Customer experience and the company life cycle
Readers of a certain age may remember the late-80s college-rock hit “Birth, School, Work, Death” – a memorable, if stark, rumination on the stages of life. It’s actually helpful in the business world, too: the customer experience a company offers is often related to its life cycle – specifically, where it is in the continuum of birth, growth, maturity, and decline.
Used correctly, it can grant you a kind of superpower: You can often understand a company by its customer experience; and sometimes you can understand why a customer experience is bad, or good, by considering the life cycle of the company.
Here I’ll quote the excellent book Good Strategy/Bad Strategy, by Richard Rumelt, describing a hypothetical company that has experienced early success with a customer-oriented product:
Relying on the profits accruing to accumulated resources, they will lose the discipline of tight integration, allowing independent fiefdoms to flourish and adding so many products and projects that integration becomes impossible. Faced with the natural slowing of growth over time, they will try to create an appearance of youthful vigor with bolt-on acquisitions. Then, when their resource base eventually becomes obsolete, they, too, will become pery to another generation of upstarts.
Sound familiar? A company with a previously good customer experience that gradually becomes cluttered with products and projects? I can think of some examples. But it’s helpful to see it described as a normal (if unfortunate) pattern shared by many organizations.
Once you are aware of the effect of life cycle on the customer experience, you’ll start spotting examples everywhere. Just a few weeks ago Forbes ran a column called Why Best Buy is Going out of Business…Gradually:
First comes the strategic bankruptcy, well in progress at Best Buy, where management’s sole focus is improving some arbitrary metric from last quarter, even when doing so actually interferes with customers trying to buy something else. The financial collapse comes later. But if history is any guide, the second part, once it starts, will be quick.
As with many large retailers unable to cope with new channels and new consumer expectations, the company will continue to sputter on fumes, slowing down bit by bit until one day it just stops moving. Think of Elek-Tek, Virgin Megastores, or KB Toys.
Notice the similarity between the two quotes? An aging company is focused on something other than the customer experience – a short-term metric, or a short-term boost from an acquisition – and will inevitably pay the price.
The obvious question is how companies like this can change their direction before it’s too late.
The first step is to recognize that customer experience is a strategic issue – not primarily a tactical issue of interface elements. If the CEO and other top stakeholders take customer experience seriously, the company has a chance of a turnaround. If not, the smart and well-intentioned employees elsewhere in the firm can make some tactical improvements but the long-term outcome will not measurably change.
I’d argue that customer experience the single most important issue for many companies today. So tweet this, share this, forward this to your favorite top exec!