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Service Providers Can't Define the Customer Experience
In a growing trend across all verticals, the latest Yankee Group study finds 50 percent of service providers cannot explain what the customer experience should be.
Posted Jul 24, 2008
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Company executives often claim that the customer is paramount to their businesses and that the customer experience is an integral element in overall success or failure -- but a new study has shown that many service providers (SP) still don't truly understand what the customer experience is all about.

A new global study of SPs in the wireless, wireline cable, and satellite markets by the Yankee Group, an independent technology research and consulting firm based in Boston, finds 48 percent of respondents do not have a clear definition of what the customer experience should be. Sheryl Kingstone, director of enterprise research at Yankee Group, says that when she asked respondents to define customer experience, few used essential terms such as "cross-channel" and "consistency." "People paid lip service to an overall customer experience across multiple touchpoints," she adds. 

Kingstone says that while the lack of a definition is disconcerting, it's important to note that companies are at least trying. According to statistics from the study, "improve the customer experience" ranked second as a driver to business transformation at 32 percent. (The top driver was "reduce operating costs" at 35 percent.) "The good news is that carriers are prioritizing the customer experience," she explains. "There is a very strong movement toward understanding what [consumers] want. What isn't necessarily consistent is what companies need to provide in order to deliver [this]."

Definition aside, the Yankee Group study found the top three obstacles to providing a differentiated customer experience are (in descending order):

  • lack of integration and a common view of the customer across multiple interaction channels;
  • lack of business process consistency and integration across lines of business and interaction channels; and
  • multiple, nonintegrated information repositories.

Kingstone says the top obstacle is essential for companies to tackle. "They have to prioritize internally to break down silos," she says. "Business units have to be together -- until companies break down those silos it's going to be a very difficult organizational challenge." It seems that companies understand her sentiments as well -- the study finds master data management is the second-highest investment priority over the next three-to-five-year period. 

Another particularly telling conclusion drawn from the study is that 70 percent of SPs say business processes have a direct impact on the customer experience; however, 28 percent of respondents say they lack business process owners. Rebecca Prudhomme, director of market insight and strategy at St. Louis-based customer experience systems provider Amdocs (a study sponsor), says this means there is an absence of project funding or dedicated resources behind what companies are calling a strategic initiative. "This enlightened us and shed light on what's happening with business processes -- and that companies are looking for help," she says. 

Talking about Amdocs' position on the entire study, Prudhomme says that it helps to validate her company's position in the market. "SPs know they have to become more customer-focused and [that] they lack the holistic vision to get them there," she says. "They're looking for guidance on how to overcome their operational silos, brand definitions, and, based on that, the customer experience they want to deliver."

Kingstone says consultants and professional services vendors can offer great help to companies needing guidance, but those companies should not rely solely on outside help. "Yes, businesses can go to a consultant, but they also need to work on it internally themselves," she stresses. "So right now it's like putting lipstick on a pig. If you don't have a solid strategy, no matter how well you paint you can't do a Picasso."

What's at stake, she argues, is losing customers and gaining a bad reputation. "The future is all about the empowered consumer -- so it's more than just solving information silos," she says. "If we don't look forward and meet that empowered customer, we're going to hear about it on YouTube and all the other blogs out there. That can seriously deteriorate and be viral to other customers, so companies need to create an intensity for change."
 

News relevant to the customer relationship management industry is posted several times a day on destinationCRM.com, in addition to the news section Insight that appears every month in the pages of CRM magazine. To contact the editors, please email editor@destinationCRM.com.

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