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WHY READ THIS REPORT
In todays age of the customer, frms need to build customer experience into the overall company strategy
rather than bolting it on as an aferthought. To align employees and partners, customer experience leaders
need to help their frms prioritize target customers, reframe value propositions, and craf a clear vision for
what the company seeks to achieve. Forrester has identifed tools that help leaders engage key stakeholders
in closing these strategy gaps.
Five Tools To Close Customer Experience
Strategy Gaps
by Paul Hagen
with Harley Manning and Curt Nichols
JUNE 9, 2014
STRATEGY GAPS UNDERMINE CUSTOMER EXPERIENCE EFFORTS
In the age of the customer, frms need a new approach to competition that puts customer experience (CX)
at the center of their overall company strategy.
1
To make this pivot, strategies in the age of the customer
should provide a customer-centric vision for the organization, focus the company on customer-centered
diferentiation, and provide specifc guidance on how to serve customers. Unfortunately, many company
strategies fail at some of these basics. Firms struggle to improve CX because their strategies:
Lack a sense of urgency about customer experience improvements. CX initiatives can easily get lost
among other more established types of business eforts like improving operational efciency or trying
to penetrate a new market.
Fail to identify target customers they can win, serve, and retain based on CX. Companies dont always
factor customer experience into how they identify target customers. When that happens, frms can fnd
themselves trying to satisfy buyers who are a mismatch with the experience the company delivers.
Construct inside-out value propositions. Firms that frame value propositions in terms of products or
internal value focus employees away from the value that customers seek.
Dont provide sufcient CX guidance to employees. Vague brand statements like our aim is to
delight our customers with every interaction leave executives, managers, and employees to their own
interpretations of what delight should look and feel like.
Dont align marketing and IT behind delivering a great experience. When technology leaders
drive an agenda that internal efciency and cost savings dominate, they focus on improving todays
operational environment and risk overlooking capabilities required to deliver new value propositions.
2
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Five Tools To Close Customer Experience Strategy Gaps 2
2014, Forrester Research, Inc. Reproduction Prohibited June 9, 2014
Tools Can Help Companies Close Customer Experience Strategy Gaps
Although these problems are serious, customer experience leaders have solved them. To help
companies with lower levels of customer experience maturity, Forrester has identifed and adapted
fve tools that customer experience professionals can use to close their frms strategy gaps.
Create urgency with STEER CX. CX leaders need to identify the issues that require a frm
to immediately focus on customer experience.
3
Tey can do this by conducting an analysis of
social, technological, economic, environmental, and regulatory (STEER) elements to highlight
the macroeconomic factors that make customer experience an urgent priority (see Figure 1).
4

Duke Energy conducted a macroeconomic analysis to identify the factors afecting its business,
including regulatory changes, new economic conditions that spawn competition from industry
outsiders, customers changing expectations, and a $4 billion market opportunity (see Figure 2).
Prioritize customers with needs-based targeting. Strategies must focus a company on the
customers whom it can serve best . . . and those whom it should not acquire in the frst place. A
needs-based prioritization tool helps CX leaders align stakeholders across the company around
the buyers whose needs and motivations the frm has the best capabilities to serve (see Figure 3).
Te China division of a global building products company used this kind of approach when it
made a hard choice to stop selling to low-margin price-focused buyers. Instead, it targeted frms
that sought high-performance products and technical expertise. Te result: a 22-point jump in
Net Promoter Score along with a 24-point jump in average wallet share.
5
Defne value propositions in customer terms with the jobs-to-be-done frameworks.
Firms must articulate a value proposition in terms of how the organization helps customers
accomplish goals. Customer jobs-to-be-done tools like a value proposition canvas help
companies discover the contexts and objectives that motivate customers (see Figure 4).
6
With
this tool, frms can zoom out to discover strategic opportunities to serve clients and zoom in to
identify more tactical opportunities to improve the experience.
7
Intercom, a mobile messaging
service, frames every design problem as a customer job and looks for the triggering event and
the customers desired outcome.
8
Craf a customer experience vision with an it-feels/it-means model. Every company needs a
vivid description of the intended experience to act as a North Star that directs how employees
and partners perform their work. Southwest Airlines created an It-Feels/It-Means model
to articulate the CX it seeks to deliver to customers. To create your own North Star, write
down how youd like your customers to describe the intended experience in their own words
(see Figure 5). In the it-means section of the model, describe the guiding principles for how
employees should deliver the desired experiences.
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Five Tools To Close Customer Experience Strategy Gaps 3
2014, Forrester Research, Inc. Reproduction Prohibited June 9, 2014
Drive business technology capabilities with CX ecosystem mapping. CX leaders need to
create links to their business technology (BT) counterparts to ensure that systems support
the intended experience. A customer experience ecosystem map can help achieve this goal by
documenting the explicit connections between people, processes, and technologies within a
frm on the one hand and what a customer actually experiences on the other hand (see Figure
6).
9
USAAs shif from selling auto loan and auto insurance products to selling a carbuying
solution based on a journey highlighted redundant technology capabilities (e.g., fnancial
applications for insurance and a loan) as well as new capabilities needed to serve customers (e.g.,
car inventory at dealerships, digital applications to confgure a car).
10
Figure 1 STEER Analysis For CX Helps Companies Create A Sense Of Urgency
Source: Forrester Research, Inc. 113651
Regulatory Social
Why CX now?
Economic
Environmental Technological
Which social factors are changing customers needs or expectations?
What technology conditions are affecting the way your customers
do business with you?
Which economic factors are changing the competitive landscape?
(How is the defnition of your market changing?)
Which environmental factors are changing your companys goals?
What regulatory changes affect the way your customers interact with your frm?
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Five Tools To Close Customer Experience Strategy Gaps 4
2014, Forrester Research, Inc. Reproduction Prohibited June 9, 2014
Figure 2 Duke Energys Macroeconomic Analysis Created Urgency For CX
Source: Forrester Research, Inc. 113651
Duke Energy is being squeezed by many forces that are disrupting our
traditional business . . . what does this mean to us?
New competitors
from outside
industries entering
the market
Declining satisfaction
potentially inhibiting
additional product
and service sales and
increasing cost-to-
serve
Source: Duke Energy
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Five Tools To Close Customer Experience Strategy Gaps 5
2014, Forrester Research, Inc. Reproduction Prohibited June 9, 2014
Figure 3 Prioritize Customers Based On Teir Motivations
Source: Forrester Research, Inc. 113651
C
o
m
p
e
t
i
t
i
v
e

s
t
r
e
n
g
t
h
High
Low
High Low
Attractiveness of segment
Source: B2B International website (http://www.b2binternational.com/publications/b2b-segmentation-research)
Price-fxated
buyers
Cutting-edgers
Conventionalists
Innovators
Operational
zealots
Needs-based
segments
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2014, Forrester Research, Inc. Reproduction Prohibited June 9, 2014
Figure 4 Jobs-To-Be-Done Frameworks Orient Value Propositions On Customers
Source: Forrester Research, Inc. 113651
Source: Business Model Alchemist website
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2014, Forrester Research, Inc. Reproduction Prohibited June 9, 2014
Figure 5 Southwests It-Feels/It-Means Model Helps Guide Employees
Source: Forrester Research, Inc. 113651
Intuitive
Instinctive and hassle-free
Like Southwest has anticipated
the aspects of my travel journey
The experience is straightforward and
clear and doesnt require extra thought
Processes are smooth and things just
make sense
It means . . . It feels . . .
Source: Southwest Airlines
Figure 6 CX Ecosystem Mapping Helps Align Marketing And BT
Source: Forrester Research, Inc. 113651
Source: Mulberry House Consulting
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Five Tools To Close Customer Experience Strategy Gaps 8
2014, Forrester Research, Inc. Reproduction Prohibited June 9, 2014
RE COMME NDAT I ONS
ENGAGE THE PLAYERS IN THE ECOSYSTEM TO FILL STRATEGY GAPS
Te tools described above are meant to actively engage a wide breadth of stakeholders across the
ecosystem employees, customers, and partners in the strategy building process. Use each tool
in interactive work sessions to:
Align leaders. As part of creating a vivid description of the intended experience, the
customer experience leader at a pharmaceutical company invited representatives from
multiple business units to participate in vision sessions. Te sessions forced participants to
grapple with diferences as well as to fnd common ground across the divisions.
Involve partners. Partners need to see a holistic picture of customers relationship with a
company. Caterpillar identifed a European dealer with which it had chemistry to pilot a
redesign of how it delivered some of its services. Te pilot started with face-to-face customer
interviews and service blueprinting to identify operational changes. Te result: a 20%
improvement in customer satisfaction.
11
Include customers. Customers can be high-value participants in the use of the tools we
described. A voice of the client (VOC) leader at United Healthcares OptumHealth services
invited customers to self-select into segments based on needs, such as the propensity to partner
with the frm and not spending level or size. Te new needs-based segmentation helped the
frm align funding levels and investments to the actions that drove the best outcomes.
ENDNOTES
1
Firms perform better fnancially when they focus on customers instead of products. See the May 20, 2014,
Customer Experience Strategy: Build It In; Dont Bolt It On report.
2
Te challenge of systematically understanding and serving customers derives from the fact that increasingly
powerful customers enjoy the freedom to take whatever journey suits their perceived need. See the October
10, 2013, Technology Management In The Age Of The Customer report and see the October 21, 2013,
Linking Customer Engagement To Business Capabilities In The Age Of The Customer report.
3
Tese could range from an existential crisis from new competition and churn to an opportunity to grow.
4
Forrester adapted the analysis by having frms focus the analysis on the ways in which macroeconomic
factors afect the companys ability to deliver value to customers (e.g., technology factors that change the kind
of value proposition a frm delivers, regulatory factors that increase competition and thus customer choices).
5
Net Promoter, Net Promoter Score, and NPS are registered trademarks of Bain, Fred Reichheld, and
Satmetrix Systems. Source: Bain (http://www.bain.com/search.aspx?q=Net+Promoter); Satmetrix Systems
(http://www.satmetrix.com/).
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Five Tools To Close Customer Experience Strategy Gaps 9
Forrester Research (Nasdaq: FORR) is a global research and advisory rm serving professionals in 13 key roles across three distinct client segments. Our clients face progressively
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located at www.forrester.com. Information is based on best available resources. Opinions reect judgment at the time and are subject to change. 113651
6
Gains describe the outcomes that customers expect; pains describe negative emotions or obstacles
associated with customers trying to do the jobs.
7
Customer jobs-to-be-done models also help company leaders identify which customer journeys to map.
8
Source: Paul Adams, Te Dribbblisation Of Design, Inside Intercom (http://insideintercom.io/
the-dribbblisation-of-design/); Paul Adams, How We Design At Intercom, Inside Intercom (http://
insideintercom.io/how-we-design-at-intercom/).
Te jobs-to-be-done framework originated with Clayton Christensen. Source: Clayton Christensen Institute
(http://www.christenseninstitute.org/key-concepts/jobs-to-be-done/).
Alan Klement has a compelling approach to framing problems to design based on customer job stories.
Source: Alan Klement, Replacing Te User Story With Te Job Story, Medium (https://medium.com/the-
job-to-be-done/af7cdee10c27).
9
Forrester defnes the customer experience ecosystem as the complex set of relationships among a
companys employees, partners, and customers that determines the quality of all customer interactions. See
the February 28, 2013, The Customer Experience Ecosystem report and see the February 26, 2013, How
To Map Your Customer Experience Ecosystem report.
10
Source: Martin Mocker and Jeanne W. Ross, USAA: Capturing Value from Complexity, MIT Sloan
Management Center for Information Systems Research, March 22, 2013 (http://cisr.mit.edu/blog/
documents/2013/03/22/mit_cisr_wp389_usaa_mocker-pdf/)
11
Treat the partner ecosystem as an extended workforce. See the October 11, 2013, Engage B2B Partners To
Deliver Unified Customer Experiences report.