Harley Manning - Outside In: The Power of Putting Customers at the Center of Your Business

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Text copyright 2012 Forrester Research, Inc.
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No part of this book may be reproduced, or stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without express written permission of the publisher.

Published by Amazon Publishing
P.O. Box 400818
Las Vegas, NV 89140

ISBN-13: 9781477800089
ISBN-10: 1477800085

Cover Design by Faceout Studio
Book Design by Brian Moore

To the members of Forresters customer experience team, past, present, and future

Y OU ROAM THE aisles of a drugstore, seeking a cold medicine. You hear, but cant quite make out, announcements at the gate as you wait to board your flight. You tap on a smartphone app seeking up-to-date information about your investments.

These experiences are the stuff of everyday life. They are the ways you experience the companies you buy from, trust your safe travel to, invest withand they create a lasting impression that leads to whether or not you want to continue doing business with them. What Ive learned from Outside In is that, more than any other factor, these customer experiences determine whether companies thrive and profit or struggle and fade.

The research in this book comes from Forrester Research, a company with over two hundred analysts dedicated to helping business professionals make better decisions in a world where technology is radically changing companies relationships with customers. Among all of those insights, Harley Manning and Kerry Bodines customer experience research stands out. Why devote a book to this topic? First, because after fourteen years of research, our customer experience practice can now effectively prove that customer experience makes a huge difference. (Check out the analysis in .) And finally, because the six central disciplines of customer experience, once you master them, can create a sustainable, hard-to-duplicate competitive advantage that sets your company apart from its competitors.

Heres a quick guide to the content in this book.

The first three chapters form explains the customer experience ecosystem.

The heart of the book is , which takes you into the six disciplines of customer experience: strategy, customer understanding, design, measurement, governance, and culture. Theres a chapter on each discipline, illuminated with case studies that explain how to master it.

The end of the book, , includes three chapters that explain the path companies take as customer experience becomes central to their business, the emerging role of the chief customer officer, and how customer experience will determine which companies succeed in the future.

Harley Manning, Kerry Bodine, and the customer experience team at Forrester have been working closely with companies around the world on all these elements of customer experience. They know what it takes to get real companies with real business challenges to change the way they do business. Thats good news for your company, and its great news for all of us customers, too.

Josh Bernoff, Forrester Research
Cambridge, Massachusetts, May, 2012

K EVIN PETERS SAT alone in his car in the rain, watching the entrance of an Office Depot store. He was wearing a baseball cap and a well-worn pair of jeans.

Over the course of the last half hour hed watched one customer after another emerge from the store. None of them carried a shopping bag. On their way out, they walked past an Office Depot employee leaning against a wall under the awning, smoking a cigarette out of the rain.

Kevin was torn. On the one hand, he didnt want anyone to know he was there. As the president of Office Depots North American retail division, hed come to this parking lot in New Jersey on a gray, dreary day to get a firsthand look at how customers experienced one of his stores. His method, already followed at dozens of other locations, was to observe customers coming and going, then enter, walk the aisles, and talk to customers about whether they were finding what they needed and how they liked the store in general.

The success of each visit hinged on the store manager not knowing he was there. Kevin wanted to see the store as a customer on a shopping trip, not as an executive on an inspection tour. But this situation was too much. Frustrated customers were leaving without products while one of his employees not only ignored them but laid down a cloud of tobacco smoke for them to walk through on their way out the door. Should he blow his cover by telling the manager to get his slacking employee back in the store to help shoppers?

Kevin made a decision: This couldnt stand. There was no way he was going to sit idly by and watch his business erode one customer at a time. He abandoned his undercover plans, got out of his car, and walked into the store on a new mission.

Because hed planned to go incognito, Kevin hadnt bothered to find out the name of the store manager. But he knew that every retail location has a stanchion near the front of the store with a picture of the manager and, right under it, this service promise: If you are not satisfied with your shopping experience, please see me or another manager on duty. Kevin walked over to the stanchion, looked up to see what the store manager looked likeand found a picture of the smoking employee outside.

When he tells this story you can see very real pain in Kevins face and hear it in his voice. The darn store manager! The person with whom we trusted our customer relationship. He pauses and repeats, The person with whom we trusted our customer relationship.

What underlying problem brought Kevin hundreds of miles away from his executive office in Boca Raton, Florida, and into one of his own storesin disguise?

The story began months earlier when Kevin first got the job of president. It wasnt a great time to take over the helm of a retail chain. The economic downturn that began in 2008 had not been kind to retailers in general, and Office Depots store sales had declined even more than those of its competitors.

What puzzled Kevin was that, even as sales declined, Office Depots mystery shopping scorescompiled by a third-party research firmwere going through the roof. How could this be? How could customers be having a great in-store experience while not actually buying anything? The answer clearly didnt lie in Office Depots Boca Raton headquarters, so Kevin set out to find it in the stores.

Kevin visited over seventy locations across the United States fully expecting to find a differentiated experienceone that set Office Depot apart from other office supply stores and big box retailers. He didnt. Instead, the experiences he found ranged from, in his own words, poor to fair and, on a few occasions, good. But never good enough to truly differentiate Office Depot from its customers other options.