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Steve:
With all the exciting things happening in the customer experience field, it's sometimes easy to forget the fundamentals.

Luke:
So I think there's a little bit of a skills gap, right, what we would call a competency gap within our operating framework for saying we need to upgrade the skills that the people have when they're executing customer experience, because in order to be laterally aware of what's happening in the marketplace and the changing and expectations those competencies have to be automatically

Steve:
Getting back to basics and how the newer experience management concepts fit into the mix on this episode of The CX Leader Podcast.

Announcer:
The CX Leader Podcast with Steve Walker is produced by Walker, an experience management firm that helps our clients accelerate their XM success. You can find out more at Walkerinfo.com.

Steve:
Hello, everyone. I'm Steve Walker, host of The CX Leader Podcast and thank you for listening. On The CX Leader Podcast we explore topics and themes to help leaders like you leverage all the benefits of your customer experience and help your customers and prospects want to do more business with you. As a CX professional, I get really excited about some of the new concepts, practices and technologies that are available to help companies provide the best possible experience for their customers. But it's easy to get swept away by the excitement of how CX is growing, and we tend to forget some of the basics of our profession. Add to that the growing field of experience management or XM, and perhaps we need to step back and remember some fundamentals and explore how CX fits into these newer concepts. My guest on this episode is uniquely qualified and is going to help put some of these ideas and basics into perspective. I'm happy to have on the podcast with me Luke Williams, a distinguished principal XM Catalyst at the Qualtrics XM Institute. Luke, welcome to The CX Leader Podcast.

Luke:
Yeah, thanks for having me. I was I was I was thinking about this podcast for a very long time, wondering if I could actually pull it off. So let's see how it goes.

Steve:
No, glad to have you. And I you know, I think a lot of our listeners, frequent listeners, will be very familiar with you and obviously the Qualtrics XM Institute, because we've had many of your colleagues on as guests, too. But why don't you just give us a little background how you got into the customer experience space?. I think, you know, everybody's always interested in everyone's journey for how they become a CX pro, so…

Luke:
I think like most people, I ended up as a CX professional entirely by accident. If you if you look at the educational background of people who work in customer experience, you tend to find people who have more of a social science style background. And I came out of grad school, I did my master's degree in research methods and statistics. And I if I'm honest, I really wanted to go work at the U.N. I wanted to do policy work. And my goal was to use research to change the world because I had to believe then and I have a belief now that most of the challenges that we face in the world are just a result of us not properly understanding problems or analyzing them correctly. And as a result, I have like a doer fixer mentality and I like to do it with technical approaches, except that I came out of grad school in 2007, so absolutely zero people were hiring for researchers who wanted to save the world. So I did the next best thing. I went to go work for the financial services practice at the third largest research firm in the world, helping credit cards redesign, helping credit card companies redesign their cards and offerings, and spent probably the last 15 years now going from being just purely a researcher, focusing on research methods, then into the analytics game for quite a while and then into strategy, focusing on how do we actually adopt customer experience as a tip of the spear front of the house sales strategy that actually pays off with ROI. So that that progression from researcher to consultant has been a long one. But I think my principles have remained unchanged. And that's how I got here today.

Steve:
You know, your story is unique like everyone's is, but it's also kind of just shows you that, like you said, nobody actually got into this business on purpose, or at least not 20 years ago, they didn't for sure. So.

Luke:
Well, you know, in many ways, CX is very different from if you look at employee experiences and counterpart. Yeah, employee experience has IO psychology. It has an academic foundation from which you go study IO psychology and then you go kind of into the EX game. Customer experience still to date doesn't have a formalized, regimented academic discipline. It draws from three or four disciplines. Right, coming from marketing sciences, the service sciences, some psychology now into technology. So as a result, you know, the you know, you see people who are like, oh, I used to work in sales, I used to work in marketing, and now I ended up here. And it's the only thing that that that is in common for all CX professionals is that most of them have this mental deficiency where they can't walk past something that's broken and forget about it. Right. They just they see it and they have a natural aptitude towards wanting to fix things. And I think that that's, you know, that's universal. So I'm encouraged about the future because we're not limited to some of that, some of the things that get taught in schools in which it can be a real barrier to innovation.

Steve:
Actually, this is what I wanted to get into today, because, again, you always have such unique kind of perspectives on things. But one thing you just said that I've never heard before is that it it really doesn't have an academic grounding in the fact that you got to pull everybody into it to really talk about customer experience. It it has to pervade the organization. It has to be universal in order for it to work. But what are some of the big kind of macro trends that you're seeing right now? What. Kind of the things that are on your mind is just a guy that tries to keep his finger on the pulse of what's going on with CX?

Luke:
Well, I think they're they're probably there probably is a bigger push now than there ever has been in academia to get themselves organized around trying to understand what what the leadership is strong and and worth teaching, which is something historically they haven't done really well. But I think the bigger trends that I'm looking at in customer experience, I still think of it the same way. I think about innovation generally, which is the most effective method for developing innovation, is to do it outside or just outside the ecosystem that you're trying to innovate within. So if you do it on the outside, you get it to run and work and then you take the thing that's working and running and then you get back into the ecosystem. And I think that whenever you're seeing sort of these what I would call emerging strategies, customer experience, still being an emerging strategy of like we're still trying to figure out what customer experience is and jam it into the organization. And I think we've been lapped by newer things and ideas. So things that are actually younger than customer experience have been more effective at being adopted globally. I think the trend I'm seeing is that customer experience is right on that precipice of accelerating. And people say, well, customer experience been around and lots of companies have been effective. I would challenge that statement and say, look at the maturity curve of maturity curves. You can find them anywhere of how mature companies are in customer experience. You can see Forresters, you can see Qualtrics at the XM Institute's opinion on that. And the majority of the time you see that most people are still sitting on the early side of the maturity curve. That is evidence that the thing that we've tried to proliferate in scale hasn't taken hold yet. There's a lot more work to be done. We can look to these, I think, adjacencies and say, what can we learn from what the data science teams did and how they how did they get incorporated across every aspect of the business? And I think some of the scientific CX tends to be a little bit more human. You know, things like data science and finance are universal because, you know, people have a high degree of numeracy. Right. And that's just a skill. So making customer experience a wholly adopted skill is how you'll know it's become fully accepted, is that customer experience will sit in every organization and not sit as an initiative or project. But you'll have a center of excellence and the center of Excellence. Their job is to shepherd customer experience across the organization.

Steve:
So let me go back to this concept of the maturity curve and how how few are really moving up on that. Is that an indictment of our profession or is that an opportunity for professionals in the XM space?

Luke:
Yes.

Steve:
OK. [laughing]

Luke:
It it is. It is. But it isn't right. I mean, it's very hard to get an organization to change when you are pushing on the walls as hard as you can.

Steve:
Right.

Luke:
So I think people may be familiar with what they call the three VP problem. Right. First, VP comes in with a new initiative, does a bunch of great work, gets your telemetry system up and running, get some basic ticketing up and running, gets a little bit of ROI going, and then that person cycles out, moves on to a new job. The second VP comes and goes, OK, all the basic stuff is taken care of. And now we need to get into the real work of of mining, you know, into the value of what this brings to the organization and getting real organizational change to occur. Right. And then what ends up happening is that the corporations tend to look at that second VP and they have almost an allergic response to being told that you're not doing well enough. They don't see the path. They don't understand the risks. They don't understand the opportunity costs. And so that second VP cycles out and then the third VP comes in, basically says the same stuff. But because now they've heard it again from another professional, right. They're saying, OK, they're warming up to this idea. Right. It's the same way somebody gets rejected from a car dealership buying a car because they're credit's no good. The person who holding their credit's no good, they're going to yell at that person. My credit's great. They're going to go down the street to another car. Dealers like a credit's no good. Like I find what can we do? But they'll never go back. So we're like that. We're getting into the third VP problem now. Yeah. Which is like we've had enough people sort of bang on the doors and explain the value that now companies have no choice but to invest.

Steve:
Well, I'm glad to hear you say it was yes and not a yes, but because I do, I say it all the time. I think it's a great time to be a CX pro. I mean, the appetite for this inside organizations. And I do think that, you know, I have an even longer perspective than you. And I do believe that we have made progress over the last several decades in terms of making this a better discipline inside organizations. And I do believe that on kind of on a macro basis, customer experiences do get better. And because of the competition and because of of innovation in all the things you're talking about. So but, you know, one of the things I've always said, and particularly I think it's particularly true on the customer side is you you're not in control everything either. You can only really control what you're doing because the marketplace and customer choice is always evolving and you can't control all that either.

Luke:
No, you can't control all of it. But you can be aware.

Steve:
Yeah. And you can make some assertions about what's changing.

Luke:
And I think I think part of the challenges that we see right is that I agree that right now is a tremendous opportunity for customer experience professionals. There's also a really significant risk, and that risk is people who are coming in new or sideways or maybe don't have certain like discipline experience within this realm may may try to challenge some rules of gravity that can bend but can't break. So I think there's a little bit of a skills gap, right. What we would call a competency gap within our operating framework of saying we need to upgrade the skills that the people have when they're executing in customer experience, because in order to be laterally aware of what's happening in the marketplace, in the changing and expectations, those those sorts of skills, routines, behaviors, the things that we foster, the things that we require, how to run a program, how to run a measurement analytics strategy change, you… those things have to be those competencies have to be automatic. Right. In order for you to be. It's the same thing as like any let's say I happen to be a huge hockey fan. Best hockey players in the world we're constantly on foundational stuff.

Steve:
Yeah.

Luke:
Because they can't predict what's going to happen in a game. So their job is to to be so skilled and so practiced that those competencies that when the moment arrives where they can choose to exploit opportunities, that they're ready to do that. So I would say that, yes, I think we we can. You know, only control certain things, but the things that we can control can have a significant impact on the outcome that we generate.

Steve:
So let's go there now and just kind of talk. Let's let's go back to some basics and say, like, you know, kind of reset us in terms of all the things that are going on. But what are the things kind of basic to keep customers coming back? And what are the kind of the fundamentals for CX pros that they should always keep practicing and never overlook?

Luke:
I mean, one of those answers is much shorter than the other, right? I mean, I think customers come back for differentiated value. The challenge being is that what value means and what is differentiation is contextualized to the customer, right? What I want versus what my wife wants are two different things. And what I consider to be differentiated is separate from what she wants. In some cases, the things I differentiate on or expect differentiation on are different from hers. So it's really most of the time it always comes back to like, you know, comes back to product and and placement and services and all these kinds of things. But I think that that's what customers want. And I think there's a good deal of research to indicate that if you're looking to acquire new customers or if you're looking to gain more share of wallet, customer lifetime value, that that's absolutely the fastest path. And if you look at companies that that demand, you know, crazy behavior in order to survive, right, Tend to be the biggest brands on the planet they've got that figured out. So what I think it means from a customer experience professional standpoint, is that you can't talk about differentiation if you can't talk about basic needs first. Right. There's no reason in the world that I should receive an email at 10 o'clock on a Saturday night that says, oh, your retirement account just added a new trusted device. If this wasn't you, please call this number. And then I call the number and find out it's not a 24-7 number. Yeah. What what are you talking about. Did you just. My retirement is being hacked to a human until Monday or in this case Tuesday like that. That is the type of stuff we're saying. Like you can't even financial services is so hard to differentiate because basic needs are not met well and

Steve:
It's so heavily regulated. Some of it, you know, you can't even tailor it because of the regulations.

Luke:
And I think even those are changing. Right. As we start to see the federal government, you seeing that the federal agency Customer Experience Act finally come into fruition? I think everybody in the business has had their hands on editing that at some point, which has been fun. But like, we need to be able to solve for basic needs, really critically, which means we need to be able to serve customers fully, effectively, authentically, quickly with some degree of surety in order to earn a right to differentiate.

Steve:
My guest on the podcast this week is Luke Williams. We're having a fascinating discussion about all the innovation and new things that are happening from his unique perspective as a distinguished principal XM Catalyst at the Qualtrics XM Institute. I've known Luke long time. He's always fascinating to talk to. And as usual, I'm learning a lot by just hanging around with him today. What are some of the tips you'd give to a CX pro in terms of how they could help their companies find these kinds of differentiated value and then put that into place? From an experience standpoint, what are kind of the things that you're looking at there?

Luke:
I mean, I think I think there's probably a couple of parts to that, right. The first is discovering what what is acceptable differentiation to customers, which can be hard to know. But I think when when you look at, let's say, Qualtrics is four pillars of experience, that's predominantly where most product experience sits. Right. Like the innovation techniques and all that kind of fun stuff. I think the challenge that most people have is not can they come up with good ideas? It's do they have a disciplined process for generating good ideas because anybody can have a moonshot. But if you can't scale innovation, it can never be a core competency of a company, which, of course, is fine. Right. There's lots of companies that don't have innovation as a core competency and they tend to save their money, chase the market. Those first movers, those leaders, they're going to get an outsized benefit. But they're like two percent of the market, five percent of the market. The trick is, is that most companies, they see sufficiency as a survival methodology. But eventually that will fade. Right. And all you have to do to to see evidence for that is look at the history of the Fortune 500 over the past eight years and the fact that everybody cycles out sufficiency. You know, there's companies that that 15, 20 years ago with the biggest brands in the world that nobody thinks about today, like Kodak. Nobody. I mean, how often, you know, I mean, and they're still huge brands, but they've shifted their strategy to away from innovation towards central operating. I think that's a I think so. It's defining what is scalable innovation of one. And then two is getting the organization to adopt it. Right. Is like what is the ROI of us doing this and then doing it on a perpetual basis? And most people can't do that math and I'm not sure why or they can't be convincing enough when they do it.

Steve:
You mentioned the four pillars and I just you know, I am fascinated with experience management as an overall category. And you mentioned the EX side of that. You know, there's a little more academic grounding there and but really what we're talking about today is putting all these kind of experiences together in kind of one central place. And, you know, even if you're in the CX business, which I think a lot of our listeners are, and it's called The CX Leader Podcast, but increasingly we want them to be thinking more more broadly than that. So just talk a little bit about XM and how you bring in not just the experience data, but the operating data. And what are the implications for for, say, the CX pros in that coming evolution?

Luke:
Yeah, I think anyone who's seen know Qualtrics is vision for the world and experience management in the four pillars, you'll probably recognize that three of them, right, PX, BX and CX if we're one hundred percent honest, 15 years ago we just called it research. The problem was, is that we were delivering high quality research with high quality methods to individual disparate owners and we were delivering great independent value. But it wasn't being leveraged across teams. Right. So the so when people say, oh, is like is XM your research or is this just like a fresh coat of marketing paint? No, it's not like this is a material movement closer to action by forcing people through the systems that they use to collaborate with a severe bias towards doing something different. Right. So when we start to look at how customer experience and product experience come together, that is how we unlock customer value creation. When we look at customer experience with brand, that's how we not only understand what are the expectations that branding is set for the experience that I'm going to have and the difference between the expectation, the experience being the actual important value creation. That's also a reflexive thing where word of mouth starts to interfere with companies desire to brand a certain way. So basically, we've said is this used to be a unified skill set and the deliverable was being disparate. Now we've unified the skill set and we've unified the deliverable because the ability to distinguish between those things to the customer decreases. Because when you ask customers, what do you think of a company, part of it is the way that they're served as the employees. They interact with the product that sits in their pocket 14 hours out of the day and what they expect from that brand every time a new release comes. So I think we're thinking about this from a customer experience standpoint. We differentiate the types of skills that were unique to those things. So if you want to design a new credit card, a new loyalty program, all those innovation things tend to sit in the bucket because most of CX comes from an operational background. It comes from the total quality movement and all that and the marketing department's tracking of customer loyalty. And it was separate from innovation place. So now what we're saying is those things all need to sit in one platform because at some point you're going to ask yourself, well, we've improved the customer experience by 10, 15 points, and that's great. What do we do next? That's a very viable question. There's a whole new set of tools and skills that are going to allow you to generate ideas, test the veracity of those ideas. Right. And then be able to develop some kind of our own model that suggests whether or not you should move forward, which is part of that process of pushing the company on how to deliver better customer experience. Know look at things like customer care and digital. If you want to innovate customer care and contact centers in the first place, you start with that is with the digital experience. As crazy as that sounds, yeah, right, because it's picking up the phone is not the problem. The problem is that people are calling us because they're trying to do things and they can't do them on the website. And we can't redesign the contact center until we decrease volume and we can't decrease volume without changing the digital experience. So I think it's all interconnected. But XM is one of those things that for me mimics the way that companies work. And the more that you're operating framework mimics the natural environment of the company, the more likely you are to have success if you communicate value with a high degree of currency.

Steve:
You know, Luke, we've been talking a lot about kind of quantitative research methods, but I know you feel strongly that maybe we're overlooking one of the best and oldest research techniques and just talk about kind of your perspectives on qualitative research and its role today.

Luke:
One of the things that when we talk about data at Qualtrics, we talk about O-data, which is the operational data that tells you what's happening inside of a company. We talk about X-data, which is why things are happening inside of a company. And I think one of the things that happens is that people revert to the thing that they're used to most commonly, and they sort of narrow their gaze. And what I'm here to promote the idea is that X data is everywhere and there's like 30 or 40 different flavors of that. And qualitative as a technique has been largely overlooked because it frankly doesn't scale as well as quantitative research does. Right. We want to get more information. We send more surveys, we do more listening on customer care calls. We look at more clickstream data from your website. But I think, you know, if that was enough, we wouldn't see average maturity levels be so low. If we're thinking about customer experience, part of what's missing from this story right now is, is our ability to tell human stories, which is really crucial because you can tell a CFO, right, and say, hey, you know, our billing process is broken and it's causing real pain for customers. And they say, yeah, we know it's a non issue, it's a technology process issue. It's going to take about six or eight months to unravel that thing and fix it. And then we show you a video of of the customer who's crying in her living room because she can't pay her mortgage. And this medical bill she thinks she owes because you're billing processes broken. Now, I think data obviously I'm a big quant guy and my modeling background, but I think quant gets you in the room. It tells the story of why you need to listen to me today. But I'm not going to convince you with those numbers because you've already seen them. You need to hear the human side of what you get out of this and then how that scales out. I need to paint a picture. And the beauty of qualitative is you hardly ever know where it's going to go when done well. And it's and when I was doing my research methods, master's degree, people shouldn't hold it against me. I was a big guy. I was like, anybody can do quant calls really hard. Turns out that's true. I was terrible at it. So I went to the quant lifestyle because it was the thing that everybody could do. But the qualitative aspect of this is the one that's the most overlooked because historically it was expensive. It was difficult to execute. You have to like fly. You got to fly to Omaha to run four groups in Omaha. And the gummy bears are great, but it's probably not worth the plane ride if you can't scale globally. That's changing. Right. So I think incorporating that style of data back into your X-data telemetry system is a crucial way of of adding very significant value from a very different type of data source that most people honestly crave, because people remember stories a lot more than they remember data. And the way that you know that is that you've got stakeholders who are complaining about some story that happened before you ever even arrived at the company you work at because they remember the story. They couldn't tell you anything about the data. I can tell you the story of in fifteen years, I'll be able to tell you the story of Qualtrics rise to greatness and establishing experienced management and I won't remember the IPO price. Right. We're going to attach to those stories. And I think that that's something that we need to take into account as experienced management professionals.

Steve:
All right, Luke Williams, we've reached that point in our podcast where we ask every guest to provide take home value to our listeners. This is your best idea or tip or something that they can take back to the office the next time. If it's this morning or it's tomorrow or over the weekend, your one best tip for how they can go back and improve some of what they're doing with their own XM and CX program. So Luke Williams, take home value time.

Luke:
This is a tough tip to give, so I want you to take it and really think about it, chew on it. I want you to be ravenous about science and innovation. There is something really powerful about getting things right that challenges our perception of the world. When we first looked at things like the wallet allocation rule and said we should be seeing certain relationships between spending and satisfaction, and if we're honest about the data, we don't see them the way that we expected. And there was something really crucial in learning. What was that Delta? Between what we expected and what we saw, we learned so much in that delta. It literally changed everything about how I think about customer experience to being customer experience as an entirely competitive field changed everything for me. So what I would say is apply more rigor. Don't be afraid to lean into the science of it. It's a great backstop for you. And like I talked about earlier, it frees you up to be creative if you have a platform not based on your belief, but on something that's quantifiable, scientific, demonstrable, you're going to get a lot farther. If you do that, things will get easier. And it'll also allow you to find inspiration from everywhere, from outside your field or within. You know, those are going to be things that that happen when you start to lean towards what can I take away from this? How can I make a mechanism out of that? How can I do something different with the thing? I was given

Steve:
Luke Williams's distinguished principal, XM Catalyst at Qualtrics XM Institute. He's been a great guest on the podcast. Luke, I really thank you for coming on this episode, as always. It was very enjoyable.

Luke:
Thanks for having me.

Steve:
And if anybody wants to continue the dialog, they can get a hold of you at the XM Institute website and or LinkedIn or just anybody wants to try to connect with you.

Luke:
Forget me. Just go to the xminstitute.com. There's we have a whole team of catalysts who are 50 times smarter than me and amazing content that's always being updated. So find the best science there.

Steve:
Yeah, we talk about a lot on this podcast. You know, if you don't have XM Institute saved your favorites on your browser, that's that's another take home value yet double take home value this episode. So and if you want to talk about anything else you heard on this podcast about how Walker can help your business customer experience, feel free to email me a podcast at Walkerinfo.com. Be sure to check out our website, cxleaderpodcast.com, to subscribe to the show and find all our previous episodes, podcast, series, contact information. You can drop us a note, let us know how we're doing or give us an idea for a future podcast. The CX Leader Podcast is a production of Walker, where an experience management firm that helps companies accelerate their XM success. You can read more about us at Walkerinfo.com. Thanks for listening and we'll see you again next time.

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