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The Counterintuitive Nature of
    Customer Experience
    Ct        E     i


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




                                             © Beyond Philosophy ™ 2001-2009
                  www.beyondphilosophy.com
The Beyond Philosophy Perspective
 Leaders at helping organisations define & build emotionally
 engaging customer experiences




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

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

                                                        Links with Academia




                                                         © Beyond Philosophy ™ 2001-2009
                             www.beyondphilosophy.com
                                                                                           1
We work with some great organisations…




      …improving their customer experiences


                                                © Beyond Philosophy ™ 2001-2009
                     www.beyondphilosophy.com
                               2
                                                                                  2
How we add value…
Customer Experience Management is a relatively new area of
organization development. We help companies answer
and action tough questions like:
  What is the future of our competition?
  What do our customers expect of us?
  How much is my current Customer Experience
  costing me?
  What is the Customer Experience we are trying
  to deliver?
  How deliberate is our Customer Experience?
  What emotions are we trying to evoke in our
  Customer Experience?
  Are our senior executives engaged in the
  Customer Experience?
  How can we ensure our people understand the
                             l   d       dh
  importance of the Customer Experience to our
  organization and become motivated to change
  their be a ou s
  t e behaviours?

                                                        © Beyond Philosophy ™ 2001-2009
                             www.beyondphilosophy.com
                                                                                          3
Hand Poll

                                                                       Strongly
  Strongly
                                                                       disagree
                                                                           g
   agree
     g




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

                                                     © Beyond Philosophy ™ 2001-2009
                          www.beyondphilosophy.com
                                                                                       4
What is Customer Experience?




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




                                          © Beyond Philosophy ™ 2001-2009
               www.beyondphilosophy.com
                         5
                                                                            5
Customer Experience definition

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

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

                                           © Beyond Philosophy ™ 2001-2009
               www.beyondphilosophy.com
                         6
                                                                             6
Experience and Opportunity Gaps
  p             pp       y   p



          Current Customer Expectations
                          Experience Gap

          Current Customer Experience

                      Opportunity Gap

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




                                                                 © Beyond Philosophy ™ 2001-2009
                                  www.beyondphilosophy.com
                                                                                                   7
Yorkshire Water
Improved overall Customer Experience from 53%-91%.
Kevin Whiteman, MD, “although you start with the
mantra that this is going to cost you more, the reality
is the opposite - the evidence is that it will save you
money”. £ 8.5m ($15.5m) as a direct result of
operational improvements such as:
 – Reduction in written complaints by 40%; a
   significant reduction i repeat calls with a sharp
    i ifi        d    i    in           ll ih      h
   increase in first call resolution; reduction in
   Operational calls by 20% due to infrastructure
   improvements, system implementation & new
   procedures – l d
         d        leading to a reduction of 50% of
                                  d        f        f
   unnecessary jobs

Employee total “buy-in” to the CE through training
                                                       “The Kelda Group has
                                                        The
sessions (with average event score of 3.7 out of 4.0). turned itself from one of the
                                                            most     ridiculed    water
Kevin: I’m absolutely convinced it has an effect on the     companies in the 1990’s,
share price. The stock market is like anything else, it     into one of the most
                                                            respected.
                                                            respected It is now the
                                 reality.
works on perception as well as reality If every bit of
                                                            second    best   performing
news they get is about a transformed company,
                                                            company in terms of service
about our growing reputation of being an efficient          levels and has developed a
company that delivers a good Customer Experience…           record for steady financial
                                                            performance.
                                                            performance ”
                                                            Financial Times
                                                                 © Beyond Philosophy ™ 2001-2009
                                 www.beyondphilosophy.com
                                                                                                   8
Why clients want to improve the
Customer Experience
          Experience…
 Regional utility provider – 20% increase in Customer Satisfaction and
 25% reduction in call volumes
 Regional utility provider – Improve public and industry image, e.g.,
 winner of the 2003 Utility Industry Achievement Award for Customer
 Care
 International FMCG / retailer – 1% increase in Customer Satisfaction
 driving a 1.3% increase in revenues
 Global multi-service telco – 36% improvement in Customer
 Satisfaction, 17% costs reduction and 200% increase in customer-
 facing time
 European insurance provider – 80% reduction in transaction costs
 Global PC manufacturer – 79% improvement in “Missing, Wrong &
 Damaged” deliveries resulting in reduced back office headcount
                                  p
 International wireless telecoms provider - 82% of Customer
 Interactions “better than last time” helped by a 4% increase in first
 call resolution
 Canadian Bank – Losing 26% of high value customers. Saved 6% of
 high value Customers – value CDN $ 85m
                                                       © Beyond Philosophy ™ 2001-2009
                            www.beyondphilosophy.com
                                                                                         9
A straight forward
  Customer – “Hi, I saw your ad in the paper
  advertisement… call us,
   and wanted more info”
                     info
  we can– help you mayreferring to”code
                     you better your
  Ultralase “Certainly,     I have the
    number of the ad    are
  vision




                           © Beyond Philosophy ™ 2001-2009
www.beyondphilosophy.com
                                                             10
© Beyond Philosophy ™ 2001-2009
www.beyondphilosophy.com
                                                             11
The Customer Experience is both Rational and
Emotional



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

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




                                                           © Beyond Philosophy ™ 2001-2009
                        www.beyondphilosophy.com
                                                                                             12
At least 50% of the Customer Experience is
based on the emotional engagement


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




                                                           © Beyond Philosophy ™ 2001-2009
                        www.beyondphilosophy.com
                                                                                             13
Best Practice: Customer metrics



                    Rational (Conscious) Experience
   Customer
  Satisfaction


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

                 Emotional (Subconscious) Experience




                                                     © Beyond Philosophy ™ 2001-2009
                          www.beyondphilosophy.com
                                                                                       14
Net Promoter Score




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




                                          © Beyond Philosophy ™ 2001-2009
               www.beyondphilosophy.com
                                                                            15
The link to value




                                          © Beyond Philosophy ™ 2001-2009
               www.beyondphilosophy.com
                                                                            16
Emotional Profile




                                           © Beyond Philosophy ™ 2001-2009
                www.beyondphilosophy.com
                                                                             17
The Sainsbury’s Story | Action

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

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



            What do you think was the effect of this change?


                                                                          © Beyond Philosophy ™ 2001-2009
                                   www.beyondphilosophy.com
                                             18
                                                                                                            18
The Sainsbury’s Story | Reaction
                                                                           Slight Shift – Huge Impact


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

                         Stock price
                                                                                         Decline
                                                     Initial boost

                                             Time
                     Before                                                     After

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



                                                                                             © Beyond Philosophy ™ 2001-2009
                                               www.beyondphilosophy.com
                                                           19
                                                                                                                               19
Which of these profiles do you think represents
        Sainsbury’s after the change?
                                               2
      1

          Naive
          Ni                                  Transactional
                                              T      ti   l




                  3                                                         4

    Enlightened                                    Natural


                                                    © Beyond Philosophy ™ 2001-2009
                   www.beyondphilosophy.com
                                                                                      20
The Journey from Naïve to Natural




                                              0%


                                      32%


                         60%

              8%




                                                   © Beyond Philosophy ™ 2001-2009
                   www.beyondphilosophy.com
                             21
                                                                                     21
N2N Strategic Assessment –                Report Samples




                                            © Beyond Philosophy ™ 2001-2009
               www.beyondphilosophy.com
                                                                              22
N2N Strategic Assessment –                       Report Samples


SYSTEMS




                                    Best Performer
                                           Company “XXX”
                                                  Index Average
                                                       Lowest Performer




                                                       © Beyond Philosophy ™ 2001-2009
               www.beyondphilosophy.com
                                                                                         23
How a few organisations might fare…




                                          © Beyond Philosophy ™ 2001-2009
               www.beyondphilosophy.com
                                                                            24
The goal of the customer experience…




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




                                            © Beyond Philosophy ™ 2001-2009
                 www.beyondphilosophy.com
                                                                              25
The Counterintuitive Nature of
    Customer Experience
    Ct        E     i


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




                Thank you


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

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The counterintuitive nature of customer experience management

  • 1. The Counterintuitive Nature of Customer Experience Ct E i Qaalfa Dibeehi Vice President, Consulting & Thought Leadership Vi P id C li Th hL d hi © Beyond Philosophy ™ 2001-2009 www.beyondphilosophy.com
  • 2. The Beyond Philosophy Perspective Leaders at helping organisations define & build emotionally engaging customer experiences Global projects: Strategic Partners in Emotional side Asia and Europe of Customer Experience Beyond Philosophy Phil h Offices in London, England & Atlanta, Georgia Links with Academia © Beyond Philosophy ™ 2001-2009 www.beyondphilosophy.com 1
  • 3. We work with some great organisations… …improving their customer experiences © Beyond Philosophy ™ 2001-2009 www.beyondphilosophy.com 2 2
  • 4. How we add value… Customer Experience Management is a relatively new area of organization development. We help companies answer and action tough questions like: What is the future of our competition? What do our customers expect of us? How much is my current Customer Experience costing me? What is the Customer Experience we are trying to deliver? How deliberate is our Customer Experience? What emotions are we trying to evoke in our Customer Experience? Are our senior executives engaged in the Customer Experience? How can we ensure our people understand the l d dh importance of the Customer Experience to our organization and become motivated to change their be a ou s t e behaviours? © Beyond Philosophy ™ 2001-2009 www.beyondphilosophy.com 3
  • 5. Hand Poll Strongly Strongly disagree g agree g The following provide an entirely appropriate Customer Experience for their customers customers… Disney McDonald’s ld’ Your police force p Your company © Beyond Philosophy ™ 2001-2009 www.beyondphilosophy.com 4
  • 6. What is Customer Experience? Customer Experience is NOT about doing whatever it takes to h k “wow” customers © Beyond Philosophy ™ 2001-2009 www.beyondphilosophy.com 5 5
  • 7. Customer Experience definition A Customer Experience is an interaction between an organization and a Customer. It is a blend of an organizations physical performance, the senses stimulated and emotions evoked evoked, each intuitively measured against Customer Expectations across all moments of co tact contact. © Beyond Philosophy ™ 2001-2009 www.beyondphilosophy.com 6 6
  • 8. Experience and Opportunity Gaps p pp y p Current Customer Expectations Experience Gap Current Customer Experience Opportunity Gap Deliberate Customer Experience Company specific customer experience including process and relationship aspects © Beyond Philosophy ™ 2001-2009 www.beyondphilosophy.com 7
  • 9. Yorkshire Water Improved overall Customer Experience from 53%-91%. Kevin Whiteman, MD, “although you start with the mantra that this is going to cost you more, the reality is the opposite - the evidence is that it will save you money”. £ 8.5m ($15.5m) as a direct result of operational improvements such as: – Reduction in written complaints by 40%; a significant reduction i repeat calls with a sharp i ifi d i in ll ih h increase in first call resolution; reduction in Operational calls by 20% due to infrastructure improvements, system implementation & new procedures – l d d leading to a reduction of 50% of d f f unnecessary jobs Employee total “buy-in” to the CE through training “The Kelda Group has The sessions (with average event score of 3.7 out of 4.0). turned itself from one of the most ridiculed water Kevin: I’m absolutely convinced it has an effect on the companies in the 1990’s, share price. The stock market is like anything else, it into one of the most respected. respected It is now the reality. works on perception as well as reality If every bit of second best performing news they get is about a transformed company, company in terms of service about our growing reputation of being an efficient levels and has developed a company that delivers a good Customer Experience… record for steady financial performance. performance ” Financial Times © Beyond Philosophy ™ 2001-2009 www.beyondphilosophy.com 8
  • 10. Why clients want to improve the Customer Experience Experience… Regional utility provider – 20% increase in Customer Satisfaction and 25% reduction in call volumes Regional utility provider – Improve public and industry image, e.g., winner of the 2003 Utility Industry Achievement Award for Customer Care International FMCG / retailer – 1% increase in Customer Satisfaction driving a 1.3% increase in revenues Global multi-service telco – 36% improvement in Customer Satisfaction, 17% costs reduction and 200% increase in customer- facing time European insurance provider – 80% reduction in transaction costs Global PC manufacturer – 79% improvement in “Missing, Wrong & Damaged” deliveries resulting in reduced back office headcount p International wireless telecoms provider - 82% of Customer Interactions “better than last time” helped by a 4% increase in first call resolution Canadian Bank – Losing 26% of high value customers. Saved 6% of high value Customers – value CDN $ 85m © Beyond Philosophy ™ 2001-2009 www.beyondphilosophy.com 9
  • 11. A straight forward Customer – “Hi, I saw your ad in the paper advertisement… call us, and wanted more info” info we can– help you mayreferring to”code you better your Ultralase “Certainly, I have the number of the ad are vision © Beyond Philosophy ™ 2001-2009 www.beyondphilosophy.com 10
  • 12. © Beyond Philosophy ™ 2001-2009 www.beyondphilosophy.com 11
  • 13. The Customer Experience is both Rational and Emotional • Rationally satisfied customers behave Rational (Conscious) Experience the th same as dissatisfied customers. • Emotionally satisfied customers Product Price contribute far more to the bottom line Promotion Placement than rationally satisfied customers. customers © Beyond Philosophy ™ 2001-2009 www.beyondphilosophy.com 12
  • 14. At least 50% of the Customer Experience is based on the emotional engagement • Rationally satisfied customers behave Rational (Conscious) Experience the same as dissatisfied customers. • Emotionally satisfied customers ti fi d t contribute far more to the bottom line than rationally satisfied Emotional (Subconscious) Experience customers. © Beyond Philosophy ™ 2001-2009 www.beyondphilosophy.com 13
  • 15. Best Practice: Customer metrics Rational (Conscious) Experience Customer Satisfaction Net Promoter does not tell you what to h Emotional Rational Experience do about it Signature (Conscious experience) Emotional (Subconscious) Experience © Beyond Philosophy ™ 2001-2009 www.beyondphilosophy.com 14
  • 16. Net Promoter Score Postbank NL (15%) Commerce Bank USA (67%) Australian banks avg -35% (only 1 positive) © Beyond Philosophy ™ 2001-2009 www.beyondphilosophy.com 15
  • 17. The link to value © Beyond Philosophy ™ 2001-2009 www.beyondphilosophy.com 16
  • 18. Emotional Profile © Beyond Philosophy ™ 2001-2009 www.beyondphilosophy.com 17
  • 19. The Sainsbury’s Story | Action A little background: • Britain's longest-standing major food retailing chain. • Employs over 145,000 people. • Offers over 23,000 products. • Serves over 11 million customers/week in its 500+ stores throughout the UK. / g Before After • In the late 1980s, the Chairman was • The Chairman was replaced by an p y a outward looking marketer. inward looking accountant. • The worst thing a store manager • The worst thing a store manager could do was: could do was: 1. be 1 b out of stock f k 1. be 1 b overstocked kd 2. be overstocked 2. be out of stock What do you think was the effect of this change? © Beyond Philosophy ™ 2001-2009 www.beyondphilosophy.com 18 18
  • 20. The Sainsbury’s Story | Reaction Slight Shift – Huge Impact Shift in Priority Initially a boost in stock price but then a decline Revenue A drop in revenue that lagged behind the decrease in cost Cost Stock price Decline Initial boost Time Before After • Supermarkets main value added is that • How do accountants measure the they offer the goods you want in one impact of frustrated customers? place. • They don’t because it’s not ‘hard’ • The shift in priority caused managers to data (i.e. it is not in the past) (i e prefer to be out of stock to being • What happens if customers continue overstocked not to find what they are looking for? • The priority changed because the costs • By the time Sainsbury’s recognised y y g of an overstock i easily measured. f k is il d the problem, customer attrition had • Service levels declined from 99% gained its own momentum! average to below 90%. © Beyond Philosophy ™ 2001-2009 www.beyondphilosophy.com 19 19
  • 21. Which of these profiles do you think represents Sainsbury’s after the change? 2 1 Naive Ni Transactional T ti l 3 4 Enlightened Natural © Beyond Philosophy ™ 2001-2009 www.beyondphilosophy.com 20
  • 22. The Journey from Naïve to Natural 0% 32% 60% 8% © Beyond Philosophy ™ 2001-2009 www.beyondphilosophy.com 21 21
  • 23. N2N Strategic Assessment – Report Samples © Beyond Philosophy ™ 2001-2009 www.beyondphilosophy.com 22
  • 24. N2N Strategic Assessment – Report Samples SYSTEMS Best Performer Company “XXX” Index Average Lowest Performer © Beyond Philosophy ™ 2001-2009 www.beyondphilosophy.com 23
  • 25. How a few organisations might fare… © Beyond Philosophy ™ 2001-2009 www.beyondphilosophy.com 24
  • 26. The goal of the customer experience… The point is to blah, blah .. Blah, deliver blah….. a deliberate customer experience consistently • Deliberate not accidental • Consistent not lucky/ unlucky • Emotional not transactional © Beyond Philosophy ™ 2001-2009 www.beyondphilosophy.com 25
  • 27. The Counterintuitive Nature of Customer Experience Ct E i Qaalfa Dibeehi Vice President, Consulting & Thought Leadership Vi P id C li Th hL d hi Thank you © Beyond Philosophy ™ 2001-2009 www.beyondphilosophy.com