When different parts of an enterprise are not engaged, it leads to gaps in overall strategies, Paul Hagen, a principal analyst at Forrester Research, said during the Forrester Forum for Customer Experience Professionals today. Forrester’s research shows that such disconnects between different parts of organizations are common, and that they tend to have just such an adverse effect on digital and customer experience strategies.
Nearly three quarters (74%) of senior executives in a global Forrester survey said their company has a digital strategy. But another global survey of executives in digital roles found that only 34% of them believed their company’s digital strategy was well thought out, and only 16% thought their company could deliver on that strategy.
That kind of disconnect between the business leaders and customer experience executives weakens the customer experience strategy. It’s easy now to pick on book sellers when Amazon is taking over the industry from physical retailers. But Hagen pointed out some serious flaws in Barnes & Noble’s customer experience strategy, such as relying on their brand and physical footprint to draw customers, without differentiating what customers they should target or what value proposition they need to deliver.
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Hagen went on to identify five gaps that companies may have in their customer experience strategy, and how to fix them:
1. Why Are You Looking at Customer Experience? It seems an obvious question to ask, but it is the starting point that a customer experience strategy must be built around. Companies can turn to a PESTLE Analysis to determine the factors that are forcing them to examine their customer experience for pain points, Hagen advised.
“Why [are you looking at] customer experience now? Is it because of macro-economic changes? Regulatory changes? Or changes in technology that are changing consumer behavior?” he said. “By stating those factors through the customer experience lens, the organization can align all of its different initiatives to the customer experience strategy.”
Duke Energy was dealing with regulatory changes to the utilities industry while also dealing with new competition as Apple and Google started looking at home automation, Hagen shared. Realizing that there was a $4 billion opportunity in home energy management that it could lose to those new competitors, Duke embarked on a new customer experience strategy to get customer satisfaction levels up to the standard of its new competition.
2. Lack of Target Customers. Companies that don’t define the customers that they want to target get caught in the trap of trying to compete on everything with all potential customers, Hagen observed. “No one has the resources to do that,” he added.
To avoid that trap, companies need to develop a needs-based customer segmentation model, Hagen suggested. Different customers want different things from companies: some only care about price, while others are first adopters of the latest technology, for example. Companies need to ask two things, Hagen advised, why are certain customer segments attractive to the company, and how well can the company meet their needs.
3. What Is the Customer Trying to Accomplish? Organizations need to understand what motivates customers to do business with them if they are going to create a great experience for them, Hagen said.
Gatorade is one example of a company that has changed its experience to suit the needs of its customers, he remarked. Most of its customers had just been picking its products based on flavor and color. The company then rolled out a new line of drinks called Gatorade Prime, Perform and Recover to satisfy the needs of its core customers (athletes) before, during and after workouts and competitions.
4. What Activities Matter to the Customer? Once the company knows what the customer is trying to accomplish, they need to consider the activities that are involved with reaching that goal, Hagen commented. To do that, Blue Ocean created a “strategy canvas” that compares the competitive factors critical to customers, and maps them to the performance of a company’s offerings compared to the competition in satisfying those factors, he related.
“That helped them decide where to invest and upgrade their offerings based on their ability to meet customer needs,” Hagen added.
5. How Do You Want The Customer to Feel and What Does That Mean? Southwest Airlines used an “it feels… that means” model to create its stated goals for customer experience that served as guidelines for employees throughout the company, Hagen said. For an example, Southwest said it wanted its customers to feel hassle-free, so that meant it had to create a seamless experience for checking in, boarding and handling luggage, he shared.
“It’s an intended experience and a way to create guiding principals, for both your employees and your partners,” Hagen observed.
Airbnb has gotten its partners (those who rent out their homes on the site) to follow customer experience best practices by showing them the benefits of a great customer experience, Hagen said. For instance, homes with a 5-star cleanliness rating are 25% more likely to get booked on the site, and those that keep their availability calendar up-to-date are 70% more likely to get booked. Sharing such data and results helps employees and partners understand why its important to deliver on the company’s stated goals in customer experience.