The Customer Experience Journey September 18, 2008
Posted by Bruce Temkin in Chief customer officer, Customer experience, Customer-centric DNA, Executive leadership, Experience-Based Differentiation.trackback
I’m thrilled to announce that we just published a new Forrester report called The Customer Experience Journey. This is the culmination of several months of research where I looked into how companies progress towards Experience-Based Differentiation (EBD), the blueprint for customer experience excellence. In this report, I defined five stages of EBD maturity:
Some other highlights from the report:
- Here’s a little bit of what goes on in each of the 5 stages:
- Stage 1 (Interested): In the first level of EBD maturity, organizations begin to believe that customer experience is an important part of their business. They start undertaking a number of different efforts without making any major investments, attempting to get a handle on the current situation. There’s a flurry of uncoordinated activity and no real leadership for customer experience activities.
- Stage 2 (Invested): Companies enter into the second level of EBD maturity after they recognize that customer experience is worthy of a significant investment; in both capital and key personnel. So the approach to customer experience becomes more organized with an intensified focus on fixing problems. We start to see centralized customer experience groups and more formalized voice of the customer programs.
- Stage 3 (Committed): In the third level of EBD maturity, firms are embracing customer experience because they understand the specific impact it has on business results like growth and profitability. The effort is no longer isolated to a few groups as customer experience becomes a major transformational effort across the organization. Instead of just trying to fix problems, the focus turns to redesigning processes.
- Stage 4 (Engaged): When companies enter into the fourth level of EBD maturity, customer experience is a key component of everything they do. Instead of re-engineering processes, the focus turns to designing break-through experiences and solidifying the culture. There’s significant emphasis on employee engagement and companies become much less dependent on a centralized customer experience group.
- Stage 5 (Embedded): At the highest level of EBD maturity, which can take companies several years to achieve, customer experience is deeply ingrained throughout the organization. Just about every employee feels ownership for maintaining the culture. The executive team no longer focuses on change but views itself as keeper of the customer-centric culture, which is viewed as a critical asset.
- Based on results from 287 companies that took our Experience-Based Differentiation self-assessment, we estimate that 37% of firms have not yet reached the first stage of maturity and the 41% are in the first two stages. Only 4% are in the 5th stage.
- I outlined 8 major activities that these customer experience groups work on including customer insight management, customer experience measurement, employee communications, and culture and training.
- I also looked at Customer-Centric DNA, which we define as: a strong, shared set of beliefs that guides how customers are treated. It turns out that Customer-Centric DNA starts to show up in Stage 3 of maturity (Committed) and becomes fully developed in Stage 5 (Embedded).
- I also uncovered a set of behaviors that make up Customer-Centric DNA, which I call the 6 C’s of Customer-Centric DNA:
- Clear beliefs
- Compelling stories
- Consistent trade-offs
- Collective celebrations
- Constant communications
- Commitment to employees
The bottom line: Get ready for a multi-year customer experience journey.
[...] ago, while reading Bruce Temkin’s excellent Customer Experience Matters blog, I came across a post announcing a new Forrester report called “The Customer Experience Journey.” In the post, Bruce included the following diagram illustrating an organization’s maturity in [...]
There are customer experiences which have long lasting negative effects, where are they positioned in your chart?
http://roihunters.wordpress.com/2008/09/23/customer-experience-investment-opportunities/
Tim: Good point; while companies may evolve through the Customer Experience Journey, they can definitely lose (and gain) customers along the way. The maturity model is about a company’s evolution, and firms will definitely create more ill-will in the early stages of maturity than in later stages. If companies provide a bad experience, they will likely lose some customers for ever, but some others will give them another chance if/when the firm improves. I have not yet modeled this “customer forgiveness” dynamic.
In our experience of working with many clients to improve the Customer Experience I would agree this model looks sound. Good stuff!
Colin Shaw
Beyond Philosophy
Blog: http://www.ExperienceClinic.com
Bruce,
Demands. That is what the world is moving toward. A place where the Customer Experience is demanded. We may go to the local amusement park but what we really compare it to is the customer experience that sits top of mind . . . like a Disney.
Bruce, thanks for sharing your research. I was asked to develop a maturity model for our organization. I put something together and happened to see your work. We had a lot of similarities. Your final point was the journey to get there and I have to agree with you it takes perseverance and an unwavering commitment to the long term. I agree, it is not for all companies and very few get there.
I linked your study to our blog to share your work with our customers and employees. Well done.
http://blogging.avnet.com/weblog/customersmatter/
Fred
[...] Bruce Temkin’s Loyalty Maturity Model provides a loyalty road map to changing culture. [...]
[...] more with mine. It takes a lot of hard work and commitment for firms to make progress along their customer experience journeys. Not surprisingly, this is what I’ll be discussing in my speech later [...]
Bruce,
Thanks! I think might add a “Stage Zero” called “DAZED AND CONFUSED” which includes trying to sort out the hype and buzzwords and figure out how to move the organization forward before it’s too late (or before the company is labeled “Too big to fail” and receives a large cash infusion from the government!)
But I digress…
In my work I find a good number of smart individuals in blue chip companies that are ADAMANT about the need to become more truly customer-centric and collaborative. However, they often feel they are “Pushing an elephant uphill” when it comes to helping executives steeped in tradition LEAD in a manner that truly fosters customer centricity, operational excellence and collaboration… in other words — driving the transition from the top-down — not from the bottom up (especially from multiple silos).
Your diagram illustrates what I repeatedly say to my clients: This is an evolution, not a revolution. While it very well can revolutionize the business, it does take time and a lot of organizational and operational change to progress across these stages. It certainly isn’t for the faint of heart but a path for people passionate about customers and profits.
Guess we’ll continue to carry this torch, eh?
P.S. Interested to know which companies are in Stage 5. Pretty sure I can guess – but do you care to share?
Hi Leigh:
I like the “dazed and confused” label. My data shows that about one-third of firms are in that stage zero and there are extremely few firms in the stage 5 of maturity. Without doing a full public audit, I wouldn’t want to name any of them (I can’t talk about the things I know from my consulting work). The good news: I’ve worked with a number of companies that are making huge strides in the right direction; but it’ll take some time before those efforts get recognized.
It sounds like you’re helping companies make the uphill trek. May the force be with you!
Bruce
[...] People have been talking about customer experience for a while, but they’ve only been doing something about it for a short period of time. So I expect that many organizations will start moving higher on Forrester’s customer experience maturity model. [...]
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[...] on Dorothy’s journey in The Wizard Of Oz. Given the story that I was telling, I presented the five stages of customer experience maturity as a yellow brick [...]
[...] Executive leadership. trackback I’ve been helping several executive teams chart their customer experience journeys. The work typically centers around strategy, culture, organization, processes, and leadership. So I [...]
[...] operational creeds; and 3) tacit assumptions that are unseen and not cognitively identified. In my research on customer-centric culture, I identified the 6 C’s of customer-centric DNA: Clear beliefs, Compelling stories, Consistent [...]
Hi Bruce,
Out of all the theories behind the structure of CRM I agree full heartedly with your simple and clear report. Companies such as Zappos and Amazon have opened my eyes toward the importance in allocating resources to identify, develop and maintain CRM.
Thank you for this. All the best,
Michel Falcon
Michel: Thank you for the nice feedback!