No offense meant to any of the other great speakers at Forrester’s recent Customer Experience Forum 2011, but I have to admit that I had a favorite: Kevin Peters, Office Depot’s president, North American retail.
Kevin had some stiff competition from executives like USAA’s Wayne Peacock, Jim Bush from American Express, the members of our chief customer officer panel, and others. But Kevin won me over by giving one of the best speeches I have ever seen anywhere.
As someone who A) gives speeches on a pretty regular basis, B) attends a lot of events where I see other people give speeches, and C) feels compelled to analyze everything, I’ve been thinking a lot about why Kevin was so good.
Let’s start with the fact that he rocked it old school by standing up and delivering a speech without slides or any other kind of visual aids. Yeah, that’s right — he stood up and told a story so interesting that I just sat there riveted.
How did he manage that trick? It was a combination of great content and passion about that content. Let me be clear: If you’ve ever wondered what an executive who is deeply committed to his customers looks like, just watch this.
I was recently fortunate enough to host a panel of three chief customer officers (CCOs) on the main stage of Forrester’s Customer Experience Forum 2011.
They’re all quite different. Fred Leichter from Fidelity Investments has a background in customer experience, having guided the design of Fidelity websites for many years (and as a Fidelity customer, I can say that those sites are pretty darn good). In contrast, Jim Merlino of The Cleveland Clinic is a practicing surgeon as well as CCO, and Jeff Harvey of SAP (who was recently promoted out of the CCO position) has a diversified leadership background that’s more typical of the customer experience executives we recently studied.
Interestingly, despite their differences, they all spend time as CCOs on evangelizing customer experience, building empathy for customers among their organizations’ employees, and embedding customer-centricity into projects.
Check out this video excerpt from our session and share your own thoughts about this emerging role!
Over the past few weeks, I’ve been part of a group that picked the winners of Forrester’s Voice Of The Customer Awards for 2011. I can’t yet tell you the names of the three winners — those companies will be announced on June 21 at our Customer Experience Forum in New York, along with the other seven entrants that made up our top 10. But I can share some insight into what separated the winners from the contenders.
At one end of the spectrum, the clarity with which entrants described their programs didn’t create much differentiation. With very few exceptions, descriptions ranged from very clear to extremely clear and “please stop with the detail already, my eyes are starting to bleed” clear.
At the other end of the spectrum, the business benefits that companies derived from their voice of the customer (VoC) programs provided diamond-hard clarity as to which companies were great and which were just good.
To understand why that is, consider the question in the awards submission form that asks about business benefits. It was worded exactly like this:
“How has this activity improved your organization's business results? Please be as specific as possible about business benefits like increased revenue, decreased cost, increased customer satisfaction, or decreased customer complaints. Please specify how you measure those benefits.”
The judges were looking for a response along the lines of:
We heard these specific things from customers through our VoC program.
As a result of what we heard, we made these specific changes.
Every year in January, Forrester publishes its Customer Experience Index (CxPi), which reports how customers rate their interactions with major companies. We learn a lot from studying leaders in various industries — like USAA, which was the top credit card provider, top bank, and top insurance provider this year.
Last week, we published a follow-up report, which examined companies that raised their CxPi scores by at least five points year over year. Among others, these brands included Aetna (up six points), Citi’s credit card business (up 12 points), Charter Communications (up 20 points as an ISP and up seven points as a TV service provider), and Office Depot (up nine points). Our goal was to discover what, if anything, these firms did to earn their improvements.
And as it turned out, their big gains came as a result of major efforts.
Our research uncovered customer experience initiatives that fell into two buckets. The first bucket was business process re-engineering. Efforts here included creating or enhancing voice of the customer programs, measuring customer experience consistently across the enterprise, and changing incentive programs to reward customer-centric behavior by employees.
But perhaps the biggest impact came from upgrading the customer experience governance process at the enterprise level. For example, Aetna transformed its decentralized part-time customer experience task force into a full-time enterprise customer experience team. Cox Communications made an even more drastic change, consolidating any function with material customer interactions into one group led by a new senior vice president of customer operations.
We recently published the results of our annual survey of the members of our customer experience professionals peer research group. The group is interesting in that they’re pros: They all work to improve the customer experience delivered by their organizations.
This year, their responses are encouraging — but also very sobering.
Here are some of the encouraging data points. A whopping 86% said that customer experience is a top strategic priority at their company. More than half work at companies that already have a single set of customer experience metrics in place across the entire company, and another 20% said that their firms are considering this move. What’s more, almost as many respondents said that their companies have a voice of the customer program in place, and another 29% said that their firms are actively considering a voice of the customer (VoC) program.
At this point I’m thinking, “Fantastic! Their companies care about customer experience, and they are implementing mission-critical programs that will help them succeed!”
Plus they’re coming from a good place. When we asked our panelists how they’d describe their executive team’s goal for customer experience, 63% of respondents said that their senior executives want to be the best in their industry, while another 13% said that their execs shoot higher and want to be seen as a customer experience leader across all industries.
How should you measure customer experience? Is it even possible to measure something that feels as squishy as customer experience?
As it turns out, you can measure it, you should measure it, and you even have some decent options for measuring it. Your alternatives range from monitoring the real-world interactions your customers have with your firm (like clicks on a site or the length of a call) to asking your customers for their perceptions of those interactions (the real customer experience) to tracking what your customers do as a result of the experience (like making another purchase or recommending you).
At Forrester, we have our own direct measure of customer experience that we’ve been using since 2007: the Customer Experience Index (CxPi). Today we published the results for 2011, which are based on research conducted at the end of 2010.
To help understand those results, let me explain how the CxPi works. We ask more than 7,000 consumers to identify companies they do business with in 13 different industries. We then ask respondents to tell us how well each firm met their needs, how easy the firm was to work with, and how enjoyable it was to work with (questions that correspond to the three levels of the classic customer experience pyramid). Then for all three questions, we calculate each firm’s CxPi score by subtracting the percentage of its customers who reported a bad experience from the percentage who reported a good experience. The overall CxPi is an average of those three results.
Quantifies the correlation between a rise in a company’s Customer Experience Index score and the corresponding increase in three loyalty metrics that every company cares about: purchase intent, likelihood to switch business to a competitor, and likelihood to recommend.
Makes conservative but realistic assumptions about the business fundamentals of companies in 13 different industries.
Produces eyepopping projections of increased annual revenue as a result of realistically attainable improvements in customer experience — by industry.
If you’re reading this post, you’re someone who cares about customer experience. You might even be one of the professionals who works in the field of customer experience full-time.
So I’m going to go out on a limb here and guess that you occasionally get the question, “What is ‘customer experience?’”
Now maybe when you’re asked that question, it isn’t phrased so directly (or politely). For example, I get asked, “Isn’t customer experience just marketing?” And, “How is customer experience different from customer service?” But the bottom line is that people are looking for a definition that’s crisp, useful, and distinct from the definitions of other things that companies do. They are right and reasonable to ask for this — but collectively those of us who work to improve customer experience have failed to answer them.
I mean no offense to the many people out there who have tried to define “customer experience.” I’ve read many of the attempts that are out there, and the ones I’ve seen tend to be longer and more convoluted than necessary.
Not that customer experience is an easy concept to define. The customer experience team at Forrester has been debating the definition of customer experience for a while now, and it took us until recently to reach consensus. We now define customer experience as:
“How customers perceive their interactions with your company.”
I’ve been meaning to write about this topic for a while. What got me past the tipping point was receiving yet another in the series of hilarious videos in the iPhone versus Evo wars. (I love those, no matter which side they come down on.)
Let me first disclaim that I do not cover mobile devices for Forrester so I am speaking strictly as an end user. Okay, I have disclaimed! Now for the story . . .
Way back in the spring, I was visiting my sister and brother-in-law in Ohio. My sister had recently gotten herself a Droid and was not very happy with it. She let me play with it for a while, and I have to say that I did not like its weight, the sharp corners, and the little vibratory “thunk” of physical feedback that probably seemed like a good idea to the designers but came off as annoying after about the third time it happened. The GUI was okay but didn’t strike me as an improvement over my iPhone — in fact, I thought it was a little worse.
My sister had come to similar conclusions. She had purchased the phone so she could stay with Verizon as her wireless service provider. Her biggest complaint, though, was the lack of a decent app store. And when I say “decent,” I mean that literally. When she called up her app store, she got a really bad interface that didn’t help her find relevant apps without a struggle. Worse, about every third listing was a porno app. (I guess that’s what happens when you don’t curate content.)
Anyway, she regretted her choice but felt locked in by her contract.
When I was kid, when we thought someone was overreacting, we used to say “don’t make a Federal case out of it!” Maybe people still say this, but I haven’t heard it in a while. I suspect that it went into the Museum of Way-Historical Sayings. Still, I’m sure you get the idea: If the Federal Government is involved, it’s a big deal.
I thought of this expression this morning when I read an article in The Wall Street Journal. There is quite a battle going on over an attempt to make mortgage-disclosure documents easier to understand. On the one side, we find our Federal Government in the persons of Elizabeth Warren and Treasury Secretary Timothy Geithner. On the other side, you find the mortgage industry (or at least a big chunk of it — the article could have offered some more details IMHO).
Now if you’ve ever taken out a mortgage, you know that the documentation you received was close to the polar opposite of “easy to understand.” You may have thought (as I did) that the difficulty stemmed from a failed attempt by lawyers and bankers to communicate effectively. But apparently not! (Or at least that’s not the only reason — I’m pretty sure that most lawyers don’t have John Grisham potential).