Forrester: Why it’s time to inject confidence and energy into CX

In the lead-up to this year’s Forrester CX APAC event, CMO caught up with principal analyst, Riccardo Pasto, to discuss the state of CX maturity right now

As CX professionals know all too well, it takes years to gain maturity and consistency of customer experience across an organisation. But as Australia emerges from the shadows of the pandemic, it’s clear investments into CX transformation are paying dividends.

Just look at the most recent Forrester CX Index 2021, which found several companies across the broader financial services sector progressing from an ‘ok’ standing to ‘good’. For the first time since the study launched in 2015, NAB and Suncorp moved into the ‘good’ category for CX quality, with NAB leaping by 6 points year-on-year to first place.

NAB also had the highest percentage of customers reporting excellent experiences (47 per cent) and the best performance across all three dimensions of CX quality: Effectiveness, ease and emotion. Suncorp made similarly strong progress, improving its CX credentials for the third year in a row.

And as Forrester principal analyst for CX leaders, Riccardo Pasto, points out, many more organisations are sitting at the intersection between doing an ‘OK’ job and a ‘good’ one when it comes to customer experience.

“After years of listening to senior leaders and CX professionals talking about the investments they have made, it’s showing they are finally paying off,” he comments.

Yet what’s equally clear is many organisations have a long way to go if they’re to follow suit and importantly, translate CX transformation into sustainable business results. In the lead-up to this year’s Forrester CX APAC event, CMO caught up with Pasto to discuss the state of CX maturity right now, and what remains on the quest to customer experience excellence.

As we finally emerge from having to constantly react to changing pandemic conditions, where should work around CX across Australian organisations be focused?

Riccardo Pasto: Now, it’s really about confidence. That’s one of the subtopics of our CX APAC conference. We are fundamentally talking about bold changes and having the confidence to drive transformational organisational change. That’s takes a multi-year commitment – you can’t just throw money at it to solve the problem.

We are emerging from two years of high turbulence, uncertainty and systemic disorder. In space and astrophysics, there is a concept known as ‘entropy’, which is essentially associated with a state of disorder and randomness. The cool thing is entropy in an isolated system that cannot go back to a more ordered state by itself. You have to inject energy into the system to get to a more ordered state that delivers more benefits. This lens is the way I am seeing CX efforts right now – we need to inject positive energy into CX both as individuals and as organisations.

That requires confidence to do the work, because there is a lot of pain in this transformative process. And it starts with the very basic need for customer understanding.

Forrester has just done a study with more than 100 business decision makers across China, India, Australia. The number one priority in organisations trying to innovate in their market right now is understanding customers. During times of change, there are different needs and wants. As an organisation, you have to be quick to understand this and ensure insights are not only communicated but actioned. It doesn’t make any sense to do all the work for insights to just sit in one silo. It also doesn’t drive revenue or help organisations achieve their business goals. Peers need to use these insights, whether it be for experience design, servicing customers or what the business runs on.

The second priority from our study was investment into new and emerging technologies. It doesn’t come as a surprise; there has been a lot of investment, especially during Covid, due to digital acceleration and social distancing. Consumers who never bought anything online were forced to do so during the pandemic. However, technology is important only once you understand what customers want and need.

The third priority is linking innovation efforts in CX to business results. That’s about closing the loop and where CX professionals and business leaders are now focusing. We need to understand what is driving the needle in terms of business results. You will have a hard time getting investment and even keeping your job without this.

While some industries acquired new customers during the pandemic, many organisations had to focus harder on keeping existing customers. Now we’re going back into growth mode and looking forward, are you concerned organisations will tip the balance from retention back to acquisition?

Pasto: There are several factors that go into a growth formula. Acquiring customers is one of those levers, and many organisations traditionally think of that. But keeping the same customers and increasing your share of wallet is another effective way of achieving growth – and it’s often more sustainable. Successful companies with strong alignment between brand promise, the type of customers they attract and the way they deliver on customer experience are the ones that over time, have the strongest customer loyalty.

In times of disruption, consumer confidence usually goes down. Even though you keep or acquire new customers, if they’re not confident to spend, the share of wallet will be minimum. So it’s worth considering all factors that go into that growth model. The problems arise when organisations think short-term about acquisition and just constantly replenish a bucket that’s leaking water everywhere. It’s about attracting customers that are a good fit for your organisation.

We know fostering customer trust has been elevated as a priority off the back of rising data-driven engagement. How do you see this factoring into CX programs and thinking?  

Pasto: Trust is a very old concept and at the base of human interaction. It’s also fluid – the moment you start trusting someone or something, you shift trust towards them. For example, you may trust the government less and friends or a business more.

Credit: Forrester


A couple of years ago, a group of Forrester analyst started a new line of research on trust and established a ‘trust imperative’. This broad framework features levers or ingredients that make up trust such as accountability, competence, consistency, empathy and so on. Fast forward to 2022 and Forrester is translating that broad concept into something usable for different verticals.

For example, we have developed a model specific for financial services, looking at how trust is influencing advocacy and likelihood to forgive. This is about understanding the positive outputs of trust for financial services. In parallel, I am working with my colleague, Sam Higgins, on a government model. Australia is the pilot study and we’re aiming to release something in May alongside the Federal Elections. By the end of April, we will have data globally from the US and several European countries.

With government, our aim is to identify the ingredients but also positive outputs that are mission critical behaviours. In some ways, it’s similar to what we measure in the CX Index, such as compliance and engagement, but it’s also about a consumer’s willingness to share personal information beyond what is mandatory. This is critical for government initiatives that requires willingness by citizens to download things and participate.

We know the quality of CX impacts trust and forgiveness from our CX Index, but it’s not the core part of the model there, it’s a variable. That’s why we’re looking at creating a trust score model feeding into the wider CX equation.

What else can you share about this year’s Forrester CX agenda and how it’s fuelling ongoing conversation around CX imperatives?

Pasto: We have US analyst, Su Doyle, flying in to be with us to talk about organisational outcomes and tying CX to business results. She’ll be sharing her personal journey as well as several Fortune 100 examples on how these organisations are focusing on the customer, and positive outcomes they have achieved from that, to help with how we link CX to business outcomes.

Another of our analysts,Vasu Srinivasan, who is our customer service, contact centre automation expert, is talking about the intersection of technology with the human. It’s about using automation in a smart way so we elevate the importance of human customer service representatives.

Zhi Ying Barry, who covers the financial services space, will focus on designing experiences for emotion. That’s about customer understanding but also a deep drive into the emotional angle and how organisations can identify moments that matter in the journey for emotion and design for them. Amit Bhatia will also present on the linkage better CX and employee experience. He’ll highlight about firms who linked both of these how they deliver business results as a result.

I’ll be talking about customer complaints management and the intersection between negative feedback and service recovery, incorporating components of customer service and insights. This is timely for Australia with new regulations kicking in at end of last year in financial services, for example.

From a brand perspective, we’re also being joined by Tina Morrell, who looks after CX at NRMA Roadside Assistance and its voice of customer (VOC) program. She’ll talk about the business transformation she’s been leading for several years and how focus has shifted onto ways of working and how we structure teams to action insights that come out of the VOC program, such as cross-functional squads and agility initiatives.

Is the progression from CX insight in one silo to action cross-functionally the natural progression brands must make in this quest to transform around the customer?  

Pasto: Different organisations have their own challenges but to generalise, it’s fundamentally the journey. We’re not saying we have to demolish all organisational silos; that’s impossible. Organisations are built on sub-entities. The problem is when those entities don’t work well together. That goes back to outcomes – they often are not aligned and don’t follow the same business agenda or make technology decisions together.

A typical CX professional or chief customer officer isn’t the final decision maker when it comes to tech or many other decisions. But they are a huge influencer. That’s the role of the CX professional. And these ingredients don’t work separately – you can’t for example look at measurement and outcomes and not change the way people work, or vice versa. It’s about building out the whole picture.

The Forrester CX APAC event returns to Sydney on 10 and 11 May 2022 in-person as well as via livestream. Use the code 'SAVE' to access your special CMO ticket offer of $200 off your purchase. Check out the agenda and secure your ticket to the event here.

 

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