Case Study: ScottishPower Adapts to Customer Needs With RTIM

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1 NOT LICENSED FOR DISTRIBUTION Case Study: ScottishPower Adapts to Customer Needs With RTIM by Rusty Warner and Arleen Chien Why Read This Report This case study details how B2C marketers need to prioritize improved customer experiences when making enterprise marketing technology (EMT) investments. ScottishPower (SP) overhauled its EMT ecosystem to align with business goals to better unify its customer strategy. With its investment in Alterian s real-time interaction management (RTIM) solution, this energy and gas provider has achieved lower churn rates and higher customer satisfaction scores, as well as operational efficiencies. Key Takeaways SP Overcomes Category Challenges With Better Customer Experience (CX) Firms in low-frequency purchase categories like the utilities industry must capitalize on each customer interaction. SP s RTIM strategy centers on its ability to demonstrate a tangible value exchange at every touchpoint throughout the customer life cycle. Customer Understanding Is The Focal Point For RTIM Customer-obsessed thinking helps B2C marketers maintain a competitive foothold. But success requires them to draw on deep customer insights and leverage RTIM as part of their EMT ecosystem to address evolving customer expectations. RTIM s Value Extends Beyond Marketing Use Cases SP aligns its EMT ecosystem with its larger business technology environment. The company leverages its RTIM investments not only to orchestrate better CX, but to also improve ongoing services and product development. forrester.com

2 by Rusty Warner and Arleen Chien with Mary Pilecki, Christian Splaine, and Andrew Reese ScottishPower Wanted To Improve CX To Retain Customers Successful B2C marketers orchestrate personalized, consistent, and fluid experiences across touchpoints and channels for increasingly empowered customers. 1 But legacy processes, technology integration challenges, and the growing number of customer interaction points make this no easy task. We recently talked to Craig Paterson, UK digital director at SP, a gas and electricity provider based in Glasgow, to understand how his team is tackling these challenges. SP approached this herculean task by centering its EMT investments on delivering a better, more consistent customer experience. The company paired this goal with its business objectives of retaining more customers and switching them to longer fixed rate energy contracts. The Challenge: SP s Customers Had A Disjointed Experience For a company in an historically low-touch category, with a customer base spread across rural parts of Scotland, SP needed to ensure that it delivered a valuable and consistent experience at every customer touchpoint. But SP s customers felt that every interaction forced them to start a new conversation with the brand, leaving them frustrated and more prone to switch providers. 2 Specific customer pain points included low recognition during contract renewal and impersonal call center interactions. Paterson and his team recognized that SP was delivering subpar CX because it had: No full context for the SP customer. SP had a disconnected view of its customers because of disparate data systems and siloed engagement channels: communications across , member portal chat, mobile, and the call center were not synched. For the customer, this meant that each conversation with SP made her feel like a new customer. If she was trying to resolve an issue, she would have to repeat her reason for contacting SP and recount her past interactions with the brand to help the customer service agent understand why she was contacting SP yet again. Forrester Research, Inc., 60 Acorn Park Drive, Cambridge, MA USA Fax: forrester.com 2018 Forrester Research, Inc. Opinions reflect judgment at the time and are subject to change. Forrester, Technographics, Forrester Wave, TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. Unauthorized copying or distributing is a violation of copyright law.

3 Too many no-value-add touchpoints with the customer. ScottishPower noticed that the efficiency and resulting quality of customer engagement was inconsistent across channels. Satisfaction metrics showed that customers became annoyed after being bounced around from channel to channel to resolve common issues. For example, customers can most easily resolve questions regarding gas bill increases via the customer portal. Instead, most customers go to the SP website to find a phone number, and then call customer service only to be redirected to the customer portal again. From the customer s perspective, there were two no-value-add touchpoints that complicated interactions with the brand. The Fix: SP Filled Gaps In Customer Understanding With the overarching goal of establishing a 360-degree view of the customer, Paterson and his team embraced the task of reconciling over seventy legacy systems. They set out to build an EMT ecosystem that would allow SP to connect the dots across customer interactions and deliver a more consistent experience. Paterson s team took four steps to address the business problem at hand. They: 1. Mapped out the most popular customer journeys. Paterson s team built a business case for revamping ScottishPower s customer engagement strategy. It started by stripping down any preconceived notions of the customer journey and rebuilding its understanding of how customers interacted with the company. A team of business analysts at SP collected call center records, s, chat histories, and social media conversations to understand every touchpoint of the SP customer s journey. Armed with the data from these records, Paterson s team identified the top 10 user stories and created focus groups for each. These groups analyzed the collected qualitative data for each interaction and translated it into optimized customer journeys that SP could deliver to its customers (see Figure 1). 2. Found a brain to drive the existing technology stack s arms and legs. To go beyond consistent messaging and really stitch together customer touchpoints, SP had to supplement its technology stack with a brain that could orchestrate campaigns across channels its arms and legs. SP gave its 10 use cases to its shortlist of EMT vendors with RTIM solutions and asked for deep-dive technical demos to see how each could address its specific requirements. Ultimately, SP invested in Alterian s Dynamic Decision Engine for three reasons: the vendor s flexibility to adapt to SP s business challenges, the performance of the product specific to SP s customer use cases, and the cultural fit of Alterian s services delivery team. 2

4 3. Outlined clear success metrics for customer understanding. From the start, Paterson s team defined clear metrics to quantify what a 360-degree view of the customer would look like and how it would affect SP s ultimate business objectives for retention and contract extension. The team vetted these success metrics with SP s business technology team, Alterian, and other internal stakeholders to ensure everyone was on the same page. SP s success metrics focused on efficiency, value, and customer satisfaction. Examples include a repeat contact indicator to measure the number of channels resolving an issue required, dual metrics to measure the value to the customer and to the business, and Net Promoter Scores from social sentiment analysis, online panels, and voice-of-the-customer surveys Created a cross functional team to ensure accountability. Paterson structured the digital team he leads to include technology management, marketing, business development, and product managers. Technology management led a collaborative scrum team to onboard professional services resources from Alterian and identify integration points for a smooth implementation process. From there, marketing, business development, and product leads took ownership of cleansing customer data records and synchronizing SP s website, mobile apps, social media accounts, call center, and marketing campaigns to ensure that no conflicting rules fed into Dynamic Decision Engine. Business analysts took responsibility for creating and measuring the impact of business rules and understanding the effects of product messaging and offers across channels. 3

5 FIGURE 1 ScottishPower Created An Optimized Customer Journey To Work Toward Source: ScottishPower 4

6 The Results: Happier Customers And A Healthier Bottom Line ScottishPower employed a third-party vendor to collect and analyze customer feedback via an online panel. The analysis attributed increases in customer satisfaction to SP s improved abilities to recognize customers preferred engagement channels and improve the connected experience across multiple touchpoints. Forrester s CX Index demonstrates that such efforts dramatically improve the bottom line; from 2011 to 2015, companies with leading customer experience outgrew the revenue of competitors lagging in CX by more than 5 to 1. 4 For SP specifically, this translated to: Contract renewals to prolong customer lifetime value. SP leverages the Alterian Dynamic Decision Engine to fuel its personalization efforts by integrating customer insights from the brands most popular customer journeys. The ability to personalize product and service recommendations at contract renewal has helped SP reduce churn by 40%. Of 1.6 million known log-ins per month on its owned properties, website, and mobile apps, SP now personalizes 1.2 million, or 75%. Looking ahead, SP plans to further correlate its personalization efforts with the 10 use cases Paterson s team first defined and adapt as customer journeys evolve. Proven efficiency to reduce costs. By understanding customers better across channels, SP has seen a decline in repeat contacts to resolve account issues. SP noted a 10% decrease in the number of call center interactions within 48 hours of a customer s initial outreach credited to its RTIM solution s ability to recommend more efficient channels for answering questions and addressing problems often SP s digital properties. Eliminating the frustration of no-value-add touchpoints has had a positive impact on customer satisfaction. Moreover, SP has achieved greater operational efficiency by reducing contact center staffing. Increased customer satisfaction and perceived value to fuel enrichment. SP used its RTIM solution to first mine all social activities to better gauge which products each customer was using before feeding this tagged and categorized information to the call center and all other possible customer touchpoints. Positive social sentiment scores for the specific use case of resolving issues with billing went up between five and 10 percentage points. This fluid feedback loop further surfaced insights to SP s customer life cycle team, highlighting the need to deliver more relevant product suggestions at each stage. As a result, SP saw a 10% increase in customer satisfaction scores and a 30% improvement in value-of-conversion mix, which measures customers perceived value of a product after they ve signed up for it. 5 ScottishPower Has Laid The Foundation For Deeper Engagement This initiative is just the beginning for Paterson and his team. They ve set their sights on ensuring that superior CX elevates utilities beyond the level of commodity purchases. With a more holistic view of its customers, SP wants to align itself with how customers manage their entire connected homes. SP is applying its wins with its EMT ecosystem to the rest of its business and is aiming to: 5

7 Embark on a journey for greater digital transformation. Having built a unified database of known customers, SP can now apply customer insights to the entire business. Next up, SP is reconciling its customer relationship management (CRM) and marketing strategies to unite all customer-facing staff behind common CX initiatives. For example, it wants to arm its customer service agents with the customer information and preferences its digital properties capture. Its goal is for agents to provide personalized product recommendations to specific customers on the front end while reporting into a more organized system for performance management on the back end. Engage with customers across more touchpoints. SP can attain its aspirations to expand its ecosystem because of its legwork to understand its current digital audiences. As of October 2017, SP has 5.2 million customers and leads the UK s major energy suppliers in digital penetration: 72% of its customers have logged into SP s website, and 25% of its customers are using the SP mobile app. SP expects that the 400,000 customer interactions it manages weekly across web, mobile web, mobile app, and social media will only increase. Within current touchpoints, SP plans to plug mobile notifications into its RTIM solution to help customers be more efficient with their energy use (for example, reminding a customer that her heat is still on when she travels more than 30 miles away from home). SP is also preparing for the connected home and integrating devices such as Alexa and Google Home to add even more context to its customer engagements. Test, learn, and optimize. At SP, Paterson runs a digital test lab and allocates 10% of his budget to evaluate new and emerging technologies. The iterative process has allowed his team to explore future use cases and develop new connected home products. For example, using an online panel of 10,000 customers, Paterson s test lab has examined the adoption of remote heating thermostats and electrical controls and customer responses to offers for these new products. These learnings feed SP s strategy for engaging the consumer in a suite of lifestyle moments. Recommendations Successful RTIM Embraces Customer Obsession Like ScottishPower, other brands must start with deep customer understanding and leverage contextual cues for successful RTIM implementations. From there, to orchestrate a holistic customer experience, B2C marketers must: Align RTIM to all stages of the customer life cycle. Because RTIM relies on integrating systems of insights with systems of engagement, effective execution requires customer data governance. 6 Start by creating a process to identify customers; contextualize their needs to optimize next-bestaction recommendations and measure the impact of individual interactions across the customer life cycle. SP did this by creating a 360-degree view of its customers and calibrating its decision engine to deliver on customer needs at each life cycle stage. 6

8 Remember that customer experience involves the entire company. RTIM integrates customer data and applications with customer-facing functions across the enterprise. B2C marketers must coordinate and align with broader initiatives to transform CX. By aligning its initiatives with key performance indicators (KPIs), SP kept the customer experience across every customer interaction front-and-center in its quest to reconcile its EMT ecosystem. Resist the one-size-fits-all approach to technology investment. Each RTIM provider will have different abilities to flex in different scenarios. B2C marketers must evaluate potential solutions in light of their customers specific use cases. Start the request for proposal (RFP) process with a clear customer problem in mind and build the business case you want vendors to help you achieve. SP did this by stress-testing each vendor on its shortlist against performance parameters it defined using unique customer journeys. Engage With An Analyst Gain greater confidence in your decisions by working with Forrester thought leaders to apply our research to your specific business and technology initiatives. Analyst Inquiry To help you put research into practice, connect with an analyst to discuss your questions in a 30-minute phone session or opt for a response via . Learn more. Analyst Advisory Translate research into action by working with an analyst on a specific engagement in the form of custom strategy sessions, workshops, or speeches. Learn more. Webinar Join our online sessions on the latest research affecting your business. Each call includes analyst Q&A and slides and is available on-demand. Learn more. Forrester s research apps for ios and Android. Stay ahead of your competition no matter where you are. 7

9 Endnotes 1 See the Forrester report The Power Of Customer Context. 2 SP attributes a 31% decrease in churn rate to its work in creating a comprehensive view of the customer and as a result, consistent customer interactions across touchpoints. 3 Net Promoter and NPS are registered service marks, and Net Promoter Score is a service mark, of Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld. 4 See the Forrester report The ROI Of CX Transformation. 5 ScottishPower s value of conversion mix metric measures the number of customers who are deriving value from a specific product as a percentage of total number of customers who sign-up for that product. 6 See the Forrester report Accelerate Modern Marketing With Real-Time Interaction Management. 8

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