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The value of experience:
How the C-suite values customer
experience in the digitalage
EXECUTIVE SUMMARY Europe
1© The Economist Intelligence Unit Limited 2015
The value of experience: How the C-suite values customer experience in the...
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The value of experience: How the C-suite values customer experience in th...
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Genesys_TheEconomist_CX_Executive_Summary_EMEA_Aug2015

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Genesys_TheEconomist_CX_Executive_Summary_EMEA_Aug2015

  1. 1. Sponsored by The value of experience: How the C-suite values customer experience in the digitalage EXECUTIVE SUMMARY Europe
  2. 2. 1© The Economist Intelligence Unit Limited 2015 The value of experience: How the C-suite values customer experience in the digital age Contents Executive summary 2 1. Room for improvement 4 How to improve customer experience 5 2. Leading customer experience 6 3. Measuring success 8 4. Preferred channels 9 No time for complacency 11
  3. 3. 2 © The Economist Intelligence Unit Limited 2015 The value of experience: How the C-suite values customer experience in the digital age Executive summary “There is only one boss—the customer,” Sam Walton once said. “And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.” The fundamentals of business have remained unaltered in the half-century since Mr Walton delivered this blunt assessment after founding retail corporation, Walmart, in 1962. What has changed is the way in which companies interact with their customers. The rise of company websites, email, SMS and social media has firmly shifted the interaction between customer and company towards remote communication, although research by the Economist Intelligence Unit (EIU) shows that in-person communication remains important. Companies who fail to respond to these changing modes of communication are vulnerable to large-scale customer flight. The proliferation of customer contact points has led to an increase in potential sources of dissatisfaction. Without the personal touch of direct communications to smooth things over, a single bad experience can lead a customer to defect. To make matters worse, that same customer can instantly contact many thousands of others to share their dissatisfaction. However, if properly managed, the customer experience (CX) can in fact drive loyalty and satisfaction. To learn how companies manage their CX programmes, the EIU conducted a global survey of 516 senior-level executives in April 2015, including 187 respondents from the Europe region. The vast majority of these (174) were C-suite executives—of whom 62 were CEOs—while the remaining 13 respondents were heads of a business unit. The European respondents were from five countries: France, Germany, Italy, Sweden and the United Kingdom. The research focused on four key questions: l What importance is attached to CX within companies? l Who leads CX initiatives? l How is the success of CX measured? l Which CX channels are most favoured? This executive summary presents the highlights of the findings from the European subset of respondents.
  4. 4. 3© The Economist Intelligence Unit Limited 2015 The value of experience: How the C-suite values customer experience in the digital age (%) Respondents by country Italy South-east Asia Australia, New Zealand Canada Japan Sweden UK China, Hong Kong Mexico US Colombia France Germany Brazil 7% 8% 7% 6% 6% 7% 11% 6% 6% 6%7% 10% 6% 7% (%) Respondents by industry Manufacturing Agriculture, chemicals energy Consumer goods retail Commercial banking Professional services Telecoms media Transport logistics Other Fund wealth management Insurance Retail banking IT technology 16% 6% 7% 9% 5% 7% 11% 7% 11% 10% 7% 5% (%) Respondents by job title CIO CEO COO CXO Chief Digital Officer Other C-level executive Line of business leader CFO CMO 10% 3% 3% 32% 13% 10% 17% 10% 3%
  5. 5. 4 © The Economist Intelligence Unit Limited 2015 The value of experience: How the C-suite values customer experience in the digital age l European companies are growing their investment in customer experience but don’t think their customers rate them highly yet Two thirds of European companies (66%) say that customer experience has been a “very important” priority over the last three years, and just as many believe it will continue to be so in the next three. Financial investment reflects this commitment, with 42% revealing that investment in customer experience has increased by more than 10% over the last three years, and 48% believing that it will increase by the same amount in the coming three years. Of the five European countries included in the survey, companies in the United Kingdom are most likely to be increasing their investment by a substantial margin. More than one in four (26%) say they have increased investment by more than 25% over the last three years, compared to just 14% across the other four countries. And this investment growth is set to continue: almost the same proportion (24%) in the UK expects a similar increase in the next three years, compared to 16% in the other four countries. Despite the emphasis on investment, European respondents are less likely than their counterparts in all other regions (20% versus 26%) to say that their customers would rate their overall customer experience very positively (i.e. an industry- leading, differentiated experience), and are most likely to say (24% versus 15%) that they would view it neither positively nor negatively. United Kingdom France Germany Italy Sweden In your opinion, how do you think your customers would rate their overall customer experience with your organisation? (% of respondents) Figure 1 26 41 31 3 23 50 27 21 55 24 19 56 19 6 13 65 19 2 Very positively (ie, an industry leading differentiated experience) Positively (ie, slightly differentiated) Neither positively nor negatively (ie, not uniquely differentiated) Negatively (ie, sub-optimal) Very negatively (ie, highly sub-optimal) Don’t know Room for improvement1
  6. 6. 5© The Economist Intelligence Unit Limited 2015 The value of experience: How the C-suite values customer experience in the digital age Make CX a priority Across the board, companies that prioritise future investment in CX believe they are reaping the benefits of better revenue growth and improved profitability more than companies that consider CX less important. Place the CEO in charge As in other regions, CEOs in Europe are more likely than any other senior executive to be in charge of customer experience transformation initiatives. The survey indicates that companies where the CEO is in charge of CX initiatives are more likely to believe in them, and invest in them. Find the evidence More than a third of companies in Europe (37%) don’t measure the success of CX initiatives. This endangers the effectiveness of CX investment as companies that do not measure success will not be able to identify what works and what does not.The principal reason given for not measuring CX is that companies find it difficult to differentiate between the impact of CX and other factors that may improve performance. Look at your industry peers Our global survey reveals wide disparities in the CX channel preferences between industries. In some face-to-face communication still thrives; othersfocus more on newer channels like web self-service. Look to industry peers to infer what works well for your target market. How to improve customer experience
  7. 7. 6 © The Economist Intelligence Unit Limited 2015 The value of experience: How the C-suite values customer experience in the digital age l CEOs are most likely to lead customer experience initiatives but CMOs are more prominent in Europe than elsewhere Just as in other regions, CEOs in Europe are more likely than any other senior executive to be in charge of customer experience transformation initiatives, reflecting the strategic importance attached to this area. A significant minority of respondents (40%) say that the CEO leads these initiatives. However, when other executives are in charge, they are less likely than anywhere else in the world to report to the CEO. In Europe, CEOs have the final say on customer experience initiatives in 62% of companies, compared to 70% in the rest of the world. The CMO (chief marketing officer) is a more popular choice in Europe as leader of these initiatives than in any other region. One in five companies (20%) say that the CMO takes the helm, with 15% favouring the CIO (chief information officer). Figure 2 CEO/President/ Managing director CFO/Treasurer/ Comptroller CXO (Customer Experience Officer) Others CIO/Technology director COO CMO/Head of marketing 24 12 21 15 26 23 12 15 12 6 9 9 5 9 10 6 3 3 2 5 13 10 28 13 0 0 17 3 1 0 2 37 43 50 43 France Germany Italy Sweden United Kingdom Who is leading CX transformation initiatives within your organisation? (% of respondents) Leading customer experience2
  8. 8. 7© The Economist Intelligence Unit Limited 2015 The value of experience: How the C-suite values customer experience in the digital age Some individual countries in Europe are particularly keen to award responsibility to the CMO for these initiatives. In Italy, 26% of CMOs are in charge, while in Sweden, the proportion is 23%. In Germany, meanwhile, 28% of respondents report that the CIO is in charge, more than anywhere else in Europe. No respondents in Sweden said the same. There, the CEO is more likely to be leading initiatives than in any of the other four countries, presiding over customer experience in exactly half of Swedish companies. Companies in France, meanwhile, appear much more reluctant to place the CEO in charge. Indeed, the locus of responsibility is most variable in France, with the CEO at the helm in 24% of companies (substantially less than the European and global average), and other responses quite evenly dispersed among the rest of the C-suite. Furthermore, the CEO only has the final say on customer experience initiatives in 42% of French companies. On a global level, our survey indicates a level of confusion within companies about who is leading the customer experience drive. Although 72% of CEOs surveyed believe they own the CX initiative, only 27% of other executives believe the CEO leads it.
  9. 9. 8 © The Economist Intelligence Unit Limited 2015 The value of experience: How the C-suite values customer experience in the digital age l A significant minority of European companies do not measure the success of their customer experience transformation initiatives Despite the fact that so many companies in Europe maintain that customer experience is a very important investment priority, a significant proportion (37%) do not measure the success of customer experience transformation initiatives. When those companies that do not measure are asked why, the most frequent response (41%) is the “lack of access to the correlated customer experience outcome to activity data”. In other words, performance might improve at any given point but it is too difficult to isolate the impact of customer experience initiatives from many other factors which might influence success. Frenchcompaniesarethemostlikelytomeasure success.ThreeinfourcompaniesinFrance(76%)do so,significantlymorethanthe55%acrosstheother fourEuropeancountries.SwedenandGermany aretheleastlikelytomeasuresuccessamongthe Europeancountries.Closetohalf(47%inSweden and44%inGermany)saytheydon’tmeasure. It is perhaps not surprising, therefore, that a particularly high number of companies in these countries bemoan a lack of direction. Much larger proportions in Sweden (47%) and Germany (41%) say that “lack of clear objectives” is one of the biggest barriers to successful implementation of new initiatives than anywhere else in the world. France Italy United Kingdom Sweden Germany Figure 3 Yes No Don’t know Does your organisation measure the success or return on investment (ROI) of CX transformation initiatives? (% of respondents) 76 21 3 58 38 38 4 54 8 53 5347 44 3 Measuring success3
  10. 10. 9© The Economist Intelligence Unit Limited 2015 The value of experience: How the C-suite values customer experience in the digital age l European companies value web self- service especially highly, while social media is on the rise Web self-service (such as web transactions without human assistance) is more important as a customer experience channel in Europe than in other regions. More than a third of European companies (34%) say that web self-service is an important channel, compared to 29% in the rest of the world. Face-to-face communication is nonetheless still viewed as the most important channel (42%), albeit not as important as in the other global regions. Social media (eg, Facebook, LinkedIn) Web self-service (eg, providing FAQ pages, web transactions without human assistance) Online assistance support (eg, chat assistance, video collaboration, video chat, call back) Customer insight (eg, use of data, speech or text analytics to better understand the customer) Face-to-face communications (eg, physical in-person meetings) Telephone operations (eg, support lines or sales calls) Automation of processes (eg, establishing operational procedures) Proactive communications to customers (eg, SMS notifications, surveys, etc) Email based communications Which CX channels will be most important to your organisation three years from now? (% of respondents) Figure 4 Others France Germany Italy Sweden United Kingdom 21 28 32 37 38 39 25 36 20 38 42 38 55 33 23 33 38 30 27 18 21 41 36 50 38 15 9 9 27 23 21 9 36 27 15 6 13 21 27 18 12 25 21 27 23 6 6 10 3 Preferred channels4
  11. 11. 10 © The Economist Intelligence Unit Limited 2015 The value of experience: How the C-suite values customer experience in the digital age Respondents were asked what they think will be the most important channel three years from now. Social media is expected to become more popular, going up from 24% who think it is important now to 32% who expect it will be at the end of the three-year period, as is online assistance support (such as chat support), rising from 31% to 40%. Meanwhile, face-to-face communication predictably faces a decline in importance, although not as steep as in other three global regions, falling from 42% to 37%. Italian companies are particularly likely to value web self-service, with 47% stressing its importance as a customer experience channel, comfortably more than anywhere else in the world. Meanwhile, they are currently less likely to believe in the importance of face-to- face communication than companies in other surveyed countries. However, Italy bucks the apparent worldwide decline of face-to-face communication, with its importance actually expected to increase substantially over the next three years (going up from 23% to 36%). France, meanwhile, appears to have much less interest in social media than the global average, with still only 21% believing it will be important in three years’ time. Telephone operations are expected to plummet in importance in both France and Germany, going down from 30% to 15%, and 31% to 9%, respectively. In the United Kingdom, the three channels set to increase in importance substantially are social media, web self-service and online assistance support. We can deduce therefore that a substantial part of the sharp rise in customer experience investment within a significant number of companies in the UK will be allocated to these areas.
  12. 12. 11© The Economist Intelligence Unit Limited 2015 The value of experience: How the C-suite values customer experience in the digital age No time for complacency Companies who prioritise future investment in CX initiatives believe they are more profitable and have better revenue growth than their peers, according to the EIU’s global survey of C-level executives. Recognising this, almost one in two companies in the Europe region are boosting investment in CX by more than 10% over the next three years, a clear indication of the perceived contribution CX makes to financial performance. However, if this focus is to be maintained over the long term, lines of responsibility need to be clarified and more effort needs to be made to isolate and measure the impact of CX initiatives. The global EIU survey indicates a level of confusion within companies about who is leading the CX drive. This can only be to the detriment of a robust decision-making process. Similarly, more than one third of companies in Europe shy away from measuring the success of CX initiatives, potentially giving succour to those internal cynics who doubt their effectiveness and obscuring the pathway to performance improvement. Companies in Sweden and Germany are particularly reluctant to measure, and the reported lack of clarity in their ambitions for customer experience is surely no coincidence. The survey also delivers a more fundamental wake-up call for European companies. Although three quarters of companies currently believe their customers have a positive view of their experience, it is nevertheless surely concerning that this represents a lower percentage than in other regions. As Sam Walton suggested, there is little sentiment in a world of intense competition for customers. Unless currently lacklustre companies can provide customers with what they want, in the way they want it, they will inevitably pay the price.
  13. 13. While every effort has been taken to verify the accuracy of this information, The Economist Intelligence Unit Ltd. cannot accept any responsibility or liability for reliance by any person on this report or any of the information, opinions or conclusions set out in this report.
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