Strategic Finance

Why CEOs must become customer-experience evangelists

By Mark Hurd

Conventional wisdom has lately been taking a terrible beating from modern technology as today's natively social and mobile generation relegates big chunks of traditional business strategy to the junk-heap of irrelevance.

For example, classic business school thinking always told us that when your customer-satisfaction numbers hit 95 percent or even 98 percent, it's a waste of money to try to push beyond that because some customers are just grumpy and implacable by nature and you can't do a thing about that. So move on, we were told.

And that was okay back in the old days when the seller was in control of everything, from what the customer could buy and how the product would be fulfilled to the options that would or would not be available. But today, that model's got about as much vitality as the local video store.

In today's global marketplace, buyers are empowered by modern technology and are fully in control of the buyer-seller relationship. It's the consumers who control the leverage, not the sellers -- and with that new dynamic in place, much of the conventional business wisdom that has served CEOs nicely for the past several decades needs a complete overhaul.

A voice for the minority

Unhappy customers -- even if it's only two percent of your total customer universe -- now have the voice and the authority to exact a painful price on companies they believe have missed the mark on product selection or availability or fulfillment channels or after-purchase service and support.

Social media and mobile computing advances have given those consumers powerful platforms through which to influence the purchasing decisions of dozens or hundreds or even thousands of other potential buyers.

For CEOs, the good news is that you and most other high-level business leaders are fully aware of this dual challenge and opportunity: fully 97 percent of executives surveyed say that delivering great customer experiences is essential to their success.

But the bad news for a lot of CEOs is that only 63 percent of companies have appropriate customer experience systems and processes in place. So about one-third of businesses today are giving nothing but lip service to delivering superb experiences to customers -- how can those companies expect to compete? Or even survive?

Disconnected social media strategy

Clearly, social media has become an indispensable platform in helping customers engage with businesses and in fostering enduring and mutually beneficial relationships. However, we're once again finding that there's a jarring discrepancy between what companies say they should be doing with regard to social media, and what in fact they are doing: while 81 percent of executives surveyed say they realize that active social-media processes and culture are essential to their success, only 65 percent offer social channels for sales and service!

So what's causing this disconnect? The respondents spread the blame equally across three culprits: inflexible technology that can't handle modern social tools, siloed organizations that can't adapt to rapid external disruptions, and insufficient funding.

As I look at those three obstacles -- core technology, organizational structures, and budget priorities -- it's clear that they can't be overcome by a feisty social team, or a hard-charging sales leader, or even by a forceful finance chief. No, those barriers to becoming a truly social business that can deliver superb customer experiences can only be knocked down by the CEO.

The customer-experience evangelist