WHY CUSTOMER EXPERIENCE?I

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WHY CUSTOMER EXPERIENCE?In the age of the customer, companies find that:Commoditization has stripped away existing sources of differentiation.Competitive barriers of the past — such as manufacturing strength, distribution power,and information mastery — can’t save you today. One by one, each of these corporateinvestments has been commoditized.Traditional industry boundaries have dissolved.Automakers now find themselves competing not only with other automakers but alsowith services like Zipcar, which obviates the need for car ownership. Likewise, GoogleNews, Expedia, and mobile devices undercut newspapers, travel agents, and laptopmanufacturers. Regardless of industry, customers will compare your firm to companieslike Southwest Airlines, Zappos.com, and Disney — which are known for theircustomer centricity.Customers have more power than ever.With online reviews, social media, and mobile access, it’s easy for your customersto know more about your products, services, competitors, and pricing than you do.As strategy guru Michael E. Porter said: “Where the buyer has full information aboutdemand, actual market prices, and even supplier costs, this usually yields the buyergreater bargaining leverage.” And when customers aren’t happy, they don’t think twiceabout bashing brands on channels like Twitter and Facebook.Forrester used 15 years of customerexperience research to create aframework that outlines 40 essentialpractices across six disciplines:• Strategy• Customer understanding• Design• Measurement• Governance• Cultureforrester.com/customerexperience | +1 617.613.6000 FORRESTER PERSPECTIVE: The Business Impact Of Customer Experience | 4
CX LEADERS OUTPERFORM THE COMPETITIONA stock portfolio of Forrester’s Customer Experience Index (CXi) leaders had acumulative 43% gain in performance over a six-year period (2007 to 2012), comparedwith a 14.5% increase for the S&P 500 Index and a 33.9% decrease for a portfolioof customer experience laggards.Stock performance of CXi leaders and laggards versus S&P 500(2007 to 2012)50% CXi Leaders43.0%CumulativeTotal Return40%30%20%10%0%-10%S&P 500 Index14.5%Sprint focused on eliminating theroot causes of customer calls to itscontact center and moved from lastto first in the American CustomerSatisfaction Index. As a result offewer outsourced calls and fewercustomer credits, the companysaved $1.7 billion per year.-20%-30%-40%CXi Laggards-33.9%Source: Watermark Consultingforrester.com/customerexperience | +1 617.613.6000 FORRESTER PERSPECTIVE: The Business Impact Of Customer Experience | 5
Page 1 and 2: FORRESTER PERSPECTIVE:$The Business
Page 3: WE’VE ENTERED THE AGE OF THE CUST
Page 7 and 8: IT’S A BUSINESS DISCIPLINE, NOT A

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