2011 Global Customer Experience Management Survey

Global Customer Experience
Management Survey 2011
Beyond Philosophy

Steven Walden, Senior Head of Research
Colin Shaw, Founder & CEO

www.beyondphilosophy.com

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Beyond Philosophy © All rights reserved. 2001-2011 www.beyondphilosophy.com 2

The Beyond Philosophy Perspective

Customer Experience Thought leadership is New fourth book
is all we do! our differentiator Is now available

Offices in London,
Atlanta with partners in
Links with academia Focus on the emotional side
Europe & Asia
of Customer Experience


We are Proud to Have Helped Some Great Organizations


Themes

Methodology
1

How can we model the state of the market in Customer
2 Experience globally?

How are global resources allocated to Customer
3 Experience?

The risks, challenges and drivers to Customer
4 Experience programmes

Best Practice: what you need to do!
5

Beyond Philosophy © All rights reserved. 2001-2011
www.beyondphilosophy.com 5

Questions
1. Learn about our 7-stage Customer Experience Maturity
model. Also, gain insight into how customer experience is How can we model the
understood or misunderstood, and learn about the state of growth in
implications and risks as it continues to evolve. Customer Experience
Globally?
2. Where is customer experience management most needed?
What industry? What country? What companies?
3. Which industries spend the most on customer experience?
4. Which regions spend the most on customer experience? How are global resources
5. What companies have seen the biggest customer allocated to Customer
experience growth, by industry? Experience?
6. What industries will see the greatest growth in customer
experience over the next several years?
7. What are the drivers and challenges the customer
experience industry faces as it further develops?
8. What is the valuable element of a company’s customer The risks, challenges and
experience program? How does it differ by industry or drivers to Customer
region? Experience programmes
9. How will social media affect the way companies approach
customer experience?
10. What will be the next great customer experience Best Practice: what you
advancement?: Best Practice and Innovations need to do!


Section 1

Methodology
1


Quantitative Analysis

• 8,000 Customer Experience Executives
• Over 2,106 companies
• Covering 239 countries and regions
• Sourced from social media, Google, SEC filings, LinkedIn,
Beyond Philosophy database of 20,000 contacts; company
websites, news reports, conference speaking, blog articles


A High Bar to Minimize the Inclusion of Weakly
Active Firms or Those Not Really Doing CE
 We selected CE ‘active’ companies e.g., those with a CE presence on
an in-country Google site ‘in the last year’ and/ or a presence of
executives with a LinkedIn CE title.


Global Study: 53 In-Depth Interviews with CE
Professionals


A Cross-Section of Experts and Industries

Region %
Experts , 19% Banking, 19%
Western Europe 27%
Oil, 2%
North America 19% Healthcare, 2%
Logistics, 2%
Eastern Europe/ 10% Insurance, 10%
Charity, 2%
Russia
Construction, 2%
Middle East 10% Utilities, 2% Car, 6% Telco, 21%

South America 6% Retail,
6%
Africa 6%
Manufacturing,
India 6% 6% Outsourcing, 2%

South-East Asia 6%

Australasia 6%
 CxO 47%
Caribbean 2%  Lead PM 23%
 CE Experts 30%


Section 2

How can we model the state of the market in Customer
2 Experience globally?


Modeling the State of the World for Customer Experience
 We developed the CE Maturity Index to answer this question

CE Maturity Index

Quantitatively Derived
1. Concentration of CE active companies
2. Existence of key CE players
3. Industry presence i.e., in or beyond key verticals
4. Country Google presence
5. Size of businesses interested
6. General market conditions
7. Competitive intensity

Qualitatively Derived
1. Value derived i.e., CSAT or loyalty focused
2. Awareness of the term
3. Understanding of the term
4. Strategic or tactical use
5. Origination of term


7 Stage Maturity Model

• 7 stages of maturity
Source: 2,106 companies, and 53 CE
• Customer Experience is a global
professionals
phenomena
• Mid-low countries are key to growth


Dynamics Behind the Index: Movements are Seen
Best Practice & Innovation
Acquisition Relationship Retention
Focused on acquiring Focused on relationship Focused on retaining customers
Economics customers building with customers and preventing churn
Stages Mid-low maturity Mid-high maturity High maturity
Key metrics Sales Satisfaction and Sales Loyalty

Peru
Turkey USA
Example Nigeria
UAE UK
China
countries South Africa Singapore
India
Russia Canada
Brazil
1. Blue Ocean
2. Use to differentiate a
market entrant - 1. Target high margin
1. Optimise channels
deregulation segments
2. Manage retention
3. Leapfrog a technology 2. Manage a changed
programmes
Key drivers 4. HQ directive expectations set
3. Launch branded
5. Software vendor push 3. HQ directive
programmes
6. Government regulation 4. Technology
4. Regulation
7. Internationalization – see programmes rebranded
and be like developed
markets (social media)
1. No CE dept or very 1. Established key CE players
1. Start up CE dept. in
limited: marketing 2. Start up CE going beyond
Internal owned or defined by
certain verticals
Telco, Banking and Retail
customer service
1. Banking
Example 1. Motor 2. Telecommunications
1. B2B -Logistics
Changes in 2. B2B - Manufacturing
2. Aviation 3. Retail
3. Utilities 4. IT
High Mature 5. Insurance



Peru
Turkey USA
Example Nigeria
UAE UK
China
countries South Africa Singapore
India
Russia Canada
Brazil
1. Blue Ocean 1. Target high margin
2. Use to differentiate a segments
market entrant - 2. Manage a changed
deregulation expectations set
2. Manage retention
3. Leapfrog a technology 3. HQ directive
programmes
Key drivers 4. HQ directive 4. Technology
3. Launch branded
5. Software vendor push programmes rebranded
programmes
6. Government regulation 6. Internationalization –
4. Regulation
7. Internationalization – see see and be like
and be like developed developed markets
markets (social media) (social media)
certain verticals
customer service

Example 1. Motor 1. Banking
1. B2B -Logistics
2. Aviation 2. Telecommunications
3. Utilities 3. Retail
High Mature



Peru USA
Turkey
Example Nigeria UK
UAE
China Singapore
countries South Africa
India Canada
Russia
Brazil Netherlands
2. Manage retention
programmes
3. Launch branded
programmes
4. Regulation
5. Spread of CE into other
non-core (big 4) verticals
(see below) – increasing
customer consciousness
certain verticals
customer service
1. Banking
Example 1. Motor 2. Telecommunications
1. B2B -Logistics
3. Utilities 4. IT



Peru Moving USA
Turkey
Example Nigeria UK
UAE
China Singapore
countries South Africa
India Canada
Russia
Brazil Netherlands
2. Manage retention
programmes
3. Launch branded
programmes
4. Regulation
5. Spread of CE into other
non-core (big 4) verticals
(see below) – increasing
customer consciousness
certain verticals
customer service
1. Banking
Example Moving 1. Motor 2. Telecommunications
1. B2B -Logistics
3. Utilities 4. IT


Overall Company Growth Rates – Still Increasing In
Spite of Recession Possibilities in the ‘West’

Maturity Increase Maintain Decrease Range est.
High-Maturity 65% 35% 0% Slight 0-15%
All Other 79% 18% 2% Moderate 0-30%
Total 73.5% 24.5% 2% 15%
Source: 53 CE professionals

Certain niche industries will
continue to grow e.g., motor and
aviation. There is also a strong
push within retail, especially with
rising expectations in the Mid
Mature countries to ‘experience’
western brands and a higher
standard required from the
burgeoning ‘upper middle class’ for
luxury e.g., UAE, India and China.
Motor is a key vertical here.


The Themes

How are global resources allocated to Customer
3 Experience?


Which Regions Allocate Most Resources on Customer
Experience?

• The regions with the highest resource
allocation on CE are North America (USA
and Canada) and the UK
• Growing interest in Brazil, China, South
Africa, Singapore and New Zealand.
professionals
• A surprisingly strong impact in India and
Australia
• 21
Beyond Philosophy © All rights reserved. 2001-2011 www.beyondphilosophy.com

Which Regions Allocate Most Resources on Customer
Experience?

• In low active countries, often pushed as a
corporate mission or the language of
software vendors
professionals
• Growing interest countries are starred –
this includes UAE, Australia/ New Zealand
due to ‘awareness’ factor


Which Industries Allocate Most Resources on
Customer Experience?

Sector No. Active CE % of total
1. 63 percent in 4
companies (N= 2,106)
verticals: Telecoms,
1 Telecoms 441 21% Banking, Retail, IT and
Banking 414 20% services
2

3 Retail 291 14% 2. Large scale investment
IT and 174 8% in CE noted in Airlines
4 (Delta and Boeing)
Services
Insurance 96 5% 3. Innovation/ technology
Airlines 67 3% driver for some is key

Motor 67 3%
Software 65 3%
Utilities 60 3%
Logistics 51 2%

Source: 2,106 companies, and 53 CE professionals


Where is the concentration of resources? Is it just about
the Big 4 in each country?
Countries Total Big 4 Telecom Banking Retail IT /
(2,106) vertical Services
% 1. Regional growth
is driven by the
USA 506 55% 68 87 100 22 Big 4 verticals
UK 276 43% 31 26 46 17
2. In mature USA
Canada 165 61% 20 31 40 9 and UK there is
India diversification:
109 71% 18 11 20 28
Australia 106 56% 14 23 9 13  Insurance
China  Software
34 71% 2 11 5 6
 Utilities
France 34 62% 5 7 4 5  Motor
New
Zealand 29 69% 5 8 3 4
Netherlands 28 61% 6 4 2 5
Brazil 27 78% 8 4 6 3
Singapore 27 70% 4 8 3 4

Source: 2,106 companies, and 53 CE professionals


What Companies Have Seen the Biggest Customer
Experience Resource Allocation, by Industry?
Top 20 These companies are not
IT
necessarily the best, they
1. HP
Bank claim most activity in CE
2. HSBC
Telecom
3. Vodafone
Retail
4. GAP
5. AMEX
6. Dell
7. Citibank
8. Best Buy
9. Sprint Nextel
10. AT&T
11. TD Bank
12. Bank of America
13. All State Insurance
14. Wells Fargo
15. BT
16. BSkyB
17. Lloyds Bank Criteria: location, spread
18. Telstra and number of country
19. Verizon locations, number of CEdisclosure- the identified
Executives are by
executives give direction of focus and are for cross-
20. T-Mobile executives comparison purposes
Source: 2,106 companies, and CE experts


What do they do? HP and HSBC

HP: “TCE is the HP Enterprise Business HSBC: “Implemented a multi-faceted CEM
focus on our customer’s experience at every solution, including customer listening posts
contact with us, our products and in HSBC net, event driven surveys within the
services. We work to have the most satisfied banking platform and opportunities for future
and loyal customers in the industry and we enhancements”
would like to share some of the ways we do
that and hear your thoughts and ideas.”

“A simplified ownership experience” Customer Experience intelligence from an
annual survey of 72,000 global business
“Make products work better together” customers

“Bring the customer into the heart of our Development of targeted strategies
decision-making”
20% rise in NPS
“ Looking for competitive pricing and low
cost of ownership”


CE Professionals Most Admired Companies
(Does Not Mean Most Resources Allocated)
Rank Company • Most admired the
‘usual suspects’
1 Apple E-retail strong i.e., Apple and
2 Amazon.com Amazon
E-retailers
3 Zappos • Some e-retail
4 Starbucks success, being
able to give a
5 Disney human touch to an
6 Tesco impersonal
channel
7 Virgin Atlantic
8 Vodafone
9 Nordstrom
• This does not
10 First Direct translate to having
most ‘resources’
thrown at CE


The Themes

The risks, challenges and drivers to Customer
4 Experience programmes


Risk 1: Limitations in its Adoption: rule of 1/3rds

Example

“Most work in the USA today is in the top 100
banks (in the US there are 4,500 banks). One
third are trying to do something so CE is a
core strategy e.g., TD Bank. Umpqua,
Huntingdon; one third are dabbling in the Also an
middle - CE measurement.
Opportunity!
Now with the change in financial regulation
and margin pressure, momentum has been
built.” (Banking, USA, Expert)


Risk 2: Use of the Term to Rebadge Current Operations

“Australia not strong in CE
development, in Australia,
culturally they are between the
USA and the UK so they are
“Lipstick on a pig” always looking to do the same
things but that does not mean
they do it; they get the title but
still do standard marketing
things.” (Australia, Expert)

“There is major confusion
between customer service (i.e.,
bounded by customer service
“The other one is confusion with
departments) so CE= CS.
user experience so things about
(Expert, UK)
web, user interface, design. Techies
think user experience, business
professionals think customer service
- here it becomes, survey tools,
workforce automation, all stuff
related to the contact center use (as
they worry about CSAT).” (Expert,
UK)


Risk 3: Misappropriation of the Term for Vendor Sales

“There is a lot of CRM being
rebranded to CEM. Lots of
vendors are doing this and lots of
buyers are thinking it. (Expert,
UK)

Company Claim Fact
Bhutan “Enable Bhutan to have an end-to-end Customer Contact Center
Telecom Customer Experience Management Solution with help-desk
approach” support and management
Saudi “Provide a great level of satisfaction Contact Center
Telecom given their vast experience in managing Management
Customer Experience across multiple
geographies”


Risk 4: Failure to Take Account of the Customer’s
Emotional Viewpoint, e.g., in ROI
Measurement % Measurement %
 Over 50% of an
NPS Verbatims experience is about
15% 6% emotion.
CSAT Focus groups  Emotions drive
15% 4%
behaviour.
Don’t measure Emotion curves
15% 2%  Customer
General qualitative TRIM index Experience is about
11% 2%
using Emotions to
Cannot measure Crisis moments differentiate.
9% 2%
Journey maps Customer
8% immersion If you are not thinking
2%
Sentiment analysis about Emotions you
8% Call recovery
are not doing your job
scripts 2% and not standing out
from your competitors
Measurement % While 88 percent of
Quantitative interviewees accepted the
32% importance of emotion to
Qualitative customer experience, few
43%
Can’t do or don’t do knew what to do about it!
25%



Risk 5: Length of Time Required to Execute

“The change occurred over a 6-7
year time period. Driven by the
Chairman” (Motor, UK, CxO)

“Sprint is currently in a 3-4 year
turnaround period. It takes 5 years
to go from awful to ok then another
5 years from good to great – the
problem is companies are usually hit
by a recession in that time and Are you fit for purpose over the
scrap it, short-termism does them
in.” (Expert, UK) long run or just adding more
functionality?


Challenge: Get the Definition Right!
Definition % “It is quite a defensive definition.”
Touchpoint 60% (Expert, UK)

Customer research 28%

Emotional 18%
 Where is Experience in
Company mindset 18% terms of being memorable
and emotional, something
Company process 10% you would want to pay
money for?
Brand 8%

Loyalty 8%

Relationship 6%

Value-add 4%

Customer service 2%

Source: 53 CE Professionals


This Means Get Enlightened
First Generation Second Generation

Telecoms E-Tail Innovation

Banking Healthcare Regulation

Retail Utilities Regulation

Insurance Logistics Economic

IT and Services Manufacturing Economic

Hotel and Government Regulation

Hospitality
Pharma Economic
Software
Construction Economic
Consumer Goods
Charity Economic
Motor

Aviation New to
Enlightenment
(lower base, higher
growth, newly
Seeking innovated)
Enlightenment
(at least some)
Source: 2,106 companies and 53 CE professionals


Challenge: Get The Internal Mindset Right
Challenges %
Operational priorities override (inc. acquisition
focus, cost cutting agenda, legacy sales
metrics) 16%  Internal Mindset problems–
Culture (mindset of organization) is it a priority or not?
14%
Lack of understanding of CE 12%
Lack of leadership 11%
Uncertainty on how to implement 10%
Need to demonstrate ROI 9%
Complexity of management challenge (inc. IT,
multi-channel) 9%
Customers not used to it 5%
Recruitment difficulties 4%
Lack of industry adoption 4%
Difficulties of embedding in value chain 2%
Regulations 2%


Challenge: Get People Engaged with CE
Origin of CE VP and Director % Origin of CE VP and Director %
With CE Background 22% Strategy 1%

Without CE Background 78% Web 1%

Operations/ process 23% Purchasing 1%

Customer service 22% IT 1%

Sales 7% HR 1%

Brand 4%

Retention 4% 1. 78% of CE directors and VPs (N=136)
have no background in CEM
Marketing 4%
2. 45% of leaders have a background in
Research 4%
operations or customer service
Finance 4%

Source: LinkedIn sample of 136


Challenge: Ensure You Are Investing in the Right Projects
Projects undertaken Total
Now
IT/Software 19%  Just a rebrand?
Training  Helping software sales?
13%
Customer research 10%
Customer service 8%
Measurement 8%
Process improvement
(multi-channel) 7%
Culture 6%
Brand 6%
Governance 5%
Touchpoint mapping 5%
Strategic review 4%
HR and recruitment 3%
Marketing campaigns 3%
Social media 2%
Modelling and analytics 3%
Source: 53 CE Professionals


Challenge: Respond to the Drivers
Driver %
Differentiate under commoditization pressure 24%
Improve loyalty, retention, prevent churn 19%
 The rise of Customer
Respond to customer empowerment 19% Empowerment means you
Drive through a branded experience have to do CE
10%
Target and create new segments 8%
Practitioners push 5%
Regulation 4%
Control costs by being more efficient 4%
Customer management (multi-channels) 2%
Vision of one person 2%
Silver bullet 1%
Ethical 1%


Customer Empowerment
10 customer empowerment drivers:

1. Social media

2. The development of the ‘fast society’ – ultra competitive markets (added value CE is a
barrier to entry as well as a differentiator)

3. The burgeoning middle classes in countries such as India have raised service expectations.

4. The development of a high-value consumer segment in countries such as UAE and China
has raised demand for luxury experiences

5. Customer demand for international brands has encouraged the expansion of western firms
into new markets and the development of the ‘branded experience.’

6. Deregulation has opened up demand from third, fourth or fifth market players to differentiate
through CE e.g., in Telecommunications, UK Banking

7. With increased travel, customers are becoming more demanding

8. Government regulation

9. Cultural sensitivity – service to experience (India, Middle East); hospitality focused centers

10. Web aggregator sites (e.g., trip advisor et al. sharing views continuously)


Internationalization of Leadership and Customers
Through Contact


What Will be the Next Great Customer Experience Advancement?
WHAT YOU NEED TO DO


Aim to Become Customer Conscious
Customer Experience is an
“Organizationally
Conscious” effort to
orchestrate every action that 1. The growth in CE
impacts the customer. This programs
goes beyond customer depends on the
service, it looks at making
memorable and long-lasting
Conscious level to which an
organization has
experiences for customers
through all activity. developed a
(Banking, Nigeria, CxO) ‘conscious’
concern for the
customer.

2. Some industries
will remain
strong in
awareness,
others will be
Unconscious forced to
awareness (e.g.,
via regulation,
customer
empowerment)


Undertake an Organizational Roadmap Approach

Monitor and review

Embedding the CE culture Process improvement
Training, what it means, leadership engagement IT infrastructure, call center infrastructure

Engage the Organisation Redesign experiences
Training, governance, CE Council or organisational support for
Process design, pilot new designs (do something!)
design

Setting the strategy
Where is the organisation (audit), emotion research, strategy roadmap & ROI,

Understanding CE
What is CE! leadership buy-in, get the emotional difference
44


Monitor and review


design

Without an
Setting the strategy alignment to
Where is the organisation (audit), emotion research, strategy roadmap & ROI, emotional
engagement
your are not
doing CE

Understanding CE
45


Monitor and review


design

Without a
Setting the strategy supporting
Where is the organisation (audit), emotion research, strategy roadmap & ROI, leadership and
culture CE is
non-
transformational

Understanding CE
46


Monitor and review


design

Without a
Setting the strategy demonstration of
Where is the organisation (audit), emotion research, strategy roadmap & ROI,
return, CE as a
strategy will be
short-term

Understanding CE
47

Ensure You Become Fit for Purpose – Maintain
Long-Term CE
From retain to redesign
around customers

Emotions
Inside

More Control Better control

• Mindset stays the same • Changed mindset
• Become less customer focused • More customer focused
• See the number • See the change
• You can’t change the weight of a • CE as an Organising principle for
pig by continually weighing it maintaining CE in the long-term


7 Strategic Questions

1. What is the Customer Experience
you are trying to deliver?
2. What are the emotions you are trying
to evoke?
3. What is your subconscious
experience telling Customers?
4. Is your Customer Experience
deliberate?
5. What do your Customers really want?
6. What provides you with the most
value?
7. How Customer centric is your
organisation?


Thank You
We invite you to continue the conversation.
Steven Walden US Office: +1 770 206 5280
Senior Head of Research and Consulting UK Office: +44 (0) 207 917 1717
Beyond Philosophy

Email: steven.walden@beyondphilosophy.com

@Steven_Walden
http://www.linkedin.com/pub/steven-walden/2/ba5/1ba

Colin Shaw
CEO and Founder
Beyond Philosophy

Email: colin.shaw@beyondphilosophy.com

@ColinShaw_CX
http://www.linkedin.com/in/colinrjshaw


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