Michael Hinshaw

When a pre-revenue company with about a dozen employees gets a $1 billion Silicon Valley payday, tongues wag. Did Facebook pay too much for Instagram -- the popular photo-sharing app that lets users take and customize pictures with their phones -- or not enough? Don't know.

The bigger question is why a larger, established company like Kodak didn't invent Instagram, or an app like it. They have the resources, the talent and the opportunity. What is it that stalled -- possibly fatally -- this once-smart company?

The short version is that they struggled unsuccessfully to adapt in the face of a changing digital world, filing bankruptcy even as photo-industry upstart Instagram was growing at the rate of about one million users a month.

But the real story is much bigger. Kodak, like hundreds or even thousands of otherwise successful companies, has yet to grasp this critical point: Digital innovation is enabling customers to act smarter than the firms that wish to...

At MCorp, we’ve conducted customer experience research with thousands of customers for dozens of companies. Across the range of business buyers and retail consumers, we’ve heard from high net-worth investors, Gen-Y shoppers, baby boomers and small company CEO’s, and everyone in between.

And in the last few years, we’ve seen that the ways customers interact with and think of companies – and the experiences they expect in return – is changing. In some cases, dramatically. Yes, technology is a big piece of this change. (You can see our thoughts on that here, in our on-demand thought-leadership webinar titled “Disruptive Technologies vs. Customer Experience.”)

But a bigger, interrelated piece is around customer expectations. Think about what your expectations are as a consumer when you deal with companies like Amazon, Disney or Virgin America.  How are they met?

Across the board, we’ve...

There are myriad reasons why companies treat customers poorly. One of the most common, costly – and most easily resolvable – is a lack of understanding around customers themselves.

This gets at the core of two basic business questions that many companies either don’t ask or don’t share effectively across silos and groups internally.

Who is our customer?

Knowing your customer means having a clear picture (age, income, expectations, needs and beliefs, for example) articulated in your customer experience strategy, and in the minds of your employees. Not knowing means that you will consistently fail to give your customers what they want at any given point, and will fail to grasp opportunities to satisfy or delight them, much less increase profits from them.

One tool that can help create this “vivid picture of your customer” is research-based personas. Long used in software design, companies such as Best Buy use clearly defined personae to...

As the end of 2010 approaches, we’ve been thinking about the year ahead and – unsurprisingly – where and how we see customer experience fitting into the strategies and activities of companies as we move into 2011. With seedlings of hope sprouting on the economic front, 2011 has the potential to be a defining year for the rest of this decade.

However, this hoped for expansion won’t be fueled by massive increases in spending on the part of businesses or consumers. It’s going to be a pitched battle for customers and share of spend, driven “the old fashioned way,” through acquisition, retention and penetration. This means getting new customers from your competition; finding new and better ways to sell additional products and services to all; and re-engaging the customers you have, keeping them longer and increasing their value. 

The Competitive Battleground: Customer Experience

The good news is, both companies and their customers have clearly...