Customer Engagement Network - September 2012 by Engage Business Media

cust mer engagement issue eight

September 2012

The official magazine of the Customer Engagement Network

www.customerengagementnetwork.com

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Time: Venue:

9:00am – 5:00pm Gallup Consulting, The Adelphi, 1-11 John Adam Street, London, WC2N 6HS

For more information contact Chris Wood: chris@ictcomms.com and +44 (0) 1932 341828 or visit our website: www.customerengagementnetwork.com

Multichannel Customer Engagement

Speakers todate include: • Virgin Media

• Gallup

• Twitter

• Interactive Intelligence

• Merchants • Confirmit • BT

• Foviance • Seren

Delegates will learn:

26th September 2012, London This Directors Forum will examine the challenges and opportunities around multichannel customer engagement. It will identify winning strategies for organisations who are taking an holistic view of their customers in what is being increasingly viewed as an ‘omnichannel’ customer engagement environment.

• How world class organisations are implementing successful multichannel customer engagement strategies • How to gain a single view of customers in an ‘omnichannel’ environment and win greater customer retention and long term customer loyalty as customer behaviour and expectations change • Where social and mobile channels can be most effectively integrated onto an overall holistic customer engagement offering • How to measure and quantify the business benefits that accrue from an effective multichannel customer engagement offering • How to differentiate your organisation from competitors through an engagement culture that links employees directly to customers across channels.

Sponsors

Customer Engagement magazine is published by the Customer Engagement Network, the organisers of the Customer Engagement Directors Forums.

www.customerengagementnetwork.com

contents To join the Network (free membership) and receive weekly Alerts, Digital Magazines and Invitations to the Directors Forums go to www.customerengagementnetwork.com Editorial Director: Steve Hurst steve@ictcomms.com Sales & Marketing Director: Chris Wood chris@ictcomms.com Tel: +44 (0) 1932 341828 Customer Engagement ©ICT Communications Ltd

News Beat 6-7 Penny dropping on customer experience and profits link. Customers feel emotional about financial services. Leadership key to employee engagement.

Cover Story: 8-11 How multichannel has revolutionised customer engagement Mike Havard draws upon extensive research to tell us what must be done in our multichannel customer world to become ‘digital by default’

Engaging relationships key to customer 12-13 engagement and brand health The explosion of social media and mobile devices means customers now expect immediacy in their conversations with brands says Glen Manchester

The Big Interview 14-15 American Express doing nicely on customer engagement How American Express changed its customer service centre philosophy from a transactional approach top a relationship builder

Trust and transparency key to successful 16-18 retail customer engagement Changes in consumer behaviour and new technologies leading to a seismic shift in retail customer engagement were highlighted at the Customer Engagement Network’s latest Directors Forum. Steve Hurst reports

Mobile voice of the customer: is it really achievable? 19-21 The adoption by consumers of smart mobile devices seems to know no bounds and bog standard mobile phones are almost a thing of the past says Dave King

Multichannel marketing: an aspiration or a necessity? 22-23 Gary Roberts looks as why so many companies aspire to multichannel marketing and yet so few have achieved it

Social Media and Mobile Engagement 24-25 Directors Forum Report In the first in a new series of regular reports from our Directors Forums Dominic Graveson looks at the highlights of the social media and mobile DF

Final Word: 26 Six steps to a great multichannel experience Colin Shaw is the first to admit that his initial advice on how to create a great multichannel experience might come across as a bit strange

Editorial Advisory Board Dr Guy Fielding, Richard Sedley, Rod Butcher, Hugh Griffiths, Marcus Hickman, Karine Del Moro, David Cottam, James Rapinac, Crispin Manners. Professor Moira Clarke, Professor Katie Truss, Mike Havard 5

ISSUE EIGHT • SEPTEMBER 2012

s t new bea Customers feel emotional about financial services Financial services customers want great service and their emotional needs catered for - the likes of Barclays and Santander should take note. Financial services companies trade upon the relationships they hold with their clients, and those relationships depend on serving those customers' needs. But what do they really want and need? The answer, according to Harris Interactive, and one that banks such as Barclays and Santander (and many others) might take note of, is that when, and it’s a big when excellent service has become the 'norm', it is actually emotional factors that top customers' list of needs. The company's research in the UK also found that consumers are also looking for financial institutions that treat them fairly, act responsibly, and have friendly staff. But, given that these emotional needs are so prevalent, it leads us to ask the question: how many financial organisations are actually focusing on such needs when designing their products, services or communications?

When analysing consumer needs by their main bank, it is clear to see that the communication strategies of both the Cooperative and First Direct are working. Both have either managed to attract customers aligned to their strategy or have effectively communicated what they stand for to their customer base and make it an important point of differentiation. Interestingly, within the credit card and general insurance markets, similar differences by brand exist. In particular the AA, Tesco and LV= stand out from the crowd within motor insurance. So even on the most basic level we can see the power of brand and communications and how they have a role to play managing the customer relationship. They help set customer expectations even within those categories that many see as a commodity

The company's research in the UK also found that consumers are also looking for financial institutions that treat them fairly, act responsibly, and have friendly staff

There was a time when being big, having a large retail branch network and large number of cash machines was particularly attractive. Today those needs are less prevalent, and consumers are now looking for something different, and needs do vary bank by bank. Some are looking for a deeper emotional relationship with their bank, one that goes beyond trust and fits with their lifestyle and priorities. Some others simply want a bank that delivers good products and services, the channels of delivery are far less important.

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Organisations are finally coming round to the fact that great customer experience translates to the bottom line Temkin Group has released its new research report, The Future of Customer Experience. The research examines how customer experience (CX) management has evolved and where it is heading. The research shows that 59% of large companies have ambitions to be industry leaders in customer experience within three years. At the same time, Temkin Group estimates that there are more than 100,000 people in North America employed in fulltime customer experience roles.

What stands out and signals the importance of these 'softer' traits is that offering a wide range of products and services is only slightly more important than being ethical. In fact being ethical and relevant to you

Penny dropping on customer experience and profits link

Based on this significant ambition and the development of customer experience tools and techniques by the growing pool of customer experience professionals, many companies are building stronger overall customer experience management capabilities.

product. Of course, we have to accept that there may be a bit of post-rationalisation here. Despite this, clearly some banks are attracting customers who have distinctive rational and emotional needs.

“Customer experience has hit a tipping point, with a critical mass of professionals defining repeatable practices and delivering strong ROI to their firms,” states Bruce Temkin, author of the research and Managing Partner of Temkin Group.

Many organisations talk about how they have 'consumer centric' processes, some even shout about how they have recently integrated their legacy systems into a single customer voice or have developed a customer segmentation to help them effectively target profitable customers. But managing customer relationships effectively is not simply about integrating the latest technology or software, nor is it just about data mining and finding out who your most profitable customers are.

The report highlights that companies are being motivated by a clearer understanding about the link between good customer experience and stronger business results. Temkin Group completed a study of 10,000 consumers that shows a strong correlation between CX and loyalty across 18 industries in the U.S. The report reveals that a company with $1 billion in annual sales can generate more than $300 million over three years with a modest improvement in customer experience.

customer engagement

Leadership key to employee engagement Staff attitudes to senior management particularly important when it comes to employee engagement. There is a “significant link” between employees’ engagement with their job and their wellbeing, according to the Chartered Institute of Personnel and Development’s (CIPD’s) latest Employee Outlook survey. The report shows that engaged employees score much more highly against the Office for National Statistics’ ‘happiness index’. The index asked subjective questions relating to life satisfaction and how worthwhile people feel their lives are, on which engaged employees scored more highly, while they also reported lower scores when asked how anxious they felt, compared to employees with neutral engagement or those who are disengaged. In addition, the report found there to be a strong link between the extent to which employees trust the senior management team in their company and their well-being. It said: “There is a particularly strong link

between employees who strongly agree they trust their senior managers and lower than average levels of anxiety.” The extent to which employees agree they are consulted by senior managers on important decisions was also found to have a strong correlation with well-being scores. The CIPD said: “It is in employers’ interests to be interested in the well-being of their staff – not just because they have a duty of care towards them – but because of the link between well-being and employee engagement, as well as lower risks of accidents and lower levels of stress and absence.” The CIPD said another notable finding from this quarter’s report is the percentage of employees who feel neutral about their engagement at work – this represents 58% of those surveyed and remains consistently high from the previous two quarters. The study measures employee engagement through a number of factors relating to the level of engagement individuals feel to their

organisation beyond pure job satisfaction. The CIPD said that while people’s satisfaction with their specific jobs is relatively high, this does not extend to overall engagement with their organisation. The report said: “There are a number of pointers in the research as to why people might be feeling this way – and these mainly relate to how people are managed. “While satisfaction with immediate managers is generally strong, there are continuous issues around a lack of personal development – including coaching on the job, discussing learning and development and giving feedback on performance. “Perceptions of leaders also need to improve, with views on leaders’ consultation being particularly poor and trust and confidence in leaders falling further this quarter.”

Customers won’t engage without trust Trust is emerging as the key driver for customers in an increasingly multichannel environment. With a wealth of information available online, trust has become a crucial tool that consumers use to sort and prioritise all of that information, according to the 'Trust Factor' report conducted by About.com in collaboration with Latitude.

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• The report found that the existence of trust drives consumer decisions, with 84% of respondents reporting they will not engage with a brand until trust has been established. A number of were identified for developing trust with consumers, including the following: • Expertise - communicates authority and real value, and distinguishes itself from other brands and content fighting for consumer's attention. • Fairness - provides information and tools to help the consumer evaluate pros and cons, risks, and so on. • Relevance - aimed at the consumer's needs and situation, and directly on-topic. • Choice - respects and acknowledges

the consumer's buying process by offering more options and solutions, and by allowing consumer to express their preferences. Relatability - understands the consumer and looks at things from his point of view, leading them as would a knowledgeable friend. Awareness - although name recognition alone doesn't guarantee trust. Consumers rely on awareness driven by personal experiences or recommendations from a friend.

"With the great volume of information at consumers' fingertips, not only is trust a valuable filter but it is also a prerequisite for consumers to even enter the purchase process," said Laura Salant, director of research for About.com. Different platforms were identified as being better at delivering certain trust elements, and can therefore be complementary tools for brands. Respondents reported that all ten trust elements are even more important

to the mobile channel than the online channel. However, 'format' was identified by 71% of respondents as being more important for mobile, with 'accuracy' and 'expertise' also ranking highly. In social media, consumers are ambivalent about the value of certain commonly-used social actions such as Likes. Reviews were identified as inspiring trust twice as much as general Likes, though seeing a Like or recommendation from a friend increased the trust value of that action. Video works best to enhance trust when it is combined with other types of content, and 56% of respondents agreed that video builds trust when it adds illustration or explanation attached to other types of content. The study also found that consumers prefer to combine information from a variety of sources, with 82% reporting that they use information from brands, content, ads and social media to create custom solutions for what they need.

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Mike Havard draws upon extensive research to tell us what must be done in our multichannel customer world to become ‘digital by default’

Instead of turning to a business for information and advice, they turn to each other. Where once businesses dictated channels, customers are now taking control. 90% of

ISSUE EIGHT • SEPTEMBER 2012

The multichannel era has arrived suddenly and changed everything. Private one-on-one conversations between customers and companies are being replaced by open forum discussions that anyone can join. Instead of waiting in line to be served, customers expect to serve themselves.

customer engagement

“Where once businesses dictated channels, customers are now taking control. 90% of organisations believe the ability to provide a joined up multichannel experience is vital to success. But 70% confess they don’t do it”

organisations believe the ability to provide a joined up, multichannel experience is vital to success. But 70% confess they don’t do it. The drive towards multi-channel, increasingly non-voice customer contact is inexorable for two reasons. First, because consumers demand it. Second, because the economics are so attractive. Online transactions are carried out at a fraction of the cost of a phone call. However, if all of this is true, why have many organisations found it so hard to wean customers off the phone and onto other channels – especially for service interactions?

Digital must be exceptional Reconfiguring customer contact strategy around the principle that digital channels will be the default choice for consumers depends upon one significant and obvious factor. Namely, consumers have to believe that, in the overwhelming majority of cases, digital channels will offer them better service and faster resolution than the phone. In short, digital channel delivery must be exceptional. The first step in mapping a digital by default strategy is to analyse and categorise the reasons for customer contact and then to identify which channels will improve the speed, ease of use or value of the organisation’s response. For example,

Falling short of expectation

So, if consumers want to use low cost channels, and businesses want to encourage them to do so in the interests of business efficiency, what needs to change to make it happen? Our exhaustive study of organisations recognised as pioneers in multichannel delivery has convinced us that the route to success starts with a comprehensive re-evaluation of an organisation’s contact strategy. Instead of looking at emerging channels and seeing how they can be shoe-horned into the existing contact centre status quo, organisations need to rethink end-to-end customer contact management with the assumption that they will offer digital channels unless there is a compelling reason not to. In essence, they must manage their channels so that digital becomes the default choice for their consumers.

Customers seeking to validate information – package delivery details, flight or train times – will be happy to do so online, providing the information is accurate and up to date. Customers experiencing service issues – poor broadband performance or mobile coverage for example – are likely to review their peers’ experience via social forums, or to contact the provider direct via web chat or instant messaging. They will opt for public channels because their query is ‘non-personal’. Customers wanting to resolve a personal query – check a bill or progress an application – won’t choose public channels, but will opt instead for a phone call or swift email response.

Carphone Warehouse knows Making a clear distinction between one-on-one personal channels and one-on-many public channels is important since the latter are, as a rule of thumb, considerably cheaper to deliver. Bowing to the consumer preference for speedy online access in these cases, makes absolute economic sense.

Most often, it is because multichannel delivery falls woefully short of customer expectation. Slow response times, unclear information and non-intuitive online navigation leave consumers frustrated and reaching for the phone.

ISSUE EIGHT • SEPTEMBER 2012

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“Our exhaustive study of organisations recognised as pioneers in multichannel delivery has convinced us that the route to success starts with a comprehensive re-evaluation of an organisation’s contact strategy”

Mike Havard, Director of Ember Services

Carphone Warehouse, for example, has used video on demand to deliver top quality service at low cost. ‘Eye Openers’, a YouTube channel, provides short video clips, made by contact centre staff, that offer help and information about different phones and their features. Since its launch in November 2009, Eye Openers has received more than six million hits – each of which may otherwise have become an expensive technical support desk call or visit to a store.

Remove the barriers Carphone Warehouse is an excellent example of a company that has not only introduced lower cost channels but optimised and promoted them to maximise usage. Too often, companies introduce new channels and then, when usage is low, write them off as failures. There are often very simple barriers that, once removed, will lead to success. Bill payment is a good example. More and more organisations now allow online bill payment – cheaper for the organisation to operate and easier for the customer to use. But, take up has been slow. Concerns about online security may be part of the problem, but experience tells us that the lack of human confirmation is a contributory factor that a simple confirmation email or SMS could overcome.

issue, prompted them to call to make sure their online application had been received or to check on progress. Contrary to the Council’s intention, calls to the contact centre actually went up! They are now looking at ways to use SMS, email and other channels, not just to acknowledge receipt, but to provide proactive updates on the application’s progress. Integration of engagement key The key is to think through the entire interaction process, rather than just identify a cheaper means to do a single part of it. Our research has revealed a clear divide between organisations that have looked at their contact strategy in an integrated way, identified where digital channels can improve the customer experience and invested accordingly, and those that are simply looking at online channels as a cheap alternative to high cost interactions. The former are succeeding, not only in terms of enhancing customer service, but saving money too. They are also achieving wider organisational goals, such as loyalty, engagement and advocacy. The latter, are not even achieving their cost reduction targets, because the digital options they deliver are not effective enough to encourage customers to use them.

Transforming the contact centre

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Even in successful ‘digital by default’ organisations, the contact centre continues to play a pivotal role. There are times when a one-on-one non-public conversation is the only thing that will work. Companies that

Overcoming consumer uncertainty about transactions is an important point. Surrey Country Council recently moved its school applications process online. However, parents’ natural anxiety over so important an

customer engagement

“The business case for becoming digital by default is compelling – lower cost plus higher customer satisfaction and sales. However, no one said it is easy. It demands a willingness to challenge the status quo, develop new skills, embrace innovation and, of course, to invest in new technology and processes”

have tried to operate without a contact centre have discovered this to their cost. We are aware of several online retailers who, having opted for this route; their disgruntled customers, unable to resolve problems or vent their frustration, took to the web, publishing damning remarks on public forums. The simple lesson is this – if you don’t allow customers to resolve their issues with you privately, they will castigate you publicly. In the digital by default environment, calls to the contact centre will decrease, but their importance will increase proportionally. Customers will opt to call because their query is particularly urgent, complex or significant, or because attempts to resolve their issues by other means have failed. Either way, it is important to respond quickly and well. Traditional contact centre metrics will have to evolve to stay relevant.

Customer effort score For example, if every call is a complex one, call handle time becomes less relevant than resolution. The economic priority isn’t throughput, but call outcomes. Or, if customers are calling because other channels have already failed, speed to answer must be a priority. Businesses may have tolerated a five or ten percent abandonment rate in the past, but will find that this is no longer acceptable. Many traditional customer management metrics can effectively be replaced by the ‘customer effort score’. This is a method of rating how easily customers can undertake various interactions via various channels. It is based on the understanding that, the easier something is, the more likely people are to do it. BT

analysed customers’ online behaviour and identified moments when customers appeared to struggle with the process. They now intervene and offer a web chat to help them over the hurdle. Though this is necessary in less than two percent of online visits, these visits account for about 20% of BT’s Consumer online sales, proving that proactive intervention can save the day. Customer satisfaction with the service is an impressive 86% but, equally importantly, almost all say they would have contacted BT by another (more expensive) channel, had they not been offered web chat.

The business case The business case for becoming digital by default is compelling – lower cost plus higher customer satisfaction and sales. However, no one said it is easy. It demands a willingness to challenge the status quo, develop new skills, embrace innovation and, of course, to invest in new technology and processes. The penalties for not doing so, however, will be considerable. Organisations will find themselves landlocked into increasingly expensive contact channels with progressively lower levels of customer approval and advocacy. The evolution of customer contact is inexorable and – potentially – hugely beneficial. Embrace it. Ember’s research paper, ‘Becoming Digital by Default: New thinking for multi-channel effectiveness’ can be downloaded free of charge from www.emberservices.com. Mike Havard is Director of Ember Services and will be chairing the upcoming Customer Engagement Summit on November 27. Contact him at mike.havard@emberservices.co.uk.

ISSUE EIGHT • SEPTEMBER 2012

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The face of customer engagement is changing rapidly. The explosion of social media and mobile devices means customers now expect immediacy in their conversations with brands says Glen Manchester For many years marketers focused their energies on pushing customers to a destination, in many cases a website, call centre or retail store. But in this age of the customer, we should be more focused on the journey than the destination. We need to quickly understand that it isn’t just about what journey we want to take the customers on, it is about meeting them where they are in their journey and making ourselves adaptable along the way. It’s about engaging with the customer when they want, where they want and how they want. Personalised, contextual and relevant information required at every stage of the customer journey The landscape is now a continual stream of two way dialogue between consumer and brand; the key to this relationship is the speed and relevance of response – if you stand still amongst the deluge of tweets, Facebook posts and blogs your brand is likely to drown. The future of companies building relationships will rely heavily on the ability to offer effective communications with consumers across a variety of channels at any one time. However, building an engaging relationship by delivering the right information at the right time, to the relevant device, whilst at the same time incorporating customer profile information - all of whom have different expectations and needs - is challenging and represents one of the biggest tests for companies today.

Age of the customer The key to the whole successful business jigsaw puzzle is the pivotal position and changing self-awareness of the customer. We are living in the age of the consumer, meaning, the customer is in the driver’s seat – gone are the days where customers would accept the status quo. There’s now a need to balance what you need to sell more of with what customers are actually looking for.

Options are virtually unlimited in the digital world and today’s customers have no problem switching their allegiances. To give us some context we need only look back at employee loyalty, as this too has a direct correlation to the thinking of today’s customer. ISSUE EIGHT • SEPTEMBER 2012

customer engagement

During the 1940’s and 1950’s it was considered rare if someone of that generation had more than two jobs in a lifetime; when you joined a company, you practically joined for life. This generation was all about loyalty both to their employers and to the companies they did business with. The next generation of baby boomers started experiencing the shift in employee/employer loyalty in the mid to latter part of their careers, and had around five jobs during their working life; being not nearly as reluctant to make a change as previous generations, and it was this mind-set that started the shift to focus on employee/customer satisfaction.

New customer experience agenda The X & Y generation is expected to have between 15-20 jobs in their working career. It is this group who have, and are continuing to take the customer experience agenda to a whole new level. They are the digital society; they use every channel available to them to be connected with their friends, colleagues and favourite brands via smartphones, Facebook and Twitter. It is difficult to reach an audience that has little tolerance for mass market messages or push advertising, unless you can make it fast, easy, relevant and of a language they can understand. This group tends to travel in packs trusting their peers’ recommendations, thus personal recommendations and keeping groups happy becomes increasingly important to brands: and don’t forget those mass connectors and mavens; the people out there influencing the conversations with millions of followers, or those who are beacons for a cause, service or product. Identifying a shift in the customer-brand landscape is all well and good, but actually being able to adapt to it, and address the new landscape to meet the requirements of internal marketing, as well as those of the customer is far easier said than done. Of central importance is the ability to join up all the different touch points during the customer journey, along with the ability to personalise communications if they are to succeed. With more and more people going digital, business winners and losers will be determined by their ability to engage customers and businesses more deeply and relevantly across digital touch points and multiple channels. Customers’ expectations are to have one relationship with an organisation, not multiple relationships as a result of the multiple contact points they engage through. For example, if a customer were to interact with the customer service department, either by phone or web, they expect the company to have a view of their interactions across the entire enterprise.

Understanding the customer journey Understanding and managing the customer journey across multiple touchpoints is now mission critical. Today’s customer wants personalised, contextual and relevant information at every touch point whether they are talking to someone on the phone or interacting via the web or an app. This will require companies to know their customer’s preferences, behaviour and interactions like never before.

Customers do not want to read content that was designed for a website but has been resized onto a mobile phone. Not only should they not have to read it, in most cases, they won’t even attempt to. They shouldn't have to settle for anything less than a best-in-class experience at any point of their journey. Suffering broken conversations over time or channels, being pestered by irrelevant communications or having to repeat themselves is no longer acceptable. Nothing can ruin a brand’s reputation quicker than to send irrelevant information to the customer who has a Twitter community of over a million followers and an industry reputation. Customers today have the platforms for sharing opinions like never before and the digital savvy customer isn’t afraid of online naming and shaming. One negative post that goes viral can have dire consequences for a brands value, and lead to wide scale customer defection. Businesses are built on relationships, and now more than ever, these relationships matter. Yet as the importance of relationships has increased, so too has the relevance of the types of communication used to foster them. These are the communications which ultimately keep the CEOs, CMOs and the digital strategists awake at night.

Monologue now customer dialogue Businesses are certainly coming round to the idea of customer dialogue, which is positive, but in order to build superior customer relationships, companies need to enable effective two-way conversations with their customers. Every communication, regardless of touch point, needs to have unmatched real-time personalisation across every channel. But being able to provide this level of personalisation is far from easy and means you must incorporate a combination of behaviour, outcomes and experience. In the end, it comes down to knowing your customer so well, they never need to contact you because you can anticipate their needs and deliver moments that matter; be it in an email, text, Facebook post or letter through the post. Building customer relationships goes beyond these channels though: it’s about the whole customer journey; it’s about maintaining a consistent, intelligent conversation across all touch points while marrying opportunity, engagement and servicing; it’s about blowing up the information silos and realising the full potential of integrating back-end and front-end systems; and probably, most importantly, it’s about delivering real-time, relevant content for every conversation as if that particular person was the most important customer you ever had. Companies are treading a finer line than ever before with their customer bases thanks to the digital landscape we now occupy. Customer experience is often now the only source of competitive brand advantage to drive customer loyalty, brand health and revenue growth. Effectively managing your relationships with those who buy or use your products and services has never been more important to get right.

Glen Manchester is CEO and founder of Thunderhead.com www.thunderhead.com

ISSUE EIGHT • SEPTEMBER 2012

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How American Express changed its customer service centre philosophy from a transactional approach to a relationship-builder

A case study by Ross professor M.S. Krishnan, ‘Customer Service at American Express: A Relationship, Not a Transaction’, details how Executive Vice President Jim Bush brought a new philosophy to the credit card giant. Bush saw the value in these customer connections and shifted the company's call centre operation into a profit and opportunity centre, changing employee incentives, training, recruiting, and IT systems. He also gave employees more flexibility and empowerment along the way. As a result, customer satisfaction is up, card member spending is up, and handling time is down. In this Q&A, Krishnan, the Joseph Handleman Professor of Business Information Systems and Innovation at Ross, says this transformation is part of the growing movement toward co-creating experiences with customers, one at a time. The case also touches on how technology enables this trend. Terry Kosdrosky asks the questions. ISSUE EIGHT • SEPTEMBER 2012

How did you discover what American Express was up to in terms of changing their customer service approach? Krishnan: This originated from a MAP project [Multidisciplinary Action Projects]. We build on MAP in terms of leveraging the connections and contacts to develop research projects or teaching cases. About five years ago, I was interested in how American Express was using technology. One MAP project worked on the technology side, and two others worked on customer personalization and new projects. I got a deep look at what American Express was doing and began a relationship within the company. I had written the book The New Age of Innovation with C.K. Prahalad, which centres on the idea of a co-created, customized experience requiring partners and suppliers. Two of our alumni, Sanghy Vatsa, MBA '07, and Rohit Bery, MBA '98, connected with the concepts in my book and introduced me to the initiatives at American Express. They told me what they were doing and introduced me to Jim Bush. That's how I got into looking at moving customer service from a transaction to a relationship. That's really the key message in the case, isn't it? American Express shifted its thinking on customer service from

Companies that operate or outsource large-volume call centres usually try to get the job done as quickly and cheaply as possible. But this cost-centred viewpoint misses a key detail - calls equal one-on-one time with your customers.

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something to be done as quickly and cheaply as possible to this valuable touch point that can forge a deeper relationship with customers. Krishnan: It bucked the tradition. Traditionally, customer service was viewed as a core problem - and not just for American Express. Large-volume companies view growing call volumes as a problem, and the engagement is reactive. That creates an atmosphere where agents are incentivised to handle as many complaints as possible because what they are doing is viewed as a cost, not an opportunity to connect. American Express, at the time, took a uniquely different view. But another problem was unique to American Express, and that was that customers were not fully informed about the difference between American Express and other credit cards. American Express is a closed-loop operation, since it controls the entire purchase and payment cycle, issues cards, and manages its card member network and merchant network. It charges an annual fee but offers many benefits through corporate partners. So Jim Bush looked at the calls as an opportunity for innovation. He thought, "I'm talking directly with the customer. How can I solve the problem and use this call as an opportunity to build a relationship?" The minute the call comes in, the cost is the same no matter what. Whatever problem happened to prompt the call has happened already. So stop looking at this as a cost centre. We are talking directly with the customer. Let's take advantage of that. Easier said than done. How did he make it happen? Krishnan: He had to connect the organizational and social incentives and get the right technology. He refined the roles of their call centre agents and called them customer care professionals, and he took a different approach to recruitment and training as part of building a different culture. He recruited from the hotel and hospitality industries, since they train their employees to connect with the customers. Then he found customer agents were limited in what they could do by the technology - they had a script and a screen and were timed, which was a big constraint. And Bush learned their training was 70 percent on the technology and script, and just 20 to 30 percent on working with customers. He flipped that around. In addition, the incentives changed. In the past, it was how many calls you did and how fast - very traditional call centre metrics. And if you look at it as a cost centre, those metrics make sense. But Bush looked at it as a profit centre, an opportunity centre. He moved to giving customer care professionals a net promoter score, which measures satisfaction. They changed the metric and the behaviour. Now everyone on the team has to promote the business, solve customer problems, and educate customers about other opportunities. It becomes a much more comfortable call for the customer. Because of American Express' closed-loop model, they can leverage their partner relationships to benefit their customers. That means these customer care professionals know about those opportunities and how to understand each customer in that context. So the technology had to move in that direction. The care professional had to have data on this person, their spending habits and interests. If the customer had a history of buying golf merchandise, they could tell that person that they have a 15

partnership with a certain golf supplier or tour event and can find them deals. So the technology prompts the agents to who this customer is. That's the N=1 concept in our book at work. But they also took the N=1 customisation approach with their employees. Earlier they all worked in groups, had shifts and a supervisor, and were regimented like factory workers. Bush made it more open and collaborative. They used technology to create a portal where the employees could exchange their shifts without a chain of supervisor permissions. The system has a net promoter score for each shift, and who is on that shift. It's transparent. So it increases the work-life balance for the employees, empowers them, and makes performance transparent. How did Bush get buy-in from top executives? Krishnan: It was difficult, but he had a logical plan. In hindsight, he's shown that you can empower employees and reduce costs. Customer satisfaction is up, card member spending went up, and handling time went down. But at first it was difficult to make a case. There always are cost pressures, and to go to those executives and ask for this kind of change, which involves training and technology spending, never is easy. That's why you have to say the leadership at American Express was bold and open to new ideas. It was not an easy time to do it. That's why it requires leadership to make a decision. And certainly Jim Bush took a risk. It was his vision, and going into it you never know if it'll really work or not. You have to kind of make it work. Now American Express is taking this model global. They are looking at a global service strategy. You note this did involve upfront costs. Not to downplay the risk, but American Express is a large company with means. What are some strategies for companies with fewer resources? Krishnan: For smaller or more capital-constrained companies, I would advise they do this in a phased manner. You have to do some experiments so that you can see how things work before scaling them up. So experiment in a phased way, and then learn from it so you can figure out how to internalise it. For the IT portion of this, even American Express had to do some things gradually because of how tied they were to legacy systems. But it seems like technological demand is growing exponentially. How can companies keep up without incurring massive costs? Krishnan: Cloud computing and social media have a role. Often these legacy IT platforms and systems are intertwined in multiple aspects of the company, so it's not easy to just throw them out. The new platforms that the technology industry is developing are interesting. For example, cloud computing allows companies to dramatically reduce capital requirements. For smaller companies, they donâ&#x20AC;&#x2122;t have to incur huge costs. It shifts how companies look at computing. It used to be about products. You would buy products off the shelf. But now we get computing as an experience. You can buy on the go and pay only for what you consume. This reduces capital intensity and democratises access to capability. There's much more access to capabilities that previously were available only to large companies with deep pockets. ISSUE EIGHT â&#x20AC;˘ SEPTEMBER 2012

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Directors Forum on Customer Engagement in the Retail Sector 20th June 2012, London

Changes in consumer behaviour and new technologies leading to a seismic shift in retail customer engagement were highlighted at the Customer Engagement Network’s latest Directors Forum. Steve Hurst reports

These were come of the key findings at the latest Customer Engagement Network Directors Forum on Customer Engagement in the Retail Sector, where delegates heard that trust, transparency and relevance are critical factors in successful retail customer engagement. The Directors Forum delegates were treated to case study material from organisations as diverse as Marks & Spencer, Screwfix and Amazon plus world class keynotes from experts in the retail sector. Delegates at the Directors Forum hosted by Gallup and sponsored by Confirmit, Foviance and Interactive Intelligence heard how the retail sector will see more change in how people shop and pay over the next two to three years than we've seen over the past 20. Changing customer behaviour and a ‘third wave’ of shopping technologies are the driving force behind this revolution. In the last year, mobile customer engagement has driven the most significant change, giving consumers the ability to shop anytime and anywhere.

Third wave is upon us Retail is yet to see the full impact of technologies that sit alongside mobile: location, social, digital payments, as well as a range of cutting edge or 'third wave' shopping technologies. The ISSUE EIGHT • SEPTEMBER 2012

convergence of these will challenge the established idea of 'multichannel' retail. Online and offline channels are merging and brands have to be present everywhere where their customers are – as stated omnichannel is the new phrase being used. The opening keynote presentation came from Professor Moira Clark, Head of Marketing, Henley Business School with ‘Effortless Engagement - Are you Working Your Retail Customers Too Hard’. In a highly engaging presentation Moira looked at case study examples from as far afield as Japan and South Korea and retailers including Tesco and First Direct to show how effortless engagement or ‘making it easy to be a customer’ is where the real fight for competitive advantage can be found. She also cited examples where the opposite is true, where too much customer effort is needed, including Heathrow Terminal 5 and IKEA. Next came John Fleming - Gallup Chief Scientist for Customer Engagement with his presentation ‘Human Nature at Work: Applying Behavioural Economics to Drive Growth and Profitability in the Retail Sector’. John said that the next big institution of leadership – the next management discipline - will involve developing new sets of leadership initiatives around principles of behavioural economics because the gains to be found are bigger than in any other area. Gallup’s HumanSigma approach to measuring and managing the employee customer encounter, linking employee engagement directly to customer engagement, performance and profitability is one such initiative that retailers can use to drive high performance.

Customer engagement in the retail sector is evolving at an increasingly fast pace as a perfect storm of changing consumer behaviour and technology, coupled with the recognition of the importance of real customer insight are combining to revolutionise the sector creating an omnichannel retail environment.

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Screwfix drilling down Next came the first case study of the day ‘The Screwfix Experience: Customer and Employee Journeys, a joint presentation from James Westlake,VP, Business Development, Confirmit and Andy Dingwall, Customer Insight Manager, Screwfix After an introduction from James outlining Confirmit’s position, Andy from Screwfix presented details of its customer experience journey and shared the Screwfix story thus far story from the goals that drove the programme, to the learnings derived and technology that has underpinned the programme’s success. Andy also will also explain how the employee engagement programme is now being overseen by the Screwfix customer insight team to enable the company to use employee feedback to add another dimension and to drive change, again forging the link between employee engagement and performance. Next up came Richard Anson, Founder of online customer review organisation Reevoo with ‘How Social Engagement Strategies Drive Retail Sales’ Richard explained how consumers now expect a seamless and transparent relationship with retailers across all touch points, whilst the importance of peer-to-peer referrals and recommendations continues to grow. He said that trust and transparency are key to success – a theme that permeated the whole Directors Forum. Using case studies and insights from retailers including the likes of Dixons and Jessops Richard showed how businesses are using social content such as customer reviews - bad as well as good and consumer community solutions to increase customer engagement, drive sales and build customer loyalty.

Amazing Amazon Following Richard came Lisa Byfield-Green, Retail Analyst, at Planet Retail with her presentation ‘Global Multi-Channel Trends and the rise of Amazon’ Lisa looked at the changing face of the consumer, the rise of new technology and the knock-on effect this is having in store. Lisa focussed on how retailers are blurring the channels to create an omnichannel retail environment pivoted around customer engagement, a seismic shift in the way that retailers interact with their customers For the second part of the presentation Lisa focussed on the phenomenal growth of pureplay e-commerce retailer Amazon, its strategy and why she believes it will be among the top three global retailers by 2016. Continuing the themes of technology, trust and customer engagement came Conrad Simpson Director, Interactive Intelligence with his presentation ‘Technology solutions for retail customer engagement strategies’. Following the lunch break there was a lively Panel Debate featuring the morning presenters on 'What is the future for customer engagement in the Retail Sector?’ Here again the themes of transparency, trust, relevance, customer insight the crucial link between employee engagement, customer engagement and retail performance came to the fore Next came another joint presentation from Richard Sedley, Commercial Director, Foviance and Amanda Squires managing 17

director of Baobaz with ‘Customer Centric Retail: Nine Lessons from the Digital Frontline’. Using examples from contemporary retailers Richard and Amanda shared some of the secrets of success from their experiences with three things online retailers should do, three things they should not do and three tips for success. High level customer insight was a definite ‘do’, giving too much choice was a ‘don’t do’ and tips included a smile - even an online smile works!

No ordinary M&S Next up came another case study from Jo Moran, Head of Customer Service ‘Marks & Spencer Case Study: Customer Engagement Across Channels: One Brand..., One Experience?’ Jo explained how M&S serves 21 million customers a week in its retail stores and two million in its Food Franchise stores dealing deal with four million contacts per year through contact centres via letter, phone, email and social media, and delivering with partners into one million customers homes each year. Jo stressed that each customer, channel and interaction are different and that what matters is a consistent and appropriate approach, focussing on improving service while at the same time reducing cost to serve - defining that and delivering it is a challenge which requires companies such as M&S to be in touch with their customers whatever their point of contact with the brand. The final presentation – last but by no means least – came from Matthew Hopkinson, Director Local Data Company ‘The physical and virtual contact points in customer engagement.’ Matthew took a detailed look at how the physical shopping channels are changing and how as a result the sense of ‘place’ is changing. Vacancy rates and occupancy profiles of towns are changing faster than ever before as the omnichannel environment takes hold. Matthew said that for many retailers a turning point has been reached where growth and profitability of online sales is growing considerably faster than in store but the two have greater success in parallel than in isolation. It is consumers and technology that are driving this change, which is a first for the retail industry.

Trust and transparency In his summing up of the day Directors Forum Chairman and Editorial Director of the Customer Engagement Network Steve Hurst said it was clear customer engagement in the retail sector is undergoing a revolution driven by changes in consumer behaviour and new third wave technologies led by mobile and social engagement. Transparency, relevance and trust are the pillars of this brave new world, where employee and customer engagement are intrinsically linked to performance and profitability, and where the smart use of improved customer insight and engagement are winning strategies. Steve Hurst is Editorial Director of Customer Engagement magazine and the Customer Engagement Network www.customerengagementnetwork.com ISSUE EIGHT • SEPTEMBER 2012

Directors Forum on Customer Engagement in the Retail Sector 20th June 2012, London SPEAKER PRESENTATIONS

Keynote - Effortless Engagement - Are you Working Your Retail Customers Too Hard Professor Moira Clark, Head of Marketing,Henley Business School

success. They will also explain how their employee engagement programme has enabled the company to use employee feedback to add another dimension and to drive change. Moira Clark

Effortless engagement or ‘making it easy to be a customer’ is where the real fight for competitive advantage can be found.This session will focus on: • What do we mean by customer effort? • Understanding the different types of customer effort • How to map out the customer effort journey • How to build customer loyalty by adopting low-customer effort approaches Human Nature at Work: Applying Behavioural Economics to Drive Growth and Profitability in the Retail Sector. John Fleming - Gallup Chief Scientist for Customer Engagement

Richard Anson - Founder, Reevoo Richard Consumers now expect a Anson seamless and transparent relationship with Brands and Retailers across all touch points, whilst the importance of peer to peer referrals and recommendations continues to grow. Using case studies and insights gained from across 150 brands and retailers, Richard will show how businesses are using social content (for example customer reviews) and consumer community solutions to increase customer engagement, driving sales and building customer loyalty.

Global Multi-Channel Trends and the rise of Amazon

Case Study: The Screwfix Experience: Customer and Employee Journeys

Lisa Byfield-Green - Retail Analyst, Planet Retail Lisa

Lisa will look at the changing Byfield-Green face of the consumer, the rise of new technology and the knock-on effect this is having in store. For the second part of the presentation Lisa will focus on the phenomenal growth of pureplay e-commerce retailer Amazon, its strategy and why Planet Retail believes it will be among the top 3 global retailers by 2016.

Technology solutions for retail customer engagement strategies James Westlake

Screwfix will present details of their customer experience journey and will share their story from the goals that drove the programme, to the learnings they’ve derived and technology that has underpinned the programme’s

Richard Sedley - Commercial Director, Foviance Amanda Squires

Richard Sedley

Using examples from contemporary retailers Richard and Amanda will share some of the secret they have learnt from over 15 years of Etail experience.

John Fleming

We believe that the next big institution of leadership – the next management discipline will involve developing new sets of leadership initiatives around principles of behavioural economics because the gains to be found are more colossal than in any other area. Gallup’s HumanSigma approach to measuring and managing the employee-customer encounter is one such initiative that retailers can use to drive high performance.

Andy Dingwall - Customer Insight Manager, Screwfix James Westlake - VP, Business Development, Confirmit

How Social Engagement Strategies Drive Retail Sales

Customer Centric Retail: Nine Lessonsfrom the Digital Frontline

Conrad Simpson - Director, Interactive Intelligence Conrad Simpson

Case Study: Customer Engagement Across Channels: One Brand..., One Experience? Jo Moran - Head of Customer Service Marks & Spencer

Jo Moran

At M&S we serve 21 million customers a week in our retail stores and 2 million in our Food Franchise stores; we deal with 4 million contacts per year through our contact centres via letter, phone, email and social media; and deliver with our partners into 1 million customers homes each year. So is each experience the same? The simple answer is no as each customer, channel and interaction are different: what matters is appropriateness but defining that and delivering it is a challenge which requires companies to be In Touch with their customers whatever their point of contact with the brand. ‘The physical and virtual contact points in customer engagement.’ Matthew Hopkinson - Director Local Data Company

Matthew Hopkinson

Matthew will take a detailed look at how the physical shopping channels are changing and how as a result the sense of ‘place’ is changing. Vacancy rates and occupancy profiles of towns are changing faster than ever before as the omni-channel environment takes hold. For many retailers a turning point has been reached where growth and profitability of online sales is growing considerably faster than in store but the two have greater success in parallel than in isolation. It is consumers and technology that is driving this change, which is a first for the retail industry.

To download presentations go to: http://www.customerengagementnetwork.com/directorforum.agenda.php?a=10094#agenda29 ISSUE EIGHT • SEPTEMBER 2012

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The adoption by consumers of smart mobile devices seems to know no bounds and bog standard mobile phones are almost a thing of the past says Dave King The rate of adoption of cell phones and mobile devices in the last ten years represents one of the greatest innovations in technology, in terms of global expansion and speed, and the subsequent change in behaviour and expectations that mobile has driven among consumers and business users alike. The immediate and agile nature of mobile communication, and the ability to keep interactions brief but effective, means people can achieve more in less time. What’s more, they can do this whenever and wherever convenient— unrestricted by the traditional constraints of working hours and desktop access. As a result, mobile devices are becoming increasingly pervasive, particularly in emerging markets, and are often the preferred method of communication for many users, principally those in traditionally hard-toreach audiences such as the youth market.

For most customer insight specialists and market researchers, implementing mobile engagement is a complex challenge. It is not simply a question of adding mobile as a new and separate communications channel because that misses the 19

So, what does this mean for organisations and departments who conduct Voice of the Customer (VoC) programmes? Well, in simple terms, it means that if they haven’t already done so, they need to quickly implement ways to serve their customers and audiences ‘on the go’, or risk losing them to a competitor who has wholeheartedly embraced the mobile channel.

ISSUE EIGHT • SEPTEMBER 2012

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Dave King is Executive Vice President of Mobile Solutions, Confirmit

1. Monologue to Dialogue In the shift to supplant landline telecoms, mobile has simultaneously caused a profound cultural change in customer behaviour and attitudes. The mobile-enabled population of today expects any interaction on their mobile device to be timely and relevant. Capturing customers’ opinions ‘in-themoment’, close to the point of purchase or experience, will provide information with less bias, recall issues or influence from the brand. This leads to more accurate data, more truthful opinions, and more engaged participants. Immediacy of communication enables opportunities for validation, such as the collection of photo, video and audio evidence that adds richness to the data collected, and provides ‘proof’ of the experience in question.

2. Reduce churn through clear and engaging surveys Survey clarity and relevance for the respondent are crucial. The wide variety of handsets, displays, applications and functionalities has generated some inconsistency. It is no easy task to produce a survey that will display in a similar way on all the devices which your customers may use. The evolution of smartphones and tablets has only complicated the matter, whilst offering greater choice in survey types and methodologies. A few rules will ensure mobile technologies can be fully optimised: • use short surveys (which has become the standard in the industry) • detect participants’ mobile devices in order to use the right display mode • show questions in a manner that’s engaging for the respondent • continually review surveys to ensure they are timely and relevant • deliver surveys that are tailored to different key touchpoints for respondents • work with experienced partners

ISSUE EIGHT • SEPTEMBER 2012

3. Build value for participants Building long-term, profitable and useful relationships with your respondents is not just about delivering beautiful, engaging surveys and expecting them to complete them. Incentivising survey completion (such as valuing their input and insights to such an extent that you provide them with feedback on their feedback) is one useful additional tool for longer-term interaction but successful mobile engagement programmes develop an on-going dialogue with their respondent groups. This could include: updating participants instantly on the progress and results of the studies they are involved in; providing immediate response and resolution to customer service issues; or updating customers about new products or promotions that they can immediately benefit from.

4. Integrate mobile technologies with existing feedback processes The most successful mobile engagement strategies are those that integrate with existing feedback channels to deliver a comprehensive view of customers or the market. For each programme, organisations should ask: • What types of audiences is this programme aimed at? What are the demographic and geographic considerations? • Is this a purposefully mobile campaign, or is it better suited to multi-channel delivery with mobile support for instant response or additional evidence? • What type of mobile delivery is the programme most suited to: SMS, browser, application, or a combination? • Does this programme work best if integrated with online or telephone-based feedback, to allow a wider range of respondents to participate?

5. Embrace mobile panels Mobile panels provide a structured and permission-based way of recruiting willing and engaged respondents. These panels can be either specialist panels, or part of a multi-channel panel (offering mobile as one of the channels respondents can select). In both cases, they provide some interesting alternatives to e-mail as a way of inviting panellists to surveys, via SMS or push notifications (from an app). The voluntary nature of mobile panels means respondents are more engaged and will fill in more surveys, or even download a research app,

true opportunity of mobile which is to engage people on their terms in order to capture insights that you cannot capture by any other method. Here are a few tips to help you to get started on your mobile VoC journey.

customer engagement

“Capturing customers’ opinions ‘in-the-moment’, close to the point of purchase or experience, will provide information with less bias, recall issues or influence from the brand. This leads to more accurate data, more truthful opinions, and more engaged participants”

which will enable them to provide their feedback whilst offline and sync their answers back when online. More engaged respondents are also more likely to utilise their mobile phone to collect images, video, sounds, or even QR codes.

recommendations from those who use this method include ‘keep open ended text limited’ and ‘don’t use images’. And that makes sense if you’re going for representativeness, trying to reach every simplistic phone in the market.

6. Accommodate all screens in all environments

Mobile Applications – User Experience, Rich Insights • Constant: need to be online at all times to participate in a survey • Applications run on the device itself, taking advantage of the devices’ capabilities and power • Allows for multimedia questions and features such as GPS, video playback, audio capture and more • No lag time and offers the end user a very fluid experience • Online and offline support

There are many technicalities that organisations must consider in the implementation of mobile engagement, and experienced partners are the best reference point here. At a top level, it is important that the mobile technologies used are able to cater to all types of network, be able to work with poor networks, support touchscreens, work with Flash, and render well on all devices.

7. Multi-mode. Remember there are a number of modes that must be considered. SMS Deployment – Reach • What types of audiences is this programme aimed at? What are the demographic and geographic considerations? • The promise of ‘reach any phone on the planet’ gives strong limitations to the level and depth of insights you will gather • Maximum of 140 characters per message and will be limited to no multimedia integration • Will provide an unsophisticated and stilted end user experience • Can be expensive But, if reach is your objective then this is the model to use. Teenagers send on average 3,500 texts/month, over 100/day, so this model is worth considering for that market. Mobile Browser – Rich with Some Visual Customisations • Constant: need to be online at all times to participate in a survey • You will need to constantly load each page of the content • Best option if you want to approximate the branding and style of on on-line survey This is the method to choose if your study requires no rich elements, and if it’s acceptable that the lowest common denominator with respect to mobile browser functionality will be fine for your ‘regular’ online participants. Typical

Exploiting the power and capabilities of the device and delivering a rich, predictable, consistent experience are of primary importance. Only an application based solution can address these issues.

And finally There is a lot to digest with regard to mobile VoC; however mobile engagement is not a complicated art. It has clear and simple benefits, and can be implemented without technical difficulty, particularly when working with a proven partner. What is certain is that we are still at the infancy of what can be achieved through mobile engagement. No longer just a data collection method, it now represents a revolutionary way of engaging with your customers, ‘in-the-moment’, on their terms. Although there are a few legal and usability issues that are specific to mobile feedback, mobile customer engagement best practices are essentially the same but emphasized when compared to other research methods: surveys need to be really short, they need to be integrated within a comprehensive customer programme, they need to be fun and engaging for the respondent, and they need to generate actionable insights for the organization. Businesses that succeed in mastering the art of integrating mobile within an end-to-end feedback platform will achieve a holistic view of their customers and derive robust business actions from their insights, no matter how they were collected. Dave King is Executive Vice President of Mobile Solutions, Confirmit. www.confirmit.com

ISSUE EIGHT • SEPTEMBER 2012

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Gary Roberts looks at why so many companies aspire to multichannel marketing, yet so few have achieved it

Gary Roberts is Executive Vice President, EMEA, Pitney Bowes Software

As an executive vice president, with many years of experience in driving customer satisfaction in the retail sector, I have a very clear understanding of the challenges faced by CMOs and marketing departments, when trying to engage with customers. Whilst arguably technology has made customer engagement easier, implementing and integrating new customer channels can pose major issues for brands. Our customers often tell us this and as such, we recently published a research report entitled Disconnected Customer Channels, to try to understand the root of the problem. The research asked 250 CMOs about the challenges they faced in implementing their communications channels. Overall, for me personally, it was surprising to see that although 90% wanted to integrate their communication channels, less than a third had actually achieved it.

ISSUE EIGHT • SEPTEMBER 2012

So the question is, if CMOs are recognising the need for implementation and integration, why are companies failing to actually do it? Most companies struggle to integrate their channels and fully exploit each customer interaction. Unfortunately, in light of the current economic climate, persuading decision makers to sign off technology budgets can prove difficult. With added pressure from the top to cut costs, the predominant focus of the board is to be cost efficient and budget smart. The costs associated with technology are a sore subject for many CEO’s, often because technology appears to be expensive at the implementation stage with no immediate return on investment (ROI). I completely understand this perspective and, at times, it is hard to envision the long-term ROI when it comes to implementing technology, especially when it takes time to see impressionable results. Therefore, CMOs need to put forward a strong, convincing case, outlining the business benefits and explaining the thought process behind the recommendation. So what are the benefits of multichannel marketing, and how do they translate into significant ROI?

Customer relationships, like all relationships, must be nurtured and developed. With the influx of new channels and the growing use of social media, marketers and brands face everincreasing pressure to find the ‘right’ way to engage and communicate with their customers.

customer engagement

• Multichannels mean multiple opportunities to engage with customers and personalise offerings With the emergence of digital channels such as social media, there are far greater opportunities for companies to connect and engage with customers than ever before. This also presents an opportunity for companies to gain a deeper and more individual insight into customers, enabling them to personalise their offerings. The more relevant an offer is to a customer, the more inclined they will feel to purchase. This in turn translates to some significant ROI. • Multichannels mean companies can have a more holistic view of their customers The more channels available to communicate with each customer, means the more data to analyse on customer behaviour. The amount of data generated on customer behaviour and trends provides companies with the ability to predict what their customers want, what they are going to do and ultimately, how best to contact them. By knowing all of this, companies can deliver a satisfactory multi-channel experience for customers and communicate with them in the most effective way to make them feel valued, engender trust and encourage additional purchases. Again this puts another tick in the ROI box. • Multichannels leads to greater customer loyalty and retention It goes without saying that if you know a customer inside out and you’re communicating with them effectively, through the right channel, at the right time and with the right offers, then a customer is highly likely to be satisfied. Happy customers are loyal customers and are less likely to jump ship to another competitor, which means companies can benefit from profitable and lifetime customer relationships. More time spent keeping current

customers happy also reduces money spent on attracting new customers with discounted services or products. So it’s easy to see how multichannel marketing can deliver effective ROI for an organisation. But what are the effects of fragmented, generic communications? Fragmented ownership of customer interactions by different functions within the business was quoted as the single biggest reason for losing new customers. This can be very daunting when you think about the growing number of channels in the present day. Mass targeting was the second biggest reason, followed by lack of understanding of the customer. So how can the benefits of multichannel marketing really be ignored? Ultimately, the way in which customers wish to connect and communicate on-demand, is forcing organisations to channel their attention and resources. Times are changing and with digital information and big data overhauling the IT landscape, the need to understand the customer in order to reach them has never been so crucial. CMOs need to communicate this need and paint a picture for CEOs to visualise the long term ROI of multi-channel marketing solutions. Co-ordinated and integrated communication can give businesses a great competitive advantage, in terms of driving customer satisfaction, loyalty and therefore revenue. All any company really wants, is a successful strategy in winning new customers and the opportunity to develop lifetime customer relationships. Sounds simple really…and it is. With the right strategy in place, this is a reality any business can achieve. Gary Roberts is Executive Vice President, EMEA, Pitney Bowes Software. www.pitneybowes.com

ISSUE EIGHT • SEPTEMBER 2012

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Dominic Graveson, Director of Strategy and Engagement at leading digital agency cScape (www.cscape.com) is a regular at our Directors Forums. In the first of a series of regular reports from the events, he extracts the highlights from the discussions He blogs at dombles.wordpress.com and tweets @dombles

Social media has been an instrumental element in a revolution in customer

ISSUE EIGHT â&#x20AC;˘ SEPTEMBER 2012

expectations over the past few years. Traditional contact centre routes are being bypassed by many consumers who are preferring to air their grievances or express their delight away from the channels controlled by those providing the products and services. They are instead using the likes of Facebook, Twitter and other platforms to create a dialogue between their peers and

Summer finally arrived in London this May in time for the latest Customer Engagement Network Directors Forum which, this month, focused on how social media and mobile was being used to deliver innovations in customer service across a range of organisations.

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suppliers in a space which can appear chaotic and uncontrollable.

The main insights from the day were: Customer expectations have changed, dramatically. Most major (and many smaller) consumer brands are finding that a siginificant percentage of their consumers are active in the social space and talking about the products and services they buy and use. They expect to be able to contact and engage through these channels, but with this diversity in conversations comes a less formal style and you can be seen to be ‘more human’ and mistakes, if dealt with honestly and openly, should be viewed as a manageable learning experience. Don’t be intimidated by the prospect of engaging your customers and prospects through their channels as well as your own. While some organisations are way ahead of the pack in delivering advice, marketing and after sales service, there are simple actions you can take now which should be cost controllable, measurable and effective in opening the dialogue. The key is to participate in a manageable way. Discuss which channels and platforms are right for you, decide upon how you will engage your audience in a way which is both relevant and complimentary with your services, involve front line staff, and start small - reviewing regularly - and build up a picture of what works for you. If it isn’t already, mobile is likely to be one of the most important channels for customers in the very near future. As an ‘always on, always with you’ platform, consumers are finding it easier to access information, relationships and messages via their pocket than their PC. This means the ‘where and when’ of their contact with you is as important as the ‘what’. Companies need to think about how this changes their day to day contact - time of day, their location, what their

friends are doing - these are not only potentially available to you, but are expected to be considered when contact is made. Again, start with something small and manageable. You probably don't need to create a whole estate of apps (web access is the fastest growing and most accessible way consumers will interact with you anyway), pick the most appropriate interactions and ‘re-think’ an optimised mobile version of your web site. The 80/20 rule was made for mobile, so keep it simple and focused. Measurement is key, but keep an open mind about which metrics you gather and the meaning you derive from them. Some activities may be attributable to direct sales or increase in market share, but many won't be. Some will reduce costs through channel shift, others deliver value in reputation and improved customer service. It is important to develop a strategy for measurement early, and to take the initiative in providing essential reporting across your organisation - from reporting to the board on ROI for the activity, to being transparent, open and inclusive to front line staff who may feel unprepared or even threatened by the changing landscape. These new interactions, and the significance of these channels will vary across different businesses and stages in the buying and consuming cycle. We don’t all have to be as elegant an operator as Apple in this space, but social and mobile need to be front and centre of your marketing and contact strategy, because that's probably where your customers are. This event welcomed a range of speakers from organisations as diverse as Gallup, LinkedIn, Everything Everywhere (T-Mobile and Orange) and Facebook, with commentary and advice from Foviance, Sponge Group, The Social Media Leadership Forum and Foviance. Customer Engagement Network recorded three podcast interviews on the day you can hear by visiting the website.

Podcast links: Justin Hunt – Founder of ItsOpen and Social Media Leadership Forum http://webjam-upload.s3.amazonaws.com/ceclubpodcastmay12_justinhunt1__13094__.mp3

John Lamphiere – Facebook Head of Sales, UK and Ireland http://webjam-upload.s3.amazonaws.com/ceclubpodcastmay12_johnlamphiere1__20103__.mp3

Ben Kay – Head of Digital, Everything Everywhere http://webjam-upload.s3.amazonaws.com/ceclubpodcastmay12_benkay1__18953__.mp3

ISSUE EIGHT • SEPTEMBER 2012

customer

the l finwaord

engagement

Colin Shaw is the first to admit that his initial advice on how to create a great multichannel experience might come across as a bit strange but that doesn’t necessarily mean that it isn’t to be trusted – strange but true We live in a complex world and the bad news it’s going to get worse. I am a geek. I’m fascinated by what technology can do today and moreover, what it will do tomorrow. One thing is for certain it is going to have a huge effect on us all, like it or not.

quicker reply and pick up the phone, knowing they’ll get a quicker response. The irony is this costs the organisation more money to service but with a better understanding of the customer this could be avoided.

3. Design your channel experience

How do organisations manage these new channels? My first bit of advice may be a bit strange. You need to look at your own mind set. Are you thinking ‘how do I manage all our products down all these channels’ or are you thinking ‘as I understand my customers these channels provide me with a great way to interact with them’. The first is product centric and reactive. The latter is customer centric, proactive and looks at this multichannel environment as being an advantage and an opportunity. Once you have established which lens you are looking at the challenge through, how do you go about managing the Multichannel experience?

Once you have defined your experience you need to implement it in each channel. Simple.

4. Define an owner of the Customer Experience As I mentioned before the channels are normally in various organizational silos. Someone has to take a cross channel view and look at the world from the customer’s view point. I would suggest that someone in the organization needs to be given responsibility and the authority to ensure the experience is being delivered across all channels.

5. Customer view on systems 1. Above all, understand your Customers first! It is critical to understand your Customers at a much greater level of detail than most organisations do today. In doing so you will be able to understand and predict their behaviours; which channel is best to use in what circumstance. It is accepting Customers are people and are driven by emotions. In addition; various academic psychology theories about human behaviour apply. We call this ‘Experience Psychology’ and outlined this in our last book Customer Experience: Future trends and insights, Palgrave MacMillan, 2010. Understanding the psychological aspect of a Customer Experience means, you will understand customers may choose one channel over another because of how they want to feel or do not want to feel. For example, some customers don’t like complaining in person as they don’t like conflict. Instead they prefer to write an email or a message on social media. Understanding your customer helps you design an experience for each channel and predict their use.

2. Define the experience you wish to deliver What is the experience you are trying to deliver across all your channels? I would wager you probably don’t know. If you haven’t defined your experience, each channel will do what they think is best. When Customers interact in these different channels they see and feel a different experience dependent on the channel they use. They see and feel the lack of coordination. Customers are not stupid. They change their behaviour to get what they need. For example, a Customer will see an email saying ‘we will answer this email in 5 days’. They determine they need a

With multiple channels this normally means multiple systems. Unfortunately you will need to invest in a system that provides you and the customer with a view of the Customer experience.

6. Embrace social media and the fact it needs a different approach DO NOT just transfer the transitional experience you provide to Customers in the social media channel. It is different. Far too many organisations treat social media as a broadcast mechanism. It is not, it is an interaction channel. The multichannel experience is here to stay. I see this as an advantage not a disadvantage. The key is to understand your customer at a much greater level than you do now and then design a deliberate experience in each channel.

Colin Shaw is founder and CEO of Beyond Philosophy (www.beyondphilosophy.com) one of the world’s first organisations devoted to customer experience. Colin is an international author of four best-selling books. Follow Colin on Twitter ColinShaw_CX

ISSUE EIGHT • SEPTEMBER 2012

Time: Venue:

9:00am – 5:00pm Gallup Consulting, The Adelphi, 1-11 John Adam Street, London, WC2N 6HS

For more information contact Chris Wood: chris@ictcomms.com and +44 (0) 1932 341828 or visit our website: www.customerengagementnetwork.com

Speakers todate include: • Marks & Spencer • Essex County Council • Satmetrix • Best Companies Ltd • CIPD • University of Kent • Gallup

Employee and Customer Engagement 5th December 2012, London

• Confirmit

Delegates will learn: • How world class organisations are using employee and engagement strategies for competitive advantage • The latest thinking on the links between employee and customer engagement and the strategies that are delivering success • How to get the best from our people through a customer centric culture that ensures consistent delivery of customer service excellence across all channels • How challenging economic conditions are determining employee engagement strategies and how to keep your best people on board • The performance and profitability advantages that result from aligning your employee and customer engagement strategies.

This Directors Forum will lift the lid on the employee engagement strategies that are making some organisations winners in the battle for customer loyalty, and where the links between employee and customer engagement are being leveraged to provide benefits to all stakeholders and to gain competitive advantage.

http://employeeengagementforum.eventbrite.co.uk

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