Customer Experience Presentation

“Customer Experience…..  Mapping and Measuring”

Prepared for CCA Seminar 27th October 2005

Bramley Orchard, Bryne Lane, Padbury Bucks, MK18 2AL Tel: +44(0) 128 081 5117 Fax: +44(0) 128 081 5117 Mobile: +44 (0) 7958 794 701 Email: [email protected]

Retention Through Experience •

As the cost of acquiring customers rises organisations are  investing in retention Index of Costs                                                                        

Retention Winback Acquisition

[source QCI/WPP customer management research 2003]

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Key Retention Drivers – Brand – Proposition – Contact

•

100 140 240

Traditional Marketing Elements Service

Experience

Customer Lifecycles suggest increasing customer  interactions/contacts and more demanding customers

– National Consumer Council reported an increase in complaints  from consumers in 2003 of 24% over the past 5 years

© Marketing Inside Ltd 2004

Service Impact •

Customer Experience through contact influences customer’s  perception of the brand and is a key component of brand  loyalty and can often override traditional/other marketing  communication, for example recent outsourcing of customer  service…… – Indian Call Centres “you can’t subcontract your relationships with customers” – Richard Pym CEO Alliance & Leicester

© Marketing Inside Ltd 2004

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Customer Experience Impacts on Retention

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The Customer’s experience is an area where the successful  businesses are very good in this respect…and the not so  successful are very poor (First Direct Vs PC World)

“A Good Experience is based on strong relationships between  dialogue, satisfaction and these drive customer retention”     – Maggie Evans marketing director iSKY Europe

Most companies have fundamental  gaps in their customer lifecycle model Only 2% have regular winback programmes

Although 52% look at the quantity of customers acquired, only 8% look at the quality of customers acquired.

63% do not know how many high value customers they lose 30% follow-up a complaint to check on satisfactory resolution Only 13% of senior management have regular contact with customers

In more than 90% of companies, Staff who are responsible for talking to customers could not articulate why customers should buy from them 47% do not have any sales lead distribution agreements Only 35% bother to thank new customers

Only 4% of companies have an enterprise-wide customer information plan

In most markets, just 1% of customers are worth about 30% of total margin, 11% drive contact strategies via but 58% do not have any a database 41% do not record customer contact special development channel preferences, let alone contact plans for these key customers customers through their preferred medium. Source: QCI/WPP © MarketingCustomer Inside Ltd 2004 Management Research project 2003

Measurement and Improvement •

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Key question is how do you know if you’re delivering a good  experience (customer satisfaction scores?) and how do you  know where to improve? Organisations tend to measure Experience by measuring  Customer Satisfaction – Only measures single activity in isolation – Ignores the context

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Organisations therefore traditionally tend to look for  improvement in this area in one of two ways

– Significant investment in CRM IT systems (EdF; ESB; Britannic) – Re­engineer their customer service processes (ESB; National  Express)

© Marketing Inside Ltd 2004

Customer Experience Influencing  Components • •

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Is there delivery of a consistent experience Brand Values Touchpoints – customers can interact with a company in  increasing ways and how do they impact cost? Some  channels are more expensive than others Organisational Priority – which experiences are more  important than others and what is the organisational driver? – Segmentation? – Revenue? – Cost? (activity based)

© Marketing Inside Ltd 2004

Customer Experience Steps Step I • Define Experience Priorities – –

opportunities (e.g. high value customer segments) high impact/risk (e.g. sales and processing for new customers)

– –

Implement Plans to improve and measure effect using model Use QCI Cmat Benchmarking to develop long term KPI’s and monitor

Understand/Define Brand Values • Agree Customer Touchpoints • Map Customer Experience at Touchpoints using model • Identify poor experience areas and examine Cost Benefit at those  points Step II • Look for quick wins (non System/IT) Step III • Improvements •

© Marketing Inside Ltd 2004

Customer Experience Approach •

Developed simple tool

– Map Touch Points which generate “The Experience” – Attach values to Touch Points “Experience Score” – Weight these values by importance the customer places on a  given part of the experience

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2 part approach

– Map and Measure experience with front line staff who represent  Touchpoints (internally) – Map and Measure experience with customers who have recently  passed through experience

•

© Marketing Inside Ltd 2004

Workshop approach taken internally for staff and quantitive  research (telephone/interview) for customers

An Example – Electricity Company

Bramley Orchard, Bryne Lane, Padbury Bucks, MK18 2AL Tel: +44(0) 128 081 5117 Fax: +44(0) 128 081 5117 Mobile: +44 (0) 7958 794 701 Email: [email protected]

Background •

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© Marketing Inside Ltd 2004

This company is approaching a fully competitive electricity  market in 2005 (some business customers can choose  supplier currently) As the monopoly supplier overt retention in the short term is  not possible, but building a strong position for the future is  recognised as important Segmentation has identified valuable customers which are  desirable to retain and Customer Experience was recognised  as a key driver CRM is so large a subject that many people didn’t know  where to start in terms of Customer Experience and we  discovered there was no simple tool to measure Customer  Experience

Background • •

• • •

A new approach was required There were a number of projects in customer services  amending processes and systems and a significant  investment by IT in CRM systems (SAP with a CRM module) BUT Process work was almost ad hoc (aimed at fixing broken  processes) and Implementation of SAP is problematical Key Question ­ how to leverage longer term benefits from  investment in Customer Experience to drive better Retention? Operational Business was charged with delivering these  benefits

– Marketing (scope possibilities) – Customer Services; Retail Shops; Metering (delivery and change  management)

© Marketing Inside Ltd 2004

Customer Experience Steps •

Agreed Brand Values 

• •

Agree Customer Touchpoints and the brand values to be  communicated at those points Define Experience Priorities

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Map Customer Experience (for home movers) using model

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Identify poor experience areas Look for quick wins (non IT) Implement Plans to improve and measure effect using model

• •

© Marketing Inside Ltd 2004

– “brand iceberg” – reflected in brand(s)

– high impact/risk (e.g. billing and processing)  chose this one – opportunities (e.g. home movers) – Internally (own front line staff) – Externally (customers who have recently experienced)

Customer Experience ­  Measurement • •

Objective was to examine the end to end experience for  residential home movers and called it “Crate Expectations” Used simple tool – Attaches values to customer experience “Experience Score” – Weights these values by importance the customer places on  each aspect of the experience relative to each other

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2 part approach

– Map experience with front line call centre staff (internally) – Map experience with customers who had recently passed  through home moving (externally)

•

© Marketing Inside Ltd 2004

Workshop approach taken internally for staff and quantitive  research (telephone) for customers

Home Movers “Crate Expectations” •

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© Marketing Inside Ltd 2004

Objective: review and improve the residential customer  experience for home movers setting a platform for retention  and in the longer term winning opportunities to acquire  customers (once the market opens) 180,000 moves each year (400,000 inbound calls) Reducing calls by 20% reduces cost by €30k Losses predicted at 20% Year 1 = 36,000. Reduced losses to  10% = 18,000. Estimated incremental enterprise value  (retention:18k customers at €40 = €720k) 3 customer experience scenarios identified e.g. existing  customer moving to existing supplied property

Home Movers Experience – staff view Ref

C001

Process - Customer

C002

L001

L003

L004

C003

L005

Handle call Handle call Produce Answer call (o/bound (i/bound Welcome (opening) property) property) Letter

0 3 1.7 0

0 1 1.9 0

L006

C004

Contact with final reading

Obtain contact details Contact - Tel

Process - Internal

Experience Score Importance assigned by customer Weighting by Importance Weighted Score

L002

4 3 1.7 6.8

-3 2 1.8 -5.4

-2 7 1.3 -2.6

-3

-3.1

Receipt of Receipt of Welcome Final Bill Letter Handle call

-3 7 1.3 -3.9

C005

Bill production

0 4 1.6 0

0

0 5 1.5 0

0

-5 8 1.2 -6

Weighting Calculator Importance Score Corresponding Weighting

© Marketing Inside Ltd 2004

1 1.9

2 1.8

3 1.7

4 1.6

5 1.5

6 1.4

7 1.3

8 1.2

9 1.1

10 1

-1.09

-1.29

Home Movers Experience – customer view Ref

C001

Process - Customer

C002

L001

L002

L003

L004

C003

L005

C004

Contact with final reading

Obtain contact details Contact - Tel Handle call Handle call Produce Answer call (o/bound (i/bound Welcome (opening) property) property) Letter

Process - Internal

L006

C005

Receipt of Receipt of Welcome Final Bill Letter Handle call

Bill production Customer Experience

Experience Score Importance assigned by customer Weighting by Importance Weighted Score

-2 2 1.8 -3.6

0 1 1.9 0

3 3 1.7 5.1

-4 2 1.8 -7.2

1 8 1.2 1.2

-3

-4 3 1.7 -6.8

-3.1

0 4 1.6 0

0

-1 3 1.7 -1.7

0

-5 8 1.2 -6

Weighting Calculator Importance Score Corresponding Weighting

© Marketing Inside Ltd 2004

1 1.9

2 1.8

3 1.7

4 1.6

5 1.5

6 1.4

7 1.3

8 1.2

9 1.1

10 1

-1.36

-2.01

Home Movers Experience – compared Ref

C001

Process - Customer

Process - Internal

C002

L001

L003

L004

C003

L005

L006

Contact with final reading

Obtain contact details Contact - Tel Handle call Handle call Produce Answer call (o/bound (i/bound Welcome (opening) property) property) Letter

Experience Score - Staff

© Marketing Inside Ltd 2004

L002

Weighted Score - Staff

C004

C005

Receipt of Receipt of Welcome Final Bill Letter Handle call

Experience Score - Customer

Bill production

Weighted Score - Customer

“Crate Expectations” ­  Conclusions • • • •

Customer perception of experience different to staff view Internal process not being followed, so experience being  mapped is on different basis Improvements required are centred on communications  (support material and calls and are largely not IT related) 4 Quick Wins (not IT dependant) – Call backs in all scenarios and by same CSA – Create check list for the CSA's to use during the calls e.g.  prompt – Home Movers Pack/Booklet (tips;do’s and don’ts;contact  numbers) and Welcome letter re­write – Training for Customer Services •

© Marketing Inside Ltd 2004

E.g. Set expectations on when welcome letter will arrive

“Crate Expectations” – early implementation •

Call Backs by CSA’s

– 18% of all inbound calling in contact centres related to  home moving – In first 3 months of implementation calls reduced by 30%  (stable state = 12% of all inbound calls now relate to home  movers). Estimated cost reduction €48k

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Customer Service Training

– Total Customer Experience Weighted Score (average)  moved from ­2.01 to ­1.8

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Customer Satisfaction

– Re­visited customer satisfaction tracking and re­ aligned/added some questions to track this  activity/experience

© Marketing Inside Ltd 2004

An Example – Life Assurance (early work)

Bramley Orchard, Bryne Lane, Padbury Bucks, MK18 2AL Tel: +44(0) 128 081 5117 Fax: +44(0) 128 081 5117 Mobile: +44 (0) 7958 794 701 Email: [email protected]

Background • • • • •

© Marketing Inside Ltd 2004

A portfolio of mainly Life Assurance customers in excess of 1  million As acquisition ceased almost 3 yrs ago, this base is slowly  being eroded Retention has taken on a new importance Policies are purchased and then forgotten with little contact  with the customer and little cross sell/up sell Main contact during the life of the policy is with the contact  centre with requests for surrender values

Customer Experience Steps • •

Agree Customer Touchpoints Define Experience Priorities

– Surrender queries (active customers) – Aimed at maximum retention (winback of sorts)

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Map Customer Experience (for priorities) using model

– Internally (own front line staff) – completed as a test – Externally (customers who have experienced) – not yet started

• • •

© Marketing Inside Ltd 2004

Identify poor experience areas Look for quick wins (non IT) Implement Plans to improve and measure effect using model

Surrender Enquiries – a priority • • • • •

© Marketing Inside Ltd 2004

Objective: improve the customer experience for surrender  queries increasing retention Current attrition is 5% p.a. Estimated incremental enterprise value (retention: x  customers at £y =£) Map customer Experience both internally and externally 3 customer scenarios identified e.g. have received an annual  policy review

Surrender Queries – staff view Ref

B001

C001

C003 B002 Handle request for Receipt of Answer call surrender review letter (opening) value

Process - Customer

Process - Internal

C002

Handle request for Answer call surrender (opening) value

Automatically generate review letter

C004

C005

C006

C007

Receipt of Answer value call Handle confirmation (opening) query

Generate Surrender value confirmation

B003

C008

Send back surrender

Answer call Handle (opening) query

receipt of monies

Process surrender Customer Experience

Experience Score - Staff

Weighted Score - Staff

Staff View Experience Score Importance assigned by customer Weighting by Importance Weighted Score

0 0 0 0

-3 2 1.8 -5.4

-1 4 1.6 -1.6

2 5 1.5 3

-1 0 0 0

-4 6 1.4 -3.1

-4 8 1.2 -4.8

0 3 1.7 0

0 9 1.1 0

2 0 0 3.4

4 3 1.7 6.8

Weighting Calculator Importance Score Corresponding Weighting © Marketing Inside Ltd 2004

1 1.9

2 1.8

3 1.7

4 1.6

5 1.5

6 1.4

7 1.3

8 1.2

9 1.1

10 1

Surrender Enquiries – early thoughts • •

Making it easy for customer to leave is seen as good  customer experience internally ! Customer receives cash at end of experience is viewed as a  positive finish point for customer

– Issue is lost relationship, no winback – As there is no acquisition, any brand value cannot be leveraged  in longer term

•

© Marketing Inside Ltd 2004

Support communications is unexpected, confusing and  regulatory based

An Example – Train Franchise

Bramley Orchard, Bryne Lane, Padbury Bucks, MK18 2AL Tel: +44(0) 128 081 5117 Fax: +44(0) 128 081 5117 Mobile: +44 (0) 7958 794 701 Email: [email protected]

Objectives •

Phase I – Existing Customer Data

– Examine current customer satisfaction position, in particular  current data (SRA bi­annual reports and CSS quarterly surveys)  and methods of survey – Where possible aligning customer experience factors  (touchpoints) in each – Generate messaging template (internal comms and media) – Re­examine role of SRA (regulator) survey and CSS (internal)  survey

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Phase II – Customer Experience Measure

– Look at end to end experience and develop scoring map •

Score with internal staff as a comparison (it will be different from  customers)

– Identify key drivers of customer experience – Calculate cost impact – Focus on those factors which are most important to customer  and there is under performance on © Marketing Inside Ltd 2004

PR O VID IN

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OV ER AL L

C2C Customer Vs Staff Experience Scores

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© Marketing Inside Ltd 2004

Customers Experience Score

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Staff Experience Score Staff Weighted Score by Importance

Phase II ­ Key Findings •

Staff Score the experience lower than customers

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Commuters accept Punctuality is an issue within the  experience, but is not the most important factor

– Rail staff tend to have a pessimistic view – In terms of what they believe to be important to customers, their  view is very different to customers

– Punctuality has become a hygiene factor – Customers are more concerned about provision of information

© Marketing Inside Ltd 2004

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Ease of Access to stations and trains is important

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Cost of focussing on Punctuality does not provide cost benefit

– Disabled customers are an important group – Opportunity for a “Priority Customer” approach

– Cost of additional staff balanced by improvement in experience  score – Better information provision and leveraging technology has a  significant impact on experience score

Summary • • •

Customer Experience is a powerful driver of retention Measuring customer satisfaction is misleading The Approach demonstrated – – – – –

© Marketing Inside Ltd 2004

can be applied to any organisation/market Is simple Will deliver quick wins Is not costly e.g. Electricity Co. total cost was £17k Ongoing benchmarking will deliver ongoing benefits