Customer Experience Presentation

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]

“Customer Experience….. Mapping and Measuring”

Prepared for CCA Seminar

27th October 2005

© Marketing Inside Ltd 2004

Retention Through Experience

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

Index of Costs Retention 100

Winback 140

Acquisition 240[source QCI/WPP customer management research 2003]

• Key Retention Drivers– Brand Traditional Marketing– Proposition Elements

Experience– Contact Service

• 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


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• Customer Experience Impacts on Retention

“A Good Experience is based on strong relationships between dialogue, satisfaction and these drive customer retention”

– Maggie Evans marketing director iSKY Europe• 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)


Most companies have fundamental gaps in their customer lifecycle model

Source:

63% do not know how many high value customers they lose

In most markets, just 1% of customers are worth about 30% of total margin, but 58% do not have any special development plans for these key customers

41% do not record customer contact channel preferences, let alone contact customers through their preferred medium.

Only 13% of senior management have regular contact with customers

In more than 90% of companies, Staff who are responsible for talkingto customers could not articulate why customers should buy from them

Only 35% bother to thank new customers

Only 2% have regular winback programmes

47% do not have any sales lead distribution agreements

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

30% follow-up a complaint to check on satisfactory resolution

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

11% drive contact strategies via a database

QCI/WPP Customer Management Research project 2003


Measurement and Improvement

• 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

• 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)– Re-engineer their customer service processes (ESB; National

Express)


Customer Experience Influencing Components

• 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)


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)

• Understand/Define Brand Values• Agree Customer Touchpoints• Map Customer Experience at Touchpoints using model• Identify poor experience areas and examine Cost Benefit at those

pointsStep II• Look for quick wins (non System/IT)Step III• Improvements

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


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

• 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

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


Bucks, MK18 2AL

Tel: +44(0) 128 081 5117

Fax: +44(0) 128 081 5117

Mobile: +44 (0) 7958 794 701


An Example – Electricity Company


Background

• 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)



• Agreed Brand Values – “brand iceberg”– reflected in brand(s)

• Agree Customer Touchpoints and the brand values to be communicated at those points

• Define Experience Priorities– high impact/risk (e.g. billing and processing)– opportunities (e.g. home movers) chose this one

• Map Customer Experience (for home movers) using model– Internally (own front line staff)– Externally (customers who have recently experienced)

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


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

• 2 part approach– Map experience with front line call centre staff (internally)– Map experience with customers who had recently passed

through home moving (externally)

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


Home Movers“Crate Expectations”

• 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


Ref C001 C002 L001 L002 L003 L004 C003 L005 L006 C004 C005

Process - CustomerObtain contact details Contact - Tel

Contact with final reading

Receipt of Final Bill

Receipt of Welcome Letter

Process - InternalAnswer call (opening)

Handle call (o/bound property)

Handle call (i/bound property)

Produce Welcome Letter

Handle call

Bill production

Experience Score 0 0 4 -3 -2 -3 -3 0 0 0 -5 -1.09Importance assigned by customer 3 1 3 2 7 7 4 5 8Weighting by Importance 1.7 1.9 1.7 1.8 1.3 1.3 1.6 1.5 1.2Weighted Score 0 0 6.8 -5.4 -2.6 -3.1 -3.9 0 0 0 -6 -1.29

Weighting CalculatorImportance Score 1 2 3 4 5 6 7 8 9 10

Corresponding Weighting 1.9 1.8 1.7 1.6 1.5 1.4 1.3 1.2 1.1 1

Home Movers Experience – staff view


Ref C001 C002 L001 L002 L003 L004 C003 L005 L006 C004 C005









Handle call

Bill production

Experience Score -2 0 3 -4 1 -3 -4 0 0 -1 -5 -1.36Importance assigned by customer 2 1 3 2 8 3 4 3 8Weighting by Importance 1.8 1.9 1.7 1.8 1.2 1.7 1.6 1.7 1.2Weighted Score -3.6 0 5.1 -7.2 1.2 -3.1 -6.8 0 0 -1.7 -6 -2.01



Customer Experience

Home Movers Experience – customer view


Ref C001 C002 L001 L002 L003 L004 C003 L005 L006 C004 C005









Handle call

Bill production

Experience Score - Staff Weighted Score - Staff Experience Score - Customer Weighted Score - Customer

Home Movers Experience – compared


“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 re-write– Training for Customer Services

• 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

• Customer Service Training– Total Customer Experience Weighted Score (average)

moved from -2.01 to -1.8

• Customer Satisfaction– Re-visited customer satisfaction tracking and

re-aligned/added some questions to track this activity/experience


Bucks, MK18 2AL

Tel: +44(0) 128 081 5117

Fax: +44(0) 128 081 5117

Mobile: +44 (0) 7958 794 701


An Example – Life Assurance(early work)


Background

• 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



• Agree Customer Touchpoints• Define Experience Priorities

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

• Map Customer Experience (for priorities) using model– Internally (own front line staff) – completed as a test– Externally (customers who have experienced) – not yet started

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


Surrender Enquiries– a priority

• 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 viewRef B001 C001 C002 C003 B002 C004 C005 C006 C007 B003 C008

Process - CustomerReceipt of review letter

Answer call (opening)

Handle request for surrender value

Receipt of value confirmation


Handle query

Send back surrender

receipt of monies

Process - Internal

Automatically generate review letter


Handle request for surrender value

Generate Surrender value confirmation


Handle query

Process surrender

Staff ViewExperience Score 0 -3 -1 2 -1 -4 -4 0 0 2 4Importance assigned by customer 0 2 4 5 0 6 8 3 9 0 3Weighting by Importance 0 1.8 1.6 1.5 0 1.4 1.2 1.7 1.1 0 1.7Weighted Score 0 -5.4 -1.6 3 0 -3.1 -4.8 0 0 3.4 6.8



Customer Experience

Experience Score - Staff Weighted Score - Staff


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

• Support communications is unexpected, confusing and regulatory based


Bucks, MK18 2AL

Tel: +44(0) 128 081 5117

Fax: +44(0) 128 081 5117

Mobile: +44 (0) 7958 794 701


An Example – Train Franchise


Objectives

• Phase I – Existing Customer Data– Examine current customer satisfaction position, in particular current

data (SRA bi-annual 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)– Re-examine role of SRA (regulator) survey and CSS (internal) survey

• 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


C2C Customer Vs Staff Experience Scores

Customers Experience Score Staff Experience Score Staff Weighted Score by Importance

. .


Phase II - Key Findings

• Staff Score the experience lower than customers– 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• Commuters accept Punctuality is an issue within the

experience, but is not the most important factor– Punctuality has become a hygiene factor– Customers are more concerned about provision of information

• Ease of Access to stations and trains is important– Disabled customers are an important group– Opportunity for a “Priority Customer” approach

• Cost of focussing on Punctuality does not provide cost benefit– 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

– 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

Documents

Customer Experience Presentation