Customer Experience Management

Customer Experience
Management+

Managing Director of shaunsmith+co
 Author of best selling books on brand
and customer experience
 Consulting internationally for 20 years

© Copyright Smith+Co 2008. All rights reserved.

CEM+
Customer Experience
Management+™

3 © Copyright Smith+Co 2008. All rights reserved.

Introductions
 Your name and organisation
 What is your major challenge in
delivering your brand?


Some facts…
 Those firms in the top quartile, in terms of strength of their
relationship with customers, achieve loyalty levels three
times higher than bottom quartile brands

 Those companies that enjoy higher levels of brand loyalty
achieve price/earnings ratios twice those of average
companies

 Even in an economic downturn, 50% of consumers will pay
more for a better customer experience

Sources:
1) Carlson Marketing Group Relationship Builder Survey
2) Satmetrix Systems Customer Loyalty survey
3) Customer Experience Impact Report. RightNow Technologies


The changing economy
 Product orientation – share of manufacturing

 Market orientation – share of market

 Value orientation – share of mind


From product brands
to lifestyle brands


From service brands to
experience brands


Customer Customer
Experience loyalty
Management+
staircase Experiences
Emotional

Services
Valuable

Products
Functional


Impact on growth

Source: Satmetrix. Exploring the relationship between Net Promoter and Word Of Mouth in the computer hardware industry. 2008

“Customer experience is bigger than
customer service in that it is the full,
end-to-end experience. It starts when you
first hear about Amazon from a friend,
and ends when you get the package in
the mail and open it.”
– Jeff Bezos, CEO


What builds great brands?
List the labels in an order that describes how you believe brand value
and profitability is created

Brand Loyalty


The CEM+ profit chain
Profitability and growth

Brand loyalty

Customer behaviour

Customer satisfaction

The Customer Experience

Employee behaviour

Adapted from “Putting the Service
Employee satisfaction
Profit Chain to Work,” Harvard
Business Review, March/April
1994
The Employee Experience

Leadership

Adapted from “Putting the Service Profit Chain to
14 Work,” Harvard Business Review, March/April 1994 © Copyright Smith+Co 2008. All rights reserved.

The CEM+ six step
process
6 1
Customer
experience audit

External
communication proposition Create brand
platform

5
people
2
processes

products

Internal Customer
communication experience
design
4 3

15 Source: Brands and Branding. Profile Books. 2003 © Copyright Smith+Co 2008. All rights reserved.

Customer Experience
audit
6 1
Customer
experience audit

External
platform

5
people
2
processes

products

Internal Customer
design
4 3


What do customers value?


Value strategies
• Operational Excellence: Ryan Air
– Competitive pricing
– Speedy order fulfilment
– On time delivery
• Product Leadership: Sony
– Functionality
– Features
– Performance
• Customer Experience: Ritz Carlton
– Quality of relationships with customers
– Exceptional or individual service
– Completeness of solutions
Source: The Discipline Of Market Leaders
Treacy and Wiersema. Addiison Wesley.1995

©Copyright shaunsmith+co. 2008. All rights reserved.

The CEM+ process
6 1
Customer
experience audit

External
platform

5
people
2
processes

products

Internal Customer
design
4 3


What do these brands
stand for?


What do these
companies stand for?

● Innovation
● Service ● Quality
● Value ● Prestige
● Technical excellence

● Selection
● Convenience
● Price


Value disciplines: Virgin

Customer Intimacy
1
10

5

0

3 2
Operational Product
Excellence Leadership


Value disciplines: Ryan Air

Customer Intimacy
1
10

5

0

3 2
Operational Product


Value disciplines: Singapore Airlines

Customer Intimacy

1
10

5

0

3 2
Operational Product


Understanding our
customers
We have identified our most profitable customers

We know what are target customers expect and value

We know the value drivers that build loyalty in our market

We know how our customers rate the current experience we provide
against these value drivers

We understand to what extent, and why our target customers prefer our
brand to that of our competitors

1. Review your scores and identify one or two actions that you can take in your organisation.


“A brand is a promise
and you have to keep
your promises”


Case study two: First Direct
“What First Direct did was to
realise that people were changing
their habits and would want to
bank 24 hours a day, 7 days a
week. So that was the insight,…
I think that all great
brands have insight”

– Peter Simpson,
Commercial Director

Source: Uncommon Practice –People who deliver a great brand experience. S.Smith
28 and A. Milligan. FT.Prentice Hall 2002 © Copyright Smith+Co 2008. All rights reserved.

EVERY 8 SECONDS SOMEBODY SOMEWHERE
RECOMMENDS FIRST DIRECT TO A FRIEND

Black & white banking

Customer loyalty


Advocacy drives growth
Banking: Effect of Word of Mouth (Net Promoter Score) on Income Growth

Source. Advocacy Drives Growth. Dr. Paul Marsden. London School
34 of Economics. December 2005. © Copyright Smith+Co 2008. All rights reserved.

“The clear winner in the banking industry was First Direct,
which received a 42% rating compared with the sector
average of -4%.

Fans liked the fact that customer service staff were accessible,
friendly and knowledgeable...”

Source: Annual NPS awards. Satmetrix June 2010

The CEM+ process
6 1
Customer
experience audit

External
platform

5
people
2
processes

products

Internal Customer
design
4 3


Imagine you are in a hotel room….


designing the
new experience

Customer Journey
Customer Getting to the Comfort until Getting to
Check-In In-Flight Comfort Arrival
Touchline airport Flight Destination

Customer ● Stressful ● Long, ● Want/need ● Planes are ● Unkempt ● Traffic
Experience ● Complicated frustrating lines to work uncomfortable ● Unshowered ● Unfamiliar
Issues ● Parking ● Security ● Want/need by nature ● Clothes a place
● Lugging hassles to relax ● Long-time spent mess
in a seat
● Boredom

CUSTOMER EXPERIENCE

Pleasure

Pain


Virgin customer journey

Experience ● Complicated frustrating lines to work uncomfortable ● Unshowered ● Unfamiliar
Issues ● Parking ● Security ● Want/need by nature ● Clothes a place
● Lugging hassles to relax ● Long-time spent mess
in a seat
● Boredom

CUSTOMER EXPERIENCE

Pleasure

Pain


Virgin – brand Icons
Experience ● Complicate frustrating lines to work uncomfortable ● Unshowered ● Unfamiliar
Issues ● Parking ● Unnecessary ● Want/need by nature ● Clothes a place
● Lugging (only to relax ● Long-time mess
necessary to spent in a seat
the airline) ● Boredom
CUSTOMER EXPERIENCE
Design ● Transport to ● “Drive-though” ● Clubhouse ● Full-sleeper ● Arrival valet ● Chauffeured
features airport check-in with Internet seats ● 18 showers delivery to
provided ● Airline knows access, fax, ● Mood lighting ● Makeup & destination
● Driver where you are library ● Gradual dawn shave ● Comfortable
handles ● Salon, ● Bar ● Heated ride door-to-
luggage messages, floors door
beauty ● You decide
meals ● Clothes ● Knowledgeab
● Sound pressed le local driver
room,
driving ● Hot & Cold
range, Breakfast
skiing
machine


Defining the new
customer experience
We have set up a partnership between marketing, HR and Operations to
define and deliver the customer experience

We have defined a brand promise that differentiates us in the eyes of our
target customers

We have mapped our customer touchline in terms of identifying the key
points of contact our customers have with us and how our promise should
be delivered at each

We have defined how to improve our services and processes to deliver our
customer promise in a way that is consistently valuable to target customers

We have defined the specific employee behaviours required to deliver the
new experience



“I’ve always said I would put my
employees first, customers
second and shareholders third,
but if you do that… the
customers and the shareholders
benefit anyway”

– Richard Branson, Chairman

Source: Uncommon Practice- People who deliver a great brand experience
44 Shaun Smith and Andy Milligan. FTPrentice Hall 2002. © Copyright Smith+Co 2008. All rights reserved.

The CEM+ process
6 1
Customer
experience audit

External
platform

5
people
2
processes

products

Internal Customer
design
4 3


THE BURBERRY EXPERIENCE MODULES

Delivering the Burberry
Experience in our Store

Module 1 – Be Professional

Module 2 – Be Perceptive

Module 3 – Be Proactive

Module 4 – Be Passionate

Module 5 – Persevere

Module 6 – Personalise

Module 7 – Partnership

47 / TFWA – May 10 2010

THE BURBERRY EXPERIENCE PILOT HIGHLIGHTS
FINANCIAL RESULTS
• KPIs over the first 6 months compared to 2 months pre-initiative:
–15% points better performance in change in LFL sales growth
–0.3% points better performance in UPT

PRE-PILOT BURBERRY EXPERIENCE PILOT
% Change LFL SALES

P
%Change

R
R
(E
P

48 / TFWA – May 10 2010

WHAT WERE THE RESULTS?-
2010

The top three factors that shoppers consider before recommending a brand are
merchandise, service and store atmosphere. Two standouts across several
criteria are British fashion house Burberry and French luxury outfit Louis Vuitton,
with 77% of shoppers saying they would recommend Burberry to family and
close friends...”

Source: The Luxury Institute April 2010

49 / TFWA – May 10 2010

WHAT WERE THE RESULTS?
-2010

50 / TFWA – May 10 2010

Delivering your customer
experience
We have continuing internal communications to build clarity and
commitment around implementing the customer experience

Our leaders have been trained as champions of our customer experience
and are leading its implementation

We have created training to equip our employees to deliver the customer
experience

We have a scorecard of indicators that provide leaders with objective and
timely feedback on how well we are delivering against our promise

Our HR practices are reinforcing our brand values



The CEM+ process
6 1
Customer
experience audit

External
platform

5
people
2
processes

products

Internal Customer
design
4 3


Vorsprung durch Technik


The Ultimate
Driving Machine


What makes a great brand?
Trustworthy 97%
Credible 96%
Tells the truth 96%
Never lets me down 93%
The company has values and ethics 92%
Consistent 91%
Interesting and worth talking about 86%
Innovative 85%
Inventive 84%
Recommended by people I know 78%
Been around for a long time 41%
Seen everywhere 39%
The biggest 15%

55 Source Grey Worldwide. Eye On Australia survey © Copyright Smith+Co 2008. All rights reserved.

Be engaged…
every


The CEM+ process
6 1
Customer
experience audit

External
platform

5
people
2
processes

products

Internal Customer
design
4 3


Finally... It requires leaders

Marketing

Brand image Brand promise

CEO
Learning, performance management,
reinforcement Human
Operations
resources
Brand delivery


A tale of two CEO’s


Creating alignment
Innovation Customer
skills understanding &
insight
Product
development
Service
capability
delivery
Product & Customer
Brand services experience Customer
Icons processes
Brand
Recruitment/ promise
induction
External
Branded People &
Communications brand
training behaviour
communications
Performance
management
Leadership & Internal
management communications
development


Aligning the organisation
People

What must be unique
about our culture and
our people?
Customer Brand Strategy Purpose
Experience Proposition
Product/Service

What service What strategic
What can we
What must be experience must choices will What do
promise that will
distinctive about our we create to drive we stand
create
products and services? deliver this achievement of for/aspire
competitive
proposition? our purpose and to be?
advantage?
vision?
Process

What internal processes
do we need to enable
us to deliver our What must we measure at each stage?
proposition?

© Copyright Shaun Smith Co 2007. All rights reserved

Leading the customer
experience
Leaders believe that giving customers a better experience will lead to
profitable growth

Our company’s top executives demonstrate their commitment to our
customer experience strategy

Leaders make decisions that are consistent with our customer experience
strategy

Leaders measure and monitor the quality of the customer experience

Our leaders recognize employees who put customers first



Case Study


A case study...

Source: Advocacy Drives Growth. Dr Paul Marsden. London School of Economics December 2005.


“O2 was top of the mobile network scorecard. It gained a rating
of 24% compared with an industry average of 3%”

Source: Annual NPS awards. Satmetrix June 2010

The experience you deliver to your
customers every day, through every transaction,
direct and indirect either builds value for your
brand or destroys it.


CEM+
Customer
Experience
Management+™
www.shaunsmithco.com


Customer Experience Management

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