50 CX Tips: eBook and Infographic

1310_50CXTips_COVERI recently completed a series of 50 customer experience (CX) tips. To make it easier for people to read and download all of the tips, I assembled them into a free eBook: 50 CX Tips: Simple Ideas, Powerful Results.

Each of the 50 CX Tips is aligned with one or more of Temkin Group’s four customer experience core competencies: Purposeful Leadership, Compelling Brand Values, Employee Engagement, and Customer Connectedness.

The CX Tips include examples from a wide variety of companies including Adobe, Amazon.com, Apple, BCBS of Michigan, Becker and Poliakoff, Big Lots, BMO Financial Group, Bombardier Aerospace, CDW, Charles Schwab, Citrix, Disney, EMC, Fidelity Investments, Hampton Inn, Hilton, IBM, Intersil, Intuit, JetBlue, Microsoft, Oklahoma City Thunder, Oracle, Safelite AutoGlass, Salesforce.com, SanDIsk, SimplexGrinnell, Southwest Airlines, Sovereign Assurance of NZ, Sprint, Starbucks, Stream Global Services, Sam’s Club, USAA, VMware, and ZocDoc.
DownloadButton200wWhile you may have a hard time applying all 50 CX TIps, you should be able to identify several that will work for your organization. I challenge you to select three or more of the CX Tips to implement. Here’s an idea: Have each of your team members pick the five CX Tips that they think would be the most powerful for your organization. Use a team meeting to discuss everyone’s selections and pick the ones you want to implement.

We also created an infographic with the 50 CX tips. Here’s a version with the top 10 CX tips (click on the graphic to get a .pdf of the full infographic).

Top10CXTips_TemkinGroupThe bottom line: A handful of CX Tips can propel your customer experience.

Tech Vendors: Benchmarking Product and Relationship Satisfaction of IT Clients, 2013

1309_ITProuctsAndRelationships_COVERWe just published a new Temkin Group data snapshot: Tech Vendors: Benchmarking Product and Relationship Satisfaction of IT Clients. This new research highlights how IT professionals rate tech vendors in two key areas of experience: Products and relationships.

During Q1, 802 IT professionals from companies with at least $500 million in annual revenues rated both the products of and their relationships with 54 tech vendors. Some of the findings include: VMware leads in six of the eight satisfaction categories—product quality, product flexibility, technical support, account team support, cost of ownership, and innovation—while Microsoft servers and IBM SPSS score highest in product features, and Apple and Microsoft desktop software lead in ease of use. Deloitte Consulting on the other hand scores last in every satisfaction category except ease of use, which Computer Sciences Corporation IT services received bottom marks in.

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(includes spreadsheet with data)

As you can see below, we found a wide range of ratings across the 54 tech vendors for each of the eight criteria we examined:

ProductsRelationshipsAverages

Note: IT decision makers were asked to evaluate each of the criteria on a scale from very poor (1) to excellent (7). Net satisfaction equals the percentage of 6s and 7s minus the percentage of 1s, 2s, and 3s.

The data snapshot includes eight graphics that show the scores for each of the 54 tech vendors for each of these criteria. Here are the average net scores across all of the criteria:

ProductsRelationshipsCompanies

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The bottom line: Tech vendors need to improve their products and relationships

Report: Tech Vendor NPS Benchmark, 2013

1306_IT_NPSBenchmark_COVERWe just published a Temkin Group report, Tech Vendor NPS Benchmark, 2013, The research examines Net Promoter Scores and the link to loyalty for 54 tech vendors based on feedback from IT decision makers. We also compared results to the NPS data we published last year. Here’s the executive summary:

We surveyed IT decision makers from more than 800 large North American firms to understand how they view their tech vendors. One of the questions we asked provides Net Promoter Scores® (NPS®) for 54 of those companies. VMWare and SAP analytics earned the highest NPS while CSC IT services and Infosys IT services earned the lowest. The overall industry average NPS dropped nine points from last year. Our analysis also examined the link between NPS and loyalty, finding that compared with detractors, promoters are more than six times as likely to forgive a tech vendor if they deliver a bad experience, almost six times as likely to try a new offering from the vendor, and more than three times as likely to purchase more from them this year. When examining the loyalty levels for each vendor, we found that Oracle consulting and VMWare clients have the strongest purchase intentions, SAP analytics and Sybase have earned the most forgiveness, and VMWare and SAP analytics have the most innovation equity.

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Here are some of the findings from the research:

  • With an NPS of 47, VMware came out on top followed closely by SAP analytics with 45. At the other end of the spectrum, four tech vendors have negative NPS: CSC IT services, Infosys IT services, Alcatel-Lucent, and Deloitte consulting.
  • The average NPS in the tech industry went from 33.6 in 2012 to 24.7 in 2013. The percentage of promoters dropped seven points.
  • Compared with detractors, we found that promoters are more than six times likely to forgive a tech vendor if they deliver a bad experience, almost six times as likely to try a new offering from the company, and more than three times as likely to purchase more from them in 2013.
  • Forgiveness and willingness to try increase steadily starting at 3 while increased purchases begins steady growth at 5.
  • Promoters most frequently wanted lower prices and better support, while passives and detractors were looking for better support.
  • Oracle outsourcing has the strongest purchase intentions while Trend Micro has the weakest.
  • SAP analytics and Sybase have earned the most forgiveness while Trend Micro has earned the least.
  • VMware has the most innovation equity while Accenture consulting and Intuit have the least.

1306_ITNPS2

1305_ITNPS_Economics

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The bottom line: When it comes to NPS, large tech vendors are heading in the wrong directions

Note: See our 2012 NPS ratings for tech vendors and the post 9 Recommendations For Net Promoter Score along with all of my other posts about NPS.

P.S. Net Promoter Score, Net Promoter, and NPS are registered trademarks of Bain & Company, Satmetrix Systems, and Fred Reichheld.

Cloud Computing Leaders: Google, Microsoft, and ACS

The “cloud” is a popular topic in IT circles. So we decided to examine how much it will affect companies and how prepared technology vendors are to satisfy those changing customer demands. During January 2012, we asked 800 IT professionals from companies with at least $500 million in annual revenues two questions about cloud computing:

  • Cloud importance: To what degree will the shift to cloud computing influence your company’s IT strategy over the next three years? (Note: 79% of IT professionals say it will have a significant influence)
  • Cloud capabilities: Given your company’s plans for cloud computing, how would you rate the cloud computing capabilities of the IT vendors that you interact with compared with where they need to be?

To fully understand how prepared tech vendors are to meet their client’s changing IT needs for cloud computing, Temkin Group created the Cloud Readiness Index (CRI), a measure of where vendors are in their cloud capabilities compared with the needs of their customers. The CRI takes the cloud importance results and divides it by the cloud capability results as follows:

Here is the Cloud Readiness Index data for 60 tech vendors. Google, Microsoft’s business applications, and ACS are on top of 15 tech vendors in the “leading” category. At the other end of the spectrum, Autodesk, Check Point, and CGI are on the bottom of 25 tech vendors in the “lagging” category.
You can download the data from this post in an Excel spreadsheet for $195. The file includes detailed data for the Cloud Readiness Index as well as details for Cloud Importance and Cloud Capabilities. The spreadsheet includes the data for the 60 tech vendors listed in this post as well as for 28 other tech vendors with smaller sample sizes.

 The bottom line: Tech vendors need to meet their client’s cloud needs

Net Promoter Score and Market Share For 60 Tech Vendors

Temkin Group recently surveyed 800 IT professionals from large companies and asked them a series of questions about tech vendors. This research has fueled some of our previous posts: Temkin Experience Ratings for Tech Vendors, How IT Professionals Share Feedback About Vendors, and Tech Vendors: Benchmarking Product and Relationship Satisfaction of IT Clients.

We also asked the IT professionals to rate each tech vendor on the Net Promoter Score (NPS) scale.* NPS is based on one question: How likely are you to recommend the tech vendor to a friend or colleague? IT professionals choose an answer on a scale from 0 (not at all likely) to 10 (extremely likely). Responses are put into one of three categories:

  • Promoters (score 9 or 10)
  • Passives (score 7 or 8)
  • Detractors (score 0 to 6)

NPS is calculated as the percentage of promoters minus the percentage of detractors. (If you’re interested in best practices for using NPS, read my post 9 Recommendations for NPS which is also part of our VoC resource page).

Here is the NPS for 60 tech vendors, ranging from Intel, Microsoft and Cisco in the 50s down to Compuware, Unisys, Cognizant, and Capgemini below 10.

We also asked the IT professionals how much their company was planning to spend in 2012 compared with 2011 and mapped this data with NPS. It turns out that we found four bands of performance in this market based on NPS scores:

  • More than 40: These companies have much higher purchase momentum and are poised to grab a lot of market share
  • Between 28 and 40: These companies have above average purchase momentum and are poised to gain market share
  • Between 23 and 28: These companies have below average purchase momentum and are poised to lose market share
  • Less than 23: These companies have much lower purchase momentum and are poised to give up a lot of market share

You can purchase the data in an excel spreadsheet for $195. The file includes details on the 60 tech vendors shown in this blog post as well as 28 other tech vendors with sample sizes too small to be included in our published research. The data includes sample sizes for the companies, percentages for promoters, detractors, and NPS score, as well as the percentage of companies with increasing spending plans and those with decreasing spending plans.

*Note: Net Promoter, NPS, and Net Promoter Score are trademarks of Satmetrix Systems, Bain & Company, and Fred Reichheld

Tech Vendors: Benchmarking Product and Relationship Satisfaction of IT Clients

We just published a new Temkin Group data snapshot: Tech Vendors: Benchmarking Product and Relationship Satisfaction of IT Clients. This new research highlights how IT professionals rate tech vendors in two key areas of experience: Products and relationships.

During January 2012, 800 IT professionals from companies with at least $500 million in annual revenues rated the products of and their relationships with 60 tech vendors. Some of the findings include: Intel dominates in product flexibility, Cisco leads in product features, Compuware’s product features are severely lacking, Google has a big lead in cost of ownership, Intel dominates in product flexibility, Apple leads in innovation, and Wipro is far behind in technical support.

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As you can see below, we found a wide range of ratings across the 60 tech vendors for each of the eight criteria we examined:

The data snapshot includes eight graphics that show the scores for each of the 60 tech vendors for each of these criteria. Here’s a summary of the firms with the highest and lowest average ratings:

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(includes spreadsheet with data)

The bottom line: Tech vendors need to improve their product and relationship experiences

Report: 2012 Temkin Experience Ratings of Tech Vendors

We are excited to be publishing this first report from our large-scale research on customer experience in the IT sector.

We just published a new Temkin Group report, 2012 Temkin Experience Ratings of Tech Vendors. The report analyzes feedback from 800 IT professionals to rate 60 tech suppliers. Congratulations to the top firms:

1) Microsoft (business applications)
1) Cisco
3) IBM SPSS
3) Microsoft (servers)
5) Microsoft (desktop software)
5) IBM software (other than SPSS)
5) Intel

Here is the executive summary from the report:

To understand the customer experience delivered by IT vendors, we surveyed 800 IT professionals from large companies. Using their feedback on the functional, accessible, and emotional components of experiences with vendors, we created the 2012 Temkin Experience Ratings for Tech Vendors which rates 60 large IT suppliers by their customers. Microsoft business applications, Cisco, IBM SPSS, and Microsoft servers were at the top of the list with “excellent” ratings. At the other end of the spectrum, Compuware, Capgemini, and Fujitsu were at the bottom of nine companies with “very poor” ratings. Our research also looked at the 2012 purchase plans for these IT buyers. When we chart the Temkin Experience Ratings for Tech Vendors with the purchase momentum for these 60 firms, it shows the clear connection between customer experience and revenues.

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The Temkin Experience Ratings for Tech Vendors are based on evaluating three elements of experience:

  1. Functional: How well do experiences meet customers’ needs?
  2. Accessible: How easy is it for customers to do what they want to do?
  3. Emotional: How do customers feel about the experiences?

Here are the ratings for all 60 tech vendors that had feedback from at least 60 IT professionals:

The report also examined IT purchasing plans. We created a purchasing momentum index, equal to the percentage of companies planning to increase spending in 2012 minus the percentage that were planning to decrease spending. The report contains the purchasing momentum for all 60 tech vendors in the study. It turns out that the Temkin Experience Ratings are highly connected with purchase momentum:

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The bottom line: Customer experience and loyalty go hand in hand in the tech sector.

Verint Buys Vovici; Let The Games Begin

I spoke with Verint and Vovici execs today about Verint’s acquisition of Vovici for an estimated $76 million. For those of you who don’t know these vendors, Verint provides workforce management, call recording, and analytical capabilities targeted at contact centers. Vovici is an Enterprise Feedback Management (EFM) vendor (I consider EFM an outdated term) that provides voice of the customer (VoC) software and services. It appears that Vovici will continue to operate somewhat independently as “A Verint Company.”

My take: First of all, kudos to Verint. It’s a good extension to its offering and the price tag seems fair (although I don’t get too involved in valuations). And, they can share all of the company towels that have a “V” monogram. :-) This is a natural evolution in the market, and is consistent with the M&A activity I’ve expected and have been writing about for a while. Here are some things that I think we can learn from this acquisition:

  • The contact center is a VoC goldmine. There’s a ton of insights about customers that remain locked inside of contact centers. Companies can learn a lot by blending their contact center interactions into their voice of the customer programs.
  • Unstructured data is critical. Vovici grew up as a survey vendor which is the heritage of most of the “EFM” firms. But there’s a ton of lost insight in unstructured content such as social media conversations, call center interactions, sales notes, etc. That’s why “unstructured data appreciation” is one of our 8 customer experience megatrends. Vovici will be able to tap into Verint’s voice analytics to offer compelling capabilities around things like mobile voice feedback.
  • Look for a NICE next move. Verint’s largest competitor, Israel-based Nice Systems, needs to make a move. With a ton of “EFM” vendors around, there are a lot to choose from (including Allegiance, Medallia, Mindshare, and even another Israeli firm, Ransys, to name just a few of the many vendors).
  • The big boys will awaken. Verint’s acquisition of a major player in this market will accelerate the moves by large software players such as SAP, Oracle, SAS, and IBM. I’ve discussed that this market was heading away from “EFM” vendors towards what I’ve called “Customer Insight And Action (CIA) Platforms.” These vendors are evolving into other categories like CRM, BI, analytics, contact center, and BPM in which much larger vendors play.
  • Voice of the customer programs are evolving. All of these vendor moves will make it easier for companies to develop actionable insights from a variety of data sources. That’s why firms must continue to update and evolve their VoC programs.

The bottom line: This is the start of a busy M&A season.

P.S. Check out our Voice Of The Customer Topic Page

Enterprise Feedback Management (EFM) Is Dead

Yes, the title is a bit extreme — but I wanted to get everyone’s attention.

I’ve been hearing a lot of people talk about Enterprise Feedback Management (EFM) lately; from analysts to conference speakers. Please stop; EFM is a description of the past.

As I discussed in the post Customer Insight and Action (CIA) Platforms Emerge, EFM is an outdated moniker for applications that support voice of the customer (VoC) programs. It’s like talking about music coming on cassettes. Let’s look at the words:

  • Enterprise. The focus of these efforts need to be on the customer, not the enterprise.
  • Feedback. The analysis needs to examine insight across a variety of inputs, not just feedback.
  • Management. The value of these efforts come from taking action, not from managing surveys.

In the Temkin Group report The Evolution Of Voice Of The Customer Programs we label the emerging class of applications as “Customer Insight and Action (CIA) Platforms” which we define as:

A technology for automating multi-channel customer feedback, analysis, and response and the related workflow associated with closed-loop voice of the customer (VoC) programs

If you’re wondering where VoC programs are heading, then check out the posts Voice Of The Customer Programs Grow Up or 6 Ds For Voice Of The Customer Programs.

How Is CIA Different Than EFM?

  • CIA pulls together a full picture of the customer. These applications examine a variety of inputs like who the customer is (often from CRM applications), what the customer has done and is doing (often from analytics and ERP applications), and everything that customer has told us (including call center interactions and sales notes).
  • CIA does not overly rely on surveys. EFM grew up as a platform for managing multiple surveys, but these structured data inputs are becoming a less dominant form of insight. As text analytics becomes a more mainstream capability, companies will tap into unstructured data sources at an increasing rate.
  • CIA focuses on operationalizing the insights. VoC programs provide value when companies take customer-insightful actions based on the insight. These applications need to focus on getting the right information into the hands of the right people at the right time for them to incorporate into their day-to-day activities.
  • CIA makes market research practices obsolete. In the post Market Research Needs An Overhaul, I discuss how new VoC programs challenge historical operating practices for market research organizations; putting pressure on these groups (inside of and outside of the enterprise) to deliver value, not just reports.
  • CIA cuts across technology categories. While EFM applications represented a technology niche serving market research groups, I expect that CIA will become mainstream business platforms. The ability to disseminate and act on customer insights offers a compelling value proposition that will likely evolve into a key infrastructure for many companies. Since it cuts across areas like CRM, BI (business intelligence), BPM (business process management), and customer analytics, look for the big boys (IBM, Oracle, SAP, Salesforce.com, etc.) to get active in this space very soon.

The bottom line: EFM was an evolutionary step on the way to CIA platforms.

Kana Buys Overtone; Sign Of Bigger Trends

Kana announced that it has acquired Overtone, a key social media and text analytics firm. While this acquisition seems like a good move for Kana (I’ll have more thoughts when I get a full briefing next week), it’s more significant as a sign of bigger trends.

My take: This acquisition is best understood in conjunction with a couple of other acquisitions by software companies that support customer-facing processes and channels:

Last year I published a report called the Eight Customer Experience Megatrends which provided my forecast about how these eight megatrends will play out in 2011:

The HiveLive/Radian6/Overtone moves are clear signs of two of these megatrends:

  • Unstructured data appreciation. All of the acquired vendors provide some amount of text analytics capabilities. The acquisitions link these capabilities with a lot of enterprise data — helping to push the envelope on where and how companies will extract insights from unstructured data such as sales notes, emails, and call recordings.
  • Social media assimilation. In the long run, it makes no sense for social media to be treated as its own channel (see my post: How Much Does Social Media Matter?). The acquiring vendors will help their clients link social media with other customer-facing processes and channels.

What’s next? I expect to see acquisitions by big vendors like Oracle, SAP, IBM, and Microsoft. A few interesting targets: Clarabridge, Attensity, and Nexidia.

The bottom line: Customer experience management remains an evolving field

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!

RightNow Revamps The Software Buying Experience

About 6 months ago, I gave the thumbs-up to RightNow Technologies’ new mission: “To rid the world of bad experiences.” Having spent considerable time with RightNow’s management team, I could see that the new mission was more than just a slogan, it’s a commitment to an operating model that’s driving all of the firm’s key decisions.

The company recently announced the next element of that new mission, a new client agreement for its SaaS (software-as-a-service) offering called a “Cloud Services Agreement.” Here’s how the company describes some of the key attributes of the new agreement:

  1. No Shelfware – clients should be able to buy only what they need and still get long-term pricing certainty 
  2. Minimum 5-Year Pricing Certainty –  clients should get long-term fixed and transparent pricing without long-term lock-ins
  3. No Long-Term Contract Lock Ins – clients should be able to walk away from contracts if vendors aren’t delivering value
  4. No-Haggle Flex Up / Down – clients should be able to easily adjust seats, capacity or even product modules up – or down – to meet their changing business requirements
  5. “Roll-Over” Usage – clients should be able to adjust for seasonality without having to purchase capacity for peak usage that then sits idle most of the year
  6. Cash Service Credits – clients should receive a cash reimbursement if a vendor fails to meet its service commitments

My take: I really like the Cloud Service Agreement; it reverses many of the customer-unfriendly practices in the enterprise software market. Not only does this look like a good strategy for RightNow, but it also provides lessons for other companies and other industries. Here’s what people can learn from this strategy:

  • Be consistent with your mission; this strategy supports a key pillar that RightNow calls “easy to buy”
  • Recognize that everything impacts customer experience; purchase agreements establish the framework for an ongoing relationship (or a constant battle)
  • Create a tighter linkage between your revenue stream and customer value; tension will grow when there’s a mismatch in value
  • Provide flexibility for customers so they can easily respond to variability and unknowns in their business
  • Adjust your business model to take advantage of new capabilities; RightNow is leveraging native SaaS capabilities to depart from typical enterprise software licensing models
  • Pick strategies that large competitors can’t easily match; it will be difficult for vendors like SAP and Oracle to replicate this strategy
  • Recognize that everything is connected; making an isolated change in just one part of your business may have little long-term impact

The bottom line: Software-as-a-service will enable more customer-centric enterprise software!

Congrats to VoC Winners: Experian, Progressive, and Vanguard

Well, it’s been a wild day; the Grand Hyatt was hopping today as we kicked off our Customer Experience Forum.

My opening keynote speech seemed to go over really well. I weaved the story of the customer experience journey together with the story of Dorothy’s journey in the Wizard Of Oz. I actually ended my speech with a rewritten version of the song “Somewhere Over The Rainbow.” I also showcased some data from my new report that went live today called “Customer Experience Boosts Revenue.” I’ll talk more about my speech and that research in future posts.

For now, I want to congratulate the three winners of Forrester’s 2009 Voice Of The Customer (VoC) Award: Experian, Progressive, and Vanguard. We received 40 strong nominations, so these winners did a really great job. They all were adept at the four key elements of a VoC program: Listening, Interpreting, Reacting, and Monitoring and were able to identify significant business results from those efforts. You can download their nomination forms from Forrester’s customer experience blog.

There were so many outstanding nominations, that we named 11 finalists:

  • Cardinal Health
  • CIGNA
  • Experian
  • Gaylord
  • Hyatt Place
  • iRobot
  • Logitech
  • Oracle
  • Progressive Insurance
  • Symantec
  • Vanguard

Voice of the customer is a critical component for just about any customer experience effort. And the trends indicate that VoC will become even more important in the future. A lot of the advances in VoC are coming from innovative work from a number of vendors. That’s why one of the questions we asked was: “What technology vendors or service providers are critical to your success?”

Here’s a shout out to the vendors that were mentioned by the 11 finalists:

Bain and Company, Burke Research, CAHPS, Clarabridge, Cognos, Convergys, ECHO, Healthways, iModerate, JD Power, Lotus Notes, M/A/R/C, Medallia, Microsoft, National Committee for Quality Assurance, NICE, Opinion Lab, Oracle, Radiano, RightNow Technologies, Satmetrix, Somentics, TeaLeaf, Vovici, and Webtrends.

The nominations were loaded with great insights, so I’ll be writing a lot more about what we found.

The bottom line: Congratulations to all of the winners, finalists, and the vendors that helped!

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