Business Model And Brand: Keys To Customer Experience Innovation

At Forrester, we define customer experience as how customers perceive their interactions with your company.

Over the past few years, my colleagues and I have written a lot about the perceptions piece of that definition. Here’s a quick overview: Customers’ perceptions occur on three different levels, which we collectively refer to as the customer experience pyramid. At the base of the pyramid is “meets needs.” Do customers perceive that you’ve met their basic needs and provided value through the interaction? Then we layer on “easy.” Do customers perceive that you’re easy to do business with or that they have to jump through a bunch of hoops? And at the top of the pyramid is “enjoyable.” Do customers perceive that you’re enjoyable to do business with — that you’re connecting with them on some personal, emotional level?

Now let’s talk about the interactions themselves. Customers interact with your company at all stages of the customer journey: discover, evaluate, buy, access, use, get support, leave, and re-engage. But it’s not enough to know that these interactions exist. If you want to shift your customers’ perceptions, you have to examine those interactions on a deeper level. Specifically, you need to look at the types of interactions customers have and the qualities that those interactions embody. And that’s where your business model and your brand come into play.

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You Asked, Forrester Answered: Questions About Customer Experience Design

Of the six disciplines in Forrester’s customer experience maturity model, design is probably the least understood. It’s is not taught in most business schools (although this is starting to change at institutions like Stanford and the University of Toronto). It’s also not widely practiced in most companies outside of specialized groups that focus on digital touchpoints. And so it remains a mystery to most business people. That’s a shame, because design is an incredibly valuable business tool — and it’s accessible to just about anyone in any organization.

That’s why I wanted to take time this week to answer some of the questions that I’m frequently asked about customer experience design. In fact, all of the following are exact questions that I’ve received from Forrester clients over the past year.

What exactly is this design thing again?

Design is both a process and a mindset

Let’s talk about the process part first. Designers typically follow a common set of steps when trying to solve a problem: research that helps them uncover deep emotional insights about people’s wants and needs, analysis that helps them identify the real problems and issues, ideation of dozens (or hundreds) of possible solutions, prototyping that helps them bring those ideas to life in tangible ways, and testing that helps them evaluate the proposed prototypes and solutions. Designers don’t go thought this process once — they iterate this process several times in order to learn from their prototypes and refine their solutions.

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Catch Four Forrester Speakers At SXSW

SXSW Interactive starts tomorrow! Are you making the trek to Austin? If so, please join me for a book reading and short presentation about the ideas in Outside In: The Power of Putting Customers at the Center of Your Business. In addition to outlining the business benefits of improving your customer experience, I’ll discuss the critical role that marketers play in shaping customers’ perceptions and propelling companies to their full customer experience potential. If you’ve already got a copy of Outside In, bring it with you – or buy one in the SXSW bookstore – and then head to the book signing immediately following my talk. Here are the session details:

Putting Customers at the Center of Your Business

Sunday, March 10, 11:00 – 11:20 AM

Book signing from 11:30 – 11:50 AM

Please also check out these sessions from my Forrester colleagues Nate Elliott, Sarah Rotman Epps, and James McQuivey:

Affinity, Intent, and the War for Marketing Dollars

Sunday, March 10, 5:00 – 6:00 PM

Nate Elliott

Wearables: Moving from Niche to Mainstream

Monday, March 11, 3:45 - 4:00 PM

Sarah Rotman Epps

The Next Disruption

Monday, March 11, from 5:45 - 6:00 PM

James McQuivey

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You Asked, We Answered! Q&A From Our Co-Creation Webinar

On February 14, Amelia Sizemore and I delivered a Webinar about customer experience co-creation. We received so many questions that we couldn’t answer them all during the call, so I’m answering them (in brief) here:

How is co-creation different from human-centered design?

Co-creation is a process of face-to-face active collaboration with your company’s employees, partners, and customers. It’s not an explicit step in a human-centered design process – it’s a methodology that can be applied to any stage in that process.

How does co-creation fit with journey mapping?

Co-creation can help you explore and address misperceptions in your current customer journey maps. For example, you might plot out the customer’s journey as you perceive it, and then bring customers into a co-creation workshop to poke holes in it, point out inaccuracies, and tell you about steps you’re missing.

Once you’ve had customers define what’s really happening today, you can involve them in co-creating the ideal customer journey for tomorrow.

During the co-creation process, is there room for negotiation? What if customers want an experience that just isn't possible from a business perspective?

The term “co-creation” might sound like this activity is focused on defining polished solutions. However, its primary purpose is actually to unearth deeper insights.

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How To Co-Create Your Customer Experience: Sweat The Details

It’s Valentine’s Day, so shout it as loud as you can: “I love my customers!” Now, prove it by designing products, services, and experiences that actually meet their needs. How are you going to do that? By involving actual customers (as well as employees and partners) in the design process.

This collaborative activity, called co-creation, might ring a bell — two of my recent blog posts addressed what co-creation means and what the benefits are. Co-creation is a versatile and valuable methodology. And while it might seem effortless, it usually doesn’t happen on the fly — which is why Amelia Sizemore and I wrote our latest report, tackling the logistics behind planning a stress-free and productive co-creation workshop.

Newbies often assume that the workshop itself will be the most challenging part of a co-creation initiative, but most of the heavy lifting actually occurs before participants ever show up. Advanced preparation — and lots of it — ensures a smooth and productive workshop that feels like it runs itself. For example, you need to:

  • Hook participants with the right incentives. T. Rowe Price asked a lot of its participants — in addition to a full-day co-creation workshop, participants completed a 30-day diary study and a phone interview. In exchange, the company rewarded each person with an iPad.
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Why Should You Co-Create Your Customer Experience?

Despite professed customer centricity, many firms don’t think to involve customers, employees, or key partners in the experience design process. That’s unfortunate, because this activity — called co-creation — can help companies understand what types of interactions will best meet people’s needs and then figure out how to implement those interactions the right way.

Co-creation might sound familiar. Some people use the term to refer to Facebook ideation contents or crowdsourcing websites like mystarbucksidea.com. But in the experience design world, co-creation isn’t about soliciting hundreds or thousands of ideas through an online community. It’s the process of face-to-face active collaboration for the improvement and/or innovation of mutually beneficial products, services, or experiences. During co-creation workshops, teams focus on eliciting deep insights from participants — and translating those insights into tangible prototypes that can be evaluated in real time.

Co-creation is an extremely versatile tool, one that can inform the design of discrete touchpoints, complex customer journeys, emotionally resonant experiences, and just about anything else you can think of — even the employee experience. But pulling off an effective co-creation session requires extensive planning, preparation, and willingness to let a few customers behind the scenes.

So what’s the payoff? In our recent report, Amelia Sizemore and I outline several of the benefits co-creation provides, including:

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Can You Buy Your Way To A Better Customer Experience?

Earlier this month, Avis announced that it will acquire Zipcar. On paper, the combination of a traditional car rental company with a car-sharing service sounds like a win-win deal. Unfortunately, many of Zipcar’s customers think they’ll end up as losers. Here’s just a sampling from the hundreds of comments that concerned Zipsters have posted on Facebook since the acquisition announcement.

  • “Avis is horrible. They ‘lost’ a car I returned not that long ago. It was in the parking lot the entire time but was recorded as being a different color. And they were insanely ignorant and seemed [to] revel in my panic . . . ”
  • “I've had the worst experiences with Avis, repeatedly :-(”
  • “I've had nothing but terrible experiences with Avis. I want to believe that Zipcar will not change, but I'm very skeptical that this will turn out good . . . ”
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Forrester’s 2013 Customer Experience Predictions

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:

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The Danger Of Big Data

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.

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Outside In Holiday Promotion (Part Two) — Book Giveaway!

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!

 

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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 InWe’re giving away 10 copies this Friday, December 14. You can enter to win two different ways:

Option 1: Tweet

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