Managing and Measuring Customer Delight

Prof. Dr. Matthias Gouthier Chair of Marketing and Electronic Services / Center for Service Excellence 1 Managing and Measuring Customer Delight Prof. Dr. Matthias Gouthier Chair of Marketing and Electronic Services Center for Service Excellence

Prof. Dr. Matthias Gouthier Chair of Marketing and Electronic Services / Center for Service Excellence 2 Agenda 1 2 3 4 5 Introduction in Customer Delight Triggers of Customer Delight Tools to achieve Customer Delight Measurement of Customer Delight Outlook

Prof. Dr. Matthias Gouthier Chair of Marketing and Electronic Services / Center for Service Excellence 3 Customer Satisfaction has Become a Typical Business Goal In our company, customer satisfaction is a major business goal 80 70 60 50 40 30 20 10 0 in Percent 70 27 3 0 I fully agree I agree I rather disagree I fully disagree n=211

Prof. Dr. Matthias Gouthier Chair of Marketing and Electronic Services / Center for Service Excellence 4 Cause-Effect-Chain of Customer Satisfaction Customer Satisfaction Customer Loyalty Market Success Economical Success

Stronger Effects of Customer Delight on Customer Behaviour Prof. Dr. Matthias Gouthier Chair of Marketing and Electronic Services / Center for Service Excellence 5

Prof. Dr. Matthias Gouthier Chair of Marketing and Electronic Services / Center for Service Excellence 6 Customer Delight is a Top-3-topic in 2013 Results of a cooperative study between buw and CSE Is Customer Delight a Top-3-topic in your organization? No 19% Yes 81% n = 194 companies Source: buw/cse (2013): Kundenbegeisterung im Kundenmanagement [Customer Delight for Customer Care Centers], Osnabrück/Oestrich-Winkel.

Customer Delight in German Advertisements Prof. Dr. Matthias Gouthier Chair of Marketing and Electronic Services / Center for Service Excellence 7

Driven to Delight Example of Mercedes-Benz Customer Service Prof. Dr. Matthias Gouthier Chair of Marketing and Electronic Services / Center for Service Excellence 8

Gap Analysis of Service Excellence and the Achievement of Customer Delight Importance: In your opinion, how important is it to provide excellent service to the customers in car dealerships? Performance: How successful is the car dealer in delighting their customers? Customer Evaluation: How successful is the car dealer in delighting you? Very important Very good Very good 14,5 20 Importance Performance Customer Assessment 85,6 Important Good Good 13,6 46,7 76,9 Partly important Mediocre Mediocre 0,8 8,5 27,7 Unimportant Poor Poor Very unimportant Very poor Very poor 0 0 4,3 0 0 1,3 Remarks: - All indications in %; - Importance and Performance: 118 car dealerships; - Customer Evaluation: 300 customers; - No exact comparability between self-assessment of dealerships and customer evaluation possible. Source: AIM/CSE(2013): Automotive Service Excellence, Oestrich-Winkel. Prof. Dr. Matthias Gouthier Chair of Marketing and Electronic Services / Center for Service Excellence 9

How should we manage and measure customer delight? Prof. Dr. Matthias Gouthier Chair of Marketing and Electronic Services / Center for Service Excellence 10

Prof. Dr. Matthias Gouthier Chair of Marketing and Electronic Services / Center for Service Excellence 11 Agenda 1 2 3 4 5 Introduction in Customer Delight Triggers of Customer Delight Tools to achieve Customer Delight Measurement of Customer Delight Outlook

Prof. Dr. Matthias Gouthier Chair of Marketing and Electronic Services / Center for Service Excellence 12 Triggers of Customer Delight Literature Overview Arnold, Reynolds, Ponder, & Lueg (2005) Barnes, Ponder, & Dugar (2011) Johnston (2004) Interpersonal Effort (helpful) Interpersonal Engagement (friendly/nice) Problem Resolution (corrected a situation/ willing to go outside of rules) Interpersonal Distance (not too pushy) Time Commitment (looked for product/took time) Unanticipated Acquisition (found exactly the right product) Unanticipated Value (price/bargain) Would recommend Convenience Employee Effort (attentiveness/helpfulness/ extra effort) Employee Affect (caring/friendly) Employee Skill (employee expertise/ terrific service quality) Service Failure Recovery Bend Rules/Free Stuff Core Product Time Issue They go the extra mile They make it personal They deal well with problems They deliver the promise

Prof. Dr. Matthias Gouthier Chair of Marketing and Electronic Services / Center for Service Excellence 13 Triggers of Customer Delight The Customer Perspective Study Design: Cooperate study between Sample: n= 1515 end customers (international) Customer Experience Management in the Automotive Industry Focus on the design of customer experiences along relevant contact channels Filter question in order to determine customer delight, leading to a total of 200 incidents 6 Manufacturers:

Prof. Dr. Matthias Gouthier Chair of Marketing and Electronic Services / Center for Service Excellence 14 Triggers of Customer Delight Replication Study Main Category Sub-Category No. of incidents % of Incidents Competenceand Effort Level Skills/Expertise/Competence 15 6,82 Extra Effort 14 6,36 Helpfulness/Attentiveness/ Proactiveness 26 11,82 Personal Level Reliable/Feeling Safe and Cared for / Authenticity 16 7,27 Friendly/Nice/Fun 24 10,91 Personal/Attention/Customer Appreciation 16 7,27 Unanticipated Value Non-Monetary 15 6,82 Monetary 29 13,18 Excellent/TerrificService Quality 17 7,73 25,00 25,45 20,00 Time Dedication 29 13,18 Satisfaction 7 3,18 13,18 Provision & Ensuring of Core Activity (Delivering the Promise) 7 3,18 Innovativeness 0 0,00 Tangible atmosphere 5 2,27 Problem Resolution/ Service Recovery 0 0,00 TOTAL 200

Prof. Dr. Matthias Gouthier Chair of Marketing and Electronic Services / Center for Service Excellence 15 Triggers of Customer Delight The Management Perspective Study Design Cooperate study between Sample: n=197 customer managers Exploratory study design, cross-industry national survey via telephone Surveying status quo of customer delight in organizations Importance of customer delight as organizational goal Understanding of customer delight Measurement of customer delight and efficiency

Prof. Dr. Matthias Gouthier Chair of Marketing and Electronic Services / Center for Service Excellence 16 The Management Perspective Main Category Sub- Category No. of incidents % of incidents (T) % of incidents (A) Competenceand Effort Level Skills/Expertise/Competence 10 8,20 4,61 Extra Effort 1 0,82 0,46 Helpfulness/Attentiveness/ Proactiveness 8 6,56 3,69 Personal Level Reliable/Feeling Safe and Cared for/authenticity 11 9,02 5,07 Friendly/Nice/Fun 2 1,64 0,92 Personal/Attention/Customer Appreciation 5 4,10 2,30 Unanticipated Value Non-Monetary 40 32,79 18,43 Monetary 2 1,64 0,92 Excellent/TerrificService Quality 12 9,84 5,53 8,76 (A) 8,29 (A) 19,35 (A) Time Dedication 8 6,56 3,69 Satisfaction 12 9,84 5,53 Provision & Ensuring of Core Activity 5 4,10 2,30 Innovativeness 4 3,28 1,84 Tangible atmosphere 0 0,00 0,00 Problem Resolution/ Service Recovery TOTAL (T) 122 (A) 217 2 1,64 0,92 3,69 (A)

Prof. Dr. Matthias Gouthier Chair of Marketing and Electronic Services / Center for Service Excellence 17 Customer Delight from the Perspective of Managers Main Category Sub- Category No. of incidents % of incidents (E&R) % of incidents (A) Emotions 8 8,42 3,69 Customer Loyalty Word of Mouth 17 17,89 7,83 Customer Retention in general 53 55,79 24,42 Identification with the Brand & Company 4 4,21 1,84 Satisfaction 0 0,00 0,00 Feedback 9 9,47 4,15 EconomicSuccess and Added Value 4 4,21 1,84 TOTAL (E&R) 95 TOTAL (A) 217

Prof. Dr. Matthias Gouthier Chair of Marketing and Electronic Services / Center for Service Excellence 18 Implications Companies know about the importance of customer delight, however managers associate other categories than customers do: Main Category Perspective Customer % of incidents Organization % of incidents (T) Competence and Effort Level 25,00 15,58 Personal Level 25,45 14,76 Unanticipated Value 20,00 34,43 Time Dedication 13,18 6,56

Prof. Dr. Matthias Gouthier Chair of Marketing and Electronic Services / Center for Service Excellence 19 Agenda 1 2 3 4 5 Introduction in Customer Delight Triggers of Customer Delight Tools to achieve Customer Delight Measurement of Customer Delight Outlook

Prof. Dr. Matthias Gouthier Chair of Marketing and Electronic Services / Center for Service Excellence 20 Measures to Achieve Customer Delight What do you do to delight your customers? in % 40 35 30 25 20 15 10 5 0 37,8 14,1 8,3 3,8 10,3 3,2 1,9 3,2 17,3 n=123 Source: buw/ebs (2013): Customer Delight in Customer Management [forthcoming].

Prof. Dr. Matthias Gouthier Chair of Marketing and Electronic Services / Center for Service Excellence 21 Status quo of Surprise Management in Companies Positive moments of surprise are consciously created for your customers Mean: 2.36 In % 50 40 44,1 38,2 30 20 10 12,7 4,2 0,8 0 Fully applicable Applicable Partly applicable Not applicable Absolutely not applicable Source: buw/cse (2013): Customer Delight in Customer Management, Osnabrück/Oestrich-Winkel.

Channel-Delight-Matrix Channels Shop Call Center Email Website... Sources Personalised Service Friendliness............ Simplicity Helpfulness............ Innovative Technology Use of ipads............ Exclusivity Promptness Co-Creation Exclusive Events Quickresponse Time Customer Workshop.................................... Gamification Contest.............................. Source: Gouthier, M. (2013): Customer Delight Through Service Excellence, 2nd ed., Beuth, p. 107. Prof. Dr. Matthias Gouthier Chair of Marketing and Electronic Services / Center for Service Excellence 22

Prof. Dr. Matthias Gouthier Chair of Marketing and Electronic Services / Center for Service Excellence 23 Agenda 1 2 3 4 5 Introduction in Customer Delight Triggers of Customer Delight Tools to achieve Customer Delight Measurement of Customer Delight Outlook

Prof. Dr. Matthias Gouthier Chair of Marketing and Electronic Services / Center for Service Excellence 24 Measurement of Customer Delight in % 45 41,4 40 35 How do you measure customer delight? 30 25 23,6 20 15 12,2 12,2 10 5 0 1,4 Ask directly Customer for Customer Satisfaction Delight Measurement Customer Survey 1,4 1,4 Internal Survey Customer Feedback 6,4 Customer Loyalty Net Promoter Score Others n=189

Prof. Dr. Matthias Gouthier Chair of Marketing and Electronic Services / Center for Service Excellence 25 Difference between Customer Satisfaction and Customer Delight Customer s perception of the degree to which the customer s requirements have been fulfilled. Delight is a positive emotion that customers experience in response to having their expectations exceeded to an unexpected and surprising degree.

Prof. Dr. Matthias Gouthier Chair of Marketing and Electronic Services / Center for Service Excellence 26 Net Promoter Score (NPS) Promoter Percentage as an Indicator for Delighted Customers The Net Promoter Score (NPS) measures, how successful an organization is in retaining its customers, based on the recommendation intentions of its customers. How likely is it, that you will recommend company/brand X to a friend or colleague? Calculation of NPS: % Promoters Very unlikely Detractors Passives Promoters Very likely % Detractors

Types of Satisfied and Delighted Customers Delighted with car dealer Fully applicable 5 Superficially Delighted Customers Convinced Delighted Customers Enthusiastic Customers NPS*: 88,1 n** = 159 4 NPS*: -35.6 n** = 59 NPS*: 45.9 n** = 861 3 Unsatisfied Customers Satisfied Customers * Net Promoter Score ** Number of customers in this segment 2 NPS*: -75.7 n** = 371 NPS*: -12 n** = 224 Not applicable at all Source: ADL/CSE (2012): Customer Experience Management, Frankfurt/ Oestrich-Winkel. 1 1 2 3 4 5 Very unsatisfied Very satisfied Satisfied with car dealer Prof. Dr. Matthias Gouthier Chair of Marketing and Electronic Services / Center for Service Excellence 27

Prof. Dr. Matthias Gouthier Chair of Marketing and Electronic Services / Center for Service Excellence 28 Direct Measurement of Customer Delight Example of Ritz-Carlton I m a delighted customer of Ritz-Carlton

Prof. Dr. Matthias Gouthier Chair of Marketing and Electronic Services / Center for Service Excellence 29 Direct Measurement of Customer Delight Example of a German Premium-Car Manufacturer Source: Bartl, C./Gouthier, M.H.J./Lenker, M. (2013): Delighting Consumers Click by Click: Antecedents and Effects of Delight Online, in: Journal of Service Research (JSR), Vol. 16, Special Issue IT-Related Service: A Multidisciplinary Perspective.

Prof. Dr. Matthias Gouthier Chair of Marketing and Electronic Services / Center for Service Excellence 30 Rocket of Customer Delight Influencing Factors Customer Experiences Customer Delight Business Results Innovation Management Quality Management Customer Experience Management Complaint Management Customer Experiences (KPIs) Innovative service Unexpected added value Personalized Services Handling of complaints Customer Delight Customer Satisfaction Customer Loyalty Repeat purchase Cross-Buying Recommendation Positioning Awareness Image Differentiation from competitors......... Attention: Take Customer Segments into Account! Source: Gouthier, M. (2013): Kundenbegeisterung durch Service Excellence [Customer Delight Through Service Excellence], Beuth Verlag.

Prof. Dr. Matthias Gouthier Chair of Marketing and Electronic Services / Center for Service Excellence 31 Agenda 1 2 3 4 5 Introduction in Customer Delight Triggers of Customer Delight Tools to achieve Customer Delight Measurement of Customer Delight Outlook

Prof. Dr. Matthias Gouthier Chair of Marketing and Electronic Services / Center for Service Excellence 32 Customer Delight Through Employee Delight External Perspective Service Excellence Internal Perspective Excellent Service Quality Excellent Workplace Quality Customer Delight Employee Delight Customer Loyalty Employee Loyalty Economical Success Source: Gouthier, M. (2013): Kundenbegeisterung durch Service Excellence [Customer Delight Through Service Excellence], Beuth Verlag.

Prof. Dr. Matthias Gouthier Chair of Marketing and Electronic Services / Center for Service Excellence 33 Contact Prof. Dr. Matthias Gouthier Chair of Marketing and Electronic Services University of Koblenz-Landau Universitätsstr. 1 56070 Koblenz Germany Phone: +49 261 287 2852 email: gouthier@uni-koblenz.de

Prof. Dr. Matthias Gouthier Chair of Marketing and Electronic Services / Center for Service Excellence 34 Examples of current research projects with industrial partners Customer Delight in an Online Environment Customer Experience Management Customer Experience Management for After-Sales-Services Automotive Service Excellence Customer Delight, Employee Delight and Win the Hearts Customer Delight for Customer Care Centers

Prof. Dr. Matthias Gouthier Chair of Marketing and Electronic Services / Center for Service Excellence 35 Excellence-in-Service-Conference EXIS 2013 05th / 06th September 2013 Motto EXIS 2013: Implementation of Service Excellence: Definition, Realization, Certification Companies represented by this years speakers : Allianz, AOK Bayern, BearingPoint, Deutsche Post, easycredit, Globus SB-Warenhäuser, IBM, Porsche, SAS Institute, TeamBank, Telekom, TÜV SÜD Management Service u.v.m. Further Information: www.exis2013.de Co-organiser Gold-sponsor: Mobility partner: