Why CX Leaders Should Care About Blockchain

Blockchain – along with related concepts such as cryptocurrency and NFTs – seems to be everywhere these days. The basic idea behind blockchain is the creation of a shared digital “ledger” of transactions in which the blockchain network collectively verifies the asset’s value. Each “block” contains the transaction data, as well as a timestamp and a “hash” of the previous transaction conducted within that ledger. A transaction cannot be retroactively altered; proof of it exists in other blocks, as each transaction is linked to the one before it. Therefore, each additional transaction – or block – makes the chain stronger and more immutable.

 

One feature that makes blockchain attractive for many businesses is its ability to reconcile transactions immediately and reliably. Instead of waiting long periods of time for the parties involved in a transaction to verify everything, all the information already exists in the blockchain databases. There is no need for third-party intermediaries or lengthy – and potentially costly – delays, just a swift, verifiable, and permanently recorded transaction.

 

How Companies Are Using Blockchain

Although blockchain is still a relatively new technology, some companies are already finding ways to leverage it to solve long-term issues. For instance, Walmart Canada decided to use blockchain technology to solve a long-standing issue in its supply chain regarding overly complex, often frustrating invoices and payments.[1] Data discrepancies were a constant challenge for the retail giant, given its need to manage 70 third-party freight carriers and over 200 unique data points. Walmart Canada and its partners created a blockchain-based solution that allowed every data point to be accurately gathered and recorded along the way, while also making it visible to all parties involved. As a result, Walmart Canada reported a massive drop in disputed invoices: from nearly 70% before implementing the system to less than 1% after implementation.

 

A 2017 Harvard Business Review article suggests a four-quadrant framework for understanding how blockchain might take hold in the wider business world.[2] The four categories suggested are:

1. Single-use: Simple “upgrades” to existing technology, such as individuals using blockchain and bitcoin as alternative payment methods.
2. Localization: Innovation based within a small, coordinated group, such as using blockchain to coordinate transactions within a small network of organizations.
3. Substitution: Building on existing ideas, but with bigger and more public applications, such as the very existence of cryptocurrencies and related innovations.
4. Transformation: Big innovations for big groups – or society as a whole – such as “smart” contracts”.

Currently, many companies are focusing on the first two types of applications. A company might test the waters with a single-use application, such as accepting bitcoin as payment along with traditional cash, credit, debit, and so forth. Localized applications also can be a way “in”; the Walmart Canada supply-chain system is a great example. Change happens inevitably, but not necessarily rapidly. Wise companies will be ready to act when it does, and they will be prepared to lead the way.

 

How Blockchain Can Affect CX

While it may not seem like it on the surface, blockchain can be closely tied to the customer experience function. According to a PwC study, nearly 80% of American consumers say that speed, convenience, knowledgeable help, and friendly service are the most important elements of a positive customer experience. Blockchain technology – with its focus on fast, reliable, convenient, and secure transactions – can make a major difference in achieving those goals. Imagine a world of swift transactions, easy-to-use portals, and reliable customer service that are based on immutable databases with significantly lower likelihood of error.

 

Additionally, CX is inextricably tied to employee experience – in many ways, they are two sides of the same coin. Blockchain has the potential for game-changing applications that affect the employee experience. For example, consider the possibilities in regard to upgrading and improving payroll. A blockchain-based payroll system – much like Walmart Canada’s invoice system – could ensure fast, reliable payments to both full-time employees and independent contractors. Companies could also provide employees more flexibility by allowing wages to be paid in any number of currencies.

 

Blockchain applications aren’t just for money, however. Secure data storage is at the heart of the technology, which is important for both Employee Experience (EX) and CX. A 2019 study from Deloitte revealed the following :

• Only 38% of surveyed respondents strongly agree they know where all their customer data is stored.
• Although companies are attempting to gain more data ownership, they find it challenging to pool the budget to pay for it (55%), find a single solution that meets needs (43%), and create a unified data management strategy across all lines of business and/or teams (41%).
• Companies have, on average, 17 different technology applications leveraging customer data, with an average of 28 different data sources used for generating customer insights and customer engagement. In fact, 16% have 41 or more data sources.

All these factors paint a clear picture of the need for centralized, secure data. Customers are more likely to trust a company with strong data security. Companies can also benefit from secure, accessible data – whether that’s for crafting a CX strategy, managing information from job candidates, or something else entirely.

 

Blockchain and CX

What should companies ask themselves when considering how to incorporate blockchain into their CX strategy? When I spoke with Bob Azman of the All Things Considered CX podcast, I shared an acronym – inspired by my time as a chef – that seems applicable to the situation: EAT (Educate, Advocate, Transform). Regarding blockchain and CX, that might look like:

• Educate: Be proactive in learning all you can about blockchain and its potential applications in pay, benefits, and more. Step out of your comfort zone and learn from your internal customer base. Partner with other professionals to share data and experiences, and stay up to date on crypto and blockchain.
• Advocate: Figure out what the business needs and have CX be the answer while also presenting it from an EX perspective. Advocate for the future of pay because that is what employees may want. This will reveal the company’s openness to listen to their employees and making the necessary adjustments to delight them. Then, be the one who offers it as a solution. Be the leader who is informed enough to drive changes toward a safer, more secure payment structure.
• Transform: Be ahead of the curve regarding blockchain. The customersboth employees and end usersare waiting for you to do something with the data you have been gathering. Create the opportunities that will leverage blockchain to the company’s advantage and pivot as needed to accommodate. Now is the time to solve real business issues through CX.

 

Companies are seeking CXOs who can meet these challenges head-on and lead the way. They want their CX Leaders to ensure that the brand promise and the execution are aligned. Customers are savvier than ever, and they can easily see through inauthentic attempts to engage with trends. Blockchain is an area that is not yet explored sufficiently. A great CX leader can see the writing on the wall, take note of how other companies within the ecosystem are acting, and create an anticipatory culture to be there before everyone else.

 

Like so many other technologies, blockchain is currently a headline-grabber. This can naturally make some people and organizations a little wary of it. Change can be tricky, especially if handled poorly. However, with a smart strategy and the right expertise, blockchain might be the HR solution you need to transform how business is done.

 

By Christopher Rios

 

About the Author

Christopher Rios is a Founding Member of Blue Rock Search. He has over twenty-five years in Hospitality and Executive Search and leads the Blue Rock CX practice. His desire and passion to deliver an exceptional and engaging Client and Candidate Experience has led him to his current role as Chief Experience Officer. He has over fifteen years of hospitality experience as an executive chef and has been recruiting executive and senior-level talent in Customer Experience, HR, and Hospitality for over a decade.

 

In his capacity as CXO, Chris oversees the retained CX Executive Search practice, which specializes in the identification, assessment, recruitment, and onboarding of executive-level CX leaders and their teams inclusive of Leaders across all Experience Disciplines (Patient, Digital, User, Employee, etc.), Customer Success, Care & Support, Contact/Call Centers, Professional and Managed Services, VOC/VOE as well as Insights and Analytics.

 

 

[1] Vitasek, Kate, et al. “How Walmart Canada Uses Blockchain to Solve Supply-Chain Problems.” Harvard Business Review, 5 January 2022.

[1] Iansiti, Marco, and Lakhani, Karim R. ”The Truth About Blockchain.” Harvard Business Review, Jan.-Feb. 2017.