Customer Experience Disciplines Apply To Small Businesses, Too

I had fun last week speaking with talk show host Jim Blasingame, the “small business advocate.” (In fact, listening to the first segment of the show — embedded below — I was probably having a little too much fun at first.)

One reason I was keen to do the show is that I’ve been thinking a lot lately about showrooming. You’ve probably heard about showrooming — maybe you’ve done it yourself. It’s when a customer goes into a retail location to touch and feel a product and then goes online to buy the product at a lower price.

Showrooming causes a particularly acute problem for small business owners. Their very existence is at stake: Just last weekend, I walked by a small bookstore in Concord, Mass., and saw a sign in the window that said, “If you see it here, buy it here, to keep us here.”

I sympathize with that small store owner’s plight, so I’d like to offer some advice: Putting a sign in the window that begs people to buy from you is the wrong approach. Do customers want to “keep you here” because of convenience? Nope. They can get lower-priced products delivered the same day at little to no shipping cost. Do they want to add you to the list of charities they support? No, and you don’t want that either — you’re in business to make a profit, and you probably take pride in being able to do just that.

Here’s a better way to compete: Focus on delivering a superior customer experience. As a local business owner, you have the chance to know your customers better than any website can know them — even the increasingly sophisticated websites that make recommendations based on past behavior. If you develop that understanding and marry it with expertise about the products or services you offer, you’ll have a winning combination.

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Does Your Company Have A Customer Experience Strategy? No, Really

Here’s a typical conversation we have with businesspeople when trying to gauge the level of customer experience maturity at their company:

Forrester analyst: “Do you have a customer experience strategy?”

Manager: “We sure do!”

Forrester analyst: “Great! What’s in it? What’s the intended experience that it describes?”

Manager: “Well, uh, hmmm… You know, maybe we don’t have a customer experience strategy.”

The fact is, people at most companies are in the same boat as that manager (or director or VP or SVP or…). Why? For the most part, it’s because it never occurred to them that customer experience – like other business disciplines such as marketing and branding – requires a strategy to keep it on track.

Here’s why your organization needs a customer experience strategy: Without one, you’ll tend to mix and match best practices that may be great for someone but don’t align at all with the customer experience that you want to deliver.

People love those genius bars in Apple stores, right? And Apple is known for delivering a great customer experience. So why doesn’t Costco put genius bars in their stores? Simple: A genius bar provides an experience that aligns with Apple’s overall strategy of differentiating through innovation but flies in the face of Costco’s overarching strategy to be a cost leader.

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The Holy War Over Net Promoter: Is It The Ultimate Way To Measure Customer Experience?

Have you ever been caught in this crossfire?

Marketing Manager: “Net Promoter Score is the one number we need to grow!”

Customer Intelligence Manager: “Nonsense! ‘Satisfaction’ predicts customer loyalty better than ‘likelihood to recommend’ – it says so in the wonky business journals I read!”

Marketing Manager: “You don’t understand how business works!”

Customer Intelligence Manager: “You don’t understand how math works!”

The sad thing is that in a micro sense they’re both right, but in a macro sense they’re both wrong. The reason? They’re each taking an inside-out point of view based on their own specialties.

Where NPS Fits In A Customer Experience Measurement Framework

In our research into customer experience measurement, we see many organizations that use Net Promoter Score.  Some use it poorly because – like the fictional marketing manager above – they don’t understand the limitations of what NPS can do.

Here’s how they should think of it: Customer experience is how customers perceive their interactions with a company along each step of a customer journey, from discovery, to purchase and use, to getting service. NPS measures what customers say they’ll do as a result of one or more of those interactions. It’s what Forrester calls an “outcome metric.”

But outcome metrics are just one out of three types of metrics captured by effective customer experience measurement programs. The best programs gather and analyze:

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You Are In The Customer Experience Business, Whether You Know It Or Not

Customer experience is fundamental to the success of every business. For most companies, in fact, customer experience is the single greatest predictor of whether customers will return — or defect to a competitor.

Customer experience goes to the heart of everything you do: how you conduct your business, how your people behave when they interact with customers and each other, and the value you provide. You literally can’t afford to ignore it, because your customers take it personally each and every time they touch your products, your services, and your support.

In our new book, Outside In, my coauthor, Kerry Bodine, and I explore the real meaning of customer experience; prove the business benefits of delivering a great experience; and describe the six disciplines of customer experience leaders like American Express, JetBlue, Office Depot, and Vanguard. Our goal is to help readers understand why and how customer experience leads to profits — which it does, but only if you treat it as a business discipline.

Why is customer experience so important?

“Customer experience” is literally how your customers perceive their interactions with your company.

Those interactions occur at each step along a customer journey. That journey begins when people realize that you offer a product or service they might want, then compare your offer to other options. If things go your way, they’ll buy from you. Then they’ll use what they bought. If they encounter a problem, they’ll call for support.

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Every Parent’s Worst Nightmare: How United’s Culture Failed Its Customers

You’re at home when your phone rings. It’s your child’s summer camp calling to tell you that she never arrived. No one knows where she is.

Make your gut churn? Yes, if you’re a parent — or even if you’re not.

If you were following the news last week, you know that Annie and Perry Klebahn did get that phone call. That’s when they found out that their 10-year-old daughter Phoebe hadn’t gotten off a United Airlines flight to Traverse City, Michigan.  

Here are the highlights of what happened.

Phoebe had been traveling alone. Her parents had paid United a $99 fee for the “unaccompanied minor” service and had every reason to believe that their daughter was in good hands. According to the complaint letter that her parents wrote to United, when they dropped Phoebe off at the San Francisco airport, a United employee put an identifying wristband on her and told her to “only go with someone with a United badge on and that she would be accompanied at all times.” But when Phoebe arrived in Chicago to change planes, no one met her. The little girl reportedly asked flight attendants three times to let her use a phone to call her parents, and they told her to wait. She also asked if someone had called camp to tell them she had missed her flight, and they said they’d take care of it (but then didn’t).

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Patient Experience: Personal, Emotional, And Critical

Last week my son, Alex, had reconstructive surgery to repair his torn ACL (the ligament that holds the inside of a knee together).

He’s 11 years old.

I have to admit that this procedure worried me like hell for all sorts of irrational reasons. Sure, things could have gone wrong. But the surgeon who operated on my son literally invented this type of surgery, which is only used on children and pre-adolescents who are still growing. Plus we had the procedure donev at Boston Children’s Hospital, which topped the U.S. News & World Report honor roll of best children’s hospitals.

All that gave the left part of my brain comfort, even as the right part of my brain tried its hardest to give me high blood pressure. Fortunately, the operation was an unqualified success, and as I write this, we are three days into the recovery period, which is also going well.

Now normally I wouldn’t blog about something this personal. But throughout the process, Alex — who knows what I do for a living — kept telling me that he was having a great experience and that I should write about it.

Frankly, I was quite curious as to why Alex thought — and forgive me for being graphic — that getting his leg opened up and put back together with a bunch of new parts was “a great experience.” So I asked him.

Harley: You’ve said a number of times that you had a great experience at Boston Children’s Hospital. From your point of view, what made it a great experience?

Alex: Everyone was really nice to me. And they did a great job at keeping my pain level down.

Harley: Were you scared?

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Designing A Great Customer Experience In The Age Of Irrational Customers

Recently we’ve seen a lot of interest in the emotional aspects of customer experience by some of the smartest practitioners we know — chief customer officers. There’s a reason for this. Recent advances in the behavioral sciences now give us a better understanding of how people make decisions, experience pain and pleasure, and recall their experiences.

Maybe you’ve read about some of these studies in books like Predictably Irrational by Dan Ariely, Thinking, Fast and Slow by Daniel Kahneman, or Switch by the Heath brothers. If you have, then you picked up on the fact that we now know our customers to be inherently irrational, making most of their daily decisions without any particular logic.

For example, we know that people experience the pain of loss more acutely than they feel the pleasure of gain. That’s the reason why people dump shares of well-run mutual funds when the economy turns down, irrationally converting their paper losses to real losses. It’s also why it’s easier to lose a customer than to gain one — people are less likely to forgive you when you inflict pain on them (got the order wrong, didn’t resolve the problem) than they are to love you for satisfying them.

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Video Highlights From Forrester's Customer Experience Forum East

Thanks to everyone who made our customer experience event a success! That includes both our many industry speakers as well as our terrific, highly engaged audience and sponsors. You rock!

On June 26th to 27th, we had just under 1,400 people at the Marriott Marquis in Times Square. That was up slightly from last year, even though we're offering a second customer experience forum in November in Los Angeles as an alternative (we've pretty much reached capacity at the Marriott). The packed house was a tribute to just how many companies have woken up to the importance of customer experience (CX) as a way of doing business. Personally, I love the positive energy that comes from being around so many people who care about CX.

Our production team just finished editing the video highlights of our main-stage speakers from the event and collecting them on a single page for your viewing pleasure. You'll notice that all of the speeches were themed around Forrester's upcoming book about customer experience, Outside In, which will be available to the general public on August 28th. Forum attendees didn't have to wait until August, though, because we gave them a free digital copy of the uncorrected proof at the event. (With an uncorrected proof, you get a bonus: typos and formatting errors!)

So for all of you who attended, here's a reminder of what we saw. And for those who didn't attend, I hope these videos convey some of the energy and insight that we felt in New York. Enjoy!

Healthcare, The Supreme Court, And Customer Experience: What It Means

The Supreme Court decision upholding virtually all of the Patient Protection and Affordable Care Act (AKA “Obamacare”) shifted a balance for customer experience professionals in the healthcare industry. Now they — and the executives they report up to — know that it’s more risky to do nothing than to respond by taking action.

Keeping in mind that “the healthcare industry” is really three industries, here are some of the most important actions that healthcare organizations will need to take.

Health Insurance Providers (Payers)

As we point out in our upcoming book, Outside In, the health insurance industry has owned the cellar of our Customer Experience Index (CXi) since we began that study five years ago. The main reason for its dismal performance is that the CXi is a consumer study, and for health insurance providers, the customer has not been a consumer but a business — or more accurately, a person at a business, like a benefits manager.

The result was that payers didn’t need to focus much on the end users of their products — consumers — so most of them didn’t. But starting in 2014, a greater percentage of their business will come from consumers. That will drive health insurance providers to better understand consumers so they can attract and retain the healthiest ones, who are the most profitable. Payers will also want to get consumers to change their behavior as a way to keep costs down. For example, they’ll want them to opt for generic drugs and to take better care of themselves. But none of that will happen unless the health insurers build a trusting relationship by providing a far better experience than they have to date.

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Banks Make It Clear: We’re Sticking It To You With Fees

An article in Boston.com highlighted the fact that many big banks still don’t understand what customer experience is or why it’s the biggest single driver of business success for most companies.  

Apparently Citigroup is about to join a “growing number of banks and credit unions” that have adopted some version of a one-page disclosure form. That form makes it easier for customers to see and understand fees.

Now don’t get me wrong: Making it easier to understand fees is a step forward. After all, ease of doing business is the second level of the customer experience pyramid and only slightly less important than meeting customer needs.

What has me shaking my head is the next part of the article. It says that these new summary pages come in response to complaints about rising fees, including fees that few customers knew about in the first place, like a fee for getting a paper statement and — my personal favorite — a fee for closing an account.   

A fee for closing an account? Really? I may be old-fashioned, but I’m used to paying people to perform a service for me, not paying them to stop performing a service for me.

Here’s why the whole “fee transparency” thing misses the point: Your bank really, really wants you to open more fee-generating accounts with it. When you add a savings account or CD to your checking account, or take out an auto loan or a home equity loan, you ring its cash register.

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