creating customer relationships: is it the person or the brand?
TRANSCRIPT
Creating Customer Relationships: Is it the Person or the Brand?
October 12, 2010Beth Schelske, Vice President ITAGroup
Keith Fenhaus, CEO/President Hallmark Business Connections
•Research Center within Medill IMC graduate program at Northwestern University
•Our central objective is to develop and disseminate knowledge about communications, motivation and management
•We believe businesses can better design, implement and manage people-based initiatives - inside and outside an organization
•We bring like-minded individuals together during an annual “Think Tank” event
This research is based on the study, “The Employee or the Company: The Relative Importance of People
Versus the Company Brand on Customer Experience” Dr. Frank Mulhern
Academic Director for the Forum for People Performance Management and Measurement
Research Question
• What is the relative importance of a person versus a brand in a business relationship?
Key Findings
• Customers build relationships with individual employees more than a corporate brand
• When a company has a strong, positive brand reputation, it may have more to gain by investing in its employees than in investing more in the company’s reputation
• Investments in employees could include training, incentives, rewards, career development, benefits, and improved compensation
• The findings are central to many service industries including healthcare, financial services, and education
Case Study
• Insurance Industry – Excellent industry for investigating the role of
front line personnel in the customer experience
• Major, high involvement purchase that results in long term customer-to-company relationship
• Industry is struggling with whether to maintain networks of sales agents versus selling direct
• Direct selling allows for lower premiums but eliminates the opportunity for personal relationships
Case Study
• National Insurance Company – Portfolio = full range of retail insurance
products including life, health, property and auto
– Products are exclusively sold through company sales agents
– Agents only sell products for one company
Case Study
• Data– Customer Satisfaction Survey – Employee Engagement Survey – Employee Performance
Case Study
• Results– Experiences with Agent vs Company
• On average customer rate their agents higher than they rate the company with respect to their experience
• 90% of the Agents scored higher on customer satisfaction with the agent than with the company.
• Agent is the “public face” of the company
Case Study
• Results– Agent Performance
• Customer ratings of the agent closely tied to the performance of the agent
• Agents in the top quartile of engagement and customer satisfaction had significantly higher levels of account growth and customer retention
• Best performance achieved by having both highly engaged employees and satisfied customers
Case Study
Case Study
Insurance Case Study
• Implications – Customers build relationships with individual
employees more than a company brand– Insurance agents play a measurable role in the
customer experience – That role translates into better performance for the
agent and the company – The agent’s rating of the company has no effect on the
performance of the agent. – This result suggests that companies have more to
gain by investing in sales agents than in building the brand
Insurance Case Study
• Implications – Investments in agents could include sales training,
incentives, rewards, career development, extension of benefits and improved compensation
– Agents perform better when they are more engaged – Agents in the top quartile for agent engagement and
customer rating achieve over 4X the account growth of agents not in the top quartile for either measure.
Brand Value
Brand Value
Brand Value
• “The earlier you make the emotional connection the better, because once consumers have decided they like a particular option, the more difficult it is for them to backpedal. Their thinking falls in line with their emotions.”– Raj Raghunathan, of McCombs School of Business
Equity
Social Connections
• “Our ladies and gentlemen are our most important resource in our service commitment to our guests.” – Ritz Carlton
Experience
Energy
Brand Selection
• The Fundamentals:– Price– Product Performance– Differentiation
• The Ethereal:– Equity– Social Experience– Energy
Mission: To live and deliver WOW!
• “We wanted a list of committable core values that we were willing to hire and fire on. If we weren’t willing to do that, then they weren’t really ‘values.’”– Tony Hsieh, founder of Zappos
Brand Value
Core of the Brand
Conclusion
• Customers build relationships with individual employees more than a brand
• Employees perform better when they are engaged
• Employees perform better when their customers are satisfied
• Focusing simultaneously on employee engagement and customer experiences drives brand value