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Outside In

Outside In

The Power of Putting Customers at the Center of Your Business
by Harley Manning 2012 272 pages
3.92
500+ ratings
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Key Takeaways

1. Customer experience is the new competitive battleground

Customer experience is how your customers perceive their interactions with your company.

Experience matters more than ever. In today's hyper-competitive market, product features and pricing are easily replicated. What sets companies apart is the experience they provide to customers across all touchpoints. A superior customer experience leads to increased loyalty, positive word-of-mouth, and ultimately, better financial performance.

The stakes are high. Companies that excel at customer experience outperform their competitors in stock returns and revenue growth. For example, customer experience leaders saw a 22.5% cumulative total return over five years, compared to -46.3% for laggards. Poor experiences drive customers away - 20% of U.S. consumers are willing to switch providers due to bad experiences.

Every interaction counts. Customer experience encompasses all interactions a customer has with a company, from marketing and sales to product use and customer support. It's not just about a single touchpoint, but the entire journey and relationship. Companies must take a holistic view and design intentional experiences across all channels.

2. Understand your customers' needs, wants, and emotions

You need your customers more than they need you.

Deep customer understanding is crucial. To deliver great experiences, companies must develop genuine empathy and insight into their customers. This goes beyond basic demographic data to understanding customers' goals, pain points, behaviors, and emotions throughout their journey.

Use multiple research methods. Effective customer understanding requires a mix of:

  • Quantitative data (surveys, analytics)
  • Qualitative insights (interviews, observations)
  • Unsolicited feedback (social media, reviews)
  • Employee input (frontline staff perspectives)

Create actionable customer profiles. Tools like personas and journey maps help synthesize research into an actionable format. These artifacts make customer needs tangible and guide decision-making across the organization. For example, Discover Financial created six detailed personas to represent key customer segments and inform product development.

3. Design intentional, cohesive customer journeys

Great customer experiences don't happen by accident.

Take a holistic approach. Instead of focusing on individual touchpoints, companies must design end-to-end customer journeys. This means considering how different interactions connect and influence each other over time. For example, FedEx mapped out 48 key touchpoints across the entire shipping experience to identify improvement opportunities.

Use human-centered design methods. Effective experience design follows a structured process:

  1. Research to understand customer needs
  2. Ideation to generate potential solutions
  3. Prototyping to quickly test ideas
  4. Iteration based on feedback

Co-create with customers and employees. Involving customers and frontline staff in the design process leads to more innovative and practical solutions. For instance, Fidelity Investments holds workshops where customers and employees collaborate on new service concepts.

4. Measure and improve customer experience continuously

If you want to succeed, today and in the immediate future, you have to decide—right here, right now—to roll up your sleeves and do the work of building competence in these six disciplines.

Establish a robust measurement framework. Companies need a systematic way to assess customer experience quality and its impact on business outcomes. This typically includes:

  • Perception metrics (e.g., satisfaction, effort)
  • Descriptive metrics (e.g., wait times, error rates)
  • Outcome metrics (e.g., retention, revenue)

Connect experience to financial results. Quantify the business impact of customer experience improvements to gain organizational support. For example, JetBlue found that customers who had a positive experience spent 4.5 times more than those who didn't.

Drive continuous improvement. Use measurement insights to:

  • Identify and prioritize improvement opportunities
  • Track progress over time
  • Hold teams accountable for experience quality
  • Inform strategic decisions and resource allocation

5. Build a customer-centric culture across your organization

Culture is one of those squishy topics that people have a hard time getting their heads around in a business context.

Culture is the foundation. A truly customer-centric organization requires more than just processes and metrics. It demands a shared set of values and behaviors focused on delivering great experiences. This cultural shift must be driven from the top and reinforced at all levels.

Key elements of a customer-centric culture:

  • Clear customer experience vision and strategy
  • Leadership commitment and role modeling
  • Employee empowerment and accountability
  • Recognition and rewards tied to customer outcomes
  • Ongoing communication and storytelling

Rituals reinforce values. Simple practices can help embed customer-centricity into daily work. For example, Ritz-Carlton holds daily 15-minute meetings where employees share stories of exceptional customer service. USAA requires all new hires to go through empathy training simulating the challenges military members face.

6. Empower employees to deliver exceptional experiences

Nothing is better than a convert. I had managed product support for a year and hated it. But then I flipped and became maniacal about the customers. This job is about taking my new passion and instilling it throughout the organization.

Frontline staff are crucial. Employees who interact directly with customers have the biggest impact on experience quality. Organizations must equip them with the skills, knowledge, and authority to deliver great experiences.

Key strategies for employee empowerment:

  • Hire for customer-centric attitudes and aptitudes
  • Provide comprehensive training on products, processes, and soft skills
  • Give staff the autonomy to resolve issues on the spot
  • Share customer feedback and insights broadly
  • Recognize and reward customer-focused behaviors

Leadership sets the tone. Executives must model customer-centricity and remove barriers that prevent employees from delivering great experiences. For instance, at Zappos, CEO Tony Hsieh occasionally works in the call center to stay connected to customers and frontline realities.

7. Adapt to the age of the customer or risk obsolescence

We have entered the age of the customer.

A fundamental shift is underway. Empowered by technology and information, customers now have unprecedented control over their relationships with companies. This requires a new approach to business strategy and operations.

Key characteristics of the age of the customer:

  • Easy access to product/service information and reviews
  • Low switching costs between providers
  • Rising expectations for personalized experiences
  • Demand for seamless omnichannel interactions

Adapt or fall behind. Companies that fail to embrace customer-centricity risk losing market share to more agile, experience-focused competitors. For example, traditional banks are losing customers to fintech startups and credit unions that offer superior digital experiences and customer service.

Appoint a chief customer officer. Many organizations are creating C-level roles dedicated to customer experience to drive enterprise-wide transformation. This signals the strategic importance of customer experience and provides focused leadership for improvement initiatives.

Last updated:

FAQ

What's Outside In: The Power of Putting Customers at the Center of Your Business about?

  • Customer-Centric Focus: The book emphasizes the importance of placing customers at the center of business strategies, arguing that understanding customer needs and experiences is crucial for long-term success.
  • Research-Based Insights: It is based on extensive research from Forrester, showcasing how companies can leverage customer experience to gain a competitive advantage.
  • Six Disciplines Framework: The authors present a framework consisting of six disciplines—strategy, customer understanding, design, measurement, governance, and culture—that organizations must master to enhance customer experience.

Why should I read Outside In?

  • Practical Guidance: The book provides actionable insights and frameworks that can help businesses improve their customer experience, making it ideal for leaders looking to transform their organizations.
  • Real-World Examples: It includes case studies from various industries, illustrating the principles discussed and making the content relatable and applicable.
  • Competitive Advantage: By reading the book, you will learn how to create a sustainable competitive advantage through exceptional customer experiences, which is increasingly important in today's market.

What are the key takeaways of Outside In?

  • Customer Experience is Essential: The book stresses that customer experience is the single greatest predictor of customer loyalty and business success.
  • Six Disciplines Framework: Organizations should adopt the six disciplines outlined in the book to create a holistic approach to customer experience.
  • Ecosystem Approach: Understanding the customer experience ecosystem is vital, as all parts of an organization must work together to create a seamless and positive experience for customers.

What is the customer experience ecosystem in Outside In?

  • Interconnected Relationships: It refers to the complex set of relationships among a company’s employees, partners, and customers that determine the quality of all customer interactions.
  • Root Cause Analysis: By mapping the ecosystem, organizations can identify root causes of customer experience issues, allowing for targeted improvements.
  • Holistic View: The ecosystem approach encourages companies to look beyond individual touchpoints and consider the entire customer journey.

What are the six disciplines of customer experience in Outside In?

  • Strategy: Involves defining a clear customer experience strategy that aligns with the overall company strategy and brand attributes.
  • Customer Understanding: Focuses on gathering insights about customers through various research methods to design effective experiences.
  • Design: Emphasizes creating customer interactions that meet or exceed expectations through a structured process of ideation, prototyping, and testing.

How does Outside In define customer experience?

  • Perception of Interactions: Customer experience is defined as how customers perceive their interactions with a company, including every touchpoint.
  • Emotional Engagement: It highlights that customer experience is not just about meeting needs but also about how customers feel during their interactions.
  • Holistic Approach: Encompasses all aspects of a business, including products, services, and employee interactions.

What is the importance of customer understanding in Outside In?

  • Foundation for Strategy: Customer understanding is the bedrock of effective customer experience strategies, providing insights needed to tailor experiences.
  • Avoiding Assumptions: The book warns against making assumptions about what customers want, advocating for using qualitative and quantitative research.
  • Guiding Design and Measurement: Insights from customer understanding inform the design of experiences and the measurement of their effectiveness.

How does Outside In suggest measuring customer experience?

  • Three Types of Metrics: The authors recommend using perception metrics, descriptive metrics, and outcome metrics to measure customer experience.
  • Surveys and Feedback: Surveys are a primary tool for collecting perception metrics, allowing companies to gauge customer satisfaction.
  • Linking to Business Outcomes: Outcome metrics help connect customer experience quality to business results, such as retention and revenue.

What role does culture play in customer experience according to Outside In?

  • Cultural Foundation: A customer-centric culture is essential for delivering a great customer experience, with employees aligned with the company’s goals.
  • Socialization of Behaviors: Organizations should socialize key customer-centric behaviors through storytelling, rituals, and training.
  • Employee Engagement: Engaged employees are more likely to deliver exceptional customer experiences, and recognizing customer-centric behaviors can enhance motivation.

What are some real-world examples of companies improving customer experience in Outside In?

  • Fidelity Investments: Improved customer experience by focusing on process improvements and understanding customer needs, leading to increased satisfaction.
  • Sprint: Prioritized customer experience, resulting in reduced customer churn and increased satisfaction scores by addressing root causes of complaints.
  • FedEx: Transformed its customer experience by redesigning service centers based on customer insights, addressing emotional needs during interactions.

What is the customer experience pyramid mentioned in Outside In?

  • Three Levels: Consists of three levels: meets needs, easy, and enjoyable, each representing a different aspect of customer experience.
  • Foundation of Success: Meeting customer needs is the foundation, while ease of doing business and emotional enjoyment build upon that.
  • Measurement Framework: Serves as a framework for measuring customer experience quality and identifying areas for improvement.

What are the best quotes from Outside In and what do they mean?

  • "You need your customers more than they need you.": Emphasizes the importance of prioritizing customer needs in business, reminding that customer loyalty is essential for success.
  • "Customer experience is how your customers perceive their interactions with your company.": Highlights the subjective nature of customer experience, underscoring the need to manage these perceptions actively.
  • "Great customer experiences don’t happen by accident.": Stresses that intentional design and strategy are necessary for creating positive customer experiences, reinforcing the need for a proactive approach.

Review Summary

3.92 out of 5
Average of 500+ ratings from Goodreads and Amazon.

Outside In receives mostly positive reviews, with readers praising its insights into customer experience strategies. Many find the book's frameworks, case studies, and practical advice valuable for improving business practices. Reviewers appreciate the emphasis on customer-centric approaches and the six disciplines of customer experience. Some criticize outdated examples or lack of depth in certain areas. Overall, readers recommend it as a useful guide for understanding and implementing customer experience principles, particularly for those new to the field.

Your rating:

About the Author

Harley Manning is a recognized expert in customer experience and digital business. As a Vice President and Research Director at Forrester Research, he has extensive experience in analyzing and advising on customer-centric strategies. Harley Manning co-authored "Outside In" with Kerry Bodine, drawing on their combined expertise to provide insights into improving customer experiences across various industries. Manning's work at Forrester involves leading research on customer experience topics and helping organizations develop effective strategies. His background in technology and business consulting contributes to his understanding of how companies can leverage customer experience to gain competitive advantage.

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