Vodacom CM Programme 2015 - Part 3

Maximising Value through Customer Management

Creating the “perfect customer experience” begins with making it

easy to do business with your company

Getting the basics right – Part 2: Customer Effort Score - CES

• Measuring CSAT (perceptions) is relatively easy – but not predictive

• But measuring loyalty (behaviour) is more difficult

• Reichheld used Net Promoter Score as a simple question: Would you recommend us to others? (1 to 6 are Detractors, 7 and 8 are Passives, 9 and 10 are Promoters.)

• A far superior model is to look at customer effort – the CES

NPSNPS

Customer SatisfactionCustomer

SatisfactionRep

urch

asin

g Pr

edic

tion

Increased Spending Prediction

CESCES“How much effort did you personally

have to put into your request?”

“How much effort did you personally

have to put into your request?”

Customer Effort Score - CES

• Of the 75000 B2B and B2C customers who reported low effort, (i.e. easy to deal with company,) 94% expressed an intention to repurchase, and 88% said they would increase their spending

• Conversely, 81% of the customers who had a hard time solving their problems reported an intention to spread negative word of mouth


Why is CES a good idea?

• Drives advocacy value for loyalty

• Reduces customer churn from difficult experiences

• Applicable to all channels

• Resonates with and engages staff

• Low effort usually also means lower costs for everyone – customers and company


Customer Effort Defined

The physical, mental/cognitive/intellectual, emotional, and time-effort energy needed to do

something


Physical EffortPhysical Effort• How “hard” is it? How many muscles needed to carry, to open, to use?

• How much effort to walk or get there? (e.g. airports)

• How comfortable is it? (e.g. seating, temperature)

• Other senses?

• How can we automate through robotics?

• Can we make the physical environment more pleasant?



A Perfect Customer Experience

• 20 people around the world work only on the sound that the car makes when the door is closed

• 3 people work on the smell alone

Mental and Cognitive EffortMental and Cognitive Effort

• Documentation, conditions of sale, processes and procedures

• Price comparisons (gocompare.com)

• Instructions for use (Apple, Mr Delivery)

• Consistency (inconsistency) between channels and products (e.g. banks where private is easier than business accounts)

• Website: How to find, 3 clicks rule, navigation, quantity of information

• Self-help like airline check in and tills

• “I don’t have time to work it out”Maximising Value through Customer Management


Making things appear simple

Making things simple

The Pillar ATMThe Pillar ATM

Emotional EffortEmotional Effort• Relationships with people, not “web-bots”

• Inability to access right people/processes

• Complaints not properly dealt with

• Policies and rules: often, company actually loses

• No feedback, and being kept waiting for stuff

• Safety and security: parking, childcare, baggage, data handling, packaging, instructions

• Frustration is the emotional response to opposition and helplessness and obstructions (SAA)


Time EffortTime Effort

• Waiting and queuing in any channel – especially the “sheep pens”

• Simplified procedures to shorten time effort

• Explaining things again and again

• Being given the run around

• Distance travelled


Mapping the Customer Journey

Touch Points in Time Sequence

Cus

tom

er E

ffort

Sco

re

Location

Check In

Car Park

Lounges

Security

Shopping*

Signs

Hurry up and Wait*


Home Check In

Aircraft seating

BoardingGate seating

Toilets

Gate seating

ToiletsAircraft seating

LocationCar Park

Home Check In Lounges

No need to wait*

Signs

Shopping*

Security

Boarding

“I hate this! Why do I keep doing it?

“Aaaah! If only I could do this always”


Mapping a Customer Journey

(p71)


If you feel brave…• How important is this TP?• What type of customer experiences this TP?• Customer basic needs and wants for this TP• Customer expectations, desires and surprises for this TP• What CSAT score do we want?• Which ServQual factors are involved in this TP• What is the NPS for this TP?• Feelings and emotions customer experiences. (Do they feel

this is fair and equitable?)• Where are the problems, bottlenecks and breakdowns?• Does this involve people, and/or technology?• Back-office and/or front-line?


If you feel brave…• What information/ communication does customer need?• What information/communication do we need?• Is this TP smooth and seamless, or broken?• Can this TP be simplified, reduced or eliminated?• What must be increased, or created from scratch?• What else can we do to add value for the customer?• Is this TP differentiated and unique?• Cost to company of this TP? Can it be reduced?• Opportunity to cross- or up-sell?• Does this TP comply with our CVP, our brand promise, and

our values?

What are the lessons?What are the lessons?

“Smooth” Touch Points: Get the basics incredibly right. Kill “dumb contacts” (3)

High barriers to switching

Sustainable Customer Loyalty


Barriers to Switching include….

•Legal contracts and similar

•Use of technology: hardware

•Use of technology: software


Customisation is at the heart of amazon.com

And 56 more “Look Inside”

recommendations

Barriers to Switching include….

•Legal contracts and similar

•Use of technology: hardware

•Use of technology: software

•Rewards and clubs

•Convenience and simplicity

•Market saturation

•More

“Smooth” Touchpoints: Get the basics incredibly right. Kill “dumb contacts” (3)


Put Relation-ships First




Relationships First!

Yes

No

NoYes

Our customer relationships are better

than the competition?

Our products/services are better than the competition?*

Why are relationships so important?

Thrive & Grow

Slow, painful death

Fast, excruciating

death

Slow, Painful death

*Includes delivery systems

Yes

No

NoYes

Our customer relationships are better than the competition?

Our products/services are better than the competition?

Why are relationships so important?

Apple, Avis

Some casinos,

investment banks, MIC

SAA, Kodak, Nokia, Black-

berry

Sun City, Greece tourism

•1200+ flights

•Still don’t know who I am

•Unable to detect patterns

1986 20132001

So much for CRM!So much for CRM!

Who is Wayne Duvenage?


Me

Do you know or care who I am?Do you know or care who I am?

“Smooth” Touchpoints: Get the basics incredibly right. Kill “dumb contacts” (3)


Continuous value

innovation

Put Relation-ships First



How do we make ourselves indispensable?

How do we make ourselves indispensable?

By giving them irresistible experiences…

By giving them irresistible experiences…

And thereby making competitors irrelevant!

And thereby making competitors irrelevant!


Relative

Price

Low

High

High

Perceived Quality of Experience

The Marketing BattlegroundThe Marketing Battleground

Low-Cost Producer

Differentiator

Blue

Ocean

Rip OffRip Off

• Few Substitutes: Monopoly/cartel, proprietary technology, high cost of switching, “grudge purchase”, desperate need, dominant brand equity, powerful loyalty programme

• Status, prestige & power

• Fashions or fads

• Exclusive, unique, one-of-a-kind

• Impulse buying purchase

• Emotional purchase: +ve or -ve


Commodity or Speciality - Is It Worth It?

“There is no such thing as a commodity” (Ted Levitt)

R11/kg

R5,50/kg

R28.50c/kg

R66/kg

Experience

!

Experience

!Experie

nce!

How can you add value to toilet paper?

Experience?

Customer of the YearCustomer of the Year

It’s very possible to

create a lot of perceived

value at not much cost to

your businessAnd it was unanimous

A Perfect Customer Experience?

Start spreadin’ the news…

But who can’t/won’t be friendly?

There’s always an answer!


The Customer Experience Model

Sales Strike Rate:

•40% (at customer premises)

•60% (at their premises)

•80% (with Starbucks and Sam’s Mum’s Cookies: chocolate fudge cake with crunchy nut toppings

• Did you send my goldfish to London?

• Who is going to organise my seatbelt?

There are at least

82 ways to add value

for Your customers!

Getting to Unbelievable!

The Four Actions Framework

ReduceWhich factors should be

reduced well below industry’s standard?

RaiseWhich factors should be

raised to well above industry’s standard?

EliminateWhich factors that industry takes for granted should be

eliminated?

CreateWhich factors should be created that the industry

has never offered?

A new industry value curve

A new industry value curve

Where do you start? • Blank Strategy Canvas

• “As is” list - now

• Create new industry value curve, and reconstruct market boundaries (4 questions) - future

• Buyer Utility Map

• 6 paths to find ideas

• Implement

Value

Irritant

ValueIrritant

Company’s Reaction

Customer’s Reaction/Attitude

The Value-Irritant Grid

Simplify Make it easier to

do business with you

Leverage Opportunity

Use value innovation

Automate Migrate as much

as possible to self-service

Eliminate Kill all “dumb

contacts” at root cause!

Vodacom CM Programme 2015 - Part 3

Education

Transcript of Vodacom CM Programme 2015 - Part 3