NEW YORK—"Companies thirst for customer experience innovation but don't know how to get it," Kerry Bodine, vice president and principal analyst at Forrester, said in her keynote address at day two of the Forrester Customer Experience Forum here.
According to a recent Forrester survey of 100 customer experience professionals, 47 percent of respondents say that their executive team's strategy for customer experience is market differentiation, and claim that they have dedicated personnel, time, and money to innovation activities. While most companies believe their efforts are paying off—73 percent plan to launch more innovative customer experiences in the upcoming year—in reality, their efforts aren't as effective as they think, Bodine asserted.
"Despite their ambition, a closer look at our respondents' activities reveals that haphazard processes consume their energies. Panelists acknowledge that their firms remain focused on incremental fixes, mismanage the basics by developing innovations that are incompatible with customer needs, and fail to make the business case by providing evidence of how customer experience improvements affect revenues, cut costs, or improve customer loyalty," Bodine said.
This is a problematic trend, Bodine explained, because firms are facing pressure from customers to constantly provide something new and improved. "People innately want variety and novelty. And now digital tools give people unprecedented access to what they want, whenever they want it, leading consumers to believe that their needs can and should be met at all times," she said.
Companies are also facing pressure from not only large, established competitors but also smaller firms which, once limited by manufacturing strength, distribution power, and access to information, can now compete on a very real level. "Newcomers like thermostat manufacturer Nest Labs and eyewear manufacturer Warby Parker now compete head-to-head with established industry giants like Honeywell International and LensCrafters," Bodine explained. "And online financial services provider Simple Finance Technology offers consumers a wholly new banking relationship. The common thread among these companies is a laser-sharp focus on customer experience."
To stay ahead in the marketplace, companies need to reframe their approach to customer experience innovation. "To achieve this, customer experience professionals need to adopt explorative research techniques to develop empathy, take themselves out of customer journey maps to broaden horizons, and define a smarter problem than they started with," Bodine said.
She also invited CX professionals to ground innovations in the ecosystem by analyzing innovation ideas within the context of the core business mechanics. "To add structure to this process, customer experience professionals must connect new touch points to the broader ecosystem and ward off imitators by mapping out how the people, processes, policies, and technologies that surround new touch points change, as well as define new business models to discover new interactions," she said.
Emphasizing the importance of infusing innovations with the brand, Bodine believes that companies should wield brand power by transferring its qualities to new customer interactions and making the brand a source of innovation inspiration. "To tap the brand's potential," Bodine suggested, "CX teams should create visual models that articulate their brand's distinctiveness as well as customer needs. They can then use these models to ideate products, services, and entire customer journeys that resonate with each core aspect of the brand."
Once an innovative idea has been implemented, evaluating its effect is the next integral step toward measurable success. "Customer experience professionals can't afford to muddle along with incomplete measurement programs," principal analyst Megan Burns, said as she unveiled Forrester's seven steps to customer experience measurement success.
First, Burns explained, companies need to choose customer segments by zeroing in on the customer segments that are most important to the business and select which experiences to measure: overall relationship, discrete customer journeys, or individual interactions. Companies must then pick CX metrics for each experience, design a data collection strategy, set targets for each CX metric, identify and act on the CX issues, and, finally, share the insights they've gained from the CX measurement.
"The seven steps will help customer experience professionals develop a successful measurement program, but to keep their programs successful over time, CX professionals will need to tune their CX measurement program continuously and establish processes for a regular CX measurement program review," Burns said. "Ongoing review of measurement programs can't be left to chance."