Introducing CX Action Management
The New and Exciting CX Approach That Maximizes Retention and Customer Lifetime Value
If you’re still managing your customers’ experiences with traditional methods, it’s time to wake up and smell the coffee. The old ways of customer experience management are over, and Action Management is the new answer. Here’s why…
The biggest lie in CX is that Customer Experience Management (CXM) actually works. It does not. It is broken.
There’s a gap known as the Action Gap, which defines the disconnect between customer insights and companies’ actions. Essentially, companies are good at identifying problems but struggle to turn insights into action. CXM may be broken – but there is a new way.
CX Action Management is a new CX framework supported by new technology that aims to bridge this gap, allowing companies to deliver on their brand promises. To be successful with any strategy, you must first get the basics right – and the basics of CX is collecting customer feedback.
History of Collecting Customer Feedback
A long time ago, companies depended on agencies to conduct thorough market research to find out what customers wanted. These programs were lengthy, expensive, and complex – and would only be executed sporadically. Also, the data collected had to be structured, analyzed, and interpreted to gain insights based on the data collected from a sample of segmented customers.
The digital revolution led to the development of survey solutions allowing organizations to distribute questionnaires via email or on their website. These tools have made the process of collecting data less cumbersome.
However, the data collected from these survey tools is often unstructured and sometimes presented in statistical forms through pie and bar charts that need to be interpreted to derive insights.
From Data to Insights
Over the past decade, we saw the birth of a series of “Customer Experience Management (CXM)” solutions. Although such solutions merely manage feedback data and not customer experience, these “Feedback Management Solutions” (a more apt name for CXM) allow companies to access insights derived from text and sentiment analysis.
The data is usually well-structured, and key drivers are presented in colorful dashboards with lots of granular information and benchmarks. But more often than not, this data ends up being abandoned and forgotten on the platform itself, or at best, exported into unwieldy slide decks while nothing happens afterward.
Our recent CX Action Management Study confirms this problem:
- 50% of companies struggle to collect customer feedback
- Less than 10% excel at turning such feedback into insights
- Only 25% turn insights to action and launch meaningful CX initiatives
The same study identified a series of issues preventing companies from translating the voice of their customers into initiatives, some of which include:
- Lack of focus
- Difficult prioritization
- Data circulation
- Lack of management buy-in
- No resource allocation
- Lack of governance and authority
- Difficulties in involving units in cross-functional projects
CX units tackle too many projects without proper prioritization, trying to put patches where possible without structured programs linked to ROI projections. This leads to even more problems with each iteration as companies don’t see the impact of CX operations, and with each cycle, it becomes more challenging to get buy-in, budget, and resources.
These obstacles are the hurdles that prevent organizations from turning the voice of their customers into actionable plans and initiatives to improve customer experience, products/services, and processes – and win back unhappy customers, or incentivize advocacy and referrals.
That’s why Customer Experience Management as we know it is broken.
Check Out Our Action Management Study
Find out how effective companies really are when converting customer insights into action and triggering initiatives to improve their customer experience.
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CX Action Management: Turning Customer Insights into Action
CX Action Management is composed of two elements:
- Action Management System (AMS): A framework based on a simple five-step structured process
- Action Management Platform (AMP): A technology developed to support companies willing to implement Action Management
CX Action Management offers a framework and a series of tools designed to enable companies to transform customer insights into meaningful initiatives that immediately impact the bottom line.
CX Action Management System (AMS): An Overview
The first two steps in the Action Management System are the setup steps which only partially overlap with existing feedback management processes.
Customer insights are gathered at different customer journey steps using just-in-time channels and technologies based on KPIs you want to influence.
The collection phase of the AMS revolves around listening to customer feedback during particular interactions with the brand, using the proper methodology and survey system. Everything revolves around this input, as the process is entirely customer-centric.
At this stage, data is automatically analyzed to define key drivers of happiness or dissatisfaction, KPIs are benchmarked, and key activities are clustered and prioritized. Focus means focusing on opportunities; everything starts by identifying and prioritizing such opportunities.
Within the focus phase, there are different processes (explained in more detail in our CX Action Management Blueprint and Category Introduction whitepaper) that support the following sub-steps:
Automatic data analysis
Data clustering and modeling
Classification and segmentation of data based on products, stages, tiers, segments, location
Automatic insights in the form of key drivers of satisfaction and dissatisfaction itemized by topic and subtopics and mapped according to segmentation
A matrix system that categorizes issues based on complexity, effort of resolution, potential positive impact on operations and subsequent ROI
Issues are then prioritized based on assessment and can be processed either automatically or manually in the next step in the AMS
The Action Phase
After the setup phase, it’s time to tackle the issues identified as key opportunities. This is when CX Action Management truly shines and sets itself apart from conventional CXM projects and programs.
Actions or initiatives are divided into three categories which relate to the remaining three steps of the CX Action Management System:
- External initiatives
- Internal innovation management
- Close-the-loop activities
3. Interact (external initiatives)
This is when you automatically react to customer feedback with tailored workflows and conditional logic based on sentiment, topic, level of satisfaction, customer segments, and so on. Additionally, this stage allows you to set expectations appropriately and show accountability.
Automatic workflows allow organizations to:
- Win-back unhappy customers
- Only 25% of organizations win back customers, according to our recent study
- Involve satisfied customers in advocacy or referral programs
- Collect reviews
- Manage expectations in terms of time-to-resolution when a customer brings up an issue
- Turn one-to many conversations into a one-to-one dialogue
- Foster long-term relationships
4. Innovate (internal innovation management processes)
While “Interact” revolves around external 1:1 actions, “Innovate” is the stage at which you define, plan, and manage key activities to improve products, processes, or services while involving the right stakeholders.
At this stage, assessment data (urgency, effort, priority, and ROI projections) is automatically sent to key stakeholders to turn into insights into action plans. The scope and complexity of the action plan vary based on the opportunity:
- Simple issues have obvious and immediate solutions.
- Complicated issues require research- and experimentation-driven planning.
- Complex problems require a novel design thinking approach.
5. Delight (closing the loop)
This stage allows you to both wow and close the loop with your customers while promoting your initiatives’ success internally. “Delight” is subdivided into external and internal workflows.
Externally, you can update your customers about the impact of their feedback and take proper measures to offer even more value. Internally, you can show the ROI of your initiatives to facilitate buy-in and prioritization for future activities.
Delight leads to:
- Loyalty and repeat purchases
- A continuous dialogue with customers
- Customers as partners in decision-making processes
- A special connection with your brand which creates competitiveness
- Customers informed about their wishes being granted (when action follows their input)
- Ownership and trust
- Customers willing to take part in future surveys knowing their voice leads to action
- Visible results and impact of CX initiatives – encouraging future buy-in and prioritization
- Alignment within the company on customer obsession
- A series of WOW moments that create indelible brand experiences
In a nutshell, CX Action Management enables companies to deliver on their brand promises through CX governance and customer-centric processes.
Meet zenloop: the CX Action Management Platform
AMP has specifically been developed to enable Action Management and speed-up operations through intelligent automation.
zenloop, the pioneer in Action Management and the leading Action Management Platform, is structured so that CX units can manage all phases of CX Action Management System and are empowered to truly make a difference by boosting the ROI of CX operations.
An Action Management Platform creates automated workflows designed to trigger
projects that drive customer-centric initiatives.
Continuously WOW Your Customers
When customers spend time providing feedback, they show that they care. When organizations react to such feedback directly, acknowledging it, acting on it, and keeping customers in the loop, they show they care. These are two instances of what we define as Care Moments.
Care brands create a series of care moments for their customers that lead to Delight through Action Management. The whole process is described in detail in our Action Management Category Introduction Whitepaper, which gives you an even better overview of the CX Action Management System and the technology supporting it.
Unlike long-term CX programs that often require restructuring organizational activities, the effects of CX Action Management are immediately visible (as seen in our customer reports):
- +25% retention and repeat purchases
- +30% contract/order value on average
- 3X referrals and reviews
- -15% support requests
But long-term customer obsession supported by delightful moments also shows a deeper impact:
- Of the companies that focus on CX, there’s an 80% increase in revenue (zippia)
- According to Deloitte, customer spending increases up to 140% following a positive experience
- Customers are willing to pay a price premium of up to 18% for a great CX (PwC)
- 80% of customers are more likely to make a purchase when brands offer personalized experiences (Epsilon)
- The Temkin Group found that companies that earn $1 billion annually can expect to earn, on average, an additional $700 million within 3 years of investing in customer experience
And Gartner points out that 72% of companies think that the problem in CX is not collecting more data, but acting on the insights they collect (Customer Data Survey, 2021).
Therefore, now is the time to shift the focus from Customer Experience Management to Action Management and turn insights into actionable initiatives that will open up new growth opportunities, improve customer experience and drive business results.