[Executive Corner] Reinventing Services With Customers at Heart

[News Reporter]

For consumers, it’s the ‘experience’ that counts.

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, 73 percent of all customers place experience near the top of their checklist when making purchasing decisions, following only price and product quality in order of importance.

LG, a company that strives to ensure that ‘Life’s Good’ for all, has prioritized the art of providing F.U.N. – first, unique and new – core values for customers.

To successfully deliver the types of experiences that customers desire, LG first had to make sure that all parts of the organization were aligned and properly equipped for the task at hand. In 2024, new CX performance management system is applied to the entire executive organization structure – not just Korean executives at the company’s headquarters but global executives and employees in charge of sales, manufacturing and management – with a view to adding CX to other crucial measurements of overall business performance, such as sales and operating profit.

The data from the CX indicator is analyzed to assess the various teams involved and to instill a ‘customer-first’ mindset throughout the entire company. The definition of ‘customer’ in this equation is not limited to end-users, but includes business partners and relevant internal departments as well.

The company made meaningful changes by promoting various customer value innovation activities. However, it was identified that a process was needed to properly evaluate business performance as well as reward the achievement of increased levels of customer satisfaction.

Accordingly, starting from this year, all LG Electronics executives will be evaluated based on the level of customer satisfaction within the organizations under their purview, and also on whether or not they have achieved their allotted tasks. Customer satisfaction is graded based on LG’s in-house-developed measurement tool, which quantifies the satisfaction level of LG customers during each stage of the customer experience journey.

Now, each organization is charged with the mission of determining how it will go about innovating target customers’ experiences. In this way, each unit or team can give in-depth consideration to the important question of “What constitutes a differentiated experience from the customers’ perspective?” and then gauge whether or not a specific CX innovation can be realized.

For teams that don’t work directly with customers, CX tasks can include identifying the relevant customer groups, such as internal departments or suppliers, for a certain aspect or piece of organizational work, and generating appropriate and actionable innovation activities to drive meaningful results. LG strongly believes that customer value innovation is not just the domain of ‘management’ or select customer-facing teams. Rather, it takes a whole company working together to consistently create it, with each person adopting a ‘customer-first’ mindset and seeking to view all pertinent matters from the customer’s perspective.

This belief reflects LG CEO William Cho’s management philosophy, which states that the start and end of all innovation is the customer. Since taking charge of the company at the end of 2021, CEO Cho has continuously emphasized how accelerating customer experience innovation plays a critical role in improving customers’ lives. As a result of his astute direction, and as underscored by LG’s ‘Future Vision 2030’ document and recent brand reinvention, the company is actively expanding its CX innovation initiatives.

To boost the innovation of customer experience, the company has launched a company-wide project calling on all employees to ‘meet’ with customers directly to ‘hear’ their honest feedback and concerns in order to ‘empathize’ with them. As a part of this internal project that focuses on LG’s commitment to advancing CX, executives partook in an ‘on-site’ experience program designed to ensure the implementation of customer-centric management practices and policies. Last year alone, more than 280 LG executives from the Korean headquarters visited key offline sites to see firsthand a broad range of customer contact points and associated activities, including product purchase, phone consultation, rental, delivery and after-service care.

Many of these executives even visited Hi-Tele Service, an LG subsidiary that provides remote customer service. While there, the executives had the valuable opportunity to hear feedback direct from LG customers – giving them insight into how and where the CX might be further improved and refined.

On top of these activities, in order to ‘hear’ from customers, LG hosted seminars where employees could share CX innovation cases as well as programs where they could directly listen to customers’ stories. And, to boost ‘empathy’ for customers, the company is carrying out company-wide activities that enable employees to set their own customer and determine the value they can provide to these customers.

Customer value innovation is not just a task for management or teams that work directly with customers. It is the job of everyone at LG to make meaningful changes by rethinking and differentiating everything the company does from the customer’s perspective.

LG is committed to providing differentiated customer value. The company will continue to pursue a customer-centric way of working – one that is based on a detailed understanding of and empathy for its customers.

Not limited to HQ, our system of actively meeting, hearing and empathizing with customers is being put into place in LG offices around the world. In a dedicated series on , we will introduce how various LG teams and subsidiaries are making changes to reinvent CX, so stay tuned.

By Kang Je-nam, director of Customer Value Innovation Division at LG Electronics

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