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How frustrated are your customers?
Affiliated	to:
All rights strictly reserved. The intellectual capital contained and ill...
“Culture	eats	
strategy	for	
breakfast.”
- Peter	Drucker
2
The war between “Blink” & “Think”
3
Malcolm Gladwell’s Blink popularized “Thin
Slicing” as the new source of human
decision making – BUT it is found “Blinklik...
T h ! n k
5
• In	essence,	Mr.	Gladwell	is	making	a	case	for	one-half	of	a	classic	false	
dichotomy.	A	false	dichotomy,	som...
T h ! n k
6
• "We	can	be	distracted	by	the	most	visible	and	salient	aspects	…,"	Bernieri (Phd,	
Social	Psychologist	at	Ore...
7
Evolution of the Brain
400m	Yrs 80	m	Yrs 10	m	Yrs 800k	Yrs 50k	Yrs
Reptilian
Brain
Mammalian
Brain
Primate
Brain
Homo	Sapi...
The Core Dimension
9
Fighting
Fleeing
Freezing
Brain	Stem
Emotion
Self esteem
Motivation
Values
Limbic	SystemHigher cognit...
SYSTEM 1 DECISIONS vs SYSTEM 2 DECISIONS
Fast
Unconscious
Automatic
Everyday	decisions
Error	Prone
System	1
Slow
Conscious...
Remembering	the	Experience
Remembering	=	
Self	
StrategicOperational
=	Experiencing	
Self
11
The	Moments	in	Buying	Experience
System	1	– Experience	Self	Buying	Scenario	(Buying	a	cold	drink)
Need	Arousal
1
Intuitive...
SYSTEM 1 DECISIONS VS SYSTEM 2 DECISIONS
13
System	2System	1
System	2	is	the	only	one	that	can	follow	
rules,	compare	obje...
IT IS NOT SYSTEM 1 vs SYSTEM 2 : RATHER
SYSTEM 1 & 2 INTEGRATED – CONCEPT OF FLOW
14
System	1System	2
The Hybrid Model of Experiencing & Remembering
Transactional
Customer Feedback
Reported Customer
Satisfaction
r = 0.40
15
...
feedback programs (see Hayes (2009) for details of the study methodology).
A total of 277 customer feedback professionals ...
Top Customer
experience trends
CX Training &
Engagement
Mobile formulations
Voice of Customer
Renovations
Corporate Cultur...
Purposeful
Leadership
Compelling
Brand	Values
Employee
Engagement
Customer
Connectedness
Do	your	leaders	operate	consisten...
“The	root	of	our	problem	is	not	that	we’re	in	a	Great	Recession	or	
a	Great	Stagnation,	but	rather	that	we	are	in	the	earl...
70%
41%
37%
30%
22%
Soliciting	 customer	feedback
Sharing	 feedback	across	the
organization
Developing	 actionable	 insigh...
Success Stories
Image	Placeholderii
70%
Of	top	CX	companies	
use	
CX	Feedback		for
Strategic	decisions
21
A Step-by-Step Plan to Improve CMO-COO Collaboration –
HBR Article by David C. Edelman, Dorian Stone & Harald
Fanderl (HBR...
Putting Customer Experience in Perspective of
Brand & Future Lifetime value of customers
Adapted	from:	Bitner	M-J,	“Buildi...
Porter & Deloitte agree on differentiation as key strategic
option for modern business & only one cost leader can survive…...
In the 2016 Customer Experience Landscape – do we
believe that customer experience focus will deliver the
promised busines...
Source:	Gupta,	S.	&	Zeithaml,	V.,	2006.	Customer	Metrics	and	Their	Impact	on	Financial	Performance.	
Marketing	Science,	25...
27
CUSTOMER	EXPERIENCE	IN	SOUTH	AFRICA
Four	years	of	Tracking	SAcsi
Introduction
Integrated Measurement Framework
Strategic	/	
Visionary										
Operational	/	
Real	time																							
National...
Market Value Added - Top & Bottom ACSI
30
Source:	FCI	Group.,	2007b.	The	American	Customer	Satisfaction	Index	(ACSI)	Techn...
SAcsi Model
Complaints
Incidence
Handling
Loyalty
Retention
Price	Sensitivity
Perceived	
Value
Index
Price	vs	Quality
Qual...
TCF Index (7 pillars)
Net Promoter Score &
Consumption Appetite
Additional Included Metrics
National Sentiment Index
Statistics to Date
TOTAL	SAMPLE	=	183	180	
Brands	included	=	238
Industries	included	=	35
33
Three Year SAcsi Trend = Flat
76.40 75.80 76.91
SAcsi 2013 SAcsi 2014 SAcsi 2015
76.7 75.8 74.3
ACSI 2013 ACSI 2014 ACSI 2...
Perceived Value – Down over 3 years
60
80
100
Avg:	75.2
Min:
60.6
Avg:	77.1
Max:	
88.7
-1.9
60
80
100
2013 2015
Min:
60.7
...
Complaints – The Focus of CX industry
2015
Min:
3.8%
Max:	
49.0%Max:	
46.6%
Min:
4.7%
60% 0%
2013
30%
60% 0%
30%
-2.4%
+4....
Complaints Handling – CX Industry
getting a handle on it
2015
Max:	
74.6%
Min:
4.1%
0% 100%
2013
Avg:	55.8%
+8.9%
Avg:	55....
BUT … we do not get the Loyalty
as a result (yet)
60
80
100
Avg:	72.5
Min:
58.8
Avg:	72.1
Max:	
82.4
60
80
100
2013 2015
M...
… and tracking NPS is not helping either
(we are more confused)
20152013
0%
Avg:	31.1%
Min:
-11.7%
-100%
Max:	
60.1%Max:	
...
Sustainable Key Take outs
• More comprehensive model for CX-measurement – break the
feedback-mentality
• Journey to Custom...
Exciting Industry News
41
Coming	to	South	Africa	June	2016
next	arrival	…				
TIXCI	- Customer	Experience	Standard
(work	i...
The
Customer
is King
42
The Team
Stephan	du
Plessis
Managing	Director
stephan@consulta.co.za
T:	+27	12	665	6200
M:	+27	72	538	5362
Prof.	Adré
Schr...
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CXPA Networking event Jhb May 2016 - Overview of Customer Experience in South Africa - 2016

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During May 2016 the South African chapter of CXPA hosted a networking event where Prof Adré Schreuder (CEO of Consulta & Founder of SAcsi) was asked to present an industry overview of customer experience in South Africa. The presentation covers a divergent, well grounded view to customer experience concepts, principles, models & aims to dispel some of the most prevailing myths.

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CXPA Networking event Jhb May 2016 - Overview of Customer Experience in South Africa - 2016

  1. 1. How frustrated are your customers? Affiliated to: All rights strictly reserved. The intellectual capital contained and illustrated in this presentation is the sole property of Consulta Research (Pty) Ltd and may not be copied, infringed upon in whatever manner, without the written consent of the proprietary owners Overview of Customer Experience in South Africa - 2016 Networking Event : 26 May 2016 1
  2. 2. “Culture eats strategy for breakfast.” - Peter Drucker 2
  3. 3. The war between “Blink” & “Think” 3
  4. 4. Malcolm Gladwell’s Blink popularized “Thin Slicing” as the new source of human decision making – BUT it is found “Blinklike" judgments are not a substitute for critical thinking! • Malcolm Gladwell (Blink) describes the main subject of his book as “thin-slicing": our ability to gauge what is really important from a very narrow period of experience. • In other words, this is an idea that “spontaneous decisions are often as good as—or even better than—carefully planned and considered ones.” 4
  5. 5. T h ! n k 5 • In essence, Mr. Gladwell is making a case for one-half of a classic false dichotomy. A false dichotomy, sometimes also called “the fallacy of the excluded middle,” is an either-or proposition presented in such a way as to make us think only one, not both of the choices, can be true. (ALSO called Polarity) • In other words, lying behind these “snap judgments” are educated impressions formed by years of study, thought, and analysis. • I am certainly not out to bury intuition, “ah-ha” moments, or emotion … these elements … are all indispensable to critical and creative thinking. But as far as delivering results, that is, favorable outcomes, critical thinking and its main elements, observation, logical reasoning, and skepticism have a demonstrably better track record.
  6. 6. T h ! n k 6 • "We can be distracted by the most visible and salient aspects …," Bernieri (Phd, Social Psychologist at Oregan State Univ) says. …. can hide the inner layers of the onion” • Richard Posner, a Prof at Univ of Chicago and a judge on the US Court of Appeals for the Seventh Circuit, argues that “Gladwell … makes a variety of unsupported assumptions and mistakes in his characterizations of the evidence for his thesis.” • The Daily Telegraph review writes, "Rarely have such bold claims been advanced on the basis of such flimsy evidence.” • Nobel prize winner Daniel Kahneman, author of Thinking, Fast and Slow which speaks to rationality's advantages over intuition, says, "Malcolm Gladwell definitely created in the public arenas the impression that intuition is magical... That belief is false."
  7. 7. 7
  8. 8. Evolution of the Brain 400m Yrs 80 m Yrs 10 m Yrs 800k Yrs 50k Yrs Reptilian Brain Mammalian Brain Primate Brain Homo Sapiens Brain Modern Cognitive Brain Limbic System Neocortex 8
  9. 9. The Core Dimension 9 Fighting Fleeing Freezing Brain Stem Emotion Self esteem Motivation Values Limbic SystemHigher cognitive functions Rational thinking Neocortex
  10. 10. SYSTEM 1 DECISIONS vs SYSTEM 2 DECISIONS Fast Unconscious Automatic Everyday decisions Error Prone System 1 Slow Conscious Effortful Complex decisions Reliable System 2 10
  11. 11. Remembering the Experience Remembering = Self StrategicOperational = Experiencing Self 11
  12. 12. The Moments in Buying Experience System 1 – Experience Self Buying Scenario (Buying a cold drink) Need Arousal 1 Intuitive Autonomous action 2 Buy without much thought 3 Hardly any Post Purchase memory 5 4 Immediate gratification System 2 – Remembering Self Buying Scenario (Life Insurance Application) Need Arousal 1 Collection of information 2 Evaluation of Information 3 Post Purchasing Behaviour 5 4 Purchasing Decision 12
  13. 13. SYSTEM 1 DECISIONS VS SYSTEM 2 DECISIONS 13 System 2System 1 System 2 is the only one that can follow rules, compare objects on several attributes, and make deliberate choices between options. System 1 detects simple relations (“ they are all alike,” “the son is much taller than the father”) and excels at integrating information about one thing, but it does not deal with multiple distinct topics at once, nor is it adept at at using purely statistical information. … a need for order and structure, a passion for detail & combining intuition with knowledge makes System 2 very effective
  14. 14. IT IS NOT SYSTEM 1 vs SYSTEM 2 : RATHER SYSTEM 1 & 2 INTEGRATED – CONCEPT OF FLOW 14 System 1System 2
  15. 15. The Hybrid Model of Experiencing & Remembering Transactional Customer Feedback Reported Customer Satisfaction r = 0.40 15 Near-real time recall of Experience Operational Memory of experience = Satisfaction Strategic
  16. 16. feedback programs (see Hayes (2009) for details of the study methodology). A total of 277 customer feedback professionals from midsize to large companies completed a survey about their company’s customer feedbac program. The respondents indicated whether their company adopts 28 specific business practices related to their customer feedback program (e.g. senior executive is champion of customer feedback program; Web-based surveys are used to collect customer feedback). Additionally, respondent were asked to provide an estimate of their company’s customer loyalt ranking within their industry; this question was used to segment customer into loyalty leaders (companies with a loyalty ranking of 70% or higher) and loyalty laggards (companies with a loyalty ranking below 70%). Table 1. Adoption Rates of Customer Feedback Program Practices of Loyalty Leaders and Loyalty Laggards The survey results revealed real differences between loyalty leaders and loyalty laggards in their customer feedback programs (See Table 1). There were statistically significant differences in adoption rates between loyalt leaders and loyalty laggards across many of the business practices. Loyalt leading companies were more likely to adopt specific practices compared to their loyalty lagging counterparts, especially in areas related to strategy/governance, integration and applied research. In upcoming posts, will explore each component of the customer feedback program and presen best practices for each. 30,000-ft view of an enterprise-wide customer feedback program. A r feedback program involves more than simply surveying customers. seful, a customer feedback program must successfully manage many parts of the program, each impacting the effectiveness of the overall . The elements of customer feedback programs can be grouped into or areas or components. These components are: Strategy, ance, Business Process Integration, Method, Reporting, and Applied h. Figure 1 below represents the components of customer feedback s. Figure 1. Elements of a Customer Feedback Program involves the executive-level actions that set the overarching es around the company’s mission and vision regarding the company es. Governance deals with the organization’s policies surrounding the r feedback program. Business Process Integration deals with the o which the customer feedback program is integrated into the daily Best Practices in Customer Feedback Programs – Bob Hayes 16 Source: 20 Best Practices in Customer Feedback Programs: Building a Customer-Centric Company – Bob Hayes (Business over Broadway Blog - http://www.businessoverbroadway.com
  17. 17. Top Customer experience trends CX Training & Engagement Mobile formulations Voice of Customer Renovations Corporate Culture Conversations Source: Temkin Group 2015 Customer Experience Trends – The SA CX-Industry 17
  18. 18. Purposeful Leadership Compelling Brand Values Employee Engagement Customer Connectedness Do your leaders operate consistently with a clear, well articulated set of values? Are your brand attributes driving decisions about how you treat customers? Are your employees fully committed to the goals of your organization? Is customer feedback & insight integrated throughout your organization? Source: Temkin Group – June 2015 Corporate Culture Conversations 18
  19. 19. “The root of our problem is not that we’re in a Great Recession or a Great Stagnation, but rather that we are in the early throes of a Great Restructuring. Our technologies are racing ahead, but our skills and organizationsare lagging behind.”- Erik Brynjolfsson/Andrew McAfee/Race Against The Machine “The illiterate of the 21st Century will not be those who cannot read or write, but those who cannot learn, unlearn, and relearn.”- Alvin Toffler CX Training & Engagement 19
  20. 20. 70% 41% 37% 30% 22% Soliciting customer feedback Sharing feedback across the organization Developing actionable insights from the data Making changes to the business based on the insights Reviewing implications that cut across organizations Source: State of VoC Programs 2014 – Temkin Group Voice of Customer Renovations 20
  21. 21. Success Stories Image Placeholderii 70% Of top CX companies use CX Feedback for Strategic decisions 21
  22. 22. A Step-by-Step Plan to Improve CMO-COO Collaboration – HBR Article by David C. Edelman, Dorian Stone & Harald Fanderl (HBR Jan 2015) 1. Develop a shared vocabulary and shared metrics 2. Build a structure for collaboration 3. Work together on a few customer journeys that matter 4. See the customer journey all the way through 22 https://hbr.org/2015/01/a-step-by-step-plan-to-improve-cmo-coo-collaboration CMO COO
  23. 23. Putting Customer Experience in Perspective of Brand & Future Lifetime value of customers 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 23 CXO CMO CMO/ CXO/ COO
  24. 24. Porter & Deloitte agree on differentiation as key strategic option for modern business & only one cost leader can survive… 24 PORTER - Three Generic Strategies: • Differentiation • Cost Leadership • Focus Raynor & Ahmed (Deloitte) – Three Rules: • Better before Cheaper • Revenue before Cost • No other rules …
  25. 25. In the 2016 Customer Experience Landscape – do we believe that customer experience focus will deliver the promised business outcomes? 25 Lagging Companies Leading-edge Companies Tying Customer Experience to Business Outcomes is difficult for everyone Source: Harvard Business Review Analytic Services 2014, Sponsored by SAS Institute 19% 34% 38% Extremely Difficult Very Difficult Somewhat difficult 10% 24% 49% Extremely Difficult Very Difficult Somewhat difficult
  26. 26. Source: Gupta, S. & Zeithaml, V., 2006. Customer Metrics and Their Impact on Financial Performance. Marketing Science, 25(6), pp.718–739. 2.37% +1% ROICustomer Satisfaction -1% -5.08% The satisfaction to profit link is non-linear
  27. 27. 27 CUSTOMER EXPERIENCE IN SOUTH AFRICA Four years of Tracking SAcsi
  28. 28. Introduction
  29. 29. Integrated Measurement Framework Strategic / Visionary Operational / Real time National and International Benchmark Proprietary Strategic Measures Operational / Transactional Feedback Integrated Framework Copyright Consulta 2016
  30. 30. Market Value Added - Top & Bottom ACSI 30 Source: FCI Group., 2007b. The American Customer Satisfaction Index (ACSI) Technology: A Methodological Primer. pp.1–37. 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Top 25% ACSI Bottom 25% ACSI
  31. 31. SAcsi Model Complaints Incidence Handling Loyalty Retention Price Sensitivity Perceived Value Index Price vs Quality Quality vs Price Perceived Quality Index Customer Expectations Index Overall Quality Meeting Needs Reliability Overall Quality Meeting Needs Reliability SAcsi Satisfaction Expectations Comp. to Ideal
  32. 32. TCF Index (7 pillars) Net Promoter Score & Consumption Appetite Additional Included Metrics National Sentiment Index
  33. 33. Statistics to Date TOTAL SAMPLE = 183 180 Brands included = 238 Industries included = 35 33
  34. 34. Three Year SAcsi Trend = Flat 76.40 75.80 76.91 SAcsi 2013 SAcsi 2014 SAcsi 2015 76.7 75.8 74.3 ACSI 2013 ACSI 2014 ACSI 2015 *SAcsi Base = Similar industries over 3 years 34
  35. 35. Perceived Value – Down over 3 years 60 80 100 Avg: 75.2 Min: 60.6 Avg: 77.1 Max: 88.7 -1.9 60 80 100 2013 2015 Min: 60.7 Max: 85.9 -2.9 35
  36. 36. Complaints – The Focus of CX industry 2015 Min: 3.8% Max: 49.0%Max: 46.6% Min: 4.7% 60% 0% 2013 30% 60% 0% 30% -2.4% +4.1% <10% Avg: 17.1% Avg: 13.0% 36 The 1st Wave focus seems to pay-off since we see Customer Complaints down & getting closer to the world class benchmark of 10% – although some companies/industries still struggle (increase in max complaints)
  37. 37. Complaints Handling – CX Industry getting a handle on it 2015 Max: 74.6% Min: 4.1% 0% 100% 2013 Avg: 55.8% +8.9% Avg: 55.1% Min: 29% 0% 100% Max: 83.5% 50%50% +24.9% >50% 37 The 1st Wave focus seems to pay-off since we see Complaints Handling at above world class (>50%) on average. Both on the bottom and top end of complaints handling we see significant improvements (+24.9% & +8.9%)
  38. 38. BUT … we do not get the Loyalty as a result (yet) 60 80 100 Avg: 72.5 Min: 58.8 Avg: 72.1 Max: 82.4 60 80 100 2013 2015 Min: 56.5 Max: 82.3 -2.3 38 … but loyalty over 3 years still flat & even see deteoriation on the bottom end (minimum down by 2.3 points)
  39. 39. … and tracking NPS is not helping either (we are more confused) 20152013 0% Avg: 31.1% Min: -11.7% -100% Max: 60.1%Max: 71.1% Min: -19.9% 0% Avg: 28.8% +100% -14% -100% +100% -11% -2.3% 39 … NPS trend more volatile – but also indicating the inability to translate industry wide CX efforts in complaints handling to better loyalty.
  40. 40. Sustainable Key Take outs • More comprehensive model for CX-measurement – break the feedback-mentality • Journey to Customer Centricity will take 3-5 years (of consistent clear strategy) – break the start-and-stop-and-start mentality • We need more evangelist CX professionals by ”educating” business about the true scope of CX implementation – break the silver bullet 6-months project mentality • Business needs to ”walk-the-talk” – break the PR-Ra-ra podium lip service mentality • More CCO’/CXO’s that will represent the customer at C-level – break the “we focus on the customer, but prefer profit” mentality 40
  41. 41. Exciting Industry News 41 Coming to South Africa June 2016 next arrival … TIXCI - Customer Experience Standard (work in progress)
  42. 42. The Customer is King 42
  43. 43. The Team Stephan du Plessis Managing Director stephan@consulta.co.za T: +27 12 665 6200 M: +27 72 538 5362 Prof. Adré Schreuder Founder & Chair SAcsi CEO Consulta adre@consulta.co.za T: +27 12 665 6200 M: +27 82 452 1666

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