The counterintuitive nature of customer experience management

The Counterintuitive Nature of
Customer Experience
Ct E i

Qaalfa Dibeehi
Vice President, Consulting & Thought Leadership
Vi P id C li Th hL d hi

© Beyond Philosophy ™ 2001-2009
www.beyondphilosophy.com

The Beyond Philosophy Perspective
Leaders at helping organisations define & build emotionally
engaging customer experiences

Global projects:
Strategic Partners in Emotional side
Asia and Europe of Customer
Experience

Beyond
Philosophy
Phil h
Offices in London, England
& Atlanta, Georgia

Links with Academia

1

We work with some great organisations…

…improving their customer experiences

2
2

How we add value…
Customer Experience Management is a relatively new area of
organization development. We help companies answer
and action tough questions like:
What is the future of our competition?
What do our customers expect of us?
How much is my current Customer Experience
costing me?
What is the Customer Experience we are trying
to deliver?
How deliberate is our Customer Experience?
What emotions are we trying to evoke in our
Customer Experience?
Are our senior executives engaged in the
Customer Experience?
How can we ensure our people understand the
l d dh
importance of the Customer Experience to our
organization and become motivated to change
their be a ou s
t e behaviours?

3

Hand Poll

Strongly
Strongly
disagree
g
agree
g

The following provide an entirely appropriate
Customer Experience for their customers
customers…
Disney
McDonald’s
ld’
Your police force
p
Your company

4

What is Customer Experience?

Customer Experience
is NOT about doing
whatever it takes to
h k
“wow” customers

5
5

Customer Experience definition

A Customer Experience is
an interaction between an
organization and a
Customer.

It is a blend of an
organizations physical
performance,
the senses stimulated and
emotions evoked
evoked,
each intuitively measured
against Customer
Expectations
across all moments of
co tact
contact.

6
6

Experience and Opportunity Gaps
p pp y p

Current Customer Expectations
Experience Gap

Current Customer Experience

Opportunity Gap

Deliberate Customer Experience
Company specific customer experience including process and relationship aspects

7

Yorkshire Water
Improved overall Customer Experience from 53%-91%.
Kevin Whiteman, MD, “although you start with the
mantra that this is going to cost you more, the reality
is the opposite - the evidence is that it will save you
money”. £ 8.5m ($15.5m) as a direct result of
operational improvements such as:
– Reduction in written complaints by 40%; a
significant reduction i repeat calls with a sharp
i ifi d i in ll ih h
increase in first call resolution; reduction in
Operational calls by 20% due to infrastructure
improvements, system implementation & new
procedures – l d
d leading to a reduction of 50% of
d f f
unnecessary jobs

Employee total “buy-in” to the CE through training
“The Kelda Group has
The
sessions (with average event score of 3.7 out of 4.0). turned itself from one of the
most ridiculed water
Kevin: I’m absolutely convinced it has an effect on the companies in the 1990’s,
share price. The stock market is like anything else, it into one of the most
respected.
respected It is now the
reality.
works on perception as well as reality If every bit of
second best performing
news they get is about a transformed company,
company in terms of service
about our growing reputation of being an efficient levels and has developed a
company that delivers a good Customer Experience… record for steady financial
performance.
performance ”
Financial Times
8

Why clients want to improve the
Customer Experience
Experience…
Regional utility provider – 20% increase in Customer Satisfaction and
25% reduction in call volumes
Regional utility provider – Improve public and industry image, e.g.,
winner of the 2003 Utility Industry Achievement Award for Customer
Care
International FMCG / retailer – 1% increase in Customer Satisfaction
driving a 1.3% increase in revenues
Global multi-service telco – 36% improvement in Customer
Satisfaction, 17% costs reduction and 200% increase in customer-
facing time
European insurance provider – 80% reduction in transaction costs
Global PC manufacturer – 79% improvement in “Missing, Wrong &
Damaged” deliveries resulting in reduced back office headcount
p
International wireless telecoms provider - 82% of Customer
Interactions “better than last time” helped by a 4% increase in first
call resolution
Canadian Bank – Losing 26% of high value customers. Saved 6% of
high value Customers – value CDN $ 85m
9

A straight forward
Customer – “Hi, I saw your ad in the paper
advertisement… call us,
and wanted more info”
info
we can– help you mayreferring to”code
you better your
Ultralase “Certainly, I have the
number of the ad are
vision

10

11

The Customer Experience is both Rational and
Emotional

• Rationally satisfied
customers behave
Rational (Conscious) Experience
the
th same as
dissatisfied
customers.

• Emotionally
satisfied customers
Product Price
contribute far more
to the bottom line
Promotion Placement than rationally
satisfied
customers.
customers

12

At least 50% of the Customer Experience is
based on the emotional engagement

• Rationally satisfied
customers behave
the same as
dissatisfied
customers.
• Emotionally
satisfied customers
ti fi d t
contribute far more
to the bottom line
than rationally
satisfied
Emotional (Subconscious) Experience customers.

13

Best Practice: Customer metrics

Customer
Satisfaction

Net
Promoter
does not tell
you what to
h
Emotional
Rational Experience do about it
Signature
(Conscious experience)

Emotional (Subconscious) Experience

14

Net Promoter Score

Postbank NL (15%)
Commerce Bank USA (67%)
Australian banks avg -35%
(only 1 positive)

15

The link to value

16

Emotional Profile

17

The Sainsbury’s Story | Action

A little background:
• Britain's longest-standing major food retailing chain.
• Employs over 145,000 people.
• Offers over 23,000 products.
• Serves over 11 million customers/week in its 500+ stores throughout the UK.
/ g

Before After
• In the late 1980s, the Chairman was • The Chairman was replaced by an
p y
a outward looking marketer. inward looking accountant.
• The worst thing a store manager • The worst thing a store manager
could do was: could do was:
1. be
1 b out of stock
f k 1. be
1 b overstocked
kd
2. be overstocked 2. be out of stock

What do you think was the effect of this change?

18
18

The Sainsbury’s Story | Reaction
Slight Shift – Huge Impact

Shift in Priority Initially a boost in stock price
but then a decline
Revenue
A drop in revenue that lagged
behind the decrease in cost
Cost

Stock price
Decline
Initial boost

Time
Before After

• Supermarkets main value added is that • How do accountants measure the
they offer the goods you want in one impact of frustrated customers?
place. • They don’t because it’s not ‘hard’
• The shift in priority caused managers to data (i.e. it is not in the past)
(i e
prefer to be out of stock to being • What happens if customers continue
overstocked not to find what they are looking for?
• The priority changed because the costs • By the time Sainsbury’s recognised
y y g
of an overstock i easily measured.
f k is il d the problem, customer attrition had
• Service levels declined from 99% gained its own momentum!
average to below 90%.

19
19

Which of these profiles do you think represents
Sainsbury’s after the change?
2
1

Naive
Ni Transactional
T ti l

3 4

Enlightened Natural

20

The Journey from Naïve to Natural

0%

32%

60%

8%

21
21

N2N Strategic Assessment – Report Samples

22

N2N Strategic Assessment – Report Samples

SYSTEMS

Best Performer
Company “XXX”
Index Average
Lowest Performer

23

How a few organisations might fare…

24

The goal of the customer experience…

The point is to blah, blah ..
Blah, deliver blah…..
a deliberate
customer experience consistently
• Deliberate not accidental
• Consistent not lucky/ unlucky
• Emotional not transactional

25

The Counterintuitive Nature of
Customer Experience
Ct E i

Qaalfa Dibeehi
Vice President, Consulting & Thought Leadership
Vi P id C li Th hL d hi

Thank you


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