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JohnGoodman_CustomerManagementForum_Moscow_CMF2012

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  • 7
  • This graphic portrays the overall client experience. Read the chart from the left, walking the audience first through problem experience, then complaining rate then outcome of complaining. Define the three outcomes, satisfied, mollified, and dissatisfied. For this chart, satisfied is “completely satisfied with the action taken to resolve a problem”. Mollified is “‘not completely satisfied but the response is acceptable” or “not completely satisfied but some action was taken”. This is a so-so reply. The bottom category is “dissatisfied” and “dissatisfied, no action taken” on the complaint. Point out the resulting loyalties on the right hand side. No problem is the highest at 90%. Satisfied complainants are also 90% loyal. In some environments, their loyalty is actually higher than those with no problem but research in this industry does not show that – possibly because clients have to be persistent to get things fixed rather than one call and resolution is accomplished. Also point out that mollified patients have 30% lower loyalty than satisfied complainants, meaning that for every three clients who are mollified, one who will likely not buy again. Also point out that non-complainants are actually more loyal than mollified complainants. Therefore, if they complain you must satisfy them if you are to get a return on your complaint handling investment. The good news is that it is not that hard to satisfy the client.
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  • Ask each dealer to grade themselves on each function. Ask the group which is the weakest functions. Stress that ServiceMaster can help in those areas and that one or two customers will pay for the whole program.
  • Transcript

    • 1. Creating a Voice of the CustomerProcess That Has ImpactCustomer Management ConferenceOctober 23, 2012Moscow, RussiaJohn GoodmanTARP Worldwidewww.tarp.com
    • 2. Agenda• The Opportunity: How the VOC leads to CE impact• Eight factors leading to an effective VOC• Critical data sources and integrating them (surveys, contact centers, operations and employee input)• Creating the economic imperative for action• Myths about service• Grade yourself 2
    • 3. About TARP• Founded in 1971—41 years of customer experience leadership – White House Complaint Studies 1970s-80s (instigated 800#s and GE Answer Center) – Assisted 6 Baldrige Winners and 43 Fortune 100 Companies – Initiated concept of “word of mouth” (TARP/Coca-Cola 1978 Study) and “word of mouse” (eCare and Click & Mortar studies 1999)• Credited with developing the approach for quantifying the impact of quality on revenue, cost & WOM for companies like McDonalds, Toyota/Lexus, IBM, Harley Davidson, Cisco Systems, Xerox, 3M, HP, Honda, Hyundai, Pepsi Cola, Apple, Frito-Lay, Coca-Cola, Mercedes- Benz, Merck, Amway, Lexmark, Allstate, Cathay Pacific, Shell Oil and Qualcomm. 3
    • 4. Context of VOC within the Customer Experience DOING EFFECTIVE THE RIGHT JOB MAXIMUM RIGHT THE FIRST TIME + CUSTOMER CONTACT MANAGEMENT = CUSTOMER SATISFACTION & LOYALTY Respond to Individual Customers Customers will: Improved Identify Sources Use again Product & Service of Dissatisfaction Buy other Quality products Conduct Root Cause Analysis Tell others to buy Feedback on Prevention Proprietary © 2012 TARP Worldwide 4
    • 5. Firefighting Mode 5
    • 6. Building an Effective VOC: Six Big Ideas From Strategic Customer Service1. Staff doesn’t cause most customer dissatisfaction – sales, products, processes and customers do2. It is cheaper to give great service than just good service, the revenue payoff is 10-20X the cost3. People are still paramount – make the front line successful with flexibility and clear explanations4. Deliver technology that customers will enjoy – delivering psychic pizza via any channel5. Sensibly create remarkable delight6. An effective Voice of the Customer includes all kinds of data describing the overall customer experience 6
    • 7. Recent Survey of CE & Service Strategy Executives Survey Results: Data Collected by VOC Overuse of “rearview mirror”: Most companies primarily use traditional survey & complaint data Underutilization of early warning devices: Only 25% use operational data – Chicago bank Only 30% currently monitoring Social Media for VOC Only 13% are using Speech Analytics (Study Method- N=160, Nov 2011) Proprietary © 2012 WorldwideWorldwide Proprietary © 2012 TARP TARP 7
    • 8. Recent Survey of CE & Service Strategy Executives Survey Results: Analysis & Reporting About 33% produce an end-to-end view of the Customer Experience using data that is integrated into a single picture These 33% of companies were more than twice as likely to have significant improvements in customer satisfaction than those who didn’t integrate multiple types of data  Over 50%: 3 or more FTE Customer Experience Analysts However, the size of the analytical staff had no correlation with the impact of the VOC! Proprietary © 2012 WorldwideWorldwide Proprietary © 2012 TARP TARP 8
    • 9. Recent Survey of CE & Service Strategy Executives Survey Results: Business Case CFO buy in to business case is critical Where buy-in existed, 40% of VOC processes were very effective in getting things fixed and 55% had significant increases in customer satisfaction Where buy-in did not exist, only 8% of companies were very effective and only 23% had significant increases. Business cases can include four dimensions: Loyalty Margin – great experience and innovation Word of mouth Risk reduction (Liability, warranty, regulatory and PR) Proprietary © 2012 WorldwideWorldwide Proprietary © 2012 TARP TARP 9
    • 10. Departments With Interest in an Effective CE1. Marketing and Sales– retention and word of mouth from customers and shelf space from channels2. Finance – higher margin and lower costs3. Operations – reduce costs, more accurate execution4. Risk – better service reduces claims5. PR, Legal & Regulatory – better online reviews and publicity6. HR – less problems leads to happier front line and lower turnover Proprietary © 2012 TARP Worldwide 10
    • 11. Why Most VOC Processes Lack Impact and AreCost Inefficient• No unified picture of the customer experience• Does not estimate revenue damage by granular issue• Doesn’t focus on root causes and why problem occurred or why responses were not effective• Requires expensive additional surveys to indicate if action had impact Proprietary © 2012 TARP Worldwide 11
    • 12. Effective Voice of the Customer Process 8. Process supported by company-wide incentives 6. Formal 5. Clear 7. Formal processes for revenue systems for translating data and profit tracking into actions and implications impact targets 1. Well-defined 2. Unified data 4. Visible, 3. Integration ownership of collection granular, of multiple process and across whole actionable data sources issues lifecycle reporting Proprietary © 2012 TARP Worldwide 12
    • 13. Behavioral Basis: Employees Don’t Cause Most Dissatisfaction The majority of customer dissatisfaction is NOT caused by employee error or attitude but by products and broken processes* Customer expectations Customer Employee must be set to avoid 20%-30% 20% problems and surprises. -Fails to follow - Wrong expectations- Fails to follow - Customer error policy policy -Attitude At least Company 40%-60% Poorly designed products, 30% of - Products and services processes, and marketing contacts are don’t meet expectations create unmet expectations. preventable - Marketing miscommunication - Broken processes *Finding based upon TARP analysis problem cause data in over 200 consumer and B2B environments. Proprietary © 2012 TARP Worldwide 13
    • 14. The Tip of the Iceberg Phenomenon 1%-5% Complain to management Most that complain (5- 25%) go to front line person who can not or will not help 75%-95% Encounter a problem but don’t complain Proprietary © 2012 TARP Worldwide
    • 15. Understand Impact of Problems I II III IV Question/ Contact Contact Market Problem Behavior Handling Impact Experience % Definitely/Probably Recommend/repurchase from same organization No No problem 90% problem experience experience Satisfied11 Satisfied 93% 60% 60% 50% 50% Customers Customers Complainers Mollified22 Mollified Complainers 50% 5-50% 30% 30% 5-50% Problem Problem Dissatisfied33 Dissatisfied 30% experience experience 20% 20% 40% 40%Experience suggests Non- Non-three strategies: Complainers Complainers 60%Prevention, 95-50% 95-50%Solicitation ofComplaints, and Proprietary © 2012 TARP Worldwide 15Response
    • 16. Economic Model of Service Impact • Assume each customer is worth $1,000 • Average drop in loyalty 20% • For every five customers with a problem, one is at risk $1,000 (5 x .2 = 1) $1,000 $1,000 5 Customers 5 Customers with with 1 Retained 1 Lost Unresolved = Customer = Problems = Customer = Problems Solved/ Prevented - $1,000 + $1,000 Proprietary © 2012 TARP Worldwide
    • 17. Customer Expectation: Factors Driving Satisfaction • No Unpleasant Surprises • If Trouble Encountered – Accessibility – not average speed of answer, hours of operation – Taking ownership, apology – Clear, believable explanation – Creating an emotional connection rather than just courtesy – Money is often not the best solution – Timeliness and keeping promises Proprietary © 2012 TARP Worldwide 17
    • 18. Creating A Data Foundation for The VOC • Customer surveys • Customer contact and interaction data: coded and unstructured – key source of why it happened • Internal operations process and quality measures • Employee input – second source of why Surveys of Surveys of Customer Customer Total view of the customer customer + contact and + Internal process = Total view of the contact and Internal process customersatisfaction andsatisfaction and interaction data and quality data customer interaction data and quality data experience loyalty loyalty and employee experience and employee input input Take The Role Of Chief Customer Officer Proprietary © 2012 TARP Worldwide 18
    • 19. Estimating Number of Customers Impacted by IssueFrom Contacts to Different Touch Points 2% to flight attendant in 0.8% to consumer affairs/ pla 100 om customers relations** 20 %C Airline 7% to local supervisor** customers 5% to social media** encountering a 80 0.2% to executive by e-mail** rude gate agent % Do 1% to frequent flyer 800#** n’ tC 4% to reservations 800# om pl 1% airline web site ain 3.5% Other ** For these channels, the consumer may have first complained elsewhere and then escalated their complaint to this channel. Proprietary © 2012 TARP Worldwide 19
    • 20. Integrating Touch Point Data (Airline Example) Total Problem Estimated Best Estimate Source Reports Multiplier Instances # Instances Web Site 6 100 600 Social Media & 20 20 400 Unstructured Data Reservations 14 25 350 555 Executive Complaint 2 500 1,000 Consumer Affairs 4 120 480 Survey 0.5% 100,000 500# Customers Damage to Value of Monthly Revenue in Month Loyalty Customer Impact 555 x .25 x $2,000 = $277,500Proprietary © 2012 TARP Worldwide 20
    • 21. 2. Quantify the Damage of a Poor Customer Experience Demonstrating financial impact with the CFO, CMO and the General Counsel x x x 50% Most Satisfied Repurchasing = 2,500 25% 30% Some Not Complain Mollified Repurchasing = 3,000 200,000 Customers 20% Many Not with Dissatisfied Repurchasing = 7,000 Problems 75% Do Not Some Not Complain Repurchasing = 37,500 Total Customers At Risk = 50,500 At $1000 per customer, $50,500,000 at riskThree strategies: Prevention, Solicitation of Complaints and Improved Response Proprietary © 2012 TARP Worldwide 21
    • 22. Quantify the Payoff of Prevention of 25% of Problems Demonstrating financial impact with the CFO, CMO and the General Counsel x x x 50% 90% Satisfied Repurchasing = 1,875 25% 30% 80% Complain Mollified Repurchasing = 2,250 150,000 Customers 20% 70% with Dissatisfied Repurchasing = 2,250 Problems 75% Do Not 75% Complain Repurchasing = 28,125 Total Customers At Risk = 34,500 At $1000 per customer, $34,500,000 at risk or saving of $15,500,000Three strategies: Prevention, Solicitation of Complaints and Improved Response Proprietary © 2012 TARP Worldwide 22
    • 23. Set Priorities Based on Revenue Damage& Customers at Risk Overall Problem % Won’t % Customers problem experience freq recommend potentially lost (45%) (%)1 Will not2Meeting promised delivery 27 10.5 1.3datesProduct availability within 23 0.0 0.0desired time frameMeeting commitments/follow 21 30.0 2.8throughEquipment/system fixed right 20 22.2 2.0first timeAdequate post-sale 19 10.0 0.9communicationsReturning calls 16 33.3 2.4Minimum customers at risk 9.4%Proprietary and Confidential TARP Worldwide 1 Based on multiple problem selection 2 Based on will not repurchase only 23
    • 24. Show The CMO That Negative Word Of MouthCan Trump Marketing Example calculation of potential impact 10% Tell two = 2,000 delighted 10,000 customers 70% Tell one = 7,000 satisfied 20% Tell = -12,000 dissatisfied six -3,000 20% dissatisfaction can counter 80% satisfaction Proprietary © 2012 TARP Worldwide 24
    • 25. Great Service Is A Word of MouthManagement Mechanism 10% Tell two = 2,000 delighted 10,000 customers 80% Tell one = 8,000 satisfied Tell = -6,000 10% dissatisfied six 4,000 10% decrease in dissatisfaction results in net positive WOM Proprietary and Confidential TARP Worldwide 25
    • 26. Problems Raise Sensitivity to Price,Hindering High MarginsPercent of customers dissatisfied with fees rises with number of problems. 90% 80% 74% % Dissatisfied with price or fees 70% 60% 46% 50% 40% 30% 22% 20% 10% 10% 0% No problems 1 problem 2 to 5 problems 6 problems or more 26
    • 27. Broaden the Range of Solutions to Issues• Welcome kits, calls and emails• Enhance response with empowerment and explanations• Create efficient emotional connection• Use technology to deliver psychic pizza – JIT education – Anticipates – Simplifies• Delight sensibly• Create accountability – CCO Paper Proprietary © 2012 TARP Worldwide 27
    • 28. Enhancing Report Impact• Simplify to three issues to any one audience• Eliminate of masses of data requiring interpretation• Tailor report to each function• Provide action plan and process metrics impacted• Humanize data with quotes, stories and recordings• Act as consultant – suggest lead functional leaderProprietary © 2012 TARP Worldwide 28
    • 29. Practical Exercise: Evaluate Your VOC SystemProprietary © 2012 TARP Worldwide Grade 1 to 10, 10 being best Grade VOC Process Owned by One Person Unified Data Collection Plan Understand Non-complaint Rate and Multiplier Integration of Multiple Data Sources Actionable, Visible Reporting Understand Impact of Word of Mouth Revenue and Profit Implications of Issues Calculated Issues Translated Into Targets Tracks Do Issues Get Fixed Tied to Company-Wide Incentives If you rate less than a 75, you’re Total Score ___________ wasting 20% of your service budget 29
    • 30. Summary• Create a unified VOC including operational data to identify best opportunities• Understand root cause including customer caused• Quantify the revenue and WOM so CFO accepts• Take control of the VOC and then become the Chief Customer Officer• Proactively educate, connect, explain and deliver psychic pizza• Outlined in detail in Strategic Customer Service published by AMACOM – on Amazon for <$20.• For package of articles - jgoodman@tarp.com or 703-284-9253 30

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