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Transcript of Forrester the State of Customer Experience 2010
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Making Leaders Successful Every Day
February 19, 2010
The State Of Customer Experience,2010by Bruce D. Temkin
for Customer Experience Professionals
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© 2010, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best availableresources. Opinions reflect judgment at the time and are subject to change. Forrester®, Technographics®, Forrester Wave, RoleView, TechRadar,and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. To purchase reprints of this document, please email [email protected]. For additional information, go to www.forrester.com.
For Customer Experience Professionals
EXECUTIVE SUMMARY
We surveyed 141 executives from large North American rms to nd out about their customer
experience endeavors. It turns out that 90% of respondents think that customer experience is very
important for their companies and 80% are trying to use it as an area of di erentiation. While the lack
of funding was the top problem last year, the lack of a clear strategy has emerged as this year’s No. 1
obstacle. ere’s a lot of activity underway: 62% of companies have a voice of the customer (VoC)
program, and nearly half have an executive in charge of their overall customer experience e orts. Ourdata shows that companies with this type of leadership have fewer obstacles and are more mature in
their customer experience e orts.
TABLE O F CONTEN TSCustomer Experience Is Active In 2010
Customer Experience Leadership Makes A
Diff erence
RECOMMENDATIONS
Get The Entire Company Thinking Outside-In
Supplemental Material
NOTES & RESOURCESIn Q4 2009, Forrester surveyed 141 decision-
makers from North American companies with
annual revenues of $500 million or more.
Related Research Documents
“ The Customer Experience Index, 2010”
January 11, 2010
“ The State Of Customer Experience, 2009”
April 24, 2009
“Obstacles To Customer Experience Success, 2009”
February 20, 2009
February 19, 2010
The State Of Customer Experience, 2010Lots Of Action, Especially In Companies With Customer Experience Leaders
by Bruce D. Temkinwith William Chu and Rachel Zinser
2
10
16
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The State Of Customer Experience, 2010
For Customer Experience Professionals
2
CUSTOMER EXPERIENCE IS ACTIVE IN 2010
To understand what companies are up to in their customer experience endeavors, we surveyed 141
executives from large North American rms. eir feedback highlighted that:
· Customer experience is critical. When we asked respondents how important customer
experience was to their 2010 plans, 90% told us that it was very important or critical (see Figure
1-1). But rms aren’t aiming to just keep up with their peers: 80% of the rms want to use
customer experience as a form of di erentiation (see Figure 1-2).
· Most companies have some customer experience discipline. Nearly two-thirds of respondents
say that their companies have a disciplined approach to customer experience management —
although only 11% see their e orts as being very disciplined (see Figure 2).
·
ere’s a lot of e
ort underway. We asked about the customer experience activities thatcompanies are working on. More than six out of 10 companies have a voice of the customer
program and use a single set of customer feedback scores (see Figure 3). Nearly half of the
respondents have an executive in charge of their cross-channel customer experience e orts.
· Missing strategy has replaced funding as the key problem. About half of the respondents
identied three areas as key issues to their customer experience e orts: lack of a strategy, lack of
processes, and lack of cooperation across the organization (see Figure 4). When we compared
the problems from last year, funding has become less of an issue while the lack of a strategy has
become a bigger concern (see Figure 5).1
· Firms need more customer experience maturity. We asked the executives whether they agreedwith 12 statements that represent key competencies for Experience-Based Di erentiation (EBD).
Only three items got the nod from a majority of respondents (see Figure 6). Unfortunately, less
than one-third of these companies have employees who share a common view of the customer,
make decisions that take the customer into consideration, and reward employees for improving
customer experience.
· Brands are getting more of the attention they deserve. We compared the results from our
competency evaluations between Q4 2009 and Q4 2008 (see Figure 7). e two areas with the
largest improvements both had to do with brands: employees fully understanding the brand
attributes and infusing the brand in customer experience design.
· All interactions fail to deliver, especially online. Our 2010 Customer Experience Index (CxPi)
shows that customers aren’t being treated well (see Figure 8).2 But how do these executives think
their companies are doing? Not so well either. For ve of the nine interactions that we asked
them to rate, less than half of the respondents thought they satised customers at least 75% of
the time (see Figure 9). e online channel received the lowest marks, especially when it came
to customer service.
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Figure 1 Customer Experience Is Critical
Source: Forrester Research, Inc.56316
Base: 141 North American companies with annual revenues of $500 million or more
Not at all important (1)
(2)
(3)
(4)
Critical (5) 62%
28%
7%
2%
0%
Source: Q4 2009 Customer Experience Peer Research Panel Survey
Base: 141 North American companies with annual revenues of $500 million or more
Stay slightly behind themainstream in our industry
Stay in the mainstreamin our industry
Keep from falling too far behindleaders in our industry
Maintain parity with otherleaders in our industry
Di erentiate ourselves fromcompetitors in our industry
Di erentiate ourselves from allrms across any industry 13%
67%
13%
4%
3%
0%
80% want to
di erentiate withcustomer experience.
“How important will customer experience be in your company’s strategy in 2010?”1-1
“How would you describe your executive team’s goal for customer experience?”1-2
90% think it is
very important
or critical.
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Figure 2 Most Companies Have Some Customer Experience Discipline
Source: Forrester Research, Inc.56316
“How would you describe your company’s overall approach to customer experience management?”
Very undisciplined
Somewhat undisciplined
Somewhat disciplined
Very disciplined
64% have a disciplinedapproach to customer
experience.11%
53%
25%
11%
Source: Q4 2009 Customer Experience Peer Research Panel Survey
Base: 141 North American companies with annual revenues of $500 million or more
Figure 3 Customer Experience Activity Is Underway
Source: Forrester Research, Inc.56316
“To what extent has your company put in place the following items?”
Been doing for sixmonths or more
Been doing for lessthan six months
Not doing but activelyconsidering
Not doing Don’t know
Source: Q4 2009 Customer Experience Peer Research Panel Survey
Base: 141 North American companies with annual revenues of $500 million or more(percentages may not total 100 because of rounding)
52% 10% 14% 16% 8%
35% 18% 17% 23% 7%
36% 13% 11% 33% 7%
53% 10% 19% 10% 8%
53% already have this
62% already have this
49% already have this
63% already have this
A companywide program focusedon improving customer
experience across channels
An executive in charge of
improving customer experienceacross products and channels
A single set of customer feedback scores (e.g., satisfaction,
Net Promoter Score) that are usedacross the company
A voice of the customer program
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Figure 4 Obstacles To Customer Experience Success
Source: Forrester Research, Inc.56316
Source: Q4 2009 Customer Experience Peer Research Panel Survey
Base: 141 North American companies with annual revenues of $500 million or more
None of the above
Lack of urgency
Lack of understandingabout customers
Lack of executiveinvolvement
Lack of clear customerexperience strategy
Lack of customer experiencemanagement processes
Lack of cooperationacross organizations
Lack of budget
53%
50%
49%
43%
32%
16%
15%
11%
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Figure 5 Obstacles To Customer Experience Success Are Shifting
Source: Forrester Research, Inc.56316
Source: Q4 2006, Q4 2007, Q4 2008, and Q4 2009 Customer Experience Peer Research Panel Surveys
Base: North American companies with annual revenues of $500 million or more
73%
59%
53%
58%
56%
47%
55%
40%
42%
44%
53%
54%
53%
50%
49%
43%
Lack of a clear customerexperience strategy
Lack of customer experiencemanagement processes
Lack of budget Lack of cooperationacross organizations
35%
40%
45%
50%
55%
60%
65%
70%
75%
Lack of a clear customerexperience strategy
Lack of customer experiencemanagement processes
Lack of cooperationacross organizations
Lack of budget
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Figure 6 Companies Aren’t Focused On Target Customers
Source: Forrester Research, Inc.56316
Source: Q4 2009 Customer Experience Peer Research Panel Survey
Base: 141 North American companies with annual revenues of $500 million or more
Percentage of respondents who agree with the following statements about their companies
Employees across the company share a consistentand vivid image of target customers
Decision-making processes systematicallyincorporate the needs of target customers
The quality of interactions with target customersis closely monitored
Employees across the company are recognizedand rewarded for improving the experience
Our company’s brand drives how we designcustomer experiences
Primary research is used to fully understand theneeds and behaviors of target customers
Employees fully understand the key attributesof our brand
Senior executives regularly interact with targetcustomers
Our company has a clearly dened set of targetcustomer segments
The attributes of our company’s brand are welldened
Senior executives consistently communicate theimportance of serving target customers
We translate brand attributes into specicpromises we make to customers
60%
59%
53%
46%
45%
43%
41%
40%
31%
31%
30%
24%
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Figure 7 Companies Are Focusing More On Their Brands
Source: Forrester Research, Inc.56316
Source: Q4 2009 Customer Experience Peer Research Panel Survey
Base: North American companies with annual revenues of $500 million or more
2008
2009
Percentage of respondents who agree with the following statements about their companies
Employees across the company are recognizedand rewarded for improving the experience
Decision-making processes systematicallyincorporate the needs of target customers
Our company has a clearly dened set of targetcustomer segments
Primary research is used to fully understand theneeds and behaviors of target customers
The quality of interactions with target customersis closely monitored
Senior executives consistently communicate theimportance of serving target customers
Employees across the company share a consistentand vivid image of target customers
Senior executives regularly interact with targetcustomers
Employees fully understand the key attributesof our brand
The attributes of our company’s brand are welldened
Our company’s brand drives how we designcustomer experiences
We translate brand attributes into specicpromises we make to customers
31%41%
45%
59%
46%
53%
24%
40%
31%
60%
43%
30%
31%
36%
53%
41%
50%
21%
39%
31%
63%
47%
36%
38%
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Figure 8 Forrester’s 2010 Customer Experience Index
Source: Forrester Research, Inc.56316
20% 100%30% 40% 50% 60% 70% 80% 90%
Very poor Poor Okay Good Excellent
Retailers (82%) 73% 91%
= Average industry score
Hotels (80%) 69% 90%
Insurance providers (72%) 63% 82%
Banks (66%) 51% 85%
Credit card providers (65%) 46% 78%
Wireless service providers (65%) 60% 67%
PC manufacturers (66%) 61% 78%
Internet service providers (57%) 29% 68%
TV service providers (57%) 38% 66%
Health insurance plans (51%) 41% 67%
Industry (average)
Airlines (68%) 50% 80%
Parcel delivery/shipping rms (78%) 78% 80%
Utility providers (63%) 57% 69%
Investment rms (73%) 68% 83%
Base: US online consumers who have interacted with rms in these industries(numbers have been rounded)
Source: North American Technographics® Customer Experience Online Survey, Q4 2009 (US)
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Figure 9 Companies Don’t Satisfy Customers
Source: Forrester Research, Inc.56316
Percentage of respondents who satisfy customers at least 75% of the time
during the following interactions in these channels.
Online
On the phone
In person or in thestore/branch
55%
47%
43%
Source: Q4 2009 Customer Experience Peer Research Panel Survey
Base: 141 North American companies with annual revenues of $500 million or more
60%
49%
38%
56%
62%
33%
Researching aproduct
Buying aproduct
Getting customerservice help
CUSTOMER EXPERIENCE LEADERSHIP MAKES A DIFFERENCE
Companies are denitely making a push to improve their customer experience. And why shouldn’t
they? Our data shows that customer experience correlates to loyalty (see Figure 10).3 To understand
what role a customer experience leader serves inside of these companies, we compared responses
from the 69 companies that had an executive in charge of customer experience with the 62companies that did not have someone in that position. is analysis uncovered that the companies
with executives in charge of their customer experience e orts are:
· More ambitious. Eighty-four percent of companies with customer experience leaders say that
they want to di erentiate their companies with customer experience, compared with 75% of the
other rms (see Figure 11).
· More disciplined. Eighty-two percent of companies with customer experience leaders say that
they have a disciplined approach to customer experience, compared with 40% of the other rms
(see Figure 12).
· More active. Across all three areas of customer activity, companies with customer experience
leaders have more initiatives underway.e gap ranges from 26 percentage points for voice
of the customer programs to 56 points for enterprisewide customer experience programs (see
Figure 13).
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· Less encumbered. Leaderless companies are more likely to run into just about every obstacle
except one: the lack of funding (see Figure 14). Why is that the case? Because rms with
customer experience executives are trying to get more done. e most signicant gaps between
these rms are in the areas of executive involvement and urgency.
· More mature. Across all 12 customer experience competencies, the companies with an
executive in charge scored higher (see Figure 15). e gaps showed up in monitoring the quality
of interactions with target customers and senior executives communicating the importance of
serving customers.
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Figure 10 Customer Experience Leaders Have More Loyal Customers
Source: Forrester Research, Inc.56316
Willingness to consider theprovider for another purchase
6.7%
2.1%
-1.5%
-7.7%
Percentage of customers who are loyal compared with industry averages across three loyalty measures
Quartiles are based on companies’ CxPi scorescompared with their industry averages
Topquartile
Secondquartile
Thirdquartile
Bottomquartile
Reluctance to switch businessaway from the provider
8.2%
2.8%
-3.3%
-7.6%
Likelihood to recommend theprovider to a friend or colleague
8.4%
2.8%
-3.0%
-8.2%Base: US online consumers
Source: North American Technographics® Customer Experience Online Survey, Q4 2008
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Figure 11 Customer Experience Leaders Show Up In More Aggressive Companies
Source: Forrester Research, Inc.56316
Source: Q4 2009 Customer Experience Peer Research Panel Survey
Base: 131 North American companies with annual revenues of $500 million or more
“How would you describe your executive team’s goal for customer experience?”
(Percentage of respondents who agree with the following statements)
Stay slightly behind themainstream in our industry
Stay in the mainstreamin our industry
Keep from falling too far behindleaders in our industry
Maintain parity with otherleaders in our industry
Di erentiate ourselves fromcompetitors in our industry
Di erentiate ourselves fromall rms across any industry
17%10%
67%65%
13%16%
1%6%
1%3%
0%0%
69 companies with a customerexperience executive
62 companies without a customer
experience executive
Figure 12 Customer Experience Discipline Comes With Leadership
Source: Forrester Research, Inc.56316
Source: Q4 2009 Customer Experience Peer Research Panel Survey
Base: 131 North American companies with annual revenues of $500 million or more
69 companies with a customerexperience executive
62 companies without a customerexperience executive
“How would you describe your company’s overall approach to customer experience management?”
Very undisciplined
Somewhat undisciplined
Somewhat disciplined
Very disciplined 20%0%
40%
14%
3%
62%
39%
21%
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Figure 13 Customer Experience Leaders Are Active
Source: Forrester Research, Inc.56316
Source: Q4 2009 Customer Experience Peer Research Panel Survey
Base: 131 North American companies with annual revenues of $500 million or more
69 companies with acustomer experienceexecutive62 companies withouta customer experienceexecutive
“To what extent has your company put in place the following items?”
A single set of customer feedback scores (e.g., satisfaction, Net
Promoter Score) that are usedacross the company
A companywide program focusedon improving customer
experience across channels
A voice of the customer program48%
80%
83%
74%
24%
42%
Figure 14 Fewer Customer Experience Obstacles Exist When There Is A Leader
Source: Forrester Research, Inc.56316
Source: Q4 2009 Customer Experience Peer Research Panel Survey
Base: 131 North American companies with annual revenues of $500 million or more
69 companies with a customerexperience executive
62 companies without a customerexperience executive
None of the above
Lack of urgency
Lack of understandingabout customers
Lack of executive
involvement
Lack of clear customerexperience strategy
Lack of customer experiencemanagement processes
Lack of cooperationacross organizations
Lack of budget 46%42%
46%
45%
41%
29%
5%
6%
6%
63%
60%
56%
37%
14%
27%
26%
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Figure 15 Leaders Embed More Customer-Centric Behaviors
Source: Forrester Research, Inc.56316
Source: Q4 2009 Customer Experience Peer Research Panel Survey
Base: 131 North American companies with annual revenues of $500 million or more
69 companies with acustomer experienceexecutive62 companies withouta customer experienceexecutive
Percentage of respondents who agree with the following statements about their companies
Employees across the company share aconsistent and vivid image of target customers
Decision-making processes systematically
incorporate the needs of target customers
The quality of interactions with targetcustomers is closely monitored
Employees across the company are recognizedand rewarded for improving the experience
Our company’s brand drives how we designcustomer experiences
Primary research is used to fully understand theneeds and behaviors of target customers
Employees fully understand thekey attributes of our brand
Senior executives regularly interactwith target customers
Our company has a clearly denedset of target customer segments
The attributes of our company’s brandare well dened
Senior executives consistently communicatethe importance of serving target customers
We translate brand attributes into specicpromises we make to customers
62%56%
44%
55%
37%
39%
35%
34%
40%
21%
24%
23%
15%
61%
58%
49%
48%
45%
43%
43%
38%
35%
35%
33%
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R E C O M M E N D A T I O N S
GET THE ENTIRE COMPANY THINKING OUTSIDEIN
Companies will gain the most benefit from their customer experience eff orts when they get the
entire company to think about customer needs. How can they do that? By starting with two key
customer experience tools:
· Map the customer journey. Left to their own devices, companies will continue to operate
with an internal focus. That’s why we recommend that organizations use customer journey
maps — also known as touchpoint or “moment of truth” maps — to examine interactions
from their customers’ points of view. Forrester defines customer journey maps as: documents
that visually il lustrate customers’ processes, needs, and perceptions throughout their
relationships with a company.4 We recommend that organizations follow these five steps: 1)
Collect internal insights; 2) develop initial hypotheses; 3) research customer processes, needs,and perceptions; 4) analyze customer research; and 5) map the customer journey.
· Build a robust voice of the customer program. There’s nothing more aligning in an
organization than clear feedback from customers. But most organizations don’t provide
employees with that feedback in a consistent, usable form. That’s why customer experience
professionals should develop strong voice of the customer programs — distributing
actionable feedback to call centers, stores, merchandisers, and category managers.5 A
number of technology vendors are changing the landscape in these programs, making it
easier to do things like analyze unstructured data and share information more broadly.6
We’ve also identified 16 best practices to follow in areas like leadership, culture, and reacting
to customer feedback.7
SUPPLEMENTAL MATERIAL
Methodology
Forrester elded its Q4 2009 Customer Experience Peer Research Panel Survey to 141 customer
experience professional(s) from North American rms with $500 million or more in annual
revenues in our ongoing Marketing & Strategy Research Panel. e panel consists of volunteers who
join on the basis of interest and familiarity with specic marketing and strategy topics. For quality
assurance, panelists are required to provide contact information and answer basic questions about
their rms’ revenue and budgets.
Forrester elded the survey from November to December 2009. Respondent incentives included a
summary of the survey results and related research.
Exact sample sizes are provided in this report on a question-by-question basis. Panels are not
guaranteed to be representative of the population. Unless otherwise noted, statistical data is
intended to be used for descriptive and not inferential purposes.
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If you’re interested in joining one of Forrester’s research panels, you may visit us at http://Forrester.
com/Panel.
ENDNOTES
1 Executives have been saying for awhile that customer experience is important. Only recently, however, have
many of them begun to understand its direct link with loyalty. As a result, companies are starting to develop
more disciplined approaches to customer experience management. But they have a long way to go. See the
April 24, 2009, “e State Of Customer Experience, 2009” report.
2 Forrester asked more than 4,600 US consumers about their interactions with a variety of companies,
gauging the usefulness, ease of use, and enjoyability of those experiences. Based on these consumer
responses, we calculated the Customer Experience Index (CxPi) for 133 rms in 14 di erent industries.
Barnes & Noble, Marriott Hotels & Resorts, and Hampton Inn/Suites topped the rankings, while Charter
Communications took the bottom spot for the third year in a row. Only 13 of the rms wound upwith “excellent” ratings — and 45 were “poor” or “very poor.” See the January 11, 2010, “e Customer
Experience Index, 2010” report.
3 Forrester’s previous research has shown a high correlation between customer experience and three key
elements of loyal behavior: willingness to buy more, reluctance to switch, and likelihood to recommend. But
how does that a ect a company’s bottom line? To answer that question, we looked at the percentage of loyal
customers within the customer bases of more than 100 companies. It turns out that customer experience
leaders have an advantage of more than 14% over customer experience laggards across all three areas of
loyalty. e annual revenue gains from a modest di erence in customer experience can total $284 million
on average across industries. See the June 22, 2009, “Customer Experience Boosts Revenue” report.
4 Le to their own devices, companies will continue to operate with an internal focus. at’s why we
recommend that organizations use customer journey maps — also known as touchpoint or “moment of
truth” maps — to examine interactions from their customers’ points of view. Forrester denes customer
journey maps as: “Documents that visually illustrate customers’ processes, needs, and perceptions
throughout the life cycle of their relationships with a company.” To get the most value from these journey
maps, companies need to widely share ndings, take action on insights, and sustain the learnings over time.
See the February 5, 2010, “Mapping e Customer Journey ” report.
5 Many companies say that they don’t have a good connection with customers. at’s why rms should
consider developing a systematic approach for incorporating the needs of customers into the design of
customer experiences — what Forrester calls a voice of the customer program. Successful VoC programs
will incorporate listening, interpreting, responding, and monitoring. As customer experience professionals
roll out VoC programs, they should be prepared to overcome internal organizational obstacles. See the
February 8, 2007, “Building Your Voice Of e Customer Program” report.
6 Voice of the customer programs are a critical component to improving customer experience. But today’s
e orts are broken in many ways. ey lack action, get caught in silos, and aren’t cost- or time-e ective.
A number of trends are changing how companies implement their VoC programs, including analysis of
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unstructured and unsolicited data, inclusion of social media, and more continuous feedback. Companies
should take advantage of these trends to dramatically improve their use of customer feedback. e result:
better customer experiences and more loyal customers. See the February 26, 2009, “Voice Of e Customer:
e Next Generation” report.
7 To understand the best practices in voice of the customer programs, Forrester analyzed the 40 applications
it received for its Voice Of e Customer award. When we examined the advice that applicants listed for
other companies, we found 16 recommendations that fell into the following ve categories: leadership,
culture and alignment, listening to customer feedback, interpreting customer feedback, and reacting to
customer feedback. See the November 11, 2009, “Sixteen Voice Of e Customer Recommendations” report.
8/8/2019 Forrester the State of Customer Experience 2010
http://slidepdf.com/reader/full/forrester-the-state-of-customer-experience-2010 20/20
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