CEO Best Practices

Essential ACTS of Effective CEOs and CIOs - Part 2

The effective CEO and CIO realize that digital transformation isn’t about business processes but about customer experience. The best technology enhances the values, communication and emotions of the business-customer relationship.

Scott Smeester

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February 1, 2020

Photo credit:
Olivier Collet

I write this in the week that NBA legend Kobe Bryant and his daughter died in a helicopter crash. I have watched the outpouring of support, and I have been moved by the response of the fan base for the Los Angeles Lakers, Kobe’s team.

A couple of days after his death, a sports commentary debated if the Lakers team would be more motivated for the rest of the season by this tragedy. Some argued that such motivation couldn’t last. I disagree. Follow my reasoning, and you will see why I believe so strongly in the essential ACTS of the CEO and CIO.

A sports dynasty such as the Lakers can lull a fan base into dispassion. A team has a good season or a bad season, and fans will react accordingly, being enthusiastic or critical. This week, I watched a fan base and a city mourn as if one of their own had died. I watched a dynasty become a family. The Lakers won’t just play for themselves or for Kobe or for his surviving wife and daughters; they will play also for the fans who stood outside the arena and wept and chanted and gave gifts. The fans won’t just watch their team play; they will join the experience of the game, because the game just became more than points scored. They will pull for their family.

We have missed the point of digital transformation, which is why people can call it a trend or buzz or, already, a tired phrase. Too many companies have viewed digital transformation as how they do business. They have failed to see that digital transformation is why they do business.

Sports teams don’t exist to win games. They exist to build a family, a “nation.” Winning contributes, but winning also promotes bandwagon fans, here today and gone tomorrow. Bandwagon fans will buy a jersey once; family will decorate their rooms in memorabilia. Bandwagon fans cheer in the sun; family endures the elements.

Digital Transformation isn’t about keeping up on new technology, or changing processes because you can (all essentials, but not the drivers). Digital Transformation is about customer relationship. We are not transforming the business; we are transforming the relationship between business and customer. We are turning fans into family.

Customer service is a part of it. Customer experience (CX) is an essential culture for it. Customer relationship is the essence, the intangible, the emotional. You can measure toward it (CS and CX), but you can only deepen it, not complete it.

In last week’s article, I re-framed an InfoTech report on CEO/CIO priorities for 2020 and called them essential ACTS.

  • Adoption of technology
  • Collaboration
  • Talent Mobilization
  • Security

All of the ACTS must drive toward deeper customer relationship especially through the company-wide culture of customer experience.

  • 80% of customers declare experience to be as important to them as product and service. 74% will switch if a process is too difficult for them.
  • 86% of customers state they will pay more (between 13% and 18%) for a better experience. 49% of them will make an impulse purchase after a personalized experience.
  • High experience scores result in customers spending 140% more and remaining loyal to a company for up to 6 years.

I have a friend who has stayed with one cellular company. His partner encouraged him to change several times because of better rates and plans with competitors. He refused. He says, “They have always been great to me; I like that whoever is helping me knows I have been loyal to them. I know that they have rewarded me for it, so I reward them. I’d be crushed if they ever went out of business. Who wants to start over?”

The CEO and CIO today must look to automate business processes that deliver value in the eyes of the customer. They must utilize AI and ML to predict and respond to customer needs (have you ever met a couple and they talk about how much they love that the other knows what they need before even asking)? RPA is essential to create efficient cycles of business and customer interactions.

Three practices deepen the relationship between business and customer:

Shared value.

Businesses that are turning fans into family will use technology to enhance their customers time, energy, ability and money (the TEAM effect). As a customer, I am loyal to the company who meets my need in timely fashion and requires of me less time to get what I want. I am loyal to the company who does not drain me in the effort needed to interact. I am loyal to the company who makes the transaction cycle or interaction cycle easy (end-user friendly). I am loyal to the company who returns value to my money; I may pay more, but I deem the experience worth the cost.

By the way, all the above is applied to your internal customers. Honor the TEAM and receive loyalty in return.

Ask and answer.

Business becomes family through three skills.

  • Question out. Real-time feedback and timely questionnaires (does your digital platform allow this?) provide the data needed to analyze customer experience processes.
  • Listen. The reason your transformation is digital is to provide you the responses you need to employ more efficient and effective interactions with your customers.
  • Question in. Based on the data and analysis, what are the important and immediate changes needed to improve our customer relationship?

Connect emotionally.

Customers who feel emotionally connected to your business are three times more likely to recommend you to others and to repurchase with you. They are also 44% less likely to shop around (my friend with his cell provider).

Business connect emotionally when they are consistent to:

  • Affirm your customer. This is different than appreciation. I have had companies tell me they appreciate my business. My cynical self tells me that I am sure they do, since I increase their bottom line. No company has ever told me why. What is the answer: I appreciate you because ____. Do you as a company use profits to benefit the world? Do you know how many purchases I made and thank me for them? Are you congratulating me or rewarding me for being loyal (that is different than rewarding me for loyalty – loyalty is what I give, loyal is who I am)? Affirm your customer for their character not just their contribution.
  • Accept your customer. Customers make mistakes. Do they know they aren’t the only ones? Remember the insurance company that first came out with “accident forgiveness”? How is a customer treated when they need to resolve a complaint for which they are responsible? (Zappos sent flowers to a customer who failed to make a shoe-return in time due to a death in the family – and processed the return).
  • Advocate for your customer. Are employees empowered to “enter into the life of a customer” – if in the course of an exchange an employee discovers the customer is celebrating a marriage or birth for example – will an acknowledgement follow in the form of note or gift? Does customer service exist to protect the company or the customer?

In my work with CIO Mastermind™ Alliance, I have had the privilege of walking alongside CIO’s and their CEO’s as they have sought such transformation. The ones who have done so realized one simple truth: life is about relationship. So is business.

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