Weave study 2013 - The state of customer experience management in Belgium

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In an increasingly competitive business place charac-

terised by cut-throat competition and increasingly de-

manding and more empowered customers, service firms

are finding it difficult to gain a sustainable competitive ad-

vantage that will help them not just retain their existing

customers but also do this in a more cost-efficient manner.

It is important to note that, while retaining customers is al-

ways a good thing to curb customer churn, maintain mar-

ket share and have a guaranteed source of future income,

firms that manage to satisfy their customers consistently

will also reap the benefits of having their loyal customers

become customer advocates who, in turn, will help attract

new customers through positive word of mouth. A review

of the business practices of some of the most successful

and profitable service providers invariably reveals a con-

sistent pattern: the ability of these firms to consistently de-

liver a holistic customer experience.

While the benefits of delivering a good customer experi-

ence have been documented in various academic and

business publications, the roadmap for delivering excel-

lent customer experience in a cost-efficient manner has

seldom been explored. This means that, despite the im-

portance of delivering a good customer experience, many

service providers fail to tap into the huge potential that de-

livering a good customer experience can harness.

Various reasons can be posited for a service providers

failure to understand the dynamics involved in delivering

an excellent customer experience. Some of these include

lack of top management support for customer experience

initiatives, a silo mentality that exists within an organisation

that prevents different internal departments from delivering

a seamless customer experience, failure to accurately un-

derstand customer segment needs, lack of internal com-

munication and co-ordinated processes to deliver on cus-

tomer needs and failure to offer a holistic customer expe-

rience in an integrated multichannel system.

It is also interesting to note that, while service providers

can pull their act together and organise themselves to pro-

vide a good customer experience, they are still faced with

customers who do not see the complex web of organisa-

tions and processes that operate behind the scenes to de-

liver their experiences. They see interactions, coloured by

their expectations, emotions and their alternatives. Thus,

managing the expectations of the customers while rallying

the whole organisation to deliver on these customer ex-

pectations becomes the rather challenging job of the busi-

ness leader charged with the task of delivering a great

customer experience.

If top executives need to understand their customers and

urge their subordinates/colleagues to deliver a good ex-

perience, a logical framework that accounts for both the

strategic aspect of customer experience and the imple-

mentation process of customer experience needs to be

explored. Once this framework is established, a baseline

of the current performance by service providers on cus-

tomer experience needs to consider which further actions

need to be taken to improve customer experience.

I am convinced that the framework that has been devel-

oped in the context of this research study is a sound one

and will serve as a solid foundation for executives inter-

ested in capitalising on all the benefits of delivering a great

customer experience.

Prof. Dr. Deva Rangarajan, Vlerick Business School

2Weave study 2013 - The state of customer experience management in Belgium

Foreword

Lack of knowledge of customer experience concepts is seen as a major deterrent by service providers for

the development of

efficient customer experience management


Customer experience management performance leaves a

lot to be desired!

Our study shows that customer experience, though recog-

nised as strategically important by companies, is not suc-

cessfully managed within them.

83% of companies consider that customer experiencehas an important place in their strategy;

54% of companies consider that their customer experi-ence management performance is not satisfactory.

None of the interviewed companies rate their perform-

ance as excellent or close to excellent.

Lack of knowledge of customer experience concepts is

seen as a major deterrent by service providers for the de-

velopment of efficient customer experience management

The evaluation of companies performance on the 10 di-

mensions of the weave Customer Experience Framework

reveals that:

Companies fail to implement an efficient customer ex-perience management programme: only 12% of com-

panies have adequately developed a customer

experience management programme;

Companies must define and disseminate across thecompany a well-articulated customer experience vision:

only 29% of companies have developed a concrete cus-

tomer experience vision, and only 13% of companies

consider that their vision is adequately shared across

the company and merely 21% of companies claim to

have it satisfactorily translated into strategic objectives;

Senior executives must play their roles in improving cus-tomer experience: our study reveals that, though cus-

tomer experience is high on the agenda of the top

management for 42% of the companies (9 or 10 on a

scale of 1 to 10), senior executives are struggling to lead

concrete customer experience actions, give guidelines

and communicate about customer experience within

their company;

Companies must define a clear customer experiencestrategy only 21% of companies have a clearly defined

customer experience management strategy, and simul-

taneously 3 out of 4 companies fail to manage and inte-

grate the customer experience dimensions such as

products, customer segments, channels, customer life-

cycle, moments of truth and customer touchpoints (see

weave Customer Experience Management Framework);

Companies should better examine the experience fromthe customers point of view, and use that perspective

to make improvements and manage the experience: our

study reveals that only 8% of companies efficiently use

the collected customer insights to define and enhance

customer experience management;

Companies need to engage the whole organisation andthe employees in particular to create a great experience:

some useful levers to improve customer experience are

completely unexploited by companies:

> 4% of companies rate as excellent or close to excel-lent the development and implementation of new

technologies to improve the customer experience;

> 8% of companies consider that they successfully offera new/improved value proposition linked to the cus-

tomer experience vision;

> 21% of companies successfully engage employeesto become more customer-centric and deliver an im-

proved customer experience;

> 25% of companies consistently enhance their organ-isation or optimise operations and processes.

Companies must understand the customer experienceeconomics to build the business case for change: only

17% of companies successfully measure the impacts of

the customer experience management programme on

customer satisfaction and only 13% of companies suc-

cessfully track the effectiveness of customer experience

management actions on business performance. Exec-

utives consistently use the customer experience meas-

ures to make investment decisions in only 4% of

companies.

There is a substantial difference in customer experience

maturity levels across the different sectors in our sample

Based on the evaluations shared by the respondents

about their companys performance and maturity on each

dimension of the weave Customer Experience Manage-

ment Framework, the Customer Experience Management

Index (CEMI) calculates an overall score reflecting the gen-

eral level of customer experience management maturity.

Indexes are reported on a 0 to 100 scale.

The CEMI scores show significant differences between the

industries included in the study:

The transportation industry is by far the best performingindustry in terms of customer experience management

with a global score of 77.5;

The telecommunications industry comes second with aglobal score of 74.2;

The energy and retail banking industries lag significantlybehind the 2 others industries with scores of 65.8 and

64.7 respectively.

Executive


The objective of this study is to assess the level of maturity

and the efficiency of customer experience management

for the top companies on the Belgian market.

In order to ensure the pertinence and the viability of our

approach and the framework used (cf. weave Customer

Experience Management Framework), a neutral expert-

Prof. Deva Rangarajan from the Vlerick Business School

was consulted.

This first edition of the study covers

four different industries:

Energy Retail Banking Telecommunications Transportation

The report is based on the results of a quantitative survey

conducted among senior executives and/or middle-man-

agers in charge, directly or indirectly, of customer experi-

ence in their companies. This survey was conducted

between September 2012 and January 2013. The quanti-

tative research was implemented using an online ques-

tionnaire and a total of 34 respondents from 24 different

companies were included in the research study. All these

companies are key players in their industry.

In order to assess the performance of customer experi-

ence management in companies, we have developed a

questionnaire based on the weave Customer Experience

Management Framework. This framework helps compa-

nies define, prioritise and implement an effective customer

experience management programme.

Our questionnaire asked executives to assess the key el-

ements of the 10 dimensions of the weave Customer Ex-

perience Management Framework inside their company.

Although the assessment of the companies customer ex-

perience is based on a limited number of respondents per

company, it nevertheless allows us to undertake an analy-

sis and to establish trends on the general level of customer

experience performance and maturity in these 4 indus-

tries.

The respondents were asked to assess their companys

customer experience on a scale from 1 to 10. We have

considered 9 and 10 as excellent, 7 and 8 as neutral and

1 to 6 as not satisfactory.

About

A customer experience

management strategy

is the process of

understanding and managingthe customers interactionsand perceptions with the company


The customer experience refers to the quality and nature

of interactions between a company and its customers. The

customer experience is the result of the interactions be-

tween an organisation and a customer, as perceived

through a customers conscious and subconscious mind.

The customer experience, therefore, is a combination of

the organisations rational performance and the irrational

emotions evoked across all customer touchpoints.

A customer experience management strategy is the

process of understanding and managing the customers

interactions and perceptions with the company. The im-

plementation of an effective customer experience man-

agement strategy allows companies to develop a

company culture focused on delivering an excellent cus-

tomer experience in order to build customer-based brand

equity and long-term profitability.

Weave has developed a framework to help companies

craft a customer experience management strategy and to

align it with the companys overall strategy and brand at-

tributes.

Our framework and its 10 core dimensions allow a suc-

cessful and pragmatic customer experience strategy and

provide the blueprint to design, deliver, manage, and

measure the intended customer experience.

The weave

Management Framework

CE Implementation Levers

PeopleOrganisationValue propositionOperationsTechnology

Pro

duct

s

Customer Segm

ents

Channels

Cus

tom

er L

ifecy

cle

Moments of Truth

Customer Touchpoints

CustomerExperience Vision

Voice of the Customer

CustomerExperience ROI

CustomerExperience

Strategy

The weave Customer Experience Management Framework

1 2 54

3


Customer Experience Vision

A customer experience vision positions the im-

portance of the customer (experience) within

and outside the company. It gives a high-level

description of what and how the organisation

intends to achieve in its interactions with its

customers.

The definition of a customer experience vision

should be taken as the starting point to design

a customer experience programme. The cus-

tomer experience vision should drive the whole

customer experience management process,

from customer experience strategy definition to

implementation and return-on-investments.

On the one hand, the customer experience vi-

sion must serve as guiding principles in the

thinking process and ensure coherent deci-

sions-making. On the other hand, the purpose

is to leave the how vague in order to ensure a

wide clarification by the organisation.

Voice of the Customer

The Voice of the Customer describes the cus-

tomers needs, expectations and preferences,

which a company can capture through direct

and indirect ways.

Meeting customer needs requires that those

needs are collected, understood, analysed and

translated into actions. A customer experience

strategy cannot be defined without a deep un-

derstanding of the customer needs. This dimen-

sion is incredibly challenging for companies

since listening to and understanding the lan-

guage of the customer requires the companies

to place themselves in the customers shoes.

An efficient Voice of the Customer programme

helps executives to define the best customer

experience strategy and actions that will meet

customers' expectations.

Customer Interactions, Touchpoints and Mo-

ments

To develop an effective customer experience

strategy, companies need to strive for strong

performance in 6 core customer experience

competences: 1) products, 2) customer seg-

ments, 3) channels, 4) moments of truth and 5)

customer touchpoints.

Hence, it is broader than touchpoints and

deeper than user experiences. it requires a truly

holistic approach.

Customer Experience Implementation Levers

Delivering a remarkable customer experience

requires the mobilisation and alignment of the

whole organisation, starting from defining a dif-

ferentiated customer value proposition through

to engaging the people, optimising the

processes and using the right technology.

Linking Customer Experience ROI

Companies are always looking for ways to bet-

ter understand the connection between cus-

tomer experience and business performance.

The ROI of customer experience shows that

customer experience is highly correlated to loy-

alty, retention and satisfaction.

Appropriate measures of the customer experi-

ence management performance should allow

companies to demonstrate the positive ROI of

their customer experience actions and make

good decisions in order to enhance their cus-

tomer experience management

3

The respondent companies are struggling to implementan efficient

customer experience

management programme


While 83% of the companies recognise the importance of delivering an outstanding customer expe-

rience, 100% rate their performance as not satisfactory or neutral (see figure 1 and 2).

Are companies creating

for their customers?Without defining and implementing an efficient customer experience pro-gramme, companies will continue to struggle to create a wow experienceand to satisfy, retain and co-create value for their customers

Moreover, the results of the study reveal that the respondent companies are struggling to implement

an efficient customer experience management programme. 46% of companies consider the imple-

mentation of a customer experience management programme in their company as not satisfactory

while only 12% of companies consider it as successful (9 or 10 on a scale of 1 to 10) (see figure 3).

4%

13%

83%

46%

54%

46%

12%

42%

Figure 1 - Importance of Customer Experience

On a scale of 1 to 10, how would you rate the im-portance of delivering an outstanding customer ex-perience in your company's strategy?

Figure 2 - Performance against Customer Expe-rience Management

On a scale of 1 to 10, how would you rate the per-formance of your company against customer ex-perience management?

Figure 3 - Implementation of a Customer Experience Management Programme

To what extent has your company implemented a customer experience management programme (on a scale of 1 to 10)?

6

7 & 8

9 & 10

Companies must define and disseminate across the company a well-ar-ticulated customer experience vision, with buy-in from all stakeholders

Only 29% of companies have developed a concrete customer experience vision, only 13% consider

that their vision is adequately shared across the company and merely 21% of companies claim to

have it satisfactorily translated into strategic objectives (see figure 4).

While senior executives recognise the importance of customer experience, they fail to translate it into

concrete operational actions and behaviours.

Though customer experience is high on the agenda of the top management for 42% of the companies

(9 or 10 on a scale of 1 to 10), many senior executives are struggling to lead concrete customer ex-

perience actions, give guidelines and communicate about customer experience within their company.

Results show that senior executives are struggling in particular to communicate a shared image of

the ideal customer experience they want to deliver. Hence, executives manage to consistently com-

municate this shared image in only 17% of companies while they do not convincingly communicate

it in close to 1 out of 2 of companies (see figure 5).

25% 38% 37%

29% 46% 25%

33% 38% 29%

46% 37% 17%

37% 21% 42%

A senior executive is leading customer experience efforts within your company

Executives define guiding principles for customer experience actions

Executives consistently communicate about the importance of the customer experience management

Executives consistently communicate a shared image ofthe ideal customer experience to offer to the customers

Customer experience is a recurring agenda item for the top management

25% 46% 29%

29% 50% 21%

29% 58% 13%

33% 46% 21%

Your company has a concrete customer experience vision

Your company has a brand promise reflecting customer experience

The customer experience vision is shared within theentire company

The customer experience vision is translated instrategic objectives

Figure 4 - Customer Experience Vision

Regarding the definition of a customer experience vision in your company, please evaluate the followingstatements (on a scale of 1 to 10) :

Figure 5 Roles of Senior Executives in Improving Customer Experience Management

Regarding the role of your company's executives in improving customer experience management, pleaseevaluate the following statements (on a scale of 1 to 10) :

6

7 & 8

9 & 10


Companies especially fail to effectively integrate the customer segmentsand the customer lifecycle dimensions into their customer experiencestrategy

Only 21% of companies have a clearly defined customer experience management strategy, and, at

the same time, 3 out of 4 companies fail to manage and integrate customer experience dimensions

such as products, segments, channels, customer lifecycle, moments of truth and customer touch-

points (see weave Customer Experience Management Framework).

Indeed, only 8% of companies say they are consistently integrating products into the prioritisation

and definition of the customer experience actions. Only 13% of companies consider that they are ad-

equately integrating customer segments, channels and customer lifecycle. Barely 1 out of 4 compa-

nies rate as excellent the integration of moments of truth and customer touchpoints (see figure 7).

21%

25%

54%

Figure 6 Customer Experience Management Strategy

To what extent has your company a clearly defined customer experience management strategy (on a scale of1 to 10)?

38% 54%

41% 46% 13%

46% 41% 13%

33% 54% 13%

38% 37% 25%

25% 50% 25%

8%Products

Customer segments

Customer lifecycle

Channels

Moments of truth

Customer touch points

Figure 7 Integration of the Key Customer Experience Dimensions

To what extent does your company integrate the following dimensions into the definition and prioritisation ofthe customer experience management programme? (on a scale of 1 to 10)

6

7 & 8

9 & 10

A shift is required in the organisations DNA


A shift is required in the organisations DNA to better examine the experi-ence from the customers point of view, and to use that perspective tomake improvements and manage the experience

Though 1 out of 2 companies have very satisfactorily implemented a VOC programme, our study re-

veals that only 8% of companies efficiently use the collected customer insights to define and enhance

customer experience management.

Moreover, several improvement opportunities remain for the respondent companies in terms of po-

tential sources/means to collect the Voice of the Customer. The results reveal that, with the exception

of the customer complaints that are used by 83% of companies, all the other potential sources of

VOC, such as social media, voice of the employees, CRM, user groups/ advisory boards or all influ-

encers in the buying decision process could be more efficiently exploited by at least 79% of compa-

nies (see figure 10).

50%

33%

17%

8%

33%

59%

Figure 8 - Formalised Programme to Collect VOC

On a scale of 1 to 10, to what extent does yourcompany have a formalised programme in place tocollect the Voice of the Customer?

Figure 9 - Use of the Collected

On a scale of 1 to 10, to what extent is your com-pany efficiently using the collected customer in-sights to define and enhance the customerexperience management programme?

37% 42% 21%

46% 42% 12%

42% 42% 16%

63% 29% 8%

17% 37% 46%

67% 21% 12%

50% 38% 12%

Customer communities/forum/social media

CRM

Customer data analysis

Users groups/advisory board

Customers' complaints

All influencers in the buying decision process

Front line employees' observations

Figure 10 Use of the Different Sources to Collect the VOC

To what extent does your company use the following sources/means to collect the Voice of the Customer?

6

7 & 8

9 & 10

Companies need to engage the whole organisation and specifically theemployees to create a great experience

The results show that some useful levers to improve customer experience are unexploited by com-

panies. Indeed, only 4% of companies rate as excellent or close to excellent the development and

implementation of new technologies to improve the customer experience. Only 8% of companies

consider they successfully offer a new/improved value proposition linked to the customer experience

vision.

A somewhat higher but still very limited proportion of companies consistently enhance their organi-

sation (25%), optimise operations and processes (25%) or engage employees (21%) to become more

customer-centric and deliver an improved customer experience.

50% 46% 4%

21% 54% 25%

34% 58%

29% 46% 25%

37% 42% 21%

8%

Develop and implement new technologies to improvethe customer experience

Optimise operations and processes which supportthe delivery of the best experience to your customers

Offer a new/improved value proposition linked to thecustomer experience vision

Enhance the organisation of the company to becomemore customer-centric

Engage employees to deliver an outstanding custo-mer experience

Figure 11 Customer Experience Levers

Regarding the efforts your company is making to deliver the best customer experience, please evaluate the useof the following levers to improve customer experience (on a scale of 1 to 10)

6

7 & 8

9 & 10


Understanding the customer experience economics allows companies tobuild the business case for change; customer experience directly impactsyour bottom line

Our study reveals that only 1 company out of 5 manages to appropriately understand and measure

the customer experience business case.

Indeed, on the one hand, 83% of companies say that they measure the performance of their customer

experience management programme, although only 17% of companies consider that they success-

fully measure this performance (9 or 10 on a scale of 1 to 10).

On the other hand, while 38% of companies have adequately developed metrics to measure customer

experience management performance, only 17% of companies successfully measure the impacts of

the customer experience management programme on customer satisfaction and only 13% of com-

panies successfully track the effectiveness of customer experience management actions on business

performance.

The results show as well that, for 50% of companies, customer experience management is not sat-

isfactorily integrated into the general performance management of the organisation.

Since customer experience is not satisfactorily integrated into the performance management of com-

panies and only few of them successfully track the impacts of customer experience management on

customer satisfaction and business performance, it is not surprising to see that executives use the

customer experience measures to make investment decisions in only 4% of companies.

17% 66% 17%

33% 29% 38%

29% 54% 17%

37% 50% 13%

58% 38% 4%

Your company measure the performance of the custo-mer experience management programme

Your company has developed metrics to measure thecustomer experience management performance

Your company measures the impacts of the customerexperience management programme on the customer

satisfaction

Your company tracks the effectiveness of customer expe-rience management actions on the business performance

Executives use these measures to make investmentdcisions

Figure 12 Measurement of the Customer Experience Management Performance

Regarding the measurement of your company's performance in the field of customer experience management,please evaluate the following statements (on a scale of 1 to 10)

6

7 & 8

9 & 10

Based on its framework, weave has developed a Customer Experience Management Index (CEMI).

This index is based on the evaluations shared by the respondents about their companys performance

and maturity on each dimension of the weave Customer Experience Management Framework. The

CEMI gives an overall score reflecting the general level of customer experience management maturity

and performance. Indexes are reported on a 0 to 100 scale.

Figure 13: The 2013 Customer Experience Management Index

CEMI Dimensions National

level Energ

y Retail

banking Telec

omTrans

porta-

tion

14,0 12,1 12,3 14,9 16,7

13,1 10,9 13,3 13,4 15,1

14,0 13,0 12,8 14,9 15,2

14,1 13,8 13,0 15,2 14,4

15,1 15,0 13,3 15,8 16,2

70,3 64,8 64,7 74,2 77,5

Customer Experience Vision (../20)

Voice of the Customer (../20)

Customer Experience Strategy and Design (../20)

CE Implementation Levers (../20)

Customer Experience ROI(../20)

Customer Experience Management Index (../100)

Customer Experience

and industry comparison


The scores show significant variances between the differ-

ent industries included in the study. The transportation in-

dustry is by far the best performing industry with a global

score of 77.5. The telecommunications industry comes

second with a global score of 74.2. The retail banking and

energy industries lag significantly behind the 2 others in-

dustries (see figure 13).

The scores by dimension confirm the four industries dif-

ferent positions towards customer experience manage-

ment. Indeed, the transportation industry scores the

highest on 5 out of 6 dimensions of the CEMI model. It is

the telecommunications industry that scores the highest

on the Customer Experience Implementation Levers di-

mension.

The energy industry obtains particularly low scores on

three dimensions: the Customer Experience Vision, the

Voice of the Customer and the Customer Interactions,

Touchpoints and Moments. However, the score of the en-

ergy industry is relatively high on the Customer Experience

ROI dimension.

The scores of the retail banking industry on the different

CEMI dimensions are relatively homogeneous. The retail

banking industry is not outperforming on a particular di-

mension. However, retail banks score particularly low on

the Customer Experience Vision dimension and obtain by

far the lowest scores on the CE Implementation Levers

and Customer Experience ROI dimensions.

The telecommunications industrys performance is also

homogeneous on the different customer experience di-

mensions, with scores of around 15, except on the Voice

of the Customer dimension. Indeed, the telecommunica-

tions industry only obtains a score of 13.3 on this dimen-

sion.

The transportation industry clearly outperforms the other

industries on the Customer Experience Vision and Voice

of the Customer dimensions. However, its score on the CE

Implementation Levers is far below its average score.

Despite, or thanks to, the challenging economy, which is

putting strong cost pressure on consumer companies,

companies are convinced of the importance and the com-

petitive advantage of designing and implementing a prag-

matic customer experience strategy. Customer

satisfaction, loyalty and retention are valuable assets for

any company.

Paradoxically, companies are struggling to define, design,

measure, implement and manage a customer experience

strategy that will generate value for their customers. They

fail to deliver the expected customer experience and rela-

tionship.

Completely transforming how you interact with customers

is a larger, more complex task than simply optimising

channels to work better in concert. In order to understand

the cross-channel journey customers undertake, compa-

nies need to adopt a holistic approach.

The weave Customer Experience Framework will eventu-

ally help your company define your customer experience

strategy to connect with your customers.

Companies should increase their efforts on all 10 dimen-

sions of the weave customer experience framework to

better manage the total customer experience, and specif-

ically:

Define and disseminate across the company a well-ar-ticulated customer experience vision, with buy-in from

all stakeholders;

Examine the experience from the customers point ofview, and use that perspective to make improvements

and manage the experience;

Define a concrete customer experience strategy and de-sign the customer experience consistently integrating

the products/services, segments, channels, customer

lifecycle, customer touchpoints and moments of truth;

Engage the whole organisation and specifically the em-ployees to create a great experience;

Understand the customer experience economics in orderto build the experience business case.

Though the business community, doubtlessly and increas-

ingly, recognises the criticalness and power of delivering

a holistic customer experience, most companies have not

successfully embraced it. This is because becoming a

customer experience-driven organisation is a global trans-

formation and process, one that requires fundamental

shifts in how business behaves and is organised. We hope

that this study will help companies understand how they

can better orchestrate existing elements to realise new

values, and to better connect to their customers' needs

and wants.

Conclusion

Define and disseminatea well-articulated customer experience visionExamine the experiencefrom a customers point of view

Define a concrete customer experience strategy

Engage the whole organisationUnderstand the customer experience economics

ContactsAuthor of the study:

Weave Belgium

Academic Expert:

Vlerick Business School