The Data Digest: What Millennials Need From Your Loyalty Program

Anjali Lai

If you follow my blog regularly, you already know that I love to travel. And while I’ve had my fair share of travel hiccups (missed flight connections, last-minute assignments to the dreaded middle seat, lost luggage – you name it), I’ve always glossed over these snafus and accepted the fact that traveling inevitably comes with a few small challenges.

Until this year, when I hit executive traveler status on a major airline thanks to the loyalty points I amassed during my trips. Suddenly, my tolerable travel experiences became overwhelmingly enjoyable ones, and I quickly came to love (a word I don’t use loosely!) flying with this airline because of the VIP treatment. My reaction isn’t unique. In fact, it’s characteristic of my generation: Forrester’s Consumer Technographics® data shows that Millennials highly value loyalty programs that reward customers with enhanced customer service and special status, as Millennials cherish this sense of validation and exclusivity.

Specifically, our data shows that the loyalty program reward tactics that work for middle-aged and older consumers are not enough to satisfy Millennials. While customers of every generation want discounts, Millennials also expect loyalty programs to offer a premium customer experience. And what’s more, younger consumers want the flexibility of applying loyalty points to a variety of benefits – from travel upgrades to digital media content to charitable donations – while their older counterparts are happy using their points to get cash back.

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Why CX? Why Now? Happy CX Day, 2016!

Maxie Schmidt-Subramanian

Happy CX Day! As part of our CX Day celebrations, which include a very special episode of CX Cast, and a comprehensive CX reading list that doubles as a holiday gift buying guide for the CX pro in your life, we are launching a new report: Why CX? Why Now? 

In collaboration with my colleague, Sam Stern, we looked at why now is the time for CX pros to convince executives and colleagues at their organizations to double down on improving the customer experience. To make it a lot easier for you to message this across in your firm, we included an infographic that:

  • Conveys without a doubt how urgent it is to invest in CX because your customers, competitors and employees are changing!
  • Gives you six tangible business benefits from improving customer experience that will help you make the case for why CX drives business results. For example, Southwest Airlines, a consistent CX leader, has been profitable for 43 consecutive years, in an industry better known for red ink and bankruptcies.
  • Tells you which challenges most companies (and probably yours) face on the road to better CX. One example: More than half of CX pros said that their organization's culture impedes their success.
  • Shows the path to improving CX, starting from a CX vision, continuing with building CX competencies and strengthening your business technology foundation. 
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The Canada Customer Experience Index For 2016, Part 2: Emotion Holds The Key To CX-Fueled Loyalty

Roxana Strohmenger

Last week, my colleague Rick Parrish discussed the stagnation in CX for Canadian brands from our Canada 2016 Customer Experience Index™.

In this post, I’ll explore another big finding from our research: The way an experience makes customers feel has a bigger influence on their loyalty to a brand than the effectiveness or ease of the experience.

CX professionals often think that getting emotion right is simple: Make your customers happy, not angry. However, we find that anger and happiness do not have a very strong influence on customer loyalty. What does?

·         Making customers feel appreciated, confident, and respected drives loyalty. On average across the industries, if you make customers feel appreciated, for example, we see that 80% of them will advocate for the brand, 70% will stay with the brand, and 68% will increase their spending with the brand. In stark contrast, only 2% will advocate, 13% will stay, and 8% will increase their spending with the brand when they don't feel appreciated.

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The Demand For Industry-Specific CRM Explodes

Kate Leggett

Horizontal CRM solutions — as mature as they are (and they have been around for 20+ years) — don't always do a good job at supporting industry-specific business processes. Consider these examples: CRM users in manufacturing need capabilities to track projects, schedules, time sheets, labor efficiencies, and equipment inventory in addition to core CRM attributes. Alternatively, a real estate professional would like to use CRM to track not only client contact information but also additional data elements such as properties, lease/sales comps, and stacking plans, which illustrate how healthy a property is in terms of tenants and leases.

So, over the years, CRM vendors have built vertical market software applications from the ground up for specific industries. Historic, heavyweight on-premises applications — like Oracle Siebel, with 21 built-on industry verticals — are giving way to newer, more agile software-as-a-service vertical offerings that offer scripted best practices. And other vendors have taken a different tactic and developed lighter-weight systems of engagement to consolidate and visualize data from disparate systems to drive better decision-making. This leaves a CRM buyer with three options to choose from:

CRM Type

Description

Pros

Cons

Horizontal CRM

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CXDC 2016 Q&A with The Department of Veterans Affairs (VA)

Rick Parrish

CXDC 2016 is just around the corner, and we have an incredible agenda featuring 25+ Federal CX leaders and top Forrester analysts. 

I asked two of our speakers from the Department of Veterans Affairs (VA) – Sarah Brooks, Director, Insight & Design and Julia Kim, Chief of Staff, Veterans Experience – to chat about some of the ways VA is improving the customer experience (CX) for veterans.

Rick: The CX team at VA has been very busy! What two or three CX improvements over the past year are you most proud of? Why?

Sarah and Julia: It has been busy! Especially when we are trying to build the office while also doing the work. We are proud of many things (more than we can put into a blog post!), but here are a few things we’ll highlight:

  • Reframing the Disability Compensation and Pension application process from Veterans’ points of view. There were only five people in our office, and Secretary Bob asked us to look into this thing that he was getting a lot of calls and emails about. What we found is that VA is not managing our Veteran-facing touchpoints during this process – in fact, we have very few front stage touchpoints at all. We have done a lot of work to optimize the back stage (see figure 1). We were not thinking about how to help Veterans understand what was happening and why it was happening. This was our first exposure to what has become a recurring theme at VA.
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Thoughts on Customer Experience Strategy: Should All CX Be Awesome?

Amit Bhatia

So I visit this coffee shop close to office pretty often. The other day I was waiting in line and I paused to ask myself – why do I keep coming here? I mean, everything about the exercise including the taste is pretty unremarkable. I order, I’m served, I leave. So then why do I repeatedly give them my business?

You guessed it. I go there day after day, month after month because it is – wait for it… convenient. And predictable. Certainly not because it’s “awesome”. I’m not looking for a fake smile or a scripted line. It’s a really tiny part of my day. My expectations are minimal, they are met, and I’m satisfied. That’s it.

Globally, companies swoon over the superior experience delivered by the likes of Amazon and Apple; paeans have been written about Zappos’ legendary customer service. Last time I looked, a Zappos service associate apparently spent over 10 hours on a service call! Good for them!

Should you follow suit? May be not.

Of course CX is critical. In fact, in the Age of the Customer, we propose it’s the only way forward.

However, people don’t need “awesome” all the time. In my recently published Forrester report Should All Customer Experiences Be Awesome? I dissect this very issue.

At Forrester, we talk to many companies as well as customers the world over. In our experience we observe two things:

  • Customers and companies compare experiences across industries.  And, as a result,
  • CX laggards often want to emulate leaders. For instance, Citi, acting on Apple-fever went ahead and built an Apple Store-inspired “bank of the future” using the same architects.
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The US Customer Experience Index For 2016, Part 3: Emotion Holds The Key To CX-Fueled Loyalty

Roxana Strohmenger

Over the past two weeks, my colleagues Harley Manning and Rick Parrish have discussed the rising tide of CX quality, stagnation among top brands, and CX-fueled digital disruption in the results of our US 2016 Customer Experience Index™.

In this post, I’ll explore another big finding from our research: The way an experience makes customers feel has a bigger influence on their loyalty to a brand than the effectiveness or ease of the experience.

CX professionals often think that getting emotion right is simple: Make your customers happy, not angry. However, we find that anger and happiness do not have a very strong influence on customer loyalty. What does?

  • Making customers feel valued, appreciated, and confident drives loyalty. Consider the hotel industry, which had the largest percentage of customers that reported feeling “valued.” We found that 88% of these “valued” individuals will advocate for the hotel brand, and over three-quarters of them will keep their existing business with the company as well as enrich their relationship.
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Federal CX Professionals: Your Time Is Now

Rick Parrish

This post is part of a series dedicated to the challenges, opportunities, and realities of federal customer experience. Interested in learning more? Check out our recent webinar to learn why CX success is vital for government success.

In my last post, I explained how forces arrayed against federal customer experience (CX) improvement hinder Washington’s efforts. Luckily, there’s a way out of this quagmire. To overcome anti-CX forces and achieve all the advantages of better federal CX, customer experience professionals should:

  • Form an unstoppable coalition. Don’t try to fight alone. Instead, join forces with like-minded feds to share information, challenges, and solutions. Start by leveraging the large network of the General Services Administration’s CX Community of Practice, which has over 500 members from more than 70 federal, state, and local government organizations. Then tap into the bureaucratic muscle of the senior program managers, OMB staff, and other officials on OMB’s new Core Federal Services Council, the “government-wide governance vehicle to improve the public’s experience with federal services.”
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Yes, Federal CX Professionals, They Are Out To Get You

Rick Parrish

This post is part of a series dedicated to the challenges, opportunities, and realities of federal customer experience. Interested in learning more? Register for our complimentary government CX webinar next week, and be sure to join me as I host Forrester's first-ever CXDC Forum on Sept. 12th in Washington, DC.

It's been 23 years since the White House first told federal agencies to improve the experiences they provide to customers. Yet three presidents, two executive orders, and a bevy of memos and committees later, federal customer experience (CX) is still in crisis. In fact, federal agencies have:

  • The lowest average score on Forrester's CX Index. The federal average of "poor" was worse than all 17 private sector industries we rated and far below the overall average of "OK." In fact, even the weakest performers in most industries still outscored the government average. The National Park Service and US Postal Service, the highest-rated federal agencies, scored only as high as the average for banks.
  • A near-monopoly on the worst experiences. Seven out of the 10 worst organizations in the CX Index – and five out of six in the "very poor" category – were US federal agencies. Only internet service providers and TV service providers came close to matching this level of underperformance.
  • Shockingly bad websites. Forrester's Consumer Technographics survey shows that only 53% of customers agree that federal websites are "exactly what [they] should be." Fewer than three in five customers consider federal sites easy to use or well organized.
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The Democratization Of Customer Service Forces Vendor Consolidation

Kate Leggett

Today, customers expect easy, effective customer service which build positive emotional connections.  And they expect this type of service from all companies that they do business with – companies that are both big and small.  

Companies use complex software from different vendors to support customer service operations. They use:

  1. Queuing and routing technologies. They capture the customer inquiry, which can be via voice, digital, or social channels, and route and queue the inquiry to the right agent pool.
  2. CRM customer service technologies. They enable customer service agents to create and work the incoming service request.
  3. Workforce optimization technologies. They record agent interactions with customers, evaluate the quality of these interactions, recommend targeted training based on quality scores, manage agent schedules, forecast future schedules and more.
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