Customer experience: the next frontier beyond great customer service

Customer experience: the next frontier
How to transform your business to go
beyond great customer service
An Accenture point of view
Executive summary
As you read this, customers are
interacting with your company across
different channels and multiple touch
points. High-performance businesses
focus strongly on this customer
experience as a source of competitive
advantage. A consistent customer
experience leads to happy customers,
increased sales and a powerful brand.
For many companies, keeping pace
with rising customer expectations
feels like a never-ending race. Rapid
technology advancements and
fragmented customer touch points
make it harder to establish a unified
relationship with consumers. These
technological advances, especially
social media, also make it much easier
for unsatisfied customers to share
their poor service experiences with
friends, family and the world.
2
Many Australian companies have
made significant investments in
customer service and customer
experience delivery in the past decade,
with some notable successes, but
overall it is still a challenge. Powerful
and connected customers and new
technologies require a new wave of
investment in customer experience.
The unleashed power of analytics and
data can enable companies to deliver
much more advanced and granular
customer experience. This point of
view provides a framework to help
management teams transform their
business to successfully compete on
an outstanding customer experience,
ultimately connecting their customers
on an emotional level.
Content
Executive summary
2
Introduction
4
A snapshot of the Australian customer experience
6
Framework for an outstanding customer experience
8
Customer-centric strategy
Customer experience blueprint
Customer-centric operating model
Customer experience execution
Analytics
Customer value and emotional bond
Unlocking the value and getting started
15
About the global consumer research study
16
About Accenture
16
3
Introduction
4
Australian businesses have invested billions of dollars
over the past decade to serve their customers better.
Is it working?
The large supermarket and department
store chains have been in a race to
refurbish stores and develop their
loyalty programs. An airline recently
introduced a high-tech checkin facility that allowed frequent
travellers to literally sweep through
the departure lounge. Banks have
rolled out new channels such as mobile
banking to increase convenience for
customers, but are also enhancing
the role of local branch managers in
delivering more personalised service.
Many companies have elevated
customer experience to the executive
level, creating positions such as
chief customer officer or director of
customer insight.
So, are Australian consumers receiving
a better customer experience? Not
really.
Accenture recently conducted a
consumer trends survey of 5,841
people across 17 countries, including
375 from Australia. This study
identified 11 key customer experience
factors. It showed that between 2009
and 2010, customer satisfaction did
not increase for any of these customer
experience factors – in fact, it dropped
in four of them.
It is incredibly difficult for a business
to define an outstanding customer
experience – and even harder to
reorganise itself to provide it. One
reason is that customer expectations
are always changing: today’s
outstanding service is tomorrow’s
satisfactory. Another reason is the
growing number of ways businesses
interact with customers. It is
challenging enough to define and
execute a great customer experience
in one channel, let alone synchronising
experiences across stores, field forces,
the web, social media, contact centres
and third-party agents.
This point of view provides a snapshot
of the current customer experience
in Australia and a framework to help
management teams transform and
organise their business to compete
successfully on outstanding customer
experience. This framework includes
the elements of a customer-centric
strategy, how to develop a customer
experience blueprint and execute a
customer-centric operating model.
Myths about the customer experience
Myth
Fact
It is not tangible.
There are already frameworks and methodologies
available to break down the customer experience
into a set of required activities. In addition, there is a
direct link between customer experience and business
success.
It can’t be measured.
Businesses can use sophisticated tools and dashboards
to measure the customer experience holistically.
Powerful social media networks foster more direct and
real-time customer feedback which can be leveraged
through e.g. sentiment analysis.
It is a one-off exercise.
As expectations are permanently rising and
technologies evolving, companies must regularly revisit
strategy, design and execution.
It is not scientific.
Decisions do not have to be based on gut feeling; they
can be underpinned by analytical results.
It only improves the topline.
Enhancing the customer experience does require
investments, but these are compensated through
the reduced cost to serve and cost to sell achieved
by using new and more efficient channels, hence
improving the bottom-line. In addition, businesses
can reduce acquisition costs by establishing customer
advocates and positive word of mouth.
5
A snapshot of the Australian customer
experience
6
Are Australian consumers difficult to
please or are Australian businesses
hopeless at serving their customers?
In Accenture’s recent global consumer
study1 , one-third of respondents said
their expectations when interacting
with retailers and service providers had
increased over the past year. Nearly
50 percent said their expectations
had increased over the past five years.
Consumers’ expectations had increased
most in relation to the ease in which
they could interact with providers.
Based on the study only nine percent
of Australian consumers who
participated in the survey said they
were not at all satisfied with their
product or service providers, while
two-thirds said they were extremely
satisfied. So, it is clear that Australian
businesses are not hopeless at
serving their customers. However,
even satisfied customers are not
automatically loyal: only 22 percent
of respondents said they were loyal
to their service providers. In addition,
Australian consumers have shown an
appetite for new offers, such as the
strong growth in overseas ecommerce
and uptake of recent retail entrants
such as Costco, Groupon and Zara.
Another striking result out of the study
was the increased expectations of
service providers’ knowledge about
their own products and services
(see Figure 1). Customers said online
reviews and recommendations were
often better informed than staff at the
point of sale.
Where is the customer experience
breaking down? Time is a crucial
factor for many customers. They
are frustrated at how long it takes
to be served and to resolve issues
or problems. Another major driver
of poor satisfaction is the limited
knowledge service staff have of
the consumers’ transaction history
and personal details – especially
when this is information they have
already provided. Consumers are
also frustrated by having to speak to
multiple people when dealing with
an inquiry. In fact, many Australians
would prefer the ability to resolve
issues without having to speak to staff
at all. However, only one-third were
satisfied with their current ability to
do so.
Emerging customer behaviour
Self-directed customers place
increased importance on:
Australians love to shop online and
on their mobile devices: 76 percent
of survey respondents said online
retail channels improved their overall
customer experience. However,
Australian companies have not, as a
rule, learned to serve customers better
using online and automated channels.
Almost half of respondents said online
technologies had not increased their
customer service experience.
What is more, Australians are talking
back: The study shows that 32 percent
said they regularly posted comments
about the products, services or
companies they dealt with on social
media sites, blogs or bulletin boards.
And these comments influence the
behaviour of others. More than
half of respondents said they used
social media for information about
purchasing decisions. By contrast, only
one-fifth used traditional advertising
as a decision source.
In short, Australian companies haven’t
worked out how to continuously
improve the customer experience.
They have made efforts in the
right direction, but they need to
consider a range of new methods and
technologies. Looking ahead there
are challenges and opportunities
– the winners of the new social
media and multi-channel world will
drive investment decisions to boost
signature experience.
• Value for money
• Simple, unbundled products,
which are transparent and easy to
compare
• Multiple access points
• Direct self-service channels
• Responsive and personalised
customer service
Figure 1: Negative customer experiences in Australia and their impact on purchasing intentions
Dealing with employees who are not knowledgeable
Dealing with employees who do not acknowledge my specific needs
and preferences
79%
51%
Having to spend a lot of time before being able to purchase a product or
subscribe to a service
66%
39%
Unable to understand the information provided by companies
64%
37%
Unable to find information without speaking to a sales agent
59%
31%
57%
Unable to access information or buy a product/service using multiple
channels of my choice
32%
Receiving unsolicited advertising at home for products & services via direct mail
or telemarketing
Exposed to news that damages the image of a company from which I want
to buy products or services
79%
53%
34%
18%
53%
31%
Proportion of respondents who found these experiences frustrating or extremely frustrating
Proportion of respondents who would not consider buying from a supplier as a result of these experiences
1. Accenture Global Consumer Research Study, 2010, Executive Summary: http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture_2010_
Global_Consumer_Survey_Executive_Summary_v4.pdf
7
Framework for an outstanding customer
experience
8
Customer experience defined
Customer experience is the sum of memories and impressions formed by the
series of interactions – real and virtual – with the brand, products, employees and
all other touch points across all phases of the customer lifecycle.
The Accenture Customer Experience
Framework (see Figure 2) brings
together all the components a business
needs for a successful customer
experience transformation.
Most key elements of the corporate
strategy have an impact on customer
interactions. As a result, it is essential
to put the customer at the centre and
align the components around it. This
leads to a customer-centric strategy
that reflects and aligns with the
overall corporate view.
Subsequently the framework outlines
the key activities to develop a
customer experience blueprint as a
pre-cursor to designing a customercentric operating model, which is the
key pillar of the transformation.
These activities in sum set the
foundation for consistent and
repeatable customer experience
execution. Completing this phase, a
business starts on the next iteration
of the cycle, where it can adjust to
changes in technologies, competitive
landscape, business strategies and
customer expectations.
Analytical capabilities support the
entire transformation and enable
companies to gain visibility, insight
and foresight across their business
activities.
Bringing all this together, companies
will move towards creating higher
customer value and ultimately,
emotional bond.
Figure 2: The Accenture Customer Experience Framework - targeting customer value and emotional bond
Corporate Strategy
• Balanced scorecard
An
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Stra
ics
lyt
• Customer experience
measurement
• Market analysis and competitive
landscape
Cu
sto
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tric
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• Employee training and coaching
Cus
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• Journey and change management
n
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Exe
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lyt
An
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• Governance and program management
Customer Value
• Target customer segments
• Voice of the customer
• Customer relevance and value
proposition
• Capability diagnostic
Emotional Bond
• Transformation roadmap and business case
de
c
ep
rin
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• Employee experience, talent and culture
ly
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• Metrics and performance management
• Current state and gap analysis
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• Enabling technologies
ics
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A na
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Ce o
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C u st
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• Aligned Processes
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C ust
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Ex
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• Loyalty drivers and signature
experience
• Detailed target state experience
• Multichannel treatments
• Economics and case for change
9
Customer-centric strategy
The battle for customers is on and
having a competitive differentiator is
the key to success. As a starting point,
companies need to identify potential
business opportunities – and consider
how their offers are different from
their competitors’. This should include
both local and international markets,
recognising customers’ increasing use
of online channels to buy products and
services from overseas. Companies
should embrace analytical tools to
gain deeper insights into customers’
needs and the value of their defined
target customer segments. They can
supplement this knowledge with realtime analysis of consumer sentiment
from social media sites and community
discussions.
Having identified customer segments
and needs, companies need to consider
how to package value dimensions such
as access, price, experience, product
and service to provide a differentiated
value proposition for each segment.
It can be challenging to decide which
customer segments and needs to
focus on. Many companies have a
high-level perspective of what their
value propositions should be, but
cannot consistently translate this at
the interaction level. Conducting a
capability assessment allows companies
to better understand their abilities
and the challenges they face in each
critical customer dimension. This helps
to identify major pain points and key
opportunities for improvement.
employees in their efforts to provide
more tailored offers and services to
various customer segments resulted in
measurable business improvements.
Case study: Best Buy2
A customer insight program helped
multinational electronics retailer
Best Buy identify its most profitable
customer group. The company traced
this group’s buying patterns and the
lifestyle traits that motivated its
spending on certain items. Thanks to
these insights, the retailer realised it
could reduce its product range, since its
customers really wanted fewer items,
more knowledgeable sales support and
more packaged solutions, especially
for complex purchases. Supporting
2. See http://www.accenture.com/us-en/Pages/success-best-buy-supply-chain-strategy-summary.aspx and http://www.accenture.com/us-en/pages/
success-best-buy-customer-centricity-summary.aspx
10
Customer experience
blueprint
Analysing a business’s current
customer experience and comparing
it with its desired state provides a
baseline and identifies gaps. However,
understanding the current state is not
always helpful in achieving the desired
state. Indeed, some current capabilities
might not influence the customer
experience at all. To gain accurate and
practical insights into each customer’s
behaviour and preferences, companies
need a complete view of each
customer’s interactions throughout
the customer lifecycle. They should
consider the ‘macro journey’, for
example starting when customers
enter the point of sale until making the
first call, instead of focusing only on
the sales moment.
It is vital to develop a blueprint with
a clear and very detailed definition
of the experience companies want
to consistently deliver to customers
in each segment. These descriptions
should incorporate how the customer
should feel in a macro journey and
how the sales, marketing and service
teams support this journey. Companies
should aim to develop a relationship
where customers identify with the
organisation on an emotional level,
being strong advocates or even fans.
The buying experience is being
reinvented as customers shift from
traditional points of sale, such as
branches and shops, to multi-channel
information gathering through blogs
and social media, and connected
cross-channel shopping. Recognising
this shift, companies should deliver a
seamless transition between channels
with a centralised record of the
customer’s past interactions. This
avoids the customer having to repeat
information.
Before they start detailed planning
of customer experience strategies,
companies should closely examine
return on investment and the case
for change. Piloting a small portion of
the change can help determine and
quantify the benefits of a broader
transformation.
Case study: BMW, UK 3
The premium car manufacturer
BMW operates in a world of high
value, infrequent purchases with few
opportunities to engage with the
customer – therefore making the right
impression and exceeding expectations
becomes crucial. BMW recognised
that their customers’ experience
of the organisation spanned
many different touch points, from
advertising to the dealership customer
service teams to the product itself.
BMW designed and mapped those
journeys, identifying all the important
moments of truth – with positive
or negative effect. Those insights
were used to drive change within the
business: Investment was focused on
improving underperforming elements
of this journey and exploring ways
to outperform expectations on the
touch points with the most potential
impact on loyalty and advocacy.
Customer experience priorities were
built into the contractual standards
with the channel (dealers) and the
desired target state was developed
into a ‘curriculum’ for training into the
organisation.
3. BMW – Embedding the customer experience throughout the organisation – in: “The Future for Marketing Capability”, The Chartered Institute of Marketing
and Accenture, 2010
11
Customer-centric
operating model
processes to ensure employees have
incentives to change their behaviour to
deliver the target customer experience.
Having a clear understanding of the
experience companies would like to
offer customers for each interaction
is a vital first step. Nevertheless,
it is worth little without rigorous
processes to support delivering those
experiences. This becomes challenging
for companies organised in product
or channel silos as they attempt
to provide a consistent customer
experience across channels. They must
review, restructure and in some cases
completely redesign their processes.
Before embarking on the execution
phase of any customer experience
transformation, an organisation
should create a detailed business case
which includes investment, expected
financial and nonfinancial benefits
and return on investment. This process
makes it easier to prioritise tasks and
to identify key decision points for goor-no-go decisions.
To an extent, this relies on having
technologies that support and enable
every electronic interaction with the
customer, such as through a website
or interactive voice response system,
and enhance the in-person experience
at the point of sale, either in physical
stores or contact centres.
Beyond processes and technologies,
customer experience is most of the
time delivered by real people. This
makes employee empowerment,
happiness and motivation paramount.
Companies will need to determine
if their employees have the required
talent and if the organisation has the
right culture to support their target
customer experience. They should
also put in place key performance
indicators and workforce performance
Case study: Nordstrom4
United States-based retailer
Nordstrom was named as delivering
the best customer experience for
the ‘exclusive retailer’ category in
the most recent Luxury Customer
Experience Index survey (LCEI)
published by the New York-based
Luxury Institute. Nordstrom launched
a new website in 2010 including
a ‘conversation’ tab which guided
visitors to explore various lifestyles
through real people’s opinions and
experiences. Nordstrom recently
installed wireless networks in its
187 retail stores in 28 states. By late
2011, the company aims to equip
its employees with handheld mobile
devices. These would allow customers
in dressing rooms to text or call
employees to ask for a different sized
clothing item, for example.
Common reasons businesses fail in customer experience execution
•Program is not driven at C-level – it is not enough just to have executive
support
•Missing or limited focus on the employee experience
•No comprehensive program or change management
•No proper transition from project mode to business as usual
•Absent or limited governance – for example, not having a Chief Customer
Officer or customer experience council
•Inability to identify return on investment or visualise benefits
•People ‘don’t mean it’ – proposition and delivery are not in sync and customers
will notice it or at least feel it.
4. See http://www.retailcustomerexperience.com/blog/4954/Nordstrom-Integrates-Social-Media-on-New-Web-Site and http://www.businessnewsdaily.
com/customers-to-shape-future-of-online-shopping-nordstrom-president-says-0977/
12
Customer experience
execution
Numerous customer experience
programs fail in the execution
phase. This is the case even if they
have defined the correct strategy,
target state and operating model.
Again, people are essential. The
transformation needs to be driven
by C-level customer experience
champions. Having a designated
governance and program management
function helps to keep the project on
track and ensure the execution delivers
benefits in line with expectations. In
addition, the transition from a project
mode to business-as-usual needs
a permanent working governance,
such as by establishing the position
of a Chief Customer Officer or a
customer experience council. This
executive should also chair a customer
steering committee with strong
cross-functional participation, which
oversees all initiatives that impact the
customer.
Customer experience transformation
causes significant change for
customers and employees. Company
leadership needs to execute and
prioritise change management
strategies to ensure a smooth
evolution to the target customer
experience. This will require coaching
employees to ensure they consistently
deliver the target customer experience.
In addition, companies must invest
time carefully, creating an engagement
and communications plan to manage
the change across their organisation
and to their customers.
Setting up a balanced scorecard that
covers people, processes, customers
and finance will enable the business to
holistically manage the transformation
and continuously improve into the
future.
Once a business has defined and
executed the target customer
experience, it must continually revise
its tracking of customer interactions.
Traditional measures such as customer
satisfaction and loyalty are only a part
of the truth. Executives and managers
must track the complete customer
interaction chain with dashboards that
provide not only lagging (e.g. customer
satisfaction, net promoter score) but
also leading (e.g. employee feeling
of empowerment, on-time delivery)
indicators.
Case study: Apple5
”Apple has led the market for the
past few years as one of the most
innovative, most loved, and most
powerful companies and brands in
the world." according to stock market
opinion and analysis website Seeking
Alpha. One of the secrets is Apple’s
326 store empire – most of them
architectural masterpieces and merely
the visible manifestation of Apple’s
customer experience, projecting a
carefree and casual atmosphere. By
intensive control of how employees
interact with customers, scripted
training for on-site tech support and
consideration of every store detail
down to the pre-loaded photos and
music on demo devices, Apple does not
please customers, Apple delights them.
The fundamental sales philosophy
is not to sell, but rather to help
customers solve problems. "Your job is
to understand all of your customers'
needs – some of which they may not
even realize they have," one training
manual says. To that end, employees
receive no sales commissions and have
no sales quotas.
5. See http://seekingalpha.com/article/275887-apple-must-hold-or-look-out-below and Wall Street Journal “Secrets From Apple's Genius Bar: Full Loyalty,
No Negativity”, http://online.wsj.com/article/SB10001424052702304563104576364071955678908.html
13
Analytics
Underpinning every stage of the
customer experience journey described
above is the extensive use of analytical
capabilities. Using analytics will lead
to better business decisions, and give
management real-time reporting,
forecasting, scenario modelling and
optimisation capabilities. It also
supports the entire marketing, sales
and service cycle to e.g. launch realtime campaigns, leverage event-based
triggered marketing or define activities
down to a segment of one-to-one.
Predictive analytics can provide
insights such as which customers are
about to leave, which would most
likely respond to up-selling and how
best to treat potential and existing
customers. It enables companies
to draw fact-based conclusions for
marketing, sales, finances and other
areas such as workforce planning,
supply chain, et al.
Customer value and
emotional bond
Delivering a differentiated customer
experience yields tangible business
benefits such as profitable growth
and increasing customer value.
Organisations in highly competitive
industries can succeed by identifying
relevant customer-value dimensions
and relentlessly focusing on
connecting to the wants and needs
that really matter to individual
customers. When businesses satisfy
these needs, customers identify with
the organisation on an emotional
level, creating a bond that transcends
traditional competition dynamics. It
makes customers more forgiving and
less likely to complain the next time
their experience does not match their
increased expectations. Even more, it
gives companies a second chance and
more time to correct and sometimes
the opportunity to be one step ahead.
The next frontier of customer experience
The following areas are gaining momentum in successful customer
experience delivery:
•Using social media and its positive multiplication effect to actively influence
customer behaviour
•Delivering true multi-channel experience across the whole customer lifecycle –
enabling seamless switching of channels
•Using macro journeys instead of single moments to define end-to-end
experiences
•Creating a winning employee experience because all customer experiences are
delivered by people
•Using holistic metrics and scorecards to measure beyond customer satisfaction
to leading indicators
•Building analytics capabilities to apply scientific rigour to the customer
experience transformation and to support insight-driven business decisions.
14
Unlocking the value and getting started
Australian organisations can unlock
significant value by transforming
their customers’ experience. One
company Accenture worked with on
the customer experience journey
increased its acquisition rate by five
percent, while reducing its customer
attrition rate by 10 percent. At the
same time, it decreased its cost to
serve by 25 percent.
Australian companies clearly want
to get the customer experience right
and are investing time and money to
do so. To succeed, they must follow a
structured path to define the strategy
and build the organisational, process,
technology and people capabilities
required to deliver it.
For those who have not yet made the
move, as much as for those who have
found their efforts lacking the impact
they were expecting, the prospect
of taking customer experience to
the next level can be daunting.
Accenture’s experience working with
high-performance companies suggests
the following six factors have been
critical to their success:
Key success factor
Impact on approach
Satisfied customers happen by
design, not by accident
Systematically define the appropriate
experience for each customer interaction
and operationalise it consistently across
the organisation.
Know what matters to your
customers
Rigorously seek the voice of the customer
and triangulate the results to understand
what drives satisfaction. Don’t assume,
ask.
Understand the moments of truth
and associated macro journeys
Think about the customer’s lifecycle with
a company or product: what are the
interactions and little experience voyages
that could make or break the relationship?
Evolve with your customers, and
innovate
Study other industries your customers
interact with. Often customers set their
expectations outside your industry.
It is a science and an art
Derive strategies by analysing customer
values and competitor performance – and
achieve brand engagement and emotional
loyalty.
Make it real, quickly!
Embed the voice of the customer into
your organisation. This is not a oneoff exercise; start small with selected
measures targeting the most relevant
touch points.
15
About the global
consumer research
study
About Accenture
Management
Consulting
About Customer
Relationship
Management
Accenture conducted an online
survey of 5,841 consumers in 17
countries in Q4 2010. The survey
asked respondents to evaluate their
customer experience in four industry
sectors from a choice of 10. The survey
included 375 Australian consumers.
Accenture is a leading provider of
management consulting services
worldwide. Drawing on the
extensive experience of its 15,000
management consultants globally,
Accenture Management Consulting
helps clients move from issue to
outcome, with pace, certainty and
strategic agility. We enable companies
and governments to achieve high
performance by combining broad
and deep industry and functional
offerings and capabilities across seven
service lines: Customer Relationship
Management, Finance & Performance
Management, Process & Innovation
Performance, Risk Management, Talent
& Organisation Performance, Strategy,
and Supply Chain Management.
Accenture’s Customer Relationship
Management (CRM) service line
helps organisations achieve high
performance by transforming their
marketing, sales and customer service
functions to support accelerated
growth, increased profitability and
greater operating efficiency. Our
research, insight and innovation,
global reach and delivery experience
have made us a worldwide leader,
serving thousands of clients every
year, including most Fortune® 100
companies, across virtually all
industries.
Disclaimer
About Accenture
This point of view is intended as a
general guide and not as a substitute
for detailed advice. Neither should
it be taken as providing technical
or other professional advice on any
of the topics covered. So far as
Accenture is aware the information it
contains is correct and accurate but
no responsibility is accepted for any
inaccuracy and error or any action
taken in reliance on this publication.
This publication contains Accenture
copyrighted material and no part
of it can be copied or otherwise
disseminated with Accenture’s prior
written consent in each case.
Accenture is a global management
consulting, technology services
and outsourcing company, with
approximately 223,000 people serving
clients in more than 120 countries.
Combining unparalleled experience,
comprehensive capabilities across all
industries and business functions,
and extensive research on the world’s
most successful companies, Accenture
collaborates with clients to help them
become high-performance businesses
and governments. The company
generated net revenues of US$21.6
billion for the fiscal year ended 31
August 2010. Its home page is
www.accenture.com.
Contacts
Philippe Konfino
Managing Director CRM, Asia Pacific
Philippe.Konfino@accenture.com
Melissa E. Waldron
CRM Lead, Australia & New Zealand
Melissa.E.Waldron@accenture.com
Copyright © 2011 Accenture
All rights reserved.
Accenture, its logo, and
High Performance Delivered
are trademarks of Accenture.
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