8 Customer Experience Trends For 2011

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It’s the time of year when prognosticators drag out their crystal balls and divine about next year. Well, I’m not too different. But instead of a crystal ball, I’ll tap into the 8 customer experience megatrends that I outlined earlier this year. They remain the key trends that I think we’ll see in 2011.

Here are the 8 megatrends along with my thoughts about how they’ll play out in 2011:

1. Customer Insight Propagation. Most decisions in companies are made without any real customer insight. Companies will increasingly recognize that they need to integrate a deeper understanding of their customers throughout their company. That’s why Voice of the Customer (VoC) programs represent one of the most popular customer experience efforts. A new cadre of vendors are making it easier to collect, analyze, and share customer information broadly across just about any organization.

2011: I’ve written a lot about VoC programs this year. Companies are beginning to figure out how to better use the insights and an emerging set of vendors have deployed customer insight and action (CIA) Platforms that can help considerably. But there’s still a long way to go. In the research report The State Of Voice Of The Customer Programs, we found that only 1% of large companies are “Transformers,” which is the highest level of maturity. In 2011,  I expect to see many companies move up on the VoC maturity scale as this continues to be an increasing area of focus next year. Don’t be surprised to see CRM players like Oracle and SAP acquire some of the CIA vendors.

2. Unstructured Data Appreciation. Deep feelings that customers have about a company often get truncated into a 5-point, 7-point, or even 11-point multiple choice scales; making it difficult to understand “why” things are happening. New text analytics applications can quickly process thousands of pieces of unstructured data and discern what’s making customers happy or what’s making them upset; pushing a dramatic rise in companies analyzing rich unstructured data like comments on surveys, call center verbatims, or social media discussions.

2011: As I said in a blog post earlier this year, it’s time for text analytics. I’m working with many companies on strategies for getting deeper customer insights and just about all of them involve a component of text analytics. In 2011, I expect there to be twice as many text analytics pilots as in 2010 and a lot of companies touting success stories at conferences. I expect IBM to make a big push in this area next year with SPSS and I would not be surprised to see Big Blue acquire either Clarabridge or Attensity.

3. Customer Service Rejuvenation As companies do touchpoint analyses and customer journey maps, they often find that customer service is a key “moment of truth” for customers. Unfortunately, the cost-cutting in this area over the last several years has created many poor experiences. Companies are recognizing that poor customer service is creating a very negative perception of their brand and will increasingly make investments to improve these experiences.

2011: During customer service week in October, I discussed how companies sometimes seem to care more about saving $1.50 in transaction costs than they care about $60 worth of business. But, I am seeing some changes. I’ve actually been working with a number of contact centers that are transforming the service they deliver. In 2011, I expect to see more contact centers drop average handle time (AHT) as a core metric and revamp quality measures based on customer feedback.

4. Loyalty Intensification. Over the last several years, many executives have realized that shareholder value is not an objective; it’s actually the outcome of building stronger customer loyalty. As companies starts using measures like Net Promoter Scores (NPS) to track loyalty, more firms will elevate these metrics to their executive dashboard; pushing companies to think and act more strategically about loyalty.

2011: Many companies are developing loyalty metrics and infusing them into their management dashboards. We found that 45% of companies tie compensation to some customer feedback metrics, but don’t push too hard, too early with compensation.  We also found that only 25% of respondents think their senior executives are willing to trade-off short-term financial results for longer-term loyalty. In 2011, it will become much more common for companies to balance loyalty metrics with financial ones. And many companies will evolve beyond fixing problems that cause dissatisfaction and start designing experiences that inspire advocates.

5. Interaction iPod-ization. QWERTY keyboards help make PCs so universal. But a keyboard-based QWERTY device is not the ideal interface for the next generation of digital devices. Fortunately, Apple’s iPod (and iPhones, iPads) are doing the same thing that QWERTY did over 100 years ago, teaching myriads of people how to interact with a touch-screen. As a result, a new wave of touch-pad based applications will emerge.

2011: Add Nooks, Android, and Windows Phone to the list of devices that will be teaching people how to touch, drag, shake, pinch, and tap to get what they need. In 2011, Mainstream PCs with a keyboard and mouse will seem even more like relics’ as people increasingly transition to iPad (and iPad-like) devices.  I also expect to see more voice interfaces emerge.

6. Social Media Assimilation. Social media is a hot topic. But Social Media is not really a new thing for companies; it represents just another interaction channel with customers. Companies will increasingly fold Social Media activities into the core activities of the company; especially within customer service.

2011: I created a term called “Social Schizophrenia” which describes companies that provide levels of service in social media that differ significantly from service levels in other channels. That still describes a lot of companies. In 2011, focus on social media will continue to grow but I expect much more mature approaches as the tools and processes are evolving.

7. Digital/Physical Integration. Consumers increasingly go online with their cell phones while they are doing activities like walking through a mall or eating at a restaurant. At the same time, iPhones have introduced consumers to the notion of task-specific application downloads. In this environment, companies can no longer think about online as a separate and distinct channel. They will start designing more experiences that blend together online and offline interactions.

2011: Mobile applications will increasingly take advantage of location-awareness to provide services and capabilities that are specific to the store, restaurant, hotel, ball park, intersection, or wherever you are. In 2011, we’ll also see more adoption of recognition-based services like Shop Savvy that can scan barcodes and Google Goggles that recognizes landmarks, text — pretty much anything you can take a picture of with your phone. Given the capabilities, I think we’ll see a bunch of integrated digital/physical offerings in the second half of the year.

8. Cultural Renovation. Companies are increasingly recognizing that “unengaged employees can’t create engaged customers” which is one of my “6 Laws Of Customer Experience.” That’s why many firms are starting to focus on the culture of their firms; trying to align employees with the vision, mission, and brand of the company. Cultural change takes several years to take hold; so significant changes won’t show up in companies immediately. But when change happens, it will very difficult for competitors to replicate.

2011: It’s great to see many executives ask for help building a customer-centric culture. I often compare customer experience to quality, which is captured in my manifesto: Great Customer Experience Is Free. I also like usurping this quote from the quality movement: “Great customer experience is the result of a carefully constructed cultural environment. It has to be the fabric of the organization, not part of the fabric.” We gauge customer-centric culture with Temkin Group’s Four Customer Experience Core Competencies. Our assessment of 144 large firms showed that only 3% are customer-centric. In 2011, I expect many companies to put in place the foundations for improving their customer-centricity while a few will revert back to their old ways; this stuff is not easy.

The bottom line: Hopefully you’re ready for 2011!

About Bruce Temkin
I am a customer experience transformist, helping large organizations improve business results by changing how they deal with customers. As part of this focus, I examine strategy, marketing, interaction design, customer service, and leadership practices. I am also a fanatical student of business, so this blog provides an outlet for sharing insights from my ongoing educational journey. Simply put, I am passionate about spotting emerging best practices and helping companies master them. And, as many people know, I love to speak about these topics in almost any forum. My “title” is Managing Partner of the Temkin Group, a customer experience research and consulting firm that helps organizations become more customer-centric. Our goal is simple: accelerate the path to delighting customers. I am also the co-founder and chair of the Customer Experience Professionals Association (CXPA.org), a non-profit organization dedicated to the success of CX professionals.

12 Responses to 8 Customer Experience Trends For 2011

  1. Ray Brown says:

    Impressive crystal ball gazing. Thanks for giving a snapshot of the current customer experience ecosystem. 2011 is shaping up as a accelerating time for customer experience work. A recurring theme seems to be engaged employees lead to engaged customers. Are we moving from top down, inside out to bottom up, outside in?
    I hope so.

    • Damian says:

      Agree completely with need to be bottom up inside out. Marketing research helps tune offerings but great companies will understand what makes them great and build on this. Thanks for the article, great insights.

  2. Sort of in line with point #7, I think 2011 could be the year when small and medium businesses start facing a similar set of customer experience challenges as the bigger retailers.

    Until now, the customer-shop owner interaction at the SMB level would typically have had a very homey, intimate feel–largely due to the high number of repeat (sometimes even multi-generational) customers.

    But with location-based services and deal-of-the-day websites pushing huge influxes of new foot traffic into smaller, local retailers, converting drive-by shoppers into long-term loyals becomes a problem that they now have to grapple with, also. Enthusiastic buy-in from employees is also critical here.

  3. Very insightful post Bruce. With respect to #2, I agree with you in that it’s about time people started paying attention to the other 85% of information being stored (unstructured). You might want to check out what we are doing with IBM Content Analytics. We just shipped v2.2 this month. Here is a link http://bit.ly/gwFBPb

    It’s a powerful content analytics platform designed to help customers derive business insight by mining content and data to dynamically identify trends, patterns, correlations and anomalies across a variety of content and data sources … both inside and outside the firewall.

    One of our partners (Mindshare) was recently featured with a compelling cutomer experience solution, based on IBM Content Analytics, at Hertz Corporation .. overview and video at http://bit.ly/cDPIz8

  4. A great set of predictions that I’ll refer back to several times as we shape our strategy for the coming year. Thanks for posting this excellent resource. We’ve always used your ideas to help shape our product strategy and this will be no exception. In fact, I quote you all the time in my presentations. My two personal favorite trends are Unstructured Data Appreciation and Insight Propagation. I’ve been living, breathing, eating, and sleeping unstructured data during 2010 and I agree that it’s about to explode during 2011. It’s the “why and how” behind the “what and when” in customer feedback. For years unstructured data has been relegated to simple “color commentary.” Thanks to significant improvements in text ans speech analytics technology the semantic power of customer comments will finally be realized. As for Insight Propagation, new ways of sharing customer insights pop up all the time and are powering sophisticated analysis. At the last IBM Information on Demand Conference predictive analytics stole the show. Customer intelligence is a powerful dimension in any analysis, one that can and should be shared throughout the enterprise. Thanks again for such great information.

  5. Nate Bagley says:

    Bruce,

    Love that last point about the cultural renovation. I’m an advocate of the idea that happy employees make happy customers, and happy customers come back to spend their money more often than satisfied ones. Improving company culture is one of my big projects for 2011, no doubt about it.

  6. Sunil Gandhi says:

    Why companies ignore or dont give priority of Customer Experience Creation despite its so much of importance?? How to shake up top management thinking??

  7. Mark Gregory says:

    Bruce an excellent post and useful as a benchmark for what we should look toward and be aware of in 2011. It’ll be interesting to see how accurate your predictions are come 2012.

    Regards,

    Mark

  8. Ronelle Cain says:

    Hi Bruce

    I love your article on the 8 Customer Experience Megatrends and ask permission to use the highlights but still keeping your signature and company logo. Please let me know if this is possible. I would like to publish it our internal CEM blog.

    Thanks for the great articles.

    Ronelle Cain

  9. Dennis Adsit says:

    Right on, Bruce. Yes we need a cultural revolution around service. But this cannot just be about being nice and caring about customers. Customers are not calling us because they want a friend. We have to steal a page out of the manufacturing playbook and reduce the variation in the experience our customers are getting.

    I taught a class in the Stanford MBA program. I had students buy a prepaid cell phone and call to activate it and collect data about the call. The experience each had was wildly variable…and this is a stone simple phone call which should have only a minimal amount of variation. Why are we allowing this to happen? Why are we tolerating so much between agent variation? Why arent the right steps followed every time?

    Balloons and slogans won’t cut it anymore. Unless the cultural revolution includes a disciplined effort to resolve the customers issue, first time, every time, with only the variation the customer cares about, the revolution will be in name only.

    dennis adsit
    VP, Consulting Services
    KomBea Corporation

  10. I agree with Dennis and would suggest another megatrend. Process Management and Continuous Improvement Revival. It’s impossible to consistently deliver amazing experiences without well-designed customer-focused processes that are executed superbly. Great experiences don’t happen by chance or through motivational speeches by leaders. They happen through disciplined approaches to control, and constantly improve, processes. Great processes yield great experiences. Poor processes yield poor experiences. The people involved must have great attitudes, but they must also be capable of easily “seeing” problems and effectively solving problems through experimentation. Leadership must create an environment that values the importance of training employees on these skills and empowers employees to us them everyday. The secret behnind the cuuccess of companies like Ritz Carlton was the combination of employee attitude, shared values, and process rigor.

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