Want to know how to lead your business into an uncertain tomorrow? First, let’s consider how humans perceive the future. 

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Succeeding in Uncertain Times

<h4><strong>The future never ceases to amaze us.</strong></h4>
<p>On one hand, we’re obsessed with it. We fret about the uncertainties of tomorrow and the impact they may have on our own lives, the lives of people around us, and on the institutions that matter to us most. We try to anticipate future events and the changes that come with them in order to embrace, adapt or fight as needed.</p>
<p>On the other hand, both as individuals and as organizations, we’re often caught napping by the rapid onset of uncertainties. Corporate history is littered with tales of organizations that were blindsided by trends that now seem imminent and obvious.</p>
<p>How can we better position ourselves for an uncertain future? To understand this, we must first understand ourselves.</p>
<p><strong>How humans see the future</strong><br />
The most common way we anticipate future changes is by using historical extrapolation. We exercise our pre-existing mental models, experiences and knowledge to form opinions on what the future might look like. This makes sense, right? The future often seems obvious in retrospect, but looking ahead, it could manifest itself in so many different ways.</p>
<p>However, our future projections are usually based on a narrow focus on the breakout effect of a handful of trends or forces. We do this as a way to isolate and manage the potential for uncertainty. Although this is a comforting way to work, it limits a full understanding of what’s possible. Sometimes, the future looks nothing like the present. Other times the future simply means continuity of the current status quo. Often, it is a bit of both.</p>
<p>In an organizational setting, the effects of radical changes over a medium-to-long time horizon are further exacerbated. Despite claims (often indignant and impassioned) to the contrary, structured, long-term thinking is rarely embedded into the cultures of most organizations. This is likely because the business machinery built over the last few decades was created to assure the delivery of results under <strong>predictable conditions.</strong> Frameworks like historical forecasting, competitive benchmarking, ”best practice” analysis and value chain mapping can only use a static snapshot of the past to aid decision-making for the future.</p>
<p>Furthermore, product/service lifecycles and their corresponding time to market are getting shorter, while the variety offered to customers has broadened significantly. The corresponding<strong> incentive structures discourage long-term thinking.</strong> Companies promise to deliver long-term value but are in fact obsessed with short-term goals and immediate results.</p>
<p>This short-term focus is evidenced by the decreasing time horizon of strategic planning in modern business history. In the 1960s, organizations made 10-year plans. In the decades that followed, five-year and then three-year plans became the norm, Now, companies make 90-day “action plans.” Unfortunately, reducing time horizons doesn’t necessarily lead to flexibility. Too often, it simply breaks down existing rigidity down into smaller chunks.</p>


While most organizations have some formalized idea of where they want to go, what they really need is a structured reflection on the potential drivers of change and the capabilities to respond to them. So, how can executives and institutions thrive in an environment of uncertainty? 

<p>Position your organization to make the most out of a dynamic and unpredictable business environment. Nokia started off as a pulp and paper mill. The Indian IT giant Wipro started off as manufacturer of refined cooking oils. At a certain point in the past, these companies made a conscious decision to allocate their limited resources to develop new capabilities based on their understanding of the changing business landscape. <a href="https://www.frog.co/designmind/the-disruptor-playbook" target="_blank" rel="noopener">Disruption</a>, discontinuity and shock are not the same concepts. Each require the ability to pivot, adapt and capitalize on change.</p>


Anticipate and enact change

<p>When developing a core strategy, an organization must consider developing contingent strategies around it that get activated due to an internal or external trigger. Whether it is initiating the development of a new product, expansion to an adjacency or entry into a new market, a contingent strategy could take many forms. Businesses need to develop the capability to monitor technologies, regulations and competitive dynamics to understand how these forces work together in a system.</p>


Inculcate strategic flexibility

<p>Know what your organization does well and continue to build on these core strengths, but be cognizant of when is the right time to disengage from one capability or develop another. For example, restaurants that traditionally prioritized dine-in experiences have had to adapt to offering delivery capabilities during the COVID-19 pandemic while dining in is no longer an option. No matter what’s in store, preparing for the future is about developing a deeper knowledge and awareness of your organizations strengths and capabilities to better understand their changing relevance .</p>


Reflect on the relevance of your capabilities

<p>In volatile environments characterized by liquidity, companies are compelled to capitalize on the transient advantages that they hold and increase their malleability. One way to achieve this is to delegate complete sections of the delivery process on to third parties more capable of effectively and efficiently cover them and focus what you’re good at. Adopting a distributed operating model and joining/establishing business ecosystems provides organizations with a distinct advantage. It enables them to maximize value for their clients while using their limited assets wisely, thereby enhancing strategic flexibility.</p>


Leverage the power of ecosystems

<p>Organizational agility goes beyond deployment of the agile methodology and into the realm of people. It means understanding collaboration dynamics, developing scalable processes and building a culture of getting sh*t done, often with limited resources and in an ambiguous environment. There’s no universal formula to instill this attribute across all organizations in a uniform manner. However, agile organizations respond better to change, make quicker decisions, think on the move and develop new capabilities, which is all necessary in uncertain times.</p>


Instill organizational agility

<p>Companies that want to thrive in the future need to take the lead on defining what the future looks like. There exists a clear correlation between a company’s sense of purpose and their ability to innovate and transform themselves. Whether this has to do with changing customer preferences or introducing a new technology, ambition-driven companies need their finger on the pulse to justify major strategic decisions, especially for the medium- to long-term time horizon.</p>


Define your purpose

<p>Creativity encourages managers and executives to get out of siloed thinking and question the way things have been traditionally done. Developing this quality emboldens companies to look beyond the world of data and into the world of possibilities. It allows us to ask not just “who are we?” but also “who could we be?”</p>
<p>The future is rarely an agglomeration of individual drivers. Markets and technologies exist in systems, made up of numerous individual factors that are inextricably interlinked to each other. That’s why change often requires entire segments of the system to be reimagined.  By embracing the attributes mentioned above, organizations can position themselves to not only survive, but to thrive in the future—no matter what it holds.</p>


Embrace that artistic drive

How to future-proof your business

Octavio Egea

Arjun Shukla

<p>Octavio Egea is Executive Strategy Director at frog Madrid. For 20+ years, Octavio has been helping organizations decipher, navigate and thrive in complex industry contexts, deploy new growth platforms and embrace innovation to drive superior alpha. As Executive Director of frog’s EMEA Strategy practice, Octavio leads a team of passionate strategists assisting start-ups and global corporations in identifying emerging opportunities, developing growth strategies, building new businesses, and creating innovative and meaningful experiences that resonate with customers and employees.</p>


<p>As a Strategist, Arjun designs pathways to growth and profitability amidst constant change. He is passionate about helping people, teams and companies create long-term, scalable businesses by helping them evolve their capabilities. He has over six years of experience in conducting market studies, sectorial analysis, opportunity assessments, and designing business models. Curious about all things involving change, Arjun loves detecting patterns where few exist and looking for inconsistencies where patterns seem obvious.</p>


Authors

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frog_author_Octavio_Egea

frog_author_arjun_shukla

frog_author_Arjun_Shukla

How to drive ROI on Customer Experience Strategy and Design

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The Business Value of Customer Experience 

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<div>What are you doing to deliver exceptional customer experience?</div>
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<div>What does quality Customer Experience look like to your business?</div>
<div>What steps are you taking to deliver exceptional Customer Experience?</div>
<div>How will you unify your teams to pursue better experiences that lead to increased customer loyalty and sustainable business value?</div>
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<div><strong>What&#8217;s in the report: </strong></div>
<ul>
<li>Ways to uncover CX opportunities in your business.</li>
<li>Strategies to communicate and measure the impact of CX initiatives.</li>
<li>The 4 Effects of Better Customer Experience.</li>
</ul>
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Nieves Padilla

<p>Nieves Padilla is a Senior Strategist at frog Madrid. Combining an innovative mindset and a practical approach to make data-driven decisions, she is able to conceptualize complex business challenges in order to drive change in organizations. She brings more than 8 years of experience in strategy consulting engagements involving customer experience transformation, organizational transformation and corporate and portfolio strategy for worldwide companies within industries such as financial services, transport, services or tourism &amp; entertainment.</p>


Not all customer experience strategies are made the same. Here are some ways to think about defining quality CX and unlocking its full potential in your business.

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Your Business, Your CX: Defining Quality and Unlocking Potential

<p><strong>Fierce competition</strong> and consumer power grow at parallel paths. Traditional means of differentiation—the kind based on product or service features alone—are no longer enough. In other words, purely functional attributes will fail to impress customers into sticking around for long. To win the battle for customers at a time when there is a seemingly unlimited range of options available, the charge is to seek new sources of competitive differentiation. Customer experience (CX) is now the best lever that companies can use to compete.</p>
<p>But what does quality CX look like in your business? From meeting consumer expectations to assessing organizational capabilities, this will be determined by many factors. Read on for ways to think about how to define quality CX in your business to start unlocking its full potential.</p>
<p><strong>First, what does ‘customer experience’ mean?<br />
</strong>CX is not the same as customer satisfaction, nor is it the same as customer service. CX is also not the result of any one initiative. For instance, while quality CX inspires customer loyalty, exceptional experiences are rarely the result of customer loyalty programs alone. To further complicate matters, not all quality experiences are the same in every business or across all industries. The marketplace influences what types of interactions customers already demand and which experiences will lead to competitive differentiation.</p>
<p>Put simply, <a href="https://www.frog.co/designmind/building-loyalty-customer-experience/" target="_blank" rel="noopener">CX is the sum of all interactions a customer has with a brand over time</a>. On an individual touchpoint level, products and services lead to exceptional experiences when they include features and interactions that customers deem acceptable to use, offer some level of preference and inspire joy. Finding the right balance in these attributes—and knowing which of these will offer the most value for your organization—requires deep understanding of customer needs specific to your business.</p>
<p><img decoding="async" loading="lazy" class="alignnone size-full wp-image-14045" src="https://wp.frog.co/wp-content/uploads/2020/02/BusinessValueOfCX_INFOGRAPHIC_resized_Page_1.png" alt="" width="100%" height="100%" /></p>
<p>All this is to say that there simply is no one-size-fits-all solution. At frog, we use what we call a ‘Relationship Framework’ to define and evaluate a company’s CX. It prizes three factors above all as a guide for businesses looking to create meaningful, sustainable relationships across the customer lifecycle. These include:</p>
<p>&nbsp;</p>
<ul>
<li dir="ltr"><strong>Breadth</strong>: The frequency of interactions across a customer’s experience.</li>
<li dir="ltr"><strong>Depth</strong>: The extent to which emotional, higher order needs and desires are being met.</li>
<li dir="ltr"><strong>Consistency</strong>:The connectedness and cohesiveness of a brand’s ethos through the interactions it creates with customers.</li>
</ul>
<p>To learn more about these three factors and how they contribute to exceptional CX, see the course <a href="https://www.linkedin.com/learning/design-thinking-customer-experience/welcome" target="_blank" rel="noopener">Design Thinking: Customer Experience</a> on LinkedIn Learning taught by frog Executive Strategy Director Geoffrey Schwartz.</p>


Because CX is a holistic assessment that involves many individual moments, knowing where to start improving experiences can be daunting. It involves first identifying what qualifies as exceptional CX specifically for you and your business. This will help to clarify what’s possible and will help avoid misconceptions about intended results. Here are some ways to think about uncovering opportunities for improving the quality of CX in your business.

<p>New tech alone cannot save major flaws in a business’s overall offering, but it can lead to new ventures, offer forward-looking alternatives and influence new processes that improve overall CX in a measurable, scalable way. One example of using tech to improve CX is frog’s collaboration with DBS, a multinational financial services group. For DBS, frog designed and launched a paperless and signature-less mobile banking service. Not only did it engage new technologies and platforms, it helped DBS outperform competitors in customer acquisition and retention.</p>
<p>Of course, the integration of tech-enabled experiences goes far beyond initial launch. Even with emerging technology, it is important to think long-term about their implementation. For instance, a hotel chain may decide to digitize their room service offering to seem more modern to guests, but if the service is reliant on devices that quickly become obsolete or on software that is not maintained, the cost of such a wasted effort is big in terms of both budget and impact on perceived CX quality.</p>


Consider how technology can inspire CX innovation.

<p>Creating a deep understanding of your customer’s pain-points along their journey is a strong place to start looking for potential ways to improve CX in your business. Applying design thinking methodologies, informed by user research and deep business expertise, leads to winning product and service innovation and enhancements that ultimately contribute to greater CX.</p>
<p>This also means knowing what matters most to your customers. Otherwise, so-called CX ‘improvements’ fail to translate into impact. As the standards for a given experience are raised, customer expectations evolve, and experiences can even become commoditized. In this way, timing is everything. Being willing to drive change in your business, market or entire industry—rather than simply respond to it—can help keep your business at the forefront of CX innovation. At frog, we partner with clients to identify the right risks and experiment in the most lucrative domains to create lasting impact through innovative experiences.</p>


Look for unmet customer needs and points of friction.

<p>At the heart of making memories that lead to positive associations are understanding emotional drivers along the way. At frog, we believe ‘form follows emotion.’ This means rather than servicing just functional or technical requirements, we believe in designing experiences around customers and what they love. This will not be the same for every business. Instead, it is necessary to center on your own customer’s journey in a strategic, precise way.</p>
<p>So, when looking across your customer’s journey to uncover key business opportunities, also consider the emotional weight of these interactions. Each will leave an imprint on customers’ memories that they will associate with your brand long-term. This is all core to deepening the relationship between your customer and your brand. Only by considering how an experience can make your customers feel, will it be possible to understand what they value.</p>


Let emotions be your guide.

Identifying CX opportunities in your business 

<h6><strong>On measuring the impact of CX</strong></h6>
<p>Now that we’ve outlined what comprises a quality customer experience for your business and ways to go about thinking of CX opportunities, it’s time to start looking forward at how to measure the impact of your initiatives.</p>
<p>For even more information on measuring results, sign up to get <a href="https://go.frog.co/en/business-return-customer-experience-report" target="_blank" rel="noopener"><strong>The Bus</strong>i<strong>ness Value of CX</strong></a><strong>,</strong> a new, free report that includes the four key effects of exceptional customer experience, as well as more detail on frog’s approach to customer-centered innovation.</p>


How ready is your company to compete on customer experience?


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Without the right metrics, initiatives for improving customer experience can be met with internal skepticism. To change minds, communicate the business value of CX. 

United Around CX: Measuring and Communicating Impact 

<p><strong>Great customer experience (CX)</strong> has become the main—and in some cases, the only—driver of differentiation. According to <a href="https://www.forbes.com/sites/shephyken/2018/07/15/customer-experience-is-the-new-brand/#ef06afd7f528" target="_blank" rel="noopener">Forbes</a>, 89 percent of companies say CX is the basis for competition within their industry.</p>
<p>Yet it’s one thing to say great experiences matter and another thing entirely to demonstrate precisely where and how this focus manifests as customer experience programs. Because superior CX leads to more satisfied, engaged and loyal customers, all organizations should be united around the need to design and implement successful CX-focused initiatives. Too often, however, the difficulties found in demonstrating evidence of tangible business impact from these efforts can make for skepticism that becomes a significant roadblock to progress.</p>
<p>Only by translating the potential benefits of <a href="https://www.frog.co/services/customer-experience-design" target="_blank" rel="noopener">customer experience design</a> into explicit outcomes does it become clear how superior experiences can be a key business value driver, and only then is it possible to get the buy-in (and budget) needed within organizations to ultimately unleash its full financial impact.</p>
<p><img decoding="async" loading="lazy" class="alignnone size-full wp-image-14040" src="https://wp.frog.co/wp-content/uploads/2020/02/InfographicArticle02_BVCX_2x.png" alt="" width="100%" height="100%" /></p>
<p>Through demonstrating results, such as pointing to metrics that show how customer experience drives growth and improves customer loyalty, it’s possible to change perspectives from seeing CX initiatives as “leaps of faith” to directly connecting these efforts to evidence of competitive advantage.</p>
<p>&nbsp;</p>
<h4><strong>Customer experience in action: BT</strong></h4>
<p>In any business, the definition of what is considered quality CX will only evolve over time. For example, over-the top media services (OTT) have transformed how we consume video content. Years ago, most customers would have been delighted with the prospect of a multi-screen viewing experience, one that made it possible to begin watching something on one device and pick up precisely where they left off on another. Now, this is considered the baseline. Consumers have evolved to expect this feature, and any service that cannot offer it is seen as outdated. Once a standard for experience is raised, any business that wants to stay competitive will soon see there’s no turning back—it’s time to adapt and up the ante on quality.</p>
<p>Thankfully, there are clear connections between CX initiatives and business impact both short- and long-term. For example, when <a href="https://www.frog.co/work/bt-tv-next-generation-experience" target="_blank" rel="noopener">frog partnered with BT to redesign their complete ecosystem of BT TV products</a>, the team was committed to offering a digital-first experience that was just as intuitive as traditional TV offerings. Following the launch of the redesigned service, measures of customer satisfaction improved dramatically. Net Promoter Score (NPS), a key customer loyalty metric, improved by seven points. BT also experienced an 11 percent drop in dissatisfied customers and a seven percent drop in customers likely to leave BT TV. Not only did BT win awards for the experience-driven design strategy, they made measurable progress toward building sustainable customer loyalty in the process.</p>


So, how can business leaders make the case for aligning around the objective of improving CX? The answer lies in understanding how to communicate its value. To drive alignment organization-wide, here are some ways to establish a metrics model that connects business impact, customer data and operational indicators.

<p>Success will not be measured the same way for a transaction-based company as a subscription-based one. The strategies for improving experience as a telecom operator (e.g., long-term customer retention) will be different than that of a retailer (e.g., more frequent purchases). Still, each improvement will have an impact. As the expert of your own business, you already have a sense of metrics matter most to you. By tying this knowledge to how customer experience manifests in your business, it is possible to more directly measure the impact of improving CX.</p>
<p>How do you measure success already? Is it by creating more customers? Encouraging more frequent or varied purchases? Reducing costs? Revenue growth? The ability to expand into new markets? To launch new services? This will vary from business to business. However, across all industries, customer experience can be correlated with these tangible effects.</p>


Identify metrics linked to business impact and economic value.

<p><a href="https://www.invespcro.com/blog/customer-acquisition-retention/" target="_blank" rel="noopener">It costs five times more to attract a new customer than to retain one</a>, so keeping customers happy is a vital strategy for lasting business success. Retention rate is a critical driver of profitability, making a huge impact on the customer lifecycle value.</p>
<p>At a time when social media has shifted the power from companies to consumers, building a base of loyal customers is a key path to creating advocates on your behalf. Establishing this advocacy has all sorts of benefits, from expanding your customer base to saving costs through word-of-mouth marketing. In the upcoming report The Business Value of CX, we go deep into the value created through advocacy over time.</p>


Associate business goals to customer and marketing-related metrics.

<p>To leverage the long-term value creation opportunities that superior CX can provide, its impact should not only be assessed once. It should be carefully tracked as it evolves over time. This would make it possible to then check if such efforts are maintaining the intended result, or if it is necessary to focus on a new aspect of experience differentiation.</p>


Establish a continuous monitoring system to track impact on an ongoing basis. 

Communicating the success of your CX efforts

<h4><strong>Measuring the business value of CX</strong></h4>
<p>What steps are you taking to deliver exceptional CX? What business impact can you expect? How will you unify your teams to pursue better experiences that lead to increased customer loyalty and sustainable business value? These are all questions to consider in order to drive growth, build loyalty and stand out ahead of the competition.</p>
<p>To manage expectations of CX results, read about how to understand what quality CX looks like specifically for your business in <a href="https://www.frog.co/designmind/business-cx-defining-quality-unlocking-potential" target="_blank" rel="noopener">Your Business, Your CX: Defining Quality</a>.</p>
<p>For more information on measuring results, sign up to get <strong><a href="https://go.frog.co/en/business-return-customer-experience-report" target="_blank" rel="noopener">Business Value of CX</a></strong> , a new, free report that includes the four key effects of exceptional customer experience, as well as more detail on frog’s approach to customer-centered innovation.</p>


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