Consider the following scenario: It’s a hot summer day and a prospective customer walks into your store to buy an air conditioner. He evaluates several models and then buys one — but not from you. It turns out your competitor located two miles away is offering the same model at a 20% discount. How did he know this? He scanned the product's bar code using the RedLaser app on his iPhone, which displayed several local retailers with lower prices than yours. If he had been willing to wait three days for shipping, he could have purchased the exact same model while standing in your store from an online retailer at a 30% discount.
This type of technology-fueled disruption is affecting all industries, not just retailers. Since the early 1900s, businesses relied on competitive barriers such as manufacturing strength, distribution power, and information mastery. But this is all changing in the age of the customer, where 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.
To compete in the age of the customer, your business must become customer-obsessed. As Forrester’s Josh Bernoff (@jbernoff), SVP of Idea Development and author of Groundswelland Empowered, advocates in his latest research: “The only source of competitive advantage is the one that can survive technology-fueled disruption — an obsession with understanding, delighting, connecting with, and serving customers.”
Many of our clients work at companies that use Net Promoter. I recently had dinner with two of them at Forrester’s Customer Experience Forum, 2011. Both are senior people at companies that have been recognized as customer experience leaders in their respective industries.
When a third guest (Forrester’s CEO) asked them why and how they use Net Promoter Score (NPS), they gave remarkably consistent answers. In brief, they use it as a simple, easy-to-understand metric — one number — for aligning the business. Its main appeal is that busy executives don’t need to spend hours studying tables and spreadsheets to get a sense of how their firms are doing. Similarly, frontline employees down to the lowest levels of the organization find that NPS makes intuitive sense.
But there’s a next big (and obvious) question for people like our dinner guests who work to improve the customer experience at their companies: Does improving customer experience raise NPS? Because let’s face it, if your firm ties its overall health back to NPS, then you better be able to connect the dots for what you do, or you won’t seem to matter.
We’ve been wondering about this issue ourselves. So much so that late last year when we ran the big consumer survey that drives our Customer Experience Index, we included the Net Promoter question for two of the 13 industries in our study: banks and retailers. We were looking for a correlation between how people rate the customer experience at a company they do business with and how likely they are to recommend that company to a friend or colleague.
Late last year, I attended a workshop at a small but quite interesting conference in London. The two guys running the workshop separated the attendees into small groups where each of us took turns describing the worst customer experience we’d had, and then the best customer experience we’d had.
I thought it was a remarkably effective exercise, and I would have liked to try something like it at Forrester’s Customer Experience Forum, 2011. Of course with roughly 1,200 attendees, we couldn’t do that so instead we did the next best thing. A few weeks before our event we took a camera crew out to Harvard Square and asked some people on the street to tell us about their experiences.
Let me tell you a little bit about Harvard Square. It’s right in the heart of the Harvard University campus, which is right in the heart of Cambridge, Mass. — a town that Amazon.com recently ranked as the country's most well-read city.
The day we were there, it was graduation week. So in addition to the usual students and tourists from around the world, we met parents there for their kids’ graduation and alumni there for reunions.
We heard some fascinating stories, which led us to a few conclusions. For example, it’s very hard to satisfy every customer, every time — even for a customer experience icon like Apple.
Hopefully that first segment scared you just a little because when companies get the customer experience wrong, it makes a big impact.
But of course, there’s good news, too. When companies get the customer experience right, that also makes a big impact.
Today’s digital landscape is complex. As companies use digital interfaces to engage with customers and foster long-term relationships, customer interactions are spanning an increasing array of touchpoints, with customers often crossing multiple channels in the pursuit of a single goal. While this new reality is riddled with challenges, it’s also ripe with opportunities for companies that have a strategic plan for digital customer experience.
In a recent report, and subsequent Mashable article, I made the case that companies need to develop and execute digital customer experience strategies. As opposed to digital marketing strategies that focus mostly on what a company will provide and where, a digital customer experience strategy determines the “what” and the “where” based on the “who” and the “how.” That is, a digital customer experience strategy balances company goals and strategy with user expectations (the “who”) and describes the intended experience (the “how”). This, in turn, guides specific investments based on what customers need and a well-thought-out way of delivering on those needs that leaves a lasting positive impression.
Although he just turned 10, my son is very serious about his finances. And his entire life savings (such as it is — he only gets $3 per week for his allowance) is at Citizens Bank.
Personally I'm more interested in how my kid gets treated by his bank than I am about his account balance. So I was quite keen to hear from Nick Primola from Citizens Financial Group, one of the speakers at Forrester's Customer Experience Forum, 2011.
Nick is senior vice president of direct marketing at Citizens Financial Group, where he’s responsible for enterprisewide direct marketing efforts supporting all of the bank’s business lines. As a self-confessed "data guy," that could have put us at odds. Was he going to be the driving force behind a spam attack on my kid? But as it turns out, Nick has a very enlightened view of how data gets used.
You all know Nikon, which has more than $8 billion in annual revenue and 26,000 employees worldwide. At Forrester’s Customer Experience Forum, 2011, we also got to know David Dentry, general manager of customer relations for Nikon.
David’s a lucky guy. He’s been interested in photography since he was a small child, so working at Nikon is a dream job for him. He was a photographer and photo teacher in the US Navy for eight years, which had him shooting (in a way that’s different from the way most military personnel shoot) everything from aerial reconnaissance photos to cake-cutting events. In fact, he joined the Navy based on his recruiter’s assurance that if he signed up he’d get to be a photographer.
Today David’s responsible for all aspects of customer support for Nikon in the Americas. His team manages Nikon’s call center operations and the nikonusa.com website. That’s quite an interesting challenge because he gets the customer service experience challenge in stereo from two very different types of channels. Not to worry, though, because he has a technique he uses to suss out the lowest common denominator when it comes to customer experience challenges: ask Grandma.
There’s a personal story behind why we invited one of our speakers to be on the main stage at Forrester’s Customer Experience Forum, 2011.
A few months back, I had to take a trip from Boston to Toronto. My colleague Jeff Thurston said, “You’ve got to fly Porter.” I asked why, and he just said “trust me.” Well, I do trust Jeff so I went ahead and booked a flight on Porter Airlines.
When I got back to Boston I concluded two things. First, the only way I was going to fly to Toronto from now on was via Porter. Second, I needed to get someone from Porter on stage to talk about the butt-kicking customer experience I’d just had.
What’s so great about Porter? Let me give you my take. It starts with flying into Billy Bishop airport, which is basically in the city of Toronto — as opposed to Toronto Pearson International airport, which is a long cab ride outside of Toronto. So when you get off the plane at Billy Bishop, you just saved yourself about 15 miles worth of traffic.
That’s the convenient part. Now for the cool part. The flight experience is retro 1960s (maybe earlier, I wasn’t flying in the 60s). The seats are wide and comfortable. The crew treats you like they want your business. You get snacks that are basically meals plus wine or beer — and it’s complimentary! I almost fell out of my leather seat when the flight attendant told me that.
Last year we published not just one but two reports that featured the outstanding customer experience transformation process that took place in the American Express call centers. The first report described the winning entry submitted by American Express for a 2010 Voice Of The Customer Award — the data from that VoC program drove many of their call center improvements. The second report was a profile of the transformation itself based on a talk by Reena Panikar, vice president and business leader of American Express' Customer Service Center in Fort Lauderdale, Florida.
We were so impressed by this story that we invited Jim Bush, executive vice president of world service at American Express to speak at Forrester’s Customer Experience Forum 2011.
Jim is responsible for leading the company’s global customer servicing operation — which includes 25 proprietary locations across the globe and a team of tens of thousands of customer care professionals who provide service to more than 63 million customers. He was the driving force behind the American Express call center transformation.
One of the challenges in putting together Forrester’s Customer Experience Forum is that we have a very limited number of main-stage speaker slots. And that’s frustrating because as the content champion for the event, I wanted to put the top bank, the top credit card provider, and the top insurance provider on stage.
And that’s why we were so happy to have Wayne Peacock as a speaker.
Wayne is executive vice president of member experience at USAA, where he oversees its marketing, channel management, sales, and service functions. We profiled him earlier this year as part of our series “Conversations With Chief Customer Officers.”
As always, the USAA story is inspiring. As Wayne put it, it accomplishes its mission by focusing on three things that are deceptively simple but very hard to execute well:
Know your customer.
Organize your business around your customer’s need.
Make it about a bigger mission.
To which I will only add: If you do those things, you might also have a year-over-year customer retention rate of 97% to 98% like USAA.
But don’t take my word — listen to Wayne yourself. Enjoy!
No offense meant to any of the other great speakers at Forrester’s recent Customer Experience Forum 2011, but I have to admit that I had a favorite: Kevin Peters, Office Depot’s president, North American retail.
Kevin had some stiff competition from executives like USAA’s Wayne Peacock, Jim Bush from American Express, the members of our chief customer officer panel, and others. But Kevin won me over by giving one of the best speeches I have ever seen anywhere.
As someone who A) gives speeches on a pretty regular basis, B) attends a lot of events where I see other people give speeches, and C) feels compelled to analyze everything, I’ve been thinking a lot about why Kevin was so good.
Let’s start with the fact that he rocked it old school by standing up and delivering a speech without slides or any other kind of visual aids. Yeah, that’s right — he stood up and told a story so interesting that I just sat there riveted.
How did he manage that trick? It was a combination of great content and passion about that content. Let me be clear: If you’ve ever wondered what an executive who is deeply committed to his customers looks like, just watch this.