organization’s readiness to deliver on customer experience

ORGANIZATION’S READINESS TO DELIVER ON CUSTOMER EXPERIENCE Richard Cramer Björn Bierhaalder Deva Rangarajan

© Vlerick Business School

CONTENTS

2

1.  Background of the survey

2.  Survey results

•  Perceived Importance vs. Perceived Performance

•  Perceptions of C-level vs. Perceptions of Managers

•  Perceptions of B2B vs. Perceptions of B2B + B2C

•  Small & Midsized companies vs. Larger Privately Owned Companies & Stock Listed Corporations

3.  Next steps

BACKGROUND


INTRODUCTION

4

We believe that the future of service organizations will be more customer centric. Most service providers have the ambition to become truly customer centric, but day-to-day reality shows that fulfilling this ambition may not be as straightforward as expected. We notice a gap between ambition and current reality.

A lot of research has been done on customer experience, but not on organization’s readiness to deliver the customer experience to customers. To move from promise to delivery, being ready as an organization may be crucial.

Customer centricity starts with truly understanding what your customers really want. This implies for us, too. Vlerick Business School and MCH Consultancy have co-created a research to understand the perceptions of decision makers and senior managers on the current state of customer centricity among service providers in the Netherlands.

During May and June 2014 we have conducted an online survey with over 150 respondents in the Netherlands. The results of this survey give valuable insights in the changes required towards being customer centric as an organization. This quantitative research is the first step on our journey to understand what it takes to become a true customer centric service provider that consistently delivers its customer experience.

Richard Cramer

Björn Bierhaalder

Deva Rangarajan


BACKGROUND OF THE RESPONDENTS FROM INDUSTRY AND TYPE OF ORGANIZATION

5

38,00%

25,00% 4,00%

29,00% SME

Larger privately owned

Privately owned

Stock-market listed corporation

3,30% 5,30%

7,90% 1,30%

21,70%

4,60%

20,40%

14,50%

10,60%

Consumer goods

Industry and manufacturing

ICT-Telecom

Medical and pharmaceutical

Services

Banking

Insurance

Financial services

Other

During May and June 2014 we have conducted an online survey with over 150 respondents in the Netherlands. Top industries among respondents are ‘Services’, ‘Insurance’ and ‘Financial Services’. Almost 40% of the respondents work in the financial industries (Banking, Insurance, Financial Services). 54% of the respondents work for a large privately owned or stock listed corporation. Largest group of respondents works for an SME.

IMPORTANCE

PERFORMANCE

PERCEIVED

VERSUS PERCEIVED


OVERVIEW OF SCORES FROM SURVEY

7

0

1

2

3

4

5

Importance of statement Performance on statement

3,97

3,22

Variance Importance

Importance

5

4

3

2

1

Survey results show a negative correlation between perceived importance and the variance of all statements. It may be a conclusion that there is a common understanding among respondents of what is most important for customer centric organizations. Also, when scores on perceived importance decrease, differences in perceptions increase.

Survey results show that the average perceived importance has higher scores than perceived performance among respondents. It may be a conclusion that on average respondents rate their organizations as less customer centric than they would like their organizations to be.

Variance on scores for Importance Average scores on 5-point scale


BIGGEST GAPS BETWEEN IMPORTANCE AND PERFORMANCE ON CUSTOMER RELATED STATEMENTS

8

Statements with the biggest gaps between perceived importance and perceived performance:

1.  We have a good CRM tool to help our customer facing employees be more productive

2.  We have a clear understanding of the latent needs of our customers

3.  We use the findings of the customer satisfaction results to better manage the relationship with our third-party installers/value-added resellers

4.  We have a clear, well defined Go-to-Market strategy for our markets

5.  Cross departmental task forces are used frequently to discuss customer issues and solutions

0 0,5 1 1,5

Gap

Gap


GENERAL FINDINGS BASED ON 2 DIMENSIONS

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•  Understand latent needs of customers •  Use customer insights to improve our organization •  Have a good CRM tool •  Use the customer satisfaction results to better

manage relationship with third-party installers •  Have value propositions for every customer segment •  Be encouraged to create social ties •  Align internal business processes to meet customer

needs

•  Share customer related issues/ information with colleagues from other departments

•  Cross departmental task forces to discuss customer issues and solutions

•  Work together with partners to ensure superior customer value creation

•  Work together with personnel from other departments to solve customer issues

•  Have adequate knowledge about the jobs customers want to get done

•  Constantly measuring customer satisfaction •  Frequent, formal collaborative meetings between

different departments to discuss customer issues

•  Have clear, well defined Go-to-Market strategies •  Efficiency relates directly to being customer centric •  Having common customer related KPIs shared

between internal departments •  Organization design based on customer teams •  Clear distinction between customer responsibility

and process responsibility •  Active rotation of personnel across functionalities/

departments

•  Frequent, formal collaborative meetings with partners to support customer value creation

•  Focus on well defined customer segments with specific customer needs

•  Customer contact at all levels of our organization •  Staff members selected for relational capabilities

High importance

Low importance

Low

perf

orm

an

ce

Hig

h p

erf

orm

an

ce


GENERAL FINDINGS BASED ON 2 DIMENSIONS

10

•  Understand latent needs of customers •  Use customer insights to improve our organization •  Have a good CRM tool •  Use the customer satisfaction results to better

manage relationship with third-party installers •  Have value propositions for every customer segment •  Be encouraged to create social ties across •  Align internal business processes to meet customer

needs






•  Constantly measuring customer satisfaction •  Frequent, formal collaborative meetings between

different departments to discuss customer issues

•  Have clear, well defined Go-to-Market strategies •  Efficiency relates directly to being customer centric •  Having common customer related KPIs shared

between internal departments •  Organization design based on customer teams •  Clear distinction between customer responsibility

and process responsibility •  Active rotation of personnel across functionalities/

departments



•  Customer contact at all levels of our organization •  Staff members selected for relational capabilities

High importance

Low importance

Low

perf

orm

an

ce

Hig

h p

erf

orm

an

ce

Key finding 2

Internal collaboration on client issues is being perceived as important and the general

perception of performance is high

Key finding 1

Customer insights and knowledge about customers seems to be less than respondents

would like it to be

Key finding 4

Formal procedures to organize customer centricity are perceived as less important,

but general perception of current performance is good

Key finding 3

Being organized around customer centric structures and processes is perceived as low

importance and low performance


•  Understand latent needs of customers •  Use customer insights to improve our

organization •  Have a good CRM tool •  Use the customer satisfaction results to better

manage relationship with third-party installers •  Have value propositions for every customer

segment •  Be encouraged to create social ties across •  Align internal business processes to meet

customer needs






•  Constantly measuring customer satisfaction •  Frequent, formal collaborative meetings

between different departments to discuss customer issues

•  Have clear, well defined Go-to-Market strategies

•  Efficiency relates directly to being customer centric

•  Having common customer related KPIs shared between internal departments

•  Organization design based on customer teams •  Clear distinction between customer

responsibility and process responsibility •  Active rotation of personnel across

functionalities/departments



•  Customer contact at all levels of our organization •  Staff members selected for relational

capabilities

High importance

Low importance

Low

per

form

ance

Hig

h pe

rfor

man

ce

Key finding 2

Internal collaboration on client issues is being perceived as important and the

general perception of performance is high

Key finding 1

Customer insights and knowledge about customers seems to be less than respondents would like it to be

Key finding 4



Key finding 3

Being organized around customer centric structures and processes is perceived as

low importance and low performance





customer needs

















capabilities

High importance

Low importance

Low

per

form

ance

Hig

h pe

rfor

man

ce

Key finding 2



Key finding 1


Key finding 4



Key finding 3







customer needs

















capabilities

High importance

Low importance

Low

per

form

ance

Hig

h pe

rfor

man

ce

Key finding 2



Key finding 1


Key finding 4



Key finding 3







customer needs

















capabilities

High importance

Low importance

Low

per

form

ance

Hig

h pe

rfor

man

ce

Key finding 2



Key finding 1


Key finding 4



Key finding 3



DISCUSSION BASED ON GENERAL FINDINGS

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Key Finding 1 vs. Key Finding 2 Internal collaboration about client issues is important and seems to go well. Knowledge about customers might not be as adequate as wanted. To what extend are collaborations really helpful to get a better understanding of the customer?

Key Finding 2 vs. Key Finding 4 Internal collaboration about client issues is important and seems to go well. Formal procedures are in place, although not perceived as important. To what extend are formal procedures really helpful to deliver the customer experience?

Key Finding 2 vs. Key Finding 3 Internal collaboration about client issues is important and seems to go well. Customer centric structures and processes are perceived less important and not well executed. To what extend do customer centric processes and structures help to become a customer centric organization?

Key Finding 2 vs. Key Finding 3 & 4 Internal collaboration about client issues is important and seems to go well. Customer centric structures, processes and formal procedures are perceived less important. To what extend is being a customer centric organization the result of defining the formal organization?

C-LEVEL

MANAGERS VERSUS

PERCEPTIONS OF

PERCEPTIONS OF


DIFFERENT PERSPECTIVES AND PERCEPTIONS BETWEEN C-LEVEL AND MANAGEMENT

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Chief Executive Officer Business Unit Manager

Main area of concern Understand customers Improve collaboration

Management style Formal structures Hands on mentality

Average on importance 3.68 4.06

Average on performance 3.06 3.34

•  The survey results show a difference in responses from participants at C-level and participants at management levels. On average, respondents at C-level gave lower scores for both ‘Importance’ and ‘Performance’ than managers.

•  The difference in perceptions about what is important with regards to customer centricity (0.38) is bigger than the difference in perceptions about current performance in delivering the customers experience (0.28).

•  Both groups score lower on ‘performance’ than on ‘importance’. To what extend do CEOs and managers have a shared perception that what is needed is not fully aligned with actual performance?

•  The gap between ‘Importance’ and ‘Performance’ is bigger for managers (0.72) than for C-level (0.62). To what extend do managers perceive a bigger gap between what is needed and what is actually done?


THE BIGGEST GAPS BETWEEN PERCEIVED IMPORTANCE AND PERFORMANCE

IMPORTANCE


2.  There is a willingness amongst the personnel to share customer related issues/ information with their colleagues from other departments/business units

3.  There is customer contact at all levels of our organization

4.   Cross departmental task forces are used frequently to discuss customer issues and solutions

5.  There is a willingness to work together with partners (suppliers, intermediary, broker, branch office, even customers) to ensure superior customer value creation

PERFORMANCE

1.  We constantly measure the level of customer satisfaction with our product/service offerings


3.  We use the findings of the customer satisfaction results to better manage the relationship with our third-party installers/value-added resellers

4.  There is customer contact at all levels of our organization

5.  Our organization design is based on customer teams

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Statements with the biggest gap between perceptions of managers and CEOs, where managers gave higher scores than CEO’s

B2B B2B+B2C

VERSUS

COMPANIES


DIFFERENT PERSPECTIVES AND PERCEPTIONS BETWEEN B2B AND B2B+B2C

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B2B B2B+B2C Difference

Importance 3.77 4.13 -0.36

Performance 3.19 3.29 -0.1

Difference 0.58 0.84

•  The survey results show a difference in responses from participants from B2B vs. B2B+B2C organizations. On average, respondents from B2B organizations gave lower scores for both ‘Importance’ and ‘Performance’ than respondents from B2B+B2C organizations. To what extend is customer centricity more relevant in a consumer oriented environment?

•  The difference in perceptions about what is important with regard to customer centricity (0.36) is bigger than the difference in perceptions about current performance in delivering the customers experience (0.1).

•  Perceptions on performance seem to be more consistent than perceptions on importance. A possible explanation is the more objective measurement of performance.


0,51

0,56

0,57

0,61

0,66

0,68

0 0,2 0,4 0,6 0,8

well-defined customer segments

Well-defined go-to-market strategies

Measuring the level of customer satisfaction

Cross-departmental task forces

CRM

Efficiency in our organization relates to customer centricity

Average size of the gap on a 5 point scale

BIGGEST GAPS IN PERCEPTION OF WHAT IS IMPORTANT BETWEEN B2B AND B2B+B2C

1.   Efficiency in our organization relates directly to being more customer centric


3.   Cross departmental task forces are used frequently to discuss customer issues and solutions

4.  We constantly measure the level of customer satisfaction with our product/service offerings

5.  We have a clear, well defined Go-to-Market strategies for our

6.  We focus on well-defined customer segments with specific customer needs

17

SME LPOC & SLC

VERSUS

(LARGER PRIVATELY OWNED COMPANIES)

(STOCK LISTED CORPORATIONS)


DIFFERENT PERSPECTIVES AND PERCEPTIONS FOR DIFFERENT TYPES OF ORGANIZATIONS

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SME Large Privately Owned Stock Listed

Importance 3.87 4.16 4.00

Performance 3.14 3.20 3.34

Difference 0.73 0.96 0.66

•  The survey results show a difference in responses from participants from SME, Large Privately Owned and Stock Listed organizations. On average, respondents from SME organizations gave lower scores for both ‘Importance’ and ‘Performance’ than respondents from Large Privately Owned and Stock Listed organizations. Possible explanation: the need for formal customer centric policies increases when companies are larger?

•  Respondents from Stock Listed organizations perceive their performance on delivering customer experience higher than respondents from other organizations. To what extend are stock listed organizations better able to deliver customer experience?

•  The gap between perceived importance and perceived performance is smaller for Stock Listed organizations than for other organizations. To what extend are stock listed organizations better able to close the gap between knowing what needs to be done and execution?

NEXT STEPS


BETTER UNDERSTANDING OF ORGANIZATION READINESS FOR CUSTOMER CENTRICITY

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This quantitative research is the first step on our journey to understand what it takes to become a true customer centric service provider that consistently delivers its customer experience.

Based on our findings as presented in this report, we have identified subjects for further research. Also we have identified subjects that are interesting for further explanation and discussion with participants of this survey.

For this purpose we are organizing two meetings, in which we will have in depth discussions on the findings of this report. The meetings will be held on

•  September 18th, 2014 from 16:00h until 18:00h

•  October 23rd, 2014 from 16:00h until 18:00h

Location for both events is Postillion Hotel Dordrecht, Rijksstraatweg 30 in Dordrecht. If you like to participate, please inform us. Your attendance is much appreciated!

Thank you!

Björn Bierhaalder ([email protected])

Richard Cramer ([email protected])

Deva Rangarajan ([email protected])

THANK YOU!

[email protected] [email protected]

[email protected]