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CUSTOMER-
DRIVEN
CAPABILITIES
MATURITY
MARKET-
DRIVEN
RELATIONSHIP-
DRIVEN
EXPERIENCE-
DRIVEN
THE DIFFERENCE
IS THE EXPERIENCE
The journey to become a truly customer experience-driven company
PA Consulting Group’s Customer Experience Management Report 2016
ABOUT
PA is a consulting, technology and
innovation firm. We define success as
achieving exceptional results that have a
lasting impact on businesses, communities
and individuals worldwide.
This principle has remained the cornerstone
of our ethos since 1943 – and it continues to
underpin everything we do.
Our clients choose us because we challenge
convention to find the solutions that really work
– in practice, not just on paper. Then we roll up
our sleeves and get the job done.
At PA we don’t just believe in making a
difference. We believe in making the difference.
PA CONSULTING GROUP
2
FOREWORD
Great customer experiences are not built overnight.
Organisations know strong customer experience management
is essential for long-term success, but often stumble when
deciding which resources and initiatives to prioritise
Troels Gregersen
Nordic head of Business Design
Claus Høyer Madsen
Nordic head of Digital
In our research, we surveyed 95 international
senior professionals across a range of sectors and
we have defined eight customer experience
dimensions that form the foundation of any
customer experience strategy – understand your
customers, be driven by insight, innovate as usual,
balance the approach, differentiate value
propositions, design the journey, provide channel
choice, personalise the experience.
And we did not stop there. We then went on to
define how these dimensions are correlated with
best practice to develop our Customer Experience
Management Maturity Model. The model sets out
where organisations should be starting their
customer experience management journey and in
what order they should be implementing initiatives.
Our research reveals that the value of this
prioritisation should not be underestimated.
In fact, an organisation that increases its customer
experience management score by 10% can expect
to see a boost in its customers’ satisfaction by 5%.
In turn, a 10% increase in customer satisfaction is
seen to improve financial results by around 5% –
enabled by an increase in revenue and growth of
market share.
We also found that most of the organisations
we surveyed are placed at the bottom end of
our maturity model – with very few achieving
the highest maturity level of customer
experience management.
We urge these companies to up their game,
consider the right customer experience
management ambition for them and adopt the
appropriate mindset to compete and thrive.
A number of leading organisations, detailed
throughout our report, demonstrate that by
rethinking their approach to customer experience
management and by prioritising initiatives
correctly, great opportunities can be seized.
3
WE MAKE THE
DIFFERENCE
THE
4
ABOUT OUR
RESEARCH
We surveyed 95 international senior professionals
from a range of sectors to identify a best practice
approach to customer experience management that
drives greater market performance and financial
results.
The respondents came from a variety of sectors
including energy, financial services and public sector;
organisations with a national, international and global
reach; and those with revenues ranging from millions
to multi-billion dollars.
From this research we developed our Customer
Experience Management Maturity Model. The eight
dimensions that make up our model, which we explore in
more detail on page 9, were ranked on each maturity
level – depending on the number of best practices
associated with them and their importance to that level.
The most important best practices for each maturity level
were then mapped against the eight dimensions to create
a priority list for what best practices should be focused on
to improve your score for the dimension in question.
Our research revealed that the most important
capabilities to the lower levels of maturity were also
important to the higher maturity levels – indicating
that as organisations improve their customer
experience management maturity, they need to be
building on foundational ‘basics’.
This methodology allows organisations to clearly see
what dimensions, and associated best practices, require
prioritisation to move up along our maturity model to
achieve the level of ambition appropriate for each.
DEVELOPING OUR CUSTOMER EXPERIENCE MATURITY MODEL
5
Our survey results reveal that improving your organisation’s
customer experience management score by 10%, and taking
your organisation through each stage in our Customer
Experience Management Maturity Model, can boost your
customers’ satisfaction score by 5%.
To put this into context, organisations that have improved
their customer experience management score by 10%,
e.g. from 6 to 6.6, have seen a 5% positive impact on how
satisfied their customers are. Your customer satisfaction can
be measured by how successful you are in providing value
to customers, your ability to retain customers and attract new
customers, and your ability to bring new products and
services to the market.
THE IMPACT OF GOOD
CUSTOMER EXPERIENCE MANAGEMENT
increase in your
customer experience
management score
10%
5%
will often
raise customer
satisfaction by
The survey results also prove that a similar effect is true for
converting satisfied customers into strong financial results
– a 10% increase in the former is proven to lead to around 5%
increase in the latter compared to competitors.
This means that a 10% improvement of your customer
experience management score is likely to improve your
financial results by 2.5%.
It is clear that the importance of keeping customers satisfied is
hitting home, with 80% of CEOs stating that customer
experience is the main area they are competing on – up from
30% compared to a few years ago*.
*Finding from PA’s 2014 customer experience survey
10%
5%
will often
improve financial
results by around
increase in your
customer
satisfaction
6
Improves customer
satisfaction compared
to competitors by
5%
Improving customer
experience
management by
10%
Improves financial
results compared to
competitors by
5%
Improving
customers’
satisfaction by
10%
CUSTOMER
EXPERIENCE
MANAGEMENT
HAPPY
CUSTOMERS FINANCIAL
RESULTS
7
8 CUSTOMER EXPERIENCE
MANAGEMENT DIMENSIONS
We have identified eight capabilities, outlined on the right, that organisations can evolve and improve to
achieve customer experience management maturity. Based on our extensive experience, and drawing on
best practice, these dimensions formed the foundation of our survey. We asked respondents to rate their own
ability to execute on each of these dimensions and the respondent’s average score of these dimensions
constitutes their customer experience management score.
In figure 1 we have highlighted the average score of all companies in relation to each dimension.
UNDERSTAND YOUR CUSTOMERS
Of the eight customer experience management dimensions,
organisations rated ‘understand your customers’ as what they are
best at managing. Given that customer segmentation has been a
well-recognised, well-integrated business discipline for many years,
companies have built up strong capabilities within this dimension.
PA customer experience expert, Jacob Klit, comments:
“In general, all companies have segmented their customers. However,
this segmentation is often ‘inside-out’-driven based on industry codes,
sales volume or cost-to-serve parameter from an operation point of view.
These companies are therefore missing out on the full potential of driving
top line growth and customer centricity. Building effective and relevant
customer relationships to grow B2B accounts or share of wallets among
consumers requires implementation of need-based segmentation.
Need-based segmentation, based on for example psychographic
and behavioural characteristics, is used by best practice B2C and B2B
companies – but is not that difficult to implement. It can actually be
completed in around 12 to15 weeks”.
KEY HIGHLIGHTS
We have highlighted
the overall highest
and lowest scoring
dimensions in our
survey.
PERSONALISE THE EXPERIENCE
At the other end of the spectrum is
personalisation. This is a relatively new
discipline that requires a whole new set of
skills and it is the dimension we see
organisations struggling to master.
As Dave Peters, CEO and founder of Emagine,
warns: “Getting personalisation right requires an
all-or-nothing approach. The aim of
personalisation is to foster a better customer
relationship that is rooted in value and relevance
for the individual; marketing to one, not many.
It’s about understanding a customer’s needs
and preferences and connecting with them in
a manner that suits them in order to extract
maximum customer value and protect the
relationship”*.
7.4 /10 5.5 /10
8
*http://www.mycustomer.com/marketing/strategy/personalisation-how-to-build-a-successful-strategy
5.5 /10
6.1 /10
6.1 /10
6.2 /10 6.5 /10
6.7 /10
6.9 /10
7.4 /10
UNDERSTAND YOUR CUSTOMERS
Your organisation identifies customer needs and this
helps you to allocate resources to product development,
marketing, service and delivery programmes.
You track your customer experience quality for each of
the segments using the customer segment perceptions
as the ultimate test of what is ‘good’.
CUSTOMER
EXPERIENCE
MANAGEMENT
FIGURE 1: HOW ORGANISATIONS RANK THEMSELVES ON THE EIGHT KEY DIMENSIONS
BE DRIVEN BY INSIGHT
Your organisation has an accurate, consistent and
shared understanding of who your customers are,
what they want and how they perceive the interactions
they are having with your company today.
INNOVATE AS USUAL
Your organisation constantly experiments,
measures, learns with your customer and
adjusts to develop the optimal experience
across all channels.
BALANCE THE APPROACH
Your organisation optimises the balance between the
rational and emotional interactions, i.e. the functionality
and the feelings that your product or service ignites.
DIFFERENTIATE VALUE PROPOSITIONS
Your organisation has clear and unique value propositions
for each of your customer segments based on specifically
defined customer needs.
DESIGN THE JOURNEY
Your organisation clearly maps customer
touchpoints and interactions, defining how to
interact with the customers in these touchpoints.
This means knowing where the ‘magic moments’
and ‘pain points’ are, and how to build new
experiences that resonate with your customers.
PROVIDE CHANNEL CHOICE
Your organisation formulates and executes
a clear channel strategy to engage all
customers and allows them to seamlessly
move between the channels they choose
to interact in.
PERSONALISE THE EXPERIENCE
Your organisation creates a personalised experience
based on the customer’s interests, previous
experiences, their purchase and
behavioural history.
9
PA’S CUSTOMER EXPERIENCE
MANAGEMENT MATURITY MODEL
From our research it became clear that there is a clear
sequence in the way best practice companies build up
their customer experience management capability. The
unique maturity model that we have developed, based
on their responses to more than 50 questions related to
customer experience management, clarifies the customer
experience priorities of any organisation – dependent on
the customer maturity they have already achieved.
Our Customer Experience Management Maturity Model,
outlined in figure 2, displays which capabilities need to
be developed to meet each of the four levels within the
model – ‘market-driven’, ‘customer-driven’, ‘relationship-
driven’ and ‘experience-driven’ – together with the best
practices required to build the capabilities.
It is important to note that while it is possible to start
working towards the more advanced capabilities required
in the later stages of maturity, it is essential for
organisations to master the more basic capabilities
to ensure long-term success.
It is also vital for organisations to not lose focus on the
lower level capabilities as they advance further up the
maturity model – the basics must always be maintained
to enable your high-level capabilities. Your organisation
will, for instance, need to implement customer
segmentation well to enable personalisation.
We found that the vast majority of organisations
we surveyed are still placed at the bottom at
‘market-driven’ and very few have made it
to the ‘experience-driven’ level.
Many organisations rate themselves well on certain
dimensions such as ‘understand your customers’ and
‘be driven by insight’, but there was no consistency
through the dimensions that make up the required steps
taking them up the model’s levels. This can be a cause
for concern since improving customer experience
management enables companies to outperform their
competitors through improved customer satisfaction.
10
MARKET-DRIVEN
• Fix the basics of your
go-to-market strategy
• Understand your customers
• Understand the value you
provide to them
• Use analytics to create
overview of product portfolio,
sales and earnings.
UNDERSTAND
YOUR
CUSTOMERS
DIFFERENTIATE
VALUE
PROPOSITIONS
CUSTOMER-DRIVEN
DESIGN
THE
JOURNEY
BALANCE
THE
APPROACH
RELATIONSHIP-DRIVEN
• Build and attract digital skills
• Enable personalisation
through digitisation
• Build relationships and
include customers in
structured co-creation
• Build organisational capacity
to quickly act and react to
market changes.
BE
DRIVEN
BY INSIGHT
PERSONALISE
THE
EXPERIENCE
EXPERIENCE-DRIVEN
• Explore and optimise channel
options
• Create new ways to engage
the customer and revisit and
redesign service ecosystems
• Remain curious and agile
• Leverage the full potential of
digital.
PROVIDE
CHANNEL
CHOICE
INNOVATE
AS
USUAL
• Make top management
accountable
• Enforce customer-centric
mindset – and focus on it daily
• Design customer journeys to
deliver ‘magic moments’
• Understand what drives
customer demand and
behaviour – and build
capability to predict it
• Actively use customer
analytics to drive development
of new offerings.
Improving
the basics
good to great
great to excellent
excellent to world-class
11
FIGURE 2: PA’S CUSTOMER EXPERIENCE MANAGEMENT MATURITY MODEL
CASE STUDY
IMPROVING THE BASICS
This international airline was looking to target its customers
on a more personal level using strong, evidence-based
insight.
The carrier had various sources of data at its disposal,
including frequent flier information, customer satisfaction
surveys, transaction and booking data, and customer
complaints. However, these were all analysed in silos
– preventing the airline from creating integrated insights.
PA took an approach deeply rooted in analytics to create
a number of ‘myth busters’ about the preconceptions the
airline had about its customers. We identified six clear
customer segments and a profile was created for each
segment to understand what truly mattered to them.
We also found that many customers were not booking with
the airline directly – a key area where the organisation was
losing money. Therefore, converting them to book with the
carrier, and not through an agent, became a main priority
for the organisation.
As a result of this analysis, we were able to identify £35
million of incremental revenue opportunities.
During their engagement with
us, PA provided some really
excellent insights into our
consumer needs and
expectations – including their
service and technology
requirements. The level of
insight gained through PA’s
customer modelling expertise
went well beyond what we
believed was possible using
core analytical techniques alone.
Marketing Director
Identifying a
£35 million
opportunity
for an
international
airline
12
13
Employees understand
the needs of your
customers
A single view
of go-to-market
Implement
product portfolio
management
Systematic sales
planning and
budgeting
Near-real time
monitoring of
profitability
Ensure your employees
understand their own role in
meeting the customers’
needs.
Develop a strategic
management framework that
outlines your organisation’s
policy on a single view of
brand, product and/or service,
customer and channel.
Your company should have
a clear overview of your
product/service portfolio,
including profitability and
lifecycle of individual items.
Ensure you share this
knowledge with the
employees who are
responsible for sales and
service.
Your sales planning and
budgeting should be based
on history and projections,
and you should implement
rigorous sales performance
management.
Is your company able to
monitor profitability per
region, market,
customer channel,
product/service category and
item based on near-real time
data? If the answer is no, this
should be made a priority.
MARKET-DRIVEN
OVERVIEW
13
Two customer experience management dimensions are especially important when fixing the basics of your organisation’s
customer experience: knowing your customers and segmenting your customers’ needs.
Through our research, we identified the five most important capabilities that will improve your ability to execute on these two
dimensions. In essence, it is these capabilities that are the foundation for performing well at the market-driven level.
With up to 70,000 passengers passing through the doors of the
airport each day, it is safe to say the airport’s employees have
their work cut out for them.
With high aims for passenger growth and own place in the
transportation landscape, the airport identified service
excellence as one of the key ‘breakthrough’ areas that would
take its customer experience from ‘good’ to ‘great’.
Having already won the industry award for great service five
times in the last ten years, the airport engaged PA to help define
service excellence and develop the service value proposition for
each of the five customer groups. Working with the leadership
team, we defined customer personas, customer journeys and
the desired experience for each customer, together with
initiatives to improve the service delivery.
PA also supported the development of five ‘playbooks’ for each
customer group that outlined service standards, guidelines and
key performance indicators. Furthermore, we put together over
200 initiatives for how airport staff could interact with customers
within each touchpoint, defined the governance model, created
a roll-out plan and initiated the development of their training
programme.
International
airport: Taking
customer
experience
from good to
great
CASE STUDY
GOING FROM GOOD TO GREAT
As a result of PA’s work,
the airport now has a clear
view on how to continuously
improve its customers’
experiences in the next three
years and is in a good state
to start embedding the new
service excellence concept
across the entire organisation.
14
15
CUSTOMER-DRIVEN
OVERVIEW
Customer-centric
leadership
Top management is
accountable for customer
experience results
Overview of
customer journey
Employee
commitment to
brand and values
Data-driven and timely
analysis of customer
demands
Most leaders understand the
importance of having a
customer-centric mindset,
but not all leaders take active
steps to develop one.
Clear communication and role
modelling is key here.
Customer-driven companies
assign clear responsibility and
accountability in the top
management for the
Customer experience related
financial results.
A prerequisite is that you can
measure the customer
experience management
related financial results in
clearly defined key
performance indicators.
You must develop a clear
overview of all customer
journeys linked to the touch-
points in which value is
created.
Ensure your employees
understand and embody your
products or services but also
your brand, heritage, story
and company values.
Your customer analytics must
be data-driven and timely
– and provided at multiple
times throughout the year,
so you can monitor changing
customer demands.
You should also be capable
of responding to these
changing demands.
15
When you have developed the capabilities that enable you to perform at a market-driven level, you are in a position to start
working towards the next level in the maturity model.
Organisations that are customer-driven manage clear customer segments and segmented value propositions, but also identify
where ‘magic moments’ occur and find a fine balance between the rational and the emotional interactions with their customers.
Below are the capabilities required for your organisation to reach the customer-driven level.
To meet increasing customer demands, and deliver a seamless
experience across all channels, a large retail bank wanted to
harness the power of digital and transform its business model.
The bank quickly realised it had a wealth of transaction data
from different applications available which it could use to create
insights into its customers to help it improve service and develop
new products.
Working shoulder-to-shoulder with the bank, we designed
an advanced data analytics platform and ran several insight
projects, delivered within 6-8 weeks which identified all customer
journeys, predicted how customers were going to behave in
those journeys and identified any areas within those journeys
where bottlenecks would occur.
Using this data-driven approach, the bank was able to
significantly improve its level of customer service. Within 1 year
alone, we were able to remove 400,000 unnecessary and costly
interactions with customers. Not only did this lead to a potential
€4 million reduction in costs, but customers also received more
efficient responses to their queries.
CASE STUDY
GOING FROM GREAT TO EXCELLENT
Unlocking
the digital
potential for
a leading
retail bank
As a result of our work, the bank
now has a well-trained customer
service team that successfully
generates and completes insight
projects, innovates new
methods for analysing data and
is able to capitalise upon
business benefits. This has
already led to new business and
improved conversion rates for
the number of people visiting the
website, making appointments
and buying products.
16
17
RELATIONSHIP-DRIVEN
OVERVIEW
Clear roles and
responsibilities for
customer interaction
Predictive
analysis
of demand
Systematic
tracking of
customer behaviour
Employees
with competitive
digital skills
Structured
co-creation with
customers
Your company must have
clearly assigned roles and
responsibilities when it comes
to interacting with the
customers.
Collect real time demand
forecasts that are
consolidated and presented
electronically through
predictive analytics.
Do you know what your
customers do and not just
what they say?
Your organisation should be
capable of using systematic
tracking of target customer
segments when it comes to
behaviour, preferences and
behavioural drivers.
The digital age has brought
about new ways to engage
and serve the customers, and
being digital requires a new
culture, mindset and different
ways of operating.
Your organisation needs
strong in-house digital skills,
with employees across the
value chain who understand
the online, digital world and
can take advantage of the
opportunities.
Your customers’ resources
and skills should be applied
creatively in a continuous and
structured process to shape
the future product and service
offerings.
This way, boundaries of
innovation and product
development are extended
well beyond your company to
include your customers, their
cultural resources and skills.
17
*Avaya.com, www.avaya.com/usa/faqs/articles/8-best-practices-for-customer-experience-management-today/
**Apple.com, www.apple.com/pr/library/2015/10/27Apple-Reports-Record-Fourth-Quarter-Results.html
Moving from customer-driven to relationship-driven requires a new set of capabilities. At this stage, companies typically have most
of their service excellence related capabilities in place.
Companies at this level develop capabilities that enable them to understand individual customers as they strive to appreciate what
their product or service really means to their customers, and to develop a personalised experience based on their purchase and
behavioural history.
Apple is a prime example of an organisation that focuses on building a relationship with its customers. At its stores, Apple
employees will actually try to ‘down-sell’ customers on what they are looking to buy in an attempt to save them money. Apple’s
approach reportedly results in fewer products being returned, higher sales rates on add-on services, fewer technical issues and
minimal employee attrition*. The company’s 40% gross margin also speaks volumes**.
If you are aiming to reach the relationship-driven stage, focus on the following key capabilities.
CASE STUDY
GOING FROM EXCELLENT TO WORLD-CLASS
Innovating
mobile
banking at a
large Nordic
bank
As a result of our work, the
organisation now has a clear
view on what technologies can
improve its customer
experience.
To help this financial services firm boost its customer experience and
stay a step ahead of the competition, we worked with the bank to design
an innovation unit devoted to trialling new mobile banking features.
We helped them launch an experimental banking application in two
countries, using agile principles, and tested 13 experimental features in
nine months.
Reaching around 2,000 customers, we collaborated with the bank to
track the impact the new features were having on its customer
experience. These features ranged from using fingerprint ID to log into
mobile banking, to novel money-saving ideas and graphical illustrations
of transaction data.
For each trial, we monitored whether the new feature appealed to its
customers. For instance, did customers continue to use the feature or
switch it off after trying it out? And what comments did they have about
the feature’s impact on their own user experience?
This approach, based on prototyping tests and which saw us releasing
incomplete features to customers, is unconventional in the financial
services sector, but allowed us to quickly test new ideas and
continuously evolve the features based on behavioural data and
feedback.
We went on to recommend the features that proved to be popular with
customers and should be implemented – with the bank rolling out the
fingerprint touch ID function across iPhone users with much success.
18
19
EXPERIENCE-DRIVEN
OVERVIEW
To advance to the highest level in our maturity model, two customer experience management dimensions are vital. Firstly, your
company needs a clear channel strategy to engage all customers, and customers must be able to seamlessly move between
different channels. The other dimension relates to your organisation’s ability to constantly innovate, measure and learn with your
customers.
We have identified the five most important capabilities that will improve your organisation’s ability to execute on these two
dimensions.
19
Customer experience
is a focus in daily
business
New offerings driven by
systematic customer
analytics
Living and
breathing the
‘digital world’
Quickly acting and
reacting to market
changes
External
resources
for inspiration
Your company must run
customer experience
improvements as part of
normal operations –
as opposed to projects that
need to be prioritised, initiated
and closed down.
The development of new
products and services should
be driven by systematic
customer analytics of
behaviour, preferences and
trends.
Digital skills are not enough.
Your entire organisation must
understand the drivers of
success and actively explore
the opportunities in the ‘digital
world’.
Is your company able to act
and react to changes in the
market quickly?
Market changes relate to new
product or service offerings,
adjusting to fluctuations in
demand and innovating in
marketing.
Our research suggests that
companies at this level utilise
external resources to get the
right competencies and
inspiration when necessary.
SECTOR HIGHLIGHTS
Many companies in the consumer and manufacturing sector
come from a very traditional background that is focused on
the ‘product push’ – meaning they are in the early stages of
our maturity model. A particular area they need to improve
on is omni-channel. In the financial services sector, for
example, it is easier for organisations to achieve a
seamless customer experience because they do not have a
physical product to sell. For organisations that do, it is much
more difficult to achieve – and many are struggling.
For companies to succeed with customer experience,
they must turn their focus away from a manufacturing,
‘product push’ approach to one that is market-facing
and innovation-driven, with strong sales and
operations planning.
Burberry is one of the most cited examples of great
customer experience. This is because the retailer
customises its products to meet consumer needs and uses
digital to great effect to build immersive and engaging
experiences for its customers.
CONSUMER AND MANUFACTURING
Troels Gregersen
Consumer and manufacturing expert
Drawing on our experts’ insights, we outline how four example sectors – consumer and manufacturing, government,
financial services, and transportation and logistics – stack up when it comes to customer experience management.
There is a lot of room for organisations in this
sector to improve. Train companies, for instance,
are rather poorly regarded in the sphere of customer
experience because of frequent disruptions to
services, cancellations and high ticket prices.
However, it is not all bad news. Airlines have a
more advanced ticket pricing structure, loyalty
programmes to reward customers and clearer
defined customer segments.
Looking to the future, the sharing economy is an
area that I think will really be taking off. Companies
such as BlaBlaCar, which helps people travelling
between cities to split the cost of a car journey, have
grown in popularity. However, we are now seeing
consumers taking more power into their own hands
to find opportunities to share travel within their own
personal network.
For organisations to stay competitive they need
to focus on addressing their customers’
problems, digitising and optimising the efficiency
of their services.
20
TRANSPORT AND LOGISTICS
Frank Madsen
Transport and logistics expert
If you ask financial services firms today what their
number one priority is, many would say it is customer
experience. However, many well-established companies
are failing to turn this ambition into a reality.
We are seeing disruptive players entering the market.
Friendsurance, for instance, offers peer-to-peer
insurance that rewards small groups of users with a
cash-back bonus at the end of each year if they do not
make a claim. It is this type of organisation – one that is
designed to focus on the customer and draws on the
sharing economy – that is revolutionising the sector.
With more of these innovative and customer-centric
options coming into the market, the incumbents
must improve their customer experience or risk
becoming irrelevant.
FINANCIAL SECTOR
Martin Tillisch
Financial services expert
When we look at the public sector, regulation and
legacy systems are hindering organisations from using
their citizens’ or customers’ data to the best effect.
The siloed way in which they are organised is also
making it tricky for various government departments
and agencies to connect their insights and data.
Organisations must invest the time to create a new
culture that puts their customers at the centre
– a very different mindset than most are used to.
However, there are some standout organisations that
excel in this area. In Denmark, the Danish Business
Authority has an online portal that offers digital
solutions and cross-channel support for its customers
(companies). This has led to quicker and more
effective query handling, higher customer satisfaction
scores and better employee engagement.
What sets these leading organisations apart is that
their top management really champions great
customer experience and takes their employees on
the customer experience journey with them.
21
PUBLIC SECTOR
Stinne Henriksen
Public sector expert
22
IS YOUR ORGANISATION A LEADER IN
CUSTOMER EXPERIENCE MANAGEMENT?
To find out if your organisation is a customer experience management
leader, complete the following self-assessment.
Consider the extent to which you agree or disagree with the following statements.
Understand
your
customers
My organisation identifies customer needs and this helps us to allocate
resources internally. We track customer experience quality for each
segment to perform the ultimate test of what is ‘good’.
Differentiate
value
propositions
My organisation has clear and unique value propositions for each of
our customer segments based on clearly defined customer needs.
Design
the
journey
My organisation has clearly mapped the customer touchpoints and
defined how to interact with the customers in these touchpoints,
knowing where the ‘magic moments’ and ‘pain points’ are.
Balance
the
approach
My organisation optimises the balance between the rational and
emotional interactions (i.e. feelings that we should ignite).
Be
driven by
insight
My organisation has a good understanding of who our customers are,
what they want and how they perceive their interactions with our
company.
Personalise
the
experience
My organisation provides the customer with a personalised experience
based on purchase and behavioural history.
Provide
channel
choice
My organisation has a clear channel strategy to engage all customers
and the customer can seamlessly move between the different
channels.
Innovate
as
usual
My organisation constantly experiments, measures, learns with our
customer and adjusts to develop the optimal experience across all
channels.
I can do this! I’m getting there I need help!
22
or visit
paconsulting.com
To speak to one of our experts about developing your
Organisation’s Customer Experience Management Capabilities,
please contact:
23
Claus Høyer Madsen
claus.hoyer.madsen@paconsulting.com
Troels Gregersen
troels.gregersen@paconsulting.com
The four steps outlined in our Customer Experience
Management Maturity Model are the foundation for success
if organisations are to succeed at customer experience
management.
These are not short-term fixes, but areas that need
to be developed and nurtured over time. As the thriving
organisations cited throughout this report demonstrate,
success is achievable – but only through challenging your
organisation's convention.
GETTING STARTED
Corporate headquarters
123 Buckingham Palace Road
London SW1W 9SR
United Kingdom
Tel: +44 20 7730 9000
paconsulting.com
This document has been prepared by PA.
The contents of this document do not constitute
any form of commitment or recommendation
on the part of PA and speak as at the date of
their preparation.
© PA Knowledge Limited 2016.
All rights reserved.
No part of this documentation may be
reproduced, stored in a retrieval system,
or transmitted in any form or by any means,
electronic, mechanical, photocopying or
otherwise without the written permission
of PA Consulting Group.
We Make the Difference
An independent firm of over 2,600 people, we operate
globally from offices across the Americas, Europe, the
Nordics, the Gulf and Asia Pacific.
We are experts in consumer and manufacturing, defence
and security, energy and utilities, financial services,
government, healthcare, life sciences, and transport,
travel and logistics.
Our deep industry knowledge together with skills in
management consulting, technology and innovation
allows us to challenge conventional thinking and deliver
exceptional results that have a lasting impact on
businesses, governments and communities worldwide.
Our clients choose us because we don’t just believe in
making a difference. We believe in making the difference.

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The journey to become a truly customer experience-driven company

  • 1. CUSTOMER- DRIVEN CAPABILITIES MATURITY MARKET- DRIVEN RELATIONSHIP- DRIVEN EXPERIENCE- DRIVEN THE DIFFERENCE IS THE EXPERIENCE The journey to become a truly customer experience-driven company PA Consulting Group’s Customer Experience Management Report 2016
  • 2. ABOUT PA is a consulting, technology and innovation firm. We define success as achieving exceptional results that have a lasting impact on businesses, communities and individuals worldwide. This principle has remained the cornerstone of our ethos since 1943 – and it continues to underpin everything we do. Our clients choose us because we challenge convention to find the solutions that really work – in practice, not just on paper. Then we roll up our sleeves and get the job done. At PA we don’t just believe in making a difference. We believe in making the difference. PA CONSULTING GROUP 2
  • 3. FOREWORD Great customer experiences are not built overnight. Organisations know strong customer experience management is essential for long-term success, but often stumble when deciding which resources and initiatives to prioritise Troels Gregersen Nordic head of Business Design Claus Høyer Madsen Nordic head of Digital In our research, we surveyed 95 international senior professionals across a range of sectors and we have defined eight customer experience dimensions that form the foundation of any customer experience strategy – understand your customers, be driven by insight, innovate as usual, balance the approach, differentiate value propositions, design the journey, provide channel choice, personalise the experience. And we did not stop there. We then went on to define how these dimensions are correlated with best practice to develop our Customer Experience Management Maturity Model. The model sets out where organisations should be starting their customer experience management journey and in what order they should be implementing initiatives. Our research reveals that the value of this prioritisation should not be underestimated. In fact, an organisation that increases its customer experience management score by 10% can expect to see a boost in its customers’ satisfaction by 5%. In turn, a 10% increase in customer satisfaction is seen to improve financial results by around 5% – enabled by an increase in revenue and growth of market share. We also found that most of the organisations we surveyed are placed at the bottom end of our maturity model – with very few achieving the highest maturity level of customer experience management. We urge these companies to up their game, consider the right customer experience management ambition for them and adopt the appropriate mindset to compete and thrive. A number of leading organisations, detailed throughout our report, demonstrate that by rethinking their approach to customer experience management and by prioritising initiatives correctly, great opportunities can be seized. 3
  • 5. ABOUT OUR RESEARCH We surveyed 95 international senior professionals from a range of sectors to identify a best practice approach to customer experience management that drives greater market performance and financial results. The respondents came from a variety of sectors including energy, financial services and public sector; organisations with a national, international and global reach; and those with revenues ranging from millions to multi-billion dollars. From this research we developed our Customer Experience Management Maturity Model. The eight dimensions that make up our model, which we explore in more detail on page 9, were ranked on each maturity level – depending on the number of best practices associated with them and their importance to that level. The most important best practices for each maturity level were then mapped against the eight dimensions to create a priority list for what best practices should be focused on to improve your score for the dimension in question. Our research revealed that the most important capabilities to the lower levels of maturity were also important to the higher maturity levels – indicating that as organisations improve their customer experience management maturity, they need to be building on foundational ‘basics’. This methodology allows organisations to clearly see what dimensions, and associated best practices, require prioritisation to move up along our maturity model to achieve the level of ambition appropriate for each. DEVELOPING OUR CUSTOMER EXPERIENCE MATURITY MODEL 5
  • 6. Our survey results reveal that improving your organisation’s customer experience management score by 10%, and taking your organisation through each stage in our Customer Experience Management Maturity Model, can boost your customers’ satisfaction score by 5%. To put this into context, organisations that have improved their customer experience management score by 10%, e.g. from 6 to 6.6, have seen a 5% positive impact on how satisfied their customers are. Your customer satisfaction can be measured by how successful you are in providing value to customers, your ability to retain customers and attract new customers, and your ability to bring new products and services to the market. THE IMPACT OF GOOD CUSTOMER EXPERIENCE MANAGEMENT increase in your customer experience management score 10% 5% will often raise customer satisfaction by The survey results also prove that a similar effect is true for converting satisfied customers into strong financial results – a 10% increase in the former is proven to lead to around 5% increase in the latter compared to competitors. This means that a 10% improvement of your customer experience management score is likely to improve your financial results by 2.5%. It is clear that the importance of keeping customers satisfied is hitting home, with 80% of CEOs stating that customer experience is the main area they are competing on – up from 30% compared to a few years ago*. *Finding from PA’s 2014 customer experience survey 10% 5% will often improve financial results by around increase in your customer satisfaction 6
  • 7. Improves customer satisfaction compared to competitors by 5% Improving customer experience management by 10% Improves financial results compared to competitors by 5% Improving customers’ satisfaction by 10% CUSTOMER EXPERIENCE MANAGEMENT HAPPY CUSTOMERS FINANCIAL RESULTS 7
  • 8. 8 CUSTOMER EXPERIENCE MANAGEMENT DIMENSIONS We have identified eight capabilities, outlined on the right, that organisations can evolve and improve to achieve customer experience management maturity. Based on our extensive experience, and drawing on best practice, these dimensions formed the foundation of our survey. We asked respondents to rate their own ability to execute on each of these dimensions and the respondent’s average score of these dimensions constitutes their customer experience management score. In figure 1 we have highlighted the average score of all companies in relation to each dimension. UNDERSTAND YOUR CUSTOMERS Of the eight customer experience management dimensions, organisations rated ‘understand your customers’ as what they are best at managing. Given that customer segmentation has been a well-recognised, well-integrated business discipline for many years, companies have built up strong capabilities within this dimension. PA customer experience expert, Jacob Klit, comments: “In general, all companies have segmented their customers. However, this segmentation is often ‘inside-out’-driven based on industry codes, sales volume or cost-to-serve parameter from an operation point of view. These companies are therefore missing out on the full potential of driving top line growth and customer centricity. Building effective and relevant customer relationships to grow B2B accounts or share of wallets among consumers requires implementation of need-based segmentation. Need-based segmentation, based on for example psychographic and behavioural characteristics, is used by best practice B2C and B2B companies – but is not that difficult to implement. It can actually be completed in around 12 to15 weeks”. KEY HIGHLIGHTS We have highlighted the overall highest and lowest scoring dimensions in our survey. PERSONALISE THE EXPERIENCE At the other end of the spectrum is personalisation. This is a relatively new discipline that requires a whole new set of skills and it is the dimension we see organisations struggling to master. As Dave Peters, CEO and founder of Emagine, warns: “Getting personalisation right requires an all-or-nothing approach. The aim of personalisation is to foster a better customer relationship that is rooted in value and relevance for the individual; marketing to one, not many. It’s about understanding a customer’s needs and preferences and connecting with them in a manner that suits them in order to extract maximum customer value and protect the relationship”*. 7.4 /10 5.5 /10 8 *http://www.mycustomer.com/marketing/strategy/personalisation-how-to-build-a-successful-strategy
  • 9. 5.5 /10 6.1 /10 6.1 /10 6.2 /10 6.5 /10 6.7 /10 6.9 /10 7.4 /10 UNDERSTAND YOUR CUSTOMERS Your organisation identifies customer needs and this helps you to allocate resources to product development, marketing, service and delivery programmes. You track your customer experience quality for each of the segments using the customer segment perceptions as the ultimate test of what is ‘good’. CUSTOMER EXPERIENCE MANAGEMENT FIGURE 1: HOW ORGANISATIONS RANK THEMSELVES ON THE EIGHT KEY DIMENSIONS BE DRIVEN BY INSIGHT Your organisation has an accurate, consistent and shared understanding of who your customers are, what they want and how they perceive the interactions they are having with your company today. INNOVATE AS USUAL Your organisation constantly experiments, measures, learns with your customer and adjusts to develop the optimal experience across all channels. BALANCE THE APPROACH Your organisation optimises the balance between the rational and emotional interactions, i.e. the functionality and the feelings that your product or service ignites. DIFFERENTIATE VALUE PROPOSITIONS Your organisation has clear and unique value propositions for each of your customer segments based on specifically defined customer needs. DESIGN THE JOURNEY Your organisation clearly maps customer touchpoints and interactions, defining how to interact with the customers in these touchpoints. This means knowing where the ‘magic moments’ and ‘pain points’ are, and how to build new experiences that resonate with your customers. PROVIDE CHANNEL CHOICE Your organisation formulates and executes a clear channel strategy to engage all customers and allows them to seamlessly move between the channels they choose to interact in. PERSONALISE THE EXPERIENCE Your organisation creates a personalised experience based on the customer’s interests, previous experiences, their purchase and behavioural history. 9
  • 10. PA’S CUSTOMER EXPERIENCE MANAGEMENT MATURITY MODEL From our research it became clear that there is a clear sequence in the way best practice companies build up their customer experience management capability. The unique maturity model that we have developed, based on their responses to more than 50 questions related to customer experience management, clarifies the customer experience priorities of any organisation – dependent on the customer maturity they have already achieved. Our Customer Experience Management Maturity Model, outlined in figure 2, displays which capabilities need to be developed to meet each of the four levels within the model – ‘market-driven’, ‘customer-driven’, ‘relationship- driven’ and ‘experience-driven’ – together with the best practices required to build the capabilities. It is important to note that while it is possible to start working towards the more advanced capabilities required in the later stages of maturity, it is essential for organisations to master the more basic capabilities to ensure long-term success. It is also vital for organisations to not lose focus on the lower level capabilities as they advance further up the maturity model – the basics must always be maintained to enable your high-level capabilities. Your organisation will, for instance, need to implement customer segmentation well to enable personalisation. We found that the vast majority of organisations we surveyed are still placed at the bottom at ‘market-driven’ and very few have made it to the ‘experience-driven’ level. Many organisations rate themselves well on certain dimensions such as ‘understand your customers’ and ‘be driven by insight’, but there was no consistency through the dimensions that make up the required steps taking them up the model’s levels. This can be a cause for concern since improving customer experience management enables companies to outperform their competitors through improved customer satisfaction. 10
  • 11. MARKET-DRIVEN • Fix the basics of your go-to-market strategy • Understand your customers • Understand the value you provide to them • Use analytics to create overview of product portfolio, sales and earnings. UNDERSTAND YOUR CUSTOMERS DIFFERENTIATE VALUE PROPOSITIONS CUSTOMER-DRIVEN DESIGN THE JOURNEY BALANCE THE APPROACH RELATIONSHIP-DRIVEN • Build and attract digital skills • Enable personalisation through digitisation • Build relationships and include customers in structured co-creation • Build organisational capacity to quickly act and react to market changes. BE DRIVEN BY INSIGHT PERSONALISE THE EXPERIENCE EXPERIENCE-DRIVEN • Explore and optimise channel options • Create new ways to engage the customer and revisit and redesign service ecosystems • Remain curious and agile • Leverage the full potential of digital. PROVIDE CHANNEL CHOICE INNOVATE AS USUAL • Make top management accountable • Enforce customer-centric mindset – and focus on it daily • Design customer journeys to deliver ‘magic moments’ • Understand what drives customer demand and behaviour – and build capability to predict it • Actively use customer analytics to drive development of new offerings. Improving the basics good to great great to excellent excellent to world-class 11 FIGURE 2: PA’S CUSTOMER EXPERIENCE MANAGEMENT MATURITY MODEL
  • 12. CASE STUDY IMPROVING THE BASICS This international airline was looking to target its customers on a more personal level using strong, evidence-based insight. The carrier had various sources of data at its disposal, including frequent flier information, customer satisfaction surveys, transaction and booking data, and customer complaints. However, these were all analysed in silos – preventing the airline from creating integrated insights. PA took an approach deeply rooted in analytics to create a number of ‘myth busters’ about the preconceptions the airline had about its customers. We identified six clear customer segments and a profile was created for each segment to understand what truly mattered to them. We also found that many customers were not booking with the airline directly – a key area where the organisation was losing money. Therefore, converting them to book with the carrier, and not through an agent, became a main priority for the organisation. As a result of this analysis, we were able to identify £35 million of incremental revenue opportunities. During their engagement with us, PA provided some really excellent insights into our consumer needs and expectations – including their service and technology requirements. The level of insight gained through PA’s customer modelling expertise went well beyond what we believed was possible using core analytical techniques alone. Marketing Director Identifying a £35 million opportunity for an international airline 12
  • 13. 13 Employees understand the needs of your customers A single view of go-to-market Implement product portfolio management Systematic sales planning and budgeting Near-real time monitoring of profitability Ensure your employees understand their own role in meeting the customers’ needs. Develop a strategic management framework that outlines your organisation’s policy on a single view of brand, product and/or service, customer and channel. Your company should have a clear overview of your product/service portfolio, including profitability and lifecycle of individual items. Ensure you share this knowledge with the employees who are responsible for sales and service. Your sales planning and budgeting should be based on history and projections, and you should implement rigorous sales performance management. Is your company able to monitor profitability per region, market, customer channel, product/service category and item based on near-real time data? If the answer is no, this should be made a priority. MARKET-DRIVEN OVERVIEW 13 Two customer experience management dimensions are especially important when fixing the basics of your organisation’s customer experience: knowing your customers and segmenting your customers’ needs. Through our research, we identified the five most important capabilities that will improve your ability to execute on these two dimensions. In essence, it is these capabilities that are the foundation for performing well at the market-driven level.
  • 14. With up to 70,000 passengers passing through the doors of the airport each day, it is safe to say the airport’s employees have their work cut out for them. With high aims for passenger growth and own place in the transportation landscape, the airport identified service excellence as one of the key ‘breakthrough’ areas that would take its customer experience from ‘good’ to ‘great’. Having already won the industry award for great service five times in the last ten years, the airport engaged PA to help define service excellence and develop the service value proposition for each of the five customer groups. Working with the leadership team, we defined customer personas, customer journeys and the desired experience for each customer, together with initiatives to improve the service delivery. PA also supported the development of five ‘playbooks’ for each customer group that outlined service standards, guidelines and key performance indicators. Furthermore, we put together over 200 initiatives for how airport staff could interact with customers within each touchpoint, defined the governance model, created a roll-out plan and initiated the development of their training programme. International airport: Taking customer experience from good to great CASE STUDY GOING FROM GOOD TO GREAT As a result of PA’s work, the airport now has a clear view on how to continuously improve its customers’ experiences in the next three years and is in a good state to start embedding the new service excellence concept across the entire organisation. 14
  • 15. 15 CUSTOMER-DRIVEN OVERVIEW Customer-centric leadership Top management is accountable for customer experience results Overview of customer journey Employee commitment to brand and values Data-driven and timely analysis of customer demands Most leaders understand the importance of having a customer-centric mindset, but not all leaders take active steps to develop one. Clear communication and role modelling is key here. Customer-driven companies assign clear responsibility and accountability in the top management for the Customer experience related financial results. A prerequisite is that you can measure the customer experience management related financial results in clearly defined key performance indicators. You must develop a clear overview of all customer journeys linked to the touch- points in which value is created. Ensure your employees understand and embody your products or services but also your brand, heritage, story and company values. Your customer analytics must be data-driven and timely – and provided at multiple times throughout the year, so you can monitor changing customer demands. You should also be capable of responding to these changing demands. 15 When you have developed the capabilities that enable you to perform at a market-driven level, you are in a position to start working towards the next level in the maturity model. Organisations that are customer-driven manage clear customer segments and segmented value propositions, but also identify where ‘magic moments’ occur and find a fine balance between the rational and the emotional interactions with their customers. Below are the capabilities required for your organisation to reach the customer-driven level.
  • 16. To meet increasing customer demands, and deliver a seamless experience across all channels, a large retail bank wanted to harness the power of digital and transform its business model. The bank quickly realised it had a wealth of transaction data from different applications available which it could use to create insights into its customers to help it improve service and develop new products. Working shoulder-to-shoulder with the bank, we designed an advanced data analytics platform and ran several insight projects, delivered within 6-8 weeks which identified all customer journeys, predicted how customers were going to behave in those journeys and identified any areas within those journeys where bottlenecks would occur. Using this data-driven approach, the bank was able to significantly improve its level of customer service. Within 1 year alone, we were able to remove 400,000 unnecessary and costly interactions with customers. Not only did this lead to a potential €4 million reduction in costs, but customers also received more efficient responses to their queries. CASE STUDY GOING FROM GREAT TO EXCELLENT Unlocking the digital potential for a leading retail bank As a result of our work, the bank now has a well-trained customer service team that successfully generates and completes insight projects, innovates new methods for analysing data and is able to capitalise upon business benefits. This has already led to new business and improved conversion rates for the number of people visiting the website, making appointments and buying products. 16
  • 17. 17 RELATIONSHIP-DRIVEN OVERVIEW Clear roles and responsibilities for customer interaction Predictive analysis of demand Systematic tracking of customer behaviour Employees with competitive digital skills Structured co-creation with customers Your company must have clearly assigned roles and responsibilities when it comes to interacting with the customers. Collect real time demand forecasts that are consolidated and presented electronically through predictive analytics. Do you know what your customers do and not just what they say? Your organisation should be capable of using systematic tracking of target customer segments when it comes to behaviour, preferences and behavioural drivers. The digital age has brought about new ways to engage and serve the customers, and being digital requires a new culture, mindset and different ways of operating. Your organisation needs strong in-house digital skills, with employees across the value chain who understand the online, digital world and can take advantage of the opportunities. Your customers’ resources and skills should be applied creatively in a continuous and structured process to shape the future product and service offerings. This way, boundaries of innovation and product development are extended well beyond your company to include your customers, their cultural resources and skills. 17 *Avaya.com, www.avaya.com/usa/faqs/articles/8-best-practices-for-customer-experience-management-today/ **Apple.com, www.apple.com/pr/library/2015/10/27Apple-Reports-Record-Fourth-Quarter-Results.html Moving from customer-driven to relationship-driven requires a new set of capabilities. At this stage, companies typically have most of their service excellence related capabilities in place. Companies at this level develop capabilities that enable them to understand individual customers as they strive to appreciate what their product or service really means to their customers, and to develop a personalised experience based on their purchase and behavioural history. Apple is a prime example of an organisation that focuses on building a relationship with its customers. At its stores, Apple employees will actually try to ‘down-sell’ customers on what they are looking to buy in an attempt to save them money. Apple’s approach reportedly results in fewer products being returned, higher sales rates on add-on services, fewer technical issues and minimal employee attrition*. The company’s 40% gross margin also speaks volumes**. If you are aiming to reach the relationship-driven stage, focus on the following key capabilities.
  • 18. CASE STUDY GOING FROM EXCELLENT TO WORLD-CLASS Innovating mobile banking at a large Nordic bank As a result of our work, the organisation now has a clear view on what technologies can improve its customer experience. To help this financial services firm boost its customer experience and stay a step ahead of the competition, we worked with the bank to design an innovation unit devoted to trialling new mobile banking features. We helped them launch an experimental banking application in two countries, using agile principles, and tested 13 experimental features in nine months. Reaching around 2,000 customers, we collaborated with the bank to track the impact the new features were having on its customer experience. These features ranged from using fingerprint ID to log into mobile banking, to novel money-saving ideas and graphical illustrations of transaction data. For each trial, we monitored whether the new feature appealed to its customers. For instance, did customers continue to use the feature or switch it off after trying it out? And what comments did they have about the feature’s impact on their own user experience? This approach, based on prototyping tests and which saw us releasing incomplete features to customers, is unconventional in the financial services sector, but allowed us to quickly test new ideas and continuously evolve the features based on behavioural data and feedback. We went on to recommend the features that proved to be popular with customers and should be implemented – with the bank rolling out the fingerprint touch ID function across iPhone users with much success. 18
  • 19. 19 EXPERIENCE-DRIVEN OVERVIEW To advance to the highest level in our maturity model, two customer experience management dimensions are vital. Firstly, your company needs a clear channel strategy to engage all customers, and customers must be able to seamlessly move between different channels. The other dimension relates to your organisation’s ability to constantly innovate, measure and learn with your customers. We have identified the five most important capabilities that will improve your organisation’s ability to execute on these two dimensions. 19 Customer experience is a focus in daily business New offerings driven by systematic customer analytics Living and breathing the ‘digital world’ Quickly acting and reacting to market changes External resources for inspiration Your company must run customer experience improvements as part of normal operations – as opposed to projects that need to be prioritised, initiated and closed down. The development of new products and services should be driven by systematic customer analytics of behaviour, preferences and trends. Digital skills are not enough. Your entire organisation must understand the drivers of success and actively explore the opportunities in the ‘digital world’. Is your company able to act and react to changes in the market quickly? Market changes relate to new product or service offerings, adjusting to fluctuations in demand and innovating in marketing. Our research suggests that companies at this level utilise external resources to get the right competencies and inspiration when necessary.
  • 20. SECTOR HIGHLIGHTS Many companies in the consumer and manufacturing sector come from a very traditional background that is focused on the ‘product push’ – meaning they are in the early stages of our maturity model. A particular area they need to improve on is omni-channel. In the financial services sector, for example, it is easier for organisations to achieve a seamless customer experience because they do not have a physical product to sell. For organisations that do, it is much more difficult to achieve – and many are struggling. For companies to succeed with customer experience, they must turn their focus away from a manufacturing, ‘product push’ approach to one that is market-facing and innovation-driven, with strong sales and operations planning. Burberry is one of the most cited examples of great customer experience. This is because the retailer customises its products to meet consumer needs and uses digital to great effect to build immersive and engaging experiences for its customers. CONSUMER AND MANUFACTURING Troels Gregersen Consumer and manufacturing expert Drawing on our experts’ insights, we outline how four example sectors – consumer and manufacturing, government, financial services, and transportation and logistics – stack up when it comes to customer experience management. There is a lot of room for organisations in this sector to improve. Train companies, for instance, are rather poorly regarded in the sphere of customer experience because of frequent disruptions to services, cancellations and high ticket prices. However, it is not all bad news. Airlines have a more advanced ticket pricing structure, loyalty programmes to reward customers and clearer defined customer segments. Looking to the future, the sharing economy is an area that I think will really be taking off. Companies such as BlaBlaCar, which helps people travelling between cities to split the cost of a car journey, have grown in popularity. However, we are now seeing consumers taking more power into their own hands to find opportunities to share travel within their own personal network. For organisations to stay competitive they need to focus on addressing their customers’ problems, digitising and optimising the efficiency of their services. 20 TRANSPORT AND LOGISTICS Frank Madsen Transport and logistics expert
  • 21. If you ask financial services firms today what their number one priority is, many would say it is customer experience. However, many well-established companies are failing to turn this ambition into a reality. We are seeing disruptive players entering the market. Friendsurance, for instance, offers peer-to-peer insurance that rewards small groups of users with a cash-back bonus at the end of each year if they do not make a claim. It is this type of organisation – one that is designed to focus on the customer and draws on the sharing economy – that is revolutionising the sector. With more of these innovative and customer-centric options coming into the market, the incumbents must improve their customer experience or risk becoming irrelevant. FINANCIAL SECTOR Martin Tillisch Financial services expert When we look at the public sector, regulation and legacy systems are hindering organisations from using their citizens’ or customers’ data to the best effect. The siloed way in which they are organised is also making it tricky for various government departments and agencies to connect their insights and data. Organisations must invest the time to create a new culture that puts their customers at the centre – a very different mindset than most are used to. However, there are some standout organisations that excel in this area. In Denmark, the Danish Business Authority has an online portal that offers digital solutions and cross-channel support for its customers (companies). This has led to quicker and more effective query handling, higher customer satisfaction scores and better employee engagement. What sets these leading organisations apart is that their top management really champions great customer experience and takes their employees on the customer experience journey with them. 21 PUBLIC SECTOR Stinne Henriksen Public sector expert
  • 22. 22 IS YOUR ORGANISATION A LEADER IN CUSTOMER EXPERIENCE MANAGEMENT? To find out if your organisation is a customer experience management leader, complete the following self-assessment. Consider the extent to which you agree or disagree with the following statements. Understand your customers My organisation identifies customer needs and this helps us to allocate resources internally. We track customer experience quality for each segment to perform the ultimate test of what is ‘good’. Differentiate value propositions My organisation has clear and unique value propositions for each of our customer segments based on clearly defined customer needs. Design the journey My organisation has clearly mapped the customer touchpoints and defined how to interact with the customers in these touchpoints, knowing where the ‘magic moments’ and ‘pain points’ are. Balance the approach My organisation optimises the balance between the rational and emotional interactions (i.e. feelings that we should ignite). Be driven by insight My organisation has a good understanding of who our customers are, what they want and how they perceive their interactions with our company. Personalise the experience My organisation provides the customer with a personalised experience based on purchase and behavioural history. Provide channel choice My organisation has a clear channel strategy to engage all customers and the customer can seamlessly move between the different channels. Innovate as usual My organisation constantly experiments, measures, learns with our customer and adjusts to develop the optimal experience across all channels. I can do this! I’m getting there I need help! 22
  • 23. or visit paconsulting.com To speak to one of our experts about developing your Organisation’s Customer Experience Management Capabilities, please contact: 23 Claus Høyer Madsen claus.hoyer.madsen@paconsulting.com Troels Gregersen troels.gregersen@paconsulting.com The four steps outlined in our Customer Experience Management Maturity Model are the foundation for success if organisations are to succeed at customer experience management. These are not short-term fixes, but areas that need to be developed and nurtured over time. As the thriving organisations cited throughout this report demonstrate, success is achievable – but only through challenging your organisation's convention. GETTING STARTED
  • 24. Corporate headquarters 123 Buckingham Palace Road London SW1W 9SR United Kingdom Tel: +44 20 7730 9000 paconsulting.com This document has been prepared by PA. The contents of this document do not constitute any form of commitment or recommendation on the part of PA and speak as at the date of their preparation. © PA Knowledge Limited 2016. All rights reserved. No part of this documentation may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying or otherwise without the written permission of PA Consulting Group. We Make the Difference An independent firm of over 2,600 people, we operate globally from offices across the Americas, Europe, the Nordics, the Gulf and Asia Pacific. We are experts in consumer and manufacturing, defence and security, energy and utilities, financial services, government, healthcare, life sciences, and transport, travel and logistics. Our deep industry knowledge together with skills in management consulting, technology and innovation allows us to challenge conventional thinking and deliver exceptional results that have a lasting impact on businesses, governments and communities worldwide. Our clients choose us because we don’t just believe in making a difference. We believe in making the difference.