How to benchmark CX capabilities against your peers

The need to prove the value of CX is a constant battle in business. In our Global State of CX research for 2023, we found that 42 percent of CX Network members believe the pressure to prove a return on their investments is increasing. Elsewhere in the survey 36 percent said their organization has a lot of CX benefits that go unmeasured.

Helping to tackle these challenges, the annual CEM Benchmark Report from CXPA Finland allows organizations to benchmark their CX strategy and practices against competitors. In this interview, Sirte Pihlaja, head of team at CXPA Finland and CEO of Shirute, tells CX Network about the research, what it means for the development of CX standards and how CX Network members can get involved.

CX Network: CXPA Finland is conducting its 10th annual study into the state of customer experience management (CEM). What does the CEM Benchmark aim to establish?

Sirte Pihlaja: Originally, we created the report for CX professionals and practitioners in Finland to establish where everybody was in their current level of understanding of CEM. Since then, it has become an annual checkpoint so practitioners can learn more about what their peers are doing, for example where they are investing, the activities they have planned and the challenges they face. It’s really about getting an understanding of where they should be in relation to others.

CXPA Finland was initially established to help share ideas and guidance among practitioners, and the CEM Benchmark Report is just one more way that we help practitioners. It is a community effort.

RELATED CONTENT: The complete guide to generative AI for customer experience

CX Network: When it comes to the practice of customer experience management, considering the data you have gathered over the last decade, how has CEM progressed and how would you describe its maturity at present?

Sirte Pihlaja: The way different organizations have started developing CEM allows practitioners to measure what their customers think of them. It is a good way to hold a mirror to what you are currently doing and I fully subscribe to that!

The problem is, however, that many companies have used CX measurement to take a snapshot of their customers but it was nothing more than a box ticking exercise. A survey was conducted and data gathered, but it was not put to use.

Simply measuring things is quite trivial. What I always say to anybody who really wants to start to listen to their customer is that you are about to open the floodgates and when you do that, people have expectations. They will pour their hearts out and tell you all the things they would like to change in your behavior and services, but then you have to act on it. It means organizations need to have processes and assigned roles, as well as solid data management and all the work that goes into a Voice of the Customer (VOC) program. Then, of course, there are the CX development activities themselves and how you run those in your organization.

Measuring CX is where everything starts, but more and more companies are putting an emphasis on organizational-level understanding of the customer experience; putting in place CX frameworks and helping their employees to understand how important it is not just to listen, but also act on what your customers are saying then put all that great feedback into real-life use in customer encounters. That is a huge change and it takes years to accomplish.

At the same time, of course, there is all this technology behind everything which should be an enabler, but at the moment everybody is so hyped up with AI that they are not seeing the wood for the trees – they are not seeing the essential areas where they need to concentrate. The CEM Benchmark can be used as a tool to make data-backed decisions on where to concentrate and say, ‘we are running in this direction, but should we be doing something totally different?’ For our respondents, whether they have used it for 10 years or one, they say it is really a checklist for them to make sure they are taking the right actions.

The report is a great opportunity not just for looking around at competitors but also looking within your organization and having discussions. We see CX is less of a solo endeavor these days and it is very important you have internal discussions with the people around you.

CX Network: The CEM Benchmark study started as a benchmark for companies in Finland, but now it has an international focus. Yet in the most recent edition, seven of the top 10 companies were from Finland. Why do you believe Finland is leading the way in customer experience?

Sirte Pihlaja: First of all, there is the volume of responses from Finland compared to the rest of the world, but there are many companies in the top 10 that scored highly. One development we have seen in Finland is that CX has really become a discipline. When the study started, there were typically only one or two people in CX in an organization, but now there are many people who understand CX and know what they are talking about.

In Finland in particular, the population is less than six million so every organization is looking to the same customers and using the same technical capabilities, while trying to distinguish themselves in the marketplace. In the telecoms space, for example, there are three players offering the same services and you can’t differentiate on price anymore, so you have to do things differently.

You must think more creatively when you are designing your customer experiences, and you need new and creative methodologies to do that, so you can actually find new ways of differentiating yourself.

CX Network: The CEM Benchmark categorizes organizations according to the score they achieve and those categories run from survivor to apprentice, executive and visionary. Explain more about what these categories mean.

Sirte Pihlaja: The research asks about the scope (goals and strategy), organization and governance (people and resources), culture (what is happening to drive customer centricity), tools and what procedures and processes are in place to bring a CX strategy to life. It is not about how customers see the company, but how systematically companies are doing across the five Customer Experience Management competency areas that we discuss and score when we are looking at the responses.

You need to measure with different methodologies or surveys the CX you deliver, that is what's your actual performance in this respect, but let's say that most of the companies who are in the top, they often do have a good customer experience as well, from the customer perspective, or at least it should be that way.

The survivors are not focusing on their customer and they do not have this customer centric way of working at the moment, in fact, they can only just support their customers.

The apprentices already have some kind of CEM practices in place, CX skills across teams and some tools, but they are not very good at doing things. These organizations are heading towards being customer centric, but are not there yet.

The Executives are really looking into ways of being more available for customers. They are well organized and care for customers and employees, they have a history of using different tools and putting processes into practice and they know how to deliver better CX and how to develop their own activities.

Most companies fall into the Apprentice or Executive category and sometimes we get a couple of visionaries as well, although that does not happen too often.

The visionaries are the ones that live and breathe their customers’ needs. They have a customer-centric DNA, the tools they need to deliver and systematic processes in place – they are technologically savvy. In short, the whole organization is invested in CX initiatives and strategies and there is a common CX framework.

RELATED CONTENT: The Global State of CX 2023

CX Network: What are the principles of effective CEM that survival organizations need to adopt to move closer to being visionaries?

Sirte Pihlaja: First, you need to establish why these organizations are in the survivor category. Why is their current situation how it is? It could be because they are short on resources, or because they just do not care.

The solution will not be the same for every survivor organization, but please try to get an understanding of what your customers are currently thinking! That research can be conducted through focus groups, one-on-one interviews, or other means.

A company might have mystery shoppers that score them highly, but when the same questions are put to customers the results are totally different. It’s only then that you discover the factors that do influence customers to purchase are not necessarily the same factors the company expects. It all comes back to understanding customers, so focus on basic things like journey mapping to understand personas and behavior and the kinds of customers you’re actually serving. These personas should be grounded in solid research. You need a solid grasp of your current position and further to that, the CEM Benchmark Report gives you an indication of which areas might deliver quick wins.

You need to measure progress before the work begins to measure overall progress and compare before, during and after. As mentioned, you can also use the CEM Benchmark Report as a checklist. It is a real-time survey tool that you can run comparisons against any time of the year, as frequently as is required, so you can benchmark against more advanced organizations as things improve.

CX Network: When it comes to the trends that will define CX in 2024, where are you focused and where should organizations be looking to concentrate their efforts?

Sirte Pihlaja: Machine customers. Firstly, because I’m writing a book on it, but also because of developments we are seeing at present with artificial intelligence.

Everybody is talking about or doing something around AI but there is too much focus on ChatGPT and the idea of how to make sales more effective or reduce the amount of work it takes to acquire customers – which I believe is a backwards way of thinking if you want to be customer centric! If you are really a CX professional, then why would you want to spend less time doing the right things for customers?

Instead, we should all be busy learning new skills to re-design our businesses and experiences for machine customers – our digital representatives. Doing so, we will ultimately both support our customers and ensure better employee experiences.

Imagine if you have a digital assistant coming to your website or calling customer care. The agent will not necessarily be able to differentiate that they are talking to a voice AI. You might have a whole discussion with a machine and not know the customer is a machine. All the soft skills you have taught your CSRs will not help any in these encounters.

This will be huge in the long-run. People want convenience – if one can use a generative AI based personal assistant to do bookings, make phone calls to not need to stay on hold, contest a parking ticket or re-negotiate your mobile contract, for example – why wouldn’t they? I’ll gladly be doing this as soon as possible! But then if you think of the customer-facing organization, they also have AI assistants so this may well become an AI to AI interaction. This requires some serious process re-engineering.

According to Gartner, the introduction of machine customers is going to represent a bigger economic shift than ecommerce ever has. OpenAI just released their newest feature for anyone to create digital agents using natural language.

Companies should already be looking into how to prepare for machine customers. This will be a massive opportunity for those that get it right.

CX Report: Artificial intelligence for customer engagement

Discover how brands across the APAC region are prioritizing, investing in and deploying AI for customer engagement. Download your copy of this CX Network special report now.

Download Now