"The customer experience." It's a widely spoken phrase, often used as a catch-all term for companies' efforts to improve operations and rally employees and consumers. Most companies want to elevate the customer experience, but somewhere between the good intentions and actual implementation, many things can break down. The current state of the customer experience is not ideal.
Forrester Research recently interviewed more than 4,600 U.S. consumers about their interactions with 133 companies across a variety of industries for its 2010 Customer Experience Index. Only 13 firms received "excellent" customer experience ratings, while 45 were rated either "poor" or "very poor." However, 22 companies did make significant improvements over last year. According to Bruce Temkin, vice president and principal analyst at Forrester, there is a considerable opportunity for companies to drive better business results by improving their customer experience management efforts.
Companies first need to define what, in fact, the customer experience is at their firm. Forrester categorizes the customer experience as the sum of three elements: meeting needs, being easy to work with, and providing customer enjoyment. Companies that can do all three well rank highest in Forrester's index and develop loyal customers. According to Temkin, Barnes & Noble, Marriott Hotels, Hampton Inn/Suites, Amazon.com, and Holiday Inn Express top the Customer Experience Index with high marks for all three elements. Conversely, companies like Citigroup, US Airways, and the now defunct Washington Mutual round out the bottom of Forrester's list with low scores from customers in all three categories.
The challenge for these customer experience laggards, and many other organizations, is the many complex internal processes, interconnected technologies, and human obstacles to providing something seemingly simple.
Customer experience pitfalls
Temkin says most companies encounter three common pitfalls when it comes to delivering a good customer experience:
- Lack of cooperation across departments
- Limited understanding of customer needs across the organization
- The general power of inertia within a business
These three pitfalls often share one root cause: a company is too internally focused. "People just don't understand, or spend the time to think about, how their decisions and actions impact customers," Temkin says. "I'd say it's more often an issue with people and process than it is with technology. Good processes and people skills can overcome many technology glitches, if the experiences are designed and delivered appropriately."
Avoiding these pitfalls starts at the top. Company leadership has to not only buy in, but mustactively support, customer experience efforts. However, having a C-level customer executive does not automatically equal customer experience success. Companies also need to prioritize three business areas: cross-channel alignment, customer-focused metrics, and a customer-focused culture.
1. A seat in the C-suite
The customer experience should be the responsibility of all departments, ideally with a C-level executive overseeing the cross-departmental communication and projects. Anna Convery, chief marketing officer at customer experience analytics company ClickFox, says she is beginning to see more chief customer officers and the like who sponsor customer experience projects. But it's not yet commonplace. "There is a lot of talk about the customer experience at the C-level, but not a lot of folks putting their shoulder to the wheel," she says.
Bob Johnson, CCO of Century Furniture, has guided the high-end furniture manufacturer's shift from a product-focused mind-set to a customer-centric one. "Every employee at Century needs to recognize that they are in customer service," Johnson says. "We have had good success through recognition, promotion, and training...we're starting to move the needle so everybody recognizes that something they do is affected down the line. We're also getting the entire organization to recognize that we're selling an experience."
2. Cross-channel alignment
A customer thinks of a company as one entity and today expects alignment across channels. Meanwhile, most companies still think of themselves as a series of departments. They may use technical, hierarchical, or geographical excuses why they don't align their organization. But a breakdown in the customer experience from one channel to another has an impact on the bottom line-something senior management should be acutely aware of. Vodafone's Paul de Laat is.
"A brand is what a brand does, and everything that touches the customer determines that customer's perception of Vodafone," says Paul de Laat, global director of customer value management (CVM) the mobile telecom provider. "Being relevant to customers is very important in the CVM space, because the relevance of our offers builds trust and trust drives retention, and when done well over a longer period of time, creates advocacy."
Vodafone serves 323 million customers worldwide, and had been operating independent offices in a variety of countries without a common voice or process. "In some cases the customer experience was the responsibility of a small team, and not of every individual in the organization," de Laat says. "In the CVM space, the offer that a customer would get in a call centre could be repeated or completely different in another interaction channel. That experience makes customers wonder whether we really know them, whether we are interested in them as individuals, and if we deserve their loyalty. Consistency and relevance are the two main customer benefits we try to achieve with our CVM programs."
The company works with Chordiant to deliver a consistent customer experience across channels and its offices in 10 countries. It uses tools such as multichannel interaction management, marketing campaign management, and recommendation engines.
"Alignment of objectives, metrics, and strategies is very important," de Laat says. "The tools allow us to deliver relevance and consistency across the channels to our customers. It enhances our ability to be easy to do business with, and allows customers to continue a conversation with us across multiple channels. We focus mostly on consistency within a country. We share our best practices extensively across countries, in order to increase implementation speed and collective learning."
3. Customer-based metrics
They say what gets measured gets done, something Forrester's Temkin says is crucial for customer experience initiatives. "Companies should develop a set of customer-centric loyalty metrics that they track in the same way and at the same level that they track business metrics like sales and profitability," he says. Putting customer initiatives on par with other senior-level programs will elevate their stature within the organization. "Traditionally analytics have been pushed up from each department," adds Convery of ClickFox. "But as you bring metrics up to the C-level, it means that the organization understands the importance of the customer experience."
Vodafone's de Laat says his company tracks Net Promoter Score (NPS) and customer satisfaction at the highest levels in the organization and that those scores drive performance-related remuneration across business units. "We have seen a direct link between any decline in customer satisfaction and NPS and financial performance," he says. "We make customer satisfaction or NPS one of the KPIs for each employee, related to the area we work in. We track the evolution of customer satisfaction and advocacy very closely, and countrywide programs are in place to drive excellence."
So what customer-based metrics should companies measure? Simple metrics are sometimes the best, because they are easiest to understand and yield results. "The challenge in most fast-moving organizations is that the things that are more difficult to quantify, and thus more difficult to create a business case for, can slip through the net and never get the full attention they deserve," says de Laat. "Identify the one or two things that are really going to make a difference in customer perception and behavior," he says.
ClickFox's Convery agrees. She also recommends a focus on metrics around customer acquisition, retention, and growth, which all have bottom-line impact. In addition to new customer volume and share of wallet numbers, however, she advises going deeper into the data:
- What causes customers to churn? Look at 90-day pre-churn behavior to identify other potential churners and save them before they go.
- What's the best way to onboard a new customer? Follow good customers and create a model of their first 30-day experience to create other good customers from day one.
- How does self-service impact the customer experience? Map customer experience, customer satisfaction, and loyalty metrics against self-service. Are the experience metrics the same, better, or worse if customers use self-service channels?
- What are surveys really telling us? Pay close attention to user surveys not just to look at results, but to see what customers tried to do and where the experience broke down.
Ultimately, it's what you do with the data that will decide if your company creates or avoids a customer experience pitfall. "The data may be there, but as an organization if you're not ready to implement change, it becomes merely an academic result," Convery says.
Vodafone's de Laat also warns that customer-based metrics aren't as quick to show change as some other measurements, so it's important to set executives' expectations. "We see that addressing customer experience issues takes a bit longer to drive financial results," he says.
4. Sustaining a customer-focused culture
One person's attitude or action can make or break a customer experience. To avoid this customer experience pitfall, "the trick is for the brand to live in the hearts and minds of all employees," Forrester's Temkin says.
Vodafone's de Laat agrees. "Customer experience focus is a culture that needs to sit in all parts of the organization, and is driven on a daily basis by all employees."
Old Republic, a home warranty company in the United States, also knows the value of a customer-focused culture. "The customer experience is our only differentiating factor in the market," says Jacqui Crockett, chief knowledge officer. "We believe in the power of the customer experience, and we measure performance that breeds delivery of a good customer experience."
Working with AchieveGlobal, the company identified measureable behaviors that represent its motto, "People helping people." Every one of its 500 employees receives continuous training and performance measurements on those behaviors. They include "human" behaviors like listening, empathy, and politeness; "business" behaviors such as using the systems and processes correctly; and "hidden" behaviors like correct spelling on forms. "We make it part of the language and the culture," in QA forms, performance appraisals, and training programs for both internal and external customer interactions, Crockett says. The company also runs an internal peer recognition program called STARs. It acknowledges employees who exhibit seamless, trustworthy, attentive, and resourceful qualities. Employees are measured on these attributes as well.
Employee behavior metrics are compared to customer satisfaction metrics, which Crockett says have improved since the program began. Also, employee turnover has dropped, and employees are asking for more training and information about delivering a positive customer experience. Most important, Crockett says, the program has created a culture where anyone in the organization can question processes that aren't customer-focused or aligned to the culture.
The path to a superior customer experience
It takes more than four priorities to consistently deliver a positive customer experience. Each company and customer relationship is unique. Yet Temkin does say that the common attribute of top companies is the ability to deliver on the brand promise to customers.
"Customer experience leaders tend to have a much clearer picture of two things: their customers and their brands," Temkin says. "Companies like USAA and Southwest Airlines that significantly outperform their peers understand what promises they're making with their brands and find ways to consistently deliver on these promises. This clarity provides alignment across the organization." It can make the difference between ruining and delivering on the customer experience.