B2 Bcvergult18 03 Insites
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Challenges for delivering compelling customer experiences
Christophe Vergult
Director Customer Experience Management
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2Customer Experience Management
why experiences matter
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Customer experience is the impact across all moments of contact between a company and its customers that shapes relationships.
As such it is about your company’s physical performance and emotions evoked, intuitively measured against customer expectations across all touch points.
Customer experiences matter
3Customer Experience Management
10% Increase of customer satisfaction index in a bank that segmented customers and targeted self service
5% Revenue increase of a retailer that piloted customer focused treatments in-store
79% 79% of consumers will commit to a deeper relationship with a brand after a satisfying experience
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Price premium
Word-of-mouth
Cost reduction
The value of loyalty ?
4Customer Experience Management
0 1 2 3 4 5 6 7
Turnover growth
Base profit
Acquisition
Source: Reichheld & Sasser, Zero Defections: Quality Comes to Service,Harvard Business Review, Sept./Oct. 1990
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The value of loyalty - context specific
Relative market share is key driver of profitability in the following industries
Beer, soft drinks, steel, electricity generation/oil and gas production, tyres, cars (mass), audit, hotel chains, …
The premium nature of the category is key driver of profitability in the following industries
5Customer Experience Management
following industriesFMCGs, fashion and luxury goods, star restaurants, strategy consulting, Bordeaux wines, …
Loyalty is key driver of profitability in the following industriesInsurance, banking, credit cars, airlines, luxury cars, hotels (not chains) and restaurants, petrol stations, car leasing, ...
Source: Bain & Company
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Retention leads to higher profits...
... for profitable customers
350%
300%
250%
Cum
ulat
ive
Pro
fits
(per
cent
of t
otal
pro
fits)
DesiredCustomers
CostlyCustomers
Break-evenCustomers
6Customer Experience Management
0% 20% 40% 60% 80% 100%
200%
150%
100%
50%
0%
MostProfitable
LeastProfitable
Cum
ulat
ive
Pro
fits
(per
cent
of t
otal
pro
fits)
Percent of Customers
Source: Keiningham e.a.(2006), Loyalty Myths
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Loyalty anno 2008
Risk reduction NoveltyRisk
reduction
20th century 21th century
7Customer Experience Management
• Performance risk• Psychological risk
• Financial risk• Safety risk• Social risk• Time risk
• Loyal to one
• Behavioral loyalty
• Safety
•Pleasure of experiencing new products and establishing new
relationships
Loyal to many
Attitudinal loyalty
(Brand) experiences
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What is true loyalty?
8Customer Experience Management
“Retention is for wimps. We measure the percent of customers who have our name tattoed on one of their body parts.” (Harley Davidson Annual report)
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What is true loyalty?
loya
lty
high NMBS
HospitalsPC’s
Spuriousloyal
Trueloyal
9Customer Experience Management
������������� �������������������������������
Attitudinal loyaltylow high
Beh
avio
rall
oyal
ty
low
Airlines
Cars
Noloyal
Latentloyal
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10Customer Experience Management
creating meaningful experiences
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Differentiating experiences as competitive advantage
Five ways for developing differentiating experiences
1. Economic experience
2. Functional experience
Biological and psychological needs
Safety needs
Maslow hierarchy of needs
11Customer Experience Management
2. Functional experience
3. Emotional experience
4. Status experience
5. Meaningful experience Personal growth and fulfilment
Safety needs
Belongingness and love needs
Esteem needs ( reputation, achievement)
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Sources of expectations that are (hard) to manage
Managing experiences is managing expectations
Word of mouth Competitive
Previous experience
12Customer Experience Management
Expectations
Word of mouth Competitive experience
Communication Personal needs
Brand
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Expectations keep on increasing
Tecnological experiences enable new and better
experiences
Customers have different touch points with one company
Customer s are interconnected
13Customer Experience Management
Expectations
Word of mouth Competitive experience
Previous experience
Experiences are even shaped across industries
Customers are better informed than before
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Defining a great customer experience across all touch points
14Customer Experience Management
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Stay ahead of competition
Identify important customers
Understand their expectationsSet priorities Experience-
based
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Assess your performance
Define moments of truth
based differentiation
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It’s about differentiation AND resource management
Remove dissatisfiers
Create differentiators
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Create differentiators
Right-size when an interaction doesn’t matter
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17Customer Experience Management
how mature are you to deliver the experience ?
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76% performs in line with or above customer expectations
You believe...
18Customer Experience Management
You believe...
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It is not easy to deliver the experience
Companies that believe they provide a superior
experience
Companies whose customers agree
80%
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Source : Bain & Company
Delivery gap
8%
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How mature are you to deliver the experience?
Understand your customers
Organization alignment
20Customer Experience Management
Moments of truth Brand consistency
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Understand your customersUnderstand your
customers
Formal
Desk research 2.0
Qualitative research
In-depth quantitative research
Tracking research after the moments of truth
Talk with all your customers
Current
21Customer Experience Management
Current
Potential
Lost
Informal
Focused executive program: executives in charge of some accounts
Customer officer of the day: service center interim
C-level travel program: in any continent they visit a Xerox user
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For whom do you create experiences?
My customer’s customer is my customer
Understand your customers
22Customer Experience Management
Understand the influencers and the end customer
Shift from functional to emotional differentiation
Branding to end customers pays off
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For whom do you create experiences?
Having a cool office to work in builds loyalty with pilots
Understand your customers
23Customer Experience Management
Boeing 777 flight deck Boeing 787 flight deck
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For whom do you create experiences?
Two contrary visions for Boeing to deal with
Airline companies : faster and higher
Understand your customers
24Customer Experience Management
Airline companies : faster and higher
Passengers : space and silence
Which one build customer loyalty?
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How mature are you to deliver the experience?
Novice Basic Practicing Mature Best in class• Scale
Mature + Best in class - Novice - BasicMaturity index = -----------------------------------------------------
All respondents
25Customer Experience Management
• Maturity index - 100 0 + 100
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Do you really understand your customers?Understand your
customers
• Customer knowledge
Maturity indexMaturity index
26Customer Experience Management
• Customer knowledgeDoes the company register non-self-reported customer data (e.g. client profile data, interaction data, transaction data …)? The challenge lies in extended data collection (across customer touch points & over time). Practical applicability of the data in an integrated manner (across touch points) is strived for.
- 22- 22
• Customer feedback loopsDoes the company collect self-reported customer insights (e.g. questions, satisfaction, complaints …)?Closing the feedback loop is about openness for customer feedback, processing of the insights gathered and using the feedback to positively alter customer relations.
+18+18
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Do you create meaningful experiences on the moments of truth?
Moments of truth
• Moments of truthDoes the company identify moments of truth and deliver on those moments?Moments of truth are critical customer interactions, on specific moments, via specific touch points that drive superior customer experience.
- 11- 11
Maturity indexMaturity index
27Customer Experience Management
customer experience.
• Customer centric design of....Does the company understand customer needs and expectations related to specific touch points? Does the company adapt the moments of contact according to these customer insights?
+7+7• ...sales contact touch points+ 39+ 39• ...product touch points+21+21• ...delivery touch points+12+12• ...customer service touch points- 12- 12• ...communication touch points
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Is your organization aligned?Organization
alignment
Is customer experience part of the company’s DNA?
Organization Processes Communication People
28Customer Experience Management
“Customer experience is our top priority, for the management and for any of our 59.000 employees”
“I will make any experience outstanding” - purple promise
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Is your organization aligned?Organization
alignment
• Management alignmentIs customer centricity inherent in the company culture? Are customer focused initiatives adopted? +25+25
Maturity indexMaturity index
29Customer Experience Management
• Consistent and shared infoIs customer information consistent and shared across the entire organization? - 12- 12
• Integrated experience via partnersIs customer information consistent and shared across the entire organization? - 19- 19
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Brand fit as a condition to build loyaltyBrand consistency
The brandMy inner self
Far apart
Near
30Customer Experience Management
Small overlap
One
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Brand consistency
1 billion customer interactions a year= 1 billion opportunities to build a relationship
= 1 billion opportunities to screw it up
Brand consistency
31Customer Experience Management
= 1 billion opportunities to screw it up
Is Amex delivering a consistent experience and always expressing the Amex brand essence?
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Customer interaction in line with brand values?Brand consistency
• Brand consistencyIs there a common vision across the company about customer experience? And are customer interactions developed in line +2+2
Maturity indexMaturity index
32Customer Experience Management
Is there a common vision across the company about customer experience? And are customer interactions developed in line with the corporate brand values?
+2+2
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How mature are you to deliver the experience?
Understand your customers
Organization alignment
-2-2 -2-2
33Customer Experience Management
Moments of truth Brand consistency
+2+2+13+13-11-11
Customer centric design
Identification moments of truth
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Fill out the online questionnaire
www.insites.eu/maturitymodel
34Customer Experience Management
And benchmark your performance with other companies
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Evergemsesteenweg 1959032 GentBelgiumTel. +32 9 269.15.00www.insites.eu
35Customer Experience Management
Christophe VergultDirector Customer Experience ResearchTel. +32 9 269.15.06Mobile +32 496 232.932E-mail: [email protected]