SEYMOUR SLOAN IDEAS THAT MATTER MOVING BEYOND CUSTOMER EXPERIENCE TOWARDS CUSTOMER ENGAGEMENT - A WINNING APPROACH

Transcription

1 SEYMOUR SLOAN IDEAS THAT MATTER MOVING BEYOND CUSTOMER EXPERIENCE TOWARDS CUSTOMER - A WINNING APPROACH

2 INTRODUCTION The traditional discussion within organisations has always focused around the customer experience and engineering a great experience. However, the challenge in delivering this lies in the fact that customers usually engage with brands from separate and sometimes opposing start points. As such, the experience is a subjective concept, individual to each customer, one in which brands have a meaningful but limited impact. From a technical perspective, organisations underpin their customer management approach with multiple systems from multiple vendors. These platforms rarely interact with each other, giving an important aspect of customer management a fragmented look. Seymour Sloan, following discussions with leading executives believe that the main focus is on how organisations engage with their customers. This moves the thinking from a transmitter/receptor relationship towards an integrated two-way approach where engagement is based more on customer understanding and need. Business leaders understand that in an increasingly competitive market and facing diminishing differentiation, effective customer engagement is the key to sustainable development. One of the challenges currently is moving the focus from the technology available towards focusing on the psychology and emotion of the engagement. With the proliferation of new technologies, CEOs are looking for ways to play on each platform, chasing the technology when, in fact, focusing on customer impact would prove more effective. Seymour Sloan understand that defining the correct engagement framework will allow organisations to make platforms work for them. This is likely to drive creative ways to use existing and upcoming developments in technology. Below we outline 7 areas of focus to enhance the development of a leading customer engagement model. As the market moves slightly away from products towards brands, delivering effective customer engagement becomes the significant differentiator. 89% of CEOs aspire to be customer engagement leaders in their market, yet 59% are yet to commence a customer engagement initiative SEYMOUR SLOAN RESEARCH 2014

3 #1 UNDERSTANDING CUSTOMER Customer engagement, in its simplest form, is the totality of brand customer interactions. It is more than to touchpoints and more than the service, it is about the customers emotional response to the customer journey. In terms of start point, it commences with initial customer engagement with the brand. This can be the initial advertisement or the first website visit. In reality, any stage in the journey could serve as the start point, which presents a strong case for having no weaknesses in any aspect of the proposition. The diagram below illustrates the interaction between the key elements of customer engagement and the key outcomes from each. Ultimately, successful organisations will maximise all three elements in an integrated manner and it at this point that customer engagement becomes a powerful tool for sustained growth. Some touchpoints may include: Social media engagement Customer rewards and loyalty schemes Promotions Corporate and retail websites Physical stores The significant aspect of customer engagement and one that is often forgotten is the ability to understand and maximise the moment. The moment is defined as, the instance where the customer requires the organisation to provide the outcome, but an outcome consistent with the broader context of the customer interaction and wider customer journey. BUILDING AN EMOTIONAL CONNECTION Branding Relationship Management Social Media BUSINESS (CREATION) OPERATIONAL EFFECTIVENESS Process efficiency Automation Data Cost Reduction PEOPLE (CONSUMPTION) TECHNOLOGY (FACILITATION) EFFECTIVE Interaction Products and Services Communication Feedback Refinement SERVICE EFFECTIVENESS Ecommerce Self-service Customer collaboration and communication Figure 1: The elements of customer engagement. Organisations must aim to fi nd that sweet spot where all the elements combine neatly and this combination is what the customer experiences. The aim is to make life as easy for the customer as possible.

4 #2 DEFINING THE CUSTOMER FRAMEWORK Successful customer engagement is only 30% strategy and 70% culture. Reshaping culture is what will embed the right behaviours and processes to deliver effective customer engagement. Organisations must define the elements by which they want their engagement to be defined. These will vary by organisation and available resources. These high-level elements should be reflected in each customer touchpoint to a consistent level of quality. A significant consideration is understanding the key moment and the wider context that surrounds it in order to deliver the right solution for each customer. With this definition, requirements are set for each touchpoint, from there; it is easier to establish the appropriate platform to use. It is vital that these are developed separately but tested together and against the original high-level requirements. This creates a proactive approach to dealing with the changing IT landscape and provides an easier framework by which to monitor and assess performance. Supporting that is the need to capture all relevant customer data to inform subsequent decision making. Figure 2: The stages customer engagement. In the journey from a product-led business to a customer-led business it is wise to understands the requirements of each step from moving from product, to service and fi nally engagement as the focus of customer strategy. Each will place demands on your business and having the correct capabilities at each stage is essential. PRODUCT Internally focused organisation SERVICE Brand focused organisation Customer aware and focused organisation DEVELOP AN AMAZING PRODUCT DEVELOP HIGH QUALITY PACKAGAING AND MARKETING DELIVER AN AMAZING LEVEL AND QUALITY OF

5 #3 PLACING VALUE ON CUSTOMER To deliver market leading customer engagement, the whole organisation must understand and buy into the value that it will create both both customer and organisation. In terms of individual moments, identifying the value can prove difficult. However, when aggregated and multiplied through multiple iterations, the effect is significant and can improve the following: Customer retention Increased wallet spend Increased brand advocacy and Reduced complaints volumes These factors all drive growth and once the momentum is built it becomes an upward spiral of success. With that considered, the rverse is true. Poor customer engagement creates a negative spiral that can see a business become extinct with two years, particularly in the fast moving marlket that has become the new normal. Understanding these factors is also important in order to know what value metric to measure and monitor. Once the value metrics are agreed, staff can assess progress against these and see their contribution to enhanced customer value. The main Benefits of Effective Customer Engagement Sales traffic / volume Customer loyalty Sales conversion rate Customer satisfaction Customer advocacy Average order value Brand Value Differentiation Price sensitivity Customer loss ratio Customer support costs Customer retention costs Service costs Figure 3: Benefi ts of successful customer engagement. Bove are some of the benefi ts associated with good customer engagement. In its simplest form it is an essential platform for successful and sustained growth.

6 #4 MOVING INTO THE OMNICHNNEL MODEL In a world where we interact with brands across a number of devices, organisations must be capable of delivering a consistent and fluid service across all channels. This is the holy grail for all organisations, but is limited by existing organisational structures. A seamless world requires an organisation without silos where information and insight flow freely across the whole organisation. In many clients we have seen that the physical and online retail functions are spoken of separately as are the telephone and online servicing fnctions. This is not a sustainable model as inovative start-ups fight to get ever closer to their customers. It is also time for the larger brands to care about their customers. We see four dimensions as being key in moving into the omnichannel world 1. Data Flows - an essential element is the ability to access the customer data from any channel, allowing purchasing and servicing interactions to happen on any platform at any time. 2. Effective Data - as much data to build the individual customer view, as is reasonable, should be collected. this may also include external data. What is key is that all the customer ineractions should link to the individual customer so that their actual value is known. 3. Segmentation - based on the dad held, customers should be semented based on their value to the organisation and the servicing, up-selling and cross-selling can be aligned to the customer personally. tis rill increase rates of return on investment and in our experience is 5 times more effective that most other marketing spend. 4. Scalability - it is vital to create a model that can grow with you with no sacrifice in quality, effectiveness or responsiveness. The omnichannel world is one where no organisation will want to lose. Failure to adapt will leave brands behind the competition and even eliminate them from the market.

7 #5 DATA, DATA AND MORE DATA At the heart of the revolution in customer engagement is a deeper understanding of the customer. This exists at many levels, at the individual level, segment level and as a whole customer base. To do this, organisations must make better use of the data they currently have. The two current challenges in a rapidly changing data landscape are, data quality and data analysis. Currently, most senior executives admit that the quality of the data they currently hold is not to the standards they would like and this has a direct impact of obscuring the customer view. Limited data also affects what analysis can be done with the data. The progress in data volumes and sources has been so rapid that the supporting skills are yet to appear in the right volumes to allow all organisations to explore this new frontier fully. The limited analytical capability has meant that, while organisations say they are in the Big Data world, vey few are. Finding the right skills, or developing them internally, will unlock the insight required to provide a true customer view and one that informs the customer engagement framework. It is this capability that will allow organisations to truly listen to the customer.

8 #6 GOVERNANCE AND ACCOUNTABILITY Successful customer engagement is as much about governance as it is about strategy and culture. Effective governance will support sustainability and keep customer engagement as a consideration in business planning. There are some that call for a specific Chief Experience Officer (CXO), a role we feel complicates rather than simplifies governance. Instead we feel customer engagement should be owned at board level by the CEO, CIO, COO and CMO. As the experience will impact these departments, it is right that they are all deeply invested in the process and that they all offer support in terms of cross functional working, management and accountability. There is even a powerful argument that the CEO should really be the CXO and the customer champion. Elon Musk CEO of tesla is an example of a customer evangelist who places the customer experience at the heart of what the organisation does. Such a structure allows organisations to make decisions with due considerations to the impact on customer experience, another way to ensure the sustainability of the framework. Data from our survey suggests there is no clear rule on how to govern customer engagement. this is to be expected and as a orthodoxy emerges, Executives will be better place to reassess their governance framework. Seymour Sloan Executive Survey Results 45% 15% 65% 85% 55% 35% YES NO YES NO YES NO Do you see there being a role for a Chief Customer within 7 years? Are you currently considering a Chief Customer Officer role? Is the current leadership team aligned to common and consistent Customer Engagement objectives. Figure 4: Our survey results present a mixed picture, one we expect to solidify as customer engagement is better understood and receives greater traction. successful and sustained

9 #7 CREATE, ITERATE AND REINVENT As business cycles shorten and markets change with increasing regularity, it becomes essential to review and reinvent customer engagement regularly. With the right internal data framework customers changing needs should be easier to identify and with the right governance, changes should be swift and targeted. It is also worth considering changes in the external environment. Customers now compare experiences across industries and even geographies and any new innovations in unconnected markets can shape customer expectations. At Seymour Sloan we have identified 5 key stages in enhancing and developing the customer engagement framework. 1) Current-state assessment of customer engagement framework Understand the internal framework and assess, via social media and other feedback channels customers, how customers perceive your brand based on experience. 2) Identify objectives and measures of success Understand what successful customer engagement looks like to the customer and the internal capabilities required to deliver that. In addition, identify key measures of success and how these are monitored. 3) Disrupt Understand what the competition are doing. Identify how to deliver it faster and more effectively. The improvement can be incremental. It is not necessary that it is groundbreaking. 4) Reinvent Use customers and employees as vital sounding boards for innovative ideas. Test and test often, looking to improve iteration by iteration. 5) Look to the Future It is essential to have an eye to the future and identify both, internal and external drivers for change and how best to maximize the opportunities that they present. The future of customer engagement innovation is around the idea of continuous learning and improvement. It will move from being a series of initiatives and programmes towards a continuous spiral of improvement. This is an initiative that should be owned at board level, reflecting its importance to long-term growth.

10 LOOKING TOWARDS AN EXCITING FUTURE As we have discussed, customers usually engage with brands from separate and sometimes opposing start points. This makes creating an experience challenging with a diverse customer base. As we have discussed, we favour a broader approach, looking at customer engagement as a means to build the right relationships with customers. Seymour Sloan see the future shaped by an integrated two-way approach where engagement is based more on customer understanding and need. Business leaders understand that in an increasingly competitive market and facing diminishing differentiation, effective customer engagement is the key to sustainable development. We favour focusing on the psychology and emotion of the engagement as well as allowing the objectives to shape the solution and not the other way around. Above, we outlined 7 areas of focus to enhance the development of a leading customer engagement model. We feel these will provide the right platform for growth in a challenging but exciting new era. SEYMOUR SLOAN 2014