them, are there any major differences between the companies that are really seeing success with customer experience and those that are struggling?
Greg Kihlstrom:
I would say two things. First, to tie directly back to the measurement thing, those organizations that are successful have mapped investments in CX to the bottom line, just no doubt about it. The handful or maybe dozen companies that we always name drop whenever a CX case study is needed, they have done that, and they've been doing that for a while. And so, I think that's a big one.
Greg Kihlstrom:
The second part is culture. And that gets to the very fundamental from day one, customer centric culture is part of the DNA of the organization. And it's not just about, I think, happy employees do better work and make happier customers, but also what CX has done well, creating great experiences is not only the motivation to those employees, but it's also the reward. And so, when I've worked with employee experience, I've done a lot with intrinsic and extrinsic motivation. Extrinsic being salaries and bonuses and all those things. That stuff works, but what really works is finding things that are more meaningful and deeply valuable to the employees. When you can make their mission serving customers and making better experiences, it's just a win, win, win for everybody involved, including the customer.
Ciaran Doyle:
It seems like we are in the echo chamber. So, customer experience is what everyone should want to achieve. But if an organization is trying to sell this to their board or their executive team, what are the levers that they should try to pull in terms of what the organization can get out of customer experience?
Greg Kihlstrom:
Any executive that's been in sales knows that it's easier to keep a customer than to win a new one. So, that's a fairly pragmatic, and again, any exec that's been in sales knows that, so you don't have to pull up too many stats to show that. But I think it's things like that show, listen, we're going to make investments, but we're going to make it easy to win new customers because of word of mouth, which can be near free, if not free. We're going to leverage things like, customer loyalty programs have been around for decades and work phenomenally well. There's a lot of brands that are looking into loyalty programs that never would've 10, 15 years ago, because of subscription models changing and all those kinds of things. So, I think there's just a wealth of statistics out there.
Greg Kihlstrom:
I think it also requires executives and leaders to be on board with this and to just wrap their heads around this, and sometimes maybe stick their necks out and say, because it's tough to say, "Hey, you know what? We're going to forego increasing the stock price this quarter because we're going to make investments in CX." I haven't been at that level as a CEO. I've been a CEO a couple times, but not at that level. I know that's a tough thing to do, but the leaders that do that, that have been successful, their companies are number one, if not number two, they're number one in their category. We know them. We talk about them. But it took a risk, it took somebody sticking their neck out there to say, "We're going to do this and we're going to stick by it." And sure enough, again, they pulled ahead in their category.
Ciaran Doyle:
From the last few things you said, it sounds like prioritization is just the difference between the CX leaders that we know and speak about all the time, and those that are struggling. It's if you prioritize it, you measure it. And if you prioritize it, you invest in it. And if you prioritize it, you see all the follow on effects of product adoption, and customer expansion, and customer advocacy. So, actually, yeah, that's a really interesting point. So, are there any areas where, and sometimes we speak about this specific to metrics, but maybe just in terms of customer experience fads, do you think people are focusing a little too much on that's distracting from the big picture?
Greg Kihlstrom:
I guess maybe to go back to a couple things we've touched on briefly, at least, I do think focusing on making one channel the most delightful experience at the expense of focusing more broadly. You mentioned the term omnichannel. Man, we've got a long way to go before omnichannel is a reality, but it's got to start somewhere. And so, by no means am I saying you shouldn't have a great experience on any of your channels, but to focus so much on one, but then have such a terrible experience if you use a different one or an inconsistent one, it would be better to start tying things together than to focus so much on one.
Greg Kihlstrom:
It's almost like it's going to be disappointing if your website is the most amazing thing in the world, but you call customer support and they have no idea what they're doing, it would be better to have a good experience across everything, if possible. So, that also speaks to the siloed nature though, is that website team may have gotten the funds and had a leader that was able to advocate for investment, and the customer support team got the short end of the stick for the budget that quarter, or whatever. So, this is where these things need to be spread more evenly and there needs to be a governing body that really understands where shortcomings are and where to shore up those gaps.
Ciaran Doyle:
Should that be the role of the CX leader to be this arbiter or all knowing, all seeing voice? I mean, I guess it depends on the stage of the business, less on the project work and more on auditing and quality control.
Greg Kihlstrom:
I think they do need to be, because they're not going to do all the work. They're going to lay out some strategies and some plans, and ideally they would own measurement of it and things like that. But they do need to understand where the priorities lie and where the shortcomings are. I would say that's a good way to say it.
Ciaran Doyle:
From what I've seen, a customer experience vertical within an organization, there's no customer experience analyst at the bottom. They seem to be very top heavy in terms of an organization. So, how do you make sure the other sibling organizations internally give them that support, and also seed some of their control to this person?
Greg Kihlstrom:
Yeah. I think this is where working groups, steering committees, center of excellence, I think that these models, I mean, in that order, would be escalation of how big it is. And larger organizations, it's going to be easier to do a center of excellence, but that's a big investment for any size org. But I've seen steering committees or working groups work very successfully. Even in Fortune 100 companies, that works fine. Because actually, it allows people to build relationships.
Greg Kihlstrom:
If you're in a small organization, chances are a CX leader is going to know the people and interact with most of the people on a regular basis. If you're in a large organization, you may not even know who's pulling the data for you, or even know where in the organization that data's getting. It gets so convoluted and so siloed. And so, having a group that convenes on a regular basis, it allows everybody to understand each other's challenges a little bit easier. Yet the CX leader can still be in control of what gets done and prioritized, but they're building bonds with other people within the organization, so that when they need something, they know exactly where to go.
Greg Kihlstrom:
They know the challenges in getting that. Because part of prioritization also is, if it takes a lot of effort to measure something or to implement something, maybe find a different way to get to that point sooner, or in a different way. If you don't know, then you could be asking for something that's an 18-month initiative when there's another way around that's a three month initiative. And knowing the person that's responsible for that makes a big difference, versus just sending in a JIRA ticket or some request in some internal forum or something like that.
Ciaran Doyle:
And I think it's also just, like you said, a common understanding of what's the outcome we're trying to achieve? Not just I would do it this way and it would take 18 months, versus if I do it another way, it's three months. So, one last question before we close, is there any aspect of customer experience you think people don't want to tell senior leadership, whether it's more difficult, there's less alignment, the measurement isn't telling the whole picture. What would you tell a CEO that everyone reporting up to him or her is afraid to tell?
Greg Kihlstrom:
It's hard, but not impossible to draw that line to the bottom line, from CX investments, but it just takes time. And the onus is on the employees and the CX leaders to make that happen as quickly as possible, but it does require a little bit of patience to get those things in place. There's lots of ways to accelerate that, or to not completely divert from other company priorities in doing that. Doing small projects, pilot projects, proofs of concept, all those things can build momentum as well as build the case for more, but executives, they need to buy into this or else they're going to fall behind.
Greg Kihlstrom:
And there is such a gap between those that are at the top and those that are lagging behind. It's only accelerated. I mean, the pandemic has massively increased investments in digital experiences and things like that from the companies that were smart and that had their stuff together. Those that didn't make investments, then they're even further behind now because we're only moving more and more digital, more and more self-service, more and more all of that realm of stuff. If you weren't making investments in that and paying attention to the CX part of that, man, the gap is growing into a chasm.
Ciaran Doyle:
So, Greg, any final thoughts before we close?
Greg Kihlstrom:
If you're wondering where to start, my podcast is called the Agile Brand. So, I'm a proponent of agile approaches, whether it's formal agile, or less than formal agile. You got to start somewhere, start small, build consensus, think about working groups, steering committees, ways to build relationships across your organization. And you've got to have leadership support in what you're doing. I do think there are some things that employees, and managers, and directors within an organization can do to at least build the case. And then leadership is going to have to take it from there as far as their support and their investments.
Ciaran Doyle:
That's great. And if you want to listen to the Agile Brand, you can probably find it on all the usual podcast places, but you can also head over to GregKihlstrom.com, and also check out his book, Meaningful Measurement of the Customer Experience. Thank you for listening to this episode of Flourish CX. To learn more, head over to zoominsoftware.com/podcasts, and follow along wherever you get your audio.
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