Achieving customer experience excellence Customer Experience 101 The expert knowledge series Achieving customer experience excellence PAGE 1
Customer experience 101 - The expert knowledge series // Chapter 1 Contents INTRODUCTION 3 THE CUSTOMER OF TODAY AND DIGITAL DISRUPTION 5 WHAT IS CUSTOMER EXPERIENCE? 7 Is the emotion attached to customer experience more important than the experience itself? 7 What is the importance of cumulative experiences along the customer journey? 9 THE BENEFITS AND ROI OF CUSTOMER EXPERIENCE EXCELLENCE 10 WHAT DOES GOOD CUSTOMER EXPERIENCE LOOK LIKE AND WHAT WE CAN LEARN FROM THE UK S LEADING BRANDS? 11 John Lewis 12 Amazon 14 First Direct 16 CONCLUSION 18 PAGE 2
Achieving customer experience excellence Introduction Customer experience has become a critical differentiating factor for brands across all industries today. Fuelled by the rapid evolution of technology, customers are now more powerful than ever before, and markets are becoming increasingly competitive as digital disruption takes hold. Numerous studies highlight the fact that companies that deliver customer experience excellence enjoy significant revenue gain as a result, compared to their lower performing counterparts. According to Forrester the impact from a 10-percentage-point improvement in customer experience score can yield over $1 billion1, and the revenue impact from a modest improvement in customer experience can range from $177 million to $311 million2 Established enterprises also face the very real threat of new market entrants in the form of digital disruptors such as Uber that are harnessing the latest technology to meet customer needs and expectations better than ever before. 1 Customer Experience Boosts Revenue, Forrester, 2010 2 Navigate The Future of Customer Service In 2014, Forrester, 2014 PAGE 3
Customer experience 101 - The expert knowledge series // Chapter 1 Business leaders recognise that competing on price, product or service alone is simply no longer enough and a focus on truly strengthening and cementing customer relationships has shot to the top of the corporate agenda. Brands in the U.K. are currently losing nearly 15 billion annually due to poor customer service.3 In order to be successful, businesses must now focus on delighting their customers, meeting their growing expectations and communicating with them on a more human and personal level. Marketers must be able to engage their audiences by delivering highly contextual, relevant and personalised experiences based on true insights derived from each customer s unique behaviour. In this chapter of the CX 101 series we ll look at the business landscape of today which highlights the need for organisations to focus acutely on their customers. We ll explore the definition of customer experience, examine the benefits and ROI that can be achieved from customer experience excellence, and take a look at what good customer experience looks like with examples from leading brands including John Lewis, Amazon and First Direct. 3 UK Businesses Losing Over a Third of Customers Due to Poor Service, ClickSoftware, 2014 PAGE 4
Achieving customer experience excellence The customer of today and digital disruption We are living in what Forrester calls the age of the customer. Customers today are increasingly connected, they have access to the latest in consumer technology, they are time-poor, their expectations are greater than ever before and they simply won t tolerate a sub-standard customer experience from the brands they choose to do business with. They have more buying power with selfservice access to information, peer reviews and social opinion. Customer 66% percent of B2B and 52% of B2C customers will stop buying from a company after a bad customer service experience and 44% of B2C and 36% of B2B customers are likely to recommend others not to do business with a company after a poor experience.4 loyalty is increasingly fragile and with increased competition and lower barriers to switching, unhappy customers will now simply take their business elsewhere. 4 Customer service and business results: a survey of customer service from mid-size companies, Dimensional research 2013 PAGE 5
Customer experience 101 - The expert knowledge series // Chapter 1 Forrester describes the age of the customer as a 20-year business cycle in which the most successful enterprises will reinvent themselves to systematically understand and serve increasingly powerful customers. 5 This description also highlights the digital disruption which is happening across almost every industry today with brands like Uber, Airbnb and YPlan entering markets and delivering on what the customer now wants, expects and needs. Digital disruptors are armed with new business models designed to bridge the gap between what customers expect and what businesses are actually delivering today. The only way established businesses can compete is by taking their traditional operating models and enhancing them with digital solutions, which build on and enhance their legacy assets to optimise the customer experience. They must position the customer at the heart of their business and focus on strengthening customer relationships and building long-term customer engagement. The real winners in the age of the customer will be those brands that can connect with customers on an individual level and turn valuable customer data into authentic, personal connections. 5 Competitive Strategy In The Age Of The Customer, Forrester, 2013 PAGE 6
Achieving customer experience excellence What is customer experience? Forrester offers a simple definition for customer experience as: How customers perceive their interactions with your company. 6 The most important part of this definition is customer perception. Customer experience is not about what you do as a company or a brand but about how a customer perceives your brand based on all of their interactions with it over time. Each time a customer visits your website, contacts your service team, or sees an online ad for your brand, it will affect their perception and impact the customer experience. 6 Harley Manning, Customer Experience Defined, Forrester, November 2010 Is the emotion attached to customer experience more important than the experience itself? The emotions associated with each interaction will shape the customer experience over time. If we consider a few different experiences such as a rollercoaster ride or an online mobile tablet purchase, each of these experiences will be different for the individual depending on the context of the experience and the emotions felt as a result of that experience. PAGE 7
Customer experience 101 - The expert knowledge series // Chapter 1 A rollercoaster ride may be a thrilling and enjoyable experience for one person while it could be a most terrifying experience for someone else who has an extreme fear of heights. A person s emotion is altered based on how the interactions make them feel. People remember the emotions attached to an experience rather than the experience itself. The context of each customer interaction is also an important element in shaping customer experience and will impact how each experience is perceived. An online purchase of a mobile tablet may be enhanced for a customer if a brand can recall the customer s previous online search activity and combine it with customer data to present the most suitable tablets for her individual needs. By understanding the context of a customer interaction marketers are in a much better position to deliver a personalised and relevant customer experience that evokes positive emotions. Marketers that can harness an understanding of customer context and combine it with the ability to dynamically respond in real time will be in a much stronger position to deliver customer experience excellence. Marketers must be able to anticipate and deliver contextually relevant content, commerce and offers to their customers even before they know they want it. The future is all about building the systems and technology that let us deliver the right experience to the right person at the right time. PAGE 8
Achieving customer experience excellence What is the importance of cumulative experiences along the customer journey? Delivering a one-time experience won t do. In order to build customer loyalty, advocacy and engagement, brands must focus on delivering consistently high quality experiences at every point of interaction along the customer journey. Only then can they create a truly positive perception of the brand. An article in the Harvard Business Review explains that customer experience is about a customer s endto-end journey with your brand with research by McKinsey revealing that most customers don t care about individual transactions or singular touch-point experiences. It is The same study also revealed that organisations that are able to skilfully manage the entire customer experience reap enormous rewards including enhanced customer satisfaction, reduced churn, increased revenue, and greater employee satisfaction. Those organisations also discover moreways to collaborate across functions and levels, a process that delivers gains throughout the company. 7 cumulative experiences across multiple touchpoints and multiple channels over time that affects the customer s perception of the brand. 7 The Truth about Customer Experience, Harvard Business Review, 2013 PAGE 9
Customer experience 101 - The expert knowledge series // Chapter 1 The benefits and ROI of customer experience excellence There is little doubt that the brands that have achieved the highest levels of customer experience excellence are reaping the rewards of their investment. of their customer experience management initiatives, compared to their lower performing counterparts8. The study was based on companies with an average annual revenue of $1.08 billion, but across the board, organisations of all sizes can expect rewards from customer experience excellence to include increased customer loyalty and retention, reduced churn, higher lifetime customer value, greater brand equity and reduced costs of service. Aberdeen Groups 2013 next generation customer experience management study revealed that 83% of B2B and 85% of B2C brand invest in customer experience management programs to grow company revenue and improve the financial health of their business. The Group s research also revealed that Providing good customer experience is a win-win for customers and companies. Customers are more loyal, and loyal customers are more willing to consider another purchase from a company, less likely to switch business to a competitor and likely to recommend the company to a friend or colleague. 9 Kate Leggett, Forrester the world s top performing businesses enjoy an average of $316million in incremental annual revenue as a result 8 Next-Generation Customer Experience Management, Aberdeen Group, March 2013 9 Kate Leggett, Navigate The Future Of Customer Service, Forrester, January 2012 PAGE 10
Achieving customer experience excellence What does good customer experience look like and what we can learn from the UK s leading brands? PAGE 11
Customer experience 101 - The expert knowledge series // Chapter 1 John Lewis John Lewis topped the charts in Nunwood s annual customer experience excellence programme in the UK in 2013.10 In addition to delivering outstanding customer service John Lewis offers a seamless omnichannel experience that has set the benchmark for online retailing in the UK. Customers are empowered to purchase how they want, in the way that they want without being pushed to low cost channels. The John Lewis ownership model lies at the heart of its customer experience Despite continued growth and expansion, John Lewis has still managed to maintain the feel of a local company for its customers. When you go into a John Lewis store you are served by an owner who takes pride in everything the brand stands for. This ensures that customers get excellent service at the front line, no matter which store they go into or who they talk to. success. Every John Lewis staff member shares in the ownership of the business, which in turn, makes ownership of the customer experience more effective. 10 Nunwood customer experience excellence 2013 UK programme PAGE 12
Achieving customer experience excellence John Lewis is emulating this level of customer experience across the business with its omnichannel strategy. We know that about 60% of our customers buy both online and in shops so the approach is to make it absolutely seamless for them to move from one to the other. So they can research in one place and shop in the other, they can buy in one place and pick up in the other the art of sales is consistent across channels, so the whole approach is to make it channel agnostic. They re not even supposed to know or see or realise which channel they're using because it's one overall customer offer. 11 John Lewis MD, Andy Street What other brands can learn from John Lewis: Create a culture for customer experience excellence Invest in employee satisfaction as well as customer satisfaction and link the two Grant ownership of the customer experience to everyone in the company via shared ownership of the business to make it more effective Focus on delivering a seamless omnichannel customer experience across in-store and online channels No matter the size of your company, aim to deliver a personal, localised service so that customers always receive the highest quality customer experience. 11 John Lewis: How a 150 year-old retailer became an omnichannel champion, Mycustomer.com, April 2013 PAGE 13
Customer experience 101 - The expert knowledge series // Chapter 1 Amazon matter more than short-term profits. Sticking vehemently to these core beliefs, Amazon s two directives are to proactively deliver great customer experiences, and to put the customer s bottom-line ahead of your own.13 99.9% of the time Amazon gets it right, Four out of five (82%) UK consumers said that no company offers the same levels of web-personalisation as Amazon.12 however the brand s willingness to resolve a problem satisfactorily, whether it is their responsibility or not, is what truly sets them apart. The brand has raised the bar in customer experience and the challenge is for retailers across the world to try to match that. Amazon s approach has always been steeped in a proactive, principled, and We build automated systems that look for occasions when we ve provided a customer experience that isn t up to our standards, and those systems then proactively refund customers. Amazon CEO, Jeff Bezos uncompromising focus on customer centricity. Its founder Jeff Bezos has always been a true believer in the longterm benefits of customer experience and posits that customer relationships 12 Amazon leads the way for personalisation, say 82% of consumers, The Drum, September 2014 13 The Secrets To Amazon s Wall St.: Defying Customer Experience Strategy, CMO.com, April 2013 PAGE 14
Achieving customer experience excellence Amazon not only aims to meet customer expectations but to exceed them wherever possible. Its efficiency in terms of logistics and service response is second to none and the company has spent the past two decades building its own technology in order to achieve this. By understanding its customers and creating a single view of each customer Amazon delivers the most relevant products and personalised messages to the right customers at just the right time and all in the most efficient way possible. This has proven to be a powerful concept in business with Amazon topping the polls time and time again for its excellence in customer experience. What other brands can learn from Amazon: Earn customer trust by proactively delighting customers Don t just listen to your customers, understand them Invest in the systems and technology needed to achieve the highest levels of customer experience excellence Put your customer s bottom line ahead of your own Take a long-term view, and the interests of customers and shareholders align PAGE 15
Customer experience 101 - The expert knowledge series // Chapter 1 First Direct First Direct achieved top position in Nunwood s UK customer experience excellence poll in 2014.14 The brand attributes its success to longterm investments in both capabilities and culture centred around the customer and a dedicated and continuous focus on the quality of the customer experience. The brand creates fans rather than customers and is setting the gold standard for customer experience excellence in financial services. The world of banking has changed beyond recognition in the 25 years since we launched on 1 October 1989 and started a service revolution. Our future will continue to be based around our customers - which is exactly how we started all those years ago. First Direct cites outstanding empathy as being central to its success. In the Nunwood assessment customers praised the brand s personable service, staff knowledge and ability to answer the phone quickly without the need to navigate a telephony routing system. The brand s customers know exactly what to expect and find their expectations consistently achieved and often exceeded. Tracy Garrad, CEO, First Direct 14 Nunwood Customer Experience Excellence 2014 UK analysis PAGE 16
Achieving customer experience excellence What other brands can learn from First Direct: Remove the barriers between the customer and the bank Focus on first call resolution and delivering a personalised service to each and every customer Employ people who want to serve the customer and care about doing a good job Recruit new employees via referrals from existing staff Train your staff intensely and empower them to handle and resolve any issues brought to them by their customers PAGE 17
Customer experience 101 - The expert knowledge series // Chapter 1 Conclusion This paper highlights the fact that in today s customer empowered, digitally disruptive world customer experience can make or break a brand. According to Watermark The reality today is that many sources of competitive differentiation can be fleeting. Product innovations can be mimicked, technology advances can be copied, and cost leadership is difficult to achieve let alone sustain, but a great customer experience, and the internal ecosystem supporting it, can deliver tremendous strategic and economic value to a business, in a way that s difficult for competitors to replicate. 15 A brand s ability to harness the social advocacy delighted customers can provide, can substantially lower the marketing investment required to attract new customers and increase the ROI of their marketing initiatives. Organisations that are not invested in customer experience are now finding it difficult to compete with those that are strategically investing in driving compelling customer experiences, throughout the lifetime of, and dialogue with their customer. In order to achieve customer experience excellence brands must adopt a truly customer focused culture and envelop customer experience into their business strategy. They must recruit the right talent to deliver customer experience excellence and equip them with the most powerful and holistic systems and technology available. 15 The 2014 Customer Experience ROI Study, Watermark, 2014 Share this ebook PAGE 18
About Sitecore Sitecore is the global leader in customer experiencemanagement. The company delivers highly relevant content and personalized digital experiences that delight audiences, build loyalty, and drive revenue. With the Sitecore Experience Platform, marketers can own the experience of every customer that engages with their brand, across every channel. More than 4,000 of the world s leading brands including American Express, Carnival Cruise Lines, easyjet, Heineken, and L Oréal trust Sitecore to help them deliver the meaningful interactions that win customers for life. Customer Engagement Digital Transformation Marketing Agility Social Marketing Connecting Commerce Mobile Marketing I d like to learn more about marketing experience platform +44 (0) 203 3270637 Sitecore UK Ltd 4th Floor, International House 1, St. Katharine's Way, London E1W 1UN www.sitecore.net @SitecoreUK