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.

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CX And An Ex-CIO

This week's Customer Experience Forum was far more than just an event for customer experience (CX) professionals. It was an event for any business leader who truly cares about customers. And this includes many CIOs.

Attendees gather at the 2013 NYC Forrester CX Forum

As far as I'm concerned, the best CX presentation by a guest speaker was given this morning by a former CIO, Paul Heller. Paul is now Managing Director of the Retail Investor Group at Vanguard. While his session was energetic and full of humor, it also conveyed his message about the business of delighting clients very clearly. Paul suggests we all need to get in touch with the why, how and who of our business: 

  • Why are customers doing what they do? To answer this question we really need to get to know the reasons for customers doing business with us. Vanguard took the time to ask their customers why they invest and they discovered people want to have more time to do the things they enjoy, they want less stress and to avoid being bored. Trust me, it's way funnier the way Paul describes it.
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How To Retain Your Most Creative Employees

There have already been plenty of articles written on the importance of creativity in the workforce. Assuming you buy into the importance of attracting creative types to your team, you will have an understanding of what to look for in hiring creative people. And then you will face the challenge of keeping these people on your team. I see this as a challenge because I don't believe our typical individual performance metrics are well suited to measuring creative individuals. 
Consider some of the common metrics used to assess individual employee performance: on-time task completion; task management; completion of specific goals; project management — all of these measures are heavily geared toward favoring individuals who have a natural ability to be well-organized, methodical and goal-oriented. Perhaps this describes your ideal employee.
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Amy’s Baking Company Social Media Meltdown: The ABCs Of Social Media

Of the many questions I get from clients, many center on the use of social media for customer engagement purposes — because sometimes IT staff are asked to block employees from using social media. But what should you do when the owners of the business take to social media?

Today, a small restaurant in Arizona is the hottest thing on social media. Their Facebook page has gone from 2,854 likes on May 14 to 74,687 on May 16. Was this incredible growth in “likes” the result of some incredibly successful social media campaign? Well not exactly.

The restaurant was recently featured on the season finale of Ramsey’s Kitchen Nightmares — a show my wife and I really enjoy as it happens. It seems the main reason why the owners, Amy and Samy Bouzaglo, invited the show to their restaurant was because business had gone downhill because of an Internet firestorm they themselves seemed to have not only started but also steadily fuelled.

Well one of the many, many lessons from the meltdown of Amy’s Baking Company (ABC) in Scottsdale, AZ is that owners should never try to use social media before understanding a few basic guidelines:

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Winning The Customer Experience Game (Part 2)

It may come as a surprise to some to hear that technology teams play an important role in the implementation of an effective customer experience strategy, but that's the conclusion from our latest research.

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Winning The Customer Experience Game

We all hear and read stories of terrible customer experiences; like me, you probably have had your own share of bad experiences. And social media has made it possible for these bad experiences to be shared instantly with millions of people. But in our journey through life, we also experience service that exceeds our expectations. And as we read reviews online, we're more likely to see a mixture of both good and bad experiences. For example, I recently posted a glowing review for a B&B in Bethel, ME, even though a few things about my stay would have typically caused me to deduct points. My five-star review was extremely positive because the proprietor had blown away my expectations on service, delivering an experience way beyond any I've had in a five-star hotel.

But excelling at the personal touch in a small-town B&B is far easier than doing it at scale in a multibillion-dollar business. Yet there are companies that consistently deliver great customer experiences. (My colleagues even wrote a book on them). They aren't perfect all the time, but, on average, they are better than their competitors. At Forrester, we identify these companies through our annual Customer Experience Index (CXi) research. Toward the top of the 2013 index, we find companies like Marshalls, Courtyard by Marriott, USAA, TD Bank, Southwest Airlines, Vanguard, Home Depot, Kohl's, Fidelity Investments, and FedEx.

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Can Twitter be used for community discussion? Nestivity believes it can.

For many, Twitter is a great way to find out what’s happening in the world but not the first place they would turn to drive a meaningful discussion with a group of colleagues or customers. Nestivity hopes to change this by creating a tool which allows Twitter users (and that includes companies) to drive meaningful discussions through Twitter.

The site officially launched today, and it’s free for Twitter users to sign up. The company offers a freemium pay model by charging customers for adding multiple community moderators — provided you only have one moderator, it remains free (for now).

Naturally I’m trying it out and you can help figure out how it works by joining in on the conversation I’ve just set up in my very own “nest”:

What’s the role of IT in creating great customer experiences? Check out the discussion and add your POV and help drive the discussion and you could see your POV included in the new research to be published at the upcoming CIO Forum in May.

And “Chief Digital Officer: real or imagined?” — add your POV to this discussion to contribute toward the research I’m doing on this to be published at our CMO/CIO Forum in the fall.

Can Twitter support vibrant discussions? Does Nestivity add to the ability to make Twitter a useful engagement environment? Share your thoughts on this post here.

Next post: Winning The Customer Experience Game

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Four Steps Toward Reducing IT Complexity And Improving Strategy

Four stepsMany CIOs are caught in the middle — stuck between competing demands from the CFO to reduce costs and from the CEO to increase innovation. In fact this is a topic which often comes up in our strategic planning workshops with clients.

The challenge is to find a means to achieve both goals simultaneously. Here are four steps you can take to achieve just that.

1. Get agreement on your business capabilities.

Business capability maps are a great way to gain clarity on what's important to your business. A good business capability map for strategy work is one which is organizationally agnostic; i.e., when you look at the boxes on the map, you don't see department names. The reason this is important is that you don't want to put anyone in the position of having to defend "their box" on the capability map. By the way, this is much harder to achieve than you might think! Once you have a draft map, you can share it with business leaders to get their input. This is an important step, as the capability map must be owned by all business leaders — the process of refining the map encourages leaders to take ownership.

  • Tip: Remember, not all your capabilities are inside your organization. Many firms leverage business partners to deliver key capabilities. For example, some firms will use FedEx or UPS to provide their distribution capabilities.
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The Gamification Of Business

GamificationThe most engaging, most entertaining, and most stimulating presentation of IBM Connect 2013 came on the third day at the end of the opening session. I'm ashamed to admit that I didn't know Jane McGonigal when she came on stage. But after a minute I was fully engaged and tweeting insights and pearls of wisdom from her presentation. 
I had missed the title of her presentation, but Jane was already throwing out fascinating data points on game playing. Now you have to understand, game playing to me is that thing my son does to avoid doing his homework. I haven't thought deeply about games since I built two animated game simulations on an Apple II to teach people business in my final year of university back in '84 (now I'm dating myself).
"We've invested 400,000 years playing Angry Birds" - Jane is on a roll now. I'm thinking "oh my, I too had contributed a few of those hours." Before giving it up as a colossal waste of time of course. I didn't know it, but apparently I was suffering from what Clive Thompson calls "gamers regret".
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Capability-As-A-Service And What It Means For Technology Vendor Strategy

In my last post, I wrote about the evolving need for big business to source generic capabilities from business partners/vendors. This shift provides an enormous opportunity as well as a threat for technology vendors and CIOs.

I’m not talking about the wholesale outsourcing of IT. Rather, the selective sourcing of business capabilities and business process through software-as-a-service (SaaS), most likely deployed through cloud-based platforms (capability-as-a-service, or CaaS). Software and hardware vendors need to rethink their business from the customer’s perspective. They must figure out how to transform their products into services that deliver business capabilities and business outcomes.

If you’re a tech vendor, this means that you need to analyze each target industry and determine which business capabilities are likely to be strategic, and which are most likely to be generic. In retailing, for example, strategic capabilities might center on mastering customer data to create unique and valuable customer experiences as well as price optimization. Whereas capabilities around merchandising and assortment planning may be generic across many retailers (even though most merchandisers I know would never admit to this), these generic capabilities are likely to be delivered as SaaS in the future.

If you have existing solutions that target an industry’s generic capabilities, they are prime candidates for delivering the capability to the market as a service. Where your solutions target strategic capabilities, you will need to provide highly customized services through strategic partnership arrangements.

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