The Gartner Customer Experience Management Maturity Model

The Gartner Customer Experience Management (CEM) Maturity Model provides you with a framework to measure the maturity level of your organization's CEM capabilities and to use that as a basis for discussing and agreeing on the "to be" state and develop a road map to reach it.

Key Findings

• The Gartner CEM Maturity Model defines five levels of increasing maturity: initial, developing, defined, managed and optimizing.
• In any organization, the stepwise improvement in CEM maturity will be an ongoing journey that will add business value at each step.
• The goal is to improve the customer experience through a systematic process to improve customer satisfaction, loyalty and advocacy.
• Technology investment is only used on 20% of customer experience projects, though it is rising rapidly. Successful CEM needs a holistic, business-driven approach that includes a strong focus on strategy, leadership, metrics, governance, organization and process, as well as technology to support it in some cases.

Recommendations

Leverage the Gartner CEM maturity model framework to:

• Assess your organization's CEM maturity objectively and compare it with competitors and best practices.
• Plan the destination and nature of the organization's CEM journey.
• Engage with different stakeholders, and to discuss the business value of moving to the next level of CEM maturity.

What You Need to Know

The Gartner CEM Maturity Model should be one of your key tools to initially measure the health and direction of your CEM program, and then to use on an ongoing basis to manage your CEM program. The CEM Maturity Model consists of five levels of maturity, ranging from scenarios in which organizations have a fragmented focus through to higher levels in which CEM is a fully funded, enterprisewide strategy that has achieved a cultural change. The highest level of maturity is where the customer experience is recognized as a key differentiator of strategic significance and is managed accordingly, with continuous improvements.

At the start of your CEM program, leverage the Gartner CEM Maturity Model to socialize the concepts around CEM maturity, to assess their level in your organization, and to provide key input when creating your CEM vision, as well as the strategy and road map for achieving your vision. As the CEM program progresses, use it to manage the ongoing journey toward greater maturity.

Introduction

Gartner defines the customer experience as the 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. Gartner defines customer experience management as the practice of designing and reacting to customer interactions to meet or exceed customer expectations and, thus, increase customer satisfaction, loyalty and advocacy.

Interest in CEM initiatives has increased, particularly over the past decade, for four primary reasons:

• Fewer forms of sustainable business differentiation, driving a greater focus by senior executives on CEM as a means of differentiation
• Greater customer access to information and power in the supplier-customer relationship, resulting in more willingness to switch suppliers and tell others about poor customer experiences
• More case studies and documented evidence of businesses that are delivering excellent customer experiences, obtaining a positive ROI and demonstrating financial benefits as a result
• Higher-profile examples of organizations with dreadful customer experiences that have humiliated management and damaged credibility and stock prices

Without an adequate focus on CEM, your organization will find it difficult to meet its business goals, either through the leaky bucket of low customer retention, requiring an increased pressure and cost of acquiring more customers, or due to low levels of advocacy, requiring higher levels of marketing spend due to limited word-of-mouth support.

In the majority of cases, CEM is an initiative or program composed of multiple projects, rather than a single project. It takes multiple years to get some initiatives right (such as altering compensation plans and corporate metrics), whereas only a few weeks are needed for other initiatives (such as quick fixes to the Web user experience). The longest-term projects (such as recruitment and training programs) tend to end up being migrated from a project to an ongoing operation, because they are without end.

When an organization starts a CEM initiative, it faces many challenges. The Gartner CEM Maturity Model is designed to help users by showing where the organization is in terms of maturity and what next steps need to be taken.

The Gartner CEM Maturity Model

This research describes the Gartner CEM Maturity Model. Its objective is to assist CEM leaders in:

• Socializing the concepts around CEM and increasing CEM maturity, together with the potential business benefits
• Assessing current CEM capabilities, comparing them with best practices, and providing a platform for assessing the cost, risk or lost opportunities of the current situation
• Building the vision of what the organization's "future state" CEM capabilities should look like
• Discussing and prioritizing (on the basis of business benefit versus time and cost to achieve) stepwise improvements to the organization's CEM capabilities
• Creating the road map for the different phases of the CEM program, and understanding what work must be done to ensure success

The Gartner CEM Maturity Model has five increasing levels of maturity:

1. Initial
2. Developing
3. Defined
4. Managed
5. Optimizing

This CEM Maturity Model is based on the standard Gartner maturity model's nomenclature and is aligned with other maturity models. Most large organizations are at Level 1 or Level 2, with a view toward achieving Level 3 (see Figure 1). The percentages in Figure 1 show Gartner's estimate of the percentage of organizations at each level of maturity based on inquiries from clients and votes by attendees at Gartner events, and participants self-scoring in workshops.

Source: Gartner (November 2011)

Customize the model to your requirements, in terms of the focus and vocabulary, and use it to assess your organization's CEM maturity. Different industries and industry sectors will have different needs. Also, it's likely there may be some (but not drastic) variation in the levels of maturity you assign to different CEM projects (see "Fifty Things to Do Right Now to Improve the Customer Experience" [Note: This document has been archived; some of its content may not reflect current conditions.] for examples). Look carefully at which elements are lagging, as they may be inhibiting progress in other areas.

In addition, note that "goodness" is a factor of breadth and depth in the CEM initiative's scope. There may be situations in which the CEM initiative involves multiple departments (customer service, marketing, finance, HR), but the focus isn't very deep or sophisticated (such as a mandatory "basic management expectations of customer experience" training course). In contrast, there could be a single project that's only in one department (such as e-commerce usability improvement), but it is very deep, sophisticated and provides great business value.

The Different Levels of CEM Maturity

Nonexistent — Off the Scale

Some organizations have not even begun to think about the customer experience, and there is no recognition of its importance. CEM isn't on the radar screen. Nobody understands the term or the need for a CEM focus. There are no recognizable CEM capabilities. Although there may be business problems relating to poor customer experiences, no one is articulating the need for change. In a few cases, this is a deliberate executive strategic decision, particularly in commodity or low-cost businesses. The focus is not on the customer experience, which is a perfectly valid approach.

However, the majority of organizations without an approach to CEM have not made a conscious decision to focus on other priorities. Industries renowned for providing poor customer experiences, where the majority of firms are at this pre-level of maturity, include airlines, cable companies, mobile telephony and some forms of insurance.

Action Item: Start educating your business and IT colleagues on what CEM is, and the business need for improved CEM capabilities in your organization. Seek competitor examples of success, and share them with your employees, partners and channels.

Level 1. Initial: Fragmented Focus

The focus on improving the customer experience is fragmented. Processes are ad hoc, disconnected and disorganized. There may be multiple individual advocates, but they have little awareness of each other, no formal strategy is in place, and there is limited acceptance of the importance of customer experience maturity across the organization. Although individuals recognize the need for CEM, the senior executives of the organization do not recognize the prevalence of the issue. Moreover:

• Vision: There is no CEM vision yet, and no business sponsorship or budget to start tackling the problem.
• Strategy: There is no CEM strategy, and little or no centrally organized action. There is little clear appreciation of the benefits of CEM, and no understanding of competitors' strengths and weaknesses in terms of the customer experience.
• Metrics: There is no metrics scheme for measuring customer experience goals. No one has the ability to measure the scale of the CEM problem, or to objectively prove the negative impact on the business. The main measurement of the customer experience is an annual customer satisfaction survey.
• Governance: There is no customer experience governance framework and, hence, no means to create policies and processes regarding CEM. Also, there's no agreed-on decision rights framework; therefore, decisions aren't made, or they're made unilaterally, without consultation or agreement with other parts of the organization.
• Organization: No one is responsible for solving customer experience problems. The culture of the organization is poorly disposed to customers, and the organization lacks individuals to take responsibility for the customer experience in different departments.
• Processes: The processes to ensure that the customer experiences are accessible, consistent, repeatable, thorough, timely, flexible, convenient and personalized aren't in place with personnel who operate purely in the context of their departments and the financial goals they have.
• Technology: No applications or tools have been bought with the primary focus for improving the customer experience. No inventory has been taken of all the technologies that impact the customer experience, regardless of the departmental ownership.

Action Item: Continue educating your business and IT colleagues about the business need for an improved customer experience, what CEM is and why your organization needs it. Link CEM with executive business goals to ensure that it is viewed as a strategic measurable objective.

Level 2. Developing: Voice of the Customer Validated

A voice-of-the-customer function has been established, and a vice president of customer experience may have been appointed. An audit of existing feedback activities has taken place. Gaps have been identified, requirements for improvements have been assessed, responsibilities have been assigned and an implementation plan is in place.

Various groups in the organization have recognized the need to take action regarding CEM, so they engage in isolated, bottom-up initiatives. However, there's no high-level business sponsorship or major investment, so the effect is mere "firefighting" — that is, trying to solve the worst customer experience problems reactively.

As attempts are made to address problems in one department, it becomes obvious that a more holistic, cross-departmental approach is necessary, because the customer does not care which department is responsible and seeks a joined-up response. This drives the need for a governance framework so that different groups can come together to discuss and decide how to move forward in organizational terms.

Either the customer service or marketing department takes the lead and struggles to get the rest of the business engaged by taking the necessary responsibility; in particular, sales is usually skeptical. The market research function, if it exists, uses feedback management tools to create a view of the voice of the customer, but it remains an incomplete view. This is when some good CEM work starts to take place, but it's mainly to achieve a baseline level of understanding the customer experience, as opposed to changing the organization's processes. However:

• Vision: There is no executive sponsorship or common definition of CEM. There are multiple bottom-up, department-specific visions for CEM being articulated.
• Strategy: There is no CEM strategy. The approach is largely reactive firefighting in response to customer pain points and specific negative publicly communicated customer experiences.
• Metrics: There is no unified metrics scheme for setting customer experience goals, but fragmented progress is being made, and multiple metrics are used in different departments.
• Governance: There is no CEM governance framework and, hence, no means of creating policies and processes regarding CEM. However, as improvements are made, it becomes clear that governance is a major issue. Either the marketing or customer service department has taken the lead in convening meetings to discuss a more joined-up customer experience.
• Organization: A voice-of-the-customer team has been formed with the primary focus on reporting on the customer experience from all available sources of feedback, including feedback from management, surveys, call recording and transactional information.
• Processes: A map of all customer-facing processes has been completed as a subset of all business processes.
• Technology: A portfolio of existing applications has been identified that helps improve the customer experience. These may include CRM tools, such as contact center call handling and Web self-service or feedback management applications; infrastructure, such as interactive voice response (IVR) systems or point of service (POS); and transactional applications, such as order management and billing.

Action Item: Focus on gaining a unified vision. Look for other business initiatives that need a CEM component to succeed. Make the business case for solving that challenge by using CEM. Find business colleagues who also see the need for improving CEM. Organize peer-to-peer learning sessions and CEM workshops.

Level 3. Defined: Executives Engaged

A vision has been outlined by senior management. Goals, practices and performance metrics are fully defined. Processes are standardized, integrated, documented and implemented. Formal governance and a compliance model are in place. There's a serious focus on multiple types of customer experience projects (e.g., making the organization act like one, personalizing interactions, designing the perfect experience, improving trust and showing you honor data privacy). The constituents are aware of each other, effectively creating a less-siloed form of CEM for a broad audience. In addition:

• Vision: There is high-level executive sponsorship, but no overall CEM vision set out by the sponsor. The business department-level visions are coalescing into common themes and there is increasing agreement on what success looks like.
• Strategy: There is a proactive focus on CEM by individual departments. A benchmark of the current state of customer experience across the whole enterprise has been performed, the to-be state has been agreed-on and a strategy has been developed.
• Metrics: The organization has agreed on a set of metrics that measures the customer experience, though they are not yet linked or on a common dashboard. Several customer experience projects have been demonstrated to be successful, based on the difference between the baseline set of metrics and those achieved following implementation.
• Governance: Department-specific governance of the customer experience still reigns, but a governance framework has been created to aid CEM-related policy formation and decision making. An internal communication process informs the relevant user communities as to how the CEM program will affect them, and change is being managed where it affects working practices and targets.
• Organization: A vice president of customer experience or equivalent is in place. The core CEM team is forming, usually reporting to the chief marketing officer (CMO). The CMO's main role is reporting on performance against goals by different departments, but also still collating the voice-of-the-customer feedback and analysis.
• Processes: The organization is working on improving the top two to three processes that impact the customer experience in different departments, having ranked all customer-facing processes across the whole organization based on their importance to customers.
• Technology: The organization has an accurate inventory of technologies and applications that impact the customer experience. It also has a portfolio of planned projects, each measured by the relative impact on improving the customer experience.

Action Item: Gain executive-level sponsorship for a CEM initiative (with clear business benefits) that centers attention on multiple departments, all focused on improving different aspects of the customer experience.

Level 4. Managed: Profit Parity

A customer experience metric has reached parity with profitability in terms of importance for executives, and all employees are focused on its improvement as much as on profit. Customer experience improvement has been systematized. Thus:

• Vision: A unifying vision for CEM that ties closely to the board's overall business vision has emerged, together with an enterprisewide CEM program. This seeks to create a set of strong, integrated CEM capabilities that spans all relevant departments.
• Strategy: There is a multiphased road map, which has been agreed-on by all departments. Previously fragmented silo-level CEM approaches are brought together to form an enterprisewide strategy.
• Metrics: There is a hierarchy of linked customer experience metrics feeding top-level goals. The various metrics hierarchies have been brought together, standardized and simplified to remain manageable and focused on the top-level satisfaction, loyalty and advocacy goals.
• Governance: Previously fragmented, domain-level governance groups have come together to manage CEM governance at an enterprise level, while retaining the drill-down expertise necessary in domain areas.
• Organization: The core customer experience team at the center has an advisory and consultancy-driven approach to helping different departments improve projects that often last up to six months.
• Processes: In terms of processes, a clear program of working through the top 10 to 25 processes over the next three to five years to improve the customer experience has been planned and is being executed.
• Technology: The focus is on the integration of different customer experience technologies, joining end-to-end processes, providing multichannel support for the customer so the organization "acts as one" to provide a single view of the customer that includes a single view of the customer voice.

Action Item: Build on CEM success in specific departments and learn practices that are adopted across departments. In addition, build a unifying, enterprisewide vision for CEM, and gain high-level business sponsorship and funding for a unified approach across the organization.

Level 5. Optimizing: Culture Change

The culture of the organization has changed, so that employees do the right thing without being asked, given incentives or pressured. Employees are empowered to take action and innovate. A culture of "alert defense" of an excellent customer experience has taken hold. The objective is to stay on top.

A shared, accurate, timely and complete view of the customer, including all forms of customer feedback, is available to all employees, regardless of the channel from which the customer starts an interaction. The governance, processes and metrics framework for CEM are ingrained in the organization's culture, and this level of CEM maturity is viewed as "the way we do things around here." It receives ongoing investment. However, there's no room for complacency; the CEM core team seeks examples of excellence from other industries, rather than the same industry, as well as innovative approaches employed in other geographies. The core team is connected through dotted-line reporting to many other employees who are charged with improving the customer experience in their departments or functions. The initiative will continue to evolve through regular learning and optimization, including the introduction of innovative technologies. Participants will respond to changes in the business environment, with the goal of maintaining differentiation through a superior customer experience.

Action Item: Maintain this highest level of CEM maturity through continued focus. Continue to investigate how and where improvements could be made, based on programs from other industries and geographies. Continue to ensure that the achievement of business benefits is measured, and that successes are shared throughout the organization.

Performing a CEM Maturity Assessment

Organizations can leverage the Gartner CEM Maturity Model to perform a maturity or capability assessment. Organizations will not typically have all the elements classified in the same maturity level. There is likely to be a spread across different levels (see Table 1).

Source: Gartner (November 2011)

Performing a capability assessment is an excellent vehicle for engaging with the sponsor and stakeholders in the organization, and for gathering and documenting their views. It enables you to start the process of building an agreed-on view, relative to an objective measure of where the organization is in terms of its CEM maturity. It also enables you to build on that benchmark of the current state and start the discussion of what the to-be state should look like. Having created and agreed-on a to-be state, it is now possible to do a gap analysis and consider the relative importance and links between the gaps. A structured prioritization process can then drive an agreed-on, prioritized road map, which is likely to be multiphased and multiyear.

As we reach the higher levels of maturity (Level 4 and Level 5), there are two ways of viewing maturity. One is in terms of depth (i.e., how comprehensive and ingrained CEM is in key parts of your organization), and the other is in terms of breadth (i.e., whether the CEM discipline spreads across the whole organization). You will need to take a view of what best constitutes maturity in your organization, as these higher levels of maturity will vary significantly, depending on your CEM vision. CEM has many complexities, and what your organization needs will be driven by the nature of your industry, your organization and which processes the customers care about most. Your organization's CEM may be very different from another organization's CEM.

Action Item: Perform an CEM maturity assessment using Gartner's CEM Maturity Model and leverage it to build a multiyear, multiphased CEM road map.