Loyalty to service provision: creating loyalty through the customer experience

Transcription

1 Loyalty to service provision: creating loyalty through the customer experience EDUCATING LEADERS FOR 800 YEARS Dr Richard Cuthbertson Research Director Oxford Institute of Retail Management Saïd Business School, University of Oxford

2 Outline A customer experience Findings from The Intentional Customer Experience TM research programme, sponsored by Amdocs Tips for best practice Reconstructing the value chain The future customer experience

3 A customer experience? Our purpose is to provide services and benefits for customers Are they valued? Our goal is to have the most satisfied customers What about the least dissatisfied? Our goal is to exceed customer s expectations What are their expectations? Our core purpose is to create value for customers to earn their lifetime loyalty Tesco, 2008

4 What is customer experience? Customer Experience one who frequents any place of sale for the sake of purchasing a person with whom one has dealings the events that have taken place within the knowledge of an individual, a community, mankind at large, either during a particular period or generally Source: Oxford English Dictionary, 2008 Q. What do you know about your customers experiences?

5 Differences along the customer journey CUSTOMER SERVICE Service Shopping PRICE PRODUCT QUALITY Repurchase First Purchase BRAND Q. Do you know what customers want, and when?

6 What customer experience is not Customer experience is not fluffy it is about operational execution & measurement based on customer knowledge customer experience is not always about being nice to customers Head of Customer Experience, UK Mobile Operator Q. Do you know what you want to provide, and what you do not want to provide?

7 Customer experience across and within industries Harris Interactive Customer Experience Report, March 2006 Q. Do you know how your customer experience compares to others?

8 Impact on the customer experience H I G H Product Quality critical at every stage of the customer lifecycle L O W Promotion not evident at any stage of the customer lifecycle Q. Do you focus on your needs or your customers?

9 Confused lines of responsibility 100% There is no end-to-end responsibility for the customer experience 80% 60% 40% 20% 0% Defining customer experience strategy Delivering Customer Satisfaction Improving Customer Satisfaction Measuring Customer Satisfaction Corporate Strategy Customer Insight Customer Services Finance Marketing Operations Sales Other Q. Does someone have overall responsibility AND authority for your customer experience?

10 Dealing with different customer needs Segmentation Popularity Average Importance Demographics 80% 6.4 Value 78% 6.6 Geography 76% 5.6 Need 60% 6.2 Behaviour 56% 5.9 Culture 24% 3.0 Demographics is the easiest way to segment and analyse our consumers. However this generalisation doesn't really take into account their needs and values. Q. Do you focus on what is easiest or what is most relevant to your customers?

11 across different channels Customers expect cross-channel coordination Pricing is not the differentiating factor across channels to customers but cost may be an important differentiating factor across channels to companies Only 10% of companies claim to have successfully integrated their channel operations Separate channels Very little integration Partly integrated Mostly integrated Fully integrated 0% 5% 10% 15% 20% 25% 30% 35% Q. Are your customers experiences integrated across all channels?

12 Diluting the message 80% of executives said their company delivered a superior customer experience only 8% of customers felt that companies delivered a superior customer experience - Bain and Company (2006) Q. Does everybody in your organisation have the same view of the customer experience?

13 Measuring the business One in three companies never measure customer satisfaction Metrics are internal and operational Satisfaction dissatisfaction Q. Do you measure what your customer really wants?

14 Customer satisfaction feedback 40% 35% 30% 25% 20% 15% 10% 5% 0% Hourly Frequency of measurement is dictated by traditional market research techniques Daily Weekly Monthly Bi-Monthly Quarterly 6-Monthly Annually > Annually Never Q. Are you responsive to changing needs?

15 We need an Intentional Customer Experience TM Intentional done on purpose Unintentional not done with, not arising from, intention Competitors The customer experience Source: Oxford English Dictionary, 2008 Analysis and planning The proposition Customer experience management activity Win back Targeting Enquiry management Measuring the effect Managing problems Welcoming Customer development Getting to know customer Processes People and organisations Technology Q. Is your customer experience designed or accidental?

16 So, we know the requirements People / Organization Process > Simplified customer processes > Delivery of a multi-channel customer experience > Integrated channel management > Increased utilization of Increased online capability Systems / Technology > IT utilized as the enabler for improved customer experience > Reduced emphasis on product innovation > Holistic one company approach to customer experience > Defined customer experience strategy emphasis on service and experience differentiation > Proactive approach to customer experience Cost > Importance of cost outweighed by importance of advocacy > Focus on cost-effectiveness > Evaluation using longer term view

17 Tips for best practice Identify who has overall responsibility and authority for the customer experience Design an overall customer experience that will achieve the business goals, taking account of customer acquisition and retention Profile key customers and design their experiences, identifying and resolving any conflicts arising Measure the customer experiences in multiple ways, to reflect different company and customer priorities Actively communicate and feedback the customer experience to the company and the customer

18 From strategy through capability to delivery CUSTOMER BUSINESS MANAGEMENT Vision Strategy People Information Infrastructure Capability Product Portfolio Service Buying Mobile Store Post Telephone Web Delivery Shopping CUSTOMERS

19 Reconstruct the value chain, from product-led Supporting activities Firm infrastructure Human resources Technology development Procurement Margin Supply chain Store locations and design Marketing and promotion Store operations Customer service Margin Primary activities Source: McGoldrick 2002, after Porter 1985

20 to customer-led Functional activities Buying and supply chain Store locations and design Marketing and promotion Store operations Customer service Margin Fundamental activities Customer development Technology development People development Firm infrastructure Margin Source: Cuthbertson 2006, after Porter 1985

21 The challenge Customers are diverse Organisations must seek to reflect this diversity without losing the ability to manage the core business This implies integrated channels, people, systems, and measures

22 The future customer experience Intentional vision focused on capability Price, value, service, niche -> Brand clarity Intentional delivery communicated to all Employee, customer, investor, community -> Operational excellence Intentionally monitored and revised accordingly Strategy, finance, people, operations, marketing -> Consumer-competitor dynamic