Problem 7: The Red Queen
Theory is Still Valid
You have to keep running, just to maintain your position in the race.
NPS performance over the last 15 years suggests, on the surface, that corporations are not improving in the eyes of their customers. The reality is that standing still has become a lot harder.
New entrants in an industry are partly to blame. They provide innovative experiences where other companies have stagnated. They almost always raise the bar (otherwise they would get no traction). So, whether newcomers succeed or fail, customer expectation permanently shifts upwards.
“Well, in our country,” said Alice, still panting a little, “you’d generally get to somewhere else — if you run very fast for a long time,
as we’ve been doing.”
– LEWIS CARROLL, THROUGH THE LOOKING GLASS
NPS is a metric that is calibrated by customers against their expectations. To a large extent because of these new businesses, getting the same NPS equates to achieving better performance every year.
No wonder that not many existing companies see NPS improvements. Few get ahead of the expectation curve, more fall behind.
By the time incumbent companies react, the costs to correct the situation can be beyond reach.
Continuous improvement, just to stand still
The implications are significant. Without a sustained focus on continuous improvement and innovation around CX, organizations drop back. They lag their competitors – or substitute products – or they leave gaps which new entrants fill.
By the time incumbent companies react, often as a result of financial crisis after years of inaction, the costs to correct the situation can be beyond reach.
To survive, an organization must understand this basic dynamic of customer experience and its consequences. Action must orient towards CX.
Maintaining parity of NPS performance requires continuous improvement. Actual competitive advance requires even more. A world where expectations accelerate is a world of heightened risk. This risk is greatest for businesses that lack ability and leadership in CX.
Because it is now a Red Queen world.
Read the next problem, Problem 8 – CX programs don’t generate results.
“A slow sort of country!” said the Queen. “Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that! “
– LEWIS CARROLL – THROUGH THE LOOKING GLASS
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