Forrester: Unique customer obsession expression key to growth
- 11 May, 2021 14:28
Customer obsession is the end-to-end organisational approach companies should be embracing to help them make the choices that ensure today’s economic climate is one of the best of times, rather than the worst.
That’s the view of Forrester VP, principal analyst for CMOs, Shar VanBoskirk, who spoke at today’s Forrester CX APAC virtual summit on the distinguishing features of customer obsession over traditional customer experience management, and how brands can better build this muscle in a way that matches the values and needs of their distinct customer bases.
As VanBoskirk pointed out, the last 12 months saw a raft of industries experiencing unexpected demand amidst the challenges of the COVID-19 global pandemic. While market forces certainly impact business conditions, she argued the factors organisations can control, such as business operations, financial savviness, facilities and brand reputation, have just as much influence on a firm’s success.
“For example, Enterprise Holdings, the parent company for rental company brands such as Alamo, National and Enterprise rent-a-car, invested in digital channels to continue to deliver high-touch experiences its brand were known for,” VanBoskirk said. “This allowed it to thrive even as the pandemic stunned the travel industry. Things like contactless pickup and drop-off allowed it to keep up with demand and service customers in the pandemic.
“It was by making good choices that Enterprise Holdings’ leadership was able to counter strong external forces toppling its competitors.”
Embracing customer as a business strategy
For Forrester, the key to making good choices is whole-heartedly embracing a framework for customer obsession. The analyst firm defines ‘customer obsession’ as putting the customer at centre of leadership, strategy and operations.
VanBoskirk said this framework should help determine what within an organisation’s leadership strategy or operations should change, and by how much, “in order to create customer value while also being true to your brand strengths”.
According to the Forrester framework, four core pillars drive customer obsessed organisations. The first is being customer-led, rather than just customer aware.
“It might sound like a nuance, but it’s an important one. A company that is customer-led uses customer understanding to guide decisions,” VanBoskirk explained. “It’s not just about knowing who your target market is, but using identified customer needs to direct all business decisions, such as who you hire, physical location, product creation and services to offer.”
The second pillar is to be insights driven, not just data rich. “I don’t have a lot of companies saying they don’t have enough data; they have ample data supply,” VanBoskirk continued.
“The challenge is making sure data they have is the right data to help them be insights-driven. Another dimension to this is making sure right people in the organisation have access to the key insights they need to be customer-led.”
VanBoskirk’s third pillar of customer obsession is to be fast rather than perfect. “This is not an excuse to be irresponsible; working fast doesn’t mean you shouldn’t be thoughtful,” she warned.
“It’s a call to be iterative and getting something out and developed at speed your customers need it, then changing, evolving and improving as you watch how your customers use what you put into the market.”
Fourth is to be connected and avoid organisational siloes. This firstly means pulling down the barriers between all groups in the organisation trying to serve the customer. But it’s also thinking through how you change communication, process, and the way you talk and collaborate with colleagues in the name of the customer, she said.
By way of example, VanBoskirk highlighted Australian insurance brand, NRMA, as striving to drive customer value through its corporate mission and brand promise: Help is who we are.
“NRMA has a customer manifesto to describe why it exists and what it promises to customers. And it operationalises this promise into a playbook defining every function across the enterprise,” she said. It’s this approach that saw NRMA offer free roadside assistance, car hire and accommodation to emergency workers during the height of the crisis, she added.
Van Boskirk pointed out customer obsession isn’t just good for end customers, it also has positive commercial impact. For one, Forrester has found customer goodwill increases with customer experience maturity, with 1.4 times more customer-obsessed companies than non-obsessed ones saying their customers trust their companies.
The analyst group has also found 82 per cent of employees at customer-obsessed firms are ‘extremely likely’ to stay with their employer versus just 13 per cent of those in only customer-aware companies. In addition, revenue growth across customer-obsessed organisations is experienced at a 2.5x times higher growth rate than non-customer obsessed firms.
Finding your distinct customer expression
Yet according to Forrester’s research on maturity, there are no more organisations who could reasonably be labelled ‘customer obsessed’ than there were in 2019, even as awareness of its benefits has increased.
“It’s a good idea that’s easy to agree with but hard to do,” VanBoskirk admitted. “What’s more, many see this as being about a customer concern, than a business strategy. But that’s comparable to playing whack-a-mole… often organisations get stuck fixing lousy social media or customer satisfaction scores instead of seeing this as a holistic strategy.
“Many organisations also exhaust resources trying to be Zappos, which is known for its high customer service. While delightful, this approach is neither scalable nor necessary for every company. If you judge a fish by ability to climb a tree, it will spend its whole life believing that it’s stupid.”
By contrast, VanBoskirk said one key to being customer obsessed is to first find your expression of customer obsession.
“This is about determining the type of value your firm will be to your customers,” she said. “For example, before Delta airlines launched improvements like mobile luggage tracker, it looked to improve processes to get customers more value. That meant stacking repair stations with common repair parts, and pushing planes back at 45 degree rather than 90 degrees to get off the gate 2 to 3 minutes faster. All of this originated with improvements to maintenance repair operations.
“Customer obsession is not the same for every company. You can be a successful fish even if you can’t climb a tree.”
To get there, VanBoskirk advised organisations to look at three common expressions of customer obsession and find their strong suit: Count on us, which is about reliability; at your service, which is about high levels of customer service; and at your side, which is about advocacy.
Referring back to NRMA as an example of a company that’s advocacy led, VanBoskirk noted the brand doesn’t just offer insurance and roadside assist, it also offers free and confidential counselling to help customers deal with the emotional issues associated with property loss. Another Australian brand, Bendigo Bank, has made advocacy its core emphasis and invested some $229 million of the proceeds made on home loan back into the local community.
“Customer obsession is more than CX. This will help you make the choices you need to so you ensure this will be the best of times, not the worst of times,” she added.