Here’s a typical conversation we have with businesspeople when trying to gauge the level of customer experience maturity at their company:
Forrester analyst: “Do you have a customer experience strategy?”
Manager: “We sure do!”
Forrester analyst: “Great! What’s in it? What’s the intended experience that it describes?”
Manager: “Well, uh, hmmm… You know, maybe we don’t have a customer experience strategy.”
The fact is, people at most companies are in the same boat as that manager (or director or VP or SVP or…). Why? For the most part, it’s because it never occurred to them that customer experience – like other business disciplines such as marketing and branding – requires a strategy to keep it on track.
Here’s why your organization needs a customer experience strategy: Without one, you’ll tend to mix and match best practices that may be great for someone but don’t align at all with the customer experience that you want to deliver.
People love those genius bars in Apple stores, right? And Apple is known for delivering a great customer experience. So why doesn’t Costco put genius bars in their stores? Simple: A genius bar provides an experience that aligns with Apple’s overall strategy of differentiating through innovation but flies in the face of Costco’s overarching strategy to be a cost leader.
The pace of business change is accelerating. The reason why it is accelerating is the mushrooming of disruptive factors: your customers expecting anytime/everywhere access to you through their mobile devices, competitors leveraging big data technology to rapidly execute on customer-centric value propositions, and new market entrants with lean business models that enable them to outmaneuver your business.
Most companies deal poorly with disruptive change. If they are the “disruptor,” seeking to use these disruptive factors to steal market share, they often run without a plan and only after, for example, a poor mobile app customer experience, realize what they should have changed. If they are the firm being disrupted, the desire for a fast response leads to knee-jerk reactions and a thin veneer of new technology on a fossilized back-office business model.
This is where the value of business architects and business process professionals comes to play: you help your company plan and execute coherent responses to disruptive factors. That’s why your company needs you to attend Forrester’s Business Architecture & Process Forum: Embracing Digital Disruption in London on October 4 and Orlando, FL on October 18–19, 2012.
We’ll start with James McQuivey describing how technology is changing the playing field for disruption in his keynote: The Disruptor’s Handbook: How To Make The Most Of Digital Disruption.
We’ll look at how firms have used technology to rethink their operating models, eliminating low-value activities to focus on what their customers value in Craig Le Clair’s Implementing The Different In The Age Of Digital Disruption.
Marketing Manager: “Net Promoter Score is the one number we need to grow!”
Customer Intelligence Manager: “Nonsense! ‘Satisfaction’ predicts customer loyalty better than ‘likelihood to recommend’ – it says so in the wonky business journals I read!”
Marketing Manager: “You don’t understand how business works!”
Customer Intelligence Manager: “You don’t understand how math works!”
The sad thing is that in a micro sense they’re both right, but in a macro sense they’re both wrong. The reason? They’re each taking an inside-out point of view based on their own specialties.
Where NPS Fits In A Customer Experience Measurement Framework
In our research into customer experience measurement, we see many organizations that use Net Promoter Score. Some use it poorly because – like the fictional marketing manager above – they don’t understand the limitations of what NPS can do.
Here’s how they should think of it: Customer experience is how customers perceive their interactions with a company along each step of a customer journey, from discovery, to purchase and use, to getting service. NPS measures what customers say they’ll do as a result of one or more of those interactions. It’s what Forrester calls an “outcome metric.”
But outcome metrics are just one out of three types of metrics captured by effective customer experience measurement programs. The best programs gather and analyze:
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.
For consumers today, online and mobile channels have become an integral part of the shopping experience — for both researching and purchasing products and services.
In their transition to agile commerce, companies must understand how consumers are interacting and using multiple touchpoints to research, transact, and get service. Our recent report Segmenting Buyers: Introducing Super Buyers, Connected Traditionalists, And Traditionalists examines how three distinct retail segments of US online consumers — Super Buyers, Connected Traditionalists, and Traditionalists — leverage various channels for their shopping needs and explains how companies can best engage with each segment.
Some highlights from the report, which is based on a survey of more than 4,500 US online consumers:
· Super Buyers are the most connected shoppers and buy from many channels: online, offline, and mobile. Super Buyers like to mix and match their shopping by either researching online and buying offline or vice versa.
· Connected Traditionalists do most of their shopping online on a computer or in an offline store.
· Traditionalists are the largest segment; they do most of their shopping in-store — although they are also shopping online on a computer. This group has the lowest uptake of tablets and smartphones.
Every day our clients flood us with inquiries on what to do about mobile and social software and smartphone and tablet adoption—not just as it pertains to their customers but to their employees too. Many firms seem to be scrambling to develop their mobile application strategy, spinning up new teams or working with outside agencies in a rush to introduce their own “killer app” or deploy some mobile capability on their CRM platforms. Smartphones and tablets are just the beginning of an explosion of digital touchpoints we will use to engage with each other, commercial enterprises, and public sector institutions. Gaming platforms, smart TVs, goggles, “magical mirrors”—there’s no end in sight.
You’re at home when your phone rings. It’s your child’s summer camp calling to tell you that she never arrived. No one knows where she is.
Make your gut churn? Yes, if you’re a parent — or even if you’re not.
If you were following the news last week, you know that Annie and Perry Klebahn did get that phone call. That’s when they found out that their 10-year-old daughter Phoebe hadn’t gotten off a United Airlines flight to Traverse City, Michigan.
Here are the highlights of what happened.
Phoebe had been traveling alone. Her parents had paid United a $99 fee for the “unaccompanied minor” service and had every reason to believe that their daughter was in good hands. According to the complaint letter that her parents wrote to United, when they dropped Phoebe off at the San Francisco airport, a United employee put an identifying wristband on her and told her to “only go with someone with a United badge on and that she would be accompanied at all times.” But when Phoebe arrived in Chicago to change planes, no one met her. The little girl reportedly asked flight attendants three times to let her use a phone to call her parents, and they told her to wait. She also asked if someone had called camp to tell them she had missed her flight, and they said they’d take care of it (but then didn’t).
Last week my son, Alex, had reconstructive surgery to repair his torn ACL (the ligament that holds the inside of a knee together).
He’s 11 years old.
I have to admit that this procedure worried me like hell for all sorts of irrational reasons. Sure, things could have gone wrong. But the surgeon who operated on my son literally invented this type of surgery, which is only used on children and pre-adolescents who are still growing. Plus we had the procedure donev at Boston Children’s Hospital, which topped the U.S. News & World Reporthonor roll of best children’s hospitals.
All that gave the left part of my brain comfort, even as the right part of my brain tried its hardest to give me high blood pressure. Fortunately, the operation was an unqualified success, and as I write this, we are three days into the recovery period, which is also going well.
Now normally I wouldn’t blog about something this personal. But throughout the process, Alex — who knows what I do for a living — kept telling me that he was having a great experience and that I should write about it.
Frankly, I was quite curious as to why Alex thought — and forgive me for being graphic — that getting his leg opened up and put back together with a bunch of new parts was “a great experience.” So I asked him.
Harley: You’ve said a number of times that you had a great experience at Boston Children’s Hospital. From your point of view, what made it a great experience?
Alex: Everyone was really nice to me. And they did a great job at keeping my pain level down.
Recently we’ve seen a lot of interest in the emotional aspects of customer experience by some of the smartest practitioners we know — chief customer officers. There’s a reason for this. Recent advances in the behavioral sciences now give us a better understanding of how people make decisions, experience pain and pleasure, and recall their experiences.
Maybe you’ve read about some of these studies in books like Predictably Irrationalby Dan Ariely, Thinking, Fast and Slow by Daniel Kahneman, or Switch by the Heath brothers. If you have, then you picked up on the fact that we now know our customers to be inherently irrational, making most of their daily decisions without any particular logic.
For example, we know that people experience the pain of loss more acutely than they feel the pleasure of gain. That’s the reason why people dump shares of well-run mutual funds when the economy turns down, irrationally converting their paper losses to real losses. It’s also why it’s easier to lose a customer than to gain one — people are less likely to forgive you when you inflict pain on them (got the order wrong, didn’t resolve the problem) than they are to love you for satisfying them.
If you are trolling around our website, you may have seen that we’ve introduced a new way to organize our research, something that we call playbooks.
We made this change because for years we’ve been producing reports that connect to each other in many ways. The connections are obvious to those of us who create the research, but until now, they may not have been as obvious to our many readers.
Playbooks make it easier for you to find the research we have about every one of your customer experience challenges. What’s more, playbooks suggest related research on topics that you might not have even thought to look for. For example, if you’re looking for best practices for how to improve your Customer Experience Index Score, you’ll also see advice on how to sustain continuous improvement once you take the first step.