Customer Experience


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Customer Experience

  1. 1. “ Customer Experience….. Mapping and Measuring” Prepared for CCA Seminar 27th October 2005
  2. 2. Retention Through Experience <ul><li>As the cost of acquiring customers rises organisations are investing in retention </li></ul><ul><ul><li>Index of Costs Retention 100 </li></ul></ul><ul><ul><li>Winback 140 </li></ul></ul><ul><ul><li>Acquisition 240 </li></ul></ul><ul><ul><li>[source QCI/WPP customer management research 2003] </li></ul></ul><ul><li>Key Retention Drivers </li></ul><ul><ul><li>Brand Traditional Marketing </li></ul></ul><ul><ul><li>Proposition Elements Experience </li></ul></ul><ul><ul><li>Contact Service </li></ul></ul><ul><li>Customer Lifecycles suggest increasing customer interactions/contacts and more demanding customers </li></ul><ul><ul><li>National Consumer Council reported an increase in complaints from consumers in 2003 of 24% over the past 5 years </li></ul></ul>
  3. 3. Service Impact <ul><li>Customer Experience through contact influences customer’s perception of the brand and is a key component of brand loyalty and can often override traditional/other marketing communication, for example recent outsourcing of customer service…… </li></ul><ul><ul><li>Indian Call Centres </li></ul></ul><ul><ul><li>“you can’t subcontract your relationships with customers” </li></ul></ul><ul><ul><li>– Richard Pym CEO Alliance & Leicester </li></ul></ul><ul><li>Customer Experience Impacts on Retention </li></ul><ul><ul><li>“A Good Experience is based on strong relationships between dialogue, satisfaction and these drive customer retention” </li></ul></ul><ul><ul><li> – Maggie Evans marketing director iSKY Europe </li></ul></ul><ul><li>The Customer’s experience is an area where the successful businesses are very good in this respect…and the not so successful are very poor (First Direct Vs PC World) </li></ul>
  4. 4. Most companies have fundamental gaps in their customer lifecycle model Source: 63% do not know how many high value customers they lose In most markets, just 1% of customers are worth about 30% of total margin, but 58% do not have any special development plans for these key customers 41% do not record customer contact channel preferences, let alone contact customers through their preferred medium. Only 13% of senior management have regular contact with customers In more than 90% of companies, Staff who are responsible for talking to customers could not articulate why customers should buy from them Only 35% bother to thank new customers Only 2% have regular winback programmes 47% do not have any sales lead distribution agreements Although 52% look at the quantity of customers acquired, only 8% look at the quality of customers acquired. 30% follow-up a complaint to check on satisfactory resolution Only 4% of companies have an enterprise-wide customer information plan 11% drive contact strategies via a database QCI/WPP Customer Management Research project 2003
  5. 5. Measurement and Improvement <ul><li>Key question is how do you know if you’re delivering a good experience (customer satisfaction scores?) and how do you know where to improve? </li></ul><ul><li>Organisations tend to measure Experience by measuring Customer Satisfaction </li></ul><ul><ul><li>Only measures single activity in isolation </li></ul></ul><ul><ul><li>Ignores the context </li></ul></ul><ul><li>Organisations therefore traditionally tend to look for improvement in this area in one of two ways </li></ul><ul><ul><li>Significant investment in CRM IT systems (EdF; ESB; Britannic) </li></ul></ul><ul><ul><li>Re-engineer their customer service processes (ESB; National Express) </li></ul></ul>
  6. 6. Customer Experience Influencing Components <ul><li>Is there delivery of a consistent experience Brand Values </li></ul><ul><li>Touchpoints – customers can interact with a company in increasing ways and how do they impact cost? Some channels are more expensive than others </li></ul><ul><li>Organisational Priority – which experiences are more important than others and what is the organisational driver? </li></ul><ul><ul><li>Segmentation ? </li></ul></ul><ul><ul><li>Revenue? </li></ul></ul><ul><ul><li>Cost? (activity based) </li></ul></ul>
  7. 7. Customer Experience Steps <ul><li>Step I </li></ul><ul><li>Define Experience Priorities </li></ul><ul><ul><li>opportunities (e.g. high value customer segments) </li></ul></ul><ul><ul><li>high impact/risk (e.g. sales and processing for new customers) </li></ul></ul><ul><li>Understand/Define Brand Values </li></ul><ul><li>Agree Customer Touchpoints </li></ul><ul><li>Map Customer Experience at Touchpoints using model </li></ul><ul><li>Identify poor experience areas and examine Cost Benefit at those points </li></ul><ul><li>Step II </li></ul><ul><li>Look for quick wins (non System/IT) </li></ul><ul><li>Step III </li></ul><ul><li>Improvements </li></ul><ul><ul><li>Implement Plans to improve and measure effect using model </li></ul></ul><ul><ul><li>Use QCI Cmat Benchmarking to develop long term KPI’s and monitor </li></ul></ul>
  8. 8. Customer Experience Approach <ul><li>Developed simple tool </li></ul><ul><ul><li>Map Touch Points which generate “The Experience” </li></ul></ul><ul><ul><li>Attach values to Touch Points “Experience Score” </li></ul></ul><ul><ul><li>Weight these values by importance the customer places on a given part of the experience </li></ul></ul><ul><li>2 part approach </li></ul><ul><ul><li>Map and Measure experience with front line staff who represent Touchpoints (internally) </li></ul></ul><ul><ul><li>Map and Measure experience with customers who have recently passed through experience </li></ul></ul><ul><li>Workshop approach taken internally for staff and quantitive research (telephone/interview) for customers </li></ul>
  9. 9. An Example – Electricity Company
  10. 10. Background <ul><li>This company is approaching a fully competitive electricity market in 2005 (some business customers can choose supplier currently) </li></ul><ul><li>As the monopoly supplier overt retention in the short term is not possible, but building a strong position for the future is recognised as important </li></ul><ul><li>Segmentation has identified valuable customers which are desirable to retain and Customer Experience was recognised as a key driver </li></ul><ul><li>CRM is so large a subject that many people didn’t know where to start in terms of Customer Experience and we discovered there was no simple tool to measure Customer Experience </li></ul>
  11. 11. Background <ul><li>A new approach was required </li></ul><ul><li>There were a number of projects in customer services amending processes and systems and a significant investment by IT in CRM systems (SAP with a CRM module) </li></ul><ul><li>BUT Process work was almost ad hoc (aimed at fixing broken processes) and Implementation of SAP is problematical </li></ul><ul><li>Key Question - how to leverage longer term benefits from investment in Customer Experience to drive better Retention? </li></ul><ul><li>Operational Business was charged with delivering these benefits </li></ul><ul><ul><li>Marketing (scope possibilities) </li></ul></ul><ul><ul><li>Customer Services; Retail Shops; Metering (delivery and change management) </li></ul></ul>
  12. 12. Customer Experience Steps <ul><li>Agreed Brand Values </li></ul><ul><ul><li>“brand iceberg” </li></ul></ul><ul><ul><li>reflected in brand(s) </li></ul></ul><ul><li>Agree Customer Touchpoints and the brand values to be communicated at those points </li></ul><ul><li>Define Experience Priorities </li></ul><ul><ul><li>high impact/risk (e.g. billing and processing) </li></ul></ul><ul><ul><li>opportunities (e.g. home movers)  chose this one </li></ul></ul><ul><li>Map Customer Experience (for home movers) using model </li></ul><ul><ul><li>Internally (own front line staff) </li></ul></ul><ul><ul><li>Externally (customers who have recently experienced) </li></ul></ul><ul><li>Identify poor experience areas </li></ul><ul><li>Look for quick wins (non IT) </li></ul><ul><li>Implement Plans to improve and measure effect using model </li></ul>
  13. 13. Customer Experience - Measurement <ul><li>Objective was to examine the end to end experience for residential home movers and called it “Crate Expectations” </li></ul><ul><li>Used simple tool </li></ul><ul><ul><li>Attaches values to customer experience “Experience Score” </li></ul></ul><ul><ul><li>Weights these values by importance the customer places on each aspect of the experience relative to each other </li></ul></ul><ul><li>2 part approach </li></ul><ul><ul><li>Map experience with front line call centre staff (internally) </li></ul></ul><ul><ul><li>Map experience with customers who had recently passed through home moving (externally) </li></ul></ul><ul><li>Workshop approach taken internally for staff and quantitive research (telephone) for customers </li></ul>
  14. 14. Home Movers “Crate Expectations” <ul><li>Objective: review and improve the residential customer experience for home movers setting a platform for retention and in the longer term winning opportunities to acquire customers (once the market opens) </li></ul><ul><li>180,000 moves each year (400,000 inbound calls) </li></ul><ul><li>Reducing calls by 20% reduces cost by €30k </li></ul><ul><li>Losses predicted at 20% Year 1 = 36,000. Reduced losses to 10% = 18,000. Estimated incremental enterprise value (retention:18k customers at €40 = €720k) </li></ul><ul><li>3 customer experience scenarios identified e.g. existing customer moving to existing supplied property </li></ul>
  15. 15. Home Movers Experience – staff view
  16. 16. Home Movers Experience – customer view
  17. 17. Home Movers Experience – compared
  18. 18. “Crate Expectations” - Conclusions <ul><li>Customer perception of experience different to staff view </li></ul><ul><li>Internal process not being followed, so experience being mapped is on different basis </li></ul><ul><li>Improvements required are centred on communications (support material and calls and are largely not IT related) </li></ul><ul><li>4 Quick Wins (not IT dependant) </li></ul><ul><ul><li>Call backs in all scenarios and by same CSA </li></ul></ul><ul><ul><li>Create check list for the CSA's to use during the calls e.g. prompt </li></ul></ul><ul><ul><li>Home Movers Pack/Booklet (tips;do’s and don’ts;contact numbers) and Welcome letter re-write </li></ul></ul><ul><ul><li>Training for Customer Services </li></ul></ul><ul><ul><ul><li>E.g. Set expectations on when welcome letter will arrive </li></ul></ul></ul>
  19. 19. “Crate Expectations” – early implementation <ul><li>Call Backs by CSA’s </li></ul><ul><ul><li>18% of all inbound calling in contact centres related to home moving </li></ul></ul><ul><ul><li>In first 3 months of implementation calls reduced by 30% (stable state = 12% of all inbound calls now relate to home movers). Estimated cost reduction €48k </li></ul></ul><ul><li>Customer Service Training </li></ul><ul><ul><li>Total Customer Experience Weighted Score (average) moved from -2.01 to -1.8 </li></ul></ul><ul><li>Customer Satisfaction </li></ul><ul><ul><li>Re-visited customer satisfaction tracking and re-aligned/added some questions to track this activity/experience </li></ul></ul>
  20. 20. An Example – Life Assurance (early work)
  21. 21. Background <ul><li>A portfolio of mainly Life Assurance customers in excess of 1 million </li></ul><ul><li>As acquisition ceased almost 3 yrs ago, this base is slowly being eroded </li></ul><ul><li>Retention has taken on a new importance </li></ul><ul><li>Policies are purchased and then forgotten with little contact with the customer and little cross sell/up sell </li></ul><ul><li>Main contact during the life of the policy is with the contact centre with requests for surrender values </li></ul>
  22. 22. Customer Experience Steps <ul><li>Agree Customer Touchpoints </li></ul><ul><li>Define Experience Priorities </li></ul><ul><ul><li>Surrender queries (active customers) </li></ul></ul><ul><ul><li>Aimed at maximum retention (winback of sorts) </li></ul></ul><ul><li>Map Customer Experience (for priorities) using model </li></ul><ul><ul><li>Internally (own front line staff) – completed as a test </li></ul></ul><ul><ul><li>Externally (customers who have experienced) – not yet started </li></ul></ul><ul><li>Identify poor experience areas </li></ul><ul><li>Look for quick wins (non IT) </li></ul><ul><li>Implement Plans to improve and measure effect using model </li></ul>
  23. 23. Surrender Enquiries – a priority <ul><li>Objective: improve the customer experience for surrender queries increasing retention </li></ul><ul><li>Current attrition is 5% p.a. </li></ul><ul><li>Estimated incremental enterprise value (retention: x customers at £y =£) </li></ul><ul><li>Map customer Experience both internally and externally </li></ul><ul><li>3 customer scenarios identified e.g. have received an annual policy review </li></ul>
  24. 24. Surrender Queries – staff view
  25. 25. Surrender Enquiries – early thoughts <ul><li>Making it easy for customer to leave is seen as good customer experience internally ! </li></ul><ul><li>Customer receives cash at end of experience is viewed as a positive finish point for customer </li></ul><ul><ul><li>Issue is lost relationship, no winback </li></ul></ul><ul><ul><li>As there is no acquisition, any brand value cannot be leveraged in longer term </li></ul></ul><ul><li>Support communications is unexpected, confusing and regulatory based </li></ul>
  26. 26. An Example – Train Franchise
  27. 27. Objectives <ul><li>Phase I – Existing Customer Data </li></ul><ul><ul><li>Examine current customer satisfaction position, in particular current data (SRA bi-annual reports and CSS quarterly surveys) and methods of survey </li></ul></ul><ul><ul><li>Where possible aligning customer experience factors (touchpoints) in each </li></ul></ul><ul><ul><li>Generate messaging template (internal comms and media) </li></ul></ul><ul><ul><li>Re-examine role of SRA (regulator) survey and CSS (internal) survey </li></ul></ul><ul><li>Phase II – Customer Experience Measure </li></ul><ul><ul><li>Look at end to end experience and develop scoring map </li></ul></ul><ul><ul><ul><li>Score with internal staff as a comparison (it will be different from customers) </li></ul></ul></ul><ul><ul><li>Identify key drivers of customer experience </li></ul></ul><ul><ul><li>Calculate cost impact </li></ul></ul><ul><ul><li>Focus on those factors which are most important to customer and there is under performance on </li></ul></ul>
  28. 28. . .
  29. 29. Phase II - Key Findings <ul><li>Staff Score the experience lower than customers </li></ul><ul><ul><li>Rail staff tend to have a pessimistic view </li></ul></ul><ul><ul><li>In terms of what they believe to be important to customers, their view is very different to customers </li></ul></ul><ul><li>Commuters accept Punctuality is an issue within the experience, but is not the most important factor </li></ul><ul><ul><li>Punctuality has become a hygiene factor </li></ul></ul><ul><ul><li>Customers are more concerned about provision of information </li></ul></ul><ul><li>Ease of Access to stations and trains is important </li></ul><ul><ul><li>Disabled customers are an important group </li></ul></ul><ul><ul><li>Opportunity for a “Priority Customer” approach </li></ul></ul><ul><li>Cost of focussing on Punctuality does not provide cost benefit </li></ul><ul><ul><li>Cost of additional staff balanced by improvement in experience score </li></ul></ul><ul><ul><li>Better information provision and leveraging technology has a significant impact on experience score </li></ul></ul>
  30. 30. Summary <ul><li>Customer Experience is a powerful driver of retention </li></ul><ul><li>Measuring customer satisfaction is misleading </li></ul><ul><li>The Approach demonstrated </li></ul><ul><ul><li>can be applied to any organisation/market </li></ul></ul><ul><ul><li>Is simple </li></ul></ul><ul><ul><li>Will deliver quick wins </li></ul></ul><ul><ul><li>Is not costly e.g. Electricity Co. total cost was £17k </li></ul></ul><ul><ul><li>Ongoing benchmarking will deliver ongoing benefits </li></ul></ul>