riding the wave of customer experience - icmi @ dreamforce 2010 handout - john goodman
DESCRIPTION
TRANSCRIPT
1
Riding the Wave of Customer
Experience: Moving From Firefighting to
Delivering Psychic Pizza
John Goodman, Vice Chairman, TARP
December 7, 2010
3:45-4:45 PM
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Challenge to Developers
• Make company easy to do business with
• Understand the real causes of dissatisfaction and conduct
preemptive education
• Impact loyalty and word of mouse to dramatically increase
revenue
• What the Director of Service needs from SF apps
• What the CMO and CFO need to measure and manage the
overall customer experience
• Getting beyond the technology – making it either
transparent or a cheap delighter for both customers and
employees
2
3
About TARP
• Founded in 1971—39 years of customer experience leadership
– White House Complaint Studies 1970s-80s (instigated 800#s and GE
Answer Center)
– Assisted 6 Baldrige Winners and 43 Fortune 100 Companies
– Initiated concept of ―word of mouth‖ (TARP/Coca-Cola 1978 Study) and
―word of mouse‖ (eCare and Click & Mortar studies 1999)
• Offices in Wash., D.C. and London
• Credited with developing the approach
for quantifying the impact of quality
on revenue, cost & WOM for companies
like Neiman Marcus, Toyota/Lexus, AOL,
USAA, Cisco Systems, Xerox, 3M,
National Geographic, MoMA, USO, HP,
Honda, Hyundai, Apple and Qualcomm.
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Customers, donors, citizens
will:
Use again
Use or donate more
Tell others to use or donate
Try your other products &
services
+ =
DOING
THE RIGHT
JOB
RIGHT THE
FIRST TIME
MAXIMUM
CUSTOMER
SATISFACTION
& LOYALTY
ImprovedProduct & Service
Quality
Respond toIndividual Customers
Identify Sourcesof Dissatisfaction
Conduct RootCause Analysis
Feedback onPrevention
EFFECTIVE
CUSTOMER
CONTACT
MANAGEMENT
Formula For Maximizing Customer Satisfaction
3
5
Firefighting Mode
6
Riding the Wave of Customer Experience
Management: Six Big Ideas
1. Staff doesn’t cause most customer dissatisfaction –sales, products, processes and customers do
2. It is cheaper to give great service than just good service, the revenue payoff is 10-20X the cost
3. An effective Voice of the Customer includes all kinds of data describing the overall customer experience
4. People are still paramount – make the front line successful with flexibility and clear explanations
5. Deliver technology that customers will enjoy –delivering psychic pizza via any channel
6. Sensibly create remarkable delight
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7
Employees Do Not Cause Most Customer Dissatisfaction
- Fails to follow
policy
The majority of customer dissatisfaction is NOT caused by employee error or attitude but
by products that cause disappointment and broken processes*
Customer20%-30%
Employee
20%
- Wrong expectations
- Customer error
-Fails to follow
policy
-Attitude
Company 40%-60%- Products and services
don’t meet expectations
- Marketing miscommunication
- Broken processes
Poorly designed products,
Processes, and marketing
create most unmet
expectations. Further,
employees are often not
equipped with effective
responses to problems.
Customer expectations
must be set and they must
be educated on how
to avoid problems
and surprises.
*Finding based upon TARP analysis problem cause
data in over 200 consumer and B2B environments.
At least
30% of
contacts are
preventable
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What is Easy to Do Business With?
• Know where to look and find it
• Get immediate access to it
• Eliminate bureaucracy
• Get my answer and ideally anticipate my next
question
• Follow through including notification of exceptions
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TARP’s Tip Of the Iceberg
Three quality
actions:
1. Extrapolate to
market place
2. Quantify word
of mouth
impact
3. Break down
barriers to
feedback
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Customer Expectation: Key Factors Driving
Satisfaction
• No Unpleasant Surprises
• If Trouble Encountered– Accessibility, Taking ownership, Apology
– Clear, believable explanation
– Creating an emotional connection rather than just
courtesy
– Money is often not the best solution
– Timeliness and Keeping promises
• Handle on First Contact Results in 10% Higher
Satisfaction and 50% Lower Cost
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1. Prevent Problems By Setting Proper Expectations
• Welcome packages
• Welcome calls
• Encourage questions before customers get
into trouble
• Confirmations and progress reports
• Reconnecting
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2. Get CFO Support by Quantifying the Impact
of Problem Experience on Loyalty I
Question/problem
experience
II
Contact
behavior
III
Contact
handling
Customers
No
Question/
problem
experience
70%
Question/
problem
experience*
30%
IV
Market
impact
Non-
contactors
66%
Satisfied1
44%
Mollified2
32%
% Definitely
Will
Recommend
69%
39%
74%
42%
32%Dissatisfied3
23%
Word
of
Mouth**
---
2.9
1.7
4.4
5.5
% Definitely
Will Keep
Purchasing
82%
42%
86%
42%
22%
% Very
Satisfied with
ABC
81%
40%
82%
52%
35%
Contactors
34%
* In the past 6 months
** Average number of friends/colleagues told about the experience with ABC
1 Top box (i.e., I was completely satisfied)
2 Second and third box (i.e., I was not completely satisfied, but the action taken was acceptable and I was not completely satisfied, but some action
was taken)
3 Fourth and fifth box (i.e., I was not at all satisfied with the action taken and I was not at all satisfied because no action was taken)
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=
=
=
=
x xx
=
2,000
6,000
9,000
37,500
54,500Total Customers At Risk
200,000
Customers
with
Problems
20%
DissatisfiedMany Not
Repurchasing
Some Not
Repurchasing
50%
Satisfied
Most
Repurchasing
75% Do Not
Complain
25%
Complain
30%
Mollified
Some Not
Repurchasing
Estimate Customers and Revenue At RiskDemonstrating financial impact with the CFO, CMO and the General Counsel
Three strategies: Prevention, Solicitation of Complaints and Improved Response
At $1000 per customer, $54.500,000 at risk
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Show The CMO That Negative Word Of Mouth
Can Trump Marketing
10%
delighted
70%
satisfied
Tell
two
Tell
one
=
=
2,000
7,000
-3,000
10,000
customers
Example calculation of potential impact
20%
dissatisfied
Tell
six
= -12,000
20% dissatisfaction can counter 80% satisfaction
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Great Service Is A Word of Mouth
Management Mechanism
10%
delighted
80%
satisfied
Tell
two
Tell
one
=
=
2,000
8,000
4,000
10,000
customers
Example calculation of potential impact
10%
dissatisfied
Tell
six
= -6,000
10% decrease in dissatisfaction results in net positive WOM
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Problems Raise Sensitivity to Price,
Hindering High Margins
10%
22%
46%
74%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
No problems 1 problem 2 to 5 problems 6 problems or
more
Percent of customers dissatisfied with fees rises with number of problems.
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3. Create a Unified Voice of the Customer
• Customer surveys
• Customer contact and interaction data
• Internal operations process and quality data
• Employee input
• Together, these elements are used to prioritize
opportunities for product and service quality improvement
+ = End to end view
and economic
priorities for
action
Internal process
and quality data
and employee
input
+Customer
contact and
interaction data
Surveys of
customer
satisfaction and
loyalty
Take The Role Of Chief Customer Officer
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1 Based on multiple problem selection2 Based on will not repurchase only
Set Priorities Based on Revenue Damage
Overall problem experience
Problem freq
% Won’t recommend
% Customers potentially lost
(45%) (%)1 Will not
2
Meeting promised delivery dates
27 10.5 1.3
Product availability within desired time frame
23 0.0 0.0
Meeting commitments/follow through
21 30.0 2.8
Equipment/system fixed right first time
20 22.2 2.0
Adequate post-sale communications
19 10.0 0.9
Returning calls 16 33.3 2.4
Minimum customers at risk 9.4%
10
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4. Create A Culture of Success
• Stellar Leaders and Culture Are Great, But..
• Tools – Issue driven flexible solution spaces
– Clear believable explanations
– Tools and information to get it done now
• Training – ongoing training and story telling
• Motivation – celebration via victory sessions
& promotability
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5. Deliver Technology People Enjoy
• Why people hate technology– Wastes my time
– Gets in the way – phone trees
• Why they love it– Anticipates
– Simplifies
• Delivering psychic pizza
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6. Delight: Heroics and Constantly Exceeding
Expectations is NOT Necessary Or Even Smart
Delight experience Average lift to repurchase or
recommend (Top Box)
Service beyond expectation - heroics 12%-14%
No unpleasant surprises 22%
Friendly 90 -second staff interaction 25%
Personal relationship over months 26%
Tell me of new product or service I can really use
30%
Proactively provide information on how to avoid problems or get more out of your product
32%
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Ten Myths About Service and Benchmarking
1. Always exceed customer expectations
2. Answering the phone really fast is the key to success
3. People always prefer talking to people
4. The customer is always right
5. Complaints are down, things are getting better
6. Employees are the cause of most dissatisfaction
7. Price and cost cutting is the key to success
8. We’re better than the average in our industry – that’s great!
9. We’re at 90% satisfaction – let’s declare victory!
10. We measure Net Promoter so we’re done!
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Mandate for Developers
• Make company easy to do business with
• Eliminate or preempt the causes of dissatisfaction
• Aggressively solicit customer frustrations
• Facilitate quantification of the impact on loyalty and word of
mouth
• Provide flexible solutions, rationales and follow-through
• Provide the Voice of the Customer the CMO needs to
understand and manage the overall customer experience
• Get beyond the technology – make app either transparent or
a cheap delighter for both customers and employees
24
Summary
• Communicate to set proper expectations and educate to avoid problems
• Aggressively solicit complaints and understand the non-complaint rate
• Create a unified VOC that quantifies revenue and WOM at risk
• Make the front line successful with tools and guidance
• Deliver psychic pizza
• Delight sensibly
• Better a Small Success Than a Big Disaster:
Practice Continuous Experimentation With Measurement
• Outlined in detail in Strategic Customer Service published by AMACOM
• [email protected] or 703-284-9253