Businesses Can't Differetiate without Customer Experience #forrforumIf there's one thing companies can't get enough of, it's being able to differentiate themselves from their competitors, and many executives clearly think they can do this by embracing customer experience.

Forrester Ready to Lead the Climb toward Customer Experience Maturity

Innovative companies are indeed embracing customer experience, but most are simply not mature enough in their practice of it to achieve differentiation, Megan Burns, Forrester VP and principal analyst said at the Forrester Forum recently.

Customer experience is a broad topic, so organizations don't always know how to get started with improving it. To be clear, most companies in general do not put their customers first, but the growth of the Internet, and the seemingly endless proliferation of mobile devices is changing that.

It's easier than ever for customers to research their purchases, and if they aren't satisfied, it's nearly as easy for them to switch to a compeitior. Companies understand they need to do more to stand out from those competitors, and turning to customer experience is one way to do it. Often, when those companies really get serious about it, they turn to consultants and analysts at Forrester to help them.

Every year, Forrester releases its Customer Experience Index, a scorecard showing how well companies are doing on customer experience. The ones that do the best tend to be retailers and hotels because those are ultra competitive industries with zero switching costs for customers, Burns said. They have to be good at providing the best customer experiences.

Map to Maturity: Repair, Elevate, Optimize then Differentiate

While customer experience may be a broad topic, there actually aren't a plethora of ways to get there, Burns said. It's not that so many industries face the exact same problems, but improving customer experiences does seem to follow a unified path, she said. Forrester recommends companies adopt a four step approach toward improving customer experience.

  • Repair
  • Elevate
  • Optimize
  • Differentiate

Because so few companies are actually differentiating on customer experience, it follows that most are only beginning their climb up the maturity scale. The first thing companies need to do is to stop providing poor customer experiences, Burns said. That sounds obvious, but it turns out many companies think they can start higher up the maturity scale. Perhaps they are in denial about the kinds of experiences they are offering, but in order to actually achieve customer experience management excellence, they need to start there.

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Financial investment firm Edward Jones tied executive perks to customer experience, and it helped the company improve its Forrester CX Index score.

The next step is to elevate key practices that help make good customer experience behavior the norm. This includes sharing customer experience insights regularly, integrating customer experience thinking into core processes and rewarding good behavior. Edward Jones, a financial services company, offers an executive vacation to its employees that score the highest on customer experience, for example.

To optimze customer experiences, Forrester recommends organizations model relationships between customer experience quality and business results. Additionally, it's recommended companies build strong experience design practices, and sharpen employees customer experience related skills.

Since differentiation is the goal, companies have to do perform those inital steps to ingrain customer experience practices that are performed systematically, Burns said. Only then can those companies begin to reframe customer problems, reveal unmet customer needs and rethink the entire customer experience ecosystem, she said.