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Linking the Customer
Experience to Value
Joel Maynes and Alex RawsonMcKinsey & Company
2
The recording and slides for today’s presentation will be made available on cxweek.com along with other content and webinars from throughout the week
Please use the chat window to submit questions throughout the webinar – we will have time designated at the end for Q&A
Join the conversation on Twitter by tweeting @Qualtrics using #cxweek
Housekeeping
©2015 QUALTRICS LLC.
3
Joel MaynesAssociate Principal, McKinsey & Company
8+ Years of experience with McKinsey & company’s Los Angeles officeLeader of McKinsey’s Customer Personalization PracticeExpertise in “What Matters” customer experience analytics & personalization
Alex RawsonPrincipal, McKinsey & Company
11+ Years of experience with McKinsey & company’s Seattle officeLeader of McKinsey’s Customer Experience PracticeExpertise in broad Customer Experience & Front Line performance transformations
Introductions
4
With a strong link to value, tackling Customer Experience can deliver stacked wins
©2015 Q
UALTRICS LLC.
LOWER COST TO SERVE
15 to 20%
FUEL REVENUE GROWTHChurn, upsell, repurchase
10 to 15%
IMPROVE CUSTOMER SATISFACTION
20%
ENGAGE EMPLOYEES
20 to 30%
5
Getting the math right requires a structured & scientific approach to achieve three objectives
©2015 Q
UALTRICS LLC.
Build an explicit link to value1
Direct investments to where they will do the most good2
Design a road map with early successes to self-fund improvements3
6
Clarify what CE is actually worth and exactly how improvements will generate value
©2015 Q
UALTRICS LLC.
Reduce Cost to Serve
Reduce Churn Risk
Increase Referrals
$144$160$180
8.0%10.9%16.4%
0.15%0.12%0.10%Referrals
customer, %
Annual Churn Rate, %
Annual Care Cost, $
Business outcomes by Satisfaction Score
$>300M
Value of a 10 point CE improvement?
$100-200M
$50-100M
Example value levers“Neutrals”(7 to 8 score)
“Promoters”(9 to 10 score)
“Detractors”(0 to 6 score)
7
Customer-experience break points are not standard across industries
©2015 Q
UALTRICS LLC.
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Likelihood of business outcomes1
Willingness to recommend(WTR)
NPS breakpointsBanking Pay TV Health insurance
Retail banking: every point matters, moving someone from a 9 to 10 is meaningful
Health insurance: driving detractors to passives has more impact; moving passives to promoters has little impact
Pay TV: passives are 5 and 6, not the typical 7 and 8
8
End-to-end customer journeys, not individual touchpoints, are the unit to measure
©2015 Q
UALTRICS LLC.
Customer satisfaction
Willingness to Recommend
0.43 +36%0.58
0.47 +28%0.60
0.50 +19%0.59
-0.25
-0.33
+33%
Likelihood to stay/renew
Likelihood to cancel/churn
TouchpointsJourneys
9
Build a model of customer satisfaction that links perceived and operational data on each journeyJohnson Relative Weights Driver Model
Func
tiona
l Ser
vice
Prod
uct
& P
rice
Emoti
on/
Bran
d
100100% =
Driven by Quant research linked to data
▪ Start by rethinking the scope of existing surveys
▪ Expand your customer data set so that it links up with operational data, as well as input from employees and customers
▪ Base priorities for initiatives and opportunities on their importance to customers
▪ Understand the sub drivers within the most important journeys
▪ Focus on customer-experience issues with the highest payouts
Example journeys: ▪ Bring me onboard▪ Solve my problem ▪ Move my service▪ Pay my bill
Example journeys: ▪ Price and value▪ Programming & equipment
10
Supplement the model by looking at how consistently you perform on top journeys
©2015 Q
UALTRICS LLC.
Customer onboarding journey – first 100 days
Resear-ch offer-ings
Explain terms and condi-tions
Confir-mation email
Instal-lation
Consi-der sign-up
First bill Subse-quent bills
Assess needs, build rapport
Deter-mine pack-age
Resolv-ing problem
Signup on website First 100 days
% Dis-satisfied 40 30 4035 30 15 30 25 40
Felt confusedby offer
Did not receive
Agent did not help customer find right
product
Difficult to under-stand
packages
Higher than
expected
Confused by
language on bill
Dissatis-fied with schedul-
ing
Surprised by repair
fees
Signup process
Pain Points
Look For: What % of customers have a perfect end-to end experience and how variable is it?
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Set priorities for addressing the journeys that matter by sizing potential across three factors
©2015 Q
UALTRICS LLC.
Early Lifecycle Journeys
Problem resolution Journeys
Loyalty and late-tenure Journeys
Payment Journeys
Areas Journey Examples
Customers Impacted, M
Improving overall satisfaction, pts
Capturing long-term loyalty potential, $M
Reducingthe cost to serve, $M
0
0
1
3
1
2
1
2
1
1
5Bring me on-board 5
Word of Mouth & Referral journey 1
Video-on-Demand journey 12
Paying my bill journey 25
Getting my service reinstated 3
Getting my service working again 15
Coordinating an in-home visit 8
Get a better product experience
Moving to a new home 4
Cancelling my service early 2
Disconnecting my service 2 2
5
0
3
8
4
18
13
10
10
25
0
0
8
2
9
35
37
11
41
20
21
12
Now you can construct a transformation road map backed by a clear business case
©2015 Q
UALTRICS LLC.
Ease of implementation
High (2+pts CE)
Low(<1pt CE)
Low High
Rev
enue
& S
atis
fact
ion
Impa
ct
Assess investment case or lower cost
Accelerate roll-out
Re-evaluate later Redesign for increased impact
Med (1-2pts CE)
3
58
1613
1
10
15 11
97
4
17
2
1214
6
Bring me onboard
Get My Service Working Again
Get a better product experience
Journeys:
Ease of implementation comprised of multiple factors: investment required, management capacity, front line training
Impact calculation based on:
• # customers impacted
• Derived Satisfaction Impact
• Demand for personal-izaiton initiative
“What Matters” driven Customer Experience Roadmap
13
Questions to ask to lock in the ROI on CE©
2015 QUALTRICS LLC.
▪ Have you quantified your CE Value Equation (e.g., linked customer experience and outcomes at customer level)?
▪ Do you have end-to-end KPIs for your most important journeys, or just individual touchpoint metrics?
▪ Do you have a formal mechanism to run and evaluate CE tests at scale and book the impact with finance?
▪ Have you hardwired CE team resource requests to use low cost process, policy, and OpEx levers before turning to IT?
▪ What is your shortlist of 1-2 customer journeys that have the most economic potential?
▪ Do you have a forcing mechanism to solve tradeoff decisions across functions in order to deliver on bolder CE aspirations?
Upfront On-GoingBoth
Q&A
THANK YOU