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PwC 10Minutes on Customer Impact
PwC 10Minutes on Customer Impact
PwC 10Minutes on Customer Impact
PwC 10Minutes on Customer Impact
PwC 10Minutes on Customer Impact
PwC 10Minutes on Customer Impact
PwC 10Minutes on Customer Impact
PwC 10Minutes on Customer Impact
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PwC 10Minutes on Customer Impact

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One of the best ways to help your business grow organically is to focus on giving your customers what they really want. Using data to understand your customers and communicate with them effectively …

One of the best ways to help your business grow organically is to focus on giving your customers what they really want. Using data to understand your customers and communicate with them effectively can give you a real advantage. Yet most companies don't have the means to do this. How can you keep pace with your customers? More info: http://www.pwc.com/us/en/10minutes/meeting-customer-expectations.jhtml

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  • 1. At a glance 01 02 03 04 Upcoming 10Minutes     How PwC can help 10Minutes on customer impact March 2012 Getting to know your customer better: the new frontier of business growth Highlights Companies now have more opportunities to understand their customers better. They can rely on more information, better technology, and advances in analytical techniques. Astute users of all these new tools will be able to fine tune the way they interact with and serve their customers. Thoughtful, systematic organizational change will often be required to create a truly synchronized, multi-channel experience for customers. The CEO is often the best-positioned leader to serve as Chief Customer Advocate. Opportunities await companies that can tap into their customers’ minds. With 65% of global CEOs—and 77% of US CEOs— indicating that customer demand will be the biggest factor driving strategy changes this year,1 it has never been more critical to understand what motivates customers. Today’s empowered customers expect distinctive, high-touch experiences that keep pace with their wants and needs. Exceptional customer experience is one of the key drivers of organic business growth, so firms can gain an advantage if they transform customer data into insights and meaningful interactions. However, the majority of companies don’t have sufficiently mature processes and skills to uncover these insights from customer information flows. Information from corporate sources is often in a format employees cannot use, and two-thirds of workers distrust information from other functions in the organization outside of their own.2 Customers’ expectations are rising fast, changing the way firms do business. This 10Minutes explores what companies should consider doing to keep up. 1 PwC, “15th Annual Global CEO Survey,” 2012. Is opportunity passing you by? 1. A quarter of global consumers—and nearly one-third in the US—believe companies usually fail to satisfy their expectations. These are also missed opportunities; most consumers are willing to spend more with companies they believe provide excellent service.3 2. Of the 47 industries in the American Customer Satisfaction Index, 60% score lower than 80 on a scale of 0 to 100. Top-rated companies in the lowerscoring industries achieve ratings that exceed industry averages by several points. And in the top-scoring industries, companies are challenged to constantly distinguish themselves from the pack.4 3. Eighty-two percent of the world’s online population use social media.5 Yet PwC research shows that only 37% of companies have invested in social media tools to understand customers.6 2 Corporate Executive Board, “Overcoming the Insight Deficit: Big Judgment in an Era of Big Data,” 2011. 3 American Express, “2011 Global Customer Service Barometer,” 2011. 4 The American Customer Satisfaction Index, 2010 and 2011 data; PwC analysis. 5 comScore, Inc., “It’s a Social World: Top 10 Need-to-Knows about Social Networking and Where It’s Headed,” 2011. 6 PwC, “The 4th Annual Digital IQ Survey,” 2011.
  • 2. Home At a glance 01 02 03 04 Upcoming 10Minutes     How PwC can help Many leading companies have moved toward customer-centric models, shifting away from a product-centric mindset. Their experience indicates that each business function should change for the transformation to be successful. Business Function Product-centric characteristics Customer-centric characteristics Marketing • Basic customer insight • Deep customer insight • Organized by product lines • Organized by customer segment or need Products • Off-the-shelf, little differentiation or customization among segments • Designed around the customer, differentiated by customer segments Channels • Lack of channel integration • Synchronized experience across channels • Systems determine strategy • Customer determines strategy • Sales team incentivized by product volumes • Sales team incentivized by customer metrics Technology • Legacy systems built around products • The newest tools that capture the customer’s voice and allow that voice to shape strategy Human Resources • Culture based on financial targets • The right talent to deliver customer excellence Finance • Measurements centered on product metrics, such as profitability and market share • Measurements based on customer perception of brand; financial and customer metrics don’t compete Operations • Customer experience exceeds expectations
  • 3. Home At a glance 02 03 04 Upcoming 10Minutes     How PwC can help 01 Taking customer insight to the next level Improvements in business intelligence and the art and science of analyzing customer behavior are coming together to help companies. Are you focusing on the right things— and using the right data? Attributes associated with good customer experiences Illustration: For retail companies, most good experiences can be attributed to strong support and staff who understand customers’ needs. 56% Support 67% Staff friendliness 40% 2% 2% Quality Accessibility Presentation 31% Staff recommendations 3% Not all data are created equal. Corporate Executive Board research finds that 85% of data captured by companies are unstructured.7 Companies that can learn to use these data to help shape strategy can find an edge. Seeking to reduce customer turnover, business-to-business telecommunications firm XO Communications applied predictive analytics to forecast when subscribers would leave or default on payments. In the first year, the company saved between $9 million and $13 million.8 Are you listening to your customers? Next-generation social intelligence tools—such as natural language analysis—allow companies to analyze context, mood, and intent within customer conversations. In 2010, PepsiCo’s Gatorade built a social media Mission Control center, using such tools to create real-time data visualizations of online conversations. Learning how customers perceive its products and brand has contributed to greater market share.9 Gatorade posted a double-digit increase in volume during the first three quarters of 2011.10 Are you benefiting from new insights garnered from economics and psychology? Behavioral economics, which combines classical economics and behavioral psychology, can help companies understand how customers actually make decisions, rather than assume how customers will behave. Southwest Airlines research found that bag fees evoked a very strong emotional response from passengers.As a result, Southwest, the only major US carrier to not charge for first and second checked bags, framed its offers with the “Bags Fly Free” slogan. In 2010 and 2011, the campaign’s first two full years, Southwest posted its biggest recent annual revenue increases, $1.75 billion and $3.55 billion, respectively.11 Is your customer experience synched up across all touch points within your company? Dividing lines between channels become hazier each day. Understanding this, retailer Nordstrom adopted a multi-channel approach to inventory, displaying stock from its warehouses and stores online.12 The company posted record sales in 2010, triggered by initiatives that integrated operations “consistent with our customers’ expectations of a seamless shopping experience regardless of channel.”13 7 Corporate Executive Board, “Overcoming the Insight Deficit: Big Judgment in an Era of Big Data,” 2011. Others Sample size: 258 Source: PwC, “Experience Radar, Retail Insights 2011,” 2011 8 Melissa Korn and Shara Tibken, “Fumbling Over Data,” The Wall Street Journal, October 3, 2011. 11 Southwest Airlines Co., company financials. 9 Business Insider, “Interview with PepsiCo head of digital, Bonin Bough,” November 4, 2011. 12 PwC and the Grocery Manufacturers Association, “2011 Financial Performance Report: Thriving in a Connected World,” 2011. 10 PepsiCo, Inc., Form 10-Q for the quarter ended September 3, 2011. 13 Nordstrom, Inc., Form 10-K for the year ended January 29, 2011.
  • 4. Home At a glance 01 03 04 Upcoming 10Minutes     How PwC can help 02 Beyond insight: meaningful interactions and brand-defining experiences PwC’s Experience Radar industry-based customer research shows that each customer segment has its own recipe for a stellar experience—with a different mix of ingredients such as convenience, support, community, and quality. Unfortunately, few companies deliver on these recipes.14 Simplifying the customer decision process PwC worked with a major US healthcare insurer to improve the company’s online channel and increase online sales. The company noticed that many customers would begin shopping for insurance coverage online, but finish the transaction by phone or abandon it altogether. Customer interviews, usability tests, and competitive analysis indicated that customers found the online process cumbersome and were intimidated by too many choices. The company updated its online navigation to reduce the number of choices— highlighting the best choice based on a customer’s needs and preselecting ancillary products (such as dental coverage). This example illustrates the impact of behavioral economics in redesigning experiences that aid customers in making decisions—leading to more relevant customer outcomes and better revenues for the company. Opening doors with first impressions Hotel chain Gaylord Entertainment began combining data from internal customer satisfaction surveys with text analysis from online industry forums and social media sites. By combining these structured and unstructured data, the company learned that the length of time customers were spending during check-in was a key reason for poor overall customer experience. Gaylord created targets for check-in times, offered staff incentives for meeting them, and generated daily reports to measure the process. Half of its check-ins (49%) in the first quarter of 2011 took less than five minutes, up from 39% about a year earlier. During the same period, average customer ratings for ease of check-in increased about 67%.15 Taking the focus away from products USAA, the financial services firm that began by servicing the military, typically leads its industry in customer satisfaction. But with no branches and a complex set of products and services, USAA realized it needed an even sharper customer focus. To keep its customers at the center, USAA moved away from a structure organized by products. Instead, it consolidated its channels and call centers into a unified Member Experience organization that focuses on life events—such as buying a house, deploying for military service, getting married, or having a baby. To provide customers with a synchronized experience across these events, USAA maintains a single, cross-channel information file for each customer, and the executive vice president of customer experience reports directly to the CEO.16 15 “Case Study: Hotel Chain Looks for ‘Moments of Truth,’” Computerworld, October 10, 2011. 14 PwC, “Experience Radar 2011,” 2011. 16 Peter Weill, “What Is Your Digital Business Model?” MIT Sloan School of Management Center for Information Systems Research, September 2011.
  • 5. Home At a glance 01 02 04 Upcoming 10Minutes     How PwC can help 03 Building the customer-centric organization takes real change How focused is your organization on the customer? Often, companies must realign and retool their organizations around these questions to put the customer at the center. In most companies, different functions (e.g., sales, marketing, service, Web, shipping) have distinct views of the customer—and each of these views represents only a slice of the overall customer. Ultimately, the design of your organization may be limiting what you can accomplish. CMO Council research finds that one in five marketers believes brand influence is being limited by his or her organization’s design.17 Organizations need feedback loops—the ability to provide customer information in real-time across the firm—because companies’ reaction times are now measured in minutes, not days. Case in point: Peeling back the onion Innovative products—Do insights about customer expectations drive your new product development? After analyzing its customer-facing organization, a top-10 retail bank realized customers were frustrated by an uncoordinated experience—a branch teller not having information on a transaction the customer made online, a customer having to repeat information when using the call center, or customers receiving multiple promotional calls after already indicating they weren’t interested. Closed-loop marketing—Are your marketing, sales, and service functions integrated in a way that is measurable and fosters collaboration? PwC helped the bank develop a strategy that would integrate its channels to create a single view of the customer. This required Customer-centered strategy—Are your functional barriers preventing a unified view of the customer across the company? Profitable pricing—Are your pricing strategies directly tied to the customer’s voice in the marketplace? Next-generation sales—Do meaningful interactions with customers align your sales process with customers’ needs? Progressive service—Do your culture and infrastructure promote service quality that can generate revenue? 17 CMO Council, “Variance in the Social Brand Experience,” 2011. organizational change that would involve people, processes, and technology, specifically: • Standardizing the types of data that different groups gathered and analyzed (i.e., demographics, customer-service patterns, online behaviors, transactional data); • Overhauling the technology suite to integrate the applications powering branches, ATMs, online banking, and call centers; and • Changing incentive structures to focus on enterprise-wide value rather than individual product line volume. The bank anticipates the new strategy and seamless customer experience will result in significant revenue increases over the next five years. Creating distinctive customer experiences means businesses need to rethink how they generate demand and how they sell to and service customers. By putting the customer at the center, companies can look beyond traditional functional boundaries, bringing together marketing, technology, and operations to reinvent the customer-facing organization.
  • 6. Home At a glance 01 02 03 Upcoming 10Minutes     How PwC can help 04 Leading the charge to create a customerfocused business The CEO is often the organization’s only leader who has the scope of responsibility, authority, and influence to properly advocate for the customer and for uniformity and excellence in customer experience. Chief experience officers can play crucial roles in connecting the dots, but their effectiveness depends on the tone from the top. The Chief Customer Advocate’s challenges Indeed, CEOs want to understand customers better. Among global CEOs, 69% wish they could spend more time meeting with customers.18 As the company’s Chief Customer Advocate, the CEO needs to overcome fundamental challenges on the way to building a customer-centric organization. 1. The CEO must delegate authority and mobilize the organization to adopt a customer focus. While 68% of respondents in PwC’s 4th Annual Digital IQ Survey say their firm has an effective overall strategy, only 49% say the strategy is well communicated across the firm.19 2. Some traditional functions will need to change, and new learning will be required, often across disciplines. CEO support will be vital to make new functions—such as communicating with customers on digital platforms, using social media, and analyzing unstructured data streams—become part of business as usual. 3. Firms can be inundated by the list of available customer connectivity technologies. But in a period of limited financial resources, the CEO needs to invest in the right spots. Among global CEOs, 73% expect changes in their technology investments over the next year.20 The difference will be how these changes align with priorities. Top-performing firms in PwC’s Digital IQ are far more likely to have a CEO who champions the use of technology to achieve strategy.21 4. Companies are collecting and using customer information that resides up against the privacy wall. Privacy is the emerging hot-button issue of customer experience, and the CEO needs to help the organization explore the privacy/value tradeoff to properly serve its customers. That makes the CEO the guardian of customer trust, leading an effective approach to mitigating data theft risks. Building a customer advocacy team—that is, a voice-of-the-customer function—at the heart of your organization gives the customer a seat at the leadership table. 18 PwC, “15th Annual Global CEO Survey,” 2012. 20 PwC, “15th Annual Global CEO Survey,” 2012. 19 PwC, “The 4th Annual Digital IQ Survey,” 2011. 21 PwC, “The 4th Annual Digital IQ Survey,” 2011.
  • 7. At a glance a glance Home At 01 02 Upcoming 10Minutes topics 03 04     How PwC can help CEO Agenda 2012 Toward a more flexible supply chain Despite uncertainties—whether economic, regulatory or other—CEOs are taking deliberate steps to stretch in markets they believe are most important for their future. 10Minutes distills the findings from PwC’s survey of more than 1,250 CEOs around the world as the CEOs’ agenda for 2012. Volatility has become a fact of life in today’s business landscape. Yet, after years of global expansion, many companies’ supply chains are brittle, unable to respond to frequent fluctuations in demand and supply. This 10Minutes explores the strategies companies can deploy to make their supply chains more agile and adaptable. Managing water risks Businesses have to compete for fresh water with a burgeoning global population that is consuming more food and energy; both are inextricably linked to water. Missteps in managing water can lead to political and legal snafus that halt production in far-flung global operations. 10Minutes discusses how companies can find creative solutions to managing water risks by taking the long view.
  • 8. Home At a glance How PwC can help 01 02 03 04 Upcoming 10Minutes     How PwC can help To have a deeper discussion about customer impact, please contact: Paul D’Alessandro Principal PwC +1.312.298.6810 pmd@us.pwc.com Tell us how you like 10Minutes and what topics you would like to hear more about. Just send an email to: 10Minutes@us.pwc.com. Download and experience the 10Minutes series with enhanced multimedia on your iPad. Look for PwC 10Minutes in the iTunes App store. Tom Puthiyamadam Principal PwC +1.646.471.1490 thomas.puthiyamadam@us.pwc.com PwC firms help organisations and individuals create the value they’re looking for. We’re a network of firms in 158 countries with close to 169,000 people who are committed to delivering quality in assurance, tax and advisory services. Tell us what matters to you and find out more by visiting us at http://www.pwc.com/. © 2012 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see http://www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors. 10Minutes® is a trademark of PwC US. ST-11-0027

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