Customer Centricity a Work in Progress

Customer Experience
Customer Experience

"A focus on superior customer experience leads to success," says Martha Rogers, Ph.D., Peppers & Rogers Group founding partner. And a recent study conducted by 1to1 Media in partnership with SAS and Jubelirer Research proves it. Unfortunately, it also revealed that many companies still have a long way to go to reach the level of customer experience maturity that will deliver a sustainable competitive advantage.

The study "Customer Experience Maturity Monitor" examines how extensively customer experience capabilities deliver business impact. Researches surveyed more than 150 marketing, CRM, and analytics executives. Additionally, they conducted in-depth interviews with a select group of respondents from such companies as Hewlett-Packard, UPS, and Wachovia.

Researchers focused on three main areas that impact the customer experience: deepening customer insight, choreographing customer interactions, and continuously improving marketing performance. According to Jeff Gilleland, global strategist, customer interaction solutions, for SAS Worldwide Marketing, these three I's are integral to customer experience success like marketing's four P's are essential to marketing success.

Gilleland explains that insight is all about managing customer data quality, predicting customer behavior, and profiling and segmenting customers; interaction refers to managing and optimizing customer strategies and engaging high-value customers;  and improvement refers to measuring and reporting on data, optimizing marketing investments, and learning and improving as a result. The survey examined the extent to which respondents engaged in these activities.

The findings indicate that most companies still view customers at the aggregate level more often than on a one-to-one basis. Although 54 percent of respondents say their companies' do a good job of using customer satisfaction or other customer-affinity measurements as key performance indicators, only one third monitor changes in customer attitudes and perceptions or link those attitudes to customer behavior to determine behavioral drivers. Additionally, although nearly half of respondents say their companies' customers can self-select channels for specific interactions and activities, only one quarter of those firms create special experiences like personal URLs in response to customer preferences. And while nearly half of respondents segment their customers based on demographics, only 26 percent create customer profiles designed to help predict customer behavior.

Customized interactions are also not yet commonplace. Nearly 40 percent of respondents' companies use rewards and loyalty programs to encourage customer loyalty among high-value customers, yet less than 20 percent create individual "treatment tracks" to manage the customer experience across both products and channels. In fact, only 35 percent of companies allow customers to select the manner in which the company contacts them, and only 22 percent create automated responses to behavioral triggers.

Why the lack of one-to-one focus? According to Rogers, few companies have made the switch from tracking and measuring product profitability to doing so for customer profitability. Most companies are still oriented around products and most employees are compensated based on product performance. It's a huge challenge to change that orientation, she says.

Gilleland adds that if top executives want their companies' focus to change, they need to measure "customer performance." Right now, however, only 43 percent of companies use customer metrics like profitability, campaign response, and channel behavior to measure organizational performance. And only about one third of respondents say their company aligns incentive programs to customer metrics. Additionally, although marketing accountability is hyped as an absolute must, only 41 percent of respondents' firms measure and manage marketing campaign ROI, 30 percent measure/manage marketing mix ROI, and only 27 percent do so for lead generation.

Although gaining customer insight and measuring its impact can be challenging, according to Gilleland, companies are missing the "diamonds on the ground" by not learning more about and acting on individual customers' preferences. Less than one third of respondents' organizations have a process for capturing customers' "expressed needs" during live interactions. Only 28 percent continually update customers' profiles to reflect all customer activity, including inbound and outbound contact. And about one fifth make changes to individual customers' interactions based on changes to their profile.

So what are companies doing well? As stated earlier, 54 percent of respondents are using customer satisfaction or other customer-affinity measurements as key performance indicators, and about 50 percent measure and report on customers' attitudes and perceptions about their companies. "We need to be cheerleaders for customer centricity all the time," said one respondent. Added another: "It's not a destination; it's a journey."

Attend an upcoming webinar on the topic, “Multichannel Mayhem: Tapping the Customer Experience for Competitive Advantage,” on November 12 at 1 p.m. ET.