Drive Revenue With Great CX — And Math!

Laura Garvin Tramm

In our Drive Revenue With Great Customer Experience, 2017 report, we describe how great customer experience (CX) drives revenue. After reading the report, you may be wondering, how did we link revenue to CX?

We followed a rigorous, academic approach that started with the premise that improving CX drives customer loyalty. Using our Customer Experience Index (CX Index™) survey questions about customers’ loyalty to and spending with a particular brand and combining them with industry-level numerical assumptions, we answered the following question: How likely is a customer to stay with your brand, or spend more, or recommend you to others — and what would that be worth to your organization in dollars and cents?

For each customer, we calculated a loyalty-based revenue potential and a CX Index score. Calculating these numbers at the individual level allows us to track the relationship between CX and revenue throughout the entire range of CX Index scores and develop models to describe the nuances of how CX drives revenue in a particular industry. With these models, we can predict the revenue associated with a brand’s CX improving — or even deteriorating.

We tested several models to find the “shape” that best describes the data. We found that the relationship between CX and revenue potential tends to follow three main shapes:

  • Linear. CX and revenue move in lockstep. Whether you improve a poor experience, a mediocre experience, or a good experience, the impact on revenue will be the same.
Read more

Context Matters: Functional Or Domain Challenges Cross Industries

Jennifer Belissent

In a previous blog, I outlined how context matters, and specifically how the industry context in which you are doing business matters to the strategic decisions you make. But there are also commonalities across industries. Some business challenges plague multiple industries such as how to improve customer experience, retain loyal customers, and improve sales whether in the retail or hospitality sector, or how to get the inputs you need to make your products and to get your products to market in a timely manner in  the manufacturing or pharmaceutical sectors. And, everyone these days is increasingly concerned about fraud, risk and security.

 

Read more

The Data Digest: It's The Most Emotional Time Of The Year

Anjali Lai

The holidays have a way of bringing people together in more ways than one – and every holiday season I’m reminded of just how universal the power of human emotion is. Regardless of lifestyle, background, and world view, people everywhere are truly emotional beings, moved by fundamental feelings of joy and sadness, hope and fear, love and loss. And anyone who has observed frantic shoppers careening through store aisles or the unbearable anticipation of children on Christmas morning can see that, at this time of year, emotions are at their peak.

Advertisers know holiday shopper emotions better than anyone; they have perfected the art of tugging at heart strings or prompting tears to spur a purchase. But as consumers wear their hearts on their sleeve, retailers broadly must be in tune with – and responsive to – customer sentiments. For example, when passionate shoppers turn to social channels, retailers mustn’t dismiss their cheering or venting. In fact, Forrester’s Customer Experience Index (CX Index™) data shows that consumers often experience their most positive brand interactions on social media – and remember them more favorably than engagements on websites, over email, through phone conversations, and even in person:

Read more

Connecting The Human Being To The P&L

Victor Milligan

The fact that human beings make affinity and spend decisions based in large part on emotion is not new news. It is the underlying logic of advertising – heartstrings are the early sparks of revenue. But there is a reason that most companies have not baked emotion into experience design and into the day-to-day engagement with customers. It's hard to do.

Emotions are situational, dynamic, and hard to read. Yet the gulf between the science of emotion and the business of emotion is closing, creating a set of new tools to convert great experiences into sustained growth.

Last week during an online event, I brought together thought leaders, Anjali Lai, Harley Manning, and Roxie Strohmenger, to translate the science of emotion to the pragmatic business application of emotion. If you were unable to watch it live, here is the replay – and for good measure, here are key takeaways from our discussion:

  • Emotion is the next step in getting to know your customer.
    The customer is now the center of the universe, and to win in this market, companies need to know – really know – their customer. Beyond satisfaction, advocacy, and journeys, companies must understand what makes customers tick and how to influence affinity and spend. Emotion is not the next thing "just because"; it gets to the heart and soul of operating in a customer-led market.
Read more

The Threat (And Opportunities) Facing Banks Today

Victor Milligan
Banks serve as the bedrock of the economy, and that bedrock is changing. These changes represent a direct attack against the current banking business model and associated P&Ls. Our Empowered Customer and North America Consumer Technographics data tells us:
 
  • Only 50% of bank customers are willing to keep their existing level of business with their bank.
  • Only 59% of bank customers are willing to purchase additional products or services, meaning 41% are not.
  • Almost 50% of Progressive Pioneers – the most progressive of our five customer segments representing 25% of consumers in 2016 – indicate they are likely to switch banks in the next year.
  • 21% of Progressive Pioneers have closed a bank account in the past 3 years.
Read more

UK Brands Have Upped Their CX Game

Joana van den Brink-Quintanilha

We’re pleased to announce that this year’s UK Customer Experience Index report is now live! The report is based on Forrester's Customer Experience Index (CX Index™) methodology, which measures how well a brand's customer experience strengthens the loyalty of its customers.

 
Overall, it’s been a good year for UK brands, with the percentage of good and OK scores increasing thanks to a significant drop in poor scores. We found that:
 
  • Six of the eight industries surveyed improved their average score.
  • Twenty-four of the 56 brands surveyed made significant improvements in their experiences.
Read more

Video - and Online Video Platforms - Are Essential For Customer Engagement

Nick Barber

Video conveys emotion unlike text and can show features and functionality unlike any picture. That’s why retailers see nearly triple the conversion rate on product pages that have video versus those that don’t. Entering what Facebook CEO Mark Zuckerberg calls “this new golden age of videos online,” companies and brands need an enterprise-class online video platform to deliver the video experiences that drive customer engagement.

 

In The Forrester Wave™: Online Video Platforms For Sales And Marketing, Q4 2016 we looked at nine vendors in the space--Adobe, Brightcove, IBM, Invodo, Kaltura, Ooyala, Qumu, uStudio, and Vidyard--and scored them against a list of 39 criteria.

Read more

Predictions 2017: The Year Of Action

Cliff Condon

Your business model is under attack. And it’s not by your competitors. It’s under attack from your customers. Three years ago, Forrester identified a major shift in the market, ushering in the age of the customer. Power has shifted away from companies and towards digitally savvy, technology-empowered customers. They now decide winners and losers: Our Empowered Customer Segmentation shows that more than a third all US online adults want new and engaging digital experiences. They will switch companies to find these experiences. In this environment, being customer-obsessed can be your only competitive strategy.   

In Forrester’s 2017 Prediction Reports, we are tracking firms’ progress on their customer-obsessed journeys. In our annual collection of predictions, we look at business strategy, leadership, customer experience, and technology dynamics to examine progress and predict the key events, changes, and trends that will occur in 2017.

Here are three key findings from our 16 predictions reports:

  • The next wave of Customer Experience will have a profound impact on firms’ P&L: The shift to a customer-led market represents an immediate and prolonged threat to company survival. Our research shows a clear correlation between the quality of customer experiences and revenue growth; it also affirms that emotion is a core driver of customer loyalty and spending. The next wave of CX will connect these dots, blending analytics, technology, and design to evoke emotions to drive affinity and directly impact revenue.
Read more

Manufacturing Firms Could Do Better With A Focus On Customer Experience

Ashutosh Sharma

Companies are turning to digital to do one of the three things: improve customer experience (CX) using digital technologies; improve their operational efficiency to better serve customers; and launch new business models.

The manufacturing and industrial sectors are undergoing a similar transformation. In my recent discussions with leaders in this market, Industry 4.0 and smart factory dominate the conversations, but the discussions quickly shift to the Internet of things (IoT). While the industrial internet is the most significant manifestation of the digital revolution in these sectors, we are also coming across a broader range of digital initiatives from manufacturing firms.

Tech vendors and systems integrators working with manufacturing firms have identified two types of engagements emerging. Infosys’ Global Head of the Manufacturing Vertical, Nitesh Bansal opined that one set of firms are taking charge of sensors and monitors that they own and leveraging the data assets to improve predictive maintenance, asset efficiency and improve track and trace. Outcomes from these digital operational excellence (DOX) initiatives include:

  • Collecting data and analyzing it for better predictive maintenance
  • Empowering technicians to do their job better by providing actionable directions at the point of maintenance
  • Using augmented reality to help with quick diagnosis and fix
  • Increasing the asset throughput while increasing safety using automated self-driven vehicles
Read more

Nokia “Connects” Network Services To Customer Experience

Dan Bieler

Nokia’s services division recently hosted an analyst event where it elaborated on the interlinkage between network services and network infrastructure. Of course, network services matter to businesses and telcos because they help technology managers to better manage infrastructure complexity and to modernize network infrastructure with the goal of making networks faster and more reliable. However, there are more fundamental implications:

  • Network services add value to products and open new business areas. Customers want features and services that are relevant to them in the immediate context of their needs and desires. As more products become connected, network services will play a critical role in developing and enhancing such features. Moreover, network services play a central role in driving augmented and virtual-reality solutions in outdoor conditions, such as those already used in manufacturing by Caterpillar or in construction by BAM Group.
Read more