Forrester CXNYC 2018: Customer Experience Must Go Beyond Strategy

Although they approached the idea from different angles, speakers on day one of Forrester’s CXNYC 2018 agreed that customer experience needs to go beyond strategy to permeate all areas of a company.

Maxie Schmidt, principal analyst at Forrester, used the example of a house her family bought to illustrate the point. She noted that although they had done a lot of decorating and furnishing, the house still wasn’t comfortable to live in. “The thing we realized is that while we did all this stuff, we had [only] nibbled at the edges because we found that in our house there were problems.” For example, she said, the house had a fancy bathroom with a broken pipe. “We needed to stop decorating our house and start renovating our house,” she said.

She went on to apply this notion to customer experience, saying that, for example, many companies have customer experience strategies that are disconnected from their overall company strategies or voice-of-the-customer programs that are finding and fixing experiences that are not designed with the customer in mind to begin with.

For Forrester principal analyst Michelle Yaiser, retention rates are key. “One of the biggest reasons that we need to pay attention to retention rates and understand that there’s not this endless pool of customers is the fact that most industries are impacted by external factors completely out of their control,” she said. She cited the example of a financial services organization during an economic downturn, when financial activities such as saving and investing become luxuries for many people; during these periods, banks and investment firms struggle as the pool of perspective new customers dwindles.

She then shifted, like Schmidt, to a house metaphor to bring the point home. “Think of your existing customer base as the foundation for your house. If you’re losing your customers, that foundation is shifting and cracking. Fixing the foundation should be one of the first renovation projects you undertake. If you don’t fix the foundation, all of those beautiful decorations that you’re putting around your house are going to begin falling off the walls,” she said.

For Forrester senior analyst TJ Keitt, good customer experiences come down to customer habits. “A good customer experience caters to a habit that your customers have and want to keep or a habit that your customers want to form,” he said. But habits can change, and he used Borders as a cautionary tale. Borders was “built to create the perfect bookstore experience,” but despite being “a leader in customer experience across a number of benchmarks” in 2011, it went out of business that same year. The reason, he asserted, is that it “catered to a bookstore habit long past the point when going to a bookstore was desirable for book lovers.” “If you wed yourself too closely to a specific customer habit, then you run the risk of catering to that habit long past its desirability to your most valuable customers,” he said.

He evoked Charles Duhigg’s The Power of Habit, saying that a habit consists of three things: cue (the trigger that starts the habit), routine (the actions taken that are the habit), and reward (the value derived from the habit). Companies have focused on the routine component “for far too long” and should instead be focusing “on the triggers and the value because what Duhigg also teaches us is that…when habits change, there are changes in those triggers and changes in the reward.”