Forrester’s Customer Experience Index, Q3 2015: It’s Hard Being An Optimist

I am an eternal optimist. My take on the Dow’s spiraling downward in Q3? Buying opportunity! That “exercise pill” scientists are working on that promises the benefits of exercise without any of the effort? I’m thinking my six-pack abs are now a sure thing. And I’m even holding out hope that the next season of Homeland will be as good as the first. But the Q3 2015 data from our Customer Experience Index (CX Index™) is making it hard for an optimist like me to find a lot of bright spots.

We’re in a world fraught with persistent economic imbalances where customers with copious options are flexing their market muscles more than ever before. If this is still news to you, I suggest reading up on our research about the age of the customer. But I think most of you know that an obsession with winning, serving, and retaining customers is a must and that you should transform your company to be more customer-focused.

Given that, I expected our latest US CX Index report would reveal that brands are delivering customer experiences that are getting better at strengthening the loyalty of their customers. But while much remained the same in the second round of Forrester’s 2015 US CX Index study (scores didn’t change for 69% of brands), when scores did change, they got worse instead of better. So of 92 scores that changed significantly from round one to round two, only seven improved; 85 got significantly worse. It’s hard being an optimist when:

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Become Customer-Obsessed Or Fail

What’s the top imperative at your company? If it’s not a transformation to make the company more customer-focused, you’re making a mistake. Technology and economic forces have changed the world so much that an obsession with winning, serving, and retaining customers is the only possible response.

We’re in an era of persistent economic imbalances defined by erratic economic growth, deflationary fears, an oversupply of labor, and surplus capital hunting returns in a sea of record-low interest rates. This abundance of capital and labor means that the path from good idea to customer-ready product has never been easier, and seamless access to all of the off-the-shelf components needed for a startup fuels the rise of weightless companies, which further intensify competition.

Chastened by a weak economy, presented with copious options, and empowered with technology, consumers have more market muscle than ever before. The information advantage tips to consumers with ratings and review sites. They claim pricing power by showrooming. And the only location that matters is the mobile phone in their hand from which they can buy anything from anyone and have it delivered anywhere.

This customer-driven change is remaking every industry. Cable and satellite operators lost almost 400,000 video subscribers in 2013 and 2014 as customers dropped them for the likes of Netflix. Lending Club, an alternative to commercial banks, has facilitated more than $6 billion in peer-to-peer loans. Now that most B2B buyers would rather buy from a website than a salesperson, we estimate that 1 million B2B sales jobs will disappear in the coming years.

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The Race From Good To Great CX Hits The Gas Pedal In 2015

2014 wasn’t a good year to be average. Since 2007, the average customer experience in the industries that Forrester tracks has gone up across the board, and the number of truly awful  experiences has dropped like a rock. So if your CX is average, it’s just not good enough to win, serve and retain customers. And it won’t get any easier next year: With companies investing more than ever to differentiate their customer experience, your average offering will soon be considered poor.
 
In 2015, the race from good to great CX will hit the gas pedal. Smart CX teams will increasingly use customer data from diverse sources like social listening platforms, campaign management platforms, mobile apps and loyalty programs – to personalize and tailor experiences in real time so that they inherently adapt to the needs, wants, and behaviors of individual customers. And as companies strive to break from the pack and gain a competitive edge through the quality of the CX they provide, we’ll see the battleground shift to new areas like emotional experiences and extended CX ecosystems, and into laggard industries like health insurance and TV service providers, and even the Federal government.
 
As we do every year, we’ve just published our Predictions report for CX. I want to share a couple of those predictions with you:
 
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