Penny dropping on customer experience and profits
Temkin Group has released its new research report, The Future of Customer Experience. The research examines how customer experience (CX) management has evolved and where it is heading.
The research shows that 59% of large companies have ambitions to be industry leaders in customer experience within three years. At the same time, Temkin Group estimates that there are more than 100,000 people in North America employed in full-time customer experience roles.
Based on this significant ambition and the development of customer experience tools and techniques by the growing pool of customer experience professionals, many companies are building stronger overall customer experience management capabilities.
“Customer experience has hit a tipping point, with a critical mass of professionals defining repeatable practices and delivering strong ROI to their firms,” states Bruce Temkin, author of the research and Managing Partner of Temkin Group.
The report highlights that companies are being motivated by a clearer understanding about the link between good customer experience and stronger business results. Temkin Group completed a study of 10,000 consumers that shows a strong correlation between CX and loyalty across 18 industries in the U.S. The report reveals that a company with $1 billion in annual sales can generate more than $300 million over three years with a modest improvement in customer experience.
As organizations improve, the Temkin Group report shows that they typically evolve through six stages of customer experience maturity:
1) Ignore: The company does not see customer experience as a key differentiator.
2) Explore: An ad-hoc group is established to understand how the company can improve customer experience.
3) Mobilize: A full-time executive leads the effort to improve customer experience and the company establishes a cross-functional governance system.
4) Operationalize: The company redesigns many of its operational processes using clear insights about customers.
5) Align: Customer experience behaviors are widespread across employees and they are supported by the company’s standard measurement and incentive systems.
6) Embed: The company delivers great customer experience without focusing on it explicitly. It comes as a result of the entire organization being committed to the company’s clear sense of purpose.
While companies are gaining customer experience maturity, technologies and processes are enabling new, innovative practices. The research report identifies eight emerging customer experience skills that companies will need to master over the next several years: Journey-centric alignment, mobile-infused experiences, predictive personalization, distributed contextual insights, federated CX capabilities, business rhythm integration, rejuvenated purposefulness, and promoter activation.