DCX Links | September 1, 2024
From Drones and Automation to Solving What Really Matters... This Week's DCX Hot Takes!
Weekly inspiration, education, and coaching for customer-obsessed leaders.
Welcome to DCX Links!
This week explore how IKEA is using drones to improve inventory management and employee wellbeing, why measuring the ROI of customer experience is crucial, and why solving real customer problems should be your priority. There's also a review of the new book from Harvard Business Press, Smart Rivals, and how AI is reshaping the workplace.
Grab a coffee and dive into this week’s top reads!
Happy reading!
-Mark
Here are this week’s must-read links:
Drones Boost CX and Employee Wellbeing
The ROI of Customer Experience: A CX Pro’s Playbook
Solve What Matters
Book Review: "Smart Rivals"
Automation Surge: How AI is Shaping the Workplace in 2024
Digital and AI Leaders Are Pulling Ahead
Enjoy!
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Drones Boost CX and Employee Wellbeing
IKEA expands use of AI-powered drones in Europe, North America | HRD America (hcamag.com)
IKEA is doubling down on automation by deploying 247 AI-powered drones across Europe and North America, aiming to revolutionize stock inventory management.
What's happening:
IKEA is expanding its use of AI-powered drones, developed in partnership with Verity, to streamline stock inventory in its distribution centers across Europe and North America. The initiative will start with the Perryville Distribution Centre in the US.
Why it matters:
For customer experience (CX) professionals, IKEA’s move is a clear example of how integrating advanced technology can improve operational efficiency and employee well-being, key factors that directly impact customer satisfaction.
Key takeaways for CX:
Real-Time Data: The AI-powered drones provide continuous, real-time inventory data, enabling quicker responses to stock issues, fewer out-of-stock situations, and better fulfillment accuracy.
Employee Wellbeing: By reducing the physical strain on workers, the drones allow employees to focus on more meaningful tasks, enhancing their job satisfaction. This often-overlooked element contributes to better CX.
Operational Efficiency: Automating inventory checks ensures smoother operations, reducing delays and errors that could affect the customer journey.
The bottom line:
As IKEA expands its AI capabilities, CX professionals should consider how automation can drive operational excellence and employee satisfaction, ultimately leading to a superior customer experience.
"Staying on top of the latest CX trendaia tough. Thankfully, the DCX newsletter does a brilliant job of curating the must-know info.” - Jimmy, CX Leader, Google
The ROI of Customer Experience: A CX Pro’s Playbook
The Customer Experience ROI Study | Watermark Consulting
Watermark Consulting’s latest study proves why investing in customer experience (CX) pays off—and why CX professionals should take note.
What’s happening:
Watermark Consulting's new CX ROI Study highlights the long-term financial impact of great versus poor customer experiences by comparing stock returns of top and bottom CX performers over 16 years. The results? CX leaders outperformed the market, while laggards significantly underperformed.
Why it matters:
For CX professionals, this study is a definitive answer to skeptics questioning the ROI of customer experience. It demonstrates that superior CX isn't just a customer-facing initiative—it's a key driver of business value, revenue growth, and cost efficiency.
Key takeaways for CX:
Financial Impact: CX leaders generated a total return 5.4 times greater than laggards, proving that good CX boosts profitability and shareholder value.
Revenue Growth: Happy customers are more loyal, less price-sensitive, and more likely to refer new business—leading to sustained revenue increases.
Cost Efficiency: Loyal customers reduce the need for costly acquisition efforts and strain on customer service, helping control expenses.
The bottom line:
Watermark’s study reaffirms that investing in CX is crucial for long-term business success. CX professionals should leverage these insights to advocate for CX initiatives, emphasizing how a well-designed experience drives both customer loyalty and financial performance.
Solve What Matters
Low-performing teams often focus on adding features rather than addressing actual customer needs, leading to ineffective outcomes.
What’s happening:
Pavel Samsonov argues that teams frequently fall into the "Build Trap"—prioritizing product problems over customer problems. This occurs when teams focus on features like trackers or dashboards, often driven by internal stakeholders, without considering whether these solutions meet customer needs.
Key takeaways for CX professionals:
Focus on Outcomes: Prioritize solving customer problems rather than adding features.
Empathy First: Align team goals with customer needs to create meaningful, practical solutions.
Avoid Vanity Metrics: Shift from output-driven goals to outcome-based strategies that enhance customer experience.
Why it matters:
Understanding the distinction between product problems and customer problems is crucial for CX professionals. Addressing customers' real issues ensures solutions that genuinely add value, leading to higher satisfaction and better business outcomes.
The bottom line:
Stop pushing features; start solving customer problems to drive meaningful impact.
"Love your content and valuable insights into CX and industry trends. Thanks for sharing with us!" - Corey
Book Review: "Smart Rivals”
Competent Rivals: How Innovative Companies Play Games That Tech Giants Can't
"Smart Rivals" explores how smaller, innovative firms can successfully compete against larger industry giants by strategically leveraging their strengths. Felix Oberholzer-Gee emphasizes that smaller companies can thrive by focusing on customer-centric innovations, creating value through differentiation, and executing with agility. Drawing on case studies and research, the book offers practical insights for leaders looking to outmaneuver bigger competitors.
Why it matters:
For CX professionals, the book emphasizes the importance of understanding customer needs deeply and using that knowledge to drive innovation and differentiation, even in competitive markets.
Key takeaways for CX professionals:
Leverage Community: Foster customer loyalty by building community connections, as seen with Powell’s Books.
Creative Data Use: Use internal data is used to improve products and customer experiences, similar to Patagonia.
Strategic Differentiation: Stand out by focusing on what makes your brand unique rather than mimicking tech giants.
The bottom line:
This book is a valuable resource for those looking to challenge industry leaders by focusing on smart, customer-driven strategies.
Automation Surge: How AI is Shaping the Workplace in 2024
AI automation in the workplace is about to reach a major tipping point (https_fortune.com)
AI Automation in the Workplace: A Tipping Point
AI integration in the workplace is accelerating as companies gear up for more automation in 2024.
What’s happening:
A recent survey by Duke University and the Federal Reserve Banks shows a significant shift towards AI-driven automation in US companies. Over half of the businesses planning to automate tasks in the next 12 months intend to use AI, marking a sharp increase from the previous year.
Why it matters:
For CX professionals, this surge in AI adoption underscores the growing need to integrate AI tools thoughtfully, ensuring they enhance rather than disrupt customer experience.
Key takeaways for CX professionals:
AI Skill Importance: Mastering AI tools will be crucial as they become more integrated into customer-facing roles.
Enhancing CX: Use AI to optimize processes without sacrificing the human touch, ensuring technology improves the customer experience.
Job Transformation: Prepare for evolving roles where AI complements human efforts rather than replacing them entirely.
The bottom line:
As AI becomes more prevalent, understanding how to leverage it effectively will be crucial for maintaining a competitive edge and improving customer interactions.
Digital and AI Leaders Are Pulling Ahead
Digital and AI leaders outcompete | McKinsey
The gap between companies leading in digital and AI capabilities and those lagging is widening significantly.
What’s happening:
A McKinsey study shows that digital and AI leaders outperform laggards by two to six times on total shareholder returns (TSR). The maturity gap has grown by 60% in recent years, driven by leaders' holistic investments in hard-to-copy capabilities.
Why it matters:
For CX professionals, this widening gap highlights the urgency of effectively integrating digital and AI technologies. Companies that do so can deliver superior customer experiences, driving loyalty, efficiency, and long-term growth.
Key takeaways for CX professionals:
Compounding Advantage: Invest in digital and AI early to drive compounding value and outperform competitors.
Holistic Strategy: Prioritize a well-rounded approach, integrating tech with customer experience.
Actionable Insights: Use data to reduce friction in the customer journey, enhancing overall CX.
The bottom line:
Companies that effectively integrate digital and AI into their operations are pulling ahead, creating a significant competitive edge. CX professionals should leverage these technologies to optimize customer interactions and drive business success.
I hope you found this week’s links and commentary useful. If you have suggestions for future DCX Links editions, send me a note.
Thanks for being here. I’ll see you next Sunday at 8:15 am ET.
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PS.
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-Mark