Over the past two years, consumer technology adoption and market forces have catapulted the field of customer experience into strategic stature. In 2012, this shift manifested itself privately through sweeping organizational changes at companies in nearly every industry — and shined publicly through professional organizations, the media, and even the courts.
However, it will be years before customer experience is embedded to the same degree as mature business disciplines like finance, human resources, and information technology. While many firms have been working diligently to improve their customer experience for years, still others remain woefully in the dark about the business value it can bring. The net result is that in 2013 — and for several years to come — the customer experience industry will be characterized by efforts that range wildly from systematic change initiatives to desperate shortcuts.
In our latest report, Ron Rogowski and I outline the changes that customer experience professionals can expect in 2013 and highlight the pitfalls that companies need to avoid during the upcoming year. For example:
A couple of months ago, I spoke at a conference in Las Vegas. Immediately before my talk, two advertising execs, one a professed quant geek and the other a “creative,” spoke about how their agencies rely less on hunches these days and more on quantitative data to drive emotional relevance between their clients and consumers. “We can identify human emotions in massive rivers of data,” the ad men said. When I pressed them for an example during the Q&A session, they described how they had recently mined millions of clickstreams, search queries, video views, website clicks, and the like for a major mortgage lender. All in, the technology investment behind their analysis must have stacked well into six figures. And their big emotional insight? When people start shopping around for a mortgage, that’s all they can focus on until they’ve gotten it all sorted out.
I could hardly believe my ears! Any skilled ethnographer could have discovered that same insight — and then some — through a day of in-home customer visits and $150 in taxi receipts.
Customer experience professionals can now glean customer insights from social media, financial systems, emails, surveys, call centers, and digital and analog sensors. It’s amazing and wonderful, yes. But here’s the danger: Companies that become mesmerized by big data put themselves at risk of spending enormous amounts of time and money amassing new data sources — and in the process, forgetting that research methods like observation and one-on-one interviews even exist. This has the potential to create a large, and exceedingly expensive, blind spot.
Don’t get me wrong. I’m not a big data hater. However, to create a complete picture of who your customers are and what they really need, you need a combination of quantitative and qualitative research methods.
Our book giveaway contest is over and our 10 randomly selected winners are:
Holly S. from Fannie Mae
Arshad F. from Mobrise
Thomas Z. from CIO2020.com
Juha-Pekka H. from P&C Insurance
Monika K. from HSBC
Francesco R. from Pasticceria Romeo
Kim P. — @retaincustomers
Christian B. — @CSinnovations4
Derek G. — @derekgardiner
Zsolt N. — @zsoltnagy4
Someone from Forrester will be in touch soon. Congratulations, and happy reading!
What simple innovation brought billions in new investments to Fidelity? What basic misunderstanding was preventing Office Depot from achieving its growth potential? What surprising insights helped the Mayo Clinic better serve both doctors and patients? The solution in each case was a focus on customer experience, the most powerful — and misunderstood — element of corporate strategy today. Your gut already tells you that customer experience is the key to business success. Now you can prove it. Based on fourteen years of research, Forrester’s new book Outside In offers a complete roadmap to attaining the experience advantage.
Want to win a copy of Outside In? We’re giving away 10 copies this Friday, December 14. You can enter to win two different ways:
Recently I was on a panel about the impact of cultural change on customer experience. My fellow panelists included Meltem Uysaler, a senior vice president of customer experience for Citi, and Patricia John, the customer experience director for Europcar UK (a car rental agency).
Right at the end of the session, Patricia responded to an audience question by saying that Europcar focused on creating a customer-centric culture because they can’t script every interaction. Therefore, employees need to be able to make the right judgment calls on their own when dealing with customers (or anything having to do with customers, which includes virtually everything a company does).
Patricia John is right. At Forrester, we see this dynamic time and again through our research. For example, every time I see USAA’s Wayne Peacock speak, he always uses the phrase, “We do the right thing because it’s the right thing to do.” That’s extremely credible coming from Wayne: He’s the EVP of Member Experience at USAA, which is the number one bank, the number one credit card provider, and the number one insurance provider in our Customer Experience Index.
You, too, probably see this dynamic because it plays out in the news every day. Just compare the decision made by a Southwest Airlines pilot to the decisions made by some United Airlines employees.
It’s that time of the year again . . . Most of you are well into (if not done with) your 2013 planning — and at Forrester, we’ve also got our eyes on the year ahead.
Ron Rogowski and I have been engaging our fellow analysts in lively conversations about what will happen in the field of customer experience (CX) in 2013. But before we tell you what we think, we want to get your perspective on what 2013 will bring. So here’s your chance for fame and fortune — or at least the opportunity to be mentioned in a Forrester report! If your ideas or comments contribute to our final analysis, we’ll add you as a contributor to the research.
Specifically, we’d love to know:
What will be your biggest CX challenges next year?
What are your most important CX initiatives and priorities for the next 12 months?
What are your predictions for the field of CX in 2013?
I was both encouraged and perplexed by an article in The Wall Street Journal that described the internal debate at Bank of America over how to grow revenue. One side of the debate wants to charge new fees for basic services like checking accounts. And who do they want to charge? Their unprofitable customers who “typically have less than $50,000 in annual household income.” Those customers do little business with the bank, and Bank of America reportedly loses a couple of hundred dollars a year on them.
The other side of the debate wants to raise revenues by getting these unprofitable customers to buy more financial products from the bank — for example, get a credit card or buy a CD or take out a mortgage. If that happened, the problematic customers would generate enough revenue to become a money-making proposition for Bank of America.
If I were picking the winner of this debate, the decision would be easy. A growth plan that depends on extracting ever-increasing fee revenue from the very people who can least afford to pay it – for services that were formerly free – doesn’t seem like a growth plan at all. But getting a bigger share of those same customers’ wallets by selling them products that they’re going to buy from someone is a strategy that’s already working today for a bank that I’ll talk about in a minute.
The real question in this debate should be, how can Bank of America get its unprofitable customers to do more business with it? The answer: Provide a vastly improved customer experience — toe-dipping will not get the job done.
The right customer interactions, implemented the right way, don't just happen. Instead, they must be actively designed. This requires learning — and then sticking to — the steps in a human-centered design process. But this approach is not for the faint of heart.
If you want to embrace human-centered design, you have to admit that you don’t know the answers to your problems. At its core, design is a problem-solving process. It takes into account the needs of customers, employees, and stakeholders — and it can be applied to create new (or improved) products, services, and experiences. While that all sounds good, embarking on a problem-solving project implicitly means you don’t have the answers to your current business problems. And in today’s solution-focused business environment, not having an answer can be seen as a weakness.
In fact, we’re so solution-focused that providing answers has become almost a knee-jerk reaction. Here’s a quick experiment: Ask the next colleague you see how to solve a particular problem, and she’ll likely give you an answer or two — maybe even three. It’s very unlikely that your colleague will pause for a moment, reflect on your question, and proceed to ask you more about the challenge you’re facing. But that’s exactly the approach that human-centered design takes.
Looking for the perfect gift to show your clients or employees the value of customer experience? How about a copy of Outside In signed by one of the authors? We’ll be happy to oblige, as long as you have a mailing address in the US. You’ll buy the books, and we’ll do the signing and pay to ship them back to you. Here’s how it works:
Contact Forrester’s Megan Reinhart (firstname.lastname@example.org) to let us know you’re participating and how many books you’d like us to sign.
Go to the Outside In page on 800CEOREAD.com. Buy enough books for your clients and employees and have them shipped to us. 800CEOREAD.com offers books at 43% off, $14.25 each, for bulk orders. Ship to either address, depending on the author you’d like to have sign the books: Harley Manning
60 Acorn Park Drive
Cambridge, MA 02140 Kerry Bodine
150 Spear Street, Suite 1100
San Francisco, CA 94105
When we receive the books, the author will sign them (Harley in Cambridge or me in San Francisco). We’ll also include a short message of your choosing, as long as it’s something we’re comfortable with.
We’ll ship them back to you at our expense.
You can distribute them to your clients or employees however you’d prefer — by mail or in person.
I was talking to a client the other day who was very frustrated. She told me that her executives talk about customer experience all the time; they seem “bought in” to the idea that it matters. But when push comes to shove, none of them have done anything to drive real improvement.
She asked me . . . how can that be? If they get it, why don’t they do something?
I struggled with this question for a long time but finally came up with an analogy that made everything clear. It’s this: Customer experience is the “eat healthy and exercise” of the business world.
Think about it. We could say the following about both topics:
Everyone knows it’s important, and why.
When talking to others, we probably pretend we do it better than we actually do.
Deep down, we aren’t quite sure what we should do — it’s complicated and confusing.
The things we know we should do just aren’t that fun or exciting, so we often avoid them.