Our Data Once Again Shows That Better Customer Experience Yields Millions In Revenue Benefit

Megan Burns

I just published Forrester’s fourth annual report “The Business Impact Of Customer Experience, 2012” using updated data from the 2012 Customer Experience Index. Once again, the news is good for companies hoping to get a financial boost from their efforts to improve customer experience.

 In the industries we modeled, the revenue benefits of a better customer experience range from $31 million for retailers to around $1.3 billion for hotels and wireless service providers.

What’s behind these impressive numbers? It’s pretty simple, really.

  • Companies with better customer experience tend to have more loyal customers. We’ve shown through both mathematical correlations and actual company scores that when your customers like the experience you deliver, they’re more likely to consider you for another purchase and recommend you to others. They’re also less likely to switch their business away to a competitor. These improved loyalty scores translate into more actual repeat purchases, more prospects influenced to buy through positive word of mouth, and less revenue lost to churn.
  • We model the size of the potential benefit using data from real companies. In each industry, we create an archetypal “ACME Company” that scores below industry average in the Customer Experience Index (CXi). We then look at what would happen to ACME’s loyalty scores if it went from below average in the CXi to above average for its specific industry based on the actual scores for companies in that industry.
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Interactive Design Agencies In Europe — Please Report Your Capabilities In Forrester's 2012 Online Survey

Jonathan Browne

Once again, I'm going to write an overview of the European interactive design agency market to help Forrester clients identify design agencies to help them with their projects in Europe. The report title will be "2012: Where To Get Help For Interactive Design Projects In Europe." Participants will receive a copy of the research and their details will be included in the report.

I would like to invite interactive design agencies in Europe to participate. Please complete the agency survey at the following location:

https://forrester.qualtrics.com/SE/?SID=SV_3ItaKu2lYfupm3G

The survey is designed to gather data from European firms that have significant experience in designing and developing digital experiences (web, mobile, etc.). Survey questions cover interactive agency size, practice areas, industry expertise, locations, and a range of costs for typical engagements. If you know any agencies that should be included in my report, please forward the survey link to them or show them this blog post.

Thank you!

P.S. If you want a preview of the survey, you can see all the questions on the following site:

https://forrester.qualtrics.com/CP/File.php?F=F_089Q1OJFXDCdXvK

 

UPDATE (10/May/2012): Survey deadline extension. This survey will be open until 15/May.

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Three Ways To Use CXi Data To Inform Customer Experience Improvement Efforts

Megan Burns

In the two months since I published "The Customer Experience Index, 2012," the number of companies requesting a deeper look at the data has been quite high. Many have asked me to suggest ways to use the information that’s available, so I thought I’d share the analyses I've found most interesting so far:

  1. Compare Customer Experience Index (CXi) respondents to your company’s target customer profile. As part of the CXi survey, we collect a range of demographic data including age, gender, marital status, household income, employment status, parental status, and location. Clients find it helpful to see if differences between our scores and their internal data stem from the fact that we’re surveying different populations. They’re also using it to think through why scores on a given criteria are what they are — for example, if most respondents for a TV service provider have small kids, the firm’s parental controls may have a bigger impact on the “meets needs” score than they would if most respondents had grown children.
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Lessons Learned From 1,500 Website User Experience Reviews

Adele Sage

After more than 12 years of evaluating website user experience, Forrester reached a major milestone — completing 1,500 Website User Experience Reviews. That's more than 100 reviews per year or more than 10 per month. Whew! We've been busy.

These reviews (using an expert/scenario/heuristic review methodology) span B2C and B2B sites, intranets, and employee portals across many industries and countries. What we do: We identify target users and attempt to accomplish realistic user goals for those users, and then we evaluate the experience on a set of 25 criteria graded across possible scores of -2 (severe failure), -1 (fail), +1 (pass), or +2 (best practice) for each criterion.

So what did we find?

  • Many poor experiences. Since scores for each of the 25 criteria range from a -2 to +2, total scores could range from -50 to +50, and passing all tests would result in a grade of +25 or higher. But the average score across all of our reviews was only +1.1, and only 3% of the sites earned a passing score (that's a total of 45 sites out of the 1,500. Yes, you read that right: 45).
  • Fluctuations in scores over time. The average score rises and falls when we look across versions of the methodology and over time. But, finally, in the latest version, there was a significant increase in the average score over the years just prior — a trend we hope to see continue. There's a similar pattern when we compare B2C and B2B sites. B2B sites have consistently lagged behind B2C sites in user experience scores, but we're finally seeing that gap narrow.
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Enjoyable Experiences Are The First Step To Creating Emotional Connections With Customers

Megan Burns

The Holy Grail of customer experience for many firms goes beyond useful and easy to interactions that create an emotional connection with the customer. That’s not easy to do, but step 1 is creating an experience that is at least enjoyable. Now, before you object . . . I’m not talking Disney-level enjoyable here — just generally pleasant and maybe even a little fun. Two brands that proved it’s possible with high scores on the CXi’s “enjoyable” criteria are:

  • USAA (bank): 84%.
  • Courtyard by Marriott: 83%.
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It's Not Easy Being Easy

Megan Burns

Thanks for all your thoughtful responses to last week’s post about why companies fail to meet customer needs. Clearly there’s more work to be done in that department, but for now, I want to move on to the next Customer Experience Index (CXi) criteria: “easy.” Many firms claim to be easy to do business with, but which ones got the highest rating from customers?

This year, USAA (bank) and Kohl’s both earned a score of 92% in this category.

For USAA, there is definitely some overlap between its ability to identify latent customer needs and its level of easiness. For example, depositing a check via mobile phone makes the deposit process easier for everyone, not just the most geographically dispersed parts of the customer base. Strong customer understanding also led to creation of the Auto Circle experience, which is designed to make the entire car buying process easier for customers, not just the parts that a financial institution like USAA would typically have been involved in.

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Forrester’s Voice Of The Customer Awards 2012 — Nomination Period Begins March 5th

Adele Sage

It’s that time of year again. We’re already in the midst of planning our annual Customer Experience Forum, and now we’re gearing up to collect and evaluate nominations for our Voice Of The Customer Awards — which we’ll present at the Forum.

If you’re new to the awards, here’s some background: Forrester's annual Voice Of The Customer Awards recognize organizations that excel in collecting, analyzing, and acting on feedback from their customers, incorporating customer insights into everyday decisions. We conduct the awards for three basic reasons: 1) to emphasize the importance of voice of the customer (VoC) programs; 2) to celebrate organizations that are leading the way; and 3) to highlight best practices.

If you (or, if you’re a vendor, your clients) have a strong VoC program, we encourage you to participate. It's free and it offers a great opportunity to earn some solid PR while sharing your wisdom with other customer experience pros. Also, we only reveal the names of the finalists and winners, so the potential downside is limited.  

You can find all of the information you need on our VoC Award home page. The 2012 nomination form will become available there on March 5th. In the meantime, you can review this year's timeline, get answers to FAQs, and check out information about past winners.

Customer Experience Leaders Obsess Over Customer Needs

Megan Burns

Last week, I took you through the top scorers in this year’s Customer Experience Index by industry. But 13% of customer experience professionals said that they aim to differentiate across all industries. Which brands do they need to beat to reach that goal? Let’s start with the “meets needs” category (I’ll cover the other two in future posts). High scorers on this criteria in 2012 were:

  • USAA (bank): 92%
  • Amazon.com: 91%
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Watch Out…Customer Experience Innovations Can Come From Where You Least Expect Them

Megan Burns

Last week I posted some of the most frequently asked questions we get about the Customer Experience Index, 2012. One question I didn’t include but should have is “Who got the highest score in my industry?”

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:

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Improve, Transform, Or Sustain: What’s Your Path To A Better Customer Experience?

Kerry Bodine

If you’re reading this post, there’s probably at least one person in your company (you) who’s already working to improve your customer experience in some way.  That means your company’s CX efforts fall somewhere on the curve below.

Improve:  This is where most companies start their customer experience initiatives.  Typically, a small group implements a voice of the customer program, prioritizes customer feedback, and routes it to different parts of the organization so that they can make changes.  Some employees might adopt new customer-focused work practices, but these efforts remain ad-hoc or siloed.  The net result is incremental customer experience improvements.

Transform:  At a certain point, some companies decide that they want to leverage customer experience in order to create a jump in customer loyalty, accelerate growth, and differentiate themselves from competitors.  When that happens, incremental customer experience improvements are no longer sufficient.  The company begins to change just about every part of the business — including processes, policies, technologies, and incentives — to focus on the needs of customers.

Sustain: For companies that decide to take the path towards transformation, this is the end goal.  Once a company puts customers at the center of all business operations, employees need to figure out how to sustain the new ways of working so that they can continue to deliver a great customer experience indefinitely.

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