$30 million. According to a news story I came across, that’s the amount one company is spending, just on an ad campaign, to attract online visitors to their poorly designed site. It’s pretty clear that the investment will be mostly wasted. The company’s customer experience is sorely lacking online, yet leadership has so far declined to make any significant investment to fix it. But $30 million for an ad campaign? No problem.

It reminds me of a conversation I had a few years ago. A potential client contacted Creative Good about improving her company’s online business. It seemed like a good fit: the company was an established, profitable company; and improving the customer experience would, without a doubt, create significant gains in metrics like revenue and customer acquisition. The site needed help, customers were frustrated, but with a bit of work the business could enjoy enormous returns.

The problem came when we talked about our consulting fee. Creative Good was too expensive, she said, because her boss (the CEO) only wanted to spend a few tens of thousands of dollars per year on anything dealing with the customer experience.

I told her that seemed a tad low for an annual budget to be spent improving the site for customers, especially given that the annual revenue of the company was around $50 million.

“Well,” she responded, “we already spend $25 million a year just on advertising, so there’s not much left over.”

Needless to say, the project never happened. The CEO decided to continue to “run a few surveys” with his $20,000-or-so budget; his $25 million campaign continued to bring users into an experience that frustrated them and turned them away.

Let’s review the numbers.

$25,000,000……Driving people to the website
$20,000…………..Customer experience (what happens when they get there)

So a good chunk of every dollar the company earned went to sending potential customers to have a bad experience. A tiny percentage of those frustrated people might muddle through and become customers; the vast majority would click away, never to return.

Is this any way to run a business?

Believe it or not, it’s the normal, accepted way business is run today in many companies. I know because I’ve encountered it again and again throughout Creative Good’s 19-year history. $25 million for an ad campaign; $1 million to redesign the visual “branding” on the home page; a few thousand to “run a focus group” to assure the executives they’re doing the right thing. Business as usual.

The good news is that more and more companies are beginning to invest in improving what happens when customers actually arrive on the site. They’re not abandoning ads; they’re just investing in a more balanced fashion to include some attention to the customer experience.

Imagine what would happen if the potential client above had had these numbers:

$12,000,000……Ad campaign
$12,000,000……Customer experience

Can you imagine a company investing in the customer experience as if it was this important? Imagine an experience changing from a slow, frustrating process into a quick, easy, informative, delightful experience that you wanted to return to – and might even tell your friends about. Imagine a team that is hired, trained, and organized around the core activity of including customers and designing for customer delight. Shouldn’t that be a way (THE way) to run a business?

The most effective companies today realize that they can’t succeed solely by trumpeting a tag line; the customer matters. Indeed, the customer experience requires a transformation of the company’s strategy, backed up by the organization, and fueled by a real budget. Executives that spend their entire budget on ads will eventually learn their lesson.

To build a better customer experience, drop Creative Good a line. We can help.

  1. Good post Mark! Only comment I would add is that if you look at many traditionally organized companies (especially those with a disproportionate emphasis on marketing spend over customer experience) there are two factors that inhibit more significant investment in customer experience:

    Inertia: Most corporate planning processes don’t easily digest large upward or downward shifts in spending – it’s treated as an exception case. Thus it’s easier (not right, but easier politically) to make small incremental bets on UE and keep the marketing machine running full tilt. User Experience as an internal skill in some cases is “new” and therefore doesn’t have umpteen quarters of incremental budget growth to work from.

    Access: In addition to historical momentum around big budgets, CMOs regularly come into contact with the CEO/CFO/Board etc. so maintaining the spend velocity tends to be easy to do, and is almost expected in many cases. The user experience budget by contrast can become “trapped” with someone at a lower level that doesn’t have the kind of access (or experience extracting un-budgeted money) that a CMO does, the issues/needs are harder to elevate.

    As more executives with strong customer experience backgrounds get into the C-suite, hopefully these two forces will become less onerous and we’ll see more exposure and balanced spends!

    • Good point, Christian, thanks.. there’s definitely a question there of what role it should be – if not the CMO, then who? No one seems to be empowered. That’s why an outside advocate (Creative Good!) can often lead the change that can’t happen on its own inside the team.

  2. I’m amazed at how much complex businesses will force their customers to do in order to buy.
    Is it because the people who allot the budget don’t actually have to ever be “in” the customer experience?

  3. Thanks Mark, The budgets are very telling. Next time a company says they’re undergoing a “customer centric transformation” it would be interesting to look at the budgets supporting that transformation

    • True. I’d also challenge whether the transformation is truly customer-centric – really, the customers can have whatever they want?… as I write in Customers Included, it’s more accurate to call it a customer-inclusive transformation (giving customers a significant voice, though they may not be the absolute center of the initiative).

  4. Murray Heidebrecht says:

    Thanks for the inspiration Mark. To extend your thought…imagine an experience that lead a customer seamlessly from the advertising to the website? 🙂

  5. Mark, first off, I completely agree with your point that many companies are more heavily invested in acquisition than experience. I’ve seen it too. However, I do think your budget comparison is misleading. What exactly should fall under the line item for “customer experience?” I would guess the company has more significant resources than just 20k invested in its digital operations, technology, content, people and underlying systems to support front line interactions online and off. Budgets aside, the issue we see most often is one with the culture and leadership. If there is a customer-obsessed culture backed by strong leaders, the financial support (or at least financial priorities) will usually follow. To your point, I think more folks are getting the memo these days.

    • Of course I’d agree that there are many ways to account for customer experience-related expenses. One could broadly say that – because the very existence of the company is predicated on creating some customer experience – all expenses in the company are CX-related.

      However, in this one example above (a true story) my acquaintance at the company said explicitly that the CEO wouldn’t invest in fixing the customer experience, exactly *because* there was such a large advertising budget. Thus we see the pattern where there are dollars spent for driving people *to* a bad customer experience, displacing dollars that could be invested in the experience itself.

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