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Optimizing Customer Experience - In House or Outsourced by Prof. Adré Schreuder


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Optimizing Customer Experience - In House or Outsourced by Prof. Adré Schreuder CEO of Consulta - Customer Insights Consultancy

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Optimizing Customer Experience - In House or Outsourced by Prof. Adré Schreuder

  1. 1. Optimizing Customer Experience – In House or Outsourced Presented by: Adré Schreuder (Prof) Founder & CEO of Consulta (Pty) Ltd
  2. 2. 28% Maritz CX Only 28% of CX professionals feel their programs are successful at driving business outcomes Gartner 2016 Of companies will be differentiating themselves mostly on the basis of Customer experience Source: Placeholder example Are you ready? 2 89%
  3. 3. An Old-New Concept … used by great leaders 3
  4. 4. “Culture eats strategy for breakfast.” - Peter Drucker 4
  5. 5. The Satisfied Customer – Claes Fornell 6 • Alert for in-house “do-it-yourself” approaches (usually guided by the desire for simplicity). Simplicity is all good and well, but it sometimes comes at a high price. • Paradoxically enough, measurement has become standard in CX, but the measurement itself is rarely subjected to professional standards and its accuracy is often questionable. • Scientific discipline brings discipline. It forces beliefs into the open, makes assumptions testable and lets us build on what’s known.
  6. 6. The Fallacy of Percentages 7 • Reporting customer satisfaction in percentage terms “85% of our customers are satisfied” and “our customer satisfaction score is 90%”. This is mostly nonsense. It is the same as measuring intelligence by asking: “Are you dumb or smart?” • Satisfaction is a continuum between two extremes – extremely dissatisfied and extremely satisfied. It leads to imprecision, i.e. large margin of error. • Measurement is about precision – random noise is the opposite of precision. • If the customer satisfaction measure cannot be tied to future financial performance, its economic relevance is lost!
  7. 7. Recommendation is better than Satisfaction - More Delusions! • First fallacy – assuming that the recommendations will actually happen regardless of how satisfied the customers are. • Second – the foolish Recommendation measurement practices proposed by NPS • GOOD measurement -> minimizing random error. NPS reduces a continuous scale to something binary and in the same time triple the random error (see next slide). • It is not that companies adopting NPS as their only measure do not have competent statisticians or market researchers, but the decisions are often made at an organizational level where even rudimentary knowledge of measurement properties is slim.
  8. 8. The Power of Estimates 9 Mean of 11-point Likely to recommend NPS CSI Sample (n) 697 697 711 Mean 7.5 23.5% 74.2 95% Confidence +/- 0.23 6.5% 1.63 Lower CI Limit 7.30 17.0% 72.6 Upper CI Limit 7.76 30.1% 75.88 Ability to predict/detect 5% increase in mean Test mean 7.9 25% 77.96 Power (1-Beta) 89.6% 5.4% 99.37% Source: FCI Group., 2007b. The American Customer Satisfaction Index (ACSI) Technology: A Methodological Primer. pp.1–37.
  9. 9. Debunking the Myths about CSI 10 • Myth: Lower number of complaints = higher customer satisfaction – Counterproductive and paradoxical objective – Complaint expectation: Customer believes = reward > effort (and unpleasantness) of complaining • Truth: SILENT MAJORITY = Most customers do not complaining!
  10. 10. You can Buy Loyalty, but Satisfaction must be Earned 11 • Myth: Customer Satisfaction is “worthless”, but Loyalty is “priceless” • Truth: Customer Loyalty without Satisfaction is a contradiction of the basic mechanics of the free market system and violates the cause-and- effect relationship between satisfaction and loyalty
  11. 11. Satisfaction vs. Loyalty 12 • Satisfaction has a STRONGER effect on financial performance than Loyalty. • Reason: the increased revenue generated by improved loyalty is not offset by the higher costs of the Loyalty programs (unless generated by customer satisfaction) – e.g. Frequent flyers being members at all frequent flyer loyalty programs
  12. 12. Optomize Excellence
  13. 13. Most Important Customer Experience Strategies for Business 14 Implement Customer Centric Culture 21% Improve workforce training/mngmt retention 17% Transformation Change 17% Costs/Efficience/P roductivity 16% Engage customers through new channels 13% Improve Call centre technology 11% Deliver CX from new geographical sites 4% Deliver CX via virtual call centre 1% Source: Teletech E-book : Customer Experience benchmark research report 2015 1 2 3 4 5 6 7 8
  14. 14. 15 Beloved Companies … • … decide to Believe “We trust our customers. We trust those who serve them” • … decide with Clarity of Purpose “Our iron-clad integrity and clarity guides the direction of our decisions” • … decide to be Real “We have inspired soul, humanity in our touch and personality that’s all ours” • … decide to be There “We must earn the right to our continued relationship with customers” • … decide to say Sorry “We act with humility when things go wrong. We will make it right” Source: www.customerbliss.comJeanne Bliss
  15. 15. What is ‘Customer Experience’? 16 Source: Verhoef, Peter C., Katherine N. Lemon, A. Parasuraman, Anne Roggeveen, Michael Tsiros and Leonard A. Schlesinger (2009), “Customer Experience Creation: Determinants, Dynamics and Management Strategies,” Journal of Retailing, 85 (1), 31–41. This experience is created by: The Customer experience construct is holistic in nature and involves the Customer’s cognitive, emotional, social and physical responses to the retailer. controllable elements - service interface, retail atmosphere, assortment and price; uncontrollable elements - influence of others, purpose of shopping; Customer experience encompasses the total experience, including the search, purchase, consumption and after-sale phases of the experience, and may involve multiple retail channels.
  16. 16. 2 3 4 5 1 Leading Indicator Of Business Performance 17 Source: Gupta, S. & Zeithaml, V., 2006. Customer Metrics and Their Impact on Financial Performance. Marketing Science, 25(6), pp.718–739.
  17. 17. Proven statistics about the links between Customer Satisfaction & Business Outcomes 18 Source: Gupta, S. & Zeithaml, V., 2006. Customer Metrics and Their Impact on Financial Performance. Marketing Science, 25(6), pp.718–739. Customer Satisfaction Meta analysis by Sunil Gupta & Valarie Zeithaml (2006): +1% Customer Satisfaction +2.37% ROI -1% Customer Satisfaction -5.08% ROI
  18. 18. Link between Customer Satisfaction & Business Outcomes 19 Research using ACSI data demonstrates the relationship between customer satisfaction and the financial performance of individual firms. ACSI’s methodology show that customer satisfaction is directly linked to stock market performance.
  19. 19. Customer Experience in Perspective 20 The term Customer Experience Management is used within the broader context of Customer Relationship Management (CRM) “CEM is part of customer relationship management (CRM) and the natural extension of building brand awareness” Source: Kirkby J, Wecksell J, Janowski W & Berg T, “The Value of Customer Experience Management”, Strategic Analysis Report, March 2003
  20. 20. CX 101 21 Adapted from: Bitner M-J, “Building service relationships: It's all about promises”, Journal of the Academy of Marketing Science, Vol 23(4), 1995 & Kirkby J, Wecksell J, Janowski W & Berg T, “The Value of Customer Experience Management”, Strategic Analysis Report, March 2003
  21. 21. Satisfaction and Loyalty Curve 22 Lacking Consistency
  22. 22. Purposeful Leadership Do your leaders operate consistently with a clear, well articulated set of values? Compelling Brand Values Are your brand attributes driving decisions about how you treat Customers? Employee Engagement Are your employees fully committed to the goals of your organization? Customer Connectedness Is Customer feedback & insight integrated throughout your organization? Source: Temkin Group – June 2015 CHANGE THE CX NARRATIVE 23
  23. 23. Before jumping right into solving a problem, we should step back and invest time and effort to improve our understanding of it. :Prof Adré Schreuder “ ”
  24. 24. CX as Art & Science Slide 25 CHURCHILL, G,A.; A Paradigm for Developing Better measures of Marketing Constructs, Journal of Marketing Research Vol. XVI (February 1979). 64-73. More stupefying than the sheer number of our measures is the ease with which they are proposed and the uncritical manner in which they are accepted. In point of fact, most of our measures are only measures because someone says that they are, not because they have been shown to satisfy standard measurement criteria (validity, reliability, and sensitivity)
  25. 25. Archetypes of Client Insights Maturity 26 Have no Insights FunctionA We cannot afford dedicated resources A1 Company Ethos We have a lot of Client data, but do not use it well A2 Beyond Analytics We cannot change the structure or process easily A3 Start-up within Have Insights Function, but want to get more out of themB We use CusInsights for Marketing rather CVP B1 Product Tool We do all the right things, but still poor CE B2 Experience Driven CusInsights too expensive, make more affordable B3 Centralized Coach CusInsights not shared/ lost in company B4 Knowledge Centre CusInsights add little value to CVP or business B5 Insights to Inform Source: Worldbank – CGAP & Dalberg Consulting Dalberg Consulting developed 8 archetypes with CGAP
  26. 26. Changing your focus from INSIDE-OUT to OUTSIDE-IN changes your perspective in the design of a differentiated customer experience. From INSIDE-OUT to OUTSIDE-IN 27
  27. 27. INSIDE-OUT vs OUTSIDE-IN 28 CUSTOMER ORGANIZATION OUTSIDE-IN INSIDE-OUT • Needs • Motivations • Expectations • Experience • Desired outcomes • Quality service • Technology • Process • Resources • Efficiency • Offerings • Capabilities
  29. 29. Outside-In & Inside-Out 30 Proprietary Strategic (Review & Focus) National and International Benchmark Operational Measures National and International Benchmark Proprietary Strategic/Visionary Measures Strategic Minimum standards Inside-Out View Outside-In View Strategic Reputational Measures CC Audit CC Destiny NPS Effort Score Best Practise OperationalStandards & Foundation Level 1 Level 2 Level 3 2018 CC Maturity OUR COMPANY OUR CUSTOMERS OUR COMPANY OUR CUSTOMERS
  30. 30. Business Understanding of Client Engagement 31 47% Brand Perspective 40% Client Perspective 13% 47% of Business view Client Engagement from a Marketing/ Brand and/or Business process perspective 40% of Business view Client Engagement from a Client Experience perspective ONLY 13% see Client Engagement from a Brand & Client Perspective Source: Rosetta Consulting. 2014 Client ENGAGEMENT Rosetta Consulting’s Client Engagement Survey Part 1: The Marketer’s Perspective
  31. 31. Client Management Best Practise 32 ©Consulta Customer Centricity Framework STRATEGIC IMPACT Expansion Retention Acquisition ENABLERS Planning Designing Delivering Engaging Responding Knowing PILLARS People, Tools & Insights Focusing Operations Customer Experience Leadership & Culture VALUE CC Maturity CC Destiny CC Benchmark TISSE2018 CC Audit Bob Hayes Strategic Audit
  32. 32. Five pillars of Customer Centricity as a business model 33 Leadership and culture Customer focused leadership and culture Focusing operations Focusing operations on the Customer - compliance, risk, IT, HR, finance, marketing, legal, training People, tools and insights Collecting information, generating insights, informing strategy, informing Customer value propositions and empowering employees Customer experience Based on insights generated, design, concepts, test, build, delivery, scale and renewal Value Creating and measuring value: at Customer, firm and society level Source: Worldbank - CGAP
  33. 33. CGAP Customer Centricity Maturity Model 34 • A Causal Model with Longitudinal Journey 35 Statements: Agreement scale _____ Aligned with 5 customer centricity pillars Customer Centricity Maturity Model Pillar 1: Leadership & Culture Pillar 3: Empowering employees, insights & tools Pillar 4: Customer experience Pillar 5: Creating value Pillar 2: Focusing operations on the customer
  34. 34. Maturity Path 35 Unconvinced but Interested 1 Getting involved & Buy-in2 Formalised & Converted3 Dedicated & Reinventing4 Entrenched & Empowered5 Engaged & Sustained6
  35. 35. Customer Centricity Maturity Model 36 Level classification 3 2 2 53 61 5160 Pillar1:Leadership &Culture The Customer Centricity Maturity Model Level 6: Engaged & Sustained Level 5: Entrenched & Empowered Level 4: Dedicated & Reinventing Level 3: Formalised & Converted Level 2: Getting involved & Buy-in Level1: Unconvinced but Interested Pillar2:Focusing OperationsonCustomer Pillar3:Empowering Employees,Insights& Tools Pillar4:Customer Experience Overall score 2017: 54 Level 2: Getting involved & buy-in A summarized view on Customer Centricity Maturity Levels Pillar5:Value 2 1 47
  36. 36. CC Development Roadmap Slide 37 Current Maturity Levels KNOWING PLANNING DESIGNING DELIVERING ENGAGING RESPONDING Level 1: Unconvinced but Interested Pillar 1: Leadership - KNOWING Pillar 1: Leadership - PLANNING Level 2: Getting involved & Buy-in Pillar 4: Customer Experience - KNOWING Pillar 2: Operations - PLANNING Level 3: Formalised & Converted Pillar 4: Customer Experience - DESIGNING Pillar 2: Operations - DELIVERING Pillar 1: Leadership - RESPONDING Level 4: Dedicated & Reinventing Pillar 2: Operations - DELIVERING Pillar 3: Empowering Employees - ENGAGING Pillar 2: Operations - RESPONDING Level 5: Entrenched & Empowered Pillar 3: Empowering Employees - DELIVERING Pillar 4: Customer Experience - ENGAGING Pillar 4: Customer Experience - RESPONDING Level 6: Engaged & Sustained Pillar 5: Value - KNOWING Pillar 5: Value - RESPONDING Enablers
  37. 37. CC Development Matrix Slide 38 Enablers► ▼ Pillars KNOWING PLANNING DESIGNING DELIVERING ENGAGING RESPONDING Pillar 1: Leadership & Culture CC MATURITY CC DESTINY CC ROADMAP CC STRATEGIC FRAMEWORK – Roll Out CC MEASUREMENT FRAMEWORK (Reputational & Transactional) CC BENCHMARK MEASURE Pillar 2: Focusing Operations on the Customer CC STRATEGIC FRAMEWORK - Planning CC MASTERCLASS CC JOURNEY MAPPING Current State Voice-of- Customer ChannelsPillar 3: Empowering Employees, Insights, and Tools RCA (Root Cause Analysis) CC JOURNEY MAPPING Desired State CEM / CEP TRAINING CEM / CEP TRAINING Pillar 4: Customer Experience CC VALUE PROP CC ROADMAP CC MATURITY Pillar 5: Creating Value CC FORECAST ROMI, Linkages Analysis, Predictive Modelling CC FORECAST
  38. 38. Key Take outs • Stop the measure-madness - More Comprehensive & Integrated model for CX-measurement • Break the start-stop-start mentality & silver bullet 6- months project mentality: – Journey to Customer Centricity will take 3-5 years (of consistent clear strategy): – We need more evangelist CX professionals by ”educating” business about the true scope of CX implementation • Break the PR-Ra-ra podium lip service mentality - Business needs to ”walk-the-talk” • Break the “we focus on the customer, but prefer profit” mentality at C-Level - More CCO’/CXO’s that will represent the customer at C-levelSlide 39
  39. 39. CONSULTA (PTY) LTD REG NO: 1998/011948/07 | VAT NO: 4920165448 Highgrove Office Park | Consulta HUB (Unit 13) Corner Tegel & Olievenhoutbosch Road Highveld Techno Park, Centurion, 0046 PO Box 67073, Highveld Park, 0169 (T) 0861 304 100 | (F) 086 582 2858 | Adre Schreuder: Mobile: 082 4521666 THANK YOU