Are you managing customer relationships or customer experience?

As consumers become more astute, sophisticated and demanding, retailers are having to adjust the way they measure success from transactions to interactions. What makes retail so distinct from other customer-centric organisations? Well, in other sectors, the role of commercial marketing is to develop a relationship between the customer and the product to stimulate demand, a relationship that is typically managed through a CRM system. Consumers, on the other hand, are transient—loyalty has to be earned rather than enshrined in a contract and they want to be serviced, not managed. Retail is less about relationships and more about experiences.

This is more than semantics—experience management demands an entirely different toolset. CRM is largely internally-focused, and often reduces customers to a set of facts and figures used to track communications and determine future sales opportunities. CX, however, is about understanding the consumer as a person, with the goal of optimising every interaction from their perspective, in order to nurture trust and loyalty.

Experience management is no mere software upgrade—it demands a shift in organisational design. Other customer-centric industries such as utilities and telecoms have seen the proliferation of the Chief Customer Officer, sending a clear signal to consumers and shareholders of their service-driven intent. Retailers’ boardrooms, however, are still more likely to feature a Chief Digital Officer—a “transformer in chief” who may be more focused on developing the business’s digital competency or e-commerce capability than championing the consumer.

Perhaps these retailers assume that customer experience is everybody’s job, so there’s no need for dedicated senior leadership or a specific team for this purpose. But marketing, e-commerce, the contact centre and stores each have their own priorities, KPIs and success metrics. CX is not engagement, UX or footfall. When nobody owns the total customer experience, the internal silos become conspicuous to the consumer in the form of a disjointed experience, which ultimately results in defection, abandoned purchases and vocal criticism on social media.

Great branding and customer acquisition are no longer enough—you can only sustain growth and protect margins by considering the customer’s perspective in everything you do and every decision you make. A single, dedicated directorate is needed to unify the organisation’s customer approaches across all channels, define success metrics, and ensure the company culture and strategy is truly customer-focused. That requires someone with mastery over a wide range of disciplines, who can bring the creativity, strategic mindset, diplomacy and commercial acumen needed to champion the customer and lead from the top.

It’s interesting to note that in the last year or two, a number of progressive retailers have taken the step of creating a Chief Customer Officer seat at the boardroom table, only for the appointee to step down or get fired after a matter of months. There are two likely scenarios that would have contributed to this ‘failure to launch’. Either the role will have been poorly defined or aligned, because to succeed, the CCO must be independent from any one department or division and report directly to the CEO. Or the incumbent won’t have been given the tools and authority to enact the complete business process transformation and restructuring needed to shape a successful customer-first approach. Whichever is closest to the truth, there are some salutary lessons to be learned from these types of setbacks.

Find out more about managing customer experience; read the eBook Big ideas for retail: 10 key CX trends