The Experience Revolution!
A number of key events in time have shaped history, and more specifically defined how we do business. For example the advent of money changed the way how business was done. Much later the industrial revolution again brought about many changes and brought prosperity to the ‘industrialized’ world. After WWII the Quality Revolution allowed companies in Japan and Germany to prosper. Not too long ago, the IT revolution has again changed the way business is done. Companies like Amazon, Apple, EBay, Facebook, Google and Microsoft have achieved success in very short periods of time, which was unimaginable in the past. Each new ‘revolution’ has allowed business to achieve greater success, earn more profits, grab bigger market shares, than was possible in the previous era.
With the economy in not too great of a condition companies are looking to find ways of surviving. Moreover competition from the developing economies is making doing business difficult. A popular question that I often discuss with my MBA students is how to tackle the challenges posed by developing economies like the BRIC or the N11 nations? Keeping all of these factors in mind, I believe that the time is rife for a new revolution - an Experience Revolution.
Companies that have adopted Customer Experience Management philosophies, and are implementing it in an appropriate manner are already beginning to prosper. Some of the best practice examples include companies like Apple, BMW, Disney, Harley Davidson, Ikea, Microsoft, Singapore Airlines, and Zara. Despite the tough economic conditions these companies are outperforming their competitors. However, as I work with numerous companies from all across the globe I find that apparently only the larger firms have started to adopt a CEM focus. The 70 odd per cent of the economy, which is made up of small and medium firms have failed to look at CEM. Overall this is having a negative impact on our economies.
The two major threats to businesses in the west are posed by the current global financial climate, as well as the threat posed by the low cost competitors from the developing countries. Both of these problems are somewhat interlinked. Companies try to survive through the troubled economic times by reducing their costs. In terms of competing against the developing countries, we simply cannot compete on price. The low wages, economies of scale, coupled with the availability of cheap raw materials makes it impossible for companies to try to compete on the basis of costs. Customer Experience Management offers us that extra something which is hard to replicate, and hence will give our companies a competitive edge.
My blog, and my talks at various conferences have focused on CEM implementation by a firm. However, as I see the number of participants and the number of CEM focused conferences increase, I want to focus on the economy as a whole. Hence, I think we need not just a handful of companies to adopt CEM, but bring about a revolution where a huge percentage of the companies start to adopt this.
A CEM revolution, however, cannot be brought about without the help of the Government at all levels (State and Federal in the US and Individual country and EU in Europe). The government needs to promote CEM to the masses. While I’m not an expert on Public Policy, I would suggest the following steps.
First, the governments need to offer tax incentives for companies that spend money on implementing CEM policies. This will encourage a larger number of companies to shirt towards CEM. Moreover, this will also encourage, cash strapped, SMEs to adopt a CEM.
An official Government encouragement will also help the academia (which is usually very slow to react to changes in the business world) to focus on this sector. It will encourage them to do more research, and consequently offer better training to companies.
Governments can also step in and either create or support CEM awards. The Malcolm Baldrige National Quality Award (MBNQA) in the US has had a positive effect in encouraging businesses adopt Quality policies. As a member of the Judging panel on the UK Customer Experience Awards, I’ve seen the number of companies apply grow over the years. Moreover, the quality of the submissions seems to be improving, which shows that companies are adopting CEM. However, a government backing will not only enhance the reputation of such awards, but will see a much larger number of companies adopting CEM principles.
Similarly, other measures need to be looked at by the Governments to encourage businesses to adopt CEM policies. This needs to be done to ensure that we bring about a CEM revolution on a large scale, a scale large enough to have a positive impact on our economies.
For comments, please email me at: o.khan@uel.ac.uk I will try to post all of them on the blog. (To prevent spammers, I’ve had to take this measure).
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By Ian Williams, April 21, 2020 @ 2:41 pm
You’re point on the involvement of governments is a very interesting one.
Those countries whose GDPs are heavily reliant upon the service sector need to understand that customer experience is a means of creating competitive advantage at a national level - something that Adam Smith spoke about over two hundred years ago and Michael Porter developed over twenty years ago. Yet here we are, still talking about it!
Here is a good link: http://prezi.com/d4zrj5xb4svq/the-competitive-advantage-of-nations-diamond-model/
By David Douglas, April 22, 2020 @ 9:45 am
Hi Dr Khan,
I’m an advocate of good customer experience inside and outside an organisation and read your blog with interest as I agree that there needs to be a customer experience revolution.
Obviously you are right that key events over time shape our history and can define the way we do business. Just as the industrial revolution (through creative use of the steam engine), brought prosperity to the industrialized world, so now in the early twenty-first century we have a similar opportunity to reach a new level of prosperity through creative use of the world wide web.
You mention that the economy is not in good condition and competition from developing economies is making doing business difficult. Whilst this is true for most organisations, the best run organisations (the minority in any industry), will continue to prosper. The majority of organisations in most industries will continue to struggle, even though the current economic climate is ripe for change, to improve products and services (particularly the customer experience), before organisations become extinct. As much of our economy is built around customer service (usually poor), bring on the experience revolution!
Whilst companies are adopting customer experience management philosophies, and are beginning to prosper, how much is based on marketing spend and brand power… perception? And how much is based on reality…. the customer experience? Some of the large organisations you mention are not immune to poor customer service having personally experienced as much with Apple, BMW and Microsoft….. I’m not a difficult customer!
As for the small and medium firms making up 70% of our economy who are failing to look at CEM and are having a negative impact on our economy, this is not quite true. Many smaller organisations have a high level of customer experience management which sets them apart from their competition and partly the secret to their continued success.
You mention two major threats to business in the west are posed by the current global financial climate and the low cost competitors from developing countries. Unfortunately the first threat was self-inflicted and we only have ourselves to blame…..weighted from the top down. As for the second threat, low cost competitors from developing countries, we are now in a global market, compete in the business you are in or create another business.
In the main, western economies are great at creative technical invention, but the two biggest threats as I see it, are our culture steeped in social hierarchy and in turn our outdated legacy businesses models which are designed to maintain the status quo, both of which will continue to hold us back…. hence poor customer service.
As for CEM being hard for others to replicate, it would be arrogant of us to think we have the sole lead on customer experience management when in the main, we are poor at it, and organisations in emerging markets have shown us a thing or two about CEM. For example, go back 10 years, quality hotels in the Far East were light years ahead of their equivalent in the west and we are still playing catch-up today.
Here’s where our views differ. Although Governments are a vital part of society and should support the engine of our economies, part of the reason for the mess we are currently in is because most western governments have been poorly led and spin doctors aside, they are not exactly good exponents of CEM, I’m not even sure governments know what good CEM is.
I could be wrong, but I can’t see tax incentives for CEM ever happening, or ever needed. CEM should be part of the culture for any organisation that offers a service and if they are good at service… the reason for their existence, they will prosper, if they are poor at service why should they survive?
Most businesses are slow to change, so I don’t blame academia for reacting slowly to change, or Governments come to that. What would help is if, business, academia and Governments, worked together in a more collaborative way. Speaking for the UK, our education system could do much more to produce young people with better skills for the work environment. More businesses could invest time partnering with local education, to impart current skills techniques and business knowledge management. Governments could make more of this collaboration part of the school curriculum as they are beginning to do so with a weeks work experience for year tens in secondary school.
On your last point, I would say the best way for a CEM revolution to take hold on a large scale for positive impact on economies, is for visible success by the organisations that champion CEM in their respective industries. When CEM is clearly seen as a driver for business success, other organisations will inevitably try to up their game and follow or go out of business.
I wish you well. Long live the CEM revolution!