This Week In Retention: Embrace Customer Experience, or Become Irrelevant. Fast.

This Week In Retention is a series covering news, trends and best practices for all things customer retention.

This is the year businesses will get customer-obsessed or will get left behind.

Forrester analysts are insistent: One-to-one marketing and a superior customer experience, once nice-to-haves, are becoming non-negotiable requirements. Companies that don’t invest in these areas now will find themselves obsolete in just three years, for the simple reason that their customers will flee.

“You have customers turning away if you can’t deliver the right kind of experience,” explained Victor Milligan, Forrester’s chief marketing officer, in a recent webinar hosted by the research company.

Leading customer-obsessed companies, such as, Southwest Airlines and The Cleveland Clinic, are being closely watched by the fast followers, which are looking for clues in a variety of areas: changing company culture; laying the groundwork for one-to-one customer interactions; learning from those outside their own industries; and incorporating agile development methods and user-focused design to the CX.

Their leaders have a very pointed perspective on the value of investing in customer experience. Says Forrester vice president and research director Harley Manning: “Now executives are asking, ‘How much lift in retention can I get [from better customer experiences]?’”

Here’s what Forrester sees happening in the next three years – when, practically speaking, it will be too late to hop on this particular bandwagon:

One-to-one is real. You need a plan.

To reach individuals and keep them coming back, CMOs need to know more about their customers. “We’ve been talking about one-to-one marketing and personalization for decades. It’s at the point now where it’s real, and if you’re not putting a plan in place you’ll look really sad in 2017, because the leaders are going there,” says Michelle Moorehead, a vice president and research director with Forrester.

The best inspiration may be outside of your industry

The “empowered customer,” who expects brands to respond to individual needs and preferences, looms large in 2016. To meet these customers’ continually expanding expectations, businesses will need to look beyond their own industries for best practices, creative approaches, and potential partnerships. Southwest Airlines, Manning points out, is an excellent example of integrating customer obsession into every aspect of corporate strategy and operations. The airline, which just had its 47th consecutive year of profitability in a volatile industry, has a mission, vision, overall strategy and culture all centered on customer experience. “If you’re only benchmarking against your industry, you’re absolutely going to be behind,” warns Moorehead.

Agile development principles and design are for everyone

As a hybrid discipline, customer experience combines elements of user interface design, computer science, user research and testing, and marketing. Fortunately, each discipline is built on tools and methods that can support the work of the others. Marketers need to consider agile development methods applied to marketing, for example, to iterate on their understanding of their customers, which in turn allows them to better offer the personalized content and services that lead to superior customer retention.

IT departments are not exempt. They need to figure out how user-focused, design-thinking processes can be inserted into product development, better reflecting customer needs. Says Sharyn Leaver, a vice president and group director with Forrester: “CIOs need to learn how to be fast.” Because three years is going to fly by.

—Kristine Lowery, Content Marketing Manager at Sailthru