Three Building Blocks to Creating a Great Customer Experience

In ten years of helping more than 900 companies design and execute enterprise-wide customer-experience programs, the McKinsey Company have a formula that they have seen 15 to 20 percent increases in sales conversion rates, 20 to 50 percent declines in service costs, and 10 to 20 percent improvement in customer satisfaction.

The formula has specific steps across three core building blocks: a clearly defined aspiration, an agile transformation approach, and a thoughtful deployment of new capabilities.

Build Aspiration and Purpose

Set a bold aspiration that reflects the brand promise

A series of three to four executive workshops is often all it takes to align around a customer-centric aspiration and the associated financial performance metrics. Many companies are able to look to internal and external benchmarks in order to set a target and establish a timeline for achieving it.

Transform the Business

Teams can problem-solve around white boards in-person or with collaboration platforms to drive continuous cross-functional innovation. Invest in recruiting and nurturing agile teams with deep expertise in experience design, developing cutting-edge omnichannel platforms and technology to reimagining the experiences, products, and services that best deliver on the brand promise:

  • Define customer personas and understand customer needs leveraging design thinking and advanced analytics toolkits to carry out rapid-fire quantitative and ethnographic research.
  • Conduct cocreation workshops to develop innovative concepts and prototypes that address pain points.
  • Use advanced analytics to identify and prioritize meaningful performance metrics such as reduced wait time to quantify the actual financial impact of changes in customer behavior as reflected, perhaps, in increased contract renewals, and to track progress.
  • Scaled across the business with integrated technology platforms and continuously tested and refined across segments and geographies.

Centralize CX Team

Create a central team that combines ideation tools and methods, continuously conducts both generative and evaluative customer research, and brings together cross-functional experts with specific expertise. This central team ensures that the culture of technology-enabled innovation becomes a distinctive competitive asset that is sustained over time and across all geographies.

Enable the Transformation

Leaders who have successfully implemented new experiences for their customers sustain the changes by building four key capabilities:

Customer-centric mindsets. From the C-suite to the front lines, employees must feel confident that they have the necessary skills and tools to deliver the best possible experience for customers. Leading companies develop academies that combine digital courses, live workshops, and ongoing nudges to support the development of new capabilities.

Integrated technology stack. In order to deliver exceptional omnichannel customer experiences, companies need a technology stack that spans the business. It often takes the form of a digital platform built around microservices and APIs to quickly and flexibly offer a variety of services to customers, an omnichannel contact-center platform with call recognition, chat, video chat, and email management, and a single system that integrates the platforms with each other.

Agile operating model and governance structure. Establish agile decision-making processes and assigning formal decision rights to leaders on the team. These new processes and decision rights often require some internal negotiations but yield extraordinary results.

Performance-management system built on predictive analytics and machine learning. Use predictive analytics, machine learning, and big data to overcome the limitations of customer feedback alone. At minimum, have management systems with sophisticated feedback loops that teach employees which behaviors yield the best results and guide innovation teams on where to focus their efforts. The best tools allow companies to accurately predict the current satisfaction and future spend of each of its customers based on their experiences.

Build an integrated customer insights and action engine

The most forward-looking companies have created integrated data lakes and used advanced analytics and machine learning to improve the experiences of every customer. An analytics engine that enables leadership to identify the customer interventions and investment strategies with the greatest impact can be deployed in three to four months.

By combining all three building blocks, companies can create a competitive advantage in their industry.

Bough, Victoria; Breuer, Ralph; Maechler, Nicolas; Ungerman, Kelly. The three building blocks of successful customer-experience transformations. McKinsey & Company. October 27, 2020.