The Leading Edges of Customer Experience Management

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2 The Leading Edges of Customer Experience Management Angelia Herrin Editor of Special Projects and Research, Harvard Business Review Jason Miller Customer Intelligence Solutions Architect, SAS Preliminary Research Findings

3 Respondents Profiles Financial IT/Telecoms Mftg Consulting services Energy/Utilities Pharma/Med/Life Sciences Retail Healthcare Leisure/Media Other Transportation/ Logistics Construction Prof/bus services 3% 3% 2% 2% 7% 6% 6% 5% 5% 15% 17% 19% 0% 5% 10% 15% 20% Which of the following best describes the MAIN industry in which you personally work? All n=403

4 Respondents Profiles Company Size (employees) 51% 11% 5% 1% 10% 22% Average no. staff = 8,602 Less than ,000-4,999 5,000-9,999 10,000 or more Gross Annual Sales FY % 19% 22% 11% Average revenue = $3.9bn $150m - $499m $500m - $999m $1bn - $4.99bn $5bn or more Not sure How many individuals does your organization employ? Base: All answering n=308 What were the approximate gross annual sales or revenues for your entire company in 2012? Base: all answering n= 403

5 Respondents Profiles Involvement in organization s customer experience (CE) practices 7% Very involved 46% Somewhat involved 47% Not at all involved How involved are you in your organization s customer experience practices? Base: All n=403

6 Challenge for All Firms Tying CE investments to business outcomes Not difficult at all Somewhat difficult Very difficult All 41% 32% 13% 6% Non forward looking firms 4% 3 34% 19% 4% Neutral firms 37% 3 11% 6% Forward looking firms 10% 49% 24% 10% About half say it is very or extremely challenging to tie CE investments to business outcomes. Forward looking firms are not immune; a third are in the same position. How difficult is it to tie customer experience investments to business outcomes? Base: All n=403 How difficult is it to tie customer experience investments to business outcomes? Base: All n=403

7 CE Management is Challenging for All NA/Don't know Not a challenge (1-4) Moderate challenge (5-7) Significant challenge (8-10) Maximizing customer experience 5% 10% 52% Achieving a 'single view' of customer 4% 11% 51% Building new customer experiences 2% 11% 36% 51% Cultivating a customer focused 1% 17% 32% 50% Connecting customer experience 4% 13% 37% 46% Integrating voice of the customer 3% 16% 36% 45% Understanding customer lifetime 3% 17% 36% 44% Identifying cross & upsell 3% 1 37% 42% Multi-channel management 7% 20% 40% Reducing customer churn 26% 66% find customer churn a challenge and this is the CE area of least concern. Forward looking firms are just as likely to face these challenges as their peers. Please rate the degree to which the following customer experience issues present challenges to your company on a scale of Base: All n=403

8 Extent of Customer Data Challenges NA/Don't know Not at all challenging (1-4) Moderately challenging (5-7) Extremely challenging (8-10) Data integration/lack of standardization 15% 43% Forecasting customer behaviour/purchasing 14% 3 40% Data quality 19% 37% 36% Big data 13% 1 36% Timeliness 1 39% 34% How actionable data is 9% 15% 43% Skills availability 17% 43% 32% Solutions costs 10% 16% 45% 30% Tracking customer trends 7% 21% 42% 30% Reliability/believability 22% 42% 2 How challenging are the following customer data challenges in your organization? All n=403

9 CE Management Forward looking firms are: Geographically evenly spread More likely to be in IT/Telecoms sector (24%, index 141) Non forward looking firm are more likely to be: Firms of fewer than 500 staff (20%, index 182) In the Manufacturing sector (20%, index 133) 36% 17% 47% Not forward looking (score 1-4) Neutral (score 5-7) Forward looking (score 8-10) How forward-looking would you say your organization is in its approach to customer experience management? Base: All n=403

10 Corporate Performance All Forward looking Neutral Not forward looking Index % Index % Index % Index 132 Index % 54% Top Box Scores (8-10) 47% 45% 46% 45% 35% 44% 44% 42% 42% 27% 2 29% 37% 34% 20% Profitability Quality Growth/revenue generation Market share Customer retention rate Please indicate how successful your company is in the following areas of corporate performance. Base: All n=403

11 CE and Competitive Advantage All Forward looking Neutral Not forward looking 71% of forward looking organizations agree that CE provides a competitive advantage. Index % Those who are not forward looking are much less likely to recognize the competitive advantages of CE; just one third agree that there is an advantage. 13% 15% 1 23% 17% 23% 31% 31% 30% 2 21% 25% 20% 14% 7% 6% 5% 12% 3% Strongly disagree Somewhat disagree Neither agree nor disagree Somewhat agree Strongly agree To what extent would you agree that your organization s customer experience management provides a competitive advantage? All n=403

12 Use of CE Practices Get feedback from customers Respond to individual customers' feedback Communicate CE's importance to all stakeholders Collect CE operational metrics Train new and existing staff in CE skills Get staff feedback on CE Get feedback from customer data Develop CE strategy to align with corporate Factor CE impacts in business decisions Regularly review CE projects/metrics Compare CE quality across segments Create consistent, company wide CE standards Share CE metrics with all staff Analyze all customer insights across organization Map customer interactions within firm Connect coprorate rewards to CE metrics Screen job candidates for customer centric values None of these analytics used 19% 22% 27% 36% 36% 34% 40% 40% 39% 45% 45% 44% 43% 4 46% 62% There is plenty of scope for increased use of CE practices, particularly in the area of analysis 69% 75% Feedback Analysis Implementation Which of the following practices does your organization routinely employ? All responding Feedback section n=402, Analysis section n=399, Implementation section n=400

13 Forward-Looking Firms Use Analysis More Analyze all customer insights across organization Develop CE strategy to align with corporate strategy Create consistent, commpany wide CE standards Share CE metrics with all staff Compare CE quality across segments Collect CE operational metrics Connect corporate rewards to CE metrics Regularly review CE projects/metrics Map customer interactions within firm Screen job candidates for customer centric values Get feedback from customer data Train new and existing staff in CE skills Factor CE impacts in business decisions Get staff feedback on CE Get customer feedback Communicate CE's importance to all stakeholders Respond to individual customers' feedback Indices Indices: Forward looking organizations answers indexed against all answers for each CE practice. Over 120 indicates more likely to use a practice, less than 80 indicates less likely to do so. Feedback Analysis Implementation Which of the following practices does your organization routinely employ? Base: All forward looking organizations n=143

14 Rating of CE Practice: Feedback All respondents saying extremely effective (top Box Scores of 8-10) Base: all respondents who routinely employ the relevant CE practice. 3 Forward looking Neutral Not forward looking 52% 46% 35% 22% 17% 16% 10% 59% 60% 39% 16% 47% Even forward looking firms have plenty of room for improvement in their CE practice 27% Gather CE input from staff Collect unsolicited experience data Collect operational metrics Solicit experience feedback from customers Respond to individual customers based on feedback Please rate the effectiveness of the practices your organization currently employs to manage the customer experience on a scale from 1 to 10, with 1 meaning not at all effective and 10 meaning extremely effective. All responding n=402

15 Rating of CE Practice: Analysis All respondents saying extremely effective (top Box Scores of 8-10) Base: all respondents who routinely employ the relevant CE practice. Forward looking Neutral Not forward looking Forward looking firms are way ahead in their use of analytics, 4 51% 49% 55% but this is the area where there is most scope for improvement 34% 17% 22% 12% 27% 35% 20% 0% Compare differences in experience quality among segments Analyze cross organizational customer insights Map customer interactions within organization Create organization wide CE standards Please rate the effectiveness of the practices your organization currently employs to manage the customer experience on a scale from 1 to 10, with 1 meaning not at all effective and 10 meaning extremely effective. All responding n=402

16 Rating of CE Practice: Implementation All respondents saying extremely effective (top Box Scores of 8-10) Base: all respondents who routinely employ the relevant CE practice. 60% Forward looking Neutral Not forward looking 63% 63% 65% 67% 6 71% 73% 36% 22% 21% 30% 26% 29% 40% 26% 41% 9% 2 42% 29% 40% 29% Factor CE impacts in decisions Regular CE project/metrics reviews Screen employment candidates for customer centrism Develop CE Provide staff CE strategy that training aligns with firm's strategy Share CE metrics with all staff Connect rewards to CE metrics Communicate CE importance to all Please rate the effectiveness of the practices your organization currently employs to manage the customer experience on a scale from 1 to 10, with 1 meaning not at all effective and 10 meaning extremely effective. All responding n=402

17 CE: Forward-Looking Firms are More Effective Customer Effort Score 194 Customer engagement Up-sell/Cross-sell rate Brand value management Customer loyalty Customer satisfaction Use of Net Promoter Score Customer retention Average revenue per customer Indices Forward looking firms are waking up to and becoming increasingly proficient in the newer CE tools like Customer Effort Score Please rate your organization s effectiveness in the following aspects of customer experience. Base: n=403

18 Importance of Multi Channel Management All Forward looking Neutral Not forward looking Index % Index % 3 36% 37% 20% 9% 16% 27% 22% 21% 21% 15% 15% 11% 19% Not at all important (1-4) Moderately important (5-7) Extremely important (8-10) Don't know How important is multichannel management to your organization? All n=403

19 Forward Looking Firms Use More Channels All Forward looking Neutral Not forward looking 45% Index 157 Index % 20% 12% 34% 25% % 25% 21% 15% 11% 2 channels or fewer 3-4 channels 5-6 channels 7-10 channels Which of the following means of customer engagement does your organization use today? Base All n=403

20 Extent of Customer Data Challenges NA/Don't know Not at all challenging (1-4) Moderately challenging (5-7) Extremely challenging (8-10) Data integration/lack of standardization 15% 43% Forecasting customer behaviour/purchasing 14% 3 40% Data quality 19% 37% 36% Big data 13% 1 36% Timeliness 1 39% 34% How actionable data is 9% 15% 43% Skills availability 17% 43% 32% Solutions costs 10% 16% 45% 30% Tracking customer trends 7% 21% 42% 30% Reliability/believability 22% 42% 2 How challenging are the following customer data challenges in your organization? All n=403

21 Success in Overcoming Data Challenges All Forward looking Neutral Not forward looking Index % Even best in class have plenty of room for improvement in overcoming data challenges. 51% 32% Index % Less than 1/3 say they are extremely successful in this aspect 29% 29% 7% 13% 6% 2% 5% 7% 6% Not at all successful (1-4) Moderately successful (5-7) Extremely successful (8-10) Don't know Overall, how successful do you think your organization is in overcoming these data challenges? All n=403

22 Data Sources Used to Enhance CE Website Surveys 71% 70% Sales/retail staff feedback 57% Social media Transaction data Contact center 'phone transcripts Location-based services Mobile interactions 37% 52% Over half of companies are drawing on social media data sources, making it a clear top four source. But they do not yet know how to manage, analyze or be highly effective in this channel. Partner data Other 3rd party data Online review data 25% 24% 24% Online chat 16% Which data sources does your organization draw upon to create better customer experiences? All n=403

23 Forward Looking Firms Preferred CE Data Sources Online chat Online review data Mobile interactions Social media Partner data Contact center phone transcripts Website Surveys Other third-party data Focus groups Transaction data Feedback from sales/retail staff Location based services Which data sources does your organization draw upon to create better customer experiences? Base: All n=403

24 Forward Looking Firms See Promise in Emerging Technologies CE/online behaviour analytics Real-time decision making Social media analytics Location based applications Text analytics Augmented reality Wearable computing Speech analytics 14% 13% 17% 12% 16% 15% 23% 22% 31% 30% 26% 26% 37% 44% 43% 41% 35% 49% 53% 61% 54% 56% Not forward looking Forward looking All In your opinion, how promising are the following emerging technologies to improving your organization s ability to manage the customer experience? Base All n=403

25 Thank you! Angelia Herrin Editor of Special Projects and Research, Harvard Business Review Jason Miller Customer Intelligence Solutions Architect, SAS The Leading Edges of Customer Experience Management Full Report Publication date: April 16, 2014

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