Why CX initiatives fail
In the B2B asset management industry, there are many ways to succeed at CX that we have covered in other blogs and research. This article, however, shines a light on the key reasons why CX initiatives fail.
We know this because over 20 firms (and counting) have compared the strength of their CX capabilities through Accomplish’s CX Maturity Benchmark. It is now a unique and powerful dataset that we use to identify themes and help clients understand and respond to their specific issues.
We also know that, industry-wide, two-thirds of asset managers plan to give greater importance to CX than in previous years, so we hope you find it instructive.
Reason 1: lack of knowledge and understanding of CX
To manage something, you need to measure it. To measure it, you need to have defined it. Your CX initiative will fail if you do not work with an effective definition of CX itself.
Asset managers often tell us that they say ‘client centricity’ a lot in internal meetings, but they don’t know what it means, and it still feels like they are all pulling in different directions. Without a common definition of CX and what good looks like, inconsistent approaches in different departments will fail to connect. Rather than providing a seamless experience for a client, disconnects will draw the client’s attention to differences across their end-to-end journey.
Armed with knowledge and understanding of CX and why it matters, firms have developed feasible objectives. Conversely, when we encounter firms that have not educated themselves about CX, we often find they have set themselves ill-informed and unachievable objectives.
Left to conduct their own learning, however, staff attempts to fill gaps in their knowledge will be limited by their understanding of what they don’t know. This can leave them with an incomplete understanding of CX, doubts about what they can achieve, and at risk of making poor resource and capability choices.
For example, one company directed all its staff to set themselves a CX-related annual objective. Without a shared understanding of CX, though, it backfired: people tried their best but many ended up with unrealistic, uninspiring or mutually exclusive goals. And yet their annual appraisals now depended on them!
In other examples, firms have made the mistake of truncating the scope of CX from being end-to-end to just the service functions. However, a key aspect of CX is making and delivering promises across teams, so as long as some teams feel free to set expectations that others have to meet, this approach will never work.
Many management consultants don’t help either. CX is still in its infancy, particularly in the B2B asset management industry, which means that few of them have studied the discipline of CX, ‘eaten their own cooking’, and lived with the outcome.
As a result, a lack of knowledge and understanding hands an ‘own goal’ to any cynics and your CX initiative can wither on the vine.
Reason 2: unclear ambition
Your CX initiative will fail if you are unclear about your strategy: what do you aim to achieve, how, and with what resources and capabilities. Indeed, in November 2018, Accomplish found that ‘unclear ambition’ was the biggest reason any strategic initiative failed.
Two years later, our CX maturity benchmark continues to validate this by demonstrating that ~85% of asset managers (November 2020) do not have a CX strategy that defines the effect they want to have on their clients and aligns resources and capabilities accordingly. Conversely, the remaining 15% have identified the mark on the horizon they are working towards, and have empowered different teams to act in support of the broader goal. Unsurprisingly, they dominate the leader board of CX maturity.
A lack of a central client journey tends to accompany a lack of CX strategy. This leaves individual teams figuring things out in their own areas and can reduce collaboration between teams.
Indeed, we found that tactical customisations had become the default for 70% of firms. This is an issue because customisations are costly and risky, and expensive processes that can go wrong are the paving stones on the road to client dissatisfaction.
Worse still, unclear ambition increases the scope for different teams to adopt inconsistent approaches that cause a disjointed experience for clients. Linking this to the section above about knowledge, the firms on the expressway to client dissatisfaction still sanction a client-facing team to make promises on behalf of a servicing team without first checking with them.
Ultimately, a lack of alignment on your CX strategy corrodes stakeholder support for your CX transformation and is a major reason why CX initiatives fail.
Reason 3: out-of-date culture
Lastly, we could not write an article on why CX initiatives fail in the investment industry without discussing culture. Remember Peter Drucker’s advice: “culture eats strategy for breakfast.”
No matter how strong your CX strategy is, it will fail if your colleagues do not align their behaviours. For example, in one investment firm that has successfully adopted a client-led culture, it is now a career-limiting move to pursue a ‘pet project’ that does not support central client outcomes.
Across the industry, however, this is not the norm. Why is it, then, that firms that understand CX and have defined their strategy for it do not always succeed? Accomplish’s data indicates the answer lies in culture.
20 years ago, interaction with clients was largely ‘direct’ through the sales and relationship teams. Because of this, it was neither uncommon nor unreasonable for other teams to defer to the salesperson’s understanding of what clients wanted. As a by-product, sales roles and their incumbents became powerful within asset management organisations.
Times have changed. Sales and relationship teams still own the ‘direct’ interactions, but marketing teams (upstream of sales) now own ‘indirect’ digital interactions, and downstream service teams are responsible for a mix of both. Directly-gathered intelligence can be rich but will contain gaps and inaccuracies. Similarly, data from digital interactions is empirical but needs real-world knowledge to ensure teams interpret it effectively.
To use an actual example, in today’s market, salespeople need to hear from their marketing colleagues if, within the same hour yesterday, 30 people from a server in Toronto visited a particular product page. The marketing team may not be able to identify the visitors, but the sales team should have a pretty good idea. If collaboration and mutual respect exist between teams, valuable information like this should flow freely, tasks for the day ahead should get re-prioritised, and pipelines should increase.
The same is true for the servicing teams. Among other things, they can identify revenue-at-risk by flagging abnormal interest in investment performance data. Such activity when fund performance is down or when the market environment is turning can indicate a client re-visiting its allocations.
In an out-of-date investment culture, a salesperson might refuse to recognise that anyone could tell him anything he doesn’t already know about “his clients” [eye-roll] and he would fail to exploit such insights. In truth, this behaviour sometimes even discourages his colleagues from bringing them to him in the first place.
This is not an academic discussion: about 65% of firms report that internal collaboration between teams is limited or not the default. The issue here is that a previously successful culture has hardened into dogma and failed to change with the environment.
Without encouragement, incentivisation and senior management role-modelling this person may be understandably reluctant to dilute his perceived position as ‘the’ source of knowledge about clients. We need to help him see how this approach is holding him back. A stronger stance would point out that failing to take into account valuable information is negligence.
Therefore, in an out-of-date culture in which upstream and downstream collaboration and mutual respect are absent, behavioural rigidity can place your CX initiative at risk of failure.
To conclude, when CX fails, it is not because of lack of capability – it is because of knowledge, strategy, and culture. Embed solutions to these risks in your CX transformation plan and you will find it easier to overcome the technical challenges like client journeys, segmentation and digital touchpoints.
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As a discipline, CX is still in its infancy. This is particularly the case in the context of B2B asset management. Accomplish is on a mission to change this with new tools that help asset managers stand-out from the crowd through the experience they give their clients.
This was the first blog in a 5-part series that will explore applied CX topics designed to support your CX transformation. In our next article, we will dig into the business case for CX.
- Why CX initiatives fail
- The business case for CX
- How to be memorable
- CX culture and behaviours
- CX – your first 100 days
If you found this interesting and would like to stay in touch with the series, follow Accomplish on LinkedIn.