As I recently celebrated my fifth anniversary as a Forrester analyst, I reflected on how my coverage area has changed. For the past five years I've covered the web content management (WCM) market. This has been a healthy market, and I still get plenty of interest from my clients on this topic.
But the context of that interest has changed markedly, particularly over the past year. When clients used to ask about WCM, they wanted to know about WCM and WCM only. But these days, they ask about WCM in the context of other technologies supporting customer experience, such as commerce, CRM, and analytics. Our clients have reached a logical conclusion: WCM isn't the end-all-be-all for digital experiences but instead is one piece of the customer experience management (CXM) puzzle.
And the market will continue to evolve in 2012. In particular:
Watch for an avalanche of acquisitions, both big and small. Though larger vendors have multiple pieces of the CXM puzzle, no one has yet put together a complete portfolio. Vendors are still missing some critical pieces, such as rich media management (IBM), commerce (Adobe), and testing and optimization (Oracle, SDL). Watch for the CXM vendors to compete to fill these gaps. High-reaching best-of-breed WCMs such as Sitecore may not remain independent for long.
Contextualization will become the byword. Forget complicated business rules and template schemes. Technology to contextually adapt customer experiences based on user segment, browsing behavior, locale, and device will be high priority. Vendors will make strides so that customers can increasingly take an "automate + optimize" approach: automating contextualization for most experiences and manually optimizing it for a few high-profile experiences, such as home pages.
I scanned the list of industry high scores and wasn’t surprised to see names like USAA (banks, credit card providers, insurance providers), Apple (consumer electronics manufacturers), and Southwest Airlines. But there were names we don’t hear about as much in customer experience like Morgan Stanley Smith Barney (investment firms), Bright House Networks (ISPs), US Cellular (Wireless service providers), and Dish Network/EchoStar (TV service providers)*.
To me this says that brands trying to differentiate on the basis of customer experience need to look in a variety of places for possible competitive threats and standard-setters, not just the most obvious ones. History is full of examples of small firms that could transform more quickly than their larger competitors or introduce a disruptive innovation that no one saw coming. I expect both those scenarios to play out in customer experience over the next few years. The question is just where and when.
As part of our research in 2012 you can be sure we’re going to look into what these lesser talked about brands are doing to raise the bar in their industries, but in the meantime here are two of my favorite examples of CX innovations that came from places I would have never thought to look:
Hotcakes, you've got some competition: the phrase "selling like tablets" might soon enter the global lexicon. And it's not all hype — though there is a fair bit of that as well. Tablet users in the US are estimated to grow at a compound annual growth rate (CAGR) of 51% from 2010 to 2015. That’s a fast-growing market for firms of all stripes.
As such, the tablet as a touchpoint is becoming a critical consideration for eBusiness & Channel strategists. This is especially true for executives at banks, as financial transactions benefit from the immediacy of the mobile channel, but users often struggle to make these transactions on smaller smartphone screens.
In my new report, I outline the process Citibank went through in building its own tablet banking strategy, developing an iPad app, rolling it out to customers, and continually improving the service. We outline how Citi:
Since publishing our Customer Experience Index, 2012 last week, we've gotten a flood of questions about the research, methodology, and results. I'm putting the finishing touches on a full Forrester report that answers the ten most common questions but thought I'd give everyone a sneak preview with a blog post summarizing a few of the answers.
1. Who are the people rating the brands in Forrester's Customer Experience Index?
To produce the CXi each year, Forrester conducts an online survey of US individuals ages 18 to 88. This year, there were 7,638 such folks who answered the survey during October 2011. We weighted the data by age, gender, income, broadband adoption, and region to demographically represent the adult US online population. The sample was drawn from members of MarketTools' online panel, and respondents were motivated by receiving points that can be redeemed for a reward.
2. Which touchpoints are consumers rating when they answer the CXi questions?
The short answer to this question is "any touchpoints they used to interact with the brand." We don't direct consumers to think about any specific touchpoints as they rate their interactions. Instead, we want them to consider all of their interactions with that brand over the past 90 days, regardless of how they happened.
We live in a world of increasing complexity: an increasing number of communication channels, an explosion of social data, the intertwining of sales, marketing, and customer service activities, and a growing amount of information and data that customer service agents need to answer customer questions. These issues complicate the challenge of being able to provide customers the service that is in line with their expectations — service that keeps customers loyal to your brand yet that can be delivered at a cost that makes sense for your business.
Being able to deliver the right customer service involves:
We all know that the gap between a customer’s expectations and the service they receive is huge. Customers are increasingly knowledgeable about products and demand value-added, personalized service. Businesses struggle with understanding which initiatives will move the needle in a positive direction and are thus worth investing in. Here is the second tip in my 10-part blog series on how to master the service experience.
Step 2: Is your customer service aligned with your company brand?
Meeting the needs of your customers are important. However, it’s just as important to stay true to your brand and design a service experience that supports your value proposition. Customers need to know what your company represents — which is especially important in the message-cluttered social media world that we live in — and have this brand reinforced every time they interact with you during the sales process, and for every interaction after the initial sale.
These companies have aligned their service offering to help reinforce their brand with their customers:
Apple. Its products are high-style and priced at a premium. Apple’s customer service is very much in line with its brand. The firm delivers customer service on the customer’s terms — you can arrange a phone call with an Apple Expert who specializes in your exact question and can talk with them now or later at your convenience. They’ll even call you. You can email Apple or browse its extensive knowledge base.
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.
Development leaders! Project leaders and business analysts! Application and solution architects! Want to move forward on your business technology (BT) journey and be viewed by your business stakeholders as a valuable team member? Take a tip from last week's Forums held in Boston. Embrace Business Process Management (BPM) And Customer Experience. Don't ignore them, embrace them. Why? They're essential to helping you achieve your business outcomes.
I know, I know. You read the above and now think "Gee Kyle, what's next? Going to enlighten me on some new BPM or customer experience management technology that's going to transform my very existence, my company's future?"
Nope. Let me explain....
Last week we hosted more than 250 of your application development and delivery and business process peers in Boston and focused on how to succeed in the new world of customer engagement. The most impactful discussions I heard were the side conversations we held with attendees, sometimes occurring over dinner and cocktails. We didn't discuss technology. We discussed the skills your peers were developing in two fundamental areas:
BPM - no, not the technology but the Lean and Six Sigma based methods, techniques, and tools organizations use to focus on business processes and not functions; to strive for continuous improvement; and to focus on customer value.
Customer experience - defined more eloquently by my peer Harley Manning, but I'll summarize as the methods, techniques, and tools used to understand how customers perceive their interactions with your company.
My colleague Andrew McInnes recently wrote a post about the tunnel vision that results when companies rely solely on analytics for understanding customers. By neglecting qualitative research methods like ethnography and related tools like personas and customer journey maps, firms run the risk of thinking they know what customers want and need but in reality not having a clue. And that’s the root cause of some of the worst customer experience problems — issues that can drag down a business.
Take the case of Kevin Peters, Office Depot’s president, North America. Kevin recently spoke at our Customer Experience Forum where he described the biggest puzzle that confronted him when he got his job. Even as sales declined, store mystery-shopping scores compiled by a third-party research firm were going through the roof. How could this be? How could customers be having a great in-store experience but not actually buying?
As it turned out, the mystery shoppers had been asking the wrong questions. They were accurately reporting that the floors and bathrooms of Office Depot stores were clean and that the shelves were stocked with merchandise. But as Peters put it: “Who cares?” When he personally visited 70 stores incognito, walked the aisles, and talked to customers, he discovered his real problems. For example, the combination of very large stores, weak signage, and employees who weren’t all that helpful made it hard to find products. That resulted in customers who walked in determined to buy and walked out without a purchase.