Why Customer Experience is critical to the success of the organization

Kerri Bodine, Vice President AT Forrester shares some insights about customer experience and what companies need to master to gain competitive advantage. She is also a speaker at the CMO Exchange and will talk about building brands through Customer Experience. 1. I understand that you are very passionate about customer experience and the impact that it can have on an organization. Can you share some insights on why you think this this area is so critical to the success of the organization? No matter what you call them — clients, patients, shoppers, members, subscribers, passengers — every company has customers. Without them, you’re out of business. And the best way to drive customers away is to provide a poor customer experience.

Customer experience has always been important. (It was either Marshall Field or Gordon Selfridge who coined the phrase “The customer is always right” roughly 100 years ago.) But in today’s world, customer experience isn’t just important — it’s an imperative. That’s because we’ve entered the age of the customer — a time when commoditization has stripped away previous sources of differentiation, traditional industry boundaries have dissolved, and customers have more power than ever. The reality is that customer experience is now the best source of competitive advantage you can find. This isn’t just an abstract concept. Forrester’s data proves that customer experience can have a profound impact on business metrics ranging from brand equity and customer loyalty to increased revenue and cost savings.

2. In your new book, Outside In, you mention that most business leaders are blind to what “customer experience” really means. What are some common misconceptions people have about customer experience?

Misconception #1: Customer experience is the same as customer service. People call customer service when they have a problem. So equating customer service with customer experience is like saying that a safety net is a trapeze act. The net is essential to the trapeze act and it keeps the performers safe, but the net alone would make for a dull (and unprofitable) show.

Misconception #2: Customer experience is just about usability. Ease of use is important, for sure. But successful customer experiences must also meet customers’ basic needs — and the best of them are enjoyable, too. Take your car, for example. Even if the steering wheel is easy to turn and the brake pedal feels just right, your driving experience will still be miserable if the car doesn’t run reliably or stop safely.

And, if you’re thinking about buying from the same automaker in the future, chances are there’s something about your car that aligns with your personal or emotional needs, as well.

Misconception #3: Customer experience is soft and fluffy. At Forrester, we define customer experience as how customers perceive their interactions with your company. At first blush, this may sound a bit intangible, but these perceptions can be easily measured by asking customers pointed questions about their interactions. In addition, there are very specific actions that you can take to improve the customer experience.

3. That’s a good segue to the ‘six disciplines’ of customer experience that companies need to master to gain competitive advantage. Can you please describe them? Sure! Companies that want to produce a high-quality customer experience need to routinely perform a set of sound, standard practices that fall under six high-level disciplines: strategy, customer understanding, design, measurement, governance, and culture.  Strategy. First you need to describe the attributes of the intended customer experience and ensure that your vision is consistent with your corporate strategy and brand.  Customer understanding. Your strategy needs to be informed by a shared understanding of who your customers are, how they perceive the interactions they’re having with your company today, and what they want and need from your company in the future.  Design. Once you understand your customers’ needs, you can use those insights as part of a human-centered design process that includes iterative idea generation, prototyping, and testing to define new interactions or improve existing ones.  Measurement. After you design (or redesign) customer interactions, you need to determine whether or not they’re having the effects you intended. That means you need to quantify customer experience quality in a consistent manner across the enterprise and deliver actionable insights to employees and partners.  Governance. Customer insights and metrics are most valuable when you use them to identify and fix customer problems. To ensure that your company acts on these inputs consistently, you need to proactively manage and oversee customer experience improvement initiatives.  Culture. To make sure that employees actually adopt all of the above disciplines, you need to create a system of shared values and behaviors that focus employees on delivering a great customer experience.

4. How can an organization take their customer experience initiatives to the next level? To achieve the full potential of customer experience, you have to change the way you run your business. You must manage your business from the outside in — bringing the perspective of your customers to every decision you make — and you must do it in a systematic and repeatable way. The six disciplines that I described above provide the framework you need to move towards that end goal.

There are 40 individual practices that span the six disciplines, and we’ve spelled them all out in Forrester’s customer experience assessment tool, which is available for free at http://forr.com/cxmaturity. I’d encourage anyone reading this to fill out the assessment — and to get people from all the various parts of your organization to fill it out, too. This will help you get a complete picture of where your

organization is today, and it will provide the inputs you need to build a customized customer experience roadmap.

5. Unlike other areas of business, customer experience is difficult to quantify. How would you recommend a company can measure their customer experience? Actually, customer experience isn’t all that difficult to quantify — that’s another big misconception. But still, most companies haven’t learned how to do this yet. There are three types of metrics that you need to gather: perception, descriptive, and outcome.

Perception metrics tell you what your customers think and feel. You need to ask customers about their perceptions of the interactions with your company. Did your company meet their needs? Were you easy to work with? Were you enjoyable to work with?

Descriptive metrics tell you what really happened. You need to marry specific customers’ perceptions with operational data — like which pages they viewed on your website or how many minutes they were on hold.

Outcome metrics tell you what customers are going to do as a result of their experience. After a single interaction (like a purchase or a customer service call) or a series of interactions (like booking travel and taking a flight), you need to ask your customers if they’re planning to buy from you again or recommend your company to a friend. If you’ve got the data available, you can also check to see what customers actually did as result, too.

When you tie perception, descriptive, and outcome metrics together, they can tell you what’s going right, what’s going wrong, and what kind of business results you can expect if you decide to make specific customer experience improvements.

6. What are the key best practices from Outside In that can help an organization reach customer experience excellence? First, you’ve got to understand your customers — who they really are, how they feel about their experience today, and what they want and need from you in the future. Tools like surveys and social media monitoring can help with this. But you also have to go out and actually talk with your customers one-on-one — there’s really no other way to get the type of insights you need to improve the customer experience.

Second, don’t fall into the trap of thinking that you can solve customer experience problems only by looking at direct customer touchpoints or frontline employees. More often than not, experience issues stem from the decisions and actions of behind-the-scenes departments like legal, finance, and human resources. To make sure your customer experience improvements stick, you’ve got to address the problems at their root.

And third, you’ve got to get comfortable modeling and measuring the tangible business benefits of customer experience. It’s your best bet for convincing people across your organization of the value of customer experience and for ensuring long-term investments.