Future Customer Experience Differentiation Will Require New Operating Models

At some point after their companies find and fix the low-hanging fruit that creates problems for customers, customer experience leaders hit a wall. That wall is the outdated operational models upon which most companies were built. These models were conceived decades ago, based on the existing capabilities and constraints of the day, when the primary vehicle for value was tied up in the product/service itself. Within these operating models, firms have worked to optimize processes like marketing, sales, and distribution focused on getting to the transaction. Support has been a cost center so limited as much as possible. But this kind of operating model has critical problems. Here are a few that just scratch the surface:

  • Product lines obstruct customer needs that cross the company. Companies organized by product lines force customers to navigate different marketing messages, sales teams, billing systems, and websites and support organizations to get what they need, while internal staff waste effort and fail to create synergies that could deliver a bigger value proposition.
  • Channel strategies don’t account for information transparency. Like product lines, firms regularly treat channels as separate P&Ls. This artifact results in disjointed pricing, confusing return policies, botched hand-offs, and assorted other mishaps that undermine the customer experience. Moreover, it leaves little incentive for the fiefdoms to cooperate on behalf of the customer.
Read more

Want Better Customer Experiences? Adopt The Six Disciplines Of CX Maturity

This morning we released the latest version of an annual client favorite: “How Companies Improved Their CXi Scores, 2013.”

As we do each year, we compiled a list of brands whose scores went up five or more points in our Customer Experience Index over the past year (in this case, between 2012 and 2013). We asked CX leaders from those brands if they’d be willing to tell us what they did to drive those improvements. Finally, we synthesized their answers into a list of best practices that others can learn from.

As you’d expect, we heard about a host of projects designed to boost the three aspects of customer experience quality. Here’s just a sampling of what we uncovered:

  • Meets needs. Marriott used one of my favorite qualitative research techniques — diary studies — to understand exactly when its guests would need a mobile device during their travels. The firm identified roughly 300 user needs that a mobile device could fill, prioritized them, and is using the resulting hierarchy as a road map for future investment.
  • Easy. Vanguard and Progressive were just two of the brands that said they upgraded website designs to make it easier for customers to get the information they need online.
  • Enjoyable. Days Inns trained more than 20,000 employees on how to make hotel guests feel welcomed.
Read more

Q&A With David Shapiro, VP Of Member Experience For Medicare And Retirement, UnitedHealth Group

There is a staggering amount of customer experience work going on in the healthcare industry these days. From providers (the docs), to pharma companies and payers (health insurers), everyone is trying to figure out what to do and how to do it.

One guy who’s figured out a lot is David Shapiro, who wowed members of Forrester’s Customer Experience Council last year with a presentation of how UnitedHealth Group uses journey maps to transform experiences. David is the vice president of member experience for Medicare and retirement at UnitedHealth, and he's one of the speakers at Forrester's Forum For Customer Experience Professionals East on June 25th and 26th in New York.

In advance of his speech, we put some questions to David about the evolution of customer experience at his organization.

David Shapiro

Q. When did your company first begin focusing on customer experience? Why?

Read more

Business Model And Brand: Keys To Customer Experience Innovation

At Forrester, we define customer experience as how customers perceive their interactions with your company.

Over the past few years, my colleagues and I have written a lot about the perceptions piece of that definition. Here’s a quick overview: Customers’ perceptions occur on three different levels, which we collectively refer to as the customer experience pyramid. At the base of the pyramid is “meets needs.” Do customers perceive that you’ve met their basic needs and provided value through the interaction? Then we layer on “easy.” Do customers perceive that you’re easy to do business with or that they have to jump through a bunch of hoops? And at the top of the pyramid is “enjoyable.” Do customers perceive that you’re enjoyable to do business with — that you’re connecting with them on some personal, emotional level?

Now let’s talk about the interactions themselves. Customers interact with your company at all stages of the customer journey: discover, evaluate, buy, access, use, get support, leave, and re-engage. But it’s not enough to know that these interactions exist. If you want to shift your customers’ perceptions, you have to examine those interactions on a deeper level. Specifically, you need to look at the types of interactions customers have and the qualities that those interactions embody. And that’s where your business model and your brand come into play.

Read more

Hear From Outside In Award Winners At Forrester’s Customer Experience Forum On June 25

The nomination period has officially closed for the new Forrester Outside In Awards for customer experience excellence. The companies nominating themselves have done their hard work, and now it’s the judges’ turn to evaluate the submissions and pick the winners.

We’ve been getting some questions about the Outside In Awards and what to expect on stage at our June Forum. First of all, we’ll be handing out the awards the morning of June 25th at Forrester’s Customer Experience Forum in New York City. If you’ve been on the edge of your seats wondering who will win, the suspense will finally be over.

The awards ceremony itself is so short, though, that you’ll only get a taste of what makes these programs award-winning material. Bummer, right? Not so fast!

What we found with our other award programs — the Voice Of The Customer Awards and the Groundswell Awards — is that companies tell us great stories about what they’re doing. In their nomination forms, we hear about all kinds of interesting practices that these companies have been able to link to business results, which is what we look for in the awards. Rather than keep all of the details to ourselves, we like to get them up on stage so that they can tell their own stories and answer questions from the audience about what they're doing.

The Outside In Awards will be no exception. On the afternoon of June 25th, I’ll be leading a track session panel with representatives from several of the winning companies. They’ll present more details about their award-winning practices and the results they’re getting, and you’ll get a chance to ask your burning questions and get some practical advice.

Read more

Announcing Speakers For Forrester’s Customer Experience Forum East, 2013 – June 25 & 26 in NYC!

I’m excited to finally be able to talk publicly about our CX Forum East in New York at the end of June. The theme this year is “Boost Your Customer Experience To The Next Level.” We picked that theme because ever since last fall when we published Outside In, our book about customer experience, people have been asking us to show them how to either get started on the path to CX maturity or accelerate their progress. This forum is all about helping people create customized roadmaps for their organizations.

Megan Burns will kick off the first day of the event with a speech about “The Path To Customer Experience Maturity.” The speech will debut new research about companies that successfully adopted new competencies and changed employee behavior. Attendees will be the first ones to get copies of Megan’s new report that details her findings – I’m editing the report and I am really jazzed about what she’d discovering.

Kerry Bodine, my co-author for Outside In, will kick off the second day of the event with a speech about customer experience innovation. Her speech will also be based on new research. She’ll detail her findings  into what distinguishes incremental CX improvements from true innovations. She’ll also describe how companies can create innovation engines within their organizations – the “road map” for the advanced class. For those of you who want to leap ahead of the pack and truly differentiate through customer experience, this is a “must see” presentation.  

Read more

Customer Signals For Adapting Experiences

A chemical manufacturer with a solid customer listening program noticed an uptick in complaints about pricing. Unlike many firms, which would take the comments at face value and take action accordingly, this company first stepped back and reflected on its strategy:  it sold premium chemical for advanced applications targeted at particular industries, so it surmised that the company shouldn’t see this kind of feedback. It did some root cause analysis, talking to those customers. It learned that some distributors were selling chemicals for applications in markets better served by off-the-shelf, commodity products. As a result, not only were these distributors driving detractors, which were creating a headwind for selling into their target market, but they were wasting time on low-value sales and more importantly, using valuable resources internally that made the company competitive in target markets (e.g. scientists to help innovative clients discover new applications for the chemicals). The company decided that the right course of action was to re-visit its distributor training and communications programs to better ensure sales teams understood the core value proposition and how to find the high value opportunities.

There are at least a few lessons to take away from this story.

Know your customer experience strategy. Firms often have blanket statements such as “we aim to delight our customers.” When these lack a connection to a company strategy, which should clearly articulate value propositions for specific target markets, firms can spend a lot of time and energy jumping through hoops trying to serve customers it never should have acquired in the first place. A situation that the chemical manufacturer avoided by reflecting on its strategy to direct its activities.

Read more