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HYPATIA RESEARCH GROUP: "Operationalizing Voice of the Customer: Maturity Model, Benchmarks & Best Practices"


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Hypatia Research Group was the FIRST industry analyst and market research firm to author primary research and vendor evaluations for Voice of the Customer technology in 2010.

Voice of the Customer (VOC) and Customer Experience Management (CEM) business processes along with enabling software technologies— solutions formerly known as Enterprise Feedback Management (EFM)—have recently converged. Moreover, more than 20 vendors are racing to add Social Media Intelligence (SMI) capabilities to these solutions so that the ability to perform unified quantitative and qualitative customer analysis[1] (holistic customer intelligence) becomes a part of this VOC equation.

This blending of the quantitative with the qualitative customer feedback is nascent still at most B2B industries such as manufacturing, process industries, energy & utilities, and professional services firms. In B2C sectors inclusive of retail, financial services, banking, consumer goods and telecommunications, maturity levels in operationalization of VOC processes are more advanced. However, less than 8% of all companies surveyed have attained a visionary level of maturity as defined through our primary research. --Leslie Ament

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HYPATIA RESEARCH GROUP: "Operationalizing Voice of the Customer: Maturity Model, Benchmarks & Best Practices"

  1. 1. Operationalizing VOC: Maturity Models & Best Practices Leslie Ament, SVP Research, Client Advisory, & Principal Analyst ©2011 Hypatia Research, LLC
  2. 2. Operationalizing VOC  Customer Intelligence Research & Advisory Services  Research Overview & Methodology  Corporate Importance  Who’s Using?  Performance Benchmarks, Metrics & the Right Stuff  Best Practices: 3 Case Studies  LiveNation  Multi-Billion Dollar Retailer  Insurance Provider  Summary  About Hypatia & Contact Info ©2011 Hypatia Research, LLC
  3. 3. Hypatia Research: Actionable Insight That Drives Results! ©2008 Hypatia Research & Consulting Primary Quantitative Surveys Primary Qualitative Interviews with B2C / B2B end- users Market Intelligence & Analysis Strategy Workshops Custom Research Competitive Intelligence • Research Reports • Seminar/ Webinar • Case Studies • Vendor Selection • KPI’s & Best Practices • Industry Snapshots
  4. 4. Enabling Technologies, Processes & Services End-Users Deploy: •Text Analytics •Data Mining •Content Mining •Enterprise Feedback Mgmt. •Consumer Generated Media •Market Insight •CRM •Marketing Automation •Web Analytics •Data Integration •Data Quality •Identity Management Customer Data Management Customer Interaction Management Business Intelligence/ Analytics Consumer Insight / Market Intelligence ©2008 Hypatia Research & Consulting ©2011 Hypatia Research, LLC
  5. 5. Research Methodology MARKET Analysis  Market Pressures and Challenges  Actions and Responses  Knowledge and Capabilities  Enabling Technologies
  6. 6. Respondent Profile >$10b 15% $1b to $9.9b 19% $501M to $999M 13% $51M to $499M 21% <$50M 32% C-level 22% EVP /VP 13% Director / Manager 31% Team Member 24% Consultant / Analyst 10% Respondent’s RoleCompany Size Source: ©2011 Hypatia Research, LLC
  7. 7. Respondent Profile Geography Africa 0.4% Asia / Australia 1.1% Eastern Europe 0.4% Middle East 1.9% North America 93.3% South America 1.9% Western Europe 1.1% 6.0% 9.0% 9.7% 10.8% 11.2% 11.9% 13.1% 13.8% 14.6% Not-for-Profit High-Tech: (HW & SW) Manufacturing Healthcare Consumer Products Retail Professional Services Financial Services Other Not surprisingly, B2C sectors are more likely to invest…. Source: ©2011 Hypatia Research, LLC
  8. 8. Current VOC Users 15 18 23 40 41 47 60 61 66 67 Web Analytics Mkt. Research-external Merchandising Other Customer Analytics Market Research-Internal Mkt./Prod. Mkt. Corporate Strategy BI / IT Services Customer Service 0 10 20 30 40 50 60 70 80 Current VOC users are those most comfortable using technology to gather, analyze, distribute & apply customer insight as part of their job function / MBO’s. Source: ©2011 Hypatia Research, LLC
  9. 9. Market Pressures & Challenges 38.90% 41.10% 54.90% Understand customer preferences Increase customer loyalty Acquire new customers Top 3 Corporate Issues Top 3 Operational Business Problems Improve customer experience 48.5% Increase customer profitability 43.3% Improve customer retention rates 43% Source: ©2011 Hypatia Research, LLC
  10. 10. Market Pressures & Challenges 38.90% 41.10% 54.90% Understand customer preferences Increase customer loyalty Acquire new customers Top 3 Corporate Issues Top 3 Operational Business Problems Improve customer experience 48.5% Increase customer profitability 43.3% Improve customer retention rates 43% Source: ©2011 Hypatia Research, LLC
  11. 11. Actions & Responses: How Will Company Respond to Challenges Internal resources usage 41.9% External expertise usage 16.7% Outsource to an agency, consulting firm or provider of research services 5.6% Top Three Challenges Faced when Adopting VOC Vendor selection 62.35% Integration with existing systems 43.50% Establish internal business processes / best practices 42.20% Planned Investment in VOC Increase (10%) Decrease (10%) About the Same None Next 0-6 Months 19.4% 9.0% 42.2% 29.5% Next 6-18 Months 20.9% 10.8% 39.9% 28.4% Next 18-36 Months 25.0% 8.6% 39.2% 27.2% Steady increase in VOC usage planned Source: ©2011 Hypatia Research, LLC
  12. 12. Knowledge & Capabilities: 16% 21.90% 27% 30.40% Globally across the organization Ad-hoc or on a project basis Centrally across the organization by region Within individual departments Sources of Data Collection 20.90% 25.20% 25.60% Monthly feedback… With each feedback… Ad-hoc or as-needed How Often is Analysis Distributed to Stakeholders? Primary Uses of Outside Expertise Subject matter [analytics, research, data modeling] expertise 28.7% Cost management 25.6% Industry expertise 18.5% Technical expertise 13.8% Project management 13.4% Sampling Rules Consistent Across the Organization ? Yes 43.3% No 56.7% Source: ©2011 Hypatia Research, LLC
  13. 13. VOC Importance to Corporate Performance Source: ©2011 Hypatia Research, LLC
  14. 14. Current Departmental Usage of VOC technologies Source: ©2011 Hypatia Research, LLC
  15. 15. Most Valuable Information Sources: VOC 15 Source:©2011HypatiaResearch,LLC
  16. 16. Performance Benchmarks & Metrics Performance metrics should vary by business application and purpose—right? Common sense would suggest this; however, as we might well know from reading Dilbert or viewing “The Office”, this is not always the case
  17. 17. Establishment of Operational Standards Metrics: Are We There Yet? 68% 67% 56% 29% 29% 0% 10% 20% 30% 40% 50% 60% 70% 80% Net Promoter Score Customer Loyalty Customer Satisfaction Index Annual Customer Profitability % Reduction in Complaints Capturing the Right Stuff? 78.8% 71.3% 71.2% 66.4% 49.7% 21.2% 28.7% 28.8% 33.6% 50.4% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Structured survey: CustSatisfaction Emails between customer & org. Structured survey: CustLoyalty Open-ended customer text Blogs: company/products Important Not Important 17 Source: ©2011 Hypatia Research, LLC Source: ©2011 Hypatia Research, LLC Performance metrics should vary by business application and purpose—right? Common sense would suggest this; however, as we might well know from reading Dilbert or viewing “The Office”, this is not always the case
  18. 18. Best Practices in Action: VOC
  19. 19. Best Practices: Live Nation  Live Nation Entertainment (NYSE:LYV) is the largest live entertainment company in the world: connecting 200 million fans to 100,000 events in over 40 countries. Their business model includes selling concert videos via Apple and iTunes as well as sponsorship, ticket sales and service fees generated from TicketMaster.  Currently Live nation performs all of their VOC techniques internally with a team of 15 and is responsible for providing decision-support to multiple departments.  Priority one was to create a self-sufficient research & analytics group that could operate without depending on external resources or internal IT resources. 19
  20. 20. Live Nation: Operationalization  Live Nation has increased their velocity by 10X. Automation has enabled unique links to be embedded in outbound email that authenticates and validates that the person who purchased ticket actually took the survey.  All customer transactions are stored in one database (Infor) and then fed into the survey database to authentic customer information such as concert genre selected, demographics, etc…  Now that the team is empowered to perform both data mining and survey functions in terms of customer knowledge---i.e. transactional behavior + survey attitudes in one group—a critical goal has been achieved.  Global research is able to put the why into VOC insight rather than continue to disseminate operational BI reports. 20
  21. 21. Live Nation: Results  Now that the team is able to capture, manage, and analyze VOC by comparing results from different channels [phone versus, retail, versus online] and points of view—clear cause and effect in regards to issues is apparent.  Sponsorships—helping them illustrate customer segments & validate value of sponsorship  Marketing—correlating the effect cannibalization rates have on incremental sales  Retail sales—comparison of gift tickets versus online purchasers  Venue/Artist—results have lead Live Nation to make changes based on VOC input  Products Offered—customer input resulted in changes:  Consumers want all in one pricing  Desire paperless tix rather than having brokers snatch up good seats  Consumers found retail outlets such as Wal-mart convenient  Brand favorability 80% due to consumer friendly pricing  Only a certain percentage purchased via retail outlets in specific regions…and some will never purchase online  Return policy & exchange policy implemented within 3 days of purchase for full refund
  22. 22. Multi-Billion $ Global Retailer  Global Retailer of 40,000+ Products  Founded in the United States, and operating in the UK, Japan and Germancy, this $9b global online retailer employs over 22,000. Merchandise is sold worldwide via the Internet, television, and the telephone and includes product categories such as apparel/accessories, jewelry, perishable goods (flowers, gourmet foods, fruits, and desserts), party supplies, outdoor and backcountry sports gear and sports nutrition.
  23. 23. Challenges: Global Retailer  Operating in a truly multi-channel environment where customer input ranged from ranging from call center, ratings and reviews on website, and online community forum, the high volume and velocity of customer feedback overwhelmed the three person VOC team tasked with monitoring customer feedback.  Due to extremely heavy workloads—a result of two open team member requisitions--the selection process took two years. With corporate sponsorship provided by the CIO, the shortlist of finalists included Attensity and Clarabridge.
  24. 24. Vendor Selection: Global Retailer  Initially the retailer was concerned about vendors meeting the volume of data required so a pilot was initiated.  While Attensity was very favorably reviewed, Clarabridge was selected ultimately because the company had just purchased and implemented Microstrategies as their business intelligence platform.  Executives drove this decision for several reasons:  Clarabridge has more retail customers and sector experience,  Microstrategies has an integration partnership with Clarabridge so reports interface easily with Microstrategy reporting,  Executives wanted dashboards for returns as well as providing power users across the enterprise with reports that they can share with supply chain partners who do not have direct access.
  25. 25. Operational Approach: Global Retailer  Previously anecdotal feedback rather than actual data and facts were used for decision-making in regards to voice of the customer. Now the team is mining for insight through a vast number of products and numerous sales channels—and Clarabridge is utilized everyday to respond to questions such as:  Why didn’t we meet sales goals?  Whats going on in the beauty area overall—and we need it before the bi- weekly meeting!  What didn’t work on the fashion day campaign?  What are we doing well or poorly in each product categories as analyzed by sentiment and should we apply the positive to additional brand segments?  How should we address the volume of negative feedback on new return labels? What actions should we take given customers’ feedback?
  26. 26. Results: Global Retailer  In a global, multi-channel retail environment, the sheer amount of customer input is daunting and impossible without an enabling technology. In addition to providing decision-support, brand perception assessments and product trending analysis on a regular and ad-hoc basis to stakeholders, results include:  Identification of success strategies that lead to a significant increase in proucts sales—and the ability to duplicate this success in other product categories  Proactive reduction in product returns due to poor quality—puts context around sales and return metrics so that products with more than a 1% rate of return due to damage or defect is discontinued.  Productivity increase—with over 10,000 comments per day, a retailer would need 20+ VOC analysts to atttempt this volume manually. Only 3-5 are now utilized.  Lowered spoilege expenses in food products—learned that more than 1% of food arrived was delivered to customers either soft or spoiled. Tracked the problem to the amount of dry ice utilized and resolved the isssue.
  27. 27. Best Practices: Insurance  Founded in early 1900’s, this is a not-for-profit member services organization has more than 700,000 members in North America. They are affiliated several other not-for-profit insurance organizations in other countries as well.  Because this insurance association believes that their competitive strength is how customers are treated, the organization “walks the walk” and exemplifies a mature stage of operationalizing VOC programs across an enterprise. For example, all staff members are required to undergo a three day work shop designed to ensure customers have high quality interactions and conversations that truly represents the association’s brand. Additionally, this insurance provider has both individual and team incentives in place to ensure its employees are appropriately motivated.
  28. 28. Insurance: Results  Dedicated to establishing a customer centric culture of continuous improvements, this association fully expects their VOC programs to evolve over the next 3-10 years. In the short term, having taken the time to plan out as much of the program in advance of vendor selection as possible has netted them significant return on investment.  This organization realized huge cost savings across the board from multiple areas inclusive of:  2% improvement in productivity gains in issue resolution  1% decrease in tens of millions of insurance claims  1% increase in customer retention scores (estimated at ~$7M in policy renewals)  3% performance improvement in sales team scores (Member satisfaction went from 87% to 90%)
  29. 29. Summary: Early Stage  VOC not yet widely deployed  Data gathered departmentally (in silos)  Non-standardized operational reporting: annual to ad- hoc  Emerging expertise / usage across functions  Inconsistent sampling practices  Inconsistent practices across departments  Incomplete Integration: legacy systems & processes  Establishment of performance metrics & standardized benchmarks lacking
  30. 30. Summary: Rules of Road  End-User Investments  Create a measurable goal and operational plan for execution  Organize: Hire expertise & train employees  Establish standard performance metrics, benchmarks & processes to help improve consistency of VOC practices  Integration of survey analysis {data + unstructured text} with enterprise data  Improve ability to collect, analyze & apply feedback more frequently
  31. 31. Summary: Rules of Road  Create a Customer Intelligence COE  Market Researchers  Consumer Insight Analysts  LOB: Marketers, Merchandising, Service, R&D  IT  Potential End-User Benefits  Acquire & retain profitable customers: Improve profitability per customer  Reduce costs: product quality defects / service & support  Establish service line extensions and/or product innovations  Manage brand reputation
  32. 32. Summary: Vendor Evaluation  Critical Requirements  Multi-channel data capture; online, phone/IVR, survey, transaction, call center, mobile etc…  Integrate survey analysis with enterprise data; CRM, Transactional Systems, & Contextual Stuff  BI, Text Analytics, Advanced Analytics & Data modeling  Create a competitive advantage: Collect & apply CI more frequently within organization
  33. 33. Summary: Benefits  Increase customer satisfaction, loyalty, NPS  Acquire & retain profitable customers: Improve profitability per customer  Reduce costs: product quality defects / service & support  Establish service line extensions and/or product innovations  Manage brand reputation via proactive monitoring  Defend competitive position & market share via VOC insight
  34. 34. 34 Q & A Leslie Ament, SVP Research & Principal Analyst Hypatia Research Group M: 617-230-0067 O: 781-862-5106 Twitter: Hypatia_LeslieA Twitter: HypatiaResearch Thank You