Put It Down to Experience

Forrester’s Bruce Temkin gives Marie Shields some tips on how companies can ensure a good customer experience.

“Good customer service is not sufficient to deliver great customer experience, because you can let customers down in other interactions”

When defining customer experience, it’s important to distinguish it from customer service. “Customer service,” as Forrester’s Bruce Temkin points out, “is a function in a company that handles a set of interactions. Often it deals with post-sales, post-customer issues, but not always. It deals with a set of issues and problems that customers have.

“When we talk about customer experience, this represents the perception that customers have of all their interactions with your firm. It does include interactions you have with customer service, but it also includes interactions with marketing campaigns, with the selling process if you’re in the store, and with the research process, if you’re online. They are components of each other. A good way to think about it is that good customer service is necessary but not sufficient to deliver great customer experience, because you can let customers down in other interactions.”

Temkin says this distinction is important, because if companies mistake customer experience for customer service, they’ll optimize around their customer service organizations. They may then focus only on a subset of interactions that customers have with them, and won’t get any real improvement in customer experience. According to Temkin, to attack customer experience requires a focus across functions like customer service, marketing and retail, as well as product development, because products are also a key piece of the experience.

Getting it
What makes the difference between those companies who really get customer experience, and those who don’t? Temkin says it comes down to tradeoffs, and so does the focus on measuring it and improving it. “We’ve been doing surveys of large companies for several years, working to understand what customer experience means to those organizations and how they go about improving it. At the end of 2006, about 90 percent of company executives said that customer experience is either very important or critical.

“About that same number said it in 2007 and about that same number said it in 2008. So we’ve seen a consistently high level of executive alignment around the concept of customer experience. What’s changed over the last few years is what they’re doing about it, how disciplined they are, do they have executive leadership assigned to it, are they measuring it with a set of metrics – those types of activities have grown rapidly.

“The level of interest in customer experience has been high all along, but only recently are we seeing large companies dedicating focus and resources to it. I look for, what are the initiatives? What are you doing to systematically improve customer experience across the organization? What are you measuring? What are you incenting? And what are you celebrating? Those are the things that are key to moving cultures along.”

Probably the biggest motivation for the increase in customer focus has come from executives realizing that they need to fight for every dollar – that the loyalty of customers is the most important asset they have. “They’ve come to realize that customer experience, the interaction they have with customers, is one of the key levers in terms of building up loyalty. Across industries, they’re starting to have to battle for every customer.”

Economic climate
Temkin believes that in the current economic climate companies should spend their money on loyalty, not on acquisition, because there aren’t as many customers left to get. “One of the things we’re seeing is that relative to other areas in the firm, customer experience has some resilience in terms of its spending and priority. That doesn’t mean it’s not going to be cut like every other area in the company, but its not going to be cut as dramatically as other areas.

There is also a link between the way companies treat employees and the quality of the experience its customers receive. Temkin says he would challenge anyone to find an organization that delivers great experience but hasn’t engaged its employees effectively. He points out that a company is an inanimate object; it doesn’t in and of itself deliver experiences. People do, either directly through their actions with customers, or the things they do that help other areas that interact with customers.

“One of the key laws for creating great customer experience is that unengaged employees can’t create engaged customers. The starting point for a lot of customer experience efforts is internally focused. We need to make clear to our employees, A, that we think customer experience is important, but also, B, engage them in the process of improving stuff with customers..

“If you want to improve customer experience, you have to make sure you’re measuring it and incenting it better, and that you’re celebrating quality. You need to have your entire systems set up to reinforce this. You can’t sustain a dramatic ongoing improvement in customer experience without getting it imbedded in the culture.”

Social media
The explosion of social media over the last few years has added to a company’s ability to monitor and analyze and measure customer feedback, but Temkin notes that it’s important to keep the social media channel in context.

“There’s a boom of free-flowing information about everything in the social media space, so there certainly is an opportunity for companies to learn about the perception that customers and non-customers have about them. Having said that, there are a couple of things that are important to keep in mind. The first is that you have to actually tap into it effectively and analyze it correctly and use it appropriately.

“The general population isn’t actively giving you feedback in the social media space. That’s a subset of people. But there are also a lot of other listening posts that companies have with their existing customers. You have verbatims from the call center, the actual dialogs and conversations that people have when they call. You have data around what they’ve done on your websites. If you send out surveys, you have the comments they put on survey responses. You have their inbound emails and letters.

“What you don’t want to do is think that the social media space represents the entirety of customer listening. It’s one slice of insight. There happens to be a lot of it, but there are also a lot of other places where you can get, sometimes, even more impactful insights about customers from other listening posts in the company.”

The key challenge for companies is to work out how they can recognize where those touch points are, or how they can use the feedback once they get it. Temkin says, “One of the limitations to what people do today is that across social media, as well as across other listening posts, voice of the customer programs are all listen and no action. They spend so much time figuring out how they’re going to collect information and how they’re going to look at it, that they don’t spend nearly enough time figuring out what are they going to do with the insight once they get it.”

For companies looking to manage this process, Temkin says he would put together cross-functional teams that are focused on figuring out what they’re going to do with the information, so they can identify problems and attack them collectively.

“If the web team, for instance, are doing web surveys and asking questions about the web experience, they might also get feedback on product or on the brand. You want to make sure that there are effective processes to get that feedback to the people who can do something about it quickly.”