Customer Experience Innovation, cxm, customer experience

How can a company create an innovative customer experience (CX) that helps it stand out? It’s much harder than one might think, but a new Forrester Research report attempts to point the way. 

The report, “Customer Experience Innovation Demystified,” noted that everyone talks about innovation, “but no one knows quite what it is or how to attain it.” It found that most firms that think they’re innovating are really wasting time and money.

The leading driver for CX innovation is differentiation that will distinguish a given company or brand in the marketplace. Some go beyond that ambitious goal: 13 percent of respondents are shooting for a better customer experience than any company in any industry. Innovation that drives what the report describes as "differentiation and long-term value" is seen as the key to getting there.

High Expectations Feed the Innovation Need

Companies are feeling the need for innovation. Customers have higher expectations than every before, upstarts are using technology to compete in fields where barriers-to-entry used to be insurmountable, and competitive advantages do not last long. The report points to customers being wow’d by new apps like Google Now, to Warby Parker’s Net-based competition with established eyewear retailers like LensCrafters, and to USAA’s short-lived advantage with its mobile check deposit app, which was soon copied by other financial institutions.

But the strategy and planning do not match the ambition. Nearly three-quarters of respondents are focused on making only incremental improvements, not radical ones that address customer needs. Less than a third said they connect CX improvements with results that have significant business consequences, such as improving revenue, cutting costs or improving customer loyalty.

A majority of respondents said their companies plan their Customer Experience innovation by watching their competitors or companies in other industries, 62 percent expect technological improvements will help them innovate, and only 53 percent develop ways to thoroughly understand and track the customer’s needs.

Going Beyond ‘Find-and-Fix’

Innovation means considering all customer angles. The report cited the example of an auto insurance company that developed a new mobile app with back-end integration to directly connect customers to a call center agent during an emergency. Sounds good in theory, but the company failed to consider that drivers are not going to download an app in the event that they might have a car crash, and, once they are in an emergency, downloading an app is the last thing on their minds.

Forrester makes the point that CX innovation differs from normal innovation processes because it goes beyond “traditional find-and-fix methods.” CX improvement enhances current customer needs, while innovation solves unmet ones.

Forrester said companies need to reframe their business opportunities as meeting customers’ unmet needs, especially needs that customers themselves do not yet know they have. To do so, of course, involves looking at the company’s CX entirely from the customer’s needs.

Interestingly, though, this report says that companies need to “take themselves out of customer journey maps to broaden horizons.” Yet, another Forrester report released just this week, “Meet the Changing Needs of Connected Customers,” says that companies need to focus on customer journeys instead of marketing funnels in order to deliver customer experiences.

Which Is It?

A generous reason for this contradiction might be that, to achieve real innovation, companies need to go outside the idea of a customer journey. This Innovation report says that customer journey maps force “teams into a find-and-fix mindset – and does little to stimulate ‘what if…?’”

But it appears that Forrester in the Innovation report, in encouraging innovative thinking, is simply talking about looking at the customer’s routine outside of the company’s products, which it views as being outside the customer journey. As an example, it noted that Philips Healthcare mapped a radiologist’s typical day and found a key daily obstacle -- the inability to easily compare one patient's scan with another's. This was outside the scope of Philip’s normal product offerings -- and therefore outside this report’s idea of a customer journey -- but represented an innovation it could pursue.

This report’s viewpoint, then, is that tracking a targeted persona in a normal day is not part of the customer’s journey if it falls outside a company’s current product scope. This is, as they say, a distinction without a difference, because the point is to figure out how prospects can become customers and then loyal customers by stepping from need to consideration to purchase to loyalty. Perhaps we should now call it “the prospect’s-or-customer’s journey.”

The Bare Truth?

To confuse things more, the report then goes on to recommend evaluations of “new customer journeys” and other such efforts. Other recommendations for actually achieving CX innovation sound like the same old: make customer interactions resemble brand qualities, make the brand inspire innovation, “temporarily ditch reality,” and other such advice.

After starting strong with why CX innovation is important and how difficult it is to achieve, I found that this report descended into confusions about customer journeys and scattershot advice about how to stimulate innovative and creative thinking, not greater specificity about achieving CX innovation or even clarity as to what it might look like.

Many of the report’s given examples of CX innovation are about creating appealing and different new offerings. The report noted that Holiday Inn, for example, decided its restaurant competition was really fast food, not other hotel restaurants, so it innovated its CX by adapting its restaurant accordingly. Perhaps the bare truth is that it’s not really about dramatically differentiating customer experience, but about differentiating products and services.