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.

1. How frustrated are your customers?
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Overview of Customer Experience in
South Africa - 2016
Networking Event : 26 May 2016
1

2. “Culture eats
strategy for
breakfast.”
- Peter Drucker
2

3. The war between “Blink” & “Think”
3

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. 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. 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

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. The Core Dimension
9
Fighting
Fleeing
Freezing
Brain Stem
Emotion
Self esteem
Motivation
Values
Limbic SystemHigher cognitive
functions
Rational thinking
Neocortex

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. Remembering the Experience
Remembering =
Self
StrategicOperational
= Experiencing
Self
11

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. 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. IT IS NOT SYSTEM 1 vs SYSTEM 2 : RATHER
SYSTEM 1 & 2 INTEGRATED – CONCEPT OF FLOW
14
System 1System 2

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. 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. 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. 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. “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. 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. Success Stories
Image Placeholderii
70%
Of top CX companies
use
CX Feedback for
Strategic decisions
21

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. 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. 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. 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. 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
CUSTOMER EXPERIENCE IN SOUTH AFRICA
Four years of Tracking SAcsi

28. Introduction

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. 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. 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. TCF Index (7 pillars)
Net Promoter Score &
Consumption Appetite
Additional Included Metrics
National Sentiment Index

33. Statistics to Date
TOTAL SAMPLE = 183 180
Brands included = 238
Industries included = 35
33

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. 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. 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. 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. 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. … 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. 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. Exciting Industry News
41
Coming to South Africa June 2016
next arrival …
TIXCI - Customer Experience Standard
(work in progress)

42. The
Customer
is King
42

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