Creating Customer Relationships: Is It the Person or the Brand?


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Creating Customer Relationships: Is It the Person or the Brand?

  1. 1. Creating Customer Relationships: Is it the Person or the Brand? October 12, 2010 Beth Schelske, Vice President ITA Group Keith Fenhaus, CEO/President Hallmark Business Connections
  2. 2. <ul><li>Research Center within Medill IMC graduate program at Northwestern University </li></ul><ul><li>Our central objective is to develop and disseminate knowledge about communications, motivation and management </li></ul><ul><li>We believe businesses can better design, implement and manage people-based initiatives - inside and outside an organization </li></ul><ul><li>We bring like-minded individuals together during an annual “Think Tank” event </li></ul>
  3. 3. This research is based on the study, “The Employee or the Company: The Relative Importance of People Versus the Company Brand on Customer Experience” Dr. Frank Mulhern Academic Director for the Forum for People Performance Management and Measurement
  4. 4. 1601 N Bond Street, Suite 303 Naperville, IL 60563 P: 630.369-7780 F: 630.369-3773 [email_address]
  5. 5. Research Question <ul><li>What is the relative importance of a person versus a brand in a business relationship? </li></ul>
  6. 6. Key Findings <ul><li>Customers build relationships with individual employees more than a corporate brand </li></ul><ul><li>When a company has a strong, positive brand reputation, it may have more to gain by investing in its employees than in investing more in the company’s reputation </li></ul><ul><li>Investments in employees could include training, incentives, rewards, career development, benefits, and improved compensation </li></ul><ul><li>The findings are central to many service industries including healthcare, financial services, and education </li></ul>
  7. 7. Case Study <ul><li>Insurance Industry </li></ul><ul><ul><li>Excellent industry for investigating the role of front line personnel in the customer experience </li></ul></ul><ul><ul><ul><li>Major, high involvement purchase that results in long term customer-to-company relationship </li></ul></ul></ul><ul><ul><ul><li>Industry is struggling with whether to maintain networks of sales agents versus selling direct </li></ul></ul></ul><ul><ul><ul><li>Direct selling allows for lower premiums but eliminates the opportunity for personal relationships </li></ul></ul></ul>
  8. 8. Case Study <ul><li>National Insurance Company </li></ul><ul><ul><li>Portfolio = full range of retail insurance products including life, health, property and auto </li></ul></ul><ul><ul><li>Products are exclusively sold through company sales agents </li></ul></ul><ul><ul><li>Agents only sell products for one company </li></ul></ul>
  9. 9. Case Study <ul><li>Data </li></ul><ul><ul><li>Customer Satisfaction Survey </li></ul></ul><ul><ul><li>Employee Engagement Survey </li></ul></ul><ul><ul><li>Employee Performance </li></ul></ul>
  10. 10. Case Study <ul><li>Results </li></ul><ul><ul><li>Experiences with Agent vs Company </li></ul></ul><ul><ul><ul><li>On average customer rate their agents higher than they rate the company with respect to their experience </li></ul></ul></ul><ul><ul><ul><li>90% of the Agents scored higher on customer satisfaction with the agent than with the company. </li></ul></ul></ul><ul><ul><ul><li>Agent is the “public face” of the company </li></ul></ul></ul>
  11. 11. Case Study <ul><li>Results </li></ul><ul><ul><li>Agent Performance </li></ul></ul><ul><ul><ul><li>Customer ratings of the agent closely tied to the performance of the agent </li></ul></ul></ul><ul><ul><ul><li>Agents in the top quartile of engagement and customer satisfaction had significantly higher levels of account growth and customer retention </li></ul></ul></ul><ul><ul><ul><li>Best performance achieved by having both highly engaged employees and satisfied customers </li></ul></ul></ul>
  12. 12. Case Study
  13. 13. Case Study
  14. 14. Insurance Case Study <ul><li>Implications </li></ul><ul><ul><li>Customers build relationships with individual employees more than a company brand </li></ul></ul><ul><ul><li>Insurance agents play a measurable role in the customer experience </li></ul></ul><ul><ul><li>That role translates into better performance for the agent and the company </li></ul></ul><ul><ul><li>The agent’s rating of the company has no effect on the performance of the agent. </li></ul></ul><ul><ul><li>This result suggests that companies have more to gain by investing in sales agents than in building the brand </li></ul></ul>
  15. 15. Insurance Case Study <ul><li>Implications </li></ul><ul><ul><li>Investments in agents could include sales training, incentives, rewards, career development, extension of benefits and improved compensation </li></ul></ul><ul><ul><li>Agents perform better when they are more engaged </li></ul></ul><ul><ul><li>Agents in the top quartile for agent engagement and customer rating achieve over 4X the account growth of agents not in the top quartile for either measure. </li></ul></ul>
  16. 17. Brand Value
  17. 18. Brand Value
  18. 19. Brand Value
  19. 20. <ul><li>“ The earlier you make the emotional connection the better, because once consumers have decided they like a particular option, the more difficult it is for them to backpedal. Their thinking falls in line with their emotions.” </li></ul><ul><ul><li>Raj Raghunathan, of McCombs School of Business </li></ul></ul>
  20. 21. Equity
  21. 22. Social Connections
  22. 23. <ul><li>“ Our ladies and gentlemen are our most important resource in our service commitment to our guests.” </li></ul><ul><ul><li>Ritz Carlton </li></ul></ul>Experience
  23. 24. Energy
  24. 25. <ul><li>The Fundamentals: </li></ul><ul><ul><li>Price </li></ul></ul><ul><ul><li>Product Performance </li></ul></ul><ul><ul><li>Differentiation </li></ul></ul><ul><li>The Ethereal: </li></ul><ul><ul><li>Equity </li></ul></ul><ul><ul><li>Social Experience </li></ul></ul><ul><ul><li>Energy </li></ul></ul>Brand Selection
  25. 27. <ul><li>Mission: To live and deliver WOW! </li></ul>
  26. 28. <ul><li>“ We wanted a list of committable core values that we were willing to hire and fire on. If we weren’t willing to do that, then they weren’t really ‘values.’” </li></ul><ul><ul><li>Tony Hsieh, founder of Zappos </li></ul></ul>
  27. 29. Brand Value
  28. 30. Core of the Brand
  29. 31. Conclusion <ul><li>Customers build relationships with individual employees more than a brand </li></ul><ul><li>Employees perform better when they are engaged </li></ul><ul><li>Employees perform better when their customers are satisfied </li></ul><ul><li>Focusing simultaneously on employee engagement and customer experiences drives brand value </li></ul>