A Guiding Framework For. Customer Experience Transformation

Transcription

1 A Guiding Framework For Customer Experience Transformation

2 A Guiding Framework For Customer Experience Transformation After years of studying customer experience exemplars, Motiv Strategies has developed a framework to guide corporate alignment of efforts targeted at transforming the way others experience your offerings. For much of the last 100+ years, the recipe for success in consumer-facing industries was simple: create and nurture brands that consumers could grow to recognize and trust, and invest heavily in multimedia ad campaigns yelling at consumers. Fortunately or unfortunately, depending on your proximity to Madison Avenue those days are numbered, as companies now realize the importance of delivering a compelling customer experience, in addition to their products and services. A customer experience is the multisensory experience of a brand, delivered through a set of end-to-end touchpoints that span awareness through re-purchase. For many companies, the customer experience has traditionally been limited to the point-of-sale of a product or the point-of-delivery of a service, but today s customer experience champions deliver compelling experiences before, during and after the consumption of the product or service. The need to deliver engaging customer experiences has largely been driven by the consumer, who is not only better informed to make decisions constant connectivity enabled by new technology, but whose limited attention span is increasingly difficult to capture. Today s industry leaders have acknowledged that delivering superior customer experiences rather than competing on price, quality and brand alone is a key means of differentiation from the competition. In today s world where the customer experience reigns supreme, brands are no longer just a wrapper to deliver a product or service to a customer; instead, they have become consumers friends, teachers, etc. living entities in their own right that are the conduit for forming personal relationships with consumers. For example, consumers engage with Nike on social media platforms to receive encouragement and fitness advice. Nike s brand speaks to its customers in a way that engenders engagement and loyalty through the way its system knows them and their preferences. Building a robust customer experience is not a one-off investment to impress your customers or fix what s broken. Instead, it should be viewed as an innovation initiative that can help identify new growth opportunities. Look at Boeing s new Dreamliner, for example: when 1

3 Customer Experience Vision Setting Vision Leadership Alignment Brand Culture Executing Technology Processes and Tools Employee Engagement Training Refining Metrics Customer Feedback Communication Partnerships How Who Boeing developed a plethora of services to maintain the jets it manufactures for its customers, it was simply taking ownership of numerous pain points in the customer experience. The result is a series a new revenue streams for Boeing that confers significant value to, and drives loyalty from, the customer. In this paper, we propose a framework for building and managing compelling customer experiences, using case studies from industry leaders to discuss the Customer Experience Vision, the Who, or human-related management aspects, and the How, which addresses the operational realities of producing a cohesive and satisfying set of interactions with customers. Customer Experience Vision A customer experience vision is the high-level goal that the organization aspires to achieve in its interactions with customers along all points of the journey of consumption. Its should aim to identify the various points where the company interacts with its customers, to empathize with what customers need, and to establish processes and tools that enable the organization to deliver the ideal experience. Most importantly, it should evoke the emotions the organization wants its customers to experience along their journeys. Starbucks is a great example of a company whose customer experience vision is brought to life in all its offerings. The company s Customer Experience Vision can most clearly be articulated as The third place between work and home, a vision it has built a global retail empire around over the previous three decades. Every element of the customer journey, from the multisensory experience of entering the retail shops to the manner in which Starbucks employees meet and treat customers, is carefully thought out and filtered through the company s customer experience vision. Such a customer-centric vision is apparent in all of Starbucks s offerings, but perhaps in no element is it more evident than the company s successful Starbucks Digital Network. Established Figure 1: Producing great customer experiences requires a framework to drive execution. 2

4 in 2010, the Digital Network offers customers free, one-click Wi-Fi that provides access to a wide collection of premium digital content. It offers exactly what the company s customer experience vision promises: speed, simplicity, and premium service that make customers look forward to walking into the store. The online destination will be true to, and expand upon, the Starbucks experience, says Stephen Gillett, Chief Information Officer. [It] will deliver free, premium offerings that are selected specifically for our customers and localized for increased personal and community relevance. One only has to look at the morning line at the corner Starbucks (or even the one immediately across the street!) to see how an intangible customer experience vision translates into real financial gains while leaving less sophisticated competitors in the dust. Leadership Alignment Is Key To Success In order to put forth a genuine effort to execute a customer experience vision, senior leaders from all functional areas must understand and buy into the organization s vision, and align to the responsibilities, activities, and incentives that support it. Having top brass aligned to the company s customer experience vision is necessary to show that delivering superior customer experiences is the new business as usual. Richard Branson s Virgin Group, where he is Chairman and leader of a business empire comprised of over 400 companies, is a great example of an organization where there is clear alignment among senior leaders to the customer experience vision. Branson has established a customer-centric culture, and puts himself on the front line to illustrate the organization s commitment to its main stakeholders: When he flies, he doesn t sit in upper class, says Liz Brackley, head of relationship marketing at Virgin Atlantic airline. He ll be walking up and down the plane, especially in economy, asking customers what they think of Virgin, asking for their ideas, suggestions and views. It s a case of him being around the business and showing an interest, asking people how they are feeling about the company and themselves. These types of actions send a message to everyone from investors to customers that the organization is fundamentally invested in the customer experience, and is always striving to make it better. Leaders who recognize the goodwill created among customers by these types of actions are seen as transformative; by ignoring hierarchies and inserting themselves into all levels of the organization, they are able to harness new ideas, create a culture in which all employees are valued, and stay in touch with relevant customer issues. But leadership alignment doesn t stop here. Leaders from up and down the hierarchy and across functional lines must also prioritize customer experience-related program investments by providing their time and energy to review and participate in initiatives and by getting rid of roadblocks that stand in the way of their staff getting customer experience problems solved. There is nothing worse for corporate customer experience alignment than an executive who doesn t get what the value of becoming a customer experience exemplar can mean to his or her company, just as there is nothing better than to feel like the company is all in it together working towards the common goal of producing a well-articulated customer experience vision. Every element of the customer journey is carefully thought out and filtered through the customer experience vision of the company. 3

5 Over the past 16 years, Amazon has grown from a scrappy online bookstore to a publicly traded company valued at more than $80B due in large part to its customer-centric focus, which is evident in all its offerings, from one-click purchases to its free two-day shipping for subscribers of its Prime service. I believe that the success we have had has been driven exclusively by that customer experience, says Jeff Bezos, Amazon s founder and CEO. We are not great advertisers. So we start with customers, figure out what they want, and figure out how to get it to them. Amazon was one of the first online companies to move beyond simply aggregating information to making recommendations in other words, it learned to use its technology expertise to make sense of vast amounts of data in an effort to perfect its customer experience, becoming more than a search engine for products in doing so. Amazon uses data it collects from its customers to build a better experience for them, perpetuating a cycle of continuous improvement in the experience. In effect, it has literally built a customer experience system that is continuously refined per the customers feedback. When a customer loads the Amazon home page, he is provided with recommended products based on previous browsing and purchase history; these recommendations make online shopping easier and more engaging for customers, who continually train the recommendation algorithm while shopping. Figure 2: Amazon has grown in large part due to its customer-centric focus. Such a platform and offering not only lead to more individual product sales, but also create a better customer experience with stickiness between the customer and the brand. By storing a customer s purchases and recommendations over a long period of time, Amazon creates a shared history with the customer that leads to loyalty and a long-term customer relationship. Branded Experiences Are Memorable Experiences Your organization should strive to infuse its brand s promise, values, and identity at every customer touchpoint because these are the most important places that consumers will associate with a particular customer experience. Your brand is what drives differentiation from the competition, and is experienced through your organization s human and technological interfaces. W Hotels has built a brand that truly embodies the organization s customer experience vision in this case, the experience is a luxurious escape from day-to-day life. A subsidiary of Starwood, the W Hotel brand focuses on creating an atmosphere of luxury for its customers at every interaction it has with those customers. When one enters the hotel, he does not walk into the lobby; instead, he enters the living room. The polished granite floors, leather couches, and massive ceiling mirrors serve to further evoke a brand that is all about helping its customers retreat from the outside world into a luxurious fantasy. We want to provide access to a world of wow, says Eva Siegler, W Hotels global brand manager. Basically, [we want to] help you to escape from the fears and from the mundanity of every day life, and come into a world where everything is possible. Hotel employees eschew nametags and unflattering, permapressed uniforms, instead opting for outfits designed by big names such as Michael Kors and Gwen Stefani. And no guest request is too odd to be fulfilled as long as a guest is willing to pay for it. 4

6 And W patrons are: an analysis by W indicates that customers are willing to spend about $80 more per trip to experience all that W Hotels offer. The lesson from W is clear: infuse every touchpoint with a consistent brand promise and identity, and loyal customers (and hopefully profitable customers as well) will follow in droves. Big Challenge for Management: Create an Empowering Culture What all customer experience exemplars have in common is an enterprise-wide commitment to identifying customer needs, and building offerings around those needs. A customer-centric culture is necessary to ensure that the customer experience vision is properly defined and executed, and permeates the organization, from the hiring process to the various rules, policies, and processes that govern the firm. Disney excels at delivering compelling customer experiences across the board, but its Disneyland business is particularly appropriate to illustrate the role of culture in delivering the customer experience even in a franchised business model. The self-proclaimed Happiest Place on Earth, Disneyland focuses on culture because, in the words of former executive Bill Ross, We cannot lose sight of the fact that this is a feelings business we make our profits from that. The actions of Disneyland employees are capable of either amplifying or dampening customer spirits, and therefore are a core concern of the business. Any breakdown in the culture rude words, indifference, etc. undermines the entire customer offering. So how does Disney ensure that its customer-centric culture shines through? There is, of course, a set of rules that define physical appearance no facial hair, no fancy jewelry, and polished shoes, for starters but more important are the rules that govern employee behavior. The legendary people skills of Disney employees are developed and delivered through acts as simple as smiling at customers, maintaining an upbeat attitude, and answering questions honestly. Disney excels at creating a culture in which teamwork is valued; for example, it offers a social calendar for employees that includes sports leagues, company picnics, and employee nights at Disney parks, among other fun events. The cost for a business to undertake such a culture management is relatively low, and the rewards, as Disney has demonstrated, can be plentiful. What Resources Are Critical For The How Of Customer Experience? Aligning to the customer experience envisioned by your organization is one thing, but delivering that experience is another challenge. The most important elements to consider and leverage in order to deliver and refine the customer experience are: technology, metrics, customer feedback and processes. (See Figure 2 for a case study of a company that embodies best-in-class practices of leveraging How elements to deliver superior customer experiences: Amazon.) Technology In order to ensure quality and a high degree of personalization, customer experience exemplars use a wide range of technologies to deliver their customer experiences, including databases, mobile apps and web-based utilities. Customer experience exemplars leverage technology to drive engagement, garner feedback, and ensure customer needs are met or exceeded. Customer experiences such as Amazon s (see Figure 2) leverage We cannot lose sight of the fact that this is a feelings business we make our profits from that. Bill Ross Former SVP, Public Affairs Walt Disney 5

7 Enterprise Rent-a-Car expanded from a single office to the nation s largest car rental company due in large part to its founder Jack Taylor s philosophy of Put your customers and employees first, and the profits will follow. In effect, Taylor cites his investment in employee engagement and training as a main reason for his company s success. His investment seems to have paid off: Enterprise is regularly rated one of the best companies to work for, as well as one of the consistently highest-ranked companies for customer satisfaction. Enterprise once identified a major reason why customers stop doing business with the organization as the poor way they were treated by employees of the company. Regardless of the superiority of a product or service, if it is not delivered by well trained, customer-centric employees, the odds of building loyal consumer relationships decrease dramatically. How do you identify, hire and train employees to be customer-centric, and to consistently improve the customer experience? Encourage accountability and provide incentives. Figure 3: Enterprise Rent-A-Car grew to be America s largest car rental company thanks to founder Jack Taylor s management philosophy. Enterprise is well aware of the potential return on investment it can achieve from its management trainees in the form of increased revenues and customer loyalty, so it puts forth significant effort in recruiting and training. Only candidates demonstrating innate customercentric skills are hired for Enterprise s management trainee program, which has been billed by the firm as an MBA without the IOU. Enterprise employees undergo vigorous training that teaches them to deliver better customer service by focusing on the needs of the customer, rather than the needs of the business. Additionally, Enterprise incentivizes its employees to be customer-centric with the most inspiring carrot possible: a share of branch profits. Enterprise built a system of metrics to determine how promotions are divvied out. By treating employees as owners of the company, Enterprise ensures that its staff will continually strive to improve the customer experience. technology to not only deliver superior experiences (as in the case of welldesigned digital interfaces), but also to measure, refine and perfect those experiences. We see tremendous evidence that customer experience exemplars have an IT strategy that is very closely aligned with their customer experience strategies. Metrics What gets measured gets managed has been a frequent refrain from managers since management guru Peter Drucker uttered those words many years ago. An overall customer satisfaction score might tell an organization how well it is doing with its customers in general, but it will not reveal what points in the customer journey are systemically broken and frustrating for its customers. Quality standards should be identified for each customer touchpoint, and the measurement of how each compares to others along the continuum in the customer journey will reveal areas for improvement. Because a single broken touchpoint can ruin the entire experience for an individual, establishing metrics and reacting to those measurements is essential to driving continuous improvement in the entire customer experience. 6

8 Customer experience exemplars have evolved beyond the customer satisfaction score to create new metrics evaluating the customer experience journey at multiple points of interaction; in fact, an entire industry of software and consulting companies espousing proprietary systems to track the customer experience has evolved in recent years to assist clients in their endeavors to create and track more compelling customer experiences. Customer service is not just about working against a benchmark; it is an absolute. For starters, treat each customer as an individual not just another member of the statistical data set and your customer experience will improve immediately. Customer Feedback Producing a great customer experience is a two-way street. By not engaging customers to inform the organization how well it is doing, the producer of the experience misses out on opportunities to drive greater relevance for that customer, or to improve upon, or cure a problem within an existing experience. Enable the customer to be a co-creator of the customer experience. What do they want, and how can you deliver it? It is his or her experience, after all! From car rental companies to online footwear and apparel shops, some of the most successful customer experience exemplars have learned to embrace customer feedback in order to build more successful offerings. Since its founding in 1999, Zappos has grown into the world s largest online shoe store through an unerring dedication to customer service. The company s famous customer service call center answers 5,000 calls per day on average, and customer feedback is consistently addressed and built into the continually evolving Zappos offering. Process and Tools Managing the development and delivery of customer experiences is a very challenging task, particularly in large organizations that must templatize the experience in order to roll it out across various interfaces, from online platforms to tens of thousands of retail locations, as is the case of McDonald s. For this reason, customer experience exemplars turn to user-centric design tools and processes, including ethnography, customer journey mapping, customer co-creation, and rapid prototyping, to design and refine the customer experience before rolling it out. Managing an overall vision and change management for large systems at scale requires synthesis of large quantities of information. Frameworks to direct action and communication efforts make these methods and tools very valuable. Who Should Be Involved In Customer Experience Efforts? Even with advanced technology, sophisticated tools and processes, and clear alignment among senior leadership to a customer experience vision, at the end of the day, an engaging customer experience cannot be delivered without dedicated, engaged employees or key partners who bring assets and capabilities that may not be your core competency. Employee engagement, partners, communication, and training are four key elements of the customer experience framework that are most relevant to the matter at hand. Rental car company and industry pioneer Enterprise Rent-a-Car exemplifies best-in-class use of the Who elements in the delivery of its customer experience, and warrants a closer look (see Figure 3). Because a single broken touchpoint can ruin an individual s entire experience, establishing metrics is essential to driving continuous improvement throughout the entire customer experience. 7

9 Employee Engagement Regardless of the superiority of your product or service, if it is delivered to the customer by a rude, uninformed or generally unhelpful employee, the customer experience has been soured for that user, and you can be sure that he will not only share his experience with others, but also will more than likely not be returning. A Gallup poll highlighting the importance of employees in delivering the customer experience found that in various industries, consumers were many times more likely to repurchase from organizations with employees considered to be outstanding in terms of customer service. If customer loyalty is your goal, engaged employees are integral to building that loyalty. For systems in which the customer experience is physically delivered (as opposed to digitally delivered), the level of employee engagement is a key indicator of whether the organization can produce a compelling, high quality experience. Organizations that can effectively communicate their customer experience vision and rally employees to deliver on the higher purpose of driving customer satisfaction and delight have aligned themselves for success. Training If the customer experience is physically delivered by, or involves in some capacity, a retail associate, a sales person, a service representative, or manager of front-line employees, training is an integral element to drive quality and consistency across all points of the customer journey. Equally important is the need to communicate how to handle exceptions to any employee who might encounter a situation that needs to be made right in order to stay in the customer s good graces. A report issued by the American Society for Training and Development reported that companies that spend more per employee on training dramatically outperformed those at the lower end of the spectrum of spending on the following measurements: net sales per employee, gross profits per employee, and market-to-book shareholder value. In effect, the study showed that investing in your employees is not only an effective way to ensure the delivery of a better customer experience, but also a means of growing your revenues. Partners The challenge of producing high quality, compelling experiences requires a myriad of talents and sometimes products and services that might not be core internal competencies for the organization. In that case, fostering connections between companies (e.g., McDonald s tight global partnership with Coca-Cola; Apple s stable of third-party software developers and product accessory manufacturers) to complete a customer experience is an effective strategy that achieves the end goal while reducing risk. Partnerships, therefore, are essential to cultivate and manage as part of any Customer Experience strategy. Apple has famously employed a closed operating model in which it exclusively controls the entire customer experience from the first touchpoint to the last. Yet one of Apple s greatest innovations was a significant deviation from this business as usual strategy: partnering with thousands of developers in the creation of its App Store. Apple s system allows it to outsource software development, while retaining complete autonomy and decision-making regarding which applications eventually make it into the store. This platform is a win-win for Apple, as its products are improved and, more importantly, the customer experience is enhanced because partnerships with outside developers give customers Outside firms should not be seen as threats; instead, a company can look outside its walls and leverage innovative partnerships to improve its overall customer experience. 8

10 Leadership Alignment Capability Audit Capacity Development Organizational Transformation What is the value to our organization of investing in customer experience? How are we positioned to deliver on our customer experience vision? How should we resource and build out our organizational capabilities that impact customer experience? How do we build an organization and culture that prioritizes customer experience? Objective Raise awareness of the importance of customer experience: articulate and communicate how it fits with business goals; establish customer experience as a explicit organizational priority Understand the current state of the organization s ability to deliver a customer experience by assessing the who and how of the customer experience framework Building on existing capabilities as a foundation, redesign the structure, systems, resources, and processes as necessary to support the desired state Create an aligned organizational structure and culture that understands and carries out the customer experience vision Action Identify and engage leadership and functional managers across the organization to promote alignment Gather information about the current customer experience Study best-in-class customer experience exemplars Develop a customer experience vision that fits with brand values and organizational culture Analyze each element of the customer experience framework for its capability to support the desired vision Map results to the intended vision; prioritize outcome for action Identify gaps and opportunities for improvement Invest in relevant technology; hire and train staff Define and test new processes Apply branded elements at key touchpoints Plan and communicate Establish communication channels that can be used to inspire and enable key functional areas Create performance measurement metrics and reward good performance Establish a permanent customer experience management structure Outcome Aligned management team with a customer experience vision to serve as True North for customer experience efforts High-level strategy & preliminary roadmap for building organizational capabilities Organizational structure and processes that support the delivery of the desired customer experience An organization capable of effectively executing against the customer experience vision access to hundreds of thousands of software applications. At the time of this writing, Apple customers have downloaded 35 billion apps from its selection of over 700,000 offerings, making this business model one of the most influential of all time. The key takeaway here is that outside firms, which have traditionally been a cause of fear among management, do not have to be seen as threats; instead, a company can look outside its walls and leverage innovative partnerships to improve its overall customer experience. Communication The need to drive system alignment around a customer experience vision requires an equal, if not a more urgent, need to foster communication across all levels: management to employees; organization to customer; customer to organization; and organization to its market and other stakeholders, to name a few. The role of communication in the delivery of compelling customer experiences is to convey the brand s promise, values, and identity, all of which must be continually reinforced through consistent messaging. Apple s retail business is a great example of communication being effectively used to deliver the customer experience. Even amidst the chaos of a day during the busy holiday season, navigating an Apple store is surprisingly easy because of the extent to which the employees effectively communicate with customers, setting expectations and delivering upon their promises. When potential customers enter an Apple Figure 4: Motiv s model for driving customer experience transformation. 9

11 store, a knowledgeable employee whose role is to understand and fill customer needs greets them; rather than having to seek out a customer service employee, that person comes to the customer. Apple s retail experience also addresses one of the most frustrating aspects of any customer experience: the customer hand-off. If an employee cannot meet a customer s particular needs, he or she clearly articulates why that is the case and how he or she will address the issue; if that customer is directed to a different employee, the issue is openly briefed so that the customer and his issue are cleanly transitioned. Apple s retail presence has been so successful in large part because of its ability to dramatically improve the customer service nightmare by providing attentive and personalized service to meet needs rather than push products. Leave it to the leaders in seamless user interface and integration to design a customer experience centered around effective communication at all levels! needs instead of selling existing solutions is key to success. The framework laid out above provides guidance about how you can build a customer experience architecture in your organization, focusing on the Customer Experience Vision, the Who, and the How. Regardless of how customercentric you may believe your organization to be, it is important to have a clearly articulated customer experience vision and address all elements from the How and the Who sections in order to ensure that customer experience isn t just a one-off innovation initiative. Changing your firm s culture and processes from hiring and training customer-centric employees, to leveraging technology to gather data and refine customer experience offerings is not an insignificant challenge; however, as our industry exemplars have shown, the returns on such investments can be exponential. Where to start Our clients often ask us, So, where do I begin? Figure 4 illustrates a process we suggest to drive decision-making, capacity development, and ultimately organizational transformation. Conclusion Industry leaders have made it abundantly clear that in order to create loyal customers and differentiation in today s crowded marketplace, delivering superior customer experiences, rather than simply selling a product or service, is critical. These companies have shown that addressing and solving customer Authors Jeneanne Rae President and CEO [email protected] Ian Campbell Director [email protected] Greg Berguig Consultant [email protected] Joy Thomas Strategist [email protected] 10

12 Motiv helps leading organizations create new strategies for growth. We combine business analysis with design strategy tools to help our clients discover new opportunity spaces, develop new services and better customer experiences, and drive the change management required to enable breakthrough innovation. 811 North Royal Street Alexandria, Virginia motivstrategies.com