© 2015 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. This publication may not be reproduced or distributed in any form without Gartner's prior written permission. If you are authorized to access this publication, your use of it is subject to the Usage Guidelines for Gartner Services posted on gartner.com. The information contained in this publication has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information and shall have no liability for errors, omissions or inadequacies in such information. This publication consists of the opinions of Gartner's research organization and should not be construed as statements of fact. The opinions expressed herein are subject to change without notice. Although Gartner research may include a discussion of related legal issues, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner is a public company, and its shareholders may include firms and funds that have financial interests in entities covered in Gartner research. Gartner's Board of Directors may include senior managers of these firms or funds. Gartner research is produced independently by its research organization without input or influence from these firms, funds or their managers. For further information on the independence and integrity of Gartner research, see "Guiding Principles on Independence and Objectivity."

Gene Phifer@gphifer

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Creating Business Value Through Exceptional Customer Experiences

By 2017, more than half of consumer product and service R&D investments will be redirected to customer experience innovations.

Consider …

© 2015 Gartner, Inc. and/or its affiliates. All rights reserved.

How Will Customer Engagement Accelerate in a world of People, Business and Things?

How Will Customer Engagement Accelerate in a world of People, Business and Things?

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Print Your Cosmetics

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Check Your Blood Glucose

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Ride in Your Car

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Order Laundry Detergent

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Business Moment

TRANSIENT OPPORTUNITIES

EXPLOITEDDYNAMICALLY

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Design Specification for a Digital Business

Customer Engagement1

Digital Product and Service Innovation

3

Security and Risk2

© 2015 Gartner, Inc. and/or its affiliates. All rights reserved.

Does Your Organization Sell Products or Experiences?

The Experience Economy:

Shift From Products to Experiences

Commodity1 cent to 2 cents a cup

Goods5 cents to 25 cents a cup

Experience$2 to $5 a cup

89% of retailers plan to compete on CX in the near future — NRF 2015

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Those Most Often Seen as Having the Best Customer Experience

Disney Apple

Legoland

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What Is Customer Experience?

"The customer's perceptions and related feelings caused by the one-off and cumulative effect of interactions with an enterprise's employees, channels, systems, or products."

© 2015 Gartner, Inc. and/or its affiliates. All rights reserved.

"Which 5 technology enabled capabilities will be the most important areas of investment to improve your business over the next 5 years?"

CEO Survey 2015Top Technology Investments, Next 5 Years

Customer experience management (CEM)

Digital marketing

Business analytics

Cloud-based business

Data science/big data

Digital products and services

Smart/intelligent processes

Supply chain optimization and traceability

Sustainability

Internet of Things/sensor networks

Product cost analytics

Social engagement (externally)

Enterprise mobility

Enhanced business reporting

M-commerce

37%

32%

28%

27%

24%

23%

22%

20%

20%

19%

19%

18%

18%

16%

15%Axis Title

Axis Title

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Sample of CCOs, VPs, Directors and Heads of Customer Experience

InsuranceAllstateCigna

Travelers

Liverpool Victoria

Prudential

USAA

Progressive

Banking

Standard Bank of South Africa

Huntington National Bank

Kiwibank

Tesco Bank

TD Ameritrade

Bank of America

Credit Suisse Group

Keycorp

Lloyds Bank

First Horizon National

OCBC Bank

Nationwide Building Society

National Australia Bank

JPMorgan Chase & Co.

American Express

Royal Bank of Canada

Royal Bank of Scotland

Fidelity

HSBC

first direct

Citigroup

Barclays

Capital One

Wells Fargo

Univest

Westpac

Volkswagen Credit

Union Bank

Comms. and Media

Global Crossing

Orange

Sprint

Time Warner Cable

Verizon Partner Solutions

Virgin Mobile Canada

Yahoo

Bell CanadaAT&T

Comcast

Telstra

T-Mobile UK

Vodafone

Telefónica

Virgin Media

TalkTalk

BT

KPN

Turk Telekom

Telus

Nextel Communications

SingTel Optus

Xohm

Telecom New Zealand

O2

DIRECTV

Charter Communications

Travel and Hospitality

Alaska Airlines

American Airlines

Air Canada

Hotels.com

Travelocity

United Airlines

AAA Northern California

thetrainline.com

Eurostar

Wyndham Hotels and Resorts

Starwood Hotels and Resorts

Marriott Hotels

Hertz

Orbitz

OthersCerner

Chrysler

Coca-Cola Enterprises

Fiat

Philips Electronics

FedEx

Thomson Reuters

LexisNexis

Department for Work and Pensions

McKesson

Porsche

DHL

Centrica

Merck

E.ON

Shell

Pfizer

Northeast Utilities

Retail

Walmart

John Lewis Partnership

Sears

Jessops

Sierra Trading Post

Marks & Spencer

Gap

Barnes & NobleBest BuyDenny's

Wendy's1-800-Flowers.com

Amazon

Walgreens

High Tech.

Dell

Océ

Sun MicrosystemsSymantec

HP

Polycom

Orange Business Services

Vertex Business Services

SAP

CSC

Sage (U.K.)

HP Spain

Pitney Bowes Business Insight

Intuit

Roxio

Epson

Xerox

Logitech

BMC Software Autodesk

Reporting relationship

15% to CMO

30% to business unit

30% to customer svc.

25% to CEO

Source: SynGro

© 2015 Gartner, Inc. and/or its affiliates. All rights reserved.

The Impact of Customer Experience on Brand Equity

• Customer experience drives brand equity:- Positive or negative- Perception is reality- Must support:• Value• Differentiation• Relevance• Esteem

• Brand equity:- Drives loyalty- Drives new customers to you- Retains existing customers- Increases spend

© 2015 Gartner, Inc. and/or its affiliates. All rights reserved.

Customer Experience Versus User Experience

1. Customer Experience:a. Customer's perceptions and related feelings caused by the

one-off and cumulative effect of interactions with a supplier's employees, channels, systems or products

b. The sum of all customer interactions

c. Online and offline

d. Can generate tremendous brand value

2. User Experience:a. The subset of customer experience that comes from direct

interaction when a person uses a specific product or service

b. Generally, but not always, applied to technology solutions

c. Aka, digital experience

d. All about usability and user-centered design

UX

CX

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Consumerization Drives Expectations: User Experience Is Now a Design Time Imperative

• User expectations:- Powerful and flexible, yet simple

- The new benchmark for design

• New devices — driven by the Internet of Things

• New UX paradigms — voice, motion, eye movement, wearable devices

• It's not traditional stuff:- New methodologies

- New tools

- The right skill set

- Third-party assistance

- Imbedded in the process, starting at design time

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Customer Experience Maturity Model

Initial Developing Defined Managed Optimizing

Culture Change

Profit Parity

Execs. Engaged

VoC Validated

Fragmented Focus

45%

30%

20%

4%

1%"Staying on Top""Getting Started" “Borrowing Ideas"

1 2 3

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CX: From the Last Best Experience to the Best Next Experience

• Show personality in interactions

• Differentiate themselves by the kinds of interactions provided

• Capture novel, but relevant contexts

• Capture of novel, but relevant events and moments

• Ability to precisely target needs and wants

• Capture all the data collected through interactions

• Measure-Investigate-Prioritize (Phil Klaus)

• Develop a digital humanist manifesto:- Put people at the center

- Embrace unpredictability

- Respect personal space

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Value-Driven, User-Centered Design Process

Best Practice Methodology:

• User-centered process

• Continuous improvement

• Based on objective dataabout user behavior

• Guided by design patterns

• Implements key scenarios

• Tied to measurable outcomes

• Obtained by instrumentation and analytics

• Result in business value

Observe Define

Refine Build

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Orchestrate the Customer Journey via Journey Maps

Source: Lono Creative

• Map your customer and their journey, not your company and its processes.

• Include all channels.

• Lead the customer by the pinkie, not by the nose.

• Answer these:- Where am I relevant?

- Where am I irrelevant?

- Where can I be made relevant?

- Where do I want the customer to end up?

© 2015 Gartner, Inc. and/or its affiliates. All rights reserved.

Deliver a Consistent, Orchestrated Cross-channel Experience

Source: Adobe

• AKA Omnichannel

• Seamless interaction and integration

• Think beyond your brand, processes, products and channels

• Supporting tools and technologies are generation one

© 2015 Gartner, Inc. and/or its affiliates. All rights reserved.

Beyond Mobile: Develop a Multichannel, Multidevice Strategy

• Build for Multichannel:- Online and Offline

• Build for Multidevice:- Mobile First/Touch First

- Responsive Design

• Build for Agility:- RESTful APIs

• But Don't Sacrifice Functionality:- Rich Versus Reach

- Leverage Device Capabilities

• And Plan for the Future

© 2015 Gartner, Inc. and/or its affiliates. All rights reserved.

Maintain a 360 Degree View of Your Customer, but Don't Be Creepy

• Capture every interaction from every touchpoint• Maintain a customer master record, perhaps via

master data management• Use analytics to mine for trends and insights:

- Correlate across information silos

- Tie to customer's relationships and peer sets

- Capture not only historical data but also WIP

• Instill expected data privacy:- Adhere to regulatory requirements

- Avoid the "creepiness factor"

- Offer opt-in

© 2015 Gartner, Inc. and/or its affiliates. All rights reserved.

Target Customers and Audience Segments With Contextual Experiences

• Content is no longer king — content in context is king

• It's more than content, though:- Features

- Permissions

- Authorization

- Look and feel

• Targeting goes well beyond demographics:- Psychographics

- Buying behavior and trends

- Peer sets/friends

- Device

- Location

© 2015 Gartner, Inc. and/or its affiliates. All rights reserved.

CX Initiative Checklist

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Users Are Unhappy; IT Needs a Different Approach

• Symptom: Web/Portal/Mobile Projects Take Too Long, Cost Too Much and Deliver Too Little

• Root Causes:- IT Cycle Times

- Complex, Expensive Technologies

- Hidden Effort (e.g., Integration)

- Poor User Experience

- Vendor Issues (Cost, Support, Relationship)

- Lack of Governance

- Personal Preference Choices, Politics Between Teams or Departments, or 'Inherited' Technologies, Resulting in Multiple Duplicative Tools and Approaches

- Lack of Skills/Training

© 2015 Gartner, Inc. and/or its affiliates. All rights reserved.

Pragmatic Steps to Drive Customer Experience Within IT

• Foster Customer Experience Culture Inside IT

• Focus on User Experience

• Examine Bimodal IT Approaches

• Architect for Flexibility and Agility:- RESTful APIs

- New Interface Paradigms (E.g., Wearables)

- Internet of Things (or Everything)

• Provide Foundational Infrastructure: - Modern Web Technologies

- Analytics

- Customer Experience Management

- User/Digital/Customer Experience Platforms

Source: Smashing Magazine

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Focus on User Experience• Innovative Technologies

- UX Tools

- Journey Builders

- User Experience Platforms

- Digital Marketing Hubs

• Innovative Approaches- Design Thinking

- Website Optimization

- User Experience Training in Universities

- Chief Customer Officer

• Changes in the Vendor Landscape- Marriage of SIs and Digital Agencies

- Traditional SIs Adding Digital Practices

- ISVs Establishing "Design Studios"

UX101

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The User Experience Platform

Supporting Infrastructure:• App server

• Integration

• Security

• Governance

• Performance

WCM

Social

Integrationand API

Context/Targeting

UCC

Mobile

PortalE-commerce

UXManagement

RichUser

Interface

Search

Analytics

Orchestration

© 2015 Gartner, Inc. and/or its affiliates. All rights reserved.

The Future of the UXP Market

• UXP market just emerged• More players will enter the market, especially from

WCM, MADP and rapid development markets• Many vendors focusing on vertical/narrow

use cases• Technology will continue to evolve:

- Mobile:• Better multichannel/multidevice capabilities

• Better integration between mobile components and rest of suite

- Analytics will undergo revolutionary change- Tooling will shift dramatically toward HTML5/CSS3/JS- Cloud delivery options will increase dramatically- Broader user experience methodologies will be delivered

programmatically- Improvements supporting broad customer journeys

© 2015 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. This publication may not be reproduced or distributed in any form without Gartner's prior written permission. If you are authorized to access this publication, your use of it is subject to the Usage Guidelines for Gartner Services posted on gartner.com. The information contained in this publication has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information and shall have no liability for errors, omissions or inadequacies in such information. This publication consists of the opinions of Gartner's research organization and should not be construed as statements of fact. The opinions expressed herein are subject to change without notice. Although Gartner research may include a discussion of related legal issues, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner is a public company, and its shareholders may include firms and funds that have financial interests in entities covered in Gartner research. Gartner's Board of Directors may include senior managers of these firms or funds. Gartner research is produced independently by its research organization without input or influence from these firms, funds or their managers. For further information on the independence and integrity of Gartner research, see "Guiding Principles on Independence and Objectivity."

Gene Phifer@gphifer

Facebook.com/gene.phifer

Linkedin.com/in/genephifer

Creating Business Value Through Exceptional Customer Experiences