13 Customer Experience Trends to Watch in 2013

2012 was a very active year for customer experience management. I expect 2013 to be an even more robust year as we move deeper into the Era of CX Professionalism.

Here are 13 CX trends to keep an eye on this year as these efforts gain maturity:

  1. Decline of surveys. As more companies thirst for customer feedback, the number of surveys has escalated. But there is a limit to customers’ willingness to complete surveys. As completion rates get more difficult to maintain, companies will become more efficient with the questions they ask, target questions at specific customers in specific situations, and stop relying as much on multiple-choice questions. Tidbit: When we asked large companies with VoC programs about the changing importance of eight listening posts, multiple choice survey questions were at the bottom of the list
  2. 13 customer experience trends for 2013Rise of text analytics.Companies are learning that some of the richest insights from customers come from unstructured content like comments on surveys, calls into the contact center, social media conversations, and chat sessions with agents. Companies will shift more of their focus towards collecting and analyzing these types of feedback. Tidbit: Nearly three-quarters of large companies with VoC programs are using or considering text analytics.
  3. “Big data” predictive insights. It’s hard to talk about trends without discussing big data (in order to be fully buzz-word compliant). But what will this term mean for customer experience in 2013? Companies will blend together customer feedback data with troves of other data they have in CRM and other systems about customer transactions and value. Using this large dataset, they will predict customer satisfaction levels and Net Promoter Scores across their customer base. Since analytics requires more than just technology, we’ll see a surge of demand for data scientists. Tidbit: More than half of large companies with a VoC program are using or considering predictive analytics, but only one-third of large companies feel that they are effective at integrating CRM data in their VoC efforts.
  4. Anticipatory service. As companies gain a deeper understanding of customers through research and analytics, they will use that information to develop more individualized customer experiences. Look for companies to route callers to phone agents most likely to help them based on anticipating why they are calling, train front line employees with different scripts based on anticipating a customers’ needs/interests/emotional styles, and proactively recover from service issues before customers even complain about them based on detecting potential changes to a customers’ loyalty. Tidbit: When companies responded very poorly after a bad experience, 47% of consumers stopped spending completely with the company. When they had a very good response, only 6% stopped spending and 37% increased their spending.
  5. Experience-infused product development. We’ll see more companies create products with customer experience embedded throughout the entire development process. What will this look like? Product teams will define usability requirements, set minimum experience thresholds for product launch, and design the entire service lifecycle. Fidelity Investments evaluates all new product and experience efforts via a CX scorecard to determine the level of customer experience risk involved in a proposed project. Its “Customer Lens” process incorporates standards and checkpoints into business case and new product development methodologies to deliver more customer-centric experiences.
  6. Design-based process improvement. As customer experience efforts highlight the need to redesign more operational processes, companies will combine customer experience efforts with other process improvement efforts such as lean sigma and design thinking. These combinations, such as GM’s bringing together of customer experience and product quality, will merge process-centric tools with the power of deep customer empathy. We’ll also see more companies follow firms such as Intuit that are embedding design thinking across their organizations (check out the Stanford d.school). Tidbit: 74% of CX professionals think that customer experience design is important for their company, but only 34% think that their firm is good at it.
  7. Loyalty-focused contact centers. As companies more fully understand the link between customer experience and loyalty, especially with customer service, they will increasingly view contact centers as value-creators and not just cost centers. Some of the effects in 2013: less focus on average-handle-time and other productivity metrics, more focus on customer feedback and quality metrics, more on-shoring of previously off-shored interactions, and more investment in agent training and coaching. Tidbit: Consumers that are satisfied with customer service interactions are more than 4 times as likely to repurchase than those who are dissatisfied.
  8. Appreciation of employee assets. Companies are beginning to see the deep connection between employee engagement and customer experience. So many firms will focus on their employees in 2013. We’ll see more CX programs develop internal ambassador programs and an initial wave of HR organizations leading employee engagement efforts across what we call Five I’s of Employee Engagement: Inform, Inspire, Instruct, Involve, and Incent. Tidbit: Highly engaged employees are 5.8 times more committed to helping their companies succeed and 3.5 times more likely to do something good for their employers that is not expected of them.
  9. Mobile, mobile, mobile. Consumers will have more smart phones, more mobile apps, more tablets for them to do even more things wherever they go. Companies will increasingly integrate mobile into their product offerings and service experiences while integrating mobile with other channels, especially when it comes to combining desktop applications with mobile apps being used in physical stores. Tidbit: 31% of U.S. consumers use apps on their mobile phones on a daily basis.
  10. Software as an Experience. The initial rise of cloud-based software (a.k.a. SaaS, or software-as-a-service) focused on renting access to software instead of the historical approach of selling licenses. As cloud-based software expands, we’ll see these offerings cater more explicitly to the needs of customers. How? More simple, highly-focused, specialized applications (like smartphone apps), more focus on quick initial usability, more sharing of best practices (usage, not technical), and customization based on behavioral analysis of users. Tidbit: Net Promoter Scores for tech vendors are more correlated to customer experience than product performance.
  11. Resurgence of values. As more companies push forward on their CX journeys, they’ll find that there’s nothing holding their efforts together. The desire to improve customer experience will fall victim to other priorities if the effort is not tied to the core values of the company. But many organizations are so heavily focused on their operations that they’ve lost sight of their raisons d’être. I expect more companies to articulate and recommit to a core set of values like those of Zappos and Whole Foods, customer promises like that of TNT Express, and mission statements like that of the Dallas Cowboys.
  12. Rethinking risk-experience trade-offs. Customer experience is often constrained by rigid requirements imposed by legal, compliance and risk management teams. As a result, companies are forced to collect additional information from customers, add additional steps in processes, and eliminate valuable self-service options. In 2013, given the increased emphasis on customer experience, we’ll see companies push back on and successfully eliminate many of the most egregious experience roadblocks.
  13. Continuing CX education. Some customer experience practices are becoming standardized enough to create educational curriculum. In 2013, we’ll see more corporate training departments rolling out CX training, MBA programs incorporating more CX content into service and marketing courses, and the creation of standalone CX academic courses. Tidbit: The percentage of CX professionals that see training as an important professionals development goal increased from 52% in 2011 to 57% in 2012.

The bottom line: 2013 will be a busy year for CX professionals!

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!

8 Customer Experience Megatrends

As I was thinking about what’s going on in customer experience, I realized that there were several key trends that would dramatically affect how companies interact with their customers over the next 3 to 5 years. So I compiled this list of 8 customer experience megatrends.

To get more details on each of these trends, download the free Temkin Group Insight Report.

These are the items that I think all executive teams will need to examine. Do they make sense to you? Are there others that should be on the list? I’d love to hear what you think.

The bottom line: Don’t be complacent in your customer experience efforts

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