Why Customer Experience Will Become The #1 CIO Priority

Customer experience isn’t typically at the top of the CIO’s priority list but it was certainly front and center in New York this week.

I believe things are about to change for CIOs. In the new era of always-connected consumers – what Forrester calls The Age Of The Customer – customer experience is so critical that I predict it will become the #1 priority for CIOs. In part because unhappy customers have the power to alter the course of any organization, as Netflix CEO Reed Hastings discovered in 2011, when his US customers forced him into an about-turn on his strategy to split movies-by-mail from online streaming.

But investing in customer experience is tricky because it’s often seen as an abstract thing with little tangible ROI. Companies like USAA, a US insurance company with a strategic focus on customer experience, have spent years re-shaping their entire organizations to think from the outside-in, focusing on the end customer. USAA did this because they believed it was the right thing to do, not because of some compelling business case.

Each year Forrester tracks consumer perceptions to determine leaders and laggards in the customer experience game, publishing a Customer Experience Index (CXi) that allows companies like USAA to see how they compare to other companies. Research into CXi leaders vs. laggards shows leaders outperforming the market by a significant margin. (See graph). In this Age Of The Customer, customer experience will quickly move to the top of the CIO agenda becuase it drives significant business results.

Watermark Consulting Analysis

In our latest CIO research we examine IT organizations in companies with strong customer experience index scores to identify what, if anything, these organizations do differently to support winning in customer experience. What we discovered was a common set of attributes for IT in each organization. Indeed they all have one thing in particular in common; their IT teams work alongside the customer experience team as an important partner in delivering the customer experience. These teams fully understand the language of the customer experience professional.

Experience begins with understanding journeys

Every customer is on a journey. We each consume products and services to satisfy a perceived need. The steps we take from awareness of our need to fully satisfying our need can be characterized as a journey. While you may have a somewhat unique journey, the chances are you share a common set of steps with other consumers just like you. Marketers create multiple “personas” to represent the individual customer types likely to use a company’s products. To better understand the steps we take from awareness of need through to satisfaction, customer experience professionals create visualizations of the steps each persona takes – often called journey maps. A journey map is often the first step to fully understanding the customer experience.

Touch points shape the customer experience along a journey

Customer journeys are characterized by a series of touch points. These are all the times when a customer encounters your brand, product or service. Typically customers begin with discovering their need for a product – this might come from a referral from a friend or perhaps seeing an ad or reading something on the Internet. The key point here is that your company is not in control of every touch point – for some, such as referrals, you may only be able to influence slightly. Some touch points are more critical than others. For example, the touch point associated with making a buying decision is critical – this is a moment of truth – a point in time when a prospective customer chooses your brand or that of a competitor. For example, when I recently purchased a flight from Boston to London, I had a choice in airlines. When I search online for a flight at BA.com I experience a touch point with British Airways, but when I search using an app like Hipmunk I experience a touch point with many airlines simultaneously – each one out of the control of the airline. 

Technology shapes each touch point

In the Age Of The Customer, technology shapes every touch point, either directly through the customer using technology at the touch point – such as online bookings for airline - or indirectly in supporting employees engaging with the customer – such as technology like product locators retail store employees use to help a customer move to the next stage on their own journey. (See figure below). In leading customer experience companies the IT organization has a significant role in designing and creating powerful customer experiences. These IT groups have organized all their customer-facing applications under one team – sometimes even creating a parallel IT organization dedicated to supporting what Forrester calls systems of engagement. The teams are highly focused on supporting the organization’s customer experience professionals, providing expertise on how to design experiences to deliver performance at scale. Customer experience winners look to do more than stick an Elastoplast on customer service through superficial technology changes – instead they examine all the people, process and technology behind every step along each customer journey, identifying all the systems, applications and data which support the journey - optimizing each journey to deliver an amazing customer experience.

IT Leaders Become Customer Experience Advocates

Perhaps because IT has a view across the entire organization, IT becomes pivotal to achieving leadership in customer experience. Without IT, customer experience professionals resort to tinkering at the edges. With IT’s support and sometimes leadership, customer experience professionals can achieve the amazing results we see in companies like USAA. Our research suggests CIOs and IT leaders are critical players in winning the customer experience game. And IT leaders need to understand their team’s role in customer experience. But to win, IT can’t simply pay lip service to customer experience. IT leaders must consider it a very real business discipline and see it as one of the most important roles of the technology team.

Comments

CIOs and CEOs, profit and non-profit

This article came at a great time for me as I'm restructuring our database as well as trying to communicate what we do (people-centered systems) to several different audiences, and the good old fashioned customer journey.

We connect philanthropists with social enterprises and non-profits that are effecting real change for good. So we have three types of "customer". We are used to tracking our end-user's (read: beneficiary) customer experience, as most nonprofits do, but I want to include the customer journey of our philanthropists and our ventures. This is a great map.

It sounds like your "systems of engagement" is similar to our people-centered systems approach as well.

Thanks for the common-sense reminders.

Sparked a post of our own!

Our team enjoyed this post so much - great points about the IT team becoming pivotal in creating great customer (or user) experiences. User research needs to find a home within the IT organization. It’s thinking from the outside-in – first learning what best serves the customer – then incorporating those findings into the design... See our thoughts shared here: http://teced.com/2013/07/11/customer-experience-now-the-number-one-prior...

Journeys

Really enjoyed the insights into customer journeys as they resonate well with what we're experiencing in the marketplace.

Agree on IT and marketing working together as it's critical to defining a winning customer experience, but having technology that enables and gives marketing full control is a necessity.

eCommerce and WCM technologies are now rewriting the rules to collaboration and are empowering marketers to sell directly to individuals and create engaging online journeys for each customer.

Adobe and hybris are two technology leaders changing the rules to how customers are sold to online and engage with a brand. See a glimpse at a framework we're developing to take customer experience as a 1# priority even further...
http://www.crownpartners.com/partners/experience-driven-commerce