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Customer Experience Strategy Playbook
 

Customer Experience Strategy Playbook

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    Customer Experience Strategy Playbook Customer Experience Strategy Playbook Document Transcript

    • HeadquartersForrester Research, Inc., 60 Acorn Park Drive, Cambridge, MA, 02140 USATel: +1 617.613.6000 • Fax: +1 617.613.5000 • www.forrester.comFor Customer Experience ProfessionalsWhy read This reportCompanies see substantial business benefit when they systematically hunt down and eliminate customerexperience problems. But eventually they need to stop doing business in ways that create those problemsin the first place. When they do, they’ll both cut costs and boost revenues, improving their bottom linesby tens of millions to hundreds of millions of dollars — or more. How can firms transform themselves andstart doing business in a new, more customer-centric way? They can do it by adopting the six disciplinesof customer experience. The main responsibility for driving this adoption falls on customer experienceprofessionals, who can use this playbook to guide them through the process.Transform To An Experience-Driven OrganizationExecutive Overview: The Experience-Driven Organization Playbookby Harley Manningwith Moira Dorsey and Belle BocalMay 7, 2012an undisciplined approach to customer experience drags on businessTo achieve the full potential of customer experience as a business strategy, you have to change the way yourun your company. You must manage from the perspective of your customers, and you must do it in asystematic, repeatable, and disciplined way. Companies that fail to do this face:■ An endless stream of costly customer service calls. When organizations operate in ways that don’tput customers at the center of their business, they inadvertently create problems for those customers.These difficulties range from getting the wrong product from a poorly trained sales rep to gettingthe wrong bill from a badly designed back-end system. What do customers do when these problemsoccur? They call contact centers — which run up costs for the company when the contact centers billthe firm by the minute and pay off customers with refunds.■ Less revenue per customer — and fewer customers over time. Customer experience correlatesstrongly to customer willingness to make another purchase. That means that every poor experience acompany delivers runs the risk of turning away the next sale. And because customer experience alsocorrelates to the likelihood of shifting business to a competitor, that same poor experience might causethe company to lose a buyer to the competition permanently.■ Social media nightmares. The quality of customers’ experience also correlates to their willingnessto recommend — or recommend against. Social media touchpoints like Facebook and Twitteramplify the customer’s ability to broadcast unfavorable opinions to hundreds or even thousands ofconnections. The result: One bad experience with the wrong Mass Connector or Mass Maven leads toa groundswell of bad sentiment.1
    • For Customer Experience ProfessionalsTransform To An Experience-Driven Organization 2© 2012, Forrester Research, Inc. Reproduction Prohibited May 7, 2012Companies Profit From Adopting A Disciplined Approach To Customer ExperienceWhen you consistently manage from the outside-in perspective of your customers, you’ll breakout of the endless cycle of chasing after problems you create for yourself. That’s because you’llsystematically stamp out the root causes of those problems. This new way of doing business will alsocreate the opportunity for competitive differentiation. Ultimately you’ll be able to achieve:■ Lower customer service costs. Your contact center can’t stamp out the customer experienceproblems that other parts of the business caused in the first place — but customer experiencediscipline can. Witness the way that JetBlue Airways’ measurement program takes theguesswork out of managing the JetBlue experience. It does this by capturing what actuallyhappened during a customer interaction (such as a flight), how the customer felt about theinteraction, and whether the customer is willing to recommend JetBlue afterward. That tellsemployees and partners what’s going right (or wrong), what (if anything) needs to be doneabout the situation, and what business impact to expect as a result.2■ Higher revenue per customer. Customers who have an above-average experience with acompany are more willing to buy again from that company. Virtually all industries feel the salesimpact that results from that fact, but a few stand to benefit even more than others. Wirelessservice providers, the largest hotel chains, and airlines see the biggest revenue gains by gettingincremental business from happier customers — hundreds of millions of dollars annually.■ Improved customer retention. Happier customers who had a better experience are less likelyto shift their business to competitors. Hotels — whose guests have near-zero switching costsif they decide to stay at a different property in the same town — can see the most revenuebenefit of any industry. When they keep their customers from defecting to the competition byoffering a superior experience, they can realize an extra $825 million annually. Wireless serviceproviders and insurance providers also stand to gain hundreds of millions of dollars throughbetter retention. And even banks, credit card providers, and TV service providers can see tensof millions of dollars of incremental revenue by embracing customer experience discipline.■ More new customers. If you want to improve your word-of-mouth marketing and drive upyour Net Promoter Score, deliver a better customer experience.3When more satisfied customersrecommend you to friends who then go on to buy from you, you’ll gain new customers — andthe revenue that comes with them. Hotels, wireless service providers, airlines, insuranceproviders, credit card providers, banks, and consumer electronics manufacturers all stand togain a minimum of $10 million of additional revenue from those new customers — withouthaving to spend any marketing dollars to attract them.
    • For Customer Experience ProfessionalsTransform To An Experience-Driven Organization 3© 2012, Forrester Research, Inc. Reproduction Prohibited May 7, 2012Use this playbook to guide your customer experience transformationAll mature companies routinely perform a set of sound, standard practices that result in a high-quality outcome.4That’s just as true for the accounting firm that does your books as it is for theutility company that supplies your power. It’s true for manufacturers that want to produce productswith an acceptably low defect rate and for retailers that want to consistently keep their supply chainsflowing and their shelves stocked. That’s the discipline of doing business.Companies that want to produce a high-quality customer experience also need to routinely performa set of sound, standard practices. This playbook explains each of those practices in detail, showsyou why you must adopt them, and walks you through the process of adopting them (see Figure 1).5The playbook will help you:1. Discover: what customer experience transformation means to your business. We definecustomer experience maturity and its most important practices. That will show you what youneed to do in order to advance down the path to maturity without false starts and missteps.You’ll also learn about the state of customer experience in business today, which will help youunderstand where you’re leading or lagging behind. And to help you grab and hold the attentionof your organization, we’ll show you the potential revenue benefits of improved customerexperience for companies in 12 major industries.2. Plan: how to create a road map to customer experience maturity. To guide yourtransformation effort, you need a vision of the specific customer experience you intend todeliver. That vision should be embodied in a customer experience strategy — we’ll show youthe best practices for building that strategy. We’ll also tell you who needs to be involved in yourinitiative in order to make it a success. And if you’re wondering where to start to accomplishthis potentially overwhelming task, you won’t once we guide you through the process ofassessing your current level of customer experience maturity.3. Act: how to transform into an experience-driven organization. Transformation requiresstrong leadership, so increasingly companies put one executive in charge of leading customerexperience transformation across the enterprise. We’ll describe the three types of organizationalmodels and help you decide which one is right for you. We’ll also give you real-world examplesof how companies improved their customer experience and whether they started from analready-strong position or they were trying to dig themselves out of a hole. Regardless of whichof those descriptions fits your situation, we’ve provided a guide of consulting organizations largeand small that can help you achieve your objectives.4. Optimize: what to do in order to maintain a high level of customer experience maturity.When you routinely perform the practices described in this playbook, you’ll consistently deliverthe customer experience your organization promises. We’ll help you set up a measurementprogram that monitors your progress over time so that you’ll know when you’ve arrived and
    • For Customer Experience ProfessionalsTransform To An Experience-Driven Organization 4Forrester Research, Inc. (Nasdaq: FORR) is an independent research company that provides pragmatic and forward-thinking advice to global leaders in business and technology.Forrester works with professionals in 19 key roles at major companies providing proprietary research, customer insight, consulting, events, and peer-to-peer executive programs.For more than 27 years, Forrester has been making IT, marketing, and technology industry leaders successful every day. For more information, visit www.forrester.com.© 2012 Forrester Research, Inc. All rights reserved. Forrester, Forrester Wave, RoleView, Technographics, TechRankings, and Total Economic Impact are trademarks of ForresterResearch, Inc. All other trademarks are the property of their respective owners. Reproduction or sharing of this content in any form without prior written permission is strictlyprohibited. To purchase reprints of this document, please email clientsupport@forrester.com. For additional reproduction and usage information, see Forrester’s Citation Policylocated at www.forrester.com. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. 72461avoid backsliding. Our Customer Experience Index will tell you how you stack up to others inyour industry and across industries. And to keep control of your ongoing efforts, we’ll provideguidance on how to measure a portfolio of customer experience improvement projects.Figure 1 The Experience-Driven Organization PlaybookSource: Forrester Research, Inc.72461PerformanceManagementAssessment OrganizationVisionStrategicPlanBest Practices BenchmarksLandscapeStakeholderMapTools AndTechnologyContinuousImprovementBusinessCaseDISCOVER PLAN ACT OPTIMIZEEndnotes1 Mass Connectors are the 6.2% of online adults who create 80% of the influence impressions on social media.Mass Mavens are the 13.8% of online adults who create 80% of posts, comments, and ratings. See theDecember 19, 2011, “Twitter: The Public Forum For Your Brand” report.2 For more about JetBlue’s customer experience measurement program, check out the upcoming book fromForrester, Outside In: The Power Of Putting Customers At The Center Of ​​Your Business.3 Net Promoter, Net Promoter Score, and NPS are registered trademarks of Bain, Fred Reichheld, andSatmetrix Systems. Source: Bain (http://www.bain.com/search.aspx?q=Net+Promoter); Satmetrix Systems(http://www.satmetrix.com/).4 If you want to learn more about maturity frameworks, check out the People CMM (Version 2) from theSoftware Engineering Institute. Source: Carnegie Mellon University (http://www.sei.cmu.edu/library/abstracts/reports/09tr003.cfm).5 Please refer back to the online document to see the associated reports in the playbook. See the May 7, 2012,“Transform To An Experience-Driven Organization” report.