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Customer Experience

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  • 1. “ Customer Experience….. Mapping and Measuring” Prepared for CCA Seminar 27th October 2005
  • 2. 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
  • 3. 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)
  • 4. 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
  • 5. 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)
  • 6. 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)
  • 7. 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
  • 8. 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
  • 9. An Example – Electricity Company
  • 10. 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
  • 11. 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)
  • 12. 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
  • 13. 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
  • 14. 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
  • 15. Home Movers Experience – staff view
  • 16. Home Movers Experience – customer view
  • 17. Home Movers Experience – compared
  • 18. “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
  • 19. “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
  • 20. An Example – Life Assurance (early work)
  • 21. 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
  • 22. 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
  • 23. 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
  • 24. Surrender Queries – staff view
  • 25. 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
  • 26. An Example – Train Franchise
  • 27. 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
  • 28. . .
  • 29. 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
  • 30. 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