Chapter 11Customer Experience and Relationships

We've discussed processes and resources, products, services, and solutions, but what about customers? Customers are obviously important to business success, but beyond the fact that they are the ultimate source of revenue, why do the customer experience and customer relationships matter?

It helps to understand what customer experience is. Forrester Research vice president and principal analyst Kerry Bodine and research director Harley Manning use a three-layer approach to what they call the customer experience pyramid.1 For an excellent customer experience, they argue that a product or service must first meet needs—that is, deliver what we earlier called the core benefit. After all, tasty snacks and courteous flight attendants won't matter much if the airline flies you to the wrong destination.

In addition, though, they argue, it must be easy and convenient, and then, ideally, must be enjoyable. While there are other ways to evaluate customer experience, Forrester's customer experience index then averages the net difference between customers that report good experiences versus those that report bad experiences in each area. In a six-year period that included the recent recession, while the S&P returned 14.5 percent, customer experience leaders' stocks returned three times that—43.0 percent—whereas laggards' lost 33.8 percent.2 Correlation doesn't imply causality, but there are numerous examples of companies that have radically ...

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