CEC Survey: Understanding Australian Customer Experience Roles, Structure and Practices. July/August 2011

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1 CEC Survey: Understanding Australian Experience Roles, Structure and Practices Headlines July/August 2011 Experience Management is still far from mature in Australia. There are some positive signs of growing maturity, with respect to the growing seniority and influence of Experience (CX) managers. However, in many cases the CX function has still to prove itself and faces challenges in linking outcomes to financial benefits or in achieving real culture change. Companies vary widely in their knowledge and abilities in customer management, and given likely leaner economic times ahead, many will lack the ability to retain and deepen customer relationships sufficiently to maintain their growth. In order to fulfil the full potential of the role, companies will need to focus on: 1. Improving their ability to prove the financial benefits of Experience work. 2. Improving their ability to engage with employees and achieve customer-centric culture change from the top-down. 3. Overcoming skills shortages, given the breadth of skills and experience required to improve Experience (from strategy to design to project, process and people change). Background Experience management is a developing field, and the roles and structure of Experience teams varies widely from one company to another. As part of our vision to help our clients continually improve the experiences they offer to customers, we set out to build on our community s understanding of the current roles, responsibilities and challenges of Experience managers across Australia. To do this we created a survey to enable us to collate this information and provide insights to Experience Managers about CX team structure, reporting lines, resourcing, measures and challenges. Extracts of Results Role: About half of Australian companies (who responded to the survey) have a dedicated Experience manager, with a title which reflects that specialist responsibility. The other half doesn t have a Experience manager as such, but cover those responsibilities through another role, e.g. Director of Marketing, Service etc. Whether or not there is a dedicated CX manager, most companies see CX responsibility belonging to someone either directly reporting to the CEO, or one level down. But approximately a quarter either have lower level management working on CX, or have no focus on it at all. Measures: satisfaction or loyalty is the most common KPI for CX leaders, though measures linked to project outcomes, complaints or resolution, costs, retention and revenue are also quite common. The prevelance of soft measures links directly to the number 1 challenge reported by Understanding Experience Roles, Structure and Practices 1

2 respondents linking CX work to business case or financial benefits. Around 2/3 rds of companies also use the same metrics at exec levels to improve company performance in an effective manner. But a third do not. Structure & Responsibilibites: CX team structure varies company to company, and there is no dominant approach used in Australia. The most common structure is to align the team to company business units, e.g. sales, marketing, service etc. However many teams stucture by skills (e.g. strategy, design, analysts etc) and some by segment (e.g. business, consumer, etc). CX team responsibilities also vary widely, but over 75% are responsible for tracking and gaining insights from customer feedback (the most common responsibility). Following that, activities related to maintaining and improving customer quality, external research, customer strategy, design, culture/training and other improvement projects are the most frequent CX team responsibiilties. The breadth of skills required is very apparent, and links to another of the high priority challenges managers face in this field. Challenges: Recruiting for CX team members is moderately difficult, especially for design and project staff, and strategists. Skills shortages are the main barrier to recruitment (but not pay, or the attractiveness of role or company, for example). And the main challenges facing CX managers? The top challenge is to prove the benefits of improving Experience, closely followed by the people challenges of employee engagement and culture change. The most common current projects concern improving customer feedback, measures and VOC programs, (though these are not listed as major challenges). Audience The survey was issued to relevant senior employees of large companies in Australia who have responsibility for Experience. No of responses The survey was completed by approximately 50 people. Queries For any queries please speak to your usual CEC contact, Chris Severn or call us on +61 (0) Contents Section 1 - You and the Leadership role Section 2 Experience KPI s and Metrics Section 3 - Your Experience work Section 4 - Your Company Section 5 Other Findings Understanding Experience Roles, Structure and Practices 2

3 Section 1 - You and the Leadership role This section covers Experience Leaders job titles, tenure, seniority and the Business Units they report to (or lead). 1.1 Job Titles Experience Leaders Job Titles MD / CEO Experience No role exists / 4% Manager Shared Role 13% 6% Head of (Other) 9% Other 11% Director (Other) / GM (Other) 22% GM - Experience 11% Head of Experience 11% Experience Director 9% Chief Officer 4% What job title does your 'Head of Experience' have? About half of Australian companies (who responded to the survey) have a dedicated Experience manager, with a title which reflects that specialist responsibility. The other half doesn t have a Experience manager as such, but cover those responsibilities through another role, e.g. Director of Marketing, Service etc. 1.2 Tenure How long have you been in your role? ( Experience Managers Only) CX Leaders Length of time in Role Australian Executives Length of Time in Role* 3-4 years 19% 5+ years 6% Less than 1 year 36% 5+ years 22% Less than 1 year 35% 3-5 years 14% 2-3 years 24% 1-2 years 15% 2-3 years 11% 1-2 years 18% *Source: Destination Talent Executive Monitor Report 2011 At first glance, CX leaders appear to have relatively short tenures, or are relatively new in their roles. However, comparing these leaders to other Australian executives, we see that many other corporate roles are also relatively new to their roles. The marked difference is that very few CX managers have been in their position for 5+ years not surprising since the term and role of CX management is probably only 7-8 years old. Understanding Experience Roles, Structure and Practices 3

4 1.3 Business unit reporting line In which function does your Experience team sit? Whilst there is no dominant reporting line for the CX team, the largest number sit in a Service division, and the second largest number in Marketing. A few are direct CEO reports, and a few elsewhere. Function of Experience Teams Product 2% Other 6% Sales 6% CEO/MD direct 15% Service 42% Marketing 29% 1.4 Seniority What level is your 'Head of' Experience? It s encouraging to see the rise of importance of Experience. Most companies see CX responsibility belonging to someone either directly reporting to the CEO, or one level down. But approximately a quarter either have lower level management working on CX, or have no focus on it at all. An Exec that reports to the 2 levels below the CEO/MD 3 levels below the CEO/M Don t have a CX leader Experience Leader Seniority Level 5% 15% 2 25% 3 35% 4 45% Understanding Experience Roles, Structure and Practices 4

5 Home Section 2: Experience KPI s and Metrics This section looks at how Experience Leaders are measured, which CX metrics are most collated and utilised and how teams are structured. 2.1 KPI s What proportion of your personal KPIs are driven by % 32% 25% 14% satisfaction or loyalty Experience Leader Summary KPI s (by % of respondents) 14% 23% 14% 23% Project delivery and outcomes 3 36% 32% 27% 2 7% 16% 14% 11% 16% 16% 16% 7% 7% 2% 2% Fixing faults; reducing complaints Cost reduction Retention Revenue/Sales (existing and/or new customers) Less than 1/4 of KPI 1/4 to 1/2 of KPI 1/2 to 3/4 of KPI Over 3/4 of KPI satisfaction or loyalty is the most common KPI for CX leaders. Although not surveyed, we know that many of these target NPS specifically, but that other customer satisfaction measures are also common. The next 5 most common measures are also strongly represented, and in general it seems unlike senior leaders in other areas who might be very focussed on sales, profitability or cost, CX leaders have quite a wide set of metrics to deliver against. Blended/Average KPI s across all CX Leaders Retention, 13% Cost reduction, 14% Revenue/S ales, 12% Faults / complaints, 14% Satisfaction / loyalty, 24% Project delivery, 23% Understanding Experience Roles, Structure and Practices 5

6 2.2 Metrics To what extent does your company track and use these metric/measures (at an executive level), to improve Experience? % 3% 28% 33% 28% 67% 64% 63% satisfaction / loyalty Use of Metrics to Improve Experience (by % of respondents) Project delivery and outcomes 13% 3 58% Revenue/sales Fixing faults; reducing (existing and/or new complaints customers) 18% 34% 47% Retention Do not track Track but data ineffectively used Use to improve Experience Around 2/3 rds of companies are actively using the same top metrics of customer satisfaction/loyalty at the executive level to improve performance, but interestingly, retention of customers seems to have relatively little focus. Number of the Key Metrics used Don't track/use any, 28% Track and use 1, 11% Track and use 2, 15% Track and use all 5 metrics, 21% Track and use 4, 8% Track and use 3, 17% Less than a third of companies surveyed use 4 or more of the 5 metrics specified. Over half track 2 or less of them and perhaps surprisingly, over a quarter don t use information in any of these 5 areas to effectively improve performance. Understanding Experience Roles, Structure and Practices 6

7 2.3 Structure How is the CX team structured? Structure of Experience Teams By projects 5% By customer segment (e.g. business, consumer) 18% Hybrid or Other 18% By business process (e.g. marketing, sales, service) 34% By function /skill (e.g. strategy, design, research) 25% Perhaps reflecting the developing nature of CX management, there is no clear consensus on the best way to structure a CX team. The most popular approach is to mirror the structure of the company, i.e. specialists might be focussed on sales, service or marketing aspects of CX. But structuring by skills, by customer segment or by other/hybrid means are also common. Understanding Experience Roles, Structure and Practices 7

8 Home Section 3: Your Experience Team Section 3 takes a look at the responsibilities of CX teams and the skills typically found in the teams. 3.1 CX Responsibility What activities does the CX team have responsibility for? % of Experience Teams Responsible for Activities % feedback & insights (internal) 64% quality 58% 55% 55% External customer research strategy design (process, online etc) 42% 42% 39% Capability development / culture change improvement projects Complaints 3 27% Cross channel/silo integration Branding 18% Marketing comms No Yes CX teams are responsible for customer feedback and insights in the majority of organisations, customer quality in over two-thirds. 3.2 Proportion of Skills What are the approximate proportions of each type of primary skill in the Experience team? Proportions of Skills in Experience Teams CX teams in Australia clearly have a fairly Support good balance of thinking and hands-on Marketing 2% CX 8% Operation roles. Perhaps half the teams are typically designers al roles working on operational Experience 8% 24% improvements, projects or training, whilst the Strategists other half are more focussed on strategy, 9% analysis, design and marketing. Whilst this Trainers & mix varies across different companies, in coaches Analysts general it indicates a healthy mix of thinking Project 24% staff and doing. Any company with a strong 15% weighting to only one of these should consider if this is appropriate, and whether to better balance to function and role of the team in future. Understanding Experience Roles, Structure and Practices 8

9 Home Section 4: Experience Challenges This section examines the main challenges of CX leaders as well as difficulties when recruiting and differences in authority levels. 4.1 Recruitment How difficult is it to recruit the following roles? Ease of Recruiting Experience Roles % 29% 29% 68% CX designers 57% 53% 14% 18% Project staff Strategists 2 16% 13% 53% 27% Trainers and coaches 74% 11% 63% 25% 6% 6% 56% 38% 67% 28% Analysts Support Marketing Operational roles Hard (very hard to find the right people) Moderate (same challenges as recruitment in most functions) Easy (plenty of good candidates with the right skills) Designers, project staff and strategists are the hardest roles to fill, probably reflecting the CX specialisms or content knowledge ideally required in these roles. Based on the previous question, what is the main challenge on recruitment? Main Challenges in Recruiting for Experience Roles Attracting candidates to my company 4% None rated as hard 4% Pay expectations / mismatch 12% Other 4% Finding candidates with the right mix of skills 76% Skills shortage is far and away the largest cause for recruiting difficulties. Understanding Experience Roles, Structure and Practices 9

10 4.3 Authority Levels How well does your level of CX authority work in improving Experience? How Well Level of Authority Works - All CX managers in Australia are generally satisfied with the level of authority and/or influence that they have in their companies. This mirrors the generally senior level of the top CX manager in an organisation, as we saw in the earlier section. Moderately Well 36% Not Well 12% Works Well 52% 4.4 Main Challenges What are the key CX challenges you currently face? 25% CX Leader Top Challenges 2 15% Moderately Well 57% Works Well 43% 5% Proving CX or financial benefits Employee engagement Culture change Resourcing Internal Alignment (Projects and Business Units) Creating a strategy / balancing cost with service Systems This section captured free text answers from respondents, and responses included a very wide range of challenges. However the top three categories reveal some fundamental challenges: 1. Proving CX benefits. This is a common problem, since many companies and/or executives are still unsure of the hard financial benefits associated with looking after customers properly. Indeed many see the relationship as a trade-off; I can either have better financial performance or spend more on Experience/care/service. Understanding and Understanding Experience Roles, Structure and Practices 10

11 quantifying the opportunity to prove that better Experience also creates higher sales/retention and better returns is still the top challenge for many. 2. & 3. Employee engagement and culture change. Systems and process change are always challenging, but it s not surprising that the 2 nd and 3 rd challenges given are both people related, being either the challenge of employee engagement, or the wider challenge of culture change. Many CX managers feel like the lone voice for the customer in an organisation, and the challenge of bringing the company with me does show that the CX function and role still has some way to go in terms of maturity and company understanding. 4.5 Initiatives Describe the top current initiatives or projects related to CX in your organisation. Responses to this were unsurprisingly quite varied. The most popular themes were; Improving Advocacy/NPS (included around 3 of responses) Improving Voice of the Capture (around 2) Retention (approximately ) Understanding Experience Roles, Structure and Practices 11

12 Section 5 Other Findings The final section covers all other findings. 5.1 Industry Gov't 8% Industry of Respondents Health 8% IT 8% Banking & Finance 28% What industry (e.g. Telecommunications, Finance etc) is your company in? Publishing 8% Other 16% Telecomm unications 24% 5.2 Company Size What is the size of your company s Australian operations (in terms of the approximate number of employees)? 5,001+ Employees Respondents Size of Company 501-5,000 Employees Employees Understanding Experience Roles, Structure and Practices 12

13 5.3 Current Recruitment Are you currently recruiting or growing your team? 7 Proportion of CX Leaders that are Recruiting % % 2 Yes No 5.4 Authority How do you rate your CX level of authority on customer impacting changes in your company? Self-rated CX Level of Authority Low (Company not aligned) 17% High (Nothing to market without CX approval) 27% Medium (Consulted most of the time) 56% Understanding Experience Roles, Structure and Practices 13

14 5.5 Inspiration Where do you generally seek CX inspiration and thought leadership? (E.g. an association, type of media). 25% CX Leaders Source of Inspiration 2 15% 5% Internet Publications External Forums Team/Colleagues External Consultants feedback Higher Education Which specific sources would you say have helped you the most in this regard? Responses to this question were variable and included; Bruce Temkin s blog Experience Strategy by Lior Arussy of Strativity The Ultimate Question by Fred Reichheld Contact Council The Experience Company What events (if any) have you attended for professional development in the last 12 months and/or are planning on attending in in the next 12 months? Responses to this question were variable and included; callcentres.net events PMI events SOCAP conference Marcus Evans (e.g. s for Life) CIO Forum NZ Oracle Open World Designerly Thinking Oracle User Group Experience Management Conference Home Understanding Experience Roles, Structure and Practices 14

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