There is broad recognition that today's 'empowered' customers are changing the fundamentals doing business. The result: Most companies are executing strategies that place the customer at the center of the universe.
According to global research firm Forrester in
The customer-obsessed blueprint, the problem is one of magnitude and speed. Many companies have underestimated the magnitude of change needed to operate a customer-obsessed business and the speed required to catch up to dynamic customers and disruptive competitors.
Throughout this year, the gap between customer-obsessed leaders and laggards will widen. Leaders will take on the hard work of shifting to a customer-obsessed operating model, while laggards will aimlessly push forward with flawed digital priorities and disjointed operations, according to Forrester.
What are 10 Critical Customer Journey Trends impacting the digitized customer experience today? Forrester offers the following insights.
- Personalization is the new bar. Customers expect to be treated as individuals in their moment of need. They expect that each encounter will be informed and enriched by current and accurate information about their accounts, history, and preferences. They will reward companies that can anticipate their personal needs and wants — and punish those that clumsily have to relearn basic customer details at each encounter.
- Small CX thinking will destroy financial results. Customer experience (CX) is intended to deliver superior, personal experiences across human and digital touchpoints — and to do so in a manner that is consistent with the brand promise. That is not so simple: The combination of people, process, and technologies must be able to understand, anticipate, and deliver on those experiences every day. CX tightly correlates with revenue performance; small, tactical CX efforts will directly impact growth.
- Who leads matters more. The shift to a customer-led market will force CEOs to restructure their leadership teams, favoring digitally savvy executives at the expense of long-standing leaders who don’t understand or who struggle to lead in the age of the customer. One central theme prevails: Leading companies will have CEOs who drive change and can put the right person in the right role to take on a rapidly changing market. Laggards will try to maintain old leadership structures while compensating for gaps with titles that have little real authority and unworkable governance structures.
- Culture is a critical path to business success. Culture has quickly moved from a perceived luxury to the critical path for customer-obsessed operations. The business impact of culture is coming into sharp focus. Everyone rowing in the same direction is accelerating the shift to a customer-obsessed organization. Culture fuels change; it is not a byproduct of change. Culture drives speed and efficiency, creating instincts, norms, and new muscle memory to shift to a customer-obsessed operation and work at the speed of dynamic customers and disruptive competitors.
- Traditional companies stand up to disruptors. Disruption is no longer disruptive — it is normal. Disruptors are free of traditional ways of doing business, legacy cultures, or the need to feed quarterly results. They are free to think about new ways to delight customers, leverage technology, and do business. Hyperadoption, where consumers are eager to adopt behaviors that were previously unimaginable, and enabling technologies add fuel to the disruption fire.
- Loyalty programs focus on participation. Loyalty structures are eroding as customers continue to free themselves of contract obligations, dismiss switch costs, and disengage from loyalty programs. Disruptors are accelerating the pace of erosion by disintermediating traditional companies and dismantling existing contract structures. Leaders are putting in place programs that allow customers to be a part of their business; laggards are trying to optimize aged loyalty programs that have minimal impact on affinity or spend.
- Analytics is a key competitive weapon. Analytics improves an organization’s ability to understand, anticipate, and act on data to drive customer value, business efficiency, and growth. But data is diverse, dispersed across systems, and dynamic — and now includes more and more crowdsourced and social data. Big data provided the potential to understand more, anticipate better, and gain competitive advantage — but in reality, it mostly drowned operations with too much data and too few insights. Big data, in part, solved the data volume issue but did not address the issue that customer data sits in systems — big and small — underpinning customer journeys. Leaders are addressing the diversity of data and unlocking the value of data via algorithms tuned to anticipate and deliver customer value.
- Digital dabbling is a fatal strategy. Innovation spend is on the rise, digital skills are in hot demand, and a new breed of digitally savvy senior leaders is emerging. C-level executives at leading firms are making digital a core driver of business transformation, not simply decorating their business with digital experiences or tools. Leaders will embed digital into all parts of the business.
- Privacy is moving from niche to value prop. Conventional wisdom stated that about 5% of the population really cared about privacy and even less would change behavior based on privacy risk. Companies prioritized accordingly, putting in privacy policies as a matter of legal hygiene. Not anymore. Well-publicized security breaches, identify theft schemes, and socially devastating privacy incidents have changed the dynamic. Customers are aware; they care and are willing to act on the basis of how well their privacy is protected - if they will even provide personal data in the first place).
- Operations becomes the nucleus of value. Leadership teams responding to a customer-led market are asking a simple yet profound question: How do we operate to win? It’s not simple to answer, as operational change — and associated people change — is seismic, and it’s not for the faint of heart. But it’s also not elective. The market fundamentals are simply too different to force old structures into this new reality. Leaders are making the shift now to gain first-mover advantage and aggressively address the threat from disruptors, focusing on the personalized client experience and delivering cross-functional consistency throughout the customer journey.
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As Forrester asserts, technology-empowered, digitally savvy customers are changing the world, the economy, and business. How today's progressive enterprises respond determines whether they will be winners in the age of the digital customer.
Forrester is a global research and advisory firms working with business and technology leaders to develop customer-obsessed strategies that drive growth. Forrester’s unique insights are grounded in annual surveys of more than 500,000 consumers and business leaders worldwide, rigorous and objective methodologies, and the shared wisdom of our most innovative clients. For more information about Forrester, click here.