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Customer Experience

Customer Experience






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    Customer Experience Customer Experience Presentation Transcript

    • “ Customer Experience….. Mapping and Measuring” Prepared for CCA Seminar 27th October 2005
    • Retention Through Experience
      • As the cost of acquiring customers rises organisations are investing in retention
        • Index of Costs Retention 100
        • Winback 140
        • Acquisition 240
        • [source QCI/WPP customer management research 2003]
      • Key Retention Drivers
        • Brand Traditional Marketing
        • Proposition Elements Experience
        • Contact Service
      • Customer Lifecycles suggest increasing customer interactions/contacts and more demanding customers
        • National Consumer Council reported an increase in complaints from consumers in 2003 of 24% over the past 5 years
    • Service Impact
      • Customer Experience through contact influences customer’s perception of the brand and is a key component of brand loyalty and can often override traditional/other marketing communication, for example recent outsourcing of customer service……
        • Indian Call Centres
        • “you can’t subcontract your relationships with customers”
        • – Richard Pym CEO Alliance & Leicester
      • Customer Experience Impacts on Retention
        • “A Good Experience is based on strong relationships between dialogue, satisfaction and these drive customer retention”
        • – Maggie Evans marketing director iSKY Europe
      • The Customer’s experience is an area where the successful businesses are very good in this respect…and the not so successful are very poor (First Direct Vs PC World)
    • Most companies have fundamental gaps in their customer lifecycle model Source: 63% do not know how many high value customers they lose In most markets, just 1% of customers are worth about 30% of total margin, but 58% do not have any special development plans for these key customers 41% do not record customer contact channel preferences, let alone contact customers through their preferred medium. Only 13% of senior management have regular contact with customers In more than 90% of companies, Staff who are responsible for talking to customers could not articulate why customers should buy from them Only 35% bother to thank new customers Only 2% have regular winback programmes 47% do not have any sales lead distribution agreements Although 52% look at the quantity of customers acquired, only 8% look at the quality of customers acquired. 30% follow-up a complaint to check on satisfactory resolution Only 4% of companies have an enterprise-wide customer information plan 11% drive contact strategies via a database QCI/WPP Customer Management Research project 2003
    • Measurement and Improvement
      • Key question is how do you know if you’re delivering a good experience (customer satisfaction scores?) and how do you know where to improve?
      • Organisations tend to measure Experience by measuring Customer Satisfaction
        • Only measures single activity in isolation
        • Ignores the context
      • Organisations therefore traditionally tend to look for improvement in this area in one of two ways
        • Significant investment in CRM IT systems (EdF; ESB; Britannic)
        • Re-engineer their customer service processes (ESB; National Express)
    • Customer Experience Influencing Components
      • Is there delivery of a consistent experience Brand Values
      • Touchpoints – customers can interact with a company in increasing ways and how do they impact cost? Some channels are more expensive than others
      • Organisational Priority – which experiences are more important than others and what is the organisational driver?
        • Segmentation ?
        • Revenue?
        • Cost? (activity based)
    • Customer Experience Steps
      • Step I
      • Define Experience Priorities
        • opportunities (e.g. high value customer segments)
        • high impact/risk (e.g. sales and processing for new customers)
      • Understand/Define Brand Values
      • Agree Customer Touchpoints
      • Map Customer Experience at Touchpoints using model
      • Identify poor experience areas and examine Cost Benefit at those points
      • Step II
      • Look for quick wins (non System/IT)
      • Step III
      • Improvements
        • Implement Plans to improve and measure effect using model
        • Use QCI Cmat Benchmarking to develop long term KPI’s and monitor
    • Customer Experience Approach
      • Developed simple tool
        • Map Touch Points which generate “The Experience”
        • Attach values to Touch Points “Experience Score”
        • Weight these values by importance the customer places on a given part of the experience
      • 2 part approach
        • Map and Measure experience with front line staff who represent Touchpoints (internally)
        • Map and Measure experience with customers who have recently passed through experience
      • Workshop approach taken internally for staff and quantitive research (telephone/interview) for customers
    • An Example – Electricity Company
    • Background
      • This company is approaching a fully competitive electricity market in 2005 (some business customers can choose supplier currently)
      • As the monopoly supplier overt retention in the short term is not possible, but building a strong position for the future is recognised as important
      • Segmentation has identified valuable customers which are desirable to retain and Customer Experience was recognised as a key driver
      • CRM is so large a subject that many people didn’t know where to start in terms of Customer Experience and we discovered there was no simple tool to measure Customer Experience
    • Background
      • A new approach was required
      • There were a number of projects in customer services amending processes and systems and a significant investment by IT in CRM systems (SAP with a CRM module)
      • BUT Process work was almost ad hoc (aimed at fixing broken processes) and Implementation of SAP is problematical
      • Key Question - how to leverage longer term benefits from investment in Customer Experience to drive better Retention?
      • Operational Business was charged with delivering these benefits
        • Marketing (scope possibilities)
        • Customer Services; Retail Shops; Metering (delivery and change management)
    • Customer Experience Steps
      • Agreed Brand Values
        • “brand iceberg”
        • reflected in brand(s)
      • Agree Customer Touchpoints and the brand values to be communicated at those points
      • Define Experience Priorities
        • high impact/risk (e.g. billing and processing)
        • opportunities (e.g. home movers)  chose this one
      • Map Customer Experience (for home movers) using model
        • Internally (own front line staff)
        • Externally (customers who have recently experienced)
      • Identify poor experience areas
      • Look for quick wins (non IT)
      • Implement Plans to improve and measure effect using model
    • Customer Experience - Measurement
      • Objective was to examine the end to end experience for residential home movers and called it “Crate Expectations”
      • Used simple tool
        • Attaches values to customer experience “Experience Score”
        • Weights these values by importance the customer places on each aspect of the experience relative to each other
      • 2 part approach
        • Map experience with front line call centre staff (internally)
        • Map experience with customers who had recently passed through home moving (externally)
      • Workshop approach taken internally for staff and quantitive research (telephone) for customers
    • Home Movers “Crate Expectations”
      • Objective: review and improve the residential customer experience for home movers setting a platform for retention and in the longer term winning opportunities to acquire customers (once the market opens)
      • 180,000 moves each year (400,000 inbound calls)
      • Reducing calls by 20% reduces cost by €30k
      • Losses predicted at 20% Year 1 = 36,000. Reduced losses to 10% = 18,000. Estimated incremental enterprise value (retention:18k customers at €40 = €720k)
      • 3 customer experience scenarios identified e.g. existing customer moving to existing supplied property
    • Home Movers Experience – staff view
    • Home Movers Experience – customer view
    • Home Movers Experience – compared
    • “Crate Expectations” - Conclusions
      • Customer perception of experience different to staff view
      • Internal process not being followed, so experience being mapped is on different basis
      • Improvements required are centred on communications (support material and calls and are largely not IT related)
      • 4 Quick Wins (not IT dependant)
        • Call backs in all scenarios and by same CSA
        • Create check list for the CSA's to use during the calls e.g. prompt
        • Home Movers Pack/Booklet (tips;do’s and don’ts;contact numbers) and Welcome letter re-write
        • Training for Customer Services
          • E.g. Set expectations on when welcome letter will arrive
    • “Crate Expectations” – early implementation
      • Call Backs by CSA’s
        • 18% of all inbound calling in contact centres related to home moving
        • In first 3 months of implementation calls reduced by 30% (stable state = 12% of all inbound calls now relate to home movers). Estimated cost reduction €48k
      • Customer Service Training
        • Total Customer Experience Weighted Score (average) moved from -2.01 to -1.8
      • Customer Satisfaction
        • Re-visited customer satisfaction tracking and re-aligned/added some questions to track this activity/experience
    • An Example – Life Assurance (early work)
    • Background
      • A portfolio of mainly Life Assurance customers in excess of 1 million
      • As acquisition ceased almost 3 yrs ago, this base is slowly being eroded
      • Retention has taken on a new importance
      • Policies are purchased and then forgotten with little contact with the customer and little cross sell/up sell
      • Main contact during the life of the policy is with the contact centre with requests for surrender values
    • Customer Experience Steps
      • Agree Customer Touchpoints
      • Define Experience Priorities
        • Surrender queries (active customers)
        • Aimed at maximum retention (winback of sorts)
      • Map Customer Experience (for priorities) using model
        • Internally (own front line staff) – completed as a test
        • Externally (customers who have experienced) – not yet started
      • Identify poor experience areas
      • Look for quick wins (non IT)
      • Implement Plans to improve and measure effect using model
    • Surrender Enquiries – a priority
      • Objective: improve the customer experience for surrender queries increasing retention
      • Current attrition is 5% p.a.
      • Estimated incremental enterprise value (retention: x customers at £y =£)
      • Map customer Experience both internally and externally
      • 3 customer scenarios identified e.g. have received an annual policy review
    • Surrender Queries – staff view
    • Surrender Enquiries – early thoughts
      • Making it easy for customer to leave is seen as good customer experience internally !
      • Customer receives cash at end of experience is viewed as a positive finish point for customer
        • Issue is lost relationship, no winback
        • As there is no acquisition, any brand value cannot be leveraged in longer term
      • Support communications is unexpected, confusing and regulatory based
    • An Example – Train Franchise
    • Objectives
      • Phase I – Existing Customer Data
        • Examine current customer satisfaction position, in particular current data (SRA bi-annual reports and CSS quarterly surveys) and methods of survey
        • Where possible aligning customer experience factors (touchpoints) in each
        • Generate messaging template (internal comms and media)
        • Re-examine role of SRA (regulator) survey and CSS (internal) survey
      • Phase II – Customer Experience Measure
        • Look at end to end experience and develop scoring map
          • Score with internal staff as a comparison (it will be different from customers)
        • Identify key drivers of customer experience
        • Calculate cost impact
        • Focus on those factors which are most important to customer and there is under performance on
    • . .
    • Phase II - Key Findings
      • Staff Score the experience lower than customers
        • Rail staff tend to have a pessimistic view
        • In terms of what they believe to be important to customers, their view is very different to customers
      • Commuters accept Punctuality is an issue within the experience, but is not the most important factor
        • Punctuality has become a hygiene factor
        • Customers are more concerned about provision of information
      • Ease of Access to stations and trains is important
        • Disabled customers are an important group
        • Opportunity for a “Priority Customer” approach
      • Cost of focussing on Punctuality does not provide cost benefit
        • Cost of additional staff balanced by improvement in experience score
        • Better information provision and leveraging technology has a significant impact on experience score
    • Summary
      • Customer Experience is a powerful driver of retention
      • Measuring customer satisfaction is misleading
      • The Approach demonstrated
        • can be applied to any organisation/market
        • Is simple
        • Will deliver quick wins
        • Is not costly e.g. Electricity Co. total cost was £17k
        • Ongoing benchmarking will deliver ongoing benefits