Enhancing the Understanding of the Total Customer Experience Through Linkage

Transcription

1 Enhancing the Understanding of the Total Customer Experience Through Linkage February 17, 2005 Dave Kreiner Manager, Total Customer Experience and Quality Technology Solutions Group

2 Why are we here? Purpose: Share how HP is using linkage analysis to improve the Total Customer Experience, from the point of view of a Customer Loyalty Practitioner Results: You will have gained a unique (different) perspective on linkage which may help determine whether this approach is right for you and your organization. Steps: The business case for linkage Defining linkage Share the linkage journey Lessons learned Capabilities: This presentation Content Experts Your Questions 2/21/2005 2

3 Those Nagging Questions That Keep Me Up at Night 1. How can I help the organization understand the Total Customer Experience when it is measured with multiple surveys? 2. How can I help the organization understand the financial impact of improving customer loyalty? 3. How can I help the organization to prioritize internal process improvements based on customer loyalty? 2/21/2005 Will I survive this presentation? (will YOU survive this presentation?) 3

4 Rationale for linkage research and analysis There are at least two trends that are driving the recent interest in and growth of linkage analysis and modeling: Desire for improved managerial confidence in and support for decisions regarding where/how to invest organizational resources Growing need to understand and align performance management within and beyond organizational boundaries and linkage helps minimize silo behavior of research 2/21/2005 4

5 Focus of linkage analysis Linkage research and analysis is rapidly-growing as an area of importance to marketers and marketing researchers. Linkage research and analysis is aimed at establishing: How key business results are related to effective management of customer experiences and relationships How successful customer experience/relationship management, in turn, is linked to and driven by effective alignment of people and processes within an organization. A more robust decision making process 2/21/2005 5

6 Step # 1: Defining Linkage Approach Understand the Big Picture Within the Survey Structure Downstream from the Survey Upstream to the Survey Develop a Business Performance Chain 2/21/2005 6

7 Linkage Defined Upstream Analysis Internal Process or employee data to customer perceptions Within the Voice of the Customer Transactional/Relationship/Image Downstream Analysis Overall Customer Perceptions to Business Results 2/21/2005 7

8 Downstream and Upstream Linkage Internal Process Measures Customer Experience Measures Business Results Measures Upstream Easy to Easy to Find & Buy Find & Buy Products Products Brand Image Brand Image and and Reputation Reputation Downstream Number of Number of Repeat Repeat Contacts or Contacts or Site Visits Site Visits Number of Number of Hours to Hours to Resolve Resolve Problem Problem First Time First Time Problem Problem Resolution Resolution Total Time Total Time To Problem To Problem Resolution Resolution Easy to Easy to Use Use Products Products Customer Customer Service & Service & Support Support Product Product Quality Quality and and Reliability Reliability Overall Overall Customer Customer Loyalty Loyalty Purchase & Purchase & Ownership Ownership Costs Costs Share of Share of IT Budget IT Budget Customer Customer Revenue & Revenue & Profitability Profitability 2/21/2005 8

9 Business Performance Chain L5 VOW L4 Operational Metrics L3 Transactional Surveys L2 Product Specific Surveys L1 Relationship Surveys L0 Financial Results Phase 3 Phase 4 Phase 1 Phase 2 Phase 5 Phase 6 2/21/2005 9

10 The Linkage Challenge The ideal situation for analyzing and integrating data from multiple streams would involve common data points for which all relevant measures are available. Unfortunately, the ideal situation almost never exists, especially at a single point-intime. As a result, linkage typically is a matter of approximating the business model by piecing things together. 2/21/

11 Step # 2: Develop a Enterprise Blueprint Blueprint puts definition and detail into the Business Performance Chain Blueprint provides the framework for linkage Blueprint will improve the strategic relevance of survey data Agreement by key stakeholders helps move project forward 2/21/

12 General Architecture: Map of Measures (as seen externally by customers, not internally) Hardware Hardware Products Products Software Software Provider Provider of of Solutions Solutions Outsourced Outsourced Services Services Consulting Consulting Transactions, Transactions, Relationships, Events, and Moments Events, and of Truth Moments of Truth Product Support Product Support Experience Attachment 2/21/

13 Step # 3: Linkage Within the Voice of the Customer Determine which surveys should be included Align scales to enable linkage Develop bridge measures to enable linkage across survey instruments 2/21/

14 Bridge Modeling u As the name suggests, bridge modeling is a technique that makes it possible to link data across multiple, separate survey instruments, in order to create one overall chain of effects. u A necessary requirement for performing such modeling is the presence of common survey items across the multiple surveys being linked. The survey items that are common across the multiple surveys, and that are used to link these surveys are called bridge measures. The bridge measures should be identical (or nearly identical) in their wording and scale type across the surveys being linked. Once the path from a lower-level bridge measure to a higherlevel measure has been quantified, the projected impact of the lower-level measure can be incorporated into ROI simulations and other what-if scenarios. 2/21/

15 Linking Transaction Surveys to Relationship Surveys: The Bridge Model Technical Technical Courier Courier Channel Channel Installation Installation Remote with Remote with Phone Phone Remote with Remote with Part Part Overall Overall Satisfaction Satisfaction With Support With Support Overall Satisfaction With Support Customer Loyalty Repair and Repair and Return Return Advanced Unit Advanced Unit Replacement Replacement Sub-Contracted Sub-Contracted On-Site On-Site HP CE HP CE On-Site On-Site Transaction Transaction Surveys Surveys Relationship Surveys 2/21/

16 Step # 4: Linkage to Downstream Business Results Enterprise Blueprint provides the framework for linkage assessment Critical success factors: Availability of appropriate data Establishment of common unit of analysis Appropriate tools and techniques of linkage analysis and modeling Not simple correlations 2/21/

17 Projected Impact of Improving Overall Pre- Sales Support on IT Budget Dollars Spent with HP Improving Overall Pre-Sales Support by 1 rating point on average... Overall Pre-Sales Overall Support Pre-Sales Support.xx Buying Buying.xx leads to a X$ increase in HP Spending by the average B2B customer Getting & Getting & Using Using.xx Company Company Imagery Imagery.xx Customer Customer Loyalty Loyalty.xx HP Spend $$ HP Spend $$ 2/21/

18 Step # 5: Future Work Linkage of customer experience to operational performance and employee engagement Develop an end to end proof of concept model Improve ability to match and merge data sets Develop more operational models for specific businesses 2/21/

19 HP Business Performance Chain Linking employees customers business results TCE business performance chain Employees Employee engagement and experience Customers TCE and organization performance Business Business results People processes Other Operational metrics Key drivers Market share People management VoW CLI Gross margin Level Legends HR In the process of defining employee engagement and experience. Proof of Concept quantitative linkage is being established Quantitative linkage has been established. 2/21/

20 Lessons Learned Enterprise Blueprint enhances the process Obtaining the appropriate data is a struggle Align these resources early Position initial work to senior leadership as proof of concept Engage business leadership Position as decision support process vs a high end market research process Scope creep others joined on willing to share Hard work keep plugging on data availability Collaborative effort with the supplier There may be a better mousetrap! 2/21/

21 2/21/

22 Advancements in Analytical Protocols Not just correlations A variety of other analytical techniques that are better suited for linkage analysis and modeling: HLM (Hierarchical Linear Modeling) LCA (Latent Class Analysis) PCR (Principal Components Regression) PLS (Partial Least Squares) Regression (e.g. Logit models) SEM (Structural Equations Modeling) 2/21/