Companies that provide good customer experience (CX) will miss the mark in 2015, states a new Forrester report.
Instead, as companies strive to differentiate themselves based on the quality of their customer experience, only those that deliver great customer experience will come out ahead, according to "Predictions 2015: The Race From Good To Great Customer Experience Heats Up" ($499 fee).
"Put simply, customer experience is the new battleground for companies that can no longer win customer loyalty based exclusively on product features (too easy to copy), selection (‘I can always find an alternative product or service online’), or price (‘At any given moment I can almost certainly find a lower price’),” said Harley Manning, vice president and research director, Forrester Research, and co-author of the report.
Specifically, Manning and his fellow researchers predict that, in the coming year, companies will focus on customer emotion, and extending the customer experience ecosystem to move ahead of the competition.
Investing in Customer Emotion
A recent Forrester study (fee) found that emotion has a larger impact on customer experience than either effectiveness (customer gets value from the experience) or ease (customer gets that value easily).
As a result, the new report states, companies will begin investing in smaller, specialized companies such as innovation consultants and service designers to make sure they get their customer experience design right.
Deloitte and Accenture have already purchased companies like these, and Forrester analysts predict that Bain, McKinsey, The Boston Consulting Group and PwC, among others, will purchase firms like Continuum, Livework and Nurun.
Voice of the Customer (VoC) program managers are also getting into the act, as leaders shell out more funds to pay for new ways to get insights about emotion, such as services that use predictive analytics to determine how customers feel during interactions based on customer profiles, events and unstructured data.
Right now, if you're not thinking about customer emotion when crafting experiences, you're missing the most important driver of customer loyalty,” said Manning.
Extending the Customer Experience Ecosystem
The report defines the customer experience ecosystem as “the web of relations among all aspects of a company -- including its customers, employees, partners, and operating environment -- that determine the quality of the customer experience.”
Forrester analysts predict that smart companies will use the CX ecosystem to determine new business opportunities, while startups will look to the ecosystem for ways to disrupt established companies.
In addition, as access to components needed to build a startup gets easier, the report predicts the rise of “weightless companies.” These companies will contract with organizations that can help them build prototypes more quickly, provide more efficient manufacturing and distribution services, and supply computing power by the rental (think Amazon).
Finally, differentiation among ecosystems will be determined by the effective integration of “soft” factors such as customer data, privacy practices, authentication protocols and payment enablement. Analysts predict that Google, Apple and Facebook will continue to compete for the ability to gain customer trust in the areas of security and data use, as well as their ability to build robust service partner networks.
Few Get CX Right
Manning concluded that, although there are other major factors that companies must consider, customer experience will continue to be a major differentiator in the coming year.
“To be clear, although CX is not the only thing companies need to get right, it is one of the biggest things -- and often the biggest thing -- that they must get right. Few do,” said Manning. “And unlike marketing, pricing or logistics, CX is in early days so there is a lot of opportunity to get ahead of competitors who aren't even thinking about it yet.”