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Deloitte Digital NL - Voice of the customer (CB seminar)
Deloitte Digital NL - Voice of the customer (CB seminar)
Deloitte Digital NL - Voice of the customer (CB seminar)
Deloitte Digital NL - Voice of the customer (CB seminar)
Deloitte Digital NL - Voice of the customer (CB seminar)
Deloitte Digital NL - Voice of the customer (CB seminar)
Deloitte Digital NL - Voice of the customer (CB seminar)
Deloitte Digital NL - Voice of the customer (CB seminar)
Deloitte Digital NL - Voice of the customer (CB seminar)
Deloitte Digital NL - Voice of the customer (CB seminar)
Deloitte Digital NL - Voice of the customer (CB seminar)
Deloitte Digital NL - Voice of the customer (CB seminar)
Deloitte Digital NL - Voice of the customer (CB seminar)
Deloitte Digital NL - Voice of the customer (CB seminar)
Deloitte Digital NL - Voice of the customer (CB seminar)
Deloitte Digital NL - Voice of the customer (CB seminar)
Deloitte Digital NL - Voice of the customer (CB seminar)
Deloitte Digital NL - Voice of the customer (CB seminar)
Deloitte Digital NL - Voice of the customer (CB seminar)
Deloitte Digital NL - Voice of the customer (CB seminar)
Deloitte Digital NL - Voice of the customer (CB seminar)
Deloitte Digital NL - Voice of the customer (CB seminar)
Deloitte Digital NL - Voice of the customer (CB seminar)
Deloitte Digital NL - Voice of the customer (CB seminar)
Deloitte Digital NL - Voice of the customer (CB seminar)
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Deloitte Digital NL - Voice of the customer (CB seminar)

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In early 2013, Deloitte and Bazaarvoice partnered to investigate what online consumer feedback reviews could reveal on the relationships between NPS, price, product assortment and customer service. In …

In early 2013, Deloitte and Bazaarvoice partnered to investigate what online consumer feedback reviews could reveal on the relationships between NPS, price, product assortment and customer service. In a short 5 week project 7.8 million customer reviews across 230 different businesses were interrogated. A selection of the key findings were included in this short presentation given at the Deloitte Consumer Business Predictions event @Rotterdam May 2013.

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  • Engaging today’s consumer is a digital battlefield. Technology innovations have been rapidly adopted by consumers resulting in new discovery and buying behaviours and expectations.Consumers are constantly connected to the internet through smart, portable, and highly usable devices, enabling… - A form of social connectivity in which customers are influenced by and influencers of their peers. (Personal story about sister in-law) - A form of commercial availability in which consumers can access a wealth of information about products, shop at any time of day, browse from shop to shop in a few key taps without having to leave the comfort of their seats.Technology, connectivity and availability is empowering the consumer and their expectations towards the businesses they buy from is continually rising.On the surface, this might appear to be a concerning development for retailers and consumer business organisations. The status quo cannot be maintained. However, there is a bright opportunity to this trend. As consumers use smartphones, tablets, PCs and all other kinds of browsers to connect, research and buy, they leave behind breadcrumbs of information. Information that can be utilised by organisations to yield yet greater levels of consumer insight and understanding. Which can then be turned into better offers, improved products and enhanced services. Things that we all want as consumers.The bright side of this trend is that the best organisations can tap into yet greater levels of customer insight. They have yet more opportunities to engage and delight customers. More opportunities to differentiate from the herd. And through the increased levels of business transparency that digital provides, above average businesses will differentiate and thrive more quickly.. While below average businesses will be picked out and their market share eroded.
  • Research goalsAssert that digital technologies allow organisations to be more customer centricShow how goal 1 can be proved using just one platform for online reviews – BazaarVoiceEstablish credibility of fact-based researchResearch methodDescribe the customer journey and the impact on the company key functionsDetermine and set hypotheses to test how product reviews can help to improve the company key functionsApply a statistical research method to test the hypothesesTest the hypotheses and draw conclusions based on the findingsResultsDescribe a future where other sources of data via digital channels could be used. Potentially re-use other findings from other data sources (maybe we merge this with the above)Provide advice on the high-level steps for an organisation can become more customer centric using our target operating model playbook
  • All retailers have a positive NPS, the bulk is higher than 50% which is considered very good on a scale of -100% to 100%The bulk of product ratings varies between 3,5 and 4,5 on a scale of 0-5 Retailer’s average rating of the products they are selling and their average NPS are significantly correlated:Retailers with a high average product rating have a high average NPSCustomers that are satisfied with the retailer’s products are also more likely to be loyal to that retailerAverage product rating and customer loyalty is the lowest for retailers in the Consumer Electronics industryAverage product rating and customer loyalty has the highest spread for retailers in the Home Improvement industry Average customer loyalty is the highest for retailers in the Drugstores industry
  • All retailers have a positive NPS, the bulk is higher than 50% which is considered very good on a scale of -100% to 100%The bulk of product ratings varies between 3,5 and 4,5 on a scale of 0-5 Retailer’s average rating of the products they are selling and their average NPS are significantly correlated:Retailers with a high average product rating have a high average NPSCustomers that are satisfied with the retailer’s products are also more likely to be loyal to that retailerAverage product rating and customer loyalty is the lowest for retailers in the Consumer Electronics industryAverage product rating and customer loyalty has the highest spread for retailers in the Home Improvement industry Average customer loyalty is the highest for retailers in the Drugstores industry
  • Most consumer electronics companies have a relatively low NPS (i.e. avg. NPS < 50), however, all but one have 20% or less products with a poor rating (have a lower NPS rating than their product assortment would suggest)Home improvement industry has largest difference in the quality of product assortments; in addition, 3 out 11 home improvement companies drag the industry average for NPS vs. poor product assortment downAbout 75% of the apparel, drug and mass merchant & general retail companies have an average or higher NPS than their product assortment would suggest; possibly due to the association between companies and their products (e.g. size/diversity of product assortment, strength individual product brands)More than 40% of the companies in 4 out of 6 industries studied, have a poor product assortment; thus at a significant number of companies there is room for improvementCompanies that sell sports products seem to do significant better at selecting the right assortment; less than 10% of those companies have a poor product assortmentRemarkable is that mass merchants & general retail do not have the poorest product assortment; they have the most varied assortments (i.e. more vulnerable for selecting the wrong products)
  • Mention difference between cheap and expensive: cheap is value for money, expensive is no value for moneyPrice perception is an important buying criteria, however it does not impact the post purchase product satisfactionFor identifying products as either “Cheap” or “Expensive” a 80:20 rule was used. Products were identified as “Cheap” when “Cheap” related pivot words were mentioned 4x as much in the reviews as pivot words related to “Expensive”. Products were identified as “Expensive” when the opposite was the caseSignificantly more products are identified as cheap rather than expensive which could be explained by the fact that the people who reviewed the products also bought them, therefore they have already decided to buy them and haven’t identified them as ‘too’ expensive“Cheap”The highest % of mentions as cheap have very high average ratings; these could be potential products whose prices could potentially be raisedProducts identified as cheap get on average a rating >4, this could suggest that the price also influences the price perception (good value for money)“Expensive”There are no clear groupingsHighlights the low amount of products being identified as being expensiveThe products identified as expensive are also more spread out than those who are not, suggesting that there is less of a trend and that product price perception and rating are more product relatedRemarksReviews for one product (Quantum Finish) were removed from the dataset. It did not fall in the 80:20 area and was identified as an outlierWith >=100 reviews
  • Price perception is an important buying criteria, however it does not impact the post purchase product satisfactionFor identifying products as either “Cheap” or “Expensive” a 80:20 rule was used. Products were identified as “Cheap” when “Cheap” related pivot words were mentioned 4x as much in the reviews as pivot words related to “Expensive”. Products were identified as “Expensive” when the opposite was the caseSignificantly more products are identified as cheap rather than expensive which could be explained by the fact that the people who reviewed the products also bought them, therefore they have already decided to buy them and haven’t identified them as ‘too’ expensive“Cheap”The highest % of mentions as cheap have very high average ratings; these could be potential products whose prices could potentially be raisedProducts identified as cheap get on average a rating >4, this could suggest that the price also influences the price perception (good value for money)“Expensive”There are no clear groupingsHighlights the low amount of products being identified as being expensiveThe products identified as expensive are also more spread out than those who are not, suggesting that there is less of a trend and that product price perception and rating are more product relatedRemarksReviews for one product (Quantum Finish) were removed from the dataset. It did not fall in the 80:20 area and was identified as an outlierWith >=100 reviews
  • NPS is a measure of customer loyalty and advocacyFor high scoring NPS businesses complaints regarding customer service are less than 1% of total issues raised by the customerThe best performing businesses have do not suffer from an increase in customer service issues during the Christmas period
  • Customer ServiceA high % of customer service complaint correlates with low NPS. As the % of customer service complaints is reduced the NPS increasesProduct FlawsBusinesses with the highest NPS manage this in spite of greater % of product flaws than those with low NPSShipping IssuesAs NPS increases, the shipping issues becomes the largest percentage of non-product issuesShipping issues decline as a proportion of total issues with increasing NPS. However, they increase as a proportion of the non-product related issuesAt good levels of NPS around 50), shipping is the largest percentage of non-product issues. In pursuit of excellence, businesses dramatically cut shipping issues by 50%
  • More reviews are from women rather than men in 7 out of 9 identified industries. Women represent 65% of the total of reviewsDrugstores received the highest amount of reviews by women with 92% of all reviews. Sports Products has marginally more reviews by women with 53%Consumer Electronics and Transportation are the only industries in which more reviews are received from men rather than women with respective 53% and 84% The most reviews with a product suggestion are found in Mass Merchants, Apparel and Home Improvement industryDespite the lower percentage of reviews, men provide more product suggestions in the Mass merchants & General Retail and Home Improvement industryIn line with the higher percentage of reviews, women provide more product suggestions in the Apparel, Sports Products and Travel industry
  • People that are >35 provide more reviews in 7 out of 9 identified industries compared to younger people. They represent 60% of all reviewsHome Improvement and Travel have the largest group of reviewers, 40% and 36% with age above 55Books, etc. and Consumer Electronics have the youngest group of reviewers, 91% and 36% of these groups are <25Product SuggestionThe most reviews with a product suggestion are found in Mass Merchants, Apparel and Home Improvement industryPeople that are >35 provide more reviews with a product suggestion in 6 out of 7 identified industries compared to younger people. There is no significant difference in age distribution between the graphsConsumer Electronics and Sports Products have the youngest group of reviewers, 43% and 22% of these groups are <25
  • Transcript

    • 1. Pursuing excellence in customer centricity Tools and approaches in today‟s digital world
    • 2. Deloitte Digital Copyright © 2013 Deloitte Holding B.V. All rights reserved. Presenting to you today... 2 1. Deloitte‟s view on digital transformation 2. How digital conversations drive business growth 3. Findings of our research on digital conversations TopicsSpeakers Gonzalo Higueras Hare • Director Partnerships Bazaarvoice Europe • Assists clients to leverage online customer conversations • Prior to Bazaarvoice, worked for BlueKiwi and T- Systems Victor Hoong • Director, Consumer Business and Technology • Assisting CB organisations shape and deliver digital and cloud initiatives • Lead the research project on digital conversations Kristin Philbin • Head of Bazaarvoice EMEA Social Analytics program • Assists clients with online marketing, public relations, consumer analytics and data science • Drives synergistic efforts between digital advertising technologies, market strategies and client requirements
    • 3. The context 3
    • 4. Deloitte Digital Copyright © 2013 Deloitte Holding B.V. All rights reserved. The challenging connected consumer also provides opportunities 3: Commercial Availability 2. Social Connectivity 1.Rapid adoption of technology Consumer Connected 1001011001... 1011001... 0011010100.. 1001011001... 1011001... 0011010100.. 1001011001... 1011001... 4. Information availability 4
    • 5. Deloitte Digital Copyright © 2013 Deloitte Holding B.V. All rights reserved. Enterprise digital “backbone” Inventory Merchandising Pricing Analytics Logistics CRM Marketing Social Supply chain Merchandising Store talent Marketing Shopping Social Analytics Distribution CRM Pricing Digital Organisation Moving to omni-channel commerce.. ...means embedding digital across the organisation Transformation is required across all functions to respond Merchandisin g Merchandisin g Traditional Warehouses Stores eCommerce Direct Warehouse Inventory Logistics Inventory Logistics
    • 6. Which requires left brain and right brain thinking
    • 7. Introducing We live and work at the intersection of business, creative, and technology - and we have a great time doing it. We‟re building tomorrow‟s digital business, today. From strategy to delivery, Deloitte Digital combines creativity with trusted business and technology to define and deliver tomorrow‟s digital business. We can help you balance the allure of emerging technologies with the realities of your business. Deloitte Digital Copyright © 2012 Deloitte Holding B.V. All rights reserved. 5 COUNTRIES 10 TIME ZONES 4 CONTINENTS Operational Processes Business Model Customer Experience Digital disruptions impact three main areas
    • 8. Topics to watch out for • CB Predictions 28th May: Insights study with Bazaarvoice • Digital transformation of customer services whitepaper Coming up later this year: • Bazaarvoice conversation index vol. • CB @KLM Open 12th September: eCommerce / Omnichannel with guest speaker Jacqueline Smith-Dubendorfer Director Platforms and Consumer Experience Global eCommerce - Adidas Group • Shopping 2020 – Orientation whitepaper Strategy Web Mobile Social Insights Security
    • 9. Our research on digital conversations 9
    • 10. Deloitte Digital Copyright © 2013 Deloitte Holding B.V. All rights reserved. We undertook a digital study to learn from customer reviews Brainstorm Data Sprint 1 Analysis and write-up Data Sprint 2 Data Sprint 3 Develop Test, analyse and refine Summarise 1.5 weeks 1 week 1 week 1 week 2 weeks • Objective: Analyse consumer data to reveal new insights • Dataset: 7.8 million customer reviews across 230 clients • Tools: Bazaarvoice and R (open-source analytics product) • Skills: Digital strategy, data analytics and CMS consultants 10
    • 11. Deloitte Digital Copyright © 2013 Deloitte Holding B.V. All rights reserved. What are the different weightings of customer criteria to the overall rating by industry? Why product flaws cannot be hidden Are you setting the right price? Consumer Survey Consumer Survey The growing importance of sustainability Product Development Marketing Operations Sales & Merchandising Consumer Journey 1 2 3 5 6 7 8 9 104 We selected research questions to provide insights across the consumer journey Gender & Age distribution for product suggestions Can review ratings be positively influenced by brand engagement? How customer service issues can effect the NPS Not having the right product offering can influence the NPS Discussed in detail today
    • 12. Our findings 12
    • 13. Deloitte Digital Copyright © 2013 Deloitte Holding B.V. All rights reserved. Marketing: Product assortment We can learn from the best retailers in the industry Consumer electronics Mass Merchants & Gen. Ret. Home Improvement Books, Toys, CD/DVDs Apparel Sports Products Drugstores Spread of average retailer NPS grouped by industry 13 Conclusions • NPS over all industries are very high • Spread and average NPS differs per industry • Average NPS is the lowest in the Consumer Electronics industry • Average NPS has the highest spread in the Home Improvement industry • Average NPS is the highest in the Drugstores industry Median NPS with 25% & 75% Quantile 40 60 80
    • 14. Deloitte Digital Copyright © 2013 Deloitte Holding B.V. All rights reserved. AverageNPS Conclusions • Retailer‟s average rating of the products they sell, and average NPS are significantly correlated: • High average product rating result in high average NPS • Customers satisfied with the retailer‟s products are also more likely to be loyal • All retailers have a positive NPS • Argos now uses product feedback to improve assortment Marketing: Product assortment Retailers can increase customer loyalty by selling products that generate high customer satisfaction Consumer Electronics Mass Merch. & Gen. Home Improvement Books, Toys, CD/DVDs Apparel Drugstores Transportation Sports Products Travel Average retailer NPS versus average product rating grouped by industry 14 Average product rating 3.0 3.5 4.0 4.5 5.0 0 25 50 75 100
    • 15. Deloitte Digital Copyright © 2013 Deloitte Holding B.V. All rights reserved. Marketing: Product assortment There is much room for improvement across the industry Consumer electronics Mass Merchants & Gen. Ret. Home Improvement Books, Toys, CD/DVDs Apparel Sports Products Percentage of retailers with a big assortment (>10%) of low rated products (<=3) 55% 46% 8% 45% 28% 43% 15 Conclusions • In 4 out of 6 industries, more than 40% of the companies have high levels of low rated products • Only 8% of the Sports Products retailers have a high product assortment of low rated products Avg (mean) product rating = 4
    • 16. Deloitte Digital Copyright © 2013 Deloitte Holding B.V. All rights reserved. Marketing: Price perception More products are considered ‘cheap’ versus ‘expensive’ % of reviews that mention ‘expensive’ versus ‘cheap’ 500 1000 1500 Number of reviews 16 %of‘Expensive’words Conclusions • More products are identified as „cheap‟ (i.e. high value for money) rather than „expensive‟ • „Cheap‟ related pivot words were mentioned 4 times as much as „Expensive‟ pivot words • Products identified as cheap have an average rating of 4 % of ‘Cheap’ words 0 10 20 30 40 0 10 20 30 40
    • 17. Deloitte Digital Copyright © 2013 Deloitte Holding B.V. All rights reserved. Marketing: Price perception Whether product prices are considered ‘cheap’ or ‘expensive’ does not appear to impact product satisfaction % products identified as ‘cheap’ vs. rating % products identified as ‘expensive’ vs. rating 200 300 400 Number of reviews 500 600 17 Average rating %ofreviewswith‘Cheap’words 200 300 400 Number of reviews 500 600 3.0 3.5 4.0 4.5 0 20 30 10 Average rating 3.0 3.5 4.0 4.5 %ofreviewswith‘Expensive’words 0 20 30 10
    • 18. Deloitte Digital Copyright © 2013 Deloitte Holding B.V. All rights reserved. Service Top performers drive customer issues to below 1% of total customer feedback Percentage of Customer Service issues per NPS category Xmas period mid- Nov to end Dec. 5 4 3 2 1 0 8 7 6 Oct-12 Sep-12 Aug-12 Jul-12 Jan-12 Apr-12 Mar-12 May-12 Date Mar-13 Feb-13 Jan-13 Dec-12 Nov-12 Feb-12 Jun-12 High 70- 90 Med 55- 70 Low 8- 55 18 %ofreviewswithaservicecomplaint Retailer NPS category: Conclusions • For retailers with high NPS, complaints regarding customer service are less than 1% of total issues raised by the customer • Retailers do not significantly suffer from an increase in customer service issues during the Christmas period • Example retailers like John Lewis provide excellent customer service on reviews
    • 19. Deloitte Digital Copyright © 2013 Deloitte Holding B.V. All rights reserved. Service Customer advocacy increases as customer service issues decrease Use of ‘tags’ in all reviews Low Med High Customer service issue Shipping Issue Price Mention Product Description Product Flaw 19 Average NPS of retailers 5 % 4 % 2 % 0 % 1 % 3 % %ofreviewswitha‘tag’ Conclusions • A high % of customer service complaints correlates with low NPS • Even a rise in product flaws and shipping issues does not prevent the NPS from improving • As NPS increases, the shipping issues becomes the largest percentage of non-product issues • Shipping issues decline as a proportion of total issues with increasing NPS Review ‘tags’:
    • 20. In summary 20
    • 21. Deloitte Digital Copyright © 2013 Deloitte Holding B.V. All rights reserved. We can improve customer loyalty and increase repeat business.. Improving product assortment 21 Improving customer service • Product rating can be used as a leading indicator for NPS • 4 out of 6 retailer segments are under-performing • Price does not drive product ratings. There may even be a possibility to increase prices (and revenue) • Good customer service drives loyalty • The best don‟t see complaints rise at xmas • The best respond to reviews to improve ratings • The best have driven customer complaints down to only 1% of customer feedback
    • 22. Deloitte Digital Copyright © 2013 Deloitte Holding B.V. All rights reserved. Take-aways • As CB companies adopt omnichannel they should not miss the opportunity to learn from the consumer data available • Begin to build the capability to capture and analyse customer data as you implement omnichannel experiences • The most customer centric retailers are already using reviews to improve loyalty and drive repeat business • Customer feedback is valuable user-generated content that can drive greater levels of online traffic 22
    • 23. Topics to watch out for • CB Predictions 28th May: Insights study with Bazaarvoice • Digital transformation of customer services whitepaper Coming up later this year: • Bazaarvoice conversation index vol. • CB @KLM Open 12th September: eCommerce / Omnichannel with guest speaker Jacqueline Smith-Dubendorfer Director Platforms and Consumer Experience Global eCommerce - Adidas Group • Shopping 2020 – Orientation whitepaper Strategy Web Mobile Social Insights Security
    • 24. Deloitte Digital Copyright © 2012 Deloitte Holding B.V. All rights reserved. Thank you.

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