Report: The Four Customer Experience Core Competencies (Free)

the four customer experience core competenciesIf you are only going to read only one thing about customer experience, then this report is it. It’s the blueprint for building a customer-centric organization… and it’s free.

We just published a Temkin Group report, The Four CX Core Competencies. This blueprint to building a customer-centric organization is an update to our groundbreaking research that was originally published in 2010 and updated in 2013.

Temkin Group has conducted multiple large-scale studies demonstrating that customer experience (CX) is highly correlated with loyalty across many different industries, in both business-to-consumer and business-to-business environments. When customers have a good experience with a company, they are more likely to repurchase from the company, try its new offerings, and recommend it to others.

While many companies try to improve their CX by making superficial changes, Temkin Group has found that the only path to lasting differentiation and increased loyalty is to build a customer-centric culture. Temkin Group has studied hundreds of companies to uncover the difference between CX leaders and their less successful peers, and has identified four CX competencies that companies must master if they wish to build and sustain CX differentiation:

  1. Purposeful Leadership: Operate consistently with a clear set of values. (see video)
  2. Compelling Brand Values: Deliver on your brand promises to customers. (see video)
  3. Employee Engagement: Align employees with the goals of the organization. (see video)
  4. Customer Connectedness: Infuse customer insight across the organization. (see video)

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This whiteboard video describes the Four CX Core Competencies:

Here’s an infograhic with the best practices described in the report:the four customer experience core competencies

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Report Outline:

  • Customer Experience: The Case For A New Approach
  • The Customer Experience Core Competencies
    • Purposeful Leadership: Operate with Clear and Consistent Values
    • Compelling Brand Values: Deliver on Your Brand Promises to Customers
    • Employee Engagement: Align Employees with Goals of the Organization
    • Customer Connectedness: Infuse Customer Insight Across the Organization
  • The Journey to Customer Experience Maturity
  • Assessing Your Customer Experience Competency

 

Figures in the Report:

  1. Customer Experience Correlates To Loyalty
  2. The Four Customer Experience Core Competencies
  3. Strategies For The Four CX Core Competencies
  4. Characteristics of Strong Brand Promises
  5. Employee Engagement Virtuous Cycle
  6. Six D’s of a Successful Voice of the Customer Program
  7. Operationalize Critical Fixes: Four Closed Loops For Taking Action
  8. Design Personas
  9. Example of a Customer Journey Map
  10. The Customer Journey Mapping Pyramid
  11. Strategies For Designing Experiences Based on Human Behaviors and Biases
  12. Six Stages of Customer Experience Maturity
  13. Temkin Group’s Customer Experience Competency and Maturity Assessment

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CEO Guide To The Chief Customer Officer Role

Someone recently raised the question: Why do companies need a chief customer officer… isn’t that the job of the CEO?

Versions of that question have been around since the role started to become popular more than five years ago. It’s a fair question, since organizations can’t just keep adding new “Chief <Fill In The Blank> Officers” to their executive teams.

It turns out that the answer is not a simple “yes” or “no.” Here’s a decision tree that a CEO can use to decide if they should create a CCO role:

Chief Customer Officer positionMy view on this question is the same as it has been for many years, the position makes sense in the right environment. Rather than creating something new, I’m sharing a post from 2012 that still holds true: Timeless Advice About Chief Customer Officers

It seems like there’s been a pickup of interest in the title of “Chief Customer Officer.” I’ve “studied” this role for a while and have worked with dozens of these execs (they often have a different “title”). Here’s my advice for companies that are considering this role that I published in the post: Chief Customer Officer: To Do, Or Not To Do?

There’s a question that I’ve heard a lot that seems to stir up some debate: Do firms need a Chief Customer Officer? Well, I’ve run into zealots on both sides of the argument.

Those who say “absolutely yes” are convinced that companies can’t change without a senior executive who “owns” customer relationships, someone who can bring senior executive visibility to all of a company’s customer-facing efforts. The argument is compelling — customers are certainly important enough to deserve a dedicated executive.

Those that say “absolutely not” are convinced that companies can’t just fix the problem by creating a new executive position. They believe that this ends up being a superficial move — like putting lipstick on a pig. The argument is compelling — people often call for a new executive whenever they don’t know what else to do.

It’s an interesting dilemma when both sides of an argument are compelling. My position on this question is equally dogmatic: Absolutely yes and absolutely no.

To understand my position, let’s start by shifting the question a bit. Instead of asking whether or not you need a person with the specific title of “Chief Customer Officer” let’s ask whether or not you need an executive in charge of a concerted effort to improve customer experience across the enterprise. If a company is truly committed to improving their customer experience, then an executive in charge of that change process will be very important. That person (who may or may not be called “Chief Customer Officer”) can lead a host of efforts like the establishing customer experience metrics and developing of a voice of the customer program.

But this type of position only makes sense if the CEO is truly committed to a significant change and will hold the entire executive team (not just the new executive) accountable for results. If the plan is to make the new executive responsible for “owning” the customer experience, then don’t create this position — it will only provide a handy scapegoat for executives who don’t make the required changes in their organizations.

While we’re on the topic of leading customer experience change, I’ll also point to another post: Corporate Customer Experience Groups; To Do Or Not To Do? Here’s what I discussed in that post:

Transformation isn’t easy. There’s a very strong need for a centralized group when companies are in a transformational mode, making changes that cut across the entire organization. This type of effort can’t be done without centralized support and facilitation. But companies that invest in centralized groups before the organization is committed to the journey are likely to either 1) completely offload responsibility for customer experience to these groups; or 2) stifle these groups through internal politics. In either case, they are likely to fail.

While these groups are important in some phases, they should never “take over” customer experience activities. Instead, they should facilitate and support transformational activities across the organization. In my research, I defined the following 8 categories of activities that these centralized customer experience organizations work on:

  • Customer insight management. Develop and support a voice of the customer program.
  • Customer experience measurement. Create and track key customer experience metrics and related management dashboards.
  • Employee communications. Make sure that employees are informed and engaged in the efforts.
  • Process improvement. Help the organization map interactions from the customer’s point of view and then redesign broken processes.
  • Customer advocacy. Make sure that customers’ needs are taken into account in all key decisions.
  • Culture and training. Actively work on cultural change and identify training required along the way.
  • Issue resolution management. Establish and support the process for solving customer issues that get escalated.
  • Cross-organizational coordination. Support the cross-functional teams and processes that govern the customer experience efforts.

The bottom line: Chief Customer Officers can be valuable in the right environments.

Winners: 2017 CX Vendor Excellence Awards

Congratulations!

Temkin Group announces the winners of its 2017 Customer Experience Vendor Excellence Awards:

Clarabridge, Medallia, Qualtrics, Rant & Rave, and Root.

 

Here are excerpts from the winners’ submissions:

  • Clarabridge’s CX Suite helps companies understand and manage the customer experience. Customer feedback is taken in and analyzed, using Clarabridge’s advanced text analytics and sentiment analysis capabilities. The meaning of the text is analyzed, and the underlying root causes of each trend, complaint, and compliment is identified.
  • Medallia strives to be a single source of truth across all customer touchpoints and to make real-time customer feedback available to employees across the organization. Medallia’s core differentiation lies in our ability to drive thousands of active users to our application rather than depending on centralized CX teams to interpret customer feedback and share periodic reports.
  • Qualtrics’ XM Platform™ provides human-factor data–the beliefs, emotions, and sentiments that tell you “why” things are happening. The predictive intelligence layer within the platform allows companies to not only respond to the experiences they have delivered in the past, but also predict how changes will influence customer satisfaction in the future.
  • Rant & Rave helps businesses profit from customer sentiment, turning customers into Ravers by reacting and responding to their emotions and feelings in realtime. Whilst traditional CX vendors continue to rely on the collation and reporting of feedback through lengthy surveys and market research, we provide our clients with a disruptive engagement model, which delivers industry-leading response rates.
  • Root Inc.’s Customers for Life process includes defining a customer-first culture at the leader level, empowering managers to make customer-focused decisions, and providing the front line with coaching and tools to deliver an authentic customer experience. This approach engages employees at every level so they can internalize their specific role in driving the customer experience and how they impact big-picture outcomes.

Below are the first two sections from the winners’ nomination forms, Company Overview and Make The CaseRead More …

Report: State of the CX Profession, 2017

1702_stateofcx-profession2017_coverWe just published a Temkin Group report, State of the CX Profession, 2017. This is the fifth year that we’ve examined the roles of CX professionals and the third year that we’ve done a compensation study. Here’s the executive summary:

To understand the mindset and roles of customer experience professionals today, we surveyed 237 CX professionals and then compared their responses to similar studies we’ve conducted over the previous five years. We asked them how their CX efforts impacted their organization last year and about their plans for the coming year. This report also includes a compensation study, which is based on the 158 respondents who agreed to participate. Here are some highlights from the research:

  • Eighty-four percent of respondents say that their customer experience efforts have had a positive business impact in 2016.
  • Ninety-nine percent think that customer experience is a great profession to be in, the highest level we’ve seen in the six years we’ve been doing the study.
  • Eighty percent think that customer experience will be more important for their companies in 2017 than it was in 2016, compared to the 3% who think it will be less important.
  • Forty-nine percent expect to see an increase in their customer experience staffing levels this year – a higher percentage than we’ve seen in previous years.
  • Respondents plan to increase their spending most on voice of the customer software and text analytics.
  • Respondents plan to increase their focus most on Web experiences and customer insights and analysis.
  • The total amount of compensation in our study ranges from $93,000 for mid-level individual contributors to $239,000 for CX executives.

1602_DontBuyReportJoinCXPA

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Here’s some data that combines pieces of two graphic, showing that CX continues to be a great profession….

1702_cxprofessionalssummary

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Report Outline:

  • The Life of a Customer Experience Professional, Circa 2017
    • CX Professionals Have More on Their Plates in 2017
  • CX Professional Compensation Study

 

Figures in the Report:

  1. Comparison of CX Professionals Across Job Types
  2. Business Impact of CX
  3. Satisfaction with the Profession
  4. Satisfaction with Elements of their Roles
  5. Job Searching and Professional Development
  6. Key Activities of CX Professionals
  7. Change in Importance and Staffing
  8. CX Spending Levels
  9. Focus on CX Interaction Channels
  10. Focus on CX Activities
  11. Range of Compensation for CX Professionals
  12. Comparison of CX Professionals Across Job Types

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The bottom line: The CX profession is thriving.

Modernize Leadership: Observe and Improve

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In a previous post, I described how today’s management techniques reflect outdated assumptions of technology-enabled practices, human behavior, and the meaning of success. That’s why organizations must shift to what I’m calling Modernize Leadership.

I’m writing individual posts for each of the eight key changes required to modernize leadership. In this post, I’m examining the shift from:

Measure and Track to Observe and Improve

Here’s some more information to better understand this shift:

Outdated Thinking
Here are some ways in which leaders must change how they view the world:

  • You can’t manage what you can’t measure. That’s a refrain that I often hear, and it pushes people in the totally wrong direction. The reality is that most things in life are managed without explicit measurements. Think about a typical day. You get up, get dressed, eat breakfast, and commute to work without referring to a dashboard of metrics. That does not mean that measurements can’t help, but they hardly ever tell the entire story.
  • Managers often look for metrics they can to use to hold people and organizations accountable. Setting measurable goals is not a bad thing, but it can cause bad behaviors. Managers will sometimes overly focus on the metrics and ignore nuances such as actual behaviors of the team and shifts in the situation. They act as  if it’s possible to manage something you don’t truly understand. That all falls apart when the an organization needs to deviate from a “straight ahead” orientation.
  • When employees believe that a metric is very important, they are explicitly and implicitly encouraged to do whatever it takes to achieve the goal. This can lead to inappropriate behaviors such as a car salesperson insisting that you give him a “10” on a survey. At Staples, a metric of $200 of add-ons for each computer pushed employees to refuse selling computers to customers who weren’t going to purchase add-ons.

Heres a quote that is often attributed to Albert Einstein:

“Not everything that counts can be counted, and not everything that can be counted counts.”

Modernized Leadership Actions
Here are some ways in which leaders should act based on a modernized perspective:

  • Look positively forward. Metrics often show how an organization has performed during some previous timeframe, but what you really care about is how it will get better in the future. Make sure that your discussions with people are focused on what the organization can learn in order to  improve, not on blaming people for the problems that caused a poor score.
  • Encourage the right behaviors. If you want your organization to make improvements, then nurture the employee behaviors that will deliver better results. So celebrate employees who are doing the right things, even when the metrics aren’t great.
  • Build operational empathy. If you want your employees to do the right things, then they should feel as if you know their environment. Rather than having employees just see you commenting on metrics from afar, set aside time to regularly get immersed in different parts of the organization. Ask employees how they think the company can improve. This will help you understand when to “back off” reacting too strongly to the metrics and let employees know that numbers aren’t everything.
  • Enable continuous improvement. Instead of using measurements as a pure grading system, use them to identify places for improvement, and always ask: what have we learned and how can we get better? Your organization needs to have an ongoing improvement cycle that is at least at the same pace as your measurement system, otherwise metrics will only lead to frustration.

The bottom line: Observe your organization and focus on improvements.

Data Snapshot: CX Expectations and Plans for 2017

1702_ds_cxplansfor2017_coverTemkin Group just published a data snapshot, Customer Experience Expectations and Plans for 2017. This annual research effort shows an increase in focus, effort, and spending on customer experience in 2017. Here’s a description of the data snapshot:

In December 2016, Temkin Group surveyed 165 respondents – each from a company with $500 million or more in annual revenues – about their customer experience efforts over the past year and their plans for 2017 and beyond. We compared the results of this survey to the results of similar surveys we’ve conducted over the previous six years. This year’s results show that companies plan on dedicating more money and effort to improving a variety of customer experience activities.

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The data snapshot has 12 graphics with data about CX plans and expectations for 2017. Here’s an excerpt from two of the graphics:

1702_cximpactandimportance

Here are some highlights from the research:

  • The percentage of respondents who report at least moderately positive results from their previous year’s CX efforts grew from 44% in Q4 2015 to 52% in Q4 2016.
  • Sixty-four percent of companies that report at least moderately positive results from their 2016 CX efforts had better financial performance than their peers, compared with only 44% of other firms.
  • The percentage of respondents who looked ahead and said that CX will be significantly more important in the following year grew from 40% in Q4 2015 to 45% in Q4 2016.
  • The percentage of respondents who expect CX spending to increase in the following year grew from 57% in Q4 2015 to 67% in Q4 2016.
  • The percentage of respondents who expect to increase their full-time CX staff in the following year grew from 37% in Q4 2015 to 44% in Q4 2016 (only 5% expect to cut back their staffing this year).
  • Spending growth is expected to be strongest for VoC software, predictive analytics, and experience design agencies.
  • Web and mobile will remain the most important channels of focus in 2017, while social media experiences decline in importance.
  • Customer insights and analytics remains the most important CX activity.
  • Companies are planning to increase their use of CX metrics to drive compensation across all types of employees.
  • More than half of respondents expect to increase CX training with customer-facing employees.

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Report: Lessons in CX Excellence, 2017

1701_lessonsincxexcellence_coverWe just published a Temkin Group report, Lessons in CX Excellence, 2017. The report provides insights from eight finalists in the Temkin Group’s 2016 CX Excellence Awards. The report, which has 62 pages of content, includes an appendix with the finalists’ nomination forms. This report has rich insights about both B2B and B2C customer experience.

Here’s the executive summary:

This year, we named five organizations the winners of Temkin Group’s 2016 Customer Experience Excellence Award – Business Development Bank of Canada (BDC), Century Support Services, Crowe Horwath, Oxford Properties, and VCA. This report highlights specific examples of how these companies’ customer experience (CX) efforts have created value for both their customers and for their businesses, describes winners’ best practices across the four customer experience competencies: purposeful leadership, compelling brand values, employee engagement, and customer connectedness. it includes all of the winners’ detailed nomination forms to help you collect examples and ideas to apply to your own CX efforts.

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Here are some highlights from the winners: Read More …

Report: Translating Brand Promises into Employee Behaviors

1608_translatingpromisesintobehaviors_coverWe just published a Temkin Group report, Translating Brand Promises into Employee Behaviors. Here’s the executive summary:

Temkin Group has found that the companies that deliver great customer experience use their brand as a blueprint for how they treat customers, which is why Compelling Brand Values is one of our four customer experience core competencies. Too often organizations put a lot of energy into communicating the brand externally, only to fall short on connecting employees to their role in keeping brand promises. And when employees aren’t connected to these promises, they tend to be less proactive, to act inconsistently, and to care less about their work. In this report, we describe three steps that companies can use to translate their brand promises into employee behaviors: Make promises, Embrace promises, and Keep promises. To illustrate this approach, we share over 20 examples of best practices from companies including Anthem, A&W Food Services of Canada, the city of Centennial, Oklahoma City Thunder, and Quest Diagnostics. To evaluate how well your organization follows this approach, use Temkin Group’s Compelling Brand Promises Assessment.

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Here’s are two of the 15 graphics in the report:

1609_bestpracticemakeembracekeeppromises 1609_promisesmissionvalues

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Report: The Federated Customer Experience Model

1603_PathtoFederation_COVERWe published a Temkin Group report, The Federated Customer Experience Model. Here’s the executive summary:

When a company starts its customer experience (CX) journey, it often establishes a centralized team to build the necessary internal capabilities and catalyze change. However, that team’s effectiveness can be limited by a number of things, including divided attention within lines of business and a lack of resources to reach across the company. In its 2012 report, The Future of Customer Experience, Temkin Group identified the need for CX efforts to become more federated. To succeed in the long-run, companies need to focus more on embedding CX capabilities across departments and functions through a federated CX model. A federated model is a structure for enabling and coordinating a distributed set of customer experience capabilities, and it operates through centers of excellence—which spread specialized expertise beyond the boundaries of the centralized team—and enterprise CX coordination—which ensures that company-wide goals and standards are in place—and distributed CX skills and mindsets—which infuses customer-centric mindset throughout the company. These centers of excellence include deep analytics, reporting and data visualization, experience design, customer-driven process improvement, and culture change management. Enterprise CX coordination oversees enterprise CX strategy and governance, insights, metrics and reporting, standard methodologies and tools, central CX storylines, and portfolio management. And distributed CX skills and mindsets encompasses CX goal alignment, customer understanding, empathy orientation, improvement focus, and organizational awareness. The path companies take to federation can include multiple phases, such as centrally driven, cross-functional participation, distributed expertise, and federated. As their companies move down this path, successful CX professionals will be the ones who learn the business, coach and advise others, embrace empowerment, and keep learning; or, alternatively, they can choose to specialize and leave the central CX team to join one of the centers of excellence.

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Here are the elements of a Federated CX Model:

1603_FederatedCXModel

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Report: Benchmarking HR’s Support of CX and Employee Engagement

1602_HRinCXBenchmark_FCOVERWe published a Temkin Group report, Benchmarking HR’s Support of CX and Employee Engagement.  We surveyed 300 HR professionals from large organizations in North America and compared the results to a similar study we did in 2012. Here’s the executive summary:

Employee engagement is a critical component of customer experience (CX). To determine how effectively human resource (HR) departments support these engagement efforts, we surveyed 300 HR professionals from large companies and compared the results to a similar study we conducted in 2012. Seventy-three percent of HR professionals believe that it’s very important for their organization to become more customer-centric, but only 31% believe that HR professionals are significantly helping these efforts. The good news? That’s more than twice the level of HR support we found in 2012. Compared with 2012, companies are both measuring and acting on employee feedback more frequently, and HR professionals have more bandwidth to work on employee engagement. When we compared the companies that deliver outstanding customer experience with the companies that don’t, we found that the CX leaders have better financial performance, enjoy higher levels of engaged employees, are more customer- and mission-centric, have HR groups that are more actively involved in CX and employee engagement activities, and more frequently measure employee feedback. To improve employee engagement, companies must master the Five I’s of Employee Engagement: Inform, Inspire, Instruct, Involve and Incent.

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Here’s one of the 25 figures in the report:

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Here are some other findings in the research: Read More …

Report: B2B Customer Experience Best Practices

1510_B2B CX Best Practices_COVERWe published a Temkin Group report, Business-to-Business (B2B) Customer Experience Best Practices. This report provides data on the state of customer experience (CX) in B2B as well as 20 CX best practices across five critical B2B processes. Here’s the executive summary:

Temkin Group research shows that although business-to-business (B2B) organizations are raising their customer experience (CX) ambitions, they still have a way to go before achieving their goals. Despite the fact that most large B2Bs have a low level of CX maturity, our research shows that 57% of them aspire to deliver industry-leading customer experience within three years. However, to improve their CX, B2Bs must master Temkin Group’s four customer experience core competencies: Purposeful Leadership, Compelling Brand Values, Employee Engagement, and Customer Connectedness. Our research uncovered 20 practices that B2Bs can emulate when applying those competencies across these five key business processes: sales and account management, implementation/project execution, support and issue resolution, partner alignment, and product management and innovation. To assess your organization’s CX maturity, use Temkin Group’s Customer Experience Competency Assessment and compare the results to data from other large B2B firms to chart your path to improvement.

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The report examines the state of B2B CX, including the results from large companies that completed Temkin Group’s CX Competency & Maturity Assessment:

1511_B2BCXMaturity

To help B2B organizations raise their CX maturity, we identify 20 best practices for mastering Temkin Group’s four customer experience core competencies: Purposeful Leadership, Compelling Brand Values, Employee Engagement, and Customer Connectedness. These practices are aligned with five key B2B activities: sales and account management, implementation/project execution, support and issue resolution, partner alignment, and product management and innovation:

1511_B2B5Processes

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Report: Creating and Sustaining a Customer-Centric Culture

1507_CreatingCXCulture_COVERWe just published a Temkin Group report, Creating and Sustaining a Customer-Centric Culture. Here’s the executive summary:

Temkin Group defines culture as how employees think, believe, and act, and if an organization wants to differentiate its customer experience, it must address each one of these areas. However culture change is not easy. Culture change efforts are often impeded by common pitfalls, such as ignoring the existing culture or becoming impatient at the pace of change. To make this effort smoother, Temkin Group recommends adopting an approach we call Employee-Engaging Transformation (EET), which consists of five practices: Vision Translation, Persistent Leadership, Middle Management Activation, Grassroots Mobilization, and Captivating Communications. In this report, we’ve compiled case studies of how five organizations—Hagerty, Hilton Garden Inn, Oxford Properties, Safelite AutoGlass, and Transamerica—apply these EET practices to create and sustain their customer-centric cultures. To help your company discuss its goals around culture, use Temkin Group’s Cultural Planning Map.

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This graphics provides an overview of the details on how five companies are driving culture change.

1509_CultureCaseStudies

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The bottom line: Promoters are much more valuable than detractors.

Report: The Secret to B2B2C Customer Experience Success

1412_B2B2CCX_COVERWe published a Temkin Group report, The Secret to B2B2C Customer Experience Success. When a company doesn’t have sole control over the customer relationship, it has to recognize the entire system of relationships that influence the end customer’s experience, focusing on what we call B2B2C CX management. Here’s the executive summary:

Many companies reach their end customers through a variety of channel partners—from independent agents and dealerships, to resellers and distributors. Temkin Group defines B2B2C customer experience as enhancing the end customer experience in a way that satisfies the needs of channel partners. The B2B2C environment is complex and full of challenges that hamper companies’ ability to deliver great customer experience to their end customers, such as a lack of alignment with partners or a limited understanding of customers. Our research uncovered five B2B2C CX capabilities that companies require to succeed in delivering a great experience to end customers: Voice of the Partner, Customer Insights Cooperation, CX Capabilities Development, Partner Engagement, and Channel Management Collaboration. We also identified three prototypical B2B2C structures that impact how companies should apply the B2B2C CX capabilities for the most effective outcome. Use Temkin Group’s assessment to identify your company’s B2B2C structure.

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Here’s an overview of the five B2B2C CX capabilities:

B2B2CCXCapabilities

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The bottom line: Engage your partners to engage your customers.