Hello and welcome to Modern CEO! I’m Stephanie Mehta, CEO and chief content officer of Mansueto Ventures. Each week this newsletter explores inclusive approaches to leadership drawn from conversations with executives and entrepreneurs, and from the pages of Inc. and Fast Company. If you received this newsletter from a friend, you can sign up to get it yourself every Monday morning.
Customer obsession is heralded as a virtue in business. From Jack Bogle, who was passionate about democratizing investing for Vanguard Group account holders, to Jeff Bezos, who signaled a “relentless” focus on customers in his first letter to Amazon shareholders, CEOs and founders have built legendary businesses and cultures on a “customer first” mentality.
But a recent discussion I had with Zig Serafin, CEO of Qualtrics, which makes software that lets organizations listen to and act on customer and employee feedback, revealed just how complicated being “customer obsessed” has become. Thanks to the explosion of digital platforms, there are many more ways and places for customers to interact with your company. That means there are also more forums for them to leave feedback—if they bother to do so at all.
Qualtrics’s 2024 Consumer Trends Report found that 66% of customers won’t tell a company directly if they’ve had a bad experience, up about seven percentage points from 2021. And as many outlets have reported, trust in business is eroding, especially among the youngest consumers; a separate Qualtrics report finds that just 28% of Gen Z customers have confidence in the organizations with which they do business, compared with 57% of Baby Boomers.
Not surprisingly, Serafin makes the case that customer experience, done right, can boost a business—and not just by improving sales. Here are three takeaways from our conversation:
Good customer experience can help make operations better
Serafin cited the experience of Dow, the 125-year-old material sciences company, which used Qualtrics research and data to understand customer pain points, which included spending time researching and testing raw materials. With this knowledge in hand, Serafin says, Dow redesigned its website to help clients and prospects better surface information and visualize formulations of components and compounds. In five years, Dow.com evolved into the main hub for customer interactions, with a 450% increase in repeat visitors. The website generated 65% of new leads after the redesign, up from 5%. “Companies can benefit from understanding the relationship between operational data and experiential data,” Serafin says. “Both data sets are mission critical to the way a company operates.”
Your most valuable customers might just be your employees
“The CEOs coming to the realization that ‘customer one’ is actually your employee base,” Serafin says. In many cases, they start as customers and come to work for a company because they love the product or brand. “You really need to connect the dots there and say, ‘Okay, well how am I actually best connecting to their passion? And then how do I make them advocates?’” Southwest Airlines cofounder Herb Kelleher famously espoused the idea of employee-as-customer, once telling Fortune magazine: “You have to treat your employees like customers. When you treat them right, then they will treat your outside customers right. That has been a powerful competitive weapon for us.”
Happy customers are part of a virtuous ecosystem
“Company experience is not just customer experience, it’s about experience overall,” Serafin says. “CEOs need to step back and understand that what defines the experience of your company is the way your brand shows up, the way that your employees show up, the way that your products come to life—and then understanding the journey of how customers interact with your business.” Put another way, all of these elements are related. Companies with happy customers tend to get a brand lift: strong brands can attract passionate employees, and passionate employees care about making great products that, in turn, delight customers. “It can create a virtuous ecosystem if these things are all lined up correctly,” Serafin says.
What’s your approach to customer experience?
Does your company take a holistic approach to customer experience? Have you seen the link between customer experience, employee engagement, product, and brand? Share your stories at stephaniemehta@mansueto.com, and we’ll share the best examples in a future newsletter.
Read more: customers first
Customer service is a competitive advantage, so why are so many companies getting it wrong?
8 keys to making customer service a more positive experience
Can GenAI put a ‘human touch’ into customer experience?