Company leaders sometimes think they know what's best for their customers without really attempting to understand the customer's point of view. Companies that take this kind of an approach risk falling prey to their competitors or emerging companies that have adopted more of a customer centric or outside-in approach.This was part of the theme that came out of today's keynote sessions at Forrester Research's Customer Experience Forum in Los Angeles. Kerry Bodine, vice president and principal analyst at Forrester, talked about how customers have the ability to access information anytime, anywhere, and how they can act on that information immediately. Today's customers, emboldened by their mobile devices and the social media megaphones they're armed with, "have more power than ever and that's a situation that's never going to be reversed," says Bodine. "This is today's reality. It doesn't matter how successful you've been to this point. If you want your company to succeed in the age of the customer, you have to adopt a perspective that's outside in" and place customers at the center of your business, she adds.
Of course, striving to deliver great customer experiences is critical to building a customer-centric business model. As Forrester sees it, there's a three-sided customer experience pyramid in which customers want their needs to be met and for the experience to be both easy and enjoyable. Forrester measures how well or poorly companies address this three-legged stool of customer expectations through its annual Customer Experience Index. Sadly, most of the 160 companies that are evaluated are mediocre at best, says Bodine.
But those companies that are making the effort to become customer centric and are following a careful methodology along with the effective use of technologies to gather and act on customer insights and to measure the business impact of these programs are clearly distancing themselves from their competitors. As part of its research, Forrester has tracked the five-year stock performance of both its Customer Experience Index (CXI) leaders and laggards and how they stack up against each other as well as the S&P Index. The results are eye-opening -- the collective stock performance of CXI leaders grew 22.5 percent over the past five years while the S&P Index is down 1.3 percent over that time. Meanwhile, stocks for CXI laggards have tanked a whopping 46.3 percent.
I hope my kids' college funds aren't tied up in that group.