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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