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How to build an emotinal connection with your customers

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    How to build an emotinal connection with your customers How to build an emotinal connection with your customers Presentation Transcript

    • How to Build an Emotional Connection with Customers 2010 Experience Tracker Steven Walden, Senior Head of Research and Consulting Kalina Janevska, Consultant, Business Psychologist www.beyondphilosophy.com
    • Interface Review 1. Viewer Window 2. Control Panel GoToWebinar Example Interface Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 2
    • Beyond Philosophy Customer Experience Thought leadership is Fourth book will is all we do! our differentiator launch in Fall 2010 Offices in London, Atlanta with Partners in Links with Focus on the emotional side Europe & Asia Academia of the Customer Experience Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 3
    • We are Proud to Have Helped Some Great Organizations… Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 4
    • The Study Basics • Methodology • Quarterly online survey via online panel • Sample Characteristics • 1015 respondents • 50% USA; 50% UK • Objective • Understand the best way to connect emotionally with your clients and consumers Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 5
    • Stopping The Leaky Bucket Keeping existing customers is less expensive than acquiring new ones. Reichheld and Sasser (1990) state that a 5% improvement in customer retention can cause an increase in profitability between 25% and 85% (in terms of net present value) Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 6
    • The Problem of Retention Confirmed Beyond Philosophy Research and Accenture Research (2010) Accenture study (2010) of Percent of customers that have switched provider in the 3,556 consumers (auto, home past 3 years and life): 50% 53 percent are considering switching to Percent of insurance holders 40% 41% a new insurance provider 39% 34% over the next year 30% 29% UK and German insurance 20% customers have the least 20% ‘loyalty’ to their current providers - 71 percent are 10% 8% either not planning to 0% purchase their insurance with their provider or are Overall Auto Home Employment Health Life unsure and planning to Source: Beyond Philosophy Experience Tracker Research Q2 2010 look around This means lost revenue Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 7
    • Solution: Focus on Engaging the Right Customers Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 8
    • Why Segmentation? Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 9
    • Traditional vs. Emotional Segmentation Segmentation Criteria Segmentation Criteria Behaviour (switching) Emotion Segments Defined: Segments Defined: High Switchers Positives Low Switchers Negatives Defining Experience: Defining Experience: Price Lovemarks Outcome Outcome Short-term Long-term Weaknesses Weaknesses False loyalty Overestimates risk •Low switch because its •Picks up people who convenient not because feel negative towards its valued you but are not ready to leave you Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 10
    • Value of Emotional View Benefits of emotional engagement: 1. Herd instinct: enthused customers encourage other customers to come to them and people stick with you in the hard times (e.g., SouthWest Airlines) 2. Brand Equity: a positive brand buzz adds to Goodwill (straight onto balance sheet) and brand halo effects 3. Market Expansion: greater opportunities for diversification (Virgin effect) 4. Staff enthusiasm: benefits to corporate culture that enables differentiation 5. Emotions drive behaviour: it is emotion that drives behaviour! So focus on emotional drivers Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 11
    • Imprinting Lovemarks in your Customer Experience Brands are running out of juice". Love is what is needed to rescue brands. Roberts asks, "What builds Loyalty that goes Beyond Reason? What makes a truly great love stand out?” Kevin Roberts, CEO Saatchi and Saatchi Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 12
    • Done in Brand why not in Experience? “Kevin, we want you to turn Toyota into the most loved automobile corporation from the most respected one it is today.” So we helped them to modify their advertisement style. We helped them distance themselves from the image of the car on the road to the image of the driver behind the wheel of a Toyota car. We added a human touch to their advertisement. Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 13
    • What Did We Want to Find Out? Can we understand switching behaviour? Emotional Signature® Traditionally way Group good behaviour and Group good feelings and compare to bad behaviour compare to bad feelings Low High Lovers Detractors Switchers Switchers Similar Similar Too many Too many pattern of Only 8% pattern of different overlap different decision decision patterns patterns making making Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 14
    • What is the Conclusion? Understand the limitations of traditional segmentation: I can be loyal but not feel loyal Focus on both “High Switchers” and “Lovers” to understand better your customers: they explain switching behaviour Identify the lovemarks in each group: these drive action and behaviour Design your experience around the differentiated needs/ lovemarks of your customers Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 15
    • Glass Half-Full Economics Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 16
    • A Different Point of View How can I make an emotional connection, not just what can I get out of this now Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 17
    • …like the advertising… …my insurance provider would go …knowledgeable… the extra mile for me… …helpful… …educates me on how to avoid …cares about me… risk/stay safe… ..communicates information to me Agent/ clearly… Broker Experience Extensions Website Insurance …bill easy to understand… Experience …application process… …easy to use… …plan is clear to me… …helpful… ..renewal process easy…… Ease of Process Call Centre …call centre advisors are knowledgeable… …can easily contact… …call centre advisor is Beyond Philosophy © All rights reserved. 2001-2009 helpful… www.beyondphilosophy.com
    • Employment Insurance Resource Allocation Experience Lovemarks Opportunity Lovers Switchers 32% of Market are Positives driving 60% Tenure value While Agent and Call Centre experiences need to be controlled as these drive switching, what actually attracts customers and reduces switching is Experience Extensions amongst Positives and Easy amongst High Switchers Source: Beyond Philosophy Experience Tracker Research Q2 2010 Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 19
    • Simple Example: Employment Insurance No loyalty incentive or marketing literature sent. Customers are treated as a direct debit transaction The vicarious, media experience is underestimated Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 20
    • Auto-Insurance Resource Allocation Experience Lovemarks Opportunity Lovers Switchers While Call Centre and Website experiences need to be controlled as these drive switching, what actually attracts customers and reduces switching is Experience Extensions amongst Positives and Easy amongst High Switchers Source: Beyond Philosophy Experience Tracker Research Q2 2010 Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 21
    • Simple Example: Auto Insurance Desire for Review Media Phone Discuss Cover 1 Ads/ Offers 2 Companies 3 Requirements 4 1 Year + Completion on Receive Payment (DD, Renewal Phone 5 Certificate 6 Check) 7 8 Propensity to Switch is reduced by injecting experience clues: moments of delight (going the extra mile), advertising and education. Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 22
    • Life Insurance Resource Allocation Experience Lovemarks Opportunity Lovers Switchers While Call Centre and Website experiences need to be controlled as these drive switching, what actually attracts customers and reduces switching is Agent amongst Positives and Easy amongst High Switchers Source: Beyond Philosophy Experience Tracker Research Q2 2010 Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 23
    • Home Insurance Resource Allocation Experience Lovemarks Opportunity Lovers Switchers While Website and Agent experiences need to be controlled as these drive switching, what actually attracts customers and reduces switching is Experience Extension amongst Positives and Call Centre amongst High Switchers Source: Beyond Philosophy Experience Tracker Research Q2 2010 Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 24
    • Health Insurance Resource Allocation Experience Lovemarks Opportunity Lovers Switchers While Experience Extension and Website experiences need to be controlled as these drive switching, what actually attracts customers and reduces switching is Call Centre amongst Positives and Agent amongst High Switchers Source: Beyond Philosophy Experience Tracker Research Q2 2010 Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 25
    • Summary Recommendations Recognize that your customers are different and want different things Recognize different customers’ take into consideration different aspects of the experience when deciding whether to switch or not Customers who feel positively emotionally engaged with their insurance provider have the same mindset and perception of your experience that is different to customers that intend to switch To make that emotional connection with your customers, you need to identify their lovemarks Employment Auto Life Home Health Lovers Switchers Lovers Switchers Lovers Switchers Lovers Switchers Lovers Switchers Easy Website Agent Call Centre Experience Extensions Segment emotionally and identify your “Lovers” Develop a lovemarks experience Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 26
    • Further Conversation? Contact us... steven.walden@beyondphilosophy.com kalina.janevska@beyondphilosophy.com London Office: 0207 917 1717 Atlanta Office: 1 678 638 6162 Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 27