what’s behind the curtain of customer transformation

1 COPYRIGHT © 2014. ALL RIGHTS PROTECTED AND RESERVED.

What’s Behind the Curtain

of Customer Transformation

November 13, 2014

Featuring:

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Today’s Presenters

Elizabeth Glagowski Editor-in-Chief

Customer Strategist Journal

Don Peppers Founding Partner

Peppers & Rogers Group

Harley Manning Research Director, CEx

Forrester

Ron Wince General Manager

Peppers & Rogers Group

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Twitter Hash tag: #customerstrategy

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Agenda

Defining the Customer Experience

Outside In:

6 Customer Experience Disciplines

Inside Out:

Delivering on the Promise of the Customer Experience

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Defining the Customer Experience

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Defining what we mean by “customer experience”

• Customer includes both current and prospective customers

• Individual interactions are those that occur in addressable channels,

i.e., non-mass media

• With a brand: social interactions with others about the brand are not a

part of the “customer experience”

• Brand is a proxy for all the selling entities: companies, retailers, dealers,

suppliers, e-commerce sites, etc.

• Over time recognizes the ongoing customer relationship

“The totality of a customer’s individual

interactions with a brand, over time.”

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Forrester’s customer experience pyramid

Meets need

Easy

Enjoyable

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The upside and downside of customer experience

Product Experience

Source: The Effortless Customer Experience, 2013

Customer Service Experience

Likelihood of telling a friend

Eliminate the friction in your service

Likelihood of telling a friend

Delight the customer with your product

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The upside and downside of customer experience

Meets need

Easy

Enjoyable

Eliminate the friction in your service

Delight the customer with your product

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The most direct way to improve the

customer experience

Seek out and eliminate

any points of friction

Amazon relies on one customer experience

metric more than any other:

“NRR” – the Non-Resolution Rate

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Hunting down the friction

During peak season, Amazon records and

analyzes more than 40,000 hours of calls per day!

Because NRR focuses directly on problems, it provides a

quicker route for eliminating friction.

But NRR also needs a universal sample size, because it

focuses on individual problems.

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Every time you find a point of friction…

…apply Lean Six Sigma Principles and other proven

techniques to drill down to root causes

This type of analysis will reveal many more problems

than are apparent just from your “customer facing”

processes.

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Outside In:

6 Customer Experience Disciplines

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The 6 Disciplines of CX

Strategy

Customer Understanding

Measurement

Design

Culture

Governance

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The 6 Disciplines of CX

Strategy

Customer Understanding

Measurement

Design

Culture

Governance

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The 6 Disciplines of CX

Strategy

17 © 2013 Forrester Research, Inc. Reproduction Prohibited 17

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If that’s what customers hate most,

let’s not cancel any more flights.

- Delta VP Operations Control Dave Holz

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The 6 Disciplines of CX

Customer Understanding

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- Matt Anderson, Former COO, Virgin Mobile

We wanted to create a differentiated customer experience: one that was

uniquely Virgin.”

“We weren’t interested in being up to par

with industry standards.

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simplicity

fairness

control

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The 6 Disciplines of CX

Design

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30 © 2012 Forrester Research, Inc. Reproduction Prohibited 30

31 © 2012 Forrester Research, Inc. Reproduction Prohibited 31

32 © 2012 Forrester Research, Inc. Reproduction Prohibited 32

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The 6 Disciplines of CX

Strategy

Customer Understanding

Measurement

Design

Culture

Governance

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The 6 Disciplines of CX

Strategy

Customer Understanding

Measurement

Design

Culture

Governance

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The 6 Disciplines of CX

Measurement

36 © 2012 Forrester Research, Inc. Reproduction Prohibited 36

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Outcome

Perception

Descriptive

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Perception

• What the customers thought happened and

how they felt about it

• Tier 1: Satisfaction with the overall experience

like how easy the bank is to do business with

and how well it communicates

• Tier 2: Perceptions of touchpoints, like ease of

navigating online banking tools or satisfaction

with financial advisors

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Descriptive

• What happened in the real world

• Tier 2: Page views, average wait time in a

branch

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Outcome

• What business impact we can expect

• Net Promoter Score

• % of HH with transaction accounts,

investments, and borrowing products

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Outcome

Perception

Descriptive

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The 6 Disciplines of CX

Governance

43 © 2012 Forrester Research, Inc. Reproduction Prohibited 43

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Barclaycard assigns accountability

for 9 key processes in the

customer journey

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Barclaycard assigns accountability for 9 key processes

in the customer journey

Providing customer service

Acquiring new accounts

Collections

There are eight Level 1 sub-processes under the new

accounts process

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One senior executive owns the new accounts process

Paul Wilmore – Senior Director of

Consumer Markets (Barclaycard)

• Works with Level 1 sub-process owners to

ensure that every aspect of the customer

experience for new accounts meets CX

standards

• Intervenes in disputes between

competing departments

• Has authority to stop any initiative that will

create a problem for customers

• Provides input on the company’s

investment priorities – based on how they

impact the customer

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The 6 Disciplines of CX

Culture

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Service Values: I am proud to be Ritz-Carlton

I build strong relationships and create Ritz-Carlton

guests for life

I am always responsive to the expressed and

unexpressed wishes and needs of our guests

I am empowered to create unique, memorable

and personal experiences for our guests

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The 6 Disciplines of CX

Strategy

Customer Understanding

Measurement

Design

Culture

Governance

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Inside Out:

Delivering on the Promise of the Customer Experience

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Turning the outside-in perspective into an operational

approach to business requires a careful balance

Simultaneously improve customer experience while

managing costs

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Key internal factors often prevent organizations from

achieving the right balance

Customer experience vision not clearly and consistently

understood across the customer journey, nor deeply in

support functions

Disparate and siloed approaches to Customer Experience

programs and initiatives

Ownership of the customer experience is not clearly

understood within the organization

Under-investment in employee development and culture

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Delivering on the customer experience promise

1. Follow the ABCs: Alignment - behavior - communications

2. Think horizontally along the same spectrum the customer

does

3. Deliberate Practice

4. End-to-End Governance

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Follow the ABCs

Guiding Principle:

An enterprise commitment requires alignment and advocacy across the organization.

Key Success Factors:

• Align front- and back-office operations

• Use incentives, rewards and recognition to influence and reinforce valued behaviors

• Engaged the organization thru strong strategic and informal communications

Best Practice:

Telstra aligned all employees, processes and policies around the customer

experience vision to establish and sustain a customer-centric culture

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Guiding Principle:

Design operations and processes from the outside-in perspective

Key Success Factors:

• Ensure complete clarity on the full customer journey by individual, not by product

or division

• Leveraging a Lean Six Sigma team to document and improve the customer’s

experience across internal functional groups as well as upstream and downstream

business partners

• Include “off stage” support functions such as HR, accounting, legal, etc. which

may have policies or requirements that may create conflict

Best Practice:

Verizon takes an outside-in perspective to solve customer challenges

Think horizontal

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Deliberate Practice

Guiding Principle:

Drive expert level capabilities to customer experience-related processes.

Key Success Factors:

• Ensure employees know what they need to start doing and what they need to stop doing

to be more customer-centric

• Teach employees the skills that drive exceptional customer experiences

• Practice and coach the new skills and behaviors until they become second nature at the

individual , team and enterprise level

• Investment in sharing information such as customer feedback, lessons learned, new

processes and practices

Best Practice:

Leader in Health, Wellness and Lifestyle invests in

Social Knowledge Management for employees

AND customers

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End-to-End Governance

Guiding Principle:

Use a steering committee to break down barriers

Key Success Factors:

• Install the CEO or a high level executive who serves as the CEO’s proxy as the

executive sponsor for the customer experience governance committee

• Include horizontal and functional representation – including external business

partners

• Assign top leaders and talent to the initiative with the clout to enable an enterprise

vision of customer experience improvements

• Drive execution in fast cycle improvement – facilitating immediate feedback on

effectiveness and impact

Best Practice:

To ensure ongoing momentum for its customer experience and

e-commerce initiative, P&G created an integrated team across

brands, functional areas and regions. Specific time

was allocated and budgeted to participate in the program.

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The result:

Driving greater customer value at the most efficient cost

Drive customer experience effectiveness in all processes and across the organization

(higher value)

Drive Organization & Process Efficiency

(lower cost)

Customer experience excellence:

- Generate customer insights to better

understand customer needs, wants,

behaviors – and customize interactions

accordingly

- Improve value provided to customers

by informing critical improvements in

processes

- Continuously discover, develop and

deploy better customer experiences

Cost optimization:

- Focus on elimination or reduction of

anything that does not bring value to

the customer

- Align operating structure with the end-to-end customer experience

- Instill “value conscious” culture

Get the $/value-add right

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Q&A

Elizabeth Glagowski Editor-in-Chief

Customer Strategist Journal eglagowski@peppersandrogersgroup.com

Don Peppers Founding Partner

Peppers & Rogers Group dpeppers@peppersandrogersgroup.com

Harley Manning Research Director, CEx

Forrester

hmanning@forrester.com

Ron Wince General Manager

Peppers & Rogers Group rwince@peppersandrogrersgroup.com

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COPYRIGHT © 2014. ALL RIGHTS PROTECTED AND RESERVED.

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