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PHOTO: Henrique Macedo

“Exceptional customer experiences are the only sustainable platform for competitive differentiation.” ― Kerry Bodine, CEO Bodine & Company

These challenging times have upended the way companies do business and put many marketing initiatives for 2020 on hold. Yet personalizing interactions, meeting customers in their moments, acting with empathy — these hallmarks of great customer experiences shine even brighter in times of crisis.

Customer experience (CX) programs will continue to be a mainstay in the marketer’s toolkit for a long time to come. Unfortunately, today’s volatile customer demand levels, increasing unemployment and shrinking revenues are combining to make it harder than ever to build or maintain a sustainable CX program. Despite the fact that spending on the customer experience has increased 71% over the last three years to 15.2% of total marketing budgets, marketing is seen to play a "surprisingly weak" role in leading companies in the most highly ranked KPI — year-over-year growth (marketing leads in this KPI in only 32.7% of responding companies).  

Forrester reinforced this dynamic in its 2020 Forrester Predicts report, predicting that one in four CX professionals will lose their jobs as CEOs will demand that CX initiatives move out of the experimental phase and prove their contributions to top- and/or bottom-line growth.

So how do marketers escape this veritable catch-22 of expanding need for CX facing off against escalating budgetary and management pressures? The answer is governance. Where CX goes, governance must follow. Without it, quality degrades, technology and business projects overlap or compete for resources and coordination becomes difficult, all of which ratchets up the likelihood that CX will not escape the catch-22 and ultimately fail or be defunded.   

What Is Customer Experience Governance?

Simply put, CX governance is “the organizing framework for establishing strategy, objectives and policies for the corporate CX program.” CX governance programs that follow the tenants set out in this definition will establish business stakeholders as information and process owners and position enterprise customer initiatives as cross-functional — both of which are critical to resolve customer-oriented problems.

While there are many ways to start when designing and implementing CX governance, making the program sustainable over time requires several critical steps. First, you need to adopt a governance framework that allows the program to be implemented and expanded incrementally while clearly highlighting all the components that will be in place when the program expansion is complete. Second, a nucleus of executives representing both business and IT must be in place to provide funding, resources, assist in prioritizing governance initiatives and ensure that the governance goals correspond to overall corporate objectives. And last, you must have an unambiguous set of roles, responsibilities and processes defined for the care and feeding of CX projects under governance.

Related Article: Where Governance Fits in Your Customer Experience Strategy

Constructing the Governance Framework

The further the CX program reaches across the organization, the more important this framework becomes. Initial design activities should include determining the governance organization structure, identifying participants, defining governance roles and responsibilities, establishing coordination points, developing clear decision rights (RACI matrix) and documenting the governance processes and procedures.

While there is no set ‘one-size-fits-all’ for effective governance structures, a duel steering committee, council format works well for most organizations. In this format, the steering committee participants should be composed of senior executives with the organizational clout to effect change and ensure enforcement. Responsibilities include:

  • Secure funding for CX initiatives (business case review, priority direction).
  • Drive CX awareness and culture change within the corporation.
  • Resolve escalated issues and act as final decision-making authority.
  • Resolve business policy and organizational issues (e.g., management by objectives and job description changes).
  • Ensure that CX initiatives continue to align with corporate priorities, particularly as internal and external factors influence those priorities.

Council members should be business unit representatives who drive the actual implementation of the CX program. Responsibilities include:

  • Define and implement CX initiatives.
  • Promote CX strategy and active engagement within the business units.
  • Define, monitor and report CX KPIs.
  • Identify and adjudicate program issues, escalate when necessary.

Related Article: Building a Big Picture Customer Experience for Now and the Future

Building the CX Portfolio

As any CX leader can tell you, CX programs often have a significant number of initiatives. Unifying customer contact channels, providing more personalized contextual offers and communications, enhancing digital capabilities — these are all legitimate CX projects. Each can require various technologies, impact multiple organizational participants and business processes and have differing metrics. Adding to the confusion, organizational priorities can change as companies grow or react to changing competitive environments which can necessitate a recalibration of CX program priorities.

A CX portfolio is a fantastic tool for dealing with these challenges and ensuring that CX projects stay in line with strategic objectives. This is one of the first things CX governance group should undertake. The CX portfolio is intended to achieve the following:

  • Expand the inventory of CX projects with the business, ensuring the list of potential CX projects evolves as the business evolves.
  • Establish a foundation for prioritization, conducting cross-functional line-of-business priority exercises for CX business and associated technology projects.

To create a CX portfolio, the governance team works with the business units to create CX placemats. Each describes a CX business and or technology need, the associated overall strategic objective(s), the high level business processes impacted, possible metrics and the data necessary to power the technology or analytics. 

Placemats are then put through a prioritization process, conducted at the business unit or executive level, where each is assigned a score for a set of variables which typically fall into two categories: strategic importance and current level of satisfaction. Results are consolidated (blending strategic importance and current satisfaction into a single score) and placemats are ordered highest score to lowest. The order can be further refined by factors like timeframe, feasibility and cost or organizational issues.  This ultimately results in a prioritized list of CX projects that can be placed into a timeline and published. The CX portfolio can be used to track progress toward program goals and it can be revisited on a periodic basis or when growth or competitive issues make it necessary to do so.