We recently published the results of our annual survey of the members of our customer experience professionals peer research group. The group is interesting in that they’re pros: They all work to improve the customer experience delivered by their organizations.
This year, their responses are encouraging — but also very sobering.
Here are some of the encouraging data points. A whopping 86% said that customer experience is a top strategic priority at their company. More than half work at companies that already have a single set of customer experience metrics in place across the entire company, and another 20% said that their firms are considering this move. What’s more, almost as many respondents said that their companies have a voice of the customer program in place, and another 29% said that their firms are actively considering a voice of the customer (VoC) program.
At this point I’m thinking, “Fantastic! Their companies care about customer experience, and they are implementing mission-critical programs that will help them succeed!”
Plus they’re coming from a good place. When we asked our panelists how they’d describe their executive team’s goal for customer experience, 63% of respondents said that their senior executives want to be the best in their industry, while another 13% said that their execs shoot higher and want to be seen as a customer experience leader across all industries.
Building a customer-centric culture is occupying the minds and activities of a lot of companies that I’m talking with lately. This is great, because culture is the difference between going through the motions of a script and internalizing a set of values that dictate actions beyond the script.
Let me give an example: I recently was on the phone with an incredibly chipper call center rep at a telecommunications company. He didn’t answer either of the two questions that I had, yet remained friendly throughout the call. As the call ended, he said: “We aim not just to meet your expectations, but exceed them. Have I done that for you today?” Not only was the question a setup that will skew results, but the asking of the question made it clear that the company hadn’t succeeded in infusing customer-centric DNA into at least this person. A more customer-centric response is what you typically get from Vanguard or Fidelity: “I’m sorry that I can’t answer your questions. Let me find someone who can. Would you like to hold or can I call you back?”
Don’t get me wrong: Company intentions are important. Before I get into the culture part, I always step back with clients and ask "what kind of culture?"Don Norman's story about Southwest Airlines, in which the company refused to give customers reserved seats, food, and baggage transfers is a great example. The company's primary value proposition to customers is low prices (along with on-time service that's fun). That sets the stage for the kind of culture the company sets out to create. It's not customer-centric at all costs. It's focused on what’s valuable to customers.
The most important finding was that for almost two-thirds of the brands in our study, their customer experience ranges from just “OK” to “very poor”. In fact, 35% of scores fell into the undifferentiated “OK” range — our most heavily populated bracket and not a good place to be if you want your brand to stand out from competitors. Only 6% of firms ended up in the “excellent” category, down from 10% of the brands in last year’s report.
What this tells us is that mediocre-to-bad customer experience is the norm, and great customer experience is really hard to find. But why does this matter? Because the old adage “A customer who gets good service will tell one person, yet a customer who gets bad service will tell 10 people” is very true. Another Forrester study shows that about one in three financial customers with a bad experience tells her friends, about one in five recommends that her friends avoid that given company, and one in 10 reduces their value of her accounts.
Over the past five years, Forrester has observed an increase in the number of companies that have a single executive leading customer experience efforts across a business unit or an entire company. Whether firms call these individuals a chief customer officer (CCO) or give them some other label, these leaders sit at high levels of power at companies as diverse as Allstate, Dunkin’ Brands, Oracle, and USAA.
We define the CCO as: “A top executive with the mandate and power to design, orchestrate, and improve customer experiences across every customer interaction.”
Who are these new customer experience executives? Why do companies appoint them? And does your company need one? To answer these questions for a newly released report called “The Rise of the Chief Customer Officer,” we gathered data on 155 CCOs, surveyed a panel of customer experience decision-makers from large North American firms, and conducted in-depth interviews with CCOs from both B2C and B2B companies. Here are a few of the nuggets we found:
Title. Forty-four percent have the title of “chief customer officer,” 23% are called “chief client officer,” and 8% go by “chief experience officer.” The many, highly varied titles of the remaining 26% highlight the extreme difficulty of trying to spot CCO-level people by title alone, such as USAA’s “executive vice president, member experience” and Sirva’s “customer experience, operational excellence, and chief innovation officer.”
There are rare moments in technology when everything changes. When the entire framework defining how we interact with machines (and consequently, each other) shifts perceptibly. That happened when the TV was invented, it happened when the computer mouse was made available commercially. These kinds of changes forever alter our economics, our social life, and our individual experiences.
It's now about to happen again. Only this time, the shift that is coming is on such a large scale that not only will it change things dramatically, it will usher in a new era in human economics (and therefore, everything else).
We call the new era the Era of Experience. I'm working furiously to complete a report detailing all the specifics so you'll understand what this era entails and, importantly, what you can do to anticipate this era rather than follow it.
In fact, at our Customer Experience Forum in New York City during the last two days in June, I gave an exclusive preview to the 600+ attendees of what the Era of Experience was. In my speech, I gave a live demo of the PrimeSense technology that the people at Xbox built on to create the Kinect for Xbox 360 platform. This platform incorporates a full-body gesture control interface, voice control, and face recognition. It's as if all the science fiction we've been reading for decades was really just a how-to manual for Kinect. Oh, and this future-defining platform costs all of $149.99 at Amazon.
It’s hard to find a firm that says: 1) We don’t care about customers, and 2) we don’t care about being good corporate citizens. That said, it’s astounding to see companies on a daily basis act in ways that show complete disregard for customers and their general well-being. For anyone within companies who cares about brand, this ought to sound alarm bells, particularly as customers become more empowered with global platforms to let others know about their dissatisfaction and as they have increasing ability to take their business elsewhere.
Two relatively new executives within companies are spending their days trying to get company actions aligned with marketing messages: the chief customer officer (or more often a VP of customer experience) and the chief sustainability officer (or more often a VP of sustainability). There is a great opportunity for these two executives to form an alliance that could strengthen both. Why?
If you’re reading this post, you’re someone who cares about customer experience. You might even be one of the professionals who works in the field of customer experience full-time.
So I’m going to go out on a limb here and guess that you occasionally get the question, “What is ‘customer experience?’”
Now maybe when you’re asked that question, it isn’t phrased so directly (or politely). For example, I get asked, “Isn’t customer experience just marketing?” And, “How is customer experience different from customer service?” But the bottom line is that people are looking for a definition that’s crisp, useful, and distinct from the definitions of other things that companies do. They are right and reasonable to ask for this — but collectively those of us who work to improve customer experience have failed to answer them.
I mean no offense to the many people out there who have tried to define “customer experience.” I’ve read many of the attempts that are out there, and the ones I’ve seen tend to be longer and more convoluted than necessary.
Not that customer experience is an easy concept to define. The customer experience team at Forrester has been debating the definition of customer experience for a while now, and it took us until recently to reach consensus. We now define customer experience as:
“How customers perceive their interactions with your company.”
His big takeaway is that consumers are still much more likely to provide feedback directly to companies through more traditional channels (like surveys, phone calls, email, and postal mail) than provide feedback through social channels. More specifically, 71% of US consumers who had unsatisfactory service interactions in the past 12 months provided feedback through at least one traditional channel (including email), while only 16% provided feedback through any of the social channels we asked about.
Despite the buzz around social media, this data shows that the majority of customer feedback comes directly to companies via surveys, phone, and email. Organizations should implement sophisticated voice-of-the-customer programs that use text analytics and other technologies to mine this information to better understand customers' needs and the issues they're dealing with, identify best practices, and come up with improvements whenever possible.
Firms are often challenged to undertake transformation at a grand scale — to sustain and scale BPM programs across the organization. All firms are at subtly different levels of maturity, with different histories, unique cultures — and while there are many commonalities, every organization needs to approach the BPM and transformation agenda in subtly different ways.
Enterprisewide transformation involves a large number of people doing some pretty special things. The reality is that each organization will need its own subtle blend of skills, methods, techniques and tools. In a sense, the organization needs to weave its own proprietary method framework — to create its own fabric — a unique approach that reflects its special needs, the maturity of the different business units, the history of change, culture, and political challenges.
There will be people inside the organization that need to own that framework and set of methods, monitor its efficacy, and improve it over time. And while external resources can complement those employees, the executives at the helm should understand that they cannot abrogate responsibility for change. Too often, I hear the transformational objective stated and then followed by something like " . . . and we are looking for an outsource provider to do it all for us.” That sort of attitude is likely to end up in a courtroom (as things go sour down the line).
Coming back to the weave — populating that framework is always a challenge (since you only know what you know you know). What methods, techniques, and approaches does your organization need? For the organization to answer those questions effectively, it needs to understand the likely challenges it will encounter and assess the skills and capabilities required to overcome them.
We just finished judging the entries for Forrester's Voice of the Customer Awards 2010. Announcing the winners will have to wait until we’re onstage at the Customer Experience Forum in New York on June 29. But there is something I want to announce right now: I am really impressed by the entries! :-)
Because I was also a judge last year, I couldn’t help but notice some big changes from last year. Here they are in no particular order: