Matza Casro Deck

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CASRO Client Conference - The Practical Application of a CUSTOMER EXPERIENCE Program
Contact me to explore design, development & implementation of similar program for your Firm or Clients.

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Matza Casro Deck

  1. 1. 2008 CASRO Client Conference Voice of the Customer Value Added – What Does It Mean? Michael Matza WaMu Service Excellence Group June 3, 2008
  2. 2. Agenda Voice of the Customer and Loyalty System (VOC) • Framework to analyze data and identify operational improvements – that drive customer loyalty VOC in Action • Case studies and examples – WaMu - Michael Matza 2 2008 CASRO Client Conference
  3. 3. Voice of the Customer and Loyalty System (VOC) WaMu - Michael Matza 3 2008 CASRO Client Conference
  4. 4. WaMu – Voice of the Customer The Opportunity High customer expectations necessitated top-notch • delivery of service at peak efficiency Actual customer experience, both product features and service – interactions, must meet or exceed brand positioning Managers must have data on „Critical-to-Customer‟ (CTC) service – criteria to drive operational improvement Business Process Excellence Solution • Actionable feedback based on customer or employee experiences – across the enterprise A framework to prioritize critical changes that drive customer – loyalty Voice of the Customer (VOC) – WaMu - Michael Matza 4 2008 CASRO Client Conference
  5. 5. Voice of the Customer (VOC) The Solution The VOC system utilizes customer insights to identify and drive improved processes: Deliver and utilize VOC data and information to discover, analyze, – trend, and recommend service improvements to increase ability to execute superior service processes and experiences as one company Consult with and educate business lines and enablers on VOC – implications to service delivery and profitability Design and deliver VOC-based Service Excellence initiatives (e.g., – best practices, problem resolution/service recovery strategies, and feedback/performance programs) Provide framework to understand & use data to create meaningful customer experiences that build strong customer relationships and loyalty. WaMu - Michael Matza 5 2008 CASRO Client Conference
  6. 6. Integrated set of tools provide insights to measure, manage, and effectively improve WaMu’s customer experience.  Measures all WaMu business lines Provides a Comprehensive View  Measures people, process, product, price, and presentation  Measures contact and steady state (non-contact) touch points of the customer’s experience  Provides an understanding of who, what, when, and how the Focuses on transaction/contact was conducted Specific Events  Captures feedback close to the transaction/contact to ensure of the experience fresh recollection by the customer Provides  Enables WaMu to prioritize performance improvement actions Priorities for Action based on what will have the greatest impact on customer based on what is important to satisfaction and loyalty the customer Includes  Provides actionable information by highlighting service Operations or Service- thresholds that support desired customer satisfaction and Level Diagnostics loyalty levels. These thresholds can be used to drive improvement targets specific to operations reported by the customer Allows for  Provides system to compare and evaluate performance across Internal and External business lines and business units Benchmarks  Provides system to benchmark WaMu performance with competitors for management insight WaMu - Michael Matza 6 2008 CASRO Client Conference
  7. 7. VOC Online Reporting Key Features • Drill-down by business – Index scores – Benchmark – Weighted attributes – Breakpoint analysis – WaMu - Michael Matza 2008 CASRO Client Conference
  8. 8. Voice of the Customer and Loyalty System In Action Linkage Analysis Key Business Drivers  Customer Impact Assessment Project Prioritization  WaMu - Michael Matza 8 2008 CASRO Client Conference
  9. 9. VOC in Action What We Wanted to Find Out STRATEGIC TACTICAL • Which customer behaviors do • At a project level, how do we currently influence through “ripple effects” to customers service experiences? and employees change the expected project outcome? – Direction – Attitudes and intentions – Magnitude – Behaviors – Financial implications – Financial implications • How can we demonstrate a return on service that is competitive with other investments? Customer Impact Linkage Analysis Assessment WaMu - Michael Matza 9 2008 CASRO Client Conference
  10. 10. Path to Profitable Service (In Theory) $ Attitudes/ Service Behaviors Intentions Experience • Satisfaction • Branch • Retention • Willingness to • Phone • Referrals recommend • Web • More products • Intention to purchased • Mail remain/repurchase • Higher balances • Intention to switch • Lower cost from competitor channel usage • Fewer complaints/ escalations • More positive/ less negative word-of-mouth WaMu - Michael Matza 10 2008 CASRO Client Conference
  11. 11. Does Satisfaction = Attrition?  Yes Satisfaction Level vs. Household Attrition 3 Months After Survey 2.7 times higher Attrition Level • Look at categories instead of averages 1.5 times higher • The effect “wears off” quickly Delighted Neutral Dissatisfied WaMu - Michael Matza 11 2008 CASRO Client Conference
  12. 12. Does Satisfaction = Purchasing?  No Satisfaction Level vs. Number of Accounts 3 Months Following Survey • Delighted customers Change in number of accounts Surveyed Month 1 Month 2 Month 3 Month 4 do not “reward” with more business or higher balances • Dissatisfied customers may “punish” by dropping accounts Delighted Neutral Dissatisfied WaMu - Michael Matza 12 2008 CASRO Client Conference
  13. 13. Does Satisfaction = Acquisition?  Yes Satisfaction Level vs. # Referrals Made Within the Last Year 3.2 times more Estimated conversion rate of referrals to 1.75 times more new households = 2.5% - 3% Delighted Neutral Dissatisfied WaMu - Michael Matza 13 2008 CASRO Client Conference
  14. 14. Does Service Climate = Employee Retention?  Yes 6-month Teller and Rep Attrition by Overall Service Climate Rating 6-month attrition rate 1.6 times higher 1.8 times higher A working climate that supports service quality also creates 1-6 Rating measurable financial 7-10 Rating benefits. Teller Sales Rep WaMu - Michael Matza 14 2008 CASRO Client Conference
  15. 15. Customer Impact Assessment (CIA) A systematic approach for estimating and measuring project “ripple effects” CIA helps answer these questions • Which customers/employees are likely to be affected? – How will their experience be different from today? – What specific customer/employee behaviors and attitudes might change? – How are those changes to be measured? – What effect on revenue or cost will result? – CIA program consists of • On-line orientation course for executives and project sponsors – Full-day training course for project managers – Tools for hypothesis-development and impact calculation – Company data source directory – Project prioritization guidelines – CIA categories included in cost-benefit calculation – WaMu - Michael Matza 15 2008 CASRO Client Conference
  16. 16. Some CIA case studies . . . 1. Emergency Card Replacement – Cost-saving project • CIA reveals unexpected revenues 2. Back-office Consolidation – Efficiency project • CIA mitigates expected negative impacts to customer and employee satisfaction 3. Teller Training – Service Climate • CIA reverses cost savings initiative WaMu - Michael Matza 16 2008 CASRO Client Conference
  17. 17. Case Study 1: Emergency Card Replacement Summary • As part of a service-level agreement with a new vendor, WaMu introduced – a new process for emergency replacement of debit cards Primary objectives • Reduce cycle time to meet vendor requirements – Reduce cost of replacement through process efficiency improvements – Hypothesized “ripple effects” • Lower cost to serve through fewer calls and escalations – Greater fee revenue by providing card more quickly – Less negative and more positive word-of-mouth – Increased customer satisfaction – WaMu - Michael Matza 17 2008 CASRO Client Conference
  18. 18. What CIA Uncovered Decreased cost to serve • Savings of ~$12 per instance was achieved through reducing average – number of customer contacts required to get card Savings of ~$1 per instance from fewer teller (rather than ATM) – transactions Increased revenue • ~$10 of lost fee income/instance was regained as a result of faster debit – card replacement Attitudes and intentions • Increased customer satisfaction – Increased likelihood to recommend – Improved reputation relative to competitors – Improved word of mouth – WaMu - Michael Matza 18 2008 CASRO Client Conference
  19. 19. Impact to Attitudes/Intentions Distribution of Customer Satisfaction Ratings Before After Critical incident results in bi-modal satisfaction curve: they love us or hate us % of Customers ng e 2 3 4 5 6 7 8 9 l ab di an pt e st cc ut na O Impact of ECR Satisfaction on Word-of-Mouth U Number of People You Told About Your 14 12 10 Experience 8 Positive Neutral/Mixed 6 Negative Dissatisfied customers told 4 3 times more people about 2 the experience than 0 2 3 4 5 6 7 8 9 ng le delighted customers b di ta an p ce st c ut Satisfaction with Emergency Card Replacement Experience na O U WaMu - Michael Matza 19 2008 CASRO Client Conference
  20. 20. Case Study 2: Back-office Consolidation Summary • Several loan fulfillment centers were closed; one new center was opened; – existing loan business was migrated to remaining centers. Primary objectives • Increase operational efficiency – Decrease labor costs – CIA objective • Monitor changes in customer and loan officer satisfaction – Mitigate possible negative satisfaction impacts – WaMu - Michael Matza 20 2008 CASRO Client Conference
  21. 21. Mitigating Customer Impact Existing front-line • satisfaction survey was All Fulfillment Centers Weekly OSAT ramped up from monthly Before After to weekly monitoring UCL=8.508 8.50 Satisfaction threshold • 8.25 Individual Value _ X=8.154 levels agreed on for 8.00 triggering action LCL=7.799 7.75 Operational task force • monitored satisfaction 1 7.50 levels over 4-month 1 3 1 3 1 3 1 3 5 2 4 2 4 k k k k k k k k k k k k k ee ee ee ee ee ee ee ee ee ee ee ee ee W W W W W W W W W t W tW t W tW period until transition ay ay une une July July Aug A ug Aug p p Oc Oc Se Se M M J J reached steady-state C11 Satisfaction levels improved during transition period WaMu - Michael Matza 21 2008 CASRO Client Conference
  22. 22. Case Study 3: Teller Training – Service Climate Summary • Overall Service Climate ratings among one department‟s employees – dropped significantly over 6-month period, from 6.56 to 5.98 (10-pt scale) - Out of 35 questions on the survey, the largest decrease was “Management encourages me to take training” (7.0 to 6.12) Reason • - Management had cancelled training as a cost reduction effort Result • Statistical analysis shows that employee satisfaction ratings are strongly – correlated to employee attrition Attrition among exempt employees is nearly twice as high if Service • Climate rating is lower than 7 out of 10 Short term cost reduction outweighed by the cost to replace/retrain/motivate staff WaMu - Michael Matza 22 2008 CASRO Client Conference
  23. 23. Cost of Low Satisfaction Low Service Climate Rating = Higher Teller and PFR turnover • Direct correlation of multi-million dollar save to the business line • in replacement costs for tellers and PFRs 6-month Teller and PFR Turnover by Overall Service Climate Rating 6-month turnover rate . Teller PFR 1 - 6 Rating 7 - 10 Rating WaMu - Michael Matza 23 2008 CASRO Client Conference
  24. 24. Conclusion WaMu “Voice of the Customer” System in Action VOC analytics aligned with business lines enables us to quantify opportunities and risks in efficiency efforts by: Initiating cross-functional collaboration • Facilitating the use of VOC to align initiatives • Assessing organizational support for providing effective service • Providing on-going analysis of Critical-to-Customer (CTC) priorities to • anticipate and monitor the effects of changes in service WaMu - Michael Matza 24 2008 CASRO Client Conference
  25. 25. Questions? Thank You WaMu - Michael Matza 25 2008 CASRO Client Conference
  26. 26. Michael Matza, SVP Service Excellence 206.849.4727 WaMu - Michael Matza 26 2008 CASRO Client Conference

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