• September 1, 2012
  • By William Band, vice president and principal analyst, Forrester Research

Join the Digital Disruptors

Article Featured Image

Executives don't decide how customer-centric their companies are—their customers are the ultimate arbiters. Digital disruptors—a term coined by Forrester describing companies that leverage digital platforms to take advantage of customers' heightened expectations and deliver a more compelling product and service experience at a lower cost—are threatening traditional business models.

Our research shows that a good experience impacts customers' behavior in three ways: 1) they are more willing to consider another purchase; 2) they are less likely to switch their business to a competitor; and 3) they are more likely to make a favorable recommendation. But how does that affect a company's bottom line? We estimate that the revenue impact from a 10 percentage point improvement in a larger service company's performance, as measured by Forrester's Customer Experience Index score, could exceed $1 billion.

During our research, we discovered three customer experience (CX) trends that you can capitalize on.

Moving from Aspiration to Strategy

In emphasizing moments of truth, such as sales opportunities or customer service cases that matter to individual departments, organizations often ignore the handoffs between business units and across channels that may affect customer perception. As a result, they miss key moments that matter to customers—for example, receiving a bill from the accounting department that accurately reflects customer expectations set by a purchase made over the phone with a customer service representative. Enlightened companies define their customer relationship strategies from the outside in, crafting them based on customers' terms.

These organizations are moving beyond empty "customer first" slogans, and instead defining clear and actionable CX strategies. To orchestrate a consistent "on-brand" experience, your CX strategy must: 1) define the intended experience, specify the target customers, describe the desired emotional response, and offer unique value; 2) spell out CX guiding principles to direct employee activities and decision-making; and 3) set project priorities and steer resources to the right projects by filtering funding requests using guidelines that include CX criteria.

Embracing the Experience Ecosystem

Companies in nearly every industry disappoint their customers, especially when customers cross channels. Many CX initiatives don't realize their potential because neither employees nor partners have a complete picture of what the customer experience actually entails or the dynamics that go into creating it. They need a new approach: one that considers the influence of every employee and external partner on every customer interaction.

We anticipate that organizations will move to break away from their tunnel vision to embrace the concept of the "customer experience ecosystem," which Forrester defines as "the complex set of relationships among a company's employees, partners, and customers that determines the quality of all customer interactions."

One major difference between the two approaches is that the CX ecosystem can be intentionally designed. We foresee that CX designers will have a broad mandate. They will plan and organize complex systems of people, products, interfaces, services, and spaces. Defining customer-journey maps is critical in linking the moments of truth affecting customers' experiences to specific activities that the organization and/or its partners undertake.

Developing a Management Discipline

Most companies want to differentiate themselves through superior customer experience. Very few do. Forrester's annual Customer Experience Index study shows huge gaps between the most- and least-advanced firms in the same industry. Entire industries are in their CX infancy.

We anticipate that CX will emerge as a management discipline comprised of a set of sound, repeatable practices that lead to excellence. Leading organizations will focus on strengthening their capabilities in the six categories that comprise Forrester's customer experience maturity framework: customer understanding, governance, strategy, measurement, design, and culture.

William Band is a vice president and principal analyst at Forrester Research.

CRM Covers
for qualified subscribers
Subscribe Now Current Issue Past Issues

Related Articles

Oracle Outlines Customer Experience Strategy

Deeper cloud offerings expected to follow recent acquisitions spree

4 Ways to Boost Customer Experience

A new Forrester Research report reveals methods to make customer experience projects matter to companies and consumers.

Retailers and Hotels Top the 2010 Customer Experience Index

In Forrester's Annual survey, Barnes and Noble, Marriott Hotels, and Hampton Inn and Suites deliver the best experiences.

Your Most Loyal Customers Demand the Best Experiences

Latest report from Forrester Research affirms high correlation between experience and loyalty across all industries.

Buyer's Guide Companies Mentioned