12 Customer Experience(Profit Improvment) Trends for 2011

It's nearly the new year and time for some 2011  Trends for designing better services that create improved business value for the organisations that employ them. This was posted by  Omar Zaibak on December 13 on Customer 1. Like all these things it is a good guide and provides some different ways of thinking about how to achieve the much needed balance between creating customer and business value. Enjoy. Customer experience as a business strategy and competitive differentiator continues to gain traction with corporations around the globe. Here are 12 customer experience trends to look out for heading into 2011.

1, Mobile Customer Experience Matures

The mobile channel continues its explosive growth in adoption, with more than 96% of US consumers owning a mobile phone and almost half with a smart phone according to a recent study conducted by Sterling Commerce and Demandware. The study shows 15% of consumers have used mobile to make a purchase, and almost a quarter to compare prices or products.

As mobile adoption grows, organisations are reacting to improve the mobile experience. A successful mobile channel places intuitiveness, simplicity, and usefulness as core guiding principles. In many ways, the necessity of such principles in mobile experience design can help ensure a smoother experience than other channels.

Mobile adoption in the retail and financial sectors is helping drive more streamlined and targeted experiences for users. I took the dive into mobile banking this year and must say I enjoy it more than the web experience. Why? Less clutter, simpler, and fewer steps to accomplish my objectives.

2. Customer Expectations Impact the Experience

The impact of a customer’s expectations on their experience cannot be stressed enough. It is vital that you set their expectations as early and clearly as possible. Otherwise they will set their own expectations, and react negatively if they are not delivered. This drives up support costs while negatively impacting customer satisfaction, a deadly combination.

Ensure all your customers are provided with clear expectations that you exceed. The perception of over-delivering on your promises goes a long way in establishing customer trust and loyalty.

3. Voice of the Customer Adoption

Emotions account for over 50% of an experience, as Colin Shaw points out in The DNA of Customer Experience. Because a customer experience is inherently emotional, qualitative data is the best way to capture and understand it.

This has led to increasing adoption in Voice of the Customer (VOC) programs, which aim to capture customer expectations, preferences, and satisfaction. Bruce Temkin describes VOC as “A systematic approach for incorporating the needs of customers into the design of customer experiences.”

Successful voice of the customer programs provide organizations with the feedback they require to continually develop a better customer experience. Think of them as the data that drives the customer experience modeling process. The necessity of optimizing the customer experience is leading to more of these programs being adopted and embraced.

4. Revenue vs Cost

Organizations that sacrifice customer experience quality in order to save costs are all too common. However, more and more organisations realize that consistently delivering great customer experiences increases revenues AND decreases support costs at the same time.

As a result, smart organizations do not view customer experience and cost as a balancing act where one must be sacrificed at the expense of another. As customer experience maturity grows, these organizations realize that an investment in customer experience can actually lower costs more than budget cutting in the medium and long-term.

5. Interaction Channel Growth

New customer interaction channels are created and evolve each year. This creates both an opportunity and challenge for organizations. Customers have more and more control over how they would like to interact. The more channels an organization offers, the more likely the customer can choose their preferred channel, inherently creating a better experience.

6. Cross-Channel Experience Still a Challenge

The rate of new channels being created and adopted by customers creates a significant challenge for organizations. How to create a consistent, seamless experience across rapidly growing channels? Unfortunately many organisations are plagued by channel silos, each with their own processes and customer data sets. This makes creating an enjoyable, cross-channel experience difficult if not impossible. Organisations must learn to break down these silos and model the experience across them. Channels should share one view of the customer, be modeled on one set of guiding customer experience principles, and allow easy escalation between channels. Only the most advanced customer experience organizations do this presently, as it remains a formidable challenge.

7. Social Media Impacts Experience

Social media continues to disrupt and change the fabric of customer experience. The experience is no longer driven by just the organization and the customer. Because of social media, expectations and experiences are rapidly shared and distributed between peers. This increases the importance and impact of each customer experience.

8. Power Shift: Companies vs Customers

The customer experience is increasingly being shaped by communities and peers. Technologies like peer reviews and ratings are influencing the customer experience. Customer communities now more than ever are positively influencing the experience in many cases. These communities frequently deliver faster and more accurate responses than could have been delivered by the organization alone, contributing to a much greater experience, even if it was not directly delivered by a company’s representative.

9. Retailers and Hotels Provide the Best Experiences

The leading industries in Forrester’s Customer Experience Index 2010 were retailers and hotels, receiving scores of 82% and 80% respectively. Customer experience has long been a key differentiator in these industries, and as a result it is an area they continue to invest very heavily in. Years of experience has led to significant customer experience maturity in these industries, and we expect them to continue to lead the pack in 2011.

10. Health Insurers and Service Providers Deliver the Worst Experiences

For one reason or another, health insurance companies and service providers deliver the worst average customer experiences out of any industry based on Forrester’s Customer Experience Index. Here are some theories why:

1. Customer experience is viewed strictly as a cost that would cut into profits 2. Competition’s customer experience is no better, resulting in less pressure to improve it 3. Poor customer experience is not impacting high profit margins

It seems like poor experiences are the status quo in this industry. Until poor customer experience has a more significant impact on the bottom line for these organizations, I expect them to stay on the bottom of the list.

11. Customers Co-Create the Experience

Savvy organisations realize the value strong customer experiences bring. What better way to design an optimal customer experience, than having your own customers contribute to its design? This reduces the level of optimization and tweaking of the experience organizations would have to do later on. Most of the leading customer experience organizations embrace this method today, and as other companies become more mature, look for this trend to increase.

A Vovici Customer Experience IQ study performed in 2009 reveals some of the key benefits companies are getting out of customer experience management programs:

1. Increase customer loyalty 2. Increased customer satisfaction 3. Greater positive word of mouth 4. Excellence in customer service 5. Increase revenue 6. Increased profits 7. Increased staff satisfaction

Getting customers involved in the design of the customer experience is an encouraging trend growing in 2011.

12. Customer Experience A Bigger Priority

As outlined in Bruce Temkin’s “The State of the Customer Experience, 2010″ 90% of North American companies with revenues of $500 million or more view customer experience as critical or very important to their company’s strategy. Organizations are increasingly realizing the benefits of improving the experience they provide, so look for customer experience to grow as a priority for more organizations.

Posted on December 26, 2010 and filed under Customer Experience, Service Design.