Outside In: The Power Of Putting Customers At The Center Of Your Business

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Customer experience is, quite simply, how your customers perceive their interactions with your company. In Forrester’s soon-to-publish book, Outside In, Harley Manning and I show that customer experience is a fundamental business driver and — in an age when customers have access to vast amounts of data about your company and its competitors — it’s also the only sustainable source of competitive advantage.

In most industries, customer experience is the greatest untapped source of decreased costs. Fidelity Investments recently spent a modest $20,000 to fix a problem that made it difficult for customers to log into their accounts through the company’s automated phone system. This single fix saves Fidelity $4 million a year by averting calls to customer service. And it’s just one of more than 160 projects that came through Fidelity’s experience improvement system in 2011. Together those projects account for more than $24 million in annual savings.

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Boom! Wow, Wow, Wow, BOOM!! Does Your Customer Experience Have A Dramatic Arc?

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Think about your favorite action movie. Raiders Of The Lost Ark. The Matrix. Any James Bond flick. What do they have in common? A storyline that goes something like this: In the first few minutes, you’re drawn into a short chase or adventure — something that immediately gets your heart pounding. It builds up quickly and then resolves with a big boom! You’re hooked. And at that point, the main narrative begins. Over the course of the next 90 minutes or so, the storyline twists and turns as the main characters fight off bands of aliens, spies, mummies, and the like. The action crescendos with a series of increasingly exciting events that make you say, “Wow . . . wow. . . WOW!” as you scoot to the edge of your seat. Finally the action-packed finale delivers one last thrilling and explosive BOOM!! As a movie-goer, you’re left breathless.

You’ve no doubt experienced this type of storytelling countless times. And if you paid attention in literature or drama class, you might recognize this narrative structure as a classic dramatic arc dating back to Aristotle. But I bet you haven’t thought about it in the context of your company’s customer experience. Or, at least I hadn’t — not until I attended the Service Design Network conference last fall and attended a workshop led by Adam Lawrence of Work•Play•Experience, a design firm that helps companies design customer experiences using theatrical methods.

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

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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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Forrester’s 2012 Customer Experience Predictions

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2011 was a pivotal year for the field of customer experience. A major increase in the number and types of consumer technologies had a wide-ranging impact on daily life: People controlled their TVs with tablets, asked their phones questions, and played video games without using physical controllers. The extensive reach of these changes — and the screaming pace at which they happened — triggered a corporate awakening to the value of great customer interactions.

Brisk consumer technology adoption may have been the ultimate driver of many customer experience initiatives in 2011. But an increasingly competitive industry landscape, the ever-increasing power of consumers, and a slippery economy will be the major drivers of customer experience efforts in 2012.

In our latest report, Ron Rogowski and I outline what these market drivers mean for customer experience professionals in the year ahead — and what they’ll need to do to keep up. The report includes predictions for how organizations will change the way they work, what types of interactions they’ll focus on, and the resulting implications for customer experience vendors. For example:

  • C-level execs will officially name customer experience as a top strategic priority. Toward the end of 2011, we started hearing of more companies in which the CEO or board of directors decreed customer experience to be a top strategic priority. For example, the chief information officers at several large telecom companies recently told us that, for the first time ever, customer experience was one of their top concerns. We expect this trend to accelerate in 2012, much to the delight of customer experience professionals who have been clamoring for executive support for years.
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Help Forrester Make Its 2012 Customer Experience Predictions!

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It’s that time of the year again . . . Most of you are well into your 2012 planning, and at Forrester, we’ve also got our eyes on the year ahead. 

But first, we’re taking a look back. Ron Rogowski and I recently revisited our 2011 customer experience predictions report and chatted about what’s happened over the past 10 months.

In some cases, our predictions were accurate (if we do say so ourselves). For example, we said that tech vendors would engage in an “all-out war to own the customer experience management space” and that it would create a “confusing marketplace that will not shake out in 2011.” We also said that “customer service will gain popularity as a key opportunity for engagement.” Given our ongoing research and client conversations, we think these predictions were spot on.

And on a few points, we missed the mark. When we wrote our last doc, people had just started hacking the Kinect for Xbox 360 to create fun demos like real-time light sabers and digital shadow puppets. We wrote, “In 2011, we'll see companies start to leverage this technology, too, with healthcare (think guided physical therapy exercises) and marketing (a la interactive product demos) diving in first.” Well, we haven’t exactly seen a tsunami of activity in this area. But were we way off? Or did we just jump the gun? Only time will tell!

In either case, the fun continues.

Ron and I are collaborating again on our 2012 CX predictions report — and we want to know what you think. 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.

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Sourcing & Vendor Management: A Key Driver In The Customer Experience Ecosystem

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Many customer experience initiatives don't meet their full potential — or worse, fail completely — because companies don’t have a complete picture of the dynamics that go into creating it. In order to break from their tunnel vision, companies need to understand their customer experience ecosystem: the complex set of relationships among a company’s employees, partners, and customers that determines the quality of all customer interactions.

In their quest to seek out the root causes of customer experience issues, companies often overlook the impact of sourcing and vendor management (SVM) professionals — often referred to as “procurement” by the rest of the organization. That’s too bad, because these decision-makers influence the customer experience in two key ways.

They influence which technologies and tools will be purchased. Some of these technologies are used internally. One example is: customer relationship management software, which enables employees across the organization to better understand customers and their ongoing relationships with the company. Other tools — like content management systems — directly affect the information that customers can access through digital touchpoints like the Web and mobile devices.

They shape the nature of service-based partner relationships. Some partners — like interactive agencies — help from behind the scenes to design and develop customer interactions. In contrast, partners like outsourced call centers and service technicians have direct contact with customers every single day.

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Why Customer Experience? Why Now?

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For decades, companies have been promising to delight customers, while simultaneously disappointing them in nearly every channel. That tactic won’t cut it anymore. Why not? We’ve entered a new era that Forrester calls the age of the customer — a time when focus on the customer matters more than any other strategic imperative. In the age of the customer, companies find that:

  • Commoditization has stripped away existing sources of differentiation. Competitive barriers of the past like manufacturing strength, distribution power, and information mastery can’t save you today — one by one, each of these corporate investments has been commoditized.
  • Traditional industry boundaries have dissolved. Companies in every industry find themselves competing with new types of competitors — automakers with services like Zipcar, newspapers with Google News, travel agents with Expedia, and the entire retail industry with eBay.
  • Customers have more power than ever. With online reviews, social networks, and mobile web access, it’s easy for your customers to know more about your products, services, competitors, and pricing than you — and to share their opinions of your company with their friends.
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Customer Experience Ecosystem Mapping: The Workshop!

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I’ve been talking a lot lately about customer experience ecosystems. And I’ve been getting tons of questions from people who would like to learn the tools and processes for mapping their own ecosystems.

Good news! Paul Hagen and I are hosting a Customer Experience Ecosystem Mapping workshop in San Francisco on Wednesday, November 16. During this full day of presentations, hands-on exercises, and discussions, you’ll learn how to use Forrester’s ecosystem framework to:

  • Detail a specific customer journey and key touchpoints. (If you’ve got them, bring your existing personas and customer journey maps.)
  • Identify the people, processes, policies, and technologies that influence those customer interactions — both the parts of the ecosystem that are in plain view of customers as well as those parts that influence the customer experience from behind the scenes.
  • Identify the root causes of customer experience problems.
  • Prioritize fixes to these problems.

You’ll leave with a solid start on your own ecosystem map — and the know-how to complete it back at the office with your extended team.

Ecosystem mapping is a collaborative exercise, and we feel you’ll get the most out of this workshop if a colleague joins you — so we’re offering a 10% discount to companies who send two attendees.

For more details, please check out the Customer Experience Ecosystem Mapping workshop page on our website.

We hope to see you in San Francisco!

Corporate Customer Experiences Need Startup Mojo

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I’m a Dropbox customer. I originally signed up for the basic plan — 2 GB for free — but ran out of space quickly and decided to upgrade to 50 GB of storage. So I forked over my $99 and got the following confirmation page:

A gold star! A hand-drawn cartoon! Now I know this page wasn’t designed specifically for yours truly, but when I saw it, I felt special. Like the people at Dropbox actually gave a damn that I had just given them $99 of my hard-earned money. 

Compare that with the $700 I spent recently for several nights at a large hotel. My final bill was printed on a plain white sheet of paper and was so devoid of any brand messaging that I feared it would raise eyebrows with our finance department! Consider the $1,600 I just plunked down for a multi-leg transcontinental flight. The airline’s confirmation email didn’t waste any time trying to sell me on a rental car, hotel room, and credit card — but didn’t even wish me a pleasant trip. Or take my credit card company — which processes tens of thousands of dollars of business expenses for me each year. When I look at my bill, the things that pop out are how much I owe them, by when, and a late payment warning — key pieces of information, yes, but reading that bill leaves me feeling like I need a shower.

These small touchpoints — a receipt, a confirmation email, a bill — play a functional role in customer interactions. But they also represent prime opportunities for companies to reinforce their brands and (perhaps even more importantly) make customers feel good about where they spend their time and money.

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Connecting Frontline Staff To Customer Experience: Two Conundrums

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I started an unusual research project recently. As a follow-up to my report on the customer experience ecosystem, I wanted to dig into the highly visible role of frontline employees like call center agents, in-home service technicians, and retail staff. Specifically, I wanted to know how customer experience professionals could help these folks understand how they personally affect customers’ interactions and perceptions of the brand.

The topic was – I thought – pretty straightforward, and it essentially boiled down to two main questions: What’s the best way to share customer feedback with frontline employees? And should you compensate frontline employees based on their individual feedback?

But what made this research effort so unusual, and so unlike most of my other projects, is that as I conducted more and more interviews, the opinions and “best practices” began to diverge wildly. I found a variety of incompatible tactics. But more than that, I uncovered major differences in management philosophies and deep passions underlying those beliefs.

What’s the best way to share customer feedback with frontline employees?  

A bevy of enterprise feedback management solutions can help managers collect and analyze feedback from customers – and not just about their overall impressions of a company, but about interactions with individual frontline staff members. Firms can collect survey-based quant data and/or verbatims. But what to share? The answers I’ve encountered include:

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