Growin’ Up: CX Hits Its Teenage Years
The discipline of Customer Experience (CX) has grown during the past 15 years from crawling infancy to soul-searching teenage status. As with any teenager, CX finds itself on a journey of self-discovery, grappling with questions of identity and striving to find its place within organizations.
The offspring of marketing and customer service, CX has developed into a key business function. It boasts an ecosystem of consultants, industry analysts, recruiters and authors; along with its own trade association – the Customer Experience Professional Association (CXPA), formed in 2011 – and a professional certification (CCXP).
As CX transitions into its teenage phase, several fundamental “coming of age” questions have emerged. Chief among these is defining CX’s identity. CX has become a buzzword, with everybody jumping on the bandwagon with some form of “we’re CX” message. These competing messages have blurred the understanding of CX.
Additionally, where should CX sit within the organizational chart? Should it be a standalone C-level function, or nestled within marketing, engineering or another function? And what should the balance be between digital and human delivery? In short, CX is trying to figure out who it is and what its place is in the world.
Searching for an identity
The growth of CX has led to an identity problem. Some leaders view CX as transactional, post-purchase marketing campaigns. To others, CX is merely reactive customer support rebranded. Still others think of CX as focusing exclusively on increasing customer adoption. These differing perceptions stem from divergent goals for the function: driving adoption, increasing renewals, or growing revenue through upselling and cross-selling. Increasingly, leaders regard CX as a holistic, enterprise-wide function designed to achieve all three goals.
As for implementing CX, for some this means human customer support agents. For others, CX only means digital touches. Others take a hybrid view.
Furthermore, the term “customer experience” is sometimes mistakenly interchanged with “customer success,” assuming they are synonymous. The lack of a unified understanding of CX often leads to ongoing struggles to define its precise identity and purpose.
My interpretation of CX, which aligns with the CXPA's definition, describes customer experience as the perception customers hold about their interactions with a company, encompassing the entirety of their experiences, both human and digital. At its core, CX is a comprehensive business strategy with a primary objective to help customers derive value from their purchases—value determined by the customer, rather than imposed by the vendor.
CX spans the entire customer journey, starting in pre-sales. In fact, Gartner notes that a prospect’s perception of the experience they’re likely to have post-purchase is the third top buying criteria – more important than price. In addition, Gartner reports that two of the top three drivers for canceling planned purchases are because “the buying team was not convinced it could achieve the value desired”.
CX also spans sales, adoption (“customer success”), renewals and advocacy. It includes every touchpoint across every channel. As for the human/digital question, I argue that every customer is digital, with a human fallback option best for larger companies.
Where does CX fit in the business?
Beyond the CX identity crisis, equally vexing is where should the function sit in an organization’s structure. The answer varies among companies, resulting in a diverse range of approaches.
Many organizations have created a separate CX function, often reporting to the C-level. Others have decided to place CX under existing functions. These include services, given services delivery plays a role in customer adoption; sales, focusing on account renewals and/or to leverage account relationships; marketing, to leveraging skills and tech stacks across both disciplines, and engineering, often when building customer portals. Large enterprises face the additional challenge of centralizing the function or splitting it across business units.
Research suggests that the optimal position for CX is as a centralized function reporting directly to the CEO. According to TSIA, when the top CX executive reports to the CEO, the dollar renewal rate reaches an impressive 91%, showcasing the highest level of optimization among all executives.
This strategic positioning reflects that the customer experience encompasses every facet of a company, including purchasing, operations, sales, and marketing. Additionally, CX should maintain strong, dotted line connections to each business unit, acting as consultants who possess specialized knowledge of experience-related disciplines.
Navigating to adulthood
Now in its teenage phase, the CX discipline is trying to figure out who it is and how to mature into adulthood. Amidst the soul-searching, several fundamental truths about CX have emerged:
- Its focus is on the customer, with the goal of expediting the value customers seek from their purchases.
- CX is an enterprise-wide endeavor, connecting and simplifying every part of a customer’s journey.
Most importantly, for every organization, investing in CX has become crucial for attracting, growing, and retaining customers.