cxpa networking event jhb may 2016 - overview of customer experience in south africa - 2016
TRANSCRIPT
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Overview of Customer Experience in South Africa - 2016
NetworkingEvent:26May2016
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“Cultureeatsstrategyforbreakfast.”- PeterDrucker
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The war between “Blink” & “Think”
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Malcolm Gladwell’s Blink popularized “Thin Slicing” as the new source of human
decision making – BUT it is found “Blinklike" judgments are not a substitute for critical
thinking!
• MalcolmGladwell(Blink)describesthemainsubjectofhisbookas“thin-slicing":ourabilitytogaugewhatisreallyimportantfromaverynarrowperiodofexperience.• Inotherwords,thisisanideathat“spontaneous decisionsareoftenasgoodas—orevenbetterthan—carefullyplannedandconsideredones.”
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T h ! n k
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• Inessence,Mr.Gladwellismakingacaseforone-halfofaclassicfalsedichotomy.Afalsedichotomy, sometimesalsocalled“thefallacyoftheexcludedmiddle,”isaneither-orproposition presentedinsuchawayastomakeusthinkonlyone,notbothof thechoices,canbetrue.(ALSOcalledPolarity)
• Inotherwords,lyingbehind these“snapjudgments”areeducatedimpressionsformedbyyearsofstudy, thought, andanalysis.
• Iamcertainlynotouttoburyintuition, “ah-ha”moments,oremotion…theseelements…areallindispensable tocriticalandcreativethinking.Butasfarasdelivering results,thatis,favorableoutcomes,criticalthinkinganditsmainelements,observation, logicalreasoning,andskepticismhaveademonstrablybettertrackrecord.
T h ! n k
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• "Wecanbedistractedbythemostvisibleandsalientaspects…,"Bernieri (Phd,SocialPsychologistatOregan StateUniv)says.…. canhidetheinner layersoftheonion”
• RichardPosner, aProfatUniv ofChicagoandajudgeontheUSCourtofAppealsfortheSeventhCircuit,arguesthat“Gladwell… makesavarietyofunsupportedassumptionsandmistakesinhischaracterizations oftheevidenceforhisthesis.”
• TheDailyTelegraphreviewwrites,"Rarelyhavesuchboldclaimsbeenadvancedonthebasisofsuch flimsyevidence.”
• NobelprizewinnerDanielKahneman,authorofThinking, FastandSlowwhichspeakstorationality'sadvantagesoverintuition, says,"MalcolmGladwelldefinitelycreatedinthepublicarenastheimpressionthatintuition ismagical...Thatbeliefisfalse."
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Evolution of the Brain
400mYrs 80mYrs 10mYrs 800kYrs 50kYrsReptilianBrain
MammalianBrain
PrimateBrain
HomoSapiensBrain
ModernCognitiveBrain
LimbicSystem Neocortex
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The Core Dimension
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FightingFleeingFreezing
BrainStem
EmotionSelf esteemMotivation
Values
LimbicSystemHigher cognitive functionsRational thinking
Neocortex
SYSTEM 1 DECISIONS vs SYSTEM 2 DECISIONS
Fast
Unconscious
Automatic
Everydaydecisions
ErrorProne
System1
Slow
Conscious
Effortful
Complexdecisions
Reliable
System2
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RememberingtheExperience
Remembering=Self
StrategicOperational
=ExperiencingSelf
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TheMomentsinBuyingExperience
System1– ExperienceSelfBuyingScenario(Buyingacolddrink)NeedArousal
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IntuitiveAutonomousaction
2
Buy withoutmuchthought
3
HardlyanyPostPurchase memory
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Immediategratification
System2– RememberingSelfBuyingScenario(LifeInsuranceApplication)NeedArousal
1
Collectionofinformation
2
EvaluationofInformation
3
PostPurchasingBehaviour
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PurchasingDecision
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SYSTEM 1 DECISIONS VS SYSTEM 2 DECISIONS
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System2System1System2istheonlyonethatcanfollowrules, compareobjectsonseveralattributes,andmakedeliberatechoicesbetweenoptions.
System1detectssimple relations(“theyareallalike,”“thesonismuchtallerthanthefather”)andexcelsatintegratinginformation aboutonething,butitdoesnot dealwithmultiple distincttopicsatonce,norisitadeptatatusingpurelystatisticalinformation.
…aneedfororderandstructure,apassionfordetail&combiningintuitionwithknowledgemakesSystem2veryeffective
IT IS NOT SYSTEM 1 vs SYSTEM 2 : RATHER SYSTEM 1 & 2 INTEGRATED – CONCEPT OF FLOW
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System1System2
The Hybrid Model of Experiencing & Remembering
TransactionalCustomer Feedback
Reported CustomerSatisfaction
r = 0.40
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Near-real time recall of
ExperienceOperational
Memory of experience = Satisfaction
Strategic
! 3!
feedback programs (see Hayes (2009) for details of the study methodology). A total of 277 customer feedback professionals from midsize to large companies completed a survey about their company’s customer feedback program. The respondents indicated whether their company adopts 28 specific business practices related to their customer feedback program (e.g., senior executive is champion of customer feedback program; Web-based surveys are used to collect customer feedback). Additionally, respondents were asked to provide an estimate of their company’s customer loyalty ranking within their industry; this question was used to segment customers into loyalty leaders (companies with a loyalty ranking of 70% or higher) and loyalty laggards (companies with a loyalty ranking below 70%).
Table 1. Adoption Rates of Customer Feedback Program Practices of Loyalty Leaders and Loyalty Laggards
The survey results revealed real differences between loyalty leaders and loyalty laggards in their customer feedback programs (See Table 1). There were statistically significant differences in adoption rates between loyalty leaders and loyalty laggards across many of the business practices. Loyalty leading companies were more likely to adopt specific practices compared to their loyalty lagging counterparts, especially in areas related to strategy/governance, integration and applied research. In upcoming posts, I will explore each component of the customer feedback program and present best practices for each.
! 2!
Components of Customer Feedback Programs Before I talk about how to best structure a customer feedback program, let us take a 30,000-ft view of an enterprise-wide customer feedback program. A customer feedback program involves more than simply surveying customers. To be useful, a customer feedback program must successfully manage many moving parts of the program, each impacting the effectiveness of the overall program. The elements of customer feedback programs can be grouped into six major areas or components. These components are: Strategy, Governance, Business Process Integration, Method, Reporting, and Applied Research. Figure 1 below represents the components of customer feedback programs.
Figure 1. Elements of a Customer Feedback Program Strategy involves the executive-level actions that set the overarching guidelines around the company’s mission and vision regarding the company objectives. Governance deals with the organization’s policies surrounding the customer feedback program. Business Process Integration deals with the extent to which the customer feedback program is integrated into the daily business processes. Method deals with the way in which customer feedback data are collected. Reporting is involved in the way in which customer feedback data are summarized and disseminated throughout the company. Finally, Applied Research focuses on the extent to which companies gain additional operational and business insight through systematic research using their customer feedback data. Best Practices Study and General Findings While many companies have a formal customer feedback program, only some of them experience improvements in customer loyalty while the other companies find that their customer loyalty remains flat. To understand why this difference occurs, I conducted a study to understand how loyalty leading companies, compared to loyalty lagging companies, structure their customer
Best Practices in Customer Feedback Programs –Bob Hayes
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Source:20BestPracticesinCustomerFeedbackPrograms:BuildingaCustomer-CentricCompany– BobHayes(BusinessoverBroadwayBlog- http://www.businessoverbroadway.com
Top Customer experience trends
CX Training & Engagement
Mobile formulationsVoice of Customer
Renovations
Corporate Culture Conversations
Source: Temkin Group 2015
Customer Experience Trends – The SA CX-Industry
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PurposefulLeadership
CompellingBrandValues
EmployeeEngagement
CustomerConnectedness
Doyour leadersoperateconsistently withaclear,wellarticulatedsetofvalues?
Areyourbrandattributes driving decisions abouthowyou treatcustomers?
Areyouremployees fully committed tothegoalsofyour organization?
Iscustomer feedback&insight integratedthroughout yourorganization?
Source: Temkin Group – June 2015
Corporate Culture Conversations
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“Therootofourproblemisnotthatwe’reinaGreatRecessionoraGreatStagnation,butratherthatweareintheearlythroesofaGreatRestructuring.Ourtechnologiesareracingahead,butour
skillsandorganizations arelaggingbehind.”-ErikBrynjolfsson /AndrewMcAfee/RaceAgainstTheMachine
“Theilliterateofthe21stCenturywillnotbethosewhocannotreadorwrite,butthosewhocannotlearn,unlearn,andrelearn.”-
AlvinToffler
CX Training & Engagement
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70%
41%
37%
30%
22%
Soliciting customer feedback
Sharing feedbackacross theorganization
Developing actionable insightsfromthedata
Making changes tothebusinessbasedon theinsights
Reviewing implications thatcutacrossorganizations
Source: State of VoC Programs 2014 – Temkin Group
Voice of Customer Renovations
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Success Stories
ImagePlaceholderii70%
OftopCXcompaniesuse
CXFeedbackforStrategicdecisions
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A Step-by-Step Plan to Improve CMO-COO Collaboration –HBR Article by David C. Edelman, Dorian Stone & Harald Fanderl (HBR Jan 2015)
1. Develop a shared vocabulary and shared metrics
2. Build a structure for collaboration
3. Work together on a few customer journeys that matter
4. See the customer journey all the way through
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https://hbr.org/2015/01/a-step-by-step-plan-to-improve-cmo-coo-collaboration
CMO
COO
Putting Customer Experience in Perspective of Brand & Future Lifetime value of customers
Adaptedfrom:BitnerM-J,“Buildingservicerelationships:It'sallaboutpromises”,JournaloftheAcademyofMarketingScience,Vol23(4),1995&KirkbyJ,WecksellJ,JanowskiW&BergT,“TheValueofCustomerExperienceManagement”,StrategicAnalysisReport,March2003
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CXO
CMOCMO/CXO/COO
Porter & Deloitte agree on differentiation as key strategic option for modern business & only one cost leader can survive…
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PORTER - Three Generic Strategies:
• Differentiation
• Cost Leadership
• Focus
Raynor & Ahmed (Deloitte) – Three Rules:
• Better before Cheaper
• Revenue before Cost
• No other rules …
In the 2016 Customer Experience Landscape – do we believe that customer experience focus will deliver the
promised business outcomes?
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LaggingCompanies
Leading-edgeCompanies
TyingCustomerExperiencetoBusinessOutcomesisdifficultforeveryone
Source:HarvardBusinessReviewAnalyticServices2014, SponsoredbySASInstitute
19%
34%
38%
ExtremelyDifficult
VeryDifficult
Somewhatdifficult
10%
24%
49%
ExtremelyDifficult
VeryDifficult
Somewhatdifficult
Source:Gupta,S.&Zeithaml,V.,2006.CustomerMetricsandTheirImpactonFinancialPerformance.MarketingScience,25(6),pp.718–739.
2.37%
+1%ROICustomer
Satisfaction-1%
-5.08%
The satisfaction to profit link is non-linear
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CUSTOMEREXPERIENCEINSOUTHAFRICAFouryearsofTrackingSAcsi
Introduction
Integrated Measurement Framework
Strategic/Visionary
Operational/Realtime
NationalandInternationalBenchmark
ProprietaryStrategicMeasures
Operational/TransactionalFeedback
IntegratedFramew
ork
CopyrightConsulta 2016
Market Value Added - Top & Bottom ACSI
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Source:FCIGroup.,2007b.TheAmericanCustomerSatisfactionIndex(ACSI) Technology:AMethodologicalPrimer.pp.1–37.
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Top25%ACSIBottom25%ACSI
SAcsi Model
Complaints
IncidenceHandling
Loyalty
RetentionPriceSensitivity
PerceivedValueIndex
PricevsQualityQualityvsPrice
PerceivedQualityIndex
CustomerExpectations
Index
OverallQualityMeetingNeeds
Reliability
OverallQualityMeetingNeeds
Reliability
SAcsiSatisfactionExpectationsComp.toIdeal
TCF Index (7 pillars)
Net Promoter Score & Consumption Appetite
Additional Included Metrics
National Sentiment Index
Statistics to Date
TOTALSAMPLE=183180
Brandsincluded=238
Industriesincluded=35
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Three Year SAcsi Trend = Flat
76.40 75.80 76.91
SAcsi 2013 SAcsi 2014 SAcsi 2015
76.7 75.8 74.3
ACSI 2013 ACSI 2014 ACSI 2015
*SAcsiBase=Similarindustriesover3years
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Perceived Value – Down over 3 years
60
80
100
Avg:75.2
Min:60.6
Avg:77.1
Max:88.7
-1.9
60
80
100
2013 2015
Min:60.7
Max:85.9
-2.9
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Complaints – The Focus of CX industry
2015
Min:3.8%
Max:49.0%Max:
46.6%
Min:4.7%
60% 0%
2013
30%
60% 0%
30%
-2.4%
+4.1%
<10%
Avg:17.1%
Avg:13.0%
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The1st Wavefocusseemstopay-offsinceweseeCustomerComplaintsdown&gettingclosertotheworldclassbenchmarkof10%– although somecompanies/industries stillstruggle (increaseinmaxcomplaints)
Complaints Handling – CX Industry getting a handle on it
2015
Max:74.6%
Min:4.1%
0% 100%
2013Avg:55.8%
+8.9%
Avg:55.1%
Min:29%
0% 100%
Max:83.5%
50%50%
+24.9%
>50%
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The1st Wavefocusseemstopay-offsinceweseeComplaintsHandlingataboveworldclass(>50%)onaverage.Bothonthebottomandtopendofcomplaintshandling weseesignificantimprovements (+24.9%&+8.9%)
BUT … we do not get the Loyalty as a result (yet)
60
80
100
Avg:72.5
Min:58.8
Avg:72.1
Max:82.4
60
80
100
2013 2015
Min:56.5
Max:82.3
-2.3
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…butloyaltyover3yearsstillflat&evenseedeteoriationonthebottomend(minimum downby2.3points)
… and tracking NPS is not helping either (we are more confused)
20152013
0%
Avg:31.1%Min:-11.7%
-100%
Max:60.1%Max:
71.1%
Min:-19.9%
0%
Avg:28.8%
+100%
-14%
-100% +100%
-11%
-2.3%
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…NPStrendmorevolatile– butalsoindicatingtheinabilitytotranslateindustrywideCXeffortsincomplaintshandling tobetterloyalty.
Sustainable Key Take outs
• More comprehensive model for CX-measurement – break the feedback-mentality
• Journey to Customer Centricity will take 3-5 years (of consistent clear strategy) – break the start-and-stop-and-start mentality
• We need more evangelist CX professionals by ”educating” business about the true scope of CX implementation – break the silver bullet 6-months project mentality
• Business needs to ”walk-the-talk” – break the PR-Ra-ra podium lip service mentality
• More CCO’/CXO’s that will represent the customer at C-level –break the “we focus on the customer, but prefer profit” mentality
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Exciting Industry News
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Coming toSouthAfricaJune2016
nextarrival…
TIXCI- CustomerExperienceStandard(workinprogress)
The Customer is King
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The Team
StephanduPlessis
T:+27126656200M:+27725385362
Prof.AdréSchreuder
Founder&ChairSAcsiCEOConsulta
[email protected]:+27126656200M:+27824521666