Taking CX from good to great

Graeme Wood
By Graeme Wood | 9 December 2019
Graeme Wood

At Forrester’s recent Annual Predictions roadshow in Sydney, the research firm drew the distinction between the pragmatism seen in 2019 and the need to harness energy in 2020. Over the last few years Forrester’s predictions have provided our team with highly relevant business and economic context to guide our research into the human experience of brand interactions. In this piece, I’ll share some insight into the direction that the CX industry needs to take in order to avoid some of Forrester’s predictions from coming true.

According to Forrester, 2019 was a year of pragmatism. Companies pulled away from large-scale transformation projects and prioritised “paying off debts” – not financially, but the legacy of previous inaction:
1. The technology debt: finally integrating legacy systems in order to be operationally fit for agile transformation of capability and customer experience
2. The data debt: resolving an inability to match disparate internal data sets, holding back end-to-end CX capability
3. The capability debt – restructuring internal organisation to remove resistance to change and address inabilities to be customer obsessed

These were all vital jobs to be done, because as the Forrester team pointed out, for all the investment in talent, technology and integration, CX capability has stalled over the last four years.

CX performance is stagnating or declining specifically because customer expectations are changing faster than the industry’s ability to keep up. Looking forward to 2020, senior CX analyst Ricardo Pasto made some more personalised predictions for the CX professionals in the audience: that one in four will lose their jobs as a direct result of not being able to prove the value that they offer. This lack of quantifiable return on investments made so far will also lead to an increase in linking hard metrics to customer journey management.

Now, we know from the world of digital and social media that once you begin to optimise to indicators (clicks, likes, shares, etc) rather than business metrics then you are likely to be prioritising the wrong thing. If we focus on what is easy to measure, rather than actual business outcomes, we are likely to lose sight for the human outcome. This will result in CX applications that effectively trick customers into actions that meet executional targets, rather than prioritising the right outcome for the customer.

Measuring the Customer Journey

Back in 2018, we saw this threat as implicit in Forrester’s prediction of a decline in CX performance, and sought a more holistic approach to measuring customer journeys through a lens of human experience. At Starcom, we’ve worked with Forrester globally to quantify the business impact of meeting real human needs; and show the causal link between better human outcomes and better business outcomes in a range of categories.

Across luxury, consumer electronics, beverage and QSR categories, experiences that made the individual feel more confident or more popular out-performed those that offered useful information or saving money across a range of marketing goals, from increasing sales volume, to justifying a higher purchase price (Building Better Outcomes for Brands and Business, Forrester Consulting June 2019).

In Australia, we’ve gone a step further, measuring the impact of different types of experiences on brand preference. By using a real-time mobile diary, we tracked 400 people’s self-reported brand experiences across consumer electronics, auto, FMCG and banking. This tracked not only what people had experienced, but also:
• how positive and relevant the experience was
• what other experiences had led to it
• how it made them feel about the brand
• and how it made them feel about the experience

Return on Experience
The most significant insight we found across categories was the impact of going from "good" to "great" CX. Of all the individual brand or product experiences reported as ‘very positive’, 69% made the respondent much more likely to choose the brand in the future. This compares to only 7% of 'fairly positive" experiences having a similarly significant effect on future purchase intentions, meaning that "great" outperforms "good" by a factor of ten. So clearly, there’s huge value in understanding what makes an experience great.

Personalised, or Personal?
From a sample of 1,100 different "very positive" experiences, 81% of them were also rated as very personally relevant in our study. While this correlation would be expected by any experience designer, what our respondents classified as "personally relevant" was more unexpected. Real-life experiences were more than twice as likely to be classed as "very relevant" than the average. What was considered real life varied according to the category: from product use in the case of food and drink, to seeing a car drive past, or having a conversation with a colleague about a new phone or tablet. Word of mouth, actually using the product, or seeing other people using it, all outweighed the impact of advertising or digital experiences. Similarly, connected experiences involving multiple interactions were also likely to be viewed very positively – 2.4 times more likely to be in the "very positive" class of experience.

So with an overall impact figure for the return on experience across our sample categories, and the key drivers of higher returns analysed, we can now measure what types of emotions are being caused by different types of experiences and map a value to each. This allows us to genuinely quantify the connected impact of better human outcomes on business performance – the return on experience.

Graeme Wood is National Head of Product & Futures, Starcom

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