You are reading part 1 in a 7-part series: Customer Experience as a Business Discipline.
Bill McNabb, Chairman and CEO of Vanguard, recently stated that, “A focus on customer experience and an outside-in perspective are the cornerstones of business success.” Customer Experience leaders such as Apple, Southwest Airlines, and USAA have understood this fact for years, to the tune of hundreds of billions in annual revenue. But in spite of the empirically undeniable correlation between positive customer experiences and economic success, few companies get it right.
In early 2012 Forrester examined the Customer Experience Indices (CXi’s) of 160 top US brands. The results were startling. After polling 7,000 American consumers, researchers discovered that only 3% of brands provide “Excellent” customer experiences, while 34% provide “Good” experiences. Surprisingly, more than two-thirds of the surveyed brands measured rated “Okay” (31%), “Poor” (23%), and “Very Poor” (10%). According to Harley Manning and Kerry Bodine, authors of Outside In: The Power of Putting Customers at the Center of Your Business, “This situation presents an incredible near-term opportunity for gaining a competitive advantage.”
In order to improve customer experience, companies must recognize, nurture, and support it as a core business discipline. Forrester’s Principal Analyst, Megan Burns identifies the following key areas which are now at the heart of Customer Experience Management:
This is your game plan. Your customer experience strategy concerns the alignment of your customer experience practices and techniques with corporate strategy, and then integrating it within the fabric of the organization until it becomes part of its culture.
2. Customer understanding
Customer understanding involves conducting research, collecting feedback, analyzing and interpreting results, and documenting findings. It is about collecting data to create an intelligible picture of customers as they interact with your brand, and then converting that data into customer-centric action.
According to Harley Manning and Kerry Bodine, “Design spells the difference between a symphony orchestra performance and a garage band jam session.” It is a deliberate attempt to craft customer interactions that meet or exceed expectations over time.
Measurement provides insight into organizational performance, and the best measurements highlight opportunities for improvement. By identifying and applying key metrics uniformly, the highest performing organizations may uncover actionable insight for customer experience improvement.
Governance concerns the disciplined management of, and shared accountability for, the customer experience across all levels of the organization. It is about the practices which lend credibility to customer experience as the heart of corporate strategy, making it more than a ‘bumper sticker’ or YACS (Yet Another Corporate Slogan).
Jeff Bezos, Amazon founder and CEO, once said that, “Brand is what people say about you when you leave the room.” The authors of Outside In describe culture in a similar way: it’s the way you “shape what your employees do when you’re not in the room.” It turns the pursuit of positive customer experiences into habit, enabling continued high performance that translates to sustainable competitive advantage.
Now that I have provided a high level overview of the six key areas within Customer Experience Management, the following sections of this series will dive into each of these disciplines in greater depth. Part 2 will examine the role of strategy in customer-centric organizations.