The Path to Customer Experience Maturityin

The Age of the Customer

Craig Menzies, Principal Analyst

Serving Customer Experience Professionals

Twitter: @craigmenzies, @forrester, #NASSCOM_ILF

My CX blog: http://blogs.forrester.com/craig_menzies

12th February, 2014

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Why should we care about customer experience?

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How customers perceive their interactions with your company

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Enjoyable

Easy

Meets Needs

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Willingness to consider

for another purchase

Likelihood to

recommend to a friend

Likelihood to switch

business to a competitor

Customer experience correlates to loyalty

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The playing field for businesses is changing before your eyes

1900-1960

1960 - 1990

1990 - 2010

2010 +

Sources of competitive advantage change over time

1900-1960

1960 - 1990

1990 - 2010

2010 +

Age of Manufacturing

Age of Distribution

Age of Information

Sources of competitive advantage change over time

Sources of Dominance

1900-1960

1960 - 1990

1990 - 2010

2010 +

Ford, RCA, GE,

Boeing, P&G, Sony

Age of Manufacturing

Age of Distribution

Age of Information

Microsoft, Dell, Google, Capital One

Wal-Mart, Toyota,

UPS, CSXDominant Companies

Sources of competitive advantage change over time

Sources of Dominance

1900-1960

1960 - 1990

1990 - 2010

2010 +

Ford, RCA, GE,

Boeing, P&G, Sony

Age of Manufacturing

Age of Distribution

Age of Information

Microsoft, Dell, Google, Capital One

Wal-Mart, Toyota,

UPS, CSXDominant Companies

Sources of competitive advantage change over time

Sources of Dominance ?Age of the Customer

Contenders include

Southwest Airlines, USAA,

Amazon, …

A 20 year business cycle in which the most successful enterprises will reinvent themselves to systematically understand and serve increasingly powerful customers.

The Age of the Customer

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My Buying Criteria:

•My friend was selling it (proximity)•I could afford it (price)•I hadn’t heard anything bad about it (information)•It was on the cover of a magazine (media)

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Fast forward 25 years!

Word of Mouth, Price, Expert opinion, Proximity

AND…

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Highly detailed specifications

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Competitive comparisons

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With even more detailed specs

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Reviews from other buyers

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Forums of opinionated owners

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• Detailed specs• Model comparisons• Trusted reviews• Best place to buy• Best price to pay• Special offers• Best insurance deals• Owner opinions• Maintenance history• Accessories• Upgrades• Social events• Where to ride• Etc, etc, etc, etc…

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In short…

The Customer has all the power

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Information

Price Location

Tech

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Information

Price LocationTech

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Information

Price LocationTech

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Information

Price Location

Tech

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So how does one “do” customer experience?

2036210,000

Khumbu Icefall

Lhotse Face

“clearly unused to even basic mountaineering equipment”

Customer Experience

47% Differentiate the company from leaders in their industry

13% Differentiate the company from leaders in ANY industry

› Base: 100 customer experience professionals (percentages may not total 100 because of rounding)Source: Q4 2012 Global Customer Experience Peer Research Panel Online Survey

Firms are not doing what it takes

47%don’t measure customer

experience quality

79% don’t train employees on how to deliver

the target customer experience

Not differentiating

Low customer experience maturity

Customer Experience Maturity

The extent to which an organization routinely performs the practices

The extent to which an organization routinely performs the practices required to design, implement, and manage customer experience

Customer Experience Maturity

The extent to which an organization routinely performs the practices required to design, implement, and manage customer experience in a disciplined way.

Customer Experience Maturity

Low CX maturityPractices are missing or performed in an ad hoc way

High CX maturityPractices are performed

systematically

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Get on the path to high customer experience maturity.

RepairElevate

Optimize

Differentiate

RepairElevate

Optimize

Differentiate

STOP the avalanche of bad customer experiences

Repair Phase Key Activities

› Identify bad experiences

› Prioritize fixes

› Coordinate implementation

› Measure results

2008 CXi – Wireless Carriers

$1.7 billion

Very Poor

OK

Base: US online consumers who have interacted with each firmSource: North American Technographics Customer Experience Online Survey, Q4 2008 (US), Q4 2009 (US), Q4 2010

(US), Q4 2011 (US), Q4 2012 (US)

Base: US online consumers who have interacted with each firmSource: North American Technographics Customer Experience Online Survey, Q4 2008 (US), Q4 2009 (US), Q4 2010

(US), Q4 2011 (US), Q4 2012 (US)

RepairElevate

Optimize

Differentiate

Make good CX behaviour the norm

Elevate Phase Key Activities

› Define a customer experience strategy

› Share customer insights with all employees

› Create a consistent, companywide customer experience measurement framework

› Start following a human-centered design process

Edward Jones CXi Score 2011 – 2013

OK

Good

Base: US online consumers who have interacted with Edward JonesSource: North American Technographics Customer Experience Online Survey, Q4 2009 (US), Q4 2010 (US), Q4 2011 (US), Q4 2012 (US)

RepairElevate

Optimize

Differentiate

A more sophisticated customer experience toolkit

Optimize Phase Key Activities

› Model the relationship between CX quality and business results

› Build strong experience design practices

› Sharpen employees’ CX related skills through targeted training

› Evaluate employee performance against role-specific CX metrics

• Let personality shine

• Provide options

• Help guests feel comfortable in public spaces

“Matt is chillin”

Systematic customer experience training

Six months before Pre-reno 11 days before3 months after re-

opening

Walk-throughImmersion

6 Webinars

Full Associate Training

2 – 3 Day Post-Visit

Courtyard by Marriott CXi Score ‘10 – ‘13

Base: US online consumers who have interacted with Courtyard by MarriottSource: North American Technographics Customer Experience Online Survey, Q4 2009 (US), Q4 2010 (US), Q4 2011 (US), Q4 2012 (US)

Good

Courtyard by Marriott CXi Score ‘10 – ‘13

Base: US online consumers who have interacted with Courtyard by MarriottSource: North American Technographics Customer Experience Online Survey, Q4 2009 (US), Q4 2010 (US), Q4 2011 (US), Q4 2012 (US)

Good

Excellent

RepairElevate

Optimize

Differentiate

Catapult you to the top

Differentiate Phase Key Activities

› Re-frame customer problems

› Reveal unmet customer needs

› Re-think the entire CX ecosystem

Car loans

Mortgages

Insurance

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USAA

Lead over next highest

brand

Banks 85 +7Credit Card Providers 82 +7Insurance Providers 83 +9

How do you get started on the path to CX maturity?

The Experience-Driven Organization PlaybookMay 2012 “Transform To An Experience-Driven Organization”

Assessment: Where Are You On The Path To Customer Experience Maturity?October 11, 2013 | Megan Burns

Overview: Transform To An Experience-Driven OrganizationMay 7, 2012 | Harley Manning

Gather best practices

Assess your maturity

Understand your customer’s journey(s)

Does your digital channel meet your customer’s needs?

Thank youCraig Menzies

Principal Analyst, Forrester Research (Sydney, Australia)

cmenzies@forrester.com

+61 02 9006 3352, +61 43 555 1412

Twitter: @craigmenzies, @forrester, #NASSCOM_ILF

My CX blog: http://blogs.forrester.com/craig_menzies

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Get in touch: cmenzies@forrester.com