Customer

ManagementWhat it is,

Why it matters,

and How to begin

Experience

Richard RandolphFlorida Customer Service Institute

What if…Your Customers

had to PAY an admission fee for the privilege of shopping with you?

What would you have to do to bring them in and keep them

happily engaged while shopping?

Today’s Agenda① What is CEX?

② Why Does it Matter? –The Economic Imperative

③ Key Ideas

④ Where To Begin

⑤ Action Tips

⑥ Next Steps

Appendix: Resources

Welcome to the

Experience Economy

1. What is

Customer

Experience

Management?

What is a

Customer

?

Functional: How well do experiences meet Customers’ needs?

Accessible: How easy is it for Customers to do what they want to do?

Emotional: How do Customers feel about the experiences?

Experience Attributes

Logic and Emotions

LOGICRationalCause & Effect‘Manufacturing’Price-DrivenTransactionsThe Head

EMOTIONSFeelings & Intuition

Not Linear‘Agriculture’

Not Price-DrivenExperiences

The Heart

PEOPLECustomer-centric

ENVIRONMENT

5 Senses

PROCESSES

ETDBW

Effort Require

d

Customers perceive service

in their own unique, idiosyncratic, emotional, irrational, end-of-the-day, and totally human terms.

“

~ Tom Peters

Perception is all there is.

All Business is Show

BusinessIntentionally “Stage”

Your Experience

It’s the sum total of the interactions that a Customer has with a company’s products, people, and processes. It goes from the moment when Customers see an advert to the moment when they accept delivery of a product and beyond.

Sure, we want people to think our computers are great. However, what matters is the totality of customers’ experiences with us: talking with our call-center representatives, visiting our Web site, buying a PC, and owning a PC. The customer experience reflects all of those interactions.

Richard Owen vice president of

Dell online worldwide

2. Why Does

This Matter

To YOU?

The Economic Imperative

Increased Loyalty / LTV Lower Acquisition Costs Word of Mouth Price Premiums Lower Operating Costs

Attract new CustomersIncrease Customer Loyalty

More wallet share Increase purchase frequency Increase Lifetime Value Reduce ‘Churn’

Increase referralsBlock competition

Why This Matters to You

84% of executives believe their company has a good understanding of how to serve Customers

57% of Customers rate overall service from “average” to “not meeting expectations”

The Big Disconnect...

but...

83% of executives said their companies have a solid understanding of their Customer’s experience

92% say they listen to and act on Customer feedback

but...

45% of Customers say companies do not understand their experience

37% say companies do not listen to or act on their feedback

80% of companies say they deliver “superior” customer service.

8% of Customers think these same companies deliver “superior” customer service.

but...

The Cost of Poor Experiences

78% of consumers have bailed on a transaction or not made an intended purchase because of a poor service experience.

On average, loyal customers are worth up to 10 times as much as their first purchase.

In 2011, 86% of consumers quit doing business with a company because of a bad Customer experience.

70% of buying experiences are based on how the Customer feelsthey are being treated.

People will forget what you said, they will forget what you did, but they will never forget how you make them ~ Maya Angelou

“

feel.

The way to make advocates

out of satisfied Customers

is to strongly appeal to the

Customers’ emotional needs.

Experience Matters!9 out of 10 U.S. consumers say they would pay more to ensure a superior customer experience.

3 in 5 Americans would try a new brand or company for a better experience.

7 in 10 Americans said they were willing to spend more with companies they believe provide an excellent customer experience.

5%-20%

Probability of selling to a new prospect

60%-70%

Probability of selling to an

existing customer

Company Performance

Employees only ask for the customer’s name 21% of the time.

Hint: The person has a name 100% of the time, and they like hearing it.

A person’s name is to that person the sweetest and most important sound in any language. ~ Dale Carnegie

“

Small Business Advantage

80% of Americans agree that smaller companies place a greater emphasis on Customer service than large businesses.

Most Cringe-Worthy Phrases Customers Don’t Want to Hear

‘We’re unable to answer your question.Please call xxx-xxx-xxxx to speak to a representative from xxx team.’

‘We’re sorry, but we’re experiencingunusually heavy call volumes.You can hold or try back at another time.’

‘Your call is important to us.Please continue to hold.’

Deliberate, Intentional Customer Experience

Management is an

3. Key Ideas

➟ Customer Centric

➟ Customer Lifetime Value

➟ E T D B W

➟ Journey Map / Touchpoints

➟Customer CentricThink like a Customer• How would you feel? Remember: It’s

more about emotions (feelings) than logic!

• The Company exists for the Customer – not the reverse!

When was the last time you bought your company’s product?

Customers Are From Venus Companies are from Mars

Your Customers

Your Company

High company knowledge High interest in topic Egos Internal Politics Varied understanding of

Customers

High self-interest Immediate Needs Wants Desires Interests Barriers and blocks

35

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6See the world from your Customer’s point of view — think like a Customer!

➟ Customer Lifetime ValueThe potential contribution of your Customers to your business over their lifetime.

Add the value of referrals and positive word-of-mouth promotion.

Customers are an ongoing stream of revenue as opposed to a one-time sale.

Knowing the Lifetime Value of your Customers is crucial.

➟E T D B WCustomer Effort

From the customer’s standpoint, doing business with you is as

effortless and inexpensive as possible.

Product price is only part of Customer cost.

Are You Driving Your Customers

C R A Z Y ?

Watch out for these signs, most are our own doing:

Repetitive procedures

Multitude of documents

Questions you already know the answers to

Customer run-around

“It’s company policy”

E T D B W• Present a single face to your Customers –

not sales, Customer service accounts, etc. – just your Company

• Work in different ways for different customers – one size does not fit all!

• Know what your Customers really want and anticipate their needs –

if a Customer buys x will she also need y?

• Let your Customers do more for themselves – let them input their own orders, check progress…

➟Customer Journey Map

Going tothe Movies

Customer In

Customer Out

Park Car

Wait in line to buy ticket

Buy theater ticket

Enter theater; Give ticket to taker

Wait in line for popcorn and soda

Go to restroom

Go into theater; find seats

Pay for food

Exit theater, return to car

Sit and watch movie

Exit Parking Lot

Actions before the transaction

Actions after the transaction(includes follow-upand follow through)

Cycle of Service withMoments of Truth

Moments of TruthTouchpoints – any interaction between a Customer and your Company

3 Levels of Service

1. Processing – done TO you (any time there’s a line)

2. Service – Responsive, customized attention

3. Experience – Creates a memory

4. Where Do I Begin?

1. Start With Your Employees!2. Customer Experience Audit3. Know Your Customers4. Voice of the Customer5. Customer ‘Bug’ List6. Map Customer Touchpoints7. Improve and Sustain

Your Improvement Plan

1. Start With Your Employees

The Service Profit Chain

Unengaged Employees Don’t Create Engaged Customers

Customer experience depends on Employee experience

You can design and create and build the most wonderful place in the world. But it takes people to make the dream a reality.

~ Walt Disney

2. Conduct a Customer Experience

Audit Your company’s experience for new and

existing/returning Customers

Shop competitors / industry peers – how do you feel about their experience?

Benchmark against the very best – Amazon, Ritz-Carlton, Zappos

Hint: Your Customers do!

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Every interaction creates a personal reaction

Experiences should be

designed for individuals.

47You need to understand your Customers personally

3. Know Your Customers!

Serve Customers – Not YourselfYes, you know more than your Customers — deal with it

Educate your CustomersAvoid jargon, acronyms

and process steps

Don’t “sell” things — help Customers buy them

Look at all interactions as an opportunity to help Customers to do something

Tune In To W I I F M

What’sInItForMe?

People are infinitely self-interested!

Preferences

Options

Information needs

What do they want that they can’t get now?

4. Voice of the Customer

“Listening posts”

• Needs– Basic: water, food, shelter

– Situational: requires a product or service

• Wants

• Emotions / Expectations

• Assumptions and stereotypes about you

V O C

Anticipate needsPrepare for predictable questions

Clarify

Validate

Respond

Plus it

What time is the three o’clock parade?

Exercise 1: What Are Your Customers’ Needs and Wants

Instructions

1. Identify one ‘Basic’ need your Customers have

2. Identify one ‘Functional’ need your Customers have

3. Identify one ‘Want’ your Customers have

4. Identify one ‘Stereotype’ your Customers have about your industry

Time: 5 minutes

5. Create a ‘Customer Bug

List’?What ‘bugs’ your Customers?

?How can you fix that?

Look for Opportunities to Reduce Friction

Eliminate Points of Confusion

1. Generate a Customer “Bug” List internally (brainstorm with front-line Customer contact workers)

2. Prioritize according to Customer impact and contribution to Customer Value

3. Confirm with real Customers (questionnaires, interviews, focus groups)

Customer “Bug” List

A simple list of things that “bug” your Customers about your

business

Customer ‘Bug’ ListWhat ‘Bugs’ Our Customers?

Customer Expectations Our Goal“As Is”

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Exercise 2: Start your own Customer ‘Bug’ List

Instructions

1. Identify one thing that ‘bugs’ your Customers now

2. List Customer Expectations for that experience

3. Describe “what’s going on now”

4. Specify what “should be happening”

Time: 5 minutes

6. Map Customer Touchpoints

Example: Open A Bank Account

The Bank Branch

Customer In

Customer Out

Park Car

Enter Bank

Ask for New Accounts Clerk

Wait for New Accounts Clerk

Meet Clerk; Explain needs and wants

Fill out forms; Make first deposit

Get temporary checks

Clerk Explains Bank’s Services and Options

Exit Bank

Confirm understandings

and expectations

Exit Parking Lot

Exercise 3: Map Your Customer’s Touchpoints

Instructions

Identify meaningful steps (touchpoints) in your Customer’s interaction cycle with your company.

Begin with the first contact.

Finish when they leave.

Time: 5 minutes

Touchpoint Analysis and Improvement

Analyze your Customers’ Moments of Truth

MINUS FACTORS PLUS FACTORS

MOMENT OF TRUTH CHART

Park CarDifficult access into

parking lot

No spaces available;Only distant spaces

available — long walk across trashy lot

Visible signage directs Bank Customers to preferred parking

Covered parking in clean, wide slots

Easy access into parking lot

Close spaces available

Lot clean

Spaces clearly marked

Enter BankOld, dirty signs

Front entrance has debris

Windows are dirty and covered with ads

Clean, clear signs

Front entrance clean professional and

inviting

Interior directional signs

Clear signs

Meet “Greeter” who directs Customers

Child Care area available

CUSTOMEREXPECTATIONS

Moment of Truth ChartCustomer Expectations

What do Customers think should happen?

Plus FactorsHow can we delight Customers

at this touchpoint?

Minus FactorsWhat might detract

from the experience?

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Touchpoint Analysis and Improvement

Functional: How well do experiences meet Customers’ needs?

Accessible: How easy is it for Customers to do what they want to do?

Emotional: How do Customers feel about the experiences?

Experience Attributes

Exercise 4: Moment of Truth Analysis

Instructions

1. Identify one Moment of Truth Touchpoint

2. List Customer Expectations for that Touchpoint

3. List two “Minus Factors”for that Touchpoint

4. List two “Plus Factors”for that Touchpoint

Time: 5 minutes

7. Improve and SustainVerify Improvements

Using your Customer-focused priorities and standards:1. Measure the results: Do the improvements show up?2. If not, fix it.3. If yes, move to next items on your priority list —

but confirm that the priorities have not changed!

Follow Up and Follow Through

Results Check-Up

Measure and track ‘Satisfaction’

9 – 10 Promoters – Apostles

7 – 8 Passives – subject to competitors

0 – 6 Detractors – unprofitable

range from “OK” to “Assassins”

to “Ninjas”

Improve and SustainKeep Score!

Net Promoter Score‘How likely is it that you would

recommend my company to a friend or colleague?’

How To Calculate Your Net Promoter Score

% of Promoters – % of Detractors = Net Promoter Score

94 84.7% 13 11.7% 4 3.6% 111 100% Promoters Passives Detractors Total

The NPS is 81.1% (84.7% - 3.6% = 81.1%)

What it really means

1. Everything Speaks!

2. Be Consistent

3. Be Nice (Customers are Guests)

4. Simplify

5. Service Recovery Matters

5. Action Tips

Pay Attention to Detail

1. Everything Speaks!

Appearances count. Design matters.

Everything Speaks!

Everything Speaks!

Everything Speaks!

Everything Speaks!

Everything Speaks!

Everything Speaks!

2. Be Consistent“I know what to expect”“Everything is going to be friendly and easy every time”

• Visual / Sight• Sound

Consistency is viewed by Customers as reliability, predictability, stability, and certainty

which build confidence and trust.

• Smell / fragrance• Touch / tactile

Consistently Remarkable Experiences Build TRUST and LOYALTY

3. Be Nice! Treat Customers as Guests in Your Home

4. Simplify! (K.I.S.S)

Confused Customers don’t buy!

5. Service Recovery When Things Go Wrong

The Customer may not always be right – but she’s always our Customer!

It’s not our fault – but it is our problem!

Customer ComplaintsA typical business hears from 4% of its dissatisfied Customers.

For every customer who bothers to complain, 26 other customers remain silent.

• 1%-5% Complain to Management

• 45% Complain to Agent/Branch/Front Line Rep

• 50% Encounter a Problem But Don’t Complain

A Complaint is a Gift!

Service Recovery Can Be Profitable!

Customers who complain and are satisfied are up to 8% more loyal than if they had no problem at all.

It is 6-7 times more expensive to acquire a new customer than to keep a current one.

A Complaint is a Gift!

Executives think only 20% of Customers share “bad news” about their experiences

87% of Customers tell others about their bad experiences

– increasingly through instantaneous channels

but...

Exercise 5: Your Action Plan

Instructions

Identify one Improvement Item for each of the five Action Areas

Time: 5 minutes

6. Next Steps

1. Start With “Why”

2. CEM Maturity Model

3. Be Authentic / Commit!

4. Resources / Continuing Study

Next Steps

2. CEM Maturity Model1. Don’t Know – Don’t Care!

(and stop bothering me with this stuff!)

2. Aware – Don’t Know What To Do

3. Know What To Do – Working On It

4. Very Experienced and Capable

5. It’s Just Part of ‘Who We Are’

3. Stay True To Yourself

Be

Authentic

94

Authenticity is all about being real. Genuine, not an imitation.

A truly great person never reminds us of anyone else.

Commit!

If you’re not committed to Remarkable Customer Experiences,you can only fool yourself.

Be prepared to burn the ships!

When is the last time you were this joyful?

And your Customers???

Enjoy Your Journey…

THANK YOU!