copyright © 2013. all rights protected and reserved. 1 tools for delivering a transformative...

COPYRIGHT © 2013. ALL RIGHTS PROTECTED AND RESERVED. 1

Tools for Delivering a Transformative

Customer Experience @DonPeppers

29 September 2013

Dubai

Strategy. Execution. Results.

COPYRIGHT © 2013 ALL RIGHTS PROTECTED AND RESERVED. 2

The dimension of business competition…

Product CentricityProduct CentricityMarket share

Customer

Needs Satisfie

d

Customers Reached

Share of customer

Cu

stom

er

Centr

icit

y

Treating different customers differently

Relationships are required


Customers remember you, whether you remember them or not

How you treat products today will have no effect on their price tomorrow

But how you treat customers today has everything to do with their value tomorrow


Customer ExperienceCustomer Insight

…customers as unique

addressable individuals

…by value, behavior and

needs

…more cost -efficiently

and effectively

…some aspect of the company’s

behavior, offerings, or

communications

Identify Differentiate Interact Customize

Managing customer relationships


Customer Experience

What is a “good” experience?

In a word: Fric

tionle

ss


Customer loyalty is not highly correlated with a superior customer experience…

But customer dis-loyalty is highly correlated with a poor customer

experience!The customer just wants his problem solved, quickly, competently, and conveniently

The secret to customer loyalty is a frictionless experience that removes

obstacles

Friction reduces loyalty and cross-selling


Reliable

A frictionless customer experience is:

Relevant

Valuable

Trustable


Reliable

Product or service works as advertised, with no flaws or failures

Quality is on a par with competitive set

Problems and inquiries are handled accurately and promptly

Privacy is protected and data is secure


Addressable, interactive channels are used to gather customer feedback and input

Relevant

Different customers are treated differently, and every customer appropriatelyAnalytics are used to differentiate customers by their needs, not just by their spending


No hidden costs, unanticipated charges, or pricing tricks

Valuable

Good service delivered at a “fair price”

Doesn’t have to be least expensive, but on a par with competitive set

Value proposition should be obvious


Trustable – Proactively Trustworthy

Do we proactively watch out for our customers’ interests, even when it costs us?

Do we ever find the need to have one story for ourselves but another for the customer?

Would we discuss issues the same way if our customer were in the room with us?

Do we readily admit mistakes, take responsibility, and communicate frankly with our customers?



Competence

Customer trust has always been

important

Good Intentions

Doing things right

Doing the right thing



Moore’s Law

Every 20 years, computers get a thousand times more powerful



Zuckerberg’s Law

Every 20 years, we interact a thousand times more with

others



The more we interact, the more trust we demand

Trust makes interactions more efficient

Interaction generates transparency



A new standard: Extreme Trust

Proactive trustworthiness

In the e-social world it’s no longer enough simply to refrain from cheating or deceiving customers

“Trustability”



Competence

Good Intentions

Doing things right

Doing the right thing

Proactively

Extreme Trust

“Trustability”



83% of consumers trust the recommendations of their friends

>50% trust online recommendations from complete strangers

Just 14% of consumers trust advertising

The Age of Transparency



Linda Kaplan Thaler, CEO, Kaplan Thaler Group

Screw up today, and the “news” will be permanent

“You

can’tun-Google

Yourself”



Grant Robertson, blog post, May 1, 2007

“Dude, you can't take something bad off the Internet. That's like trying to take pee out of a swimming pool.”



Extreme Trust often requires reducing short-term profit to gain long-term value



Extreme Trust comes from empathy

“Treat the customer the way you would want to be treated

if you were the customer.”

Applying the “Principle of Reciprocity”

For a company, empathy is the ultimate form of customer insight

Empathy is a deeply human instinct



And there’s no such thing as one-way reciprocity…

First Persian Gulf War (1991) USAA sent unsolicited refunds for time spent abroad by members

2500+ members mailed the

refunds back!



How Honeybees Find Food

Thousands of bees constantly explore territory looking for blooming flowers

When a bee finds a nectar-rich flower, it returns to the hive to do a “waggle dance”



Now suppose you were a food source for bees…

In the absence of communication among your customers, advertising rules

But when customers talk to each other, it’s the customer experience that counts



“Just because nobody complains doesn’t mean all your parachutes are

perfect”

Or, as Benny Hill said…

When customers don’t communicate, CX failures are not as

apparent


Three requirements for CXM

Information integration and accessibility

Systems and technology to track customer data and make it available at all touchpoints, as needed

Configuration of organization, including structure, incentives, metrics, accountabilities

Orientation: attitude and culture

Does everyone share a common objective to treat the customer fairly and openly?


How is “knowledge” managed?

Information integration and accessibility

Systems and technology to track customer data and make it available at all touchpoints, as needed

Massive amounts of data must be curated and made available if knowledge is to add value Multiple customer interaction channels

Disparate, loosely connected employee work groups

Keeping up with ongoing changes to the business

Providing customers the “right answer” via automation


Curation can be a social activity

“Answer Engine” identifies the one right answer out of thousands of choices, based on

Community feedback, and

Iterative learning

Solving the “information” problem

Both the Answer Engine and employee knowledgebase are fed by the “Social Knowledge Engine”


At one $50b multinational retailer

By the fourth month, correct answers to customer questions increased from 54% to 87%!

Answer Engine was implemented in just four months

Some 60,000 customer contacts/year were deflected to self-service, saving $400K in support costs annually



Configuring the organization…

Product CentricityProduct CentricityMarket share

Customer

Needs Satisfie

d

Customers Reached

Share of customer

Cu

stom

er

Centr

icit

y

Maximizing the value created by each product

Maximizing the value created by each

customer


Customers create value in two ways…

First, they generate current-period sales and costs

But second, they change their intent to buy, in the

future

Suppose a customer calls you with a complaint…



Top 2nd 3rd 4th 5th 6th 7th 8th 9th Bottom

-100%

-50%

0%

50%

100%

150%

200%

Percent of total profits, last 5 years

Life Insurance Company:% of Total Company Profits

by Customer Decile

Decile analysis at an insurance company

Top 30% of customers account for more than 100%

of profits



Top 2nd 3rd 4th 5th 6th 7th 8th 9th Bottom

-100%

-50%

0%

50%

100%

150%

200%

Average policy face value

$500K

$300K

$100K

Percent of total profits, last 5 years

Now look at average policy face values…

Life Insurance Company:% of Total Company Profits

by Customer Decile

Why are policy face value correlated with both top and bottom customer deciles?


Customers are like little bundles of future cash flow, with memories…

“The net present value of all a customer’s future financial contributions, net of costs”

Customer Lifetime Value:

The primary financial benefit of a good customer experience is a

change in LTV



“Leading indicators” of LTV changeLTV drivers

Churn rate, frequency of purchase, share of customer, service contract, account penetration level…

Behavioral cues

Change in account profile, interactions, sales, referrals, returns, complaints…

Lifestyle changes

New job, retirement, graduation, marriage, moving…

Attitudinal indicators

NPS, CSAT, brand preference…



Verizon tracks behavioral cues

Customer checks early termination fees on Website

Outbound Retention Team contacts the customer within 30

minutes




Customer’s data line is cut off for more than 3 minutes

Back Office Quality Assurance Team

investigates and resolves the problem




Customer calls Care more than 2 times in one day

Outbound Customer Support Team takes over the case from Inbound Customer

Support



Attitudinal indicators at Vodafone

“Vodafone Promise” campaign launched

21 point increase in NPS



NPS trend line versus competitors3rd party research company conducts monthly, panel-based researchCompetitors’ customers score both the carriers they use and Vodafone

Based on the results at Vodafone Turkey, “Vodafone Promise” was soon launched in

Spain



T-Mobile uses TRI*M as a leading indicator

And the company holds all employees accountable on Balanced Scorecards



NPS detractors proactively contacted

NPS used for “closed loop” service intervention

4% less churn vs. control within two

months



But computers will never do everything


HighLow

Customer Involvement

Process Standardization

High

Low

Real-world customer experiences…

Business as usual

Predictable customer

lifecycle events

Surprises, trials and tribulations

Threats to cost efficiency

Employees making non-routine decisions

Effective decisions require employees to be:

Engaged Enabled


The real secret to a frictionless customer

experience…

The “Mechanical Turk”


There has to be a person in there

What you want:

Self-organization

Your employees need to be

Engaged in their work and

Enabled to accomplish their mission


Your employees want to work for a trustable company!

At one US telecom client with 40,000 employees, we asked for suggestions on being more trustable

More than 3000 rank-and-file workers responded!

Hundreds of ways workers thought the company should be more honest with its customers!


Five work streams in first six months at one major Middle East telco

1. Workforce Optimization

Cultural transformation

Profile and screen priority agents to form a universal consumer queue

Retraining and Net Promoter Certification

Implement HeartBeat process to manage interval level performance and staffing



2. Rewards and recognition


Redesign incentive plan to reward right behaviors

Blended reliability, productivity and Net Promoter goals

Align with reporting and launch coaching tools/training



3. Learning and Leadership Development


Adapt relevant TeleTech University and Global Performance Management modules

Build Simulated Learning environment to retrain Universal Queue agents in phased roll out

Deploy Rapid Development Tool for product and process uptraining

Career Path Plan including work environment improvement recommendations



4. Net Promoter Program


Benchmark against regional and global telecoms peers

Review current customer satisfaction metrics and studies

Design and launch updated surveys

Align reporting with HeartBeat for daily, agent-level monitoring of CX



5. Closed Loop Quality


Profile and retrain select QA resources to form Customer Experience Improvement team

Integrate NPS with redesigned call listening program

Develop weekly and monthly NPS driver analysis with frontline and strategic action items

Integrate into HeartBeat process to drive improvement


Strong cultures exert peer pressure

“…if we are not efficient at a plant, if we are not creating good earnings for the

company, the peer pressure is unbelievable.”


Strong cultures inspire workers to want to provide a better customer experience

What I heard from a marketing exec at one hotel chain


Peppers & Rogers Group

Management consultants in customer strategy issues

Magazines, newsletters,research white papers

Offices and clients around the world

@DonPeppers

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copyright © 2013. all rights protected and reserved. 1 tools for delivering a transformative...

Documents

customer loyalty

customer relationships

customer feedback

poor customer experience

superior customer experience

frictionless slide

obvious slide

secure slide