Customer experience is fundamental to the success of every business. For most companies, in fact, customer experience is the single greatest predictor of whether customers will return — or defect to a competitor.
Customer experience goes to the heart of everything you do: how you conduct your business, how your people behave when they interact with customers and each other, and the value you provide. You literally can’t afford to ignore it, because your customers take it personally each and every time they touch your products, your services, and your support.
In our new book, Outside In, my coauthor, Kerry Bodine, and I explore the real meaning of customer experience; prove the business benefits of delivering a great experience; and describe the six disciplines of customer experience leaders like American Express, JetBlue, Office Depot, and Vanguard. Our goal is to help readers understand why and how customer experience leads to profits — which it does, but only if you treat it as a business discipline.
Why is customer experience so important?
“Customer experience” is literally how your customers perceive their interactions with your company.
Those interactions occur at each step along a customer journey. That journey begins when people realize that you offer a product or service they might want, then compare your offer to other options. If things go your way, they’ll buy from you. Then they’ll use what they bought. If they encounter a problem, they’ll call for support.
I bet you are thinking, “Oh no, this looks like a typical Friday IT blog post” and it has all the key ingredients – It’s Friday-tick-has science fiction references-tick-has a weird title-tick – but please go with the flow with this one.
It’s the latest craze sweeping the nation… No, I’m not talking about Fruit Ninja, I’m talking about gamification.
There's a reason "gamification" is the buzzword on the tip of so many tongues these days. It takes ideas and structures from games - the video kind and other types - to guide companies in their quest to affect consumer behavior. So should digital strategists at banks and financial institutions use gamification to meet their business objectives?
We’ll get to that, but for now let's start by clarifying what we're talking about. Forrester defines gamification as:
The insertion of game dynamics and mechanics into non-game activities to drive a desired behavior.
These mechanics come in many shapes & sizes – SCVNGR, a mobile game developer, has a list of more than 40 – but here’s a quick list of four major ones:
· Points. The most basic element of gamification, points is any type of virtual currency – or, in a few cases, IRL currency. Digital strategists at banks & credit card companies have used this tool for years in the form of rewards points.
Last week, Forrester got about 700 of our friends together (ok, conference attendees) to figure out what is cool and what is critical in marketing today as well as what is likely to cross from the former to the latter. We had amazing presentations from major consumer goods, retail, insurance, and technology brands tackling these different issues.
Below, I have included the graphic illustrations of these presentations (courtesy of Kate Dwyer at Collective Next), highlighting the key takeaways from each. In them, you can see the stories and concepts that our speakers revealed to help the audience progress in this complex marketing world we now live in.
Branding is cool again, according to Chris Stutzman. He studied the relationship expressed by consumers between things like brand pride and brand uniqueness and how they influence premium prices and willingness to recommend. His insight: 21st century brands will be built on different foundations than 20th century brands, especially as they relate to what leads the marketing effort. Product-led brands will suffer as experience-led brands thrive (Note: His report will be coming out soon, but here is preview from Advertising Age).
Just over 3 months ago, I made note of three things I'd tell your CIO, all of which focused on your need to build a software development competency to help your firm thrive in this age of software-fueled, consumer-led disruption. Since then, we've heard from a number of clients stating that they're having a tough time convincing their executives, from COOs and CFOs through to CIOs, that they need to stop looking at software and app development as a commodity.
Vendors you work with aren't helping. System integrators and consultancies continue to tell your CFO and CEO to outsource your software development work to them, that they can deliver more quickly, and more cheaply, than you can. Software application vendors build their marketing around needing no customization, even "no software." This helps fuel the perception and myths many executives hold that software development, especially app dev, is a commodity.
Recent research published by Phil Murphy and survey data we recently collected in our Forrsights Software Survey, Q4 2011 can help you bust those perceptions and myths and help you show your executives the importance of software development.
Ah, Black Friday: What would the post-Thanksgiving shopping bonanza be without a visit to the local mall? This year, I was keen to perform some gumshoe research on a theme I've been talking about all year long: mass customization, a product strategy that's ready for prime time across multiple industries.
A trip to the Natick Mall (yes, "Mall," no longer "Collection," New Englanders) reveals that mass customization isn't just the future; it's the present. In fact, it's hiding in plain sight. Build-a-Bear Workshop, Hallmark, Lego, and LensCrafters are all stores in the Natick Mall that offer significant customization for consumer products. Burberry is the latest Natick Mall vendor to offer mass customization; I am quoted in Time magazine this week (here, but subscription required to view the link; page 82 in the December 5 paper edition) discussing how luxury clothing and customization fit together well. As I've written before, one of the benefits of employing mass customization is that it empowers consumers to create products that express their personalities -- a particularly relevant feature for clothing and apparel products.
About five months ago, I “broke up” with T-Mobile in favor of AT&T. I was a T-Mobile customer for six years on a very competitive service plan. But none of that mattered; I wanted an iPhone, and T-Mobile couldn’t give it to me. It was a clean but cruel breakup: AT&T cancelled my T-Mobile contract on my behalf, the equivalent of getting dumped by your girlfriend’s new boyfriend.
I bring this up because it reminds me of the saying: “If we don’t take care of our customers, someone else will.” This is particularly important to remember in “The Age Of The Customer” where technology-led disruption is eroding traditional competitive barriers across all industries. Empowered buyers have information at their fingertips to check a price, read a product review, or ask for advice from a friend right from the screen of their smartphone.
This is affecting your IT just as much as your business: As an indicator, Forrester finds that 48% of information workers already buy whatever smartphone they want and use it for work purposes. In the new era, it is easier than ever for empowered employees and App Developers to circumvent traditional IT procurement and provisioning to take advantage of new desktop, mobile, and tablet devices as well as cloud-based software and infrastructure you don’t support. They’re “cheating” on you to get their jobs done better, faster, and cheaper.
To become more desirable to your customer – be it your Application Developers, workforce, or end buyers – IT Infrastructure and Operations leaders must become more customer-obsessed, which I talk about in this video:
Two weeks have passed since our successful AD&D and BP Forums in Boston. I’m still struck by conversations we held there and continue to hold now with many of you on how your teams can help deliver to your firm’s ever-important customer experience outcomes. Following one tip can help you either get ahead of this issue or catch up to the expectations of your stakeholders…act more like an interactive agency!
Note I didn’t say “transform” into an interactive agency. No, at the end of the day you have responsibilities to your organization the agencies your business peers use often don’t – you have to manage, operate, and maintain what’s been delivered. What I did say was “act” like one, and in doing so you’ll need to:
Revisit your talent. For those of you that haven’t outsourced big portions of development, make sure you have great, creative developers, build a high-performance development team, and up-skill your business analysts by putting personas and customer journey maps into their tool kit. Why? The agencies your peers use have and cultivate these skills. At minimum, you'll be in a better position to manage and maintain what they’ve put in place if you have complementary skills of your own. If you have outsourced development, we can help you make the case to bring back the right pieces.
Recently my colleague Sharyn Leaver and I had the opportunity to meet with Robert Mead and Michael Mathias, the CMO and CIO, respectively, at Aetna. They will be speaking at our upcoming CIO-CMO Forum on September 22, 2011, in Boston, so this serves as a bit of a preview to what should be an eye-opening presentation. Enjoy!
David Cooperstein: What external changes drove you to build a deeper partnership with your technology peers?
Robert Mead, senior vice president, Aetna marketing, product and communications: The US healthcare system is fragmented and well behind the curve in terms of price transparency and consumer-friendly products and services. The deep partnership between technology and marketing at Aetna lets us put leading-edge technologies and powerful tools and applications directly into the hands of people so that they can be confident consumers and informed patients. Our close collaboration with our colleagues in technology is driven by a few external factors:
The increasing cost of care and the corresponding changes in employer-based insurance — consumers are being asked to take more ownership of their health and wellness and their healthcare spending.
The introduction and rapid adoption of technology empowers consumers (and patients) to engage in the healthcare system where they are in life and in the way they want to be connected.
Healthcare reform aims to bring millions of previously uninsured Americans into the marketplace as consumers.
Marketing planning has changed little in the past century. It's essentially a linear process built on the development of rigid 12-month plans built around brand and channel metrics. This approach is coming increasingly under strain as the combined effects of the growth of digital marketing platforms and a volatile economy demand marketing plans that deliver clear business outcomes and can adapt and improve to meet evolving market dynamics.
Over the past 12-18 months, we have come across several marketing organizations that have decided to do something about this situation and look for new ways to improve their approach to marketing planning by adopting some principles borrowed from a relatively new methodology originally conceived for software development efforts: agile development.
From the interviews that we did with marketers that are experimenting with this new approach, several of the key principles of "agile" development looked particularly relevant to innovating their approach to marketing planning:
A clear definition of business outcomes and associated business metrics