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Making User and Customer Experience a Business Competency

by Harley Manning, Forrester Research
18 min read
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Forrester’s Harley Manning discusses customer and user experience strategy.

UX Magazine sat down with Harley Manning, Vice President, Research Director for Customer Experince at Forrester Research at the Forrester Customer Experience Forum. This discussion was part of our ongoing effort to profile business UX leaders so other businesspeople can learn from the examples set by other managers and executives, and so practitioners and consultants can hear about UX from the client’s perspective. You can read more about the Business UX Leaders Series here.

Part 1: What customer experience (CX) and user experience (UX) are, and how they are related

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Part 2: How different departments and professional disciplines such as marketing, IT, business, and design are working together under the banners of UX and CX

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Part 3: What it meanst to make CX and organizational competence, and the importance of being able to demonstrate the economic benefits of UX

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Part 1 Transcript

How do you define user experience (UX) and customer experience (CX), and what’s the relationship between the two?
Manning: Let me start with customer experience, which is sort of a superset. Customer experience, we define as the perception that customers have of their interactions with your organizations, which could be a company, or could be a government, or could be a non-profit, or whatever. So that’s very broad, but it really captures it, we think anyway.
It’s not so much what happened—certainly it’s interesting to know what happened—but it’s, how did you perceive what happened? What’s very interesting when you take that broader view and you look at it on the enterprise level, is that very often someone will have just this great perception of a company and will be very forgiving of problems that they had with a particular channel.
So, for instance, credit unions actually are a great case in point. Credit unions get very highly rated by their customers when it comes to customer experience, and rightfully so because credit unions are on your side. They’re much more on your side than, say, Bank of America. Nothing against Bank of America, but the credit union is there to benefit you; Bank of America ultimately is there to make a profit. Customer experience is a strategy for them, but it’s not their lifeblood. So people say really nice things about their credit unions.
Ever looked at a credit union website? They’re not good. These are relatively small organizations. They don’t have a lot of funding. They’re not able to run out and hire whoever you think is good, whether it’s Sapient, Razorfish, or whatever. They are going out there and they’re doing the best that they can. But people forgive them, because they have this overall great customer experience.
Now, if you look at user experience, that tends to be much more narrowly focused on a particular use case, which tends to be more narrowly focused on a channel—so the user experience of using a website. If you sit someone down and say, “Now, we’re going to go through the user experience of that credit union website,” you’re going to hear a lot of problems, as opposed to if you say, “Well, what do you think of your credit union?”
How did you come to describe your focus as being about “customer experience,” in exactly those words?
Manning: Actually, that’s a great question, because it started out as much more very specifically focused on interaction design and user experience. And then around 2000-2001, we made a decision at Forrester to change it and call it “customer experience” in order to broaden out some of the things that we were looking at.
So, for example, someone who’s interacting with an IVR system, it’s easy to say, “Well, that’s a user experience,” but then when they punch through to the call center agent, now it’s more of a customer experience than a user experience. The thing is neither one of those terms is perfect so you have to make a call one way or the other, and we mostly write for and talk to business leaders. And with them, the words “customer experience” resonate better than user experience.
So you came to CX via UX, but is that typical of what you’ve observed in the broader business community?
Manning: What happens is that you get these groups that are focused on online or interaction customer experience, and sometimes you’re dealing with interactive systems that are what we think of as online. Obviously the most action is on the Web. Those tend to be very different people from those who are involved in the enterprise customer experience.
So the people that we deal with in online customer experience tend to have backgrounds in user-centered design, in ethnographic research, in usability testing, etc. So more of a kind of a background that we might be traditionally used to, and that certainly I was used to when I started getting involved in this field.
The people, interestingly, who are involved in the enterprise-level customer experience more often come from marketing or strategy or sales. Very often, they’re just general business people who really understand their company’s dynamics and for whatever reason they decide that customer experience is the new, important business strategy that they want to be involved in, so they make that move.
On the one hand, it’s really nice and exciting because for years in the user experience area, we’ve always said, “Wow, wouldn’t it be great if the business people became more interested in user experience.” Now, we’ve got our wish. The downside is that, even though these are smart people and highly motivated, they don’t know what they don’t know. So sometimes their enthusiasm runs ahead of what they’re able to actually do effectively.

Part 2 Transcript

As companies reorganize around CX strategies, how are departments and professional disciplines such as IT, marketing, business, and design being mixed together?
Manning: There are no real one-size-fits-all answers to the whole range of questions that that triggers. For instance, we still get people who call us up and they’re all up in arms and they say, “The design team for our website is in IT. That’s wrong, isn’t it?” And my answer is, “It really depends. Do the people in IT understand the role of interaction design, and do they understand that this has all got to serve the customers, and do they have business sense?” Because if they do—and some IT departments do, and maybe you, dear marketer, don’t understand some of that stuff as well as you might—then perhaps it should remain exactly where it is over in IT.
So it’s really about who has the understanding, who understands that you have to start with a business goal and identify a customer segment or user segment and then understand them, understand their needs, meet those needs. Companies are at all different levels of understanding of this. Even smart people, they in the realm of they don’t know what they don’t know.
So if we then break it down, when I look at some of the more advanced companies that we worked with, they’ve done an increasingly good job of breaking down business–IT barriers. For example, at FedEx they had this My FedEx track your package application. It’s all personalized and the team that then turned that into this Flex application and then turned it into a desktop widget, and then turned it into their iPhone app, includes a couple of IT guys who are on the team full-time. There’s this really nice partnership—they and the business guys talk each other’s language, they collaborate really well. In fact, it was the lead IT guy on the team who, as soon as the iPhone developers kit came out, said, “Hey, you know that widget that we made for the desktop? Well, we can use the same services that feed that and its footprint is actually very similar to the footprint of an iPhone app, so we can have one really quickly.” They got that thing out in two and a half months.
So they are full believers and enthusiastic supporters of a very close and respectful partnership between business and IT. You get something similar going on at USAA—another company that I think are real leaders in this space—where they have an innovation team of coders who just work on projects that are challenging and require some out-of-the-box thinking and doing some things other than working with their seven or eight major types of backend systems have, because they’re a diversified financial services institution, so they’ve all got legacy systems. So you have this innovation group and, again, the business people really understand and respect what that innovation team of developers do.
It still seems like there’s a hard separation between design and business. Will this lessen, or is it here to stay?
Manning: I think if that problem were going to go away, it probably would have been showing signs of going away. Don Norman used to complain about this 7 by 24. I don’t know if you remember this, but for a while he was saying, “All you UX people, what you should do is go back to business school and get MBAs and come out and run companies, and then design will conquer all.” That pretty much didn’t happen because, for the most part, if you’re really interested in design, you kind of want to keep doing design. In fact, this is one of the difficulties we have in hiring analysts who can cover interaction design. For the most part, you can hire a designer to do that because they want to design.
Similarly, business people, most of them you really don’t want to invite to design. You wouldn’t be happy with what happens. So I think there’s this necessary dichotomy—it’s a different skill sets, There’s different sensibilities, it’s a different way of thinking in many ways. Really the answer is much more to work on building bridges and getting the design people to have more holistic understanding of the business context.
And let’s face it, because I come out of a design background myself—I was a creative director before joining Forrester in ’98, so I love design—but I’m not going to tell you that all designers are equally fine, nor am I going to tell you that all designers are equally capable of getting that broad picture.
Have you seen changes in the ways business analysts, designers, and engineers are working together during the course of projects?
Manning: What I’m seeing more of recently is that companies are sort of rushing to embrace agile and agile-like methodology. So increasingly what I’m seeing is you’ve got a developer, a designer, and a business person, and they interact in a very frequent basis and they iterate really rapidly, which can get out of hand really fast. But I think that model is a) it’s more of what I’m seeing and b) after being initially very skeptical of it, I am now actually seeing some merit in it, for a few reasons.
One is that as designers, we’ve tried so hard to explain to the business people, with prototypes and increasingly built-up comps, “Here’s what you’re going to get.” And then when you deliver the final product, how often have you heard, “That’s not what I thought I was going to get. What happened?” Whereas with the rapid iteration involving them more and requiring that the business person be available and, “We’re not doing this project if you’re not here every day for it for check-ins,” it’s sort of force-feeding them. It brings them along. It educates them. It gets them to understand enough of what you’re doing, and you, as a designer, understand enough of what their considerations are that you can get to an end result that’s a little better.
The trick there is to not let the IT guy— because they’re not all equally fine (none of us humans are, right?)—but not to let the IT guy sort of blow you past the user-centered design practices that you know you need. You should understand the users before you run off and start coding. But we’re seeing increasing sophistication about being able to meet all those needs.
I don’t know if you’ve ever heard Allen Cooper’s rap on this, that programmers think differently from other people. He refers to programmers as “homologicus.” He uses “programmers” as sort of a shorthand for IT people in general. There’s always going to be, I think, a fundamental difference in thinking between the people who would rather be right than happy, and the people who want to be happy and are willing to compromise on things. You’re probably not going to overcome that, but at least they can learn to co-exist and to accommodate each other’s points of view.
An awful lot of what we do at Forrester is, in fact, playing translator and trying to diffuse this whole, “Those IT guys don’t care about my business needs.” Well, yeah, actually they probably do. They may actually see the means to the end more clearly than you do, dear business person, so don’t dismiss them. And having the IT guys understand, you know, the business guys, maybe they’re not idiots. Maybe they actually sometimes do understand a bigger picture that’s important to understand. Certainly we’ve seen examples of the two groups working together really well, and I think that’s what you have to shoot for, as opposed to trying to turn people into things that they’re not.

Part 3 Transcript

Forrester frequently says that CX needs to be an organizational competence, not just a function. Can you elaborate on that?
Manning: So let’s start out with the thing that doesn’t seem to work. What doesn’t seem to work is having a small or even large customer experience team and saying, “Your job is to change the customer experience and make it good for this entire large organization.” Because then what happens is they own the problem but they can’t effect the solution, because the solution a lot of times is changing behavior of people who are interacting with the customers, changing processes, setting up the right metrics. So that requires a buy-in and collaboration across the organization.
And you get people within the organization who might say, “Oh yeah, I want to be great with customers.” But they don’t really understand how what they’re doing today is not providing a good customer experience. So that’s why we say that customer experience needs to be a competence, not function. Now, the reality is that you can have it as a function, provided that functional unit’s job is to make it a competence. And in very specific ways; not to try to turn people into designers—they’d be terrible designers—but to try and change their behavior in important ways. American Express, for example, they did a program recently where they invested a bunch of extra money in training their call center agents in active listening. So they listened for problems that people were calling in with. Not just the, “My card has this problem.” but additional things that they would talk about. And they suggested aspects of the card that the customer could use.
Now that’s very different from just solving the customer’s problem. It’s solving the customer’s problem, but also pointing to them that there are extra things that they could have that they get. Because who remembers all of the benefits that come with their card right now? Well that caused a really big spike in the customer satisfaction scores of the people that they talked to.
Now if you had a customer experience department saying, “You should do this,” but then you didn’t follow through with the investment in training, and the monitoring of the metrics and separating out the people who had been talked to post-active-listening versus those who hadn’t, you wouldn’t be able to effect change, and even if you did somehow effect change, you wouldn’t be able to measure it.
So that’s why you have to push these kinds of things out and make it a competence across the organization. The end game is to have a customer-centric culture and a set of customer-centric processes, at which point customer-centricity becomes self-sustaining. Like with the USAA guys, they’re on a mission. I mean, they are literally on a mission. They refer to themselves as “mission-driven.” And I believe—and I wouldn’t recommend this— but I believe that if you took half of them out and shot them or whatever and have the other half recruit… That’s not true. Let’s send them off to Tahiti. They all win the lottery, right? And the remaining half recruits a new half. They would go on just like they went on because the new people who came in would get trained into that culture and it would go on and it would be customer-centric.
So that’s very powerful. What it doesn’t do, unfortunately, is it doesn’t then give you the tactics. That’s where the specific skills are still needed. So you need both of those things. You need the customer-centric culture, but then you also need people to actually know what to do to deliver.
Have you seen businesses getting more sophisticated in connecting the value of UX and CX design to quantifiable business outcomes?
Manning: In some respects, that is the question. People who are really trying to effect major change in user experience or customer experience have got to be able to connect what they’re doing to economic outcomes. You don’t necessarily have to turn yourself into an accountant, but you’d better be able to understand, or at least the manager of the function better be able to understand and to translate for the business people, that doing X will produce Y economic result—whatever is the important result that that company measures. Some companies like net present value, some want ROI, some focus on a very single metric, like at Sprint it was reducing calls to Customer Care—one of two big ones—because they know that if people are calling up to complain that something went wrong, and also then it costs them money.
So, like it or not, that is the task that—and frankly I didn’t like it all that much because I had to put myself through this, too—but you have to know not just, here’s what makes a good design, but here’s what makes a good design and when you do this you will move this needle that will result in the cash register ringing in this very specific way. So we need as a group to learn how to do that.
The good news is that some companies are actually getting pretty darn good at doing that. The retailers, while not all equally fine, some of them are actually really good at—especially when you get into, for instance, the far end of the funnel. They’ll redesign a part of their shopping cart and they’re increasingly getting into doing things like multivariate testing, and then saying, “We tried these four approaches. This one produced the fewest number of abandonments and then we tried another one and this one increased additional sales.” So that gradually moved this thing forward in a very meaningful way.
So yeah, I am starting to see companies get more sophisticated doing that ,and thank God. Because it’s so easy to just dismiss what we all do, what we care about, as “Oh, it’s intuitive, it’s user-friendly.” Well, you know, you can’t measure “intuitives” or “user-friendlys.” You can measure dollars and you measure customer defection rates and you measure percent increase in size of orders in a shopping cart. You measure all of those things, so we have to put it in those terms because those are the terms that business people speak.
It’s always possible to backslide. A lot of times, if the company hasn’t made a systemic change to adopt that kind of a model and you’ve got one or two key people who drive that and that person gets a better job offer someplace else, we do see those things occasionally fall through. But it is so beneficial to the champions of user experience or, more broadly, customer experience, to learn the discipline of putting business case numbers and results to what they do, that once they get a taste of that and succeed at that, they tend to keep working at it, and they can get better at it over time.
It’s interesting because it’s not just the dollars and cents. We one of our analysts, Megan Burns, who looks at the whole making a business case body of knowledge that there is, and it’s appealing to the left part of the brain, but it’s also understanding who is your audience and what are their emotional triggers, too? Some people care very passionately about certain things, so if you can find out what the approver cares about, you can tailor your presentation to get the approval and get the funding. It’s also a very good strategy to get what we call “base hits.” To do a small project, measure it, prove success, keep going from there. That tends to be a self-sustaining thing, provided you can keep those people and keep focused on it.
Again, if you come out of a design background and you just believe—and I think rightfully so—that really good user-centered design, of course it pays. You sometimes lose sight of the fact that executives want to see proof. They need for you to connect the dots, and then they’re going to measure you on what’s going on. So yeah, you have to start out from that perspective. I asked Dan Hessey, the CEO Sprint, on stage that question today, because he made improving customer experience at Sprint a top priority, and it did improve a lot. They went from way behind Verizon and AT&T to just about parity in one year. If they keep doing what they’re doing, they will pass Verizon and AT&T.
How do companies get started in improving their CX?
Manning: You can attack improving customer experience a couple of different ways—probably a dozen ways, but there are two big ones that stand out. One is you can try to add stuff that’s going to delight people and there are proponents of that strategy. The other thing you can do is try to eliminate problems that create detractors, defectors, people who hate you and go online and say horrible things about you.
And both of those strategies are important. Sophisticated companies tend to try to do both of those things, so it’s just a matter of where you focus first, and if your customer experience is really awful, you probably want to triage and staunch the bleeding first. Some whole industries—I mean, health insurance plans come in at the bottom of our customer experience index. The highest scoring health insurance plans, Kaiser, got a 67 on a 100-point scale. That’s six points lower than the lowest-scoring retailer in our index.
There are a few things that seem to be very helpful in getting companies past a certain point. You can start out, certainly, with a grassroots movement, with a couple of people championing improved customer experience and then see pretty significant improvements.
But then you get to a certain point and it’s very helpful to have a single executive who’s in charge of improving customer experience across the company. Someone who’s truly an executive, who has the clout to get the attention of the CEO and the other C-levels, to get funding, to command that level of respect. The reason that that’s important is because so much of the ultimate customer experience has to do with coordination among channels and coordination between business silos. The only way you’d get that is if you have a true executive who sits over channels and over silos. Not as in, “I command you to do this,” but it’s typically a matrix management issue.
But one with some teeth—the teeth to do things like change the compensation process in the company so there’s some degree of compensation, whether it’s variable compensation like a bonus or, for instance, Allstate did a thing where they tied improvement of a customer satisfaction metric in the company to everyone’s 401k match. So if you want your 401k match, the customer satisfaction has got to go up. Suddenly, when you do that on a company-wide basis, everybody goes, “OK, wait a minute. This went from: ‘Customer experience is a good thing’ to ‘Tell me what I can do to improve customer experience so that I can get my 401k match.’”
So the chief customer officer, by whatever name, is one of the things that’s just a huge leverage point for companies. There are a few other things, but I’ll just mention one other that is just so critical. It’s having a really good voice of the customer program. It’s having an institutional approach to gathering feedback and data from customers through surveys, through synopses and reports back to call centers, increasingly from listening to your customers talk on social media, from taking that unstructured and unsolicited data and rolling that up and feeding it to people. Because if every day what you’re hearing is the reality of the customers’ experience with your company and your channels, then you can’t fool yourself into believing yourself that your website is great when you are reading all of these verbatims that say, “Your website stinks. I hate you. I couldn’t do this thing that I wanted to do. Die.” That’s highly motivating. It breaks through the denial.
post authorHarley Manning

Harley Manning, Harley Manning is Vice President, Research Director at Forrester Research, where he serves Customer Experience professionals. He leads a research team that covers topics ranging from voice of the customer programs to modeling the return on investment from customer experience projects. Harley's personal coverage areas include interaction design, online branding, persona development, design agencies, and user experience reviews. Harley came to Forrester in 1998 after spending 18 years designing and building interactive services for companies such as Dow Jones, AT&T, MCI, Prodigy, and Sears. Most recently, he was at Dow Jones Markets, where he was responsible for international Web sites targeted at brokers and traders. He was also responsible for the design, hosting, and operation of the Markets' intranet site, which later became the intranet site for all of Dow Jones. Prior to Dow Jones, Harley was at AT&T Labs, where he designed the user experience for projects like a search engine enhanced with ontologies (two patents awarded), a universal email/telephone/fax message center, and a Web-based community calendar. He originally joined AT&T as the creative director of its personal online services group. Before AT&T, Harley worked as a consultant for the MCI/News Corp. online joint venture, as creative director of Prodigy (a pre-Web online service), and at Sears, where he was part of a team that created the first catalog on a videodisk.

post authorForrester Research

Forrester Research, Forrester Research, Inc. (Nasdaq: FORR) is an independent research company that provides pragmatic and forward-thinking advice to global leaders in business and technology. Forrester works with professionals in 19 key roles at major companies providing proprietary research, customer insight, consulting, events, and peer-to-peer executive programs. For more than 26 years, Forrester has been making IT, marketing, and technology industry leaders successful every day. For more information, visit forrester.com.


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