Customer experience is a marathon, not a sprint. According to Forrester Research’s 2013 Customer Experience Index, brands must constantly pay attention to the customers’ ever-changing desires if they hope to make to strides in business performance.
“In the customer experience space, you really have to be running just to stand still, let alone leapfrog the competition or do something that’s really differentiating in the industry,” says Forrester principal analyst Megan Burns. “You are never done.”
Forrester defines customer experience as the customer’s perception of brand interaction, so it’s only fitting that the global research firm analyzed customers’ interactions with 154 major US brands, says Burns. For its sixth version of the Customer Experience Index, Forrester surveyed approximately 7,500 Americans about their interactions with brands over the past 90 days. The brands fell into one of 14 different categories—including airlines, banks, retailers, hotels, and insurance providers—and each brand needed to receive at least 100 responses to be included in the index. Forrester then asked participants to assign each brand a one to five score (one being the lowest) for how effectively the brand met their needs, how easily it conducted business, and how enjoyable was the overall experience. To calculate a final score, the percent of low scores was subtracted from the percent of high scores for each question, and then the three figures were averaged together. Companies were then deemed “excellent,” “good,” “OK,” or “poor” based on their scores.
Marshalls, Courtyard by Marriott, and Sam’s Club received the top three scores in the “excellent” division. Burns attributes the companies’ success to their ability to pinpoint the customers’ needs and tailor the overall experience accordingly. “It’s, in large part, understanding what their customers want–and what they don’t necessarily need–[and] then aligning with that and [providing] consistent delivery over time,” Burns says.
Burns advises the runner-ups—or those who achieved a “good” status, such as Walgreens and Barnes & Noble—to focus on details, especially those that customers may not blatantly express. “[The brands should] actually put themselves in the customers’ shoes and pick up on latent needs: things that the customers may not have expected the company to deal with, or thought about, or even said they needed or wanted,” Burns says.
As for the stragglers in the OK and poor category, Burns says these companies need to be more aware of their customer experience management tactics and strategies.
“Customer experience is something that has been unconscious for many, many companies; you have a customer experience whether you’re aware of it or not,” Burns says. “Do I have the ability to know what my customers are experiencing, is that what they want to be experiencing, and how it that affecting my business? Some companies don’t even have any sort of customer experience program to be aware of that, [and] you can’t manage what you can’t measure.”
However, Burns says that strengthening an organization’s customer experience must be a team-wide effort. She adds that Forrester VP and principal analyst Kerry Bodine refers to a customer experience as a company ecosystem in that every decision an employee makes is “interconnected” as has a “ripple effect” on the perceived experience.
Part of achieving a winning customer experience is providing a top-notch experience within the customer’s budget, says Burns. The Forrester principal analyst cites JetBlue Airways and Southwest Airlines as prime examples of brands that have reached this balance. “They have found a way to deliver a strong and differentiating experience even though they’re not a higher price carrier,” Burns explains.
Providing a positive customer experience can be cost effective for brands constantly striving to please the customer over the long run, but it can also be costly for companies that only view customer experience as a short 5k, Burns adds.
“There’s a correlation between customer experience and loyalty…companies that deliver good experiences retain more customers. Obviously when economic times are tough retaining customers is important to success,” Burns says. “But what we’re also seeing is that over time, companies that make cuts, or change policies, or do things that impede the customer experience lose customers and then have a harder time getting them back.”