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What matters in customer-experience transformations

McKinsey leaders provide an overview of the A, B, Cs of pulling together the building blocks of a customer-experience transformation.

Few debate the importance of customer experience, but companies still have trouble transforming their organizations to capture all the advantages of excellent customer experience. While approaches vary based on the maturity of the business and the customer opportunities, the most-successful companies address three building blocks: aligning on a strong aspiration, implementing a disciplined process for transformation, and building up the enablers to make it all work (exhibit).

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Of course, a simple framework doesn’t mean that the transformation isn’t complex. Any transformation effort requires leadership, focus, investment, and commitment. But we’ve found that when companies have a clear view of the building blocks and reference them throughout the transformation journey, they make better decisions and coordinate activities more efficiently.

The remainder of this article provides our leaders’ views on approaching customer-experience transformation, accompanied by videos that lay out the most important points.

A holistic approach to customer-experience transformation

A true customer-centric transformation often entails rethinking a business or even the business model itself, which is the only way the transformation can achieve its full impact and remain sustainable. A fundamental change of mind-set focusing on the customer, along with operational and IT improvements, can generate a 20 to 30 percent uplift in customer satisfaction, a 10 to 20 percent improvement in employee satisfaction, and economic gains ranging from 20 to 50 percent of the cost base addressed in the various journeys. In the words of senior partner Harald Fanderl, “There is no silver bullet—only a holistic approach will succeed.” That holistic approach relies heavily on all three building blocks. (Building blocks A, B, C.)

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A holistic approach to customer-experience transformation

Customer-experience transformation: Three major components

Any successful customer-experience program must contain several components. Partner Nicolas Maechler explains: “The first is top-management buy-in on a customer-centric strategy to ensure a shared vision. Secondly, core customer journeys must be identified and transformed by redesigning and digitizing them. Finally, enable the transformation by establishing a permanent, live feedback loop from customers to as many employees as possible.” (Building blocks A, B, C.)

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Customer-experience transformation: Three major components

The starting point for a transformation

As partner Fransje van der Marel explains, “Customer experience is an excellent starting point for a digital transformation because it places the emphasis on creating a happy customer and will also solve a lot of inherent inefficiencies.” Keys to success include engaging with your customer early and throughout the process and employing cross-functional teams to tap into the organization’s experiences and expertise. A focus on value and bottom-line value delivery is also critical, as is the ability to create broad excitement within the organization. (Building block C.)

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Starting point for a transformation

A design perspective

Designing new experiences helps employees connect with the value they are creating for customers, brings cross-functional teams together, and serves as a shared language that allows different departments to communicate more easily. “Designers can use role playing and physical prototypes to see what the experience feels like for the customers and to rapidly test new ideas,” says senior partner Stefan Moritz. “Future customer experiences can also be designed to create a “North Star” to guide the organization on its goals-based journey.” (Building block B.)

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A design perspective

Common themes in customer-experience transformations

In the words of senior partner Tjark Freundt, “Effective customer-experience transformations require a clear vision and a customer-centric, ambitious articulation of goals.” Metrics are crucial for understanding customer needs and performance levels, but leaders also need to take a holistic view of the end-to-end customer experience. A typical transformation can take two to three years and relies on attracting or upskilling talent to sustain the continuous improvement necessary for success. (Building blocks A, C.)

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Common themes in customer-experience transformations

Customer-experience measurement; 3 questions, 3 answers

“A customer-experience measurement system typically resides at the core of a transformation,” explains Ralph Breuer. “It translates sometimes confusing data to explain what’s driving customer satisfaction and shows how to increase it on a daily basis.” A customer-experience measurement system links business impact (increased revenue, cost savings) to all the elements that drive customer-satisfaction improvements. A successful measurement system is journey-based, should involve a substantial part of the organization, and can’t be cobbled together from existing systems and outdated mind-sets. (Building block C.)

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Customer-experience measurement: 3 questions, 3 answers

The three building blocks of this framework can help distill the complex challenge of customer-experience transformation, facilitating the journey and in turn improving decision making and coordination.

About the author(s)

Ralph Breuer is a partner in McKinsey’s Cologne office; Harald Fanderl is a senior partner in the Munich office; Tjark Freundt is senior partner in the Hamburg office; Nicolas Maechler is a partner in the Paris office; Stefan Moritz is a senior expert in the Stockholm office; and Fransje van der Marel is a partner in the Amsterdam office.

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