Insites on Customer Experience

Building brands through customer experiences ? OR Building customer relationships through brands ? Christophe Vergult Director Customer Experience Research

Touch Relation- Financial point Behavior experience ship value The customer experience value chain 2

Be an active partner in building customer centric organizations by connecting customers with the entire company OUR MISSION 3

Relationship Monitor by 4

About the Relationship Monitor Understand the drivers of the customer experience value chain in service driven industries Build a pan-European benchmark on customer experience Validate customer experience research model 8 industries 8 countries 3 benchmarks Financial Netherlands Countries Automotive Belgium Industries Telecom UK Companies Airlines Germany Tour operators France Food retail Sweden Furniture retail Spain Clothing retail Romania 5

About the Relationship Monitor How to reduce bias in a ...or how to avoid source bias in a customer experience (benchmark) study? 6

About the Relationship Monitor Company neutral sample frame : InSites research panel More than 2.5 million panel Brut sample representative for consumers 25-65 per country members in Per industry respondents are screened on relevance as contact 25 countries within their household If a person is customer of different suppliers within one industry, one supplier is randomly chosen Results on an industry level are representative for all existing relationships within that industry and country. Consumers are interviewed on their relationship with 2 suppliers from different industries 17.000 respondents (34.000 observations) during Summer 2008 Identical research model/questionnaire over all countries and industries 7

Our customer experience beliefs

We believe in... ...meaningful experiences 9

What they were looking for... Risk reduction 10

What they are looking for... Experiences 11

We believe in... ...meaningful experiences Relations are built through experiences A long term relationship can help people to reduce risks. But more and more people are looking for personal development in a relationship. Companies who understand that and provide meaningful experiences to their customers win the race. What are meaningful Integrate experiences through 2009 external channels forthe model experiences in your customers? 12

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How to build profitable relationships through experiences Product touch point Value for Money Sales contact touch point Delivery touch point Customer service touch point Communication touch point Rewarding touch point 14

How to build profitable relationships through experiences “It is not how a company performs, it is how I experience the brand.” “I evaluate and I feel.” + Product touch point Value for Money Sales contact touch point Delivery touch point Customer service touch point Communication touch point Rewarding touch point 15

Experiences matter to build customer equity Strength of the model Results for Belgium PRODUCT Banking R² = .57 VALUE FOR Automotive R² = .48 REWARDING MONEY Telecom R² = .55 Touroperators R² = .53 COMMUNI- Airlines R² = .48 SALES CATION CONTACT CONTACT CUSTOMER EQUITY Retail R² = .45 50% of customer CUSTOMER DELIVERY relationships are built SERVICE through experiences that are under companies‟ control 16

Managing customer experiences is about setting priorities 17

1 Remove dissatisfiers 18

Add example cash withdrawal

1 Remove dissatisfiers 2 Create differentiators 20

Add example „progressive‟ P93 „de onmisbaarheidsfactor‟ It is not about the broken car, it is about the driver. 21

1 Remove dissatisfiers 2 Create differentiators 3 Right-size when a touch point doesn‟t matter 22

You need insights in the importance and your current performance per touch point 23

How does the industry perform? Results for the Belgian food retail industry 65 Product Value for money Shopping experience 60 Performance (=score on 100) Mean all items Communication CustomerService 55 Rewarding 50 Mean all items 45 0,10 0,15 0,20 0,25 0,30 0,35 0,40 0,45 0,50 Importance (=correlation of touch point on customer equity) 24

What performance level should your strive for? 25

You need to understand the role of each touch point Delight Basic touch point Basic requirement for the customer relationship. These touch points get you in the market. Bad performance will strongly harm your customer equity. Basic 26

What is the role of each touch point? Delight Delight touch point Touch point that can lead to an excellent relationship with the customer. Way to differentiate yourself from competitors. Basic 27

What is the role of each touch point? Delight Delight touch point Performance touch point Touch point that can lead to an These touch points are both basic excellent relationship with the and delighting. At any performance customer. Way to differentiate level it makes sense to improve. yourself from competitors. Basic touch point Neutral touch point Basic requirement for the customer No or only limited relationship relationship. These touch points get between touch point and customer you in the market. Bad performance equity. will strongly harm your customer equity. Basic 28

What is the role of each touch point? Results for the Belgian food retail industry. Delight Delight touch points Performance touch points Shopping experience Rewarding Communication Product Neutral touch points Value for money Basic touch points Basic 29

Insights on the Belgian air travel industry RELATIONSHIP MONITOR 2008 30

Conversation tracking on tripadvisor.com 23200 posts 31

Conversation tracking on tripadvisor.com Delivery FLIGHT PRE CHECK-IN LUGGAGE ID & VISA UPGRADE HAND SECURITY BOARDING LUGGAGE FLIGHT DURATION DRINKS & ROOM TO SIT DIRECT PLACE ENTER SAFETY CREW OF FLIGHT FOODS FLIGHT SEAT TAINMENT FLIGHT POST DO NOT ARRIVE ON CUSTOMS IMMIGRATION TRANSIT DESTINATION 32

Conversation tracking on tripadvisor.com Delivery FLIGHT PRE CHECK-IN LUGGAGE ID & VISA UPGRADE HAND SECURITY BOARDING 409 1730 94 361 LUGGAGE 227 155 420 FLIGHT DURATION DRINKS & ROOM TO SIT DIRECT PLACE ENTER SAFETY CREW OF FLIGHT FOODS 808 FLIGHT SEAT TAINMENT 258 828 1561 1150 156 499 484 FLIGHT POST DO NOT ARRIVE ON CUSTOMS IMMIGRATION TRANSIT DESTINATION 82 47 63 1988 33

What can we learn from Harley Davidson? 34

Customer experience management is about branding “Retention is for wimps. We measure the percent of customers who have our name tattoed on one of their body parts.” (Harley Davidson Annual report) 35

We believe in... ...meaningful ... consistent brands experiences Relations are built through A brand needs to live its values experiences A long term relationship can help Companies need to attract people to reduce risks. But more customers who can identify them and more people are looking for self with their brand values. personal development in a Investments in the relationship relationship. Companies who pays off if companies act understand that and provide consistently with these brand meaningful experiences to their values through all touch points. customers win the race. 2009 What are meaningful Integrate experiences through How can you translate your 2009 external channels forthe model experiences in your brand values into real customer customers? experiences? 36

Who do you want to be ? Who are you ? Your brand positioning Your brand DNA

You need to deliver the „total experience‟ by acting consistent with your brand values trough all touch points Product touch point Customer Equity Value for Money General Recom- Choose Premium Sales contact touch point Satisfaction mendation again price Delivery touch point Customer service touch point Communication touch point Brand Equity Conform with Reputation Modernity and Personal values and and prestige innovativeness relationship Rewarding touch point mission Brand consistency Communi- The way All contact Offering cation employees act moments 40

Experiences matter to build brand equity Strength of the model Results for Belgium PRODUCT Banking R² = .72 Automotive R² = .72 VALUE FOR REWARDING MONEY Telecom R² = .77 Touroperators R² = .63 Airlines R² = .63 COMMUNI- SALES CATION BRAND CONTACT CONTACT Retail R² = .69 EQUITY Brand can be built CUSTOMER DELIVERY through experiences SERVICE that are under companies‟ control... 41

What is the brand equity in different industries among customers? 100 100 100 100 100 100 0 0 0 0 0 0 65 59 60 58 64 58 42

Brand can be built through experiences that are under companies‟ control... IF a company acts consistenly with its brand values over all touch points 100 100 100 100 100 100 Brand Consistency = High 76 72 72 73 Brand Consistency = Medium 64 67 68 59 61 58 59 56 Brand Consistency = Low 52 47 49 47 48 44 0 0 0 0 0 0 Brand Brand Brand Brand Brand Brand equity equity equity equity equity equity 43

We believe in... ...meaningful ... the connected ... consistent brands experiences customer Relations are built through A brand needs to live its values experiences A long term relationship can help Companies need to attract people to reduce risks. But more customers who can identify them and more people are looking for self with their brand values. personal development in a Investments in the relationship relationship. Companies who pays off if companies act understand that and provide consistently with these brand meaningful experiences to their values through all touch points. customers win the race. 2009 What are meaningful Integrate experiences through How can you translate your 2009 external channels forthe model experiences in your brand values into real customer customers? experiences? 44

Touch Relation- Financial point Behavior experience ship value The customer experience value chain 45

2 customer experience value chains Touch Relation- Financial point Behavior experience ship value Individual value chain Touch point satisfaction Intention to repurchase Buying behaviour Value on buying behaviour  DRIVERS > Which touch points drive conversations ?  PARTICIPANTS > Who participates in the conversations ?  CONTENT > What are the conversation about ?  IMPACT > How do these conversations drive value ? 46

2 customer experience value chains Touch Relation- Financial point Behavior experience ship value Individual value chain Touch point satisfaction Intention to repurchase Buying behaviour Value on buying behaviour Connected value chain Acting on Touch point experience Willingness to recommend Referral value conversation recommendation (NPS) 47

0% repurchase

We believe in... ...meaningful ... the connected ... consistent brands experiences customer Relations are built through A brand needs to live its values The power of conversations experiences A long term relationship can help Companies need to attract Customers talk about their people to reduce risks. But more customers who can identify them experiences. And that matters. and more people are looking for self with their brand values. Positive recommendations personal development in a Investments in the relationship generate new customers (referral relationship. Companies who pays off if companies act value). And these promoters will understand that and provide consistently with these brand buy more themselves. meaningful experiences to their values through all touch points. customers win the race. 2009 2009 What are meaningful Integrate experiences through How can you translate your How do conversations 2009 external channels forthe model experiences in your brand values into real customer contribute to the value of your customers? experiences? company? 49

Net promotor score Pose question “Have you, or would you recommend „Company X‟ to others?” Group responses 1 2 3 4 5 6 7 8 9 10 Detractors Neutral Promoters Run calculation (Number of promoters - Number of detractors) Net promoter score _____________________________________ Total respondents Metrics behind „referral value‟

“how likely is it that you would recommend this company to others?” “did you select company primarily on the basis of a + referral from a friend or colleague?” (yes/no) + “have you positively referred friends or colleagues to company in the past 12 months?” (yes/no) Metrics behind „referral value‟

Time for a small quiz!

Which 3 companies have the highest Net Promoter Score ?

Which 3 companies have the highest Net Promoter Score? 54

Which 3 companies have the highest Net Promoter Score ?

Which 3 companies have the highest Net Promoter Score? Industry benchmarks Financial -10 Automotive 24 Telecom 3 Airlines 0 Tour operators 19 Retail 6 56

in 3 nutshells Customers are talking about Customer experience Client relationships are experiences, companies management and branding death row unless you focus on processes become one have a clear positioning and act accordingly 57

Let‟s get connected! Christophe Vergult Managing partner Christophe.Vergult@insites.eu Tel. +32 9 269.15.06 Mobile +32 496 23.29.32 InSites Consulting Evergemsesteenweg 195 B-9032 Gent Belgium Tel. +32 9 269 15 00 Lichtenauerlaan 102-120 3062 ME Rotterdam Netherlands Tel. +31 10 204 56 71 info@insites.eu www.insites.eu 58

Insites on Customer Experience

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