Forrester Leaders Stress Customer Obsession at CX North America Summit
Companies today need to be customer-obsessed, speakers at Forrester Research's CX North America virtual conference today stressed.
And while"customer obsession is bigger than you, it can't be done without you," Shar VanBoskirk, a Forrester vice president and principal analyst, said in her keynote that opened the conference today.
"Customer obsession is the solution for surviving and thriving in any set of circumstances, but it can't be a piecemeal approach," she said.
And, it can't be the same thing for every company, she added.
"Companies exhaust their resources trying to be Amazon, but what Amazon does is not scalable or necessary for every company," VanBoskirk said
Customer obsession, VanBoskirk added, means "putting the customer at the center" of everything, including leadership, strategy, and operations.
"It's a framework to help shape strategies," she said.
Customer obsession comes with four main hallmarks, according to Van Boskirk:
- Companies are customer-led, not just customer-aware. The difference among these two, VanBoskirk said, is a matter of having a good handle on who your target market is and using your understanding of individual customers to guide your business decisions.
- Companies are insight-driven, not just data-rich. The difference here is just amassing huge amounts of data vs. collecting data that has valuable, critical insights to help companies be customer-led and that everyone who needs access to those insights has it.
- Companies are fast, not perfect. This is a challenge to be iterative, to launch products and services and then test to see how customers use them so you can make improvements, Van Boskirk maintained.
- Companies are connected, not siloed.
VanBoskirk also outlined five customer segments with regard to companies' maturity in customer obsession.
- Customer-naïve, where customers are sidelined in their treatment of customers.
- Customer-aware, with companies acknowledging the value of great customer experiences but not seeing the need to disrupt business as usual to provide them;
- Customer-engaged, where companies appreciate the need for great customer experiences but they are not aligned around the customer at the strategic level;
- Customer-committed, where companies have a customer-centric culture and are working to balance customer needs with business strengths; and
"Good things happen when you are customer-obsessed. Customer good will, employee engagement, and revenue all increase linearly with customer-obsession maturity," VanBoskirk said.
Companies that are customer obsessed are 1.4 times more likely to say that customers trust them; 82 percent of employees at customer-obsessed companies are likely to stay compared to just 13 percent of those at companies that are not; and companies that are customer-obsessed have 2.5 times higher revenue growth, she pointed out.
Despite the importance of customer obsession, companies are still slow to adopt that mindset, according to Van Boskirk, who said there has been no change in the number of companies that are customer-obsessed than in 2019.
"Customer obsession is a good idea that is easy to agree with but hard to do," she stated. "Most companies do not treat it as a business strategy."
It requires clear direction from leadership. "Without that, employees do not know what they should do differently."
To become customer-obsessed, companies first need to determine their goals, according to VanBoskirk. The next step is to know what customer obsession is worth, looking at the returns it will bring; followed by a look at how empowered customers are, how willing customers are to try new things, how much competition you face, and what company targets are.
"You need to align your customer obsession level with firm goals," she said. "Customer obsession is about striking a balance between your company's strengths and what customers value."
But it goes farther than that, according to Melissa Parrish, a Forrester vice president and CX group director. Companies today need to take into consideration all the touchpoints that customers have and the entire customer journey.
"To truly reap the rewards of great customer experiences, you must think about the customers' complete, holistic experience with the entirety of your company and how it pays off for your brand," Parrish said. "Customer experience is a crucial part of customer obsession and your path to growth."
To highlight this, she pointed to Forrester's most recent CX Index, which found that companies that improved their scores by just one point saw 1.3 percent higher customer retention, 1 percent higher enrichment, and 1.3 percent higher advocacy.
George Colony, Forrester's CEO, in his opening remarks designated July 13 as "CX Reality Day," a day when everyone in company leadership should become a customer and subject themselves to all of the customer-facing touchpoints. Last year, Forrester found a lack of alignment between brand message and customer experience among companies that participated.