Marketing Magazine recently spoke to Harley Manning, founder of the customer experience practice at Forrester Research, to learn more about why customer experience has become such a crucial area of focus. We found out why it's no longer okay to just stop being bad at customer service; why transformation can be expensive; and which local companies are doing are doing it well.
(For more discussions on customer experience, join our Customer Experience Conference 2015, 11-12 March.)
Marketing: What are the biggest changes in the customer experience conversation you've witnessed in your 16 years at Forrester?
Manning: Just the fact that we’re talking about customer experience is a big change. When I first started, it was all about user experience, which is a product design concept that was adopted by the tech industry. This concept has now broadened so that companies are looking at creating a systematic approach that looks at the entire customer journey, from discovery to purchase and beyond.In the past two years, we’ve seen a dramatic rise in the customer index scores of the companies we study. The number of truly awful experiences have seen a precipitous decline. Basically, ‘okay’ has become the new ‘poor’, and the more competitive the industry, the more customer experience matters. If you want competitive advantage, it’s not enough to simply stop being bad. There’s a financial incentive too: Sorting through customer complaints costs money, and this applies across all industries. Take the implementation of Obamacare, for example: American insurance companies were suddenly faced with greater competitive forces, and regulations which forces them to spend $0.85 on every $1 made on healthcare and customer claims. For American insurers, servicing customer complaints eats into margins.
Marketing: Why is customer experience not a bigger part of the marketer's remit?
Manning: Marketers craft the brand and its values, but they’ve spent less time ensuring that promises align with reality. This is because marketers don’t always control the experience. However, as companies wake up to the importance of customer experience, they look to marketers to do this, which is why in many companies a head of customer experience reports to the head of marketing.
Marketing: The Chief Customer Officer (CCO) role is on the rise. Tell us more.
Manning: The CCO role is created by companies that want to undergo rapid transformation. GM recently appointed a CCO named Alicia Boler-Davis. She used to run production plants, which requires the sort of discipline that GM want to bring to customer experience. The CCO's power is disproportionate to the number of them. Note that CCO’s often don’t have that title - it could be the chief experience officer, or the chief client officer. DBS has Paul Cobban, who’s the chief operations officer and heads up customer experience. His mandate comes directly from Piyush Gupta, DBS' CEO. (Read also: The rise of the chief customer officer and what it means for businesses)
Marketing: Does customer experience transformation always have to be expensive?
Manning: It depends on the organisation - some have it baked into their culture. For example one of Ritz-Carlton's service values is that employees are empowered to create exceptional customer experience. To support this, every morning there is a 15 minute line up where employees share stories of how they created an outstanding customer experience the day before, to motivate their colleagues to do the same. For Ritz-Carlton to tweak things is not so hard; those who haven’t built their business around customer experience find it hard and expensive. Often, you need to change the physical layout of all your stores or retrain your people, for example. Transformation needs to be made in conjunction with a strong internal communication programme, as employees need to understand why changes are being made.
Marketing: Who are the companies in Singapore who handle customer experience particularly well?
Manning: Singapore Airlines is famously known for their customer experience. DBS is going through a transformation and has seen strong, measurable improvement in customer service. And Singapore Post has become very serious about service transformation because its business has been upended by technology. In all these cases, the customer experience mandate comes down from the top.
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Representatives of brands such as Kimberly-Clark, Subway and Toys “R” Us, amongst many others, will be speaking about customer experience management at Marketing magazine’s Customer Experience 2015 conference, happening 11 – 12 March.
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