#6 UNCX NEWSLETTER | The Six CX Leadership Mistakes You Must Avoid
PLUS: Netflix's Data Strategy | Good V. Bad Strategy | Latest Consumer Trends
In my work with brands, I’ve regularly seen CX leaders making assumptions that can set them up to fail.
The Six CX Leadership Mistakes You Must Avoid
And my tips on how to avoid them.
Mistake #1 | Not proving ROI.
It’s the hardest and harshest truth to learn because you do. Your efforts will be seen as frivolous without clearly linking a better experience to increased customer satisfaction, loyalty, attraction, and business results. Because why else are you doing it? Without a financial rationale, you’ll risk losing executive sponsorship. And it’s tough because whatever you do, implement, measure or say, your organisation is being buffeted - daily - by marketing, sales, supply chains, your competition, your customers, HR, Legal, Risk and more, all micro or macro-impacting on your company’s performance.
Focus on ways to measure impact and its link to business strategy.
Because it can quickly become a messy middle and hard-to-distinguish outcome, get super-focused on the expected and the actual financial impact of what you are doing. Be very clear on how to demonstrate it (measure it) outside of the noise in your business. Every action, improvement or change has to have a positive link to your brand’s desired financial outcomes.
Mistake #2 | Product, Price and Branding is someone else’s job.
In Sampson Lee’s well-known 2006 customer journey map for Starbucks, price perception was an essential part of the research - the mapping of the emotions of Starbucks customers couldn’t happen without considering the price, and when the price became a factor in the customer journey, emotional outcomes changed.
Pricing, economic and emotional value drivers are central to a customer experience. Retail stores like Costco display their pricing in a way that makes customers feel a part of the experience. They never advertise; the max markup is never more than 15%. They are not afraid to display price tags, instead educating their customers with the necessary information to make decisions more effectively.
Branding is also critical to your outcomes. It creates emotion around desire, FOMO, identity and so on. Branding strategically works out the feelings you want to instil in your customers.
Experience design integrates all significant functions, including marketing, sales, creative, product development, customer service, and operations.
The marketing department works on brand messaging and strategy, while creatives provide the brand assets.
The product department ensures that the quality of products and services matches the brand’s promises while sales do the promotion.
Operations ensure everyone, including those in customer service, aligns with the brand’s value, voice, and quality to create a consistent experience across all brand touchpoints.
Brand Components are:
Feelings. The gut-level reaction your brand evokes in its audience.
Promise. The values that your brand stands for. These values are a silent promise that a brand makes to its audience.
Relationship. All the quality interactions a brand has with its audience and how it makes them feel, for example, excited or grateful.
How can’t these components be part of the customer experience? So, even though product, price and branding maybe someone else’s functional job, it’s a critical part of your strategy - the experience strategy you are building across your enterprise. You may not own them, but they’re vital to your work. If you ignore them and leave them to others, you lose the ability to influence your outcomes.
Stop thinking about experience as something you ‘add’ to your product or service. Your product or service isn't some generic base upon which to build your customer experience. It’s a holistic end-to-end journey that includes your product or service.
CX will fail if you think of your product or service as some generic base and CX as optional added experiences. Instead, craft a total end-to-end journey with the experiences (including your product and service) that your particular set of customers will value and want.
Mistake #3 | I lead CX, so call the shots. The buck stops with me.
No, you don’t, but it does.
Everyone is accountable to someone, no matter how senior you are.
Your CEO answers to the board. Everyone across the business reports to one of your peers. The sooner you learn this, the better. You not only have accountability to someone (your boss), but if you’re going to succeed, you must accept accountability to your peers because they will determine much of your success. You need to negotiate as well as balance priorities and demands.
Instead of focusing on ownership, focus on relationships and building influence.
Designing excellent customer experiences needs a cross-functional mindset and a customer-centric culture. It is not just your CX team that drives customer experience, nor is it just the customer-facing front line, even those who will never see a customer affect it. You’re bringing your experience, intuition, and expertise to shape your brand's experience strategy. Your job is to tell stories, articulate a vision, and make the future real for everyone. You’re also responsible for creating a culture for understanding the customer, which requires buy-in and alignment across the company. Get to know the other leaders across disciplines and teams that you’ll need to work with closely to get things done.
#1: Be data-informed. You may have a vision, but it still needs to be accountable. Benchmark and show progress. Yes, it may sometimes feel tedious, but it’s vital.
#2: Build working relationships across the enterprise. Make sure you know who your ‘virtual team’ is - the essential groups you need to educate, collaborate, and work with across your business - those that will make things happen. Spend time aligning on shared outcomes before discussing how you get there.
#3: Lead enterprise-wide, not just as a functional leader. Think holistically. Your job is not just to transform your function but to improve how well customers engage across every part of your company.
Mistake #4 | Fragmentation
I’ve seen customer experience leaders losing precious time by trying to fix everything at once (I call it ‘the dive’). A proliferation of small, siloed initiatives that lack focus dilutes your impact, resulting in incremental change at best - and at worst, results in gradual changes of little consequence.
Mistake #5 | Everyone knows good CX is a competitive advantage.
Maybe they’ve read that somewhere. Or perhaps been told that by someone. But do they buy into it? Do they think it’s your job and they have no part to play in it? Often, CX becomes a ‘key pillar’ in the board’s results pack - but without the meat. Until you get the financial budget to deliver what you’re driving, you don’t have buy-in; you have platitudes. Fight for commitment and funding.
And, depending on your company's maturity, it could mean you end up trying to push water uphill. Don’t make assumptions about how CX is perceived, and don’t accept platitudes - go out there, question, discuss, and challenge everyone to find out.
Build an execution plan.
#1: Recognise this is change management.
Change management is about people. So bring everyone inside it. Don’t assume everyone knows your mission or has bought into change. Read about culture change and why it’s so tough. (Read Kotter’s seminal book). It’s a transformation of your company's culture, not just of the CX owner/s.
#2: Bring the enterprise with you. Find opportunities for activation across your company; if there aren’t any/many, create them. Bring the messages to peer and stakeholder events, offsites, town halls, and roundtables. Leverage your leadership team and make sure everyone knows the part they can play in helping to drive the transformation.
#3: You have a more strategic function than a tactical one. So act, think and be strategic. It’s good to fix problems and grab the low-hanging fruit first to help credibility, but better to get above that and into what will make a long-term impact.
Mistake #6 | Do enterprise-changing work by letting others speak for you.
If you spend too much time working in your ‘engine room’ and don’t look horizontally and vertically, the organization will see you as a black box, not understanding what you do, being cynical about your value, and not bothering to involve you in strategic planning.
Communication is never enough. Rinse and repeat.
#1: Develop a communications plan. Think about the key messages and themes you want to build momentum.
#2: Evangelise your actionable plan for getting there. Use meetings, reports, town halls, etc., to gain visibility and buy-in. Use these opportunities to create momentum and to find champions in and across your company.
#3: Do regular showcasing. Give visibility to the work being done across your business and how it drives customer and business results. Everyone's work shines better by giving it a forum and making sure it fits the story you are telling behind your work.
Please share with colleagues who may be seeking support with strategy and leadership
Into The Data | How Netflix’s algorithm programs us to watch endlessly
Netflix’s underlying technology is a massive part of what has made them successful, with the platform able to pinpoint everything - viewership, taste, viewing habits - from every user. And Netflix can’t hide that anymore (which is why the streamer has become the poster child of the writer’s and actor’s war for proper compensation in the streaming age). And with AI soon to become a part of the company’s operations in a much more significant way, the data collected today may soon seem basic.
Netflix’s head of content, Bela Bajaria, says, “Algorithms don’t decide what we make.”
That isn’t entirely true.
As early as 2006, when still a DVD rental company, Netflix offered a $1 million prize to anyone who could create an algorithm for its planned streaming service. Six years later, it got its first big original hit, House of Cards, after data analysis identified a holy trinity of subscriber favourites: Kevin Spacey ( then, of course), movies directed by David Fincher, and the original 1990 House of Cards, which was regularly featured in lists of the best TV series of all time and still hugely popular. They didn’t need commissioning editors – or any humans - when they had the implacable logic of pure data telling them what to do.
It was fascinating how Netflix took this information and ran with it. It proceeded to cut ten different House of Cards trailers. David Fincher fans saw a trailer emphasising his moody camera work; those who enjoyed television with strong female leads were shown trailers of Robin Wright’s starring role. Kevin Spacey devotees got lots of Frank Underwood gazing into the camera.
And that was just the start. Today, your experience of Netflix – particularly the shows you see on the home screen – is rooted entirely in your data profile. Such is Netflix’s dependence on algorithms; it doesn’t bother to market much of its output. If the numbers think you’ll like a programme, it will search you out. Otherwise, the programme might as well never exist for you.
And… data seems to decide what the company keeps making.
Netflix’s algorithm knows every movie and TV show you’ve engaged with, how long you watched, where you were, when you watched, and on what devices.
The company’s insights have also determined why users started watching a title based on how they navigated the platform, what they searched, and what they clicked on.
It even tries to juice viewership by changing home-screen recommendations, thumbnails, and previews for individual subscribers based on those insights.
That data has a major impact on what types of movies get greenlit and what kinds of shows get renewed for additional seasons - with a critical data takeaway being that newer shows drive sign-ups more than returning ones.
When Netflix says it can’t now calculate a viewership-based metric for writers and actors (a sticking point for many of them who, as I write, are striking), that may be hard to justify. Data is leverage… and in an industry where leverage is the foundation of a good deal, it’s everything.
Shout out to futureparty.com
A good strategy helps you run faster in the right direction.
A common belief in CX is that execution is all that matters, and strategy is someone else’s job. That belief is wrong (and I have the scars to prove it).
The better you are at execution, the faster you can run in any direction.
But a good strategy helps you run faster in the right direction.
Execution without strategy is wasteful.
Execution is necessary, but alone it’s not enough.
Strategy on its own isn’t enough either, but it is necessary.
Strategy is the difference between playing at it or building something enduring.
Good strategy builds something worth defending.
A good strategy is not just ‘the what’ you are trying to do. It is also ‘the why’ and ‘the how’ you are doing it. And here’s the thing. You always have limited resources - always. But crafting a strategy upfront lets you throw all your limited resources in one direction from the beginning, focusing on ways to win in the ways you’ve chosen.
If you execute before crafting a strategy, you’ll be wasting precious time and making sub-optimal decisions – hiring people, new tech, org changes, and so on – making it harder to change direction later.
Read Good Strategy Bad Strategy by Richard Rumelt and learn a lot.
It’s about 12 years old, but his suggestions are easy to put into practice, and here are a few:
Don’t mistake a goal for a strategy: A classic mistake. ‘Our strategy is to increase market share and improve retention by 9%.’ OK. Good. But hold on….how?
Fluff: Make a customer happy. Let’s be the next Apple. Let’s be customer-centric. Go digital. Wow. CX (yes, CX is still considered by many as a buzzword).
If the strategy looks like fluff, bullshit is the probable culprit.
Failure to Face the Challenge: Rumelt calls it the Crux in another book - that one key thing often matters in strategy. I’m not convinced on that point – but as he says, ‘bad strategy dances around it in favour of things that matter less but are easier to deal with or measure’. That much is true.
Ignoring Competition & Ignoring Understanding Customers: Failing to recognise your competition or anticipating consumers’ needs is more than dangerous: it’s dumb. Your competitors are working hard to best you and your customers are continuously shifting in their wants and needs. Current and Future thinking is essential and, even better, gets you leading rather than following. The key is not to follow fads but to follow trends, and there’s plenty of data and research around to give you the future insights you will need.
My Pick of the Latest Consumer Trends
This newsletter, this time, has one topic: Inspiration
We all need to feel some inspiration. 75 per cent of people actively seek it, and 85 per cent say they are motivated to get to the real truths about things in the world today. Wunderman Thompson
In becoming a brand that understands and fuels inspiration, you can be more valuable to consumers. You can discover fresh perspectives, ones that allow you to differentiate from your competitors and leave them to play more superficial roles.
Inspiration helps consumers imagine and set up new behaviours, mindsets and routines valuable to them. And valuable in many ways: helping them achieve practical goals, try new things, and construct identities they’re proud of.
This is why, for brands, inspiration can be both interesting and practical. In defining a brand’s potential to inspire people, different and complementary brand roles are set up. Higher-order roles that play in identity creation can co-exist with utilitarian roles that help people get things done.
In a 2020 ‘Inspiring Growth’ study by Wunderman Thompson, inspiration scores predict 63 per cent of the variation in consumer demand for brands, 52 per cent of brands’ ability to command higher prices and 48 per cent of brands’ ability to convert customers at the point of purchase.
A brand that can step in and deliver on this ‘inspiration gap’ can win and grow, because wherever we look, inspiration is a powerful growth accelerant.
What’s interesting is that when choosing between digital or IRL (in-person) inspirational experiences, across multiple dimensions IRL is the stand-out preference, from immersive experiences to crafts, fashion, books or magazines.
Self-Transformation is a leading trend in desired Inspiration outcomes. The pandemic made us appreciate what we have and feel more positive about the changes we can make to ourselves and the world around us.
Setting new goals, being more healthy, having a simpler life, changing habits and changing my perspectives top the self-transformation outcomes wanted.
Can your experiences aim to deliver not more noise but, instead, any of these outcomes, such as ‘having a simpler life’ to the 25 per cent who are inspired to achieve that?
Meanwhile, you can read my usual monthly pick of Hot Trends here. I talk about the death of luxury logos, the move to digital authenticity, and the growing interest in dark entertainment to release anxiety.
And Lastly, Some Smart Thinking
‘Great leaders don’t set out to be a leader, they set out to make a difference. It’s never about the role, it’s always about the goal.’ - Lisa Haisha