Businesses That Excel at Customer Experience Mgmt Lead in Profitability

27 07 2007

Research conducted by Peer Insight, LLC show that businesses who focus on designing systems to create and maintain a compelling customer experience also deliver better profits than businesses who focus on operational excellence.

Looking at the chart above:

Customer experience (cX) leaders are companies that deliver value through the experiences they create around their products and services (e.g. Starbucks)

Operational Excellence (Op-X) leaders excel at the efficient and productive delivery of their product or service (e.g. Wal-Mart)

When you compare the financial growth of cX leaders with the S&P 500, the results are show that a hypothetical $1K investment in a customer experience portfolio would outperform the S&P 500 by a 10 to 1 margin from 2000 through 2005.

Peer Insight studied 104 distinct service innovation projects. They found that the use of Customer Experience Design was a key differentiator between success and mediocrity.

Their study entitled “Seizing the White Space: Innovative Service Concepts in the US,” presents 12 case studies of companies who have successfully developed new service concepts and service businesses (one features NineSigma an open business model service we featured in an earlier post).

Using the “ten types of innovation model” developed by the Doblin Group (see below), Peer Insight contrasted each of these companies approach to innovating their customer experience.

The most successful companies included these approaches to designing compelling customer experiences (bold highlights provide links to previous posts on this subject):

Minnesota Public Radio Proves Open Innovation Journalism Works

26 07 2007

Their most famous product may be the Prairie Home Companion with Garrison Keillor, but in the future we may come to know Minnesota Public Radio (MPR) as the innovators that launched “Public Insight Journalism.”

MPR, like others from earlier posts such as Gannett and the BBC, are developing new ways to design, produce and distribute news with the active participation of their news consumers.

Why are these news organizations inviting their customers to participate? MPR believes it solves an old problem of capacity and sourcing:

Our journalists are always trying to find the best sources and the best information to tell their stories. But there are few of us, and so many people who have good information and insight that they have acquired through their jobs, hobbies, contacts, friendships or life experiences.

Until recently, we have lacked the ability to ask many people to share what they know with us on any given story. Now, e-mail and the Internet have enabled us to quickly and efficiently communicate with hundreds, even thousands of people, within minutes. Those same technologies also enable us to keep track of information in a central database that we can build into a powerful storehouse of intelligence.

To date thousands of listeners have signed up to participate to help make the MPR news product better. Unlike the Wired/Assignment Zero magazine attempt to co-create news with its readers which was not as successful, MPR has a clear process for engagement throughout the news development process to ensure quality and accuracy that marries the best traditions of professional journalism with the real-time access to expertise and knowledge of their audience.

  • They use the knowledge, observations and expertise people provide to inform their news coverage.
  • A newsroom analyst will take the information, connect it with other relevant intelligence and pass it on to the appropriate reporters and editors. They do not share any personal information received outside of the MPR newsroom and never quote anyone on the air or online without first getting their permission.
  • Reporters and editors decide what information they deem relevant or important. If the information you provide interests them, they will follow up with an e-mail or a phone call.

MPR, BBC, and Gannett are demonstrating the potential of open innovation and the importance of adapting old production models to permit more creative self-expression for the consumer and the news organization while delivering product quality of the highest caliber.  It is also a customer intimacy strategy that keeps the consumer actively engaged in the product they consume.

You can read more about MPR, public insight journalism and their network here.

Further Evidence Wikis and Blogs More Productive Than Email

25 07 2007

Social Computing News reports how another company (this time Motorola) is increasing productivity and communication by relying less on email and more on a variety of networking tools like wikis and blogs.

“Intranet 2.0″ came onto the radar when Motorola’s VP of IT strategy told VisiCalc inventor Dan Bricklin in an interview that Motorola, #49 on the Fortune 500, has almost 2,000 internal wikis, and 2,700 blogs used by 60,000 of their 68,000 employees daily.

Of the 60,000 people, 4-5,000 contribute content everyday.  Efficiency and productivity cited as reasons for deployment.


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