Two Surprising Reasons Why Improvement Slows

Twenty years ago Harvard Business Review published the groundbreaking article, "Welcome to The Experience Economy." It argued that, in the coming years, companies that delivered the best overall customer experience would best be able to differentiate their offerings and charge a premium price for them, leading to growth and success for the organization. Over the past two decades, this bold prediction has played out, with companies like Zappos, Nordstrom, Southwest Airlines and USAA delivering outstanding customer experiences along with industry-leading growth.

But all that momentum recently slowed. After a continuous upward march that started in 1997, the American Customer Satisfaction Index, which measures aggregate average consumer experience satisfaction, reports that it has seen no growth beyond the level hit in the fourth quarter of 2015. How can it be that, despite continued investment in technology, training and systems to improve customer experience, companies have hit a wall in actually improving that experience?

This week, Promotional Consultant Today shares an in-depth, five-part series on what to do if your company has hit that wall, with insights from various customer experience experts.

There are two key reasons that can cause you to hit the customer experience wall, said Forrester Principal Analyst Rick Parrish in a recent Forrester podcast.

Reason 1. Not keeping up with rising customer expectations. Consumers don't compare a company's customer experience against that company's industry competitors. A company's customer experience is compared against all customer experiences delivered across all industries. Realistic or not, when Netflix offers the consumer suggestions for other shows she might like based on what she has watched, the consumer expects the same predictive experience on car repairs she will need from her mechanic. Thus, the experiences being delivered by a few leaders are fueling expectations that most companies are having difficulty fulfilling.

Reason 2. Hitting an operational wall past the low-hanging fruit. When starting out on the customer experience journey, most companies will first find the major breaks in the consumer experience and fix those. As time goes on, the company runs out of breaks to fix and the next step to continue improving the consumer experience requires a core organizational change to support additional consumer experience gains. Forrester observed that companies are finding it much more difficult to transition the organization to make consumer experience a strategic priority.

Tomorrow's Promotional Consultant Today will continue this series with a look at the recent stagnation of customer experience and four dynamics that are critical to success.

Source: Rick Parrish leads Forrester's research on CX management maturity, CX vision and strategy, and government CX from his office in Washington, D.C. He serves customer experience professionals in the government and private sector. His research helps organizations in all industries focus and organize their customer experience ecosystems around CX improvement.

filed under April 2018
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