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The Customer Experience

Scenario
Ed Thompson

This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other
authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied,
distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.
2012 Gartner, Inc. and/or its affiliates. All rights reserved.

Is Your Organization Selling Experiences, Or Is


It Still Thinking in Terms of Products?
The experience economy

Commodity
1 to 2 a cup

Goods
5 to 25 a cup

Experience
$2 to $5 a cup

Does Your Organization Have an


Experience Tab on Its Main Website?

Has Anyone Written a Book About Your


Organization's Customer Experience?

How Does Your Corporate Blog Stack Up


Against Southwest's?

Is Your Organization's Customer


Experience as Memorable as Apple's?

Has Your Organization's Customer


Experience Changed the Market?

Will One Interaction Stay With Your


Customer Forever?

el Bulli, Best Restaurant in the World in 2002, 2006, 2007, 2008, 2009
Closed 2011

Are You Willing to Listen to Your


Customers as Much as Zappos?
"Unlike most websites Zappos prominently displays
a toll-free customer-service phone number. There are
no limits on call times, and the resulting sessions
occasionally resemble protracted talk therapy.
On July 5 [2009], a 22-year-old Customer Loyalty Team
member named Britnee Brown, who has been with the
company for a little more than a year, took a call that
was a record 5 hours, 25 minutes, and 31 seconds
long, from a woman on the East Coast interested in
Masai Barefoot Technology shoes."

Source: The New Yorker, 14 September 2009

How Do You Stack Up Against Those Who


Are on Top of Their Game?

Do Your Customers Willingly Tattoo


Themselves With Your Corporate Logo?

Customers Care More About the


Customer Experience Than in the Past
1. 40% of organizations cite complexity as the greatest barrier to improving
multichannel customer experience, overtaking organizational structure since 2010.
2. Only 26% of companies have a well-developed strategy in place for improving
customer experience. Source: Econsultancy MultiChannel Customer
Experience Report
3. 50% of smartphone users would prefer to use a mobile customer service
application to try to resolve their customer service issue before calling into the
contact center. Source: SpeechCycle and Echo Research Study
4. Customers who engage with companies over social media spend 20% to 40%
more money with those companies than other customers. Source: Bain &
Company Report Putting Social Media to Work
5. 63% percent of online adults are less likely to buy from the same company via
other purchase channels if they experienced a problem with a transaction on their
mobile phones. Source: Tealeaf Mobile Transaction Research Report 2011
6. $289 Average annual value of each customer relationship lost to a competitor or
abandoned. Source: Genesys Report The Cost of Poor Customer Service
7. Consumers prefer to resolve their customers service issues using the telephone
(90%), face to face (75%), company website or email (67%), online chat (47%), text
message (22%), social networking site (22%). America Express 2011 Global
Customer Service Barometer

CIO Survey 2012: CIOs See Customer Experience


as the Greatest Opportunity for IT Innovation
Ranked First
Customer experience
(products, services, etc.)

35%
6%
18%

How we learn and


change as a business
Customer engagement
marketing & sales

13%
15%
9%
12%

The way we get ideas


and make decisions
The way we extract
value from customers

Ranked Last

16%
10%
24%
11%

The manufacturing and


service creation process

32%

Distribution of Respondents
12

Key Issues
1. What is a customer experience, and how is its
improvement measured?

2. Which projects will deliver the most positive


customer experiences?
3. How is a strategy created to start to improve the
customer experience?
4. Which technologies and vendors are best for
customer experience management?

Definitions
The dictionary defines experience as: "The sum
total of conscious events."
Gartner defines customer experience as: "The
customer's perceptions and related feelings
caused by the one-off and cumulative effect of
interactions with a supplier's employees, channels,
systems or products."

Gartner defines customer experience


management as: "The practice of designing and
reacting to customer interactions in order to meet
or exceed customer expectations and so increase
customer satisfaction, loyalty and advocacy."

The Measurable Benefits of Customer


Experience Management
Customer
Satisfaction
Loyalty/
Advocacy

Brand/
Reputation
Quality

Customer Satisfaction Scores

Average Cycle Times

Mystery Shopper Scores

Timeliness

Product Review Ratings

Competitive Benchmarks

First-Call Resolution Rates

Number of Support Requests

Customer and Employee Referrals

Average Order Size

Deactivation/Reactivation Costs

Average Customer Tenure

Customer Attrition/Churn Rates

Purchase Frequency

Loyalty Program Enrolled/Participating

Adoption of New Products

Brand Advocates/Net Promoters

Use of Multiple Channels

No. of Product or Service Upgrades

No. of Repeat Orders

No. of Customers "Likely to Defect"

No. of Customers Interacting

Brand Value

Price Sensitivity

Social Network Participation, Likes

Trust Rating

Brand Perception (Recognition,


Credibility, Relevance, Influence)

Website Usability Benchmark

Defect Rates

Delivery Timeliness and Accuracy

Tolerance of New Processes

Product Return Rates

Accuracy of Inventory and Pricing

End-to-End Transaction Times

Sentiment Scores

Key Issues
1. What is a customer experience, and how is its
improvement measured?

2. Which projects will deliver the most positive


customer experiences?
3. How is a strategy created to start to improve the
customer experience?
4. Which technologies and vendors are best for
customer experience management?

Seven Types of Customer


Experience Project
Listen,
Think, Do

From Out
to In

Act as
One

Open
Up

Get
Personal

Alter
Attitudes

Design
Better

Collect Feedback

Find Moments of
Truth

More Accessible

Personalize
Products

Empower
Employees

Have a
Strategy

Process modeling

Achieve
Consistent
Experiences

Configure to order

Identify the weakest


link

Single view of
customer

Education and
training

Executive
enlightening

Cultural values

Automate and
escalate

Recognition

Ideal and real


experiences

Share Answers

Value analysis

Redesign
Processes

Market research

Quality controls

Segmentation

Trading efficiency
and experience

Multichannel
collection
Real-time alerts and
actions

Analyze Opinion

Propensity
modeling
Start a
Conversation
Expectations setting
Capturing intent

Adapt in Real Time

Track for
customer
Add channels

Demonstrate
Trust

Mass
customization
New product
development

Ownership of the
experience

Customize Offers

Make Clear the


Responsibility

Brand
Execution

Governance and
policing

Values and
promise

Responsibility

Reputation

Compensation and
contracts

Communication

Recruit Differently

Design the
Experience

Honor privacy

Bundling
product/service

Skills inventory

Share data

Personal pricing

Better search

Use only what


you need

Real-time rerouting

Multichannel
Availability

Encourage
Participation

Stripped Down
Simplification

Analytical-driven
process decisions

Multichannel
integration

Review and
comparison

One size fits all

Deviceindependent
interaction

Communities

Argos
Clarks

Missha
Threadless
Giff Gaff

Manage dialogue

Virgin Media
Whirlpool

Knowledge
management

Self-service

Lego
UPS

Standardization
and scale

Profiling the
personalities
Balance teams
Recruit to brand

Social networks
Nike
Garmin
BMW

Southwest
Zappos

Program and
project plans

Benchmark
usability and
empathy
Digital design
cool
Disney
Nespresso

Key Issues
1. What is a customer experience, and how is its
improvement measured?

2. Which projects will deliver the most positive


customer experiences?
3. How is a strategy created to start to improve the
customer experience?
4. Which technologies and vendors are best for
customer experience management?

Know Your Starting Point for Customer


Experience Management

+
/$

3. Staying on Top

Pricing
Billing
Availability
Delivery
Build Quality
Returns
Repairs
1

2. Moving Above
Average
3

Return

Couldn't Feels
Bad
Feel
Worse

1. Get the
Basics Right

Source: Harding & Yorke

10

Feels Feels Couldn't


Neutral Good
Feel
Better

Commitment/Investment

Staying on Top: Head for Higher Levels of


Customer Experience Maturity
Customers don't forget. After the recession, those
companies that did the right thing are rewarded. Those
that kicked customers when they were down suffer.
Seek out unhappiness. Dissatisfied customers that
have their problems resolved are more loyal than those
that never had a problem.
Look outside your industry. If you've reached the top
of your industry, look at others for inspiration. Invite
them to share best practices.

20%

30%
45%

1%
4%

Culture
Change

Profit
Parity

Execs
Engaged

VOC
Validated

Fragmented
Focus
Initial

Developing

Defined

Managed

Optimizing

Key Issues
1. What is a customer experience, and how is its
improvement measured?

2. Which projects will deliver the most positive


customer experiences?
3. How is a strategy created to start to improve the
customer experience?
4. Which technologies and vendors are best for
customer experience management?

Age and Gender Recognition and


Suggestions on Japanese Vending Machines

Technologies Can Help in Multiple


Customer Experience Project Types
Listen,
From Out
Think, Do to In

Act as
One

Open
Up

Get
Personal

Alter
Attitudes

Design
Better

Collect Feedback

More Accessible

Personalize
Products

Empower
Employees

Have a
Strategy

Data mining

Achieve
Consistent
Experiences

Consultants

Lead mgmt.

Product
configuration

E-learning/LMS

MDM

WFO

Advisors

Segmentation

BPM

Pricing mgmt.

Sales analytics

Branding

BI

ERMS

New product
development

CSS analytics

Value analysts

EFM
Survey tools
Event analytics
BPM
QA monitoring
Social media
monitoring

Find Moments of
Truth

WFO

Analyze Opinion
Customer value
Analytics

Redesign
Processes
BPM modeling

Knowledge
management

Data mining

Data mining

Search

Security tools

Segmentation

Workflow

Web service

Partner mgmt.

Web analytics

Dialogue
management
ERMS
Search
Web service

Demonstrate
Trust
Data privacy

Content
management

Sentiment
Start a
Conversation

Share Answers

Web service
Tracking
Field force
optimization
Remote
monitoring
ERMS

Adapt in Real Time

Storefront
Customize Offers
Product
configuration
Pricing mgmt.
PIM, content mgmt.
Product catalog
Order mgmt.

Web analytics
Make Clear the
Responsibility

Brand
Execution

HCM, ICM

MRM

Employee contract
management

EMM

QA monitoring

Community
mgmt.

WFO

Content mgmt.

Multichannel
Availability

Encourage
Participation

Stripped-Down
Simplification

Recruit Differently
Recruitment

Design the
Experience

Induction

Web analytics

BPM modeling

Community mgmt.

Web design

In-line, event-driven
analysis

Mobile
technologies

Review and
comparison
technologies

Order mgmt.

Workflow

Application
integration

Business activity
monitoring

ERMS, IVR, SMS

Community mgmt.
Social networking

Web design
Storefront

Content
mgmt.
Storefront

There is No Customer Experience Market


100 Vendors in 100 Different Markets

CE Technology Matrices:
Customer Service Applications

Achieving ROI
Easier
Moderate
Challenging

Source: Balance Customer Experience With Customer Service Productivity in Customer


Service Automation Initiatives, September 2011

Recommendations
STOP:

START:

Banging your head against a wall Finding the spark that is


if your executive leadership are
motivating executives fear of
not really committed to it.
humiliation or pride at leading the
industry?
Trying to do everything at once,

focus on the biggest pain point for Consolidating customer feedback


customers in one department in
sources and become the voice of
one business unit for six months.
the customer internally.

Making do with part time

resources. Instead build the team.


You need both a coordinating

department at the head office, but


also dotted line links to individuals
in every department.

By appointing a VP or head of
Customer Experience.

Inspiring, seek out stories,


anecdotes, examples and case
studies of what others have
achieved, and mimic if
achievable.

Improving the Multichannel


Customer Experience
Ed Thompson

This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other
authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied,
distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.
2012 Gartner, Inc. and/or its affiliates. All rights reserved.