Welcome to theWelcome to the World’s First World’s First
Institute of Customer Institute of Customer Experience ManagementExperience Management
Addressing Business growth and profitability challenges through the Addressing Business growth and profitability challenges through the science of customer experiencescience of customer experience
Welcome to theWelcome to the World’s First World’s First
Institute of Customer Institute of Customer Experience ManagementExperience Management
Addressing Business growth and profitability challenges through the Addressing Business growth and profitability challenges through the science of customer experiencescience of customer experience
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Understanding and Understanding and managing the Service managing the Service
Profit Link.Profit Link.
Understanding and Understanding and managing the Service managing the Service
Profit Link.Profit Link.
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What is the objective of the business
Creation of WealthFor Whom
Employees? Shareholders?
Customers / Society?
Ok, let’s agree it is for shareholders.
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How is Wealth Created?
By transforming the resourcesMen, Money, Technology, Raw Materials
Into something that customer’s“VALUE”
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What is value?
Economic Definition:Economic Value = Reference Value + Differentiation Value
(price of best alternative) (difference +ve/-ve with best alternative)
Consumer Value = Rational + Emotional benefits Price
Summing up: The difference between the cost of your product or service and what the consumer is willing to pay.
Value is always what is attributed by the customer5
Consumer Process Value along 3 dimensions
Psychological DimensionReassurance / Status /
Trust/Affection
Economic DimensionPrice Perception
(Cheap, Expensive and Fair)
Functional DimensionFeatures Offered
(Relevant /irrelevant)
While the bottom two relate to the core product ,the upper dimension mostly comes from services facilitating the core product
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Firms Deliver Value
CustomizationMass customization of products / processes / communication for affinity groups
(Consumer experience Life cycle management)
StandardizationMass productionMass Advertising
InnovationNewer & better
product features
Innovation / Standardization StaccatoCustomization Contiguous
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What is Customer Experience?
A sum total of all interactions a customer has with a company’s:
People + Process + Products + Phs./VirtualEnvironment
Products, processes and environment – all driven and leveraged by people
Technology used &
managed by people
Created by people
Managed & maintained by people
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Service Profit Link
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How are People Engaged?
• Empowerment: adequately facilitated to meet and exceed customer expectations
• Acknowledgement: rewarded and recognized• Learning: Relevant and timely training inputs• Fairness: Transparency in policy
No patronization No discrimination
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Challenges towards creating an Engaged Workforce
• Service Quality Gap• Top Management Mindset• Silo mindset – micro organization
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Service Quality Gap Defined
Expected Service vs Perceived Service
Service Quality Gap
Mismatch between management perception of expected service Translation of management perception of expected service into service
standards Variance between standards and delivery
Word of Mouth Personal Needs Past Experience
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Sales & Marketing Communication
Remedial Measures
• Audit of data capture mechanism and nomenclature
• Cross-verification of qualitative inputs and external research
• Process blue printing• Process fail-safing• Service recovery procedures
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Management Mindset
Strategy Mindset Organisation Behaviour Likely ResultsSeen as short term. Don't trust either customers or staff Customers buy on price & availability
Not seen as necessary Make no exceptionStaff stay based on salary levels - low engagement
Organisation first, customer second Organization operates as a commodity Short terms focus, guidelines
Required because competitors are offering it
Limited empowerment to staffRepeat business mainly due to customer inertia
Seen as a cost, rather than marketing investment
Do only what is necesssary to hold customers
Organization operates as a commodity
Concerns primarily with reacting to customer problems
Strategic measure to develop business
Exceed customer expectations High level of repeat business
Adequate staff empowerment Positive engagement with companyCreate Customer Delight
Seen as the brand in actionBrand pormise reflected in policies & procedures
Customers as brand advocates
Tailored brand education for everyone Engaged and empowered staffIncreased brand equity & higher profits
CE as an Expression of
the Brand
CE as a cost
CEas a necessity
CE as a Competititive
Advantage
Significance of Customer Experience
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Enablers of the Service Profit Chain
• Hiring of customer centric team members• Mystery audits of all customer facing processes– Frontlining– VoC Forums– CSaT– ESaT– Service TATs
• Escalation Mechanism• Service guarantees• Price of non-conformance• Company Wide CSAT linked bonus
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Audit of the Service Profit Chain
• Net Cost to acquire • Cost to secure• Ration of Cos to revenue• Customer attrition rates• Portfolio of attrited customers• Quality of referrals• AV Lifetime value• Active to dormant customer ratio• Nett promoter score• CSAT score• Employee attrition rate• Sales and margin contribution per employee• ESAT scores
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Acknowledgements
• James Heskett , Earl Sasser & Leonard Schlesinger- Harvard Business School
• Janelle Barlow-TMI America • Dr. Deepak Jain- Dean-Insead• Bruce Temkin- Temkin Group• Dr. Fred Webster Jr.- Tuck School of Business
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Let’s begin
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