“MARCHE OU CRÈVE” SINK OR SWIM DEVELOR CUSTOMER EXPERIENCE SURVEY 2016
CUSTOMER EXPERIENCE EMERGES AS KEY FACTOR TO LONG-TERM SUCCESS “Marche ou crève” (Sink or swim) is the French Foreign Legion’s well-known slogan, referring to the only option the players of service and trade industries have today regarding customer experience. Being the leading consultancy firm in the fields of customer experience, leadership development and employee engagement, we feel it is our responsibility to provide structured and standardized research data in the areas of our expertise. DEVELOR started to conduct Customer Experience surveys in 2013. The present study is the outcome of our international survey conducted in 2016-17. Four factors give this research a unique viewpoint: • Sector-independent - with the opportunity for the comparison of various relevant industries • Representative of residential and corporate target groups - with comparability of responses and presentation of clients’ and service companies’ perspectives • Combines quantitative and qualitative approaches - uses online questionnaires and personal structured interviews for deeper analysis • International perspective - run across countries using the same methodology The research was conducted on behalf of DEVELOR International, with the professional guidance and support of the Customer Experience-specialized research firm, Momentor Research. The residential survey was completed on nationally representative samples of 1,000 people by country, while more than 300 mid- and senior-level executives participated in filling out online questionnaires and giving structured in-depth interviews for the corporate survey. The executives represented companies with the most relevance in the topic, including telecom companies, banks and insurance firms, retail chains, hotels, national sales companies and dealerships of the automotive segment, and utility companies. The study makes a pulse-check of both customers and executives of service providers with the intention of comparing both sides’ opinions concerning service quality, client satisfaction and loyalty, digital channels and companies’ efforts and future plans. There are certain stable trends and some new phenomena, but one thing remains true: if a company doesn’t focus on customer experience it will soon find itself out of the game.
CUSTOMER EXPERIENCE IS BETTER ON PAPER THAN IN REALITY As life speeds up and the competition to keep hold of clients becomes ever fiercer, a decisive factor for businesses is to be keeping their customers loyal. The notion of customer experience (CX) has been ringing bells for more and more decisions makers recently, as survey results demonstrate keeping clients engaged has become a top priority. If a company doesn’t focus on customer experience, it will find itself amongst the losers. Similarly to the previous years, 81% of companies defined this topic in their top 3 strategic priorities but only a few have detailed and clear strategy implementation plan in place, so execution fails as is shown by the dropping sector-specific Net Promoter Score (NPS) results. The mainly decreasing or stagnating NPS of the various industries are caused by low level or missing implementation of strategy to improve customer experience. This is not a country-specific problem, this is typical in Europe and beyond. Based on personal interviews with top managers, far more claim they took serious steps in this field, but it’s not more than executing some research and related marketing initiatives and high budget investments in digital channels. The people focus was lost in the last few years, as human transactions became less and less important in the eye of most business executives.
PROVIDING GREAT CX IS ONE OF THE TOP 3 STRATEGIC PRIORITIES
81% 2016 2015
80%
2014 2013
83%
84%
81%
37% IS IT WORTH INVESTING IN CX? Customers resonate well to the topic, as 37% of the population – slightly less than in the previous two years – said they have already paid more compared to market average price for higher customer experience. Answering the next question of the survey 29% of the respondents said they were willing to pay 10% more for higher levels of customer experience, while 9% of them said they would be willing to pay even 30% more for it. Working with our client on skill development we get frequently complaints from their sales and customer service staff during the courses that their price level is higher than competitors prices and this “fact” (as they believe that this is a fact and not just a perception) makes their life hard and this is the biggest barrier to be more successful. The survey results prove that if you provide better experience, not the price level will be the problem, but the fact that you do not serve your clients well so they won’t buy from you even on lower prices. The other side of the coin is the perception of constantly growing expectation of customers based on the answers of corporate representatives, 57% reported significant increase in expectations compared with the previous year. So, the bar to jump over is lifted again.
CUSTOMERS ABOUT PAYING FOR OUTSATNDING CX It has happened, that I paid more for great Customer experience, than market average
37
I would be willing to pay 10% more for greater Customer experience
29
I would be willing to pay 20% more
I would be willing to pay 30% more for greater Customer experience
12
9
CORPORATE EXECUTIVES ABOUT CUSTOMERS’ EXPECTATIONS Significantly growing expectations
Growing expectations
Expectations remained on the same level
Decreasing expectation
Significantly decreasing expectation
I somewhat agree with it I full agree with it
NOT YET PROPER REPRESENTATION OF THE TOPIC – CX MANAGERS IN A TRAP Regarding the topic telecom companies, insurance businesses, banks, hotels, car sales firms and large retail chains are the frontrunners, while small-size or independent retailers and utility firms lag behind. Along with strategic priorities 80% of players aims to be the industry leader of CX. This data has not changed in the last few years, so 4 out of 5 companies want to be the No1 choice – but significantly less made real serious steps and brave moves to reach their ambition. Customer Experience Managers have appeared in almost all large corporations where customer experience can be relevant. After several years’ experience it is clear to see and state that most of them are in a Catch-22. Without real authority and dedicated budget their impact on the service quality of their company is limited. CX is a Board room topic, only high level representation (as Customer Experience Officer – CXO) is a game changer, with empowerment across departments and hierarchy levels. In customer experience improvement, the do-it-yourself solutions and old paradigms won’t raise you to the top of the list, but regularly create a barrier to real changes. OUR AMBITION IS TO BE THE LEADER OF CX IN OUR INDUSTRY
80%
2016
80%
2014
2015
2013
80% 83%
Customer Experience Director’s role is to improve customer experience through customer loyalty management, customer relationship management and customer value management. The CX Dorector / Officer – being in a key position – should be responsible for the regular assessment of the way the organization’s sales, marketing and service departments work together to deliver seamless customer service.
EMPLOYEE ENGAGEMENT DRIVES CUSTOMER EXPERIENCE
HAVE YOU EVER EXPERIENCED, THAT EMPLOYEES OF THE SERVICE PROVIDERS ARE NOT ENGAGED TO THEIR COMPANY AND DO NOT OFFER THEIR SERVICES?
Since we launched the survey, it was the first time when employee engagement related questions were incorporated. The answers underlined our experience that employee engagement drives customer experience greatly. It is remarkable that 40% of customers said they had encountered disengaged staff behavior during their transactions with service providers and retailers, and 2/3 of those reported it had left a negative impact.
HOW IS IT INFLUENCE YOUR EVALUATION ABOUT THE SERVICE PROVIDER?
26%
40%
Changed my view significantly negative Changed my view negative
34% Did not influence my opinion
yes Changed my view positively
no Do not know
Changed my view significantly positively
Having approached the same issue from the point of view of company executives, similar trends have been observed. Some 92% believe that engagement has a great impact on service quality and has a consequence on customers’ loyalty. On the other hand, when asking about their own employees’ engagement, managers feel that only 1/3 is exceptionally or highly engaged. This self-critical statement – concerning our Employee Engagement surveys executed for several companies – seems to be true, maybe even too optimistic. Under the current circumstances of shortage of labor force and war for talents, this topic has a growing importance, with larger organizations keeping it high on the priority lists, but only a few taking steps to achieve measurable results. According to surveys 19% of the total workforce has a concrete job application now or is looking for a new job or is “open for new challenges”.
APPLICATION TO A JOB No, I am not looking for a new job Yes, I apply fore more jobs Yes, I apply for a concrete job
Better to be prepared for a hard and long fight when aiming at improving the current engagement level of workforce. We truly believe that conscious, interlinked actions built on the company specifics should be made during the entire Employee Journey. Employee Journey Mapping is not yet a widely-known or used expression and concept but DEVELOR has put special emphasis on the comprehensive approach from the job application to the exit because single steps alone cannot have considerable effect on the loyalty and engagement of the staff. As we experienced many HR efforts have been being made, but a consistent trend sees the employee’s engagement at its highest when the positive decision about employment is communicated and from that point it goes downhill. 9 out of 10 onboarding training programs are far from being an engagement-driver experience and rather is an overwhelming or boring period after the employment contract is signed. Our experience proved that Employee Journey Mapping and structured design of related actions have a dramatic effect – even in short term.
82
Employee Journey Mapping has another type of use to be considered by CX Managers and front-line managers. In each and every touchpoints our colleagues go through we can define how the particular phase can get a larger customer experience focus. Going back to the above mentioned onboarding program, it has to be set in the service of customer experience improvement.
2016
13 6
IMPROVE NPS WITH PROPER COMPLAINT HANDLING 9 out of 10 respondents said they have had negative experiences when using services, but only 1/3 of them makes a complaint to the service provider or retailer that caused the problem. The rest of the customers share their painful transaction with their relatives and friends. This means that the feedback from customers is at a relatively low level constantly without any change since 2013. This makes the situation challenging as 2/3 of complaints are never revealed, even though the majority of customers have encountered issues that left a negative stain on their loyalty to the brand. If you receive a customer complaint it means there are further two customers with complaint you are not aware of. They are not even providing you the chance to correct the mistakes. Companies have to work on collecting complaints more efficiently. Secondarily, sales and customer service staff should be trained to respond and solve the complaining customers’ issues, because it is also proved that there isn’t any other way with bigger impact on customer satisfaction and loyalty than a fast and well-solved problem. In these cases NPS grows even above the level of those who never had any problem with the service of the company. The development of the complaint handling skills and increasing the resilience of staff is not easy and cannot be done in 1 or 2 days, but since this is the key driver of customer advocacy worth the effort. The posting of negative experiences on social media shows a moderate growth, still under 15% of the total surveyed population. REACTION OF CUSTOMERS IN CASE OF NEGATIVE EXPERIENCE I share it with my friends, family members and acquaintances I just make a complaint at service provider to resolve their fault I check the competitors offer If a negative experience influences me just to small extent, I draw the conclusion by myself I fill the feedback questionnaire of service provider I switch to a competitor I share it on internet forums, facebook, public folders I usually do not have negative experiences 0
10
20
30
40
50
Think & Feel?
Hear?
See?
Say & Do?
Pain
OMNI-CHANNEL SERVICE ON THE RAISE A multi-channel or omni-channel approach that provides the customer with an integrated shopping and service experience is becoming a top priority for businesses, increasing from 44% last year to 52% in 2016. The highest positive change regarding the CX-related company plans are in the popularity of Customer Journey Mapping (from 30% to 39%). This method used to illustrate a client’s interactions with the company at all touchpoints, is applied now with a new focus in order to understand and reflect better on clients’ expectations. Working with clients we have learned the lesson: one journey is no journey, as a general overview won’t really help detect pain-points or identify the measures needed to improve service. DEVELOR believes in the scenario-based approach where each and every important type of transactions requires a specific journey. With the help of the highly recommended “360° Customer Empathy Map”, we can define what the client thinks and feels during the journey and so what pains are to be compensated and gains are to be provided. There are other typical problems as well with the current practice of Customer Journey Mapping: focusing only on the problematic actions, defining only the process related steps and ignoring the behavior standards. The importance of the proper implementation of the journey with the necessary training and mindset shift of staff is not only underestimated but in many cases it is totally forgotten. CORPORATE PLANS TO IMPROVE CX 52%
Development of technology of multi-channel service
34%
Training programmes for great Customer experience More effective collection of negative experiences Initiating company culture change programms Better mapping of customers, segment fitting proposals and content management Better knowledge of Customer journey
28% 27% 33% 39%
Gain
TEN COMMANDMENTS As stated before the problem is not the strategy, but the successful implementation which fails on the human aspect. Mainly as the side-effect of digital transformation and digital channels being in the limelight, less focus, effort and budget is allocated to the development and education of front-office people including direct managers and supervisors. The fewer standards the better; nobody can cite the whole Bible, but the Ten Commandments are easy to recall. Concerning DEVELOR’s professional approach the first step should be the definition of critical behaviors which drive mostly customer engagement and then these standards must be implemented. Expectations won't work alone without the proper empowerment of staff. On the other hand, classroom training even that supported with some on-thejob coaching has only a limited impact. As several projects have proven - if the direct superiors are successfully involved and their role and responsibility is precisely defined and supervised, extraordinary improvement is achievable. Not only the "How to do" but mainly the "What to do" is the question. The key to success is the proper determination of the operative management's daily, weekly and monthly routines, which are the most relevant ones from the voice of customer and strategy point of view. Clients are more empowered than ever: about products and services and the alternatives on offer. We can easily compare product features and customer feedback alike. We can choose a desired car model in 5 minutes online and can ask for referrals from hundreds of acquaintances on Facebook if looking for any kind of new service. Companies now have to tackle with their audience in case of any negative transaction in order to avoid of the potential to spread the bad news like wildfire. Social media has changed the speed of information exponentially, and due to the spread of smartphones we are always "on". This has created the need for 24/7 service regardless of the business sector. The survey detected that customers primarily want fast service and fast resolution of any issues, and they want to feel “appreciated” by the front-of-office representatives. This is a great challenge as it is difficult to define what "appreciation" really means in daily practice. In line with DEVELOR’s methodology you feel appreciated if the service seems to be personalized, if you receive some - even tiny – amount of positive feedback from the service representative. It also means having a certain feeling of belonging to the provider (see Apple-believers and Harley-Davidson fans). Sales and customer service colleagues should be trained how to create this feeling in each and every transaction in order to drive client loyalty and advocacy. Due to the advent of the digital age, clients are more informed, their expectations are elevated and they demand immediate assistance. In order to be prepared to meet such requirements, companies need to undergo a fundamental change at their core. You should start with the culture. Without a corporate culture in which customer-centricity has an integrated importance, you cannot provide a high quality service and clients will leave your business. Cultural change is a tough job, but not impossible, but the senior management's definite commitment is a prerequisite. If strategy is in place, start with your people, as they have a primary role to make your vision and goals happen. Keep in mind that only engaged and trained people with clear expectations who are receiving their managers’ support and supervision will follow you.
TRAINING FULLY REDESIGNED Looking at the plans regarding CX development, after the previous year’s drop there is a steep growth in training people. According to priorities the digital channels won the last 5 years to human transactions. As it was stated in our last CX study there are shrinking results of average NPS, with less decrease regarding the digital channels and dramatic in the channels with people involved. This is more than a simple warning signal. This could be one of the drivers of putting more focus on the training of frontline staff. What is the reluctance is rooted in? Training people in the last 25 years was a standard routine, together with having no real expectations about the outcome of the courses. If “happy sheets” were positive, decision makers were satisfied regardless the business impact. But old days have gone, no more limitless training budgets are available. Training started to be an investment in real terms, meaning that spending should have had a tangible return. This is a new challenge both for the executives responsible for people development and for the possible vendors. Old ways don’t work if we want measurable behavior change in return our investment. Dozens of success stories proved that training can work but only if we consider three aspects: 1) involvement and commitment of management from the top to the line managers, 2) clear expectations in the form of easy-to-apply behavior standards end leadership routines, 3) well-structured and systematic implementation support. This is not easy and simple job but far not impossible.
DEVELOR, YOUR PARTNER IN IMPLEMENTING CUSTOMER EXPERIENCE STRATEGY DEVELOR improves human & organizational & process aspects of Customer Experience. We concentrate on the human touch – the emotional impact of personal interactions with customers. Our world is undergoing rapid changes in many arenas. Our customers are becoming more and more powerful and make demands which have not been seen before. They want to be served through various channels, they want to get things done fast, seamlessly, without efforts. Customer Experience Management deals with interactions with customers and the sum of all experiences a customer has within all touchpoints with the company through all available channels. CX Management seeks to develop a loyal and long-term relationship with the customer. Achieving customer centricity means that we understand our most valuable customers’ needs, expectations and preferences. It implies to be aware of when to be there for them and when to stay away and once we attend to them, we deliver our promises. DEVELOR as CX expert supports its clients in this journey by providing expertise and capacity. We co-create solutions with our customers and get them implemented at all touchpoints with human interactions. We help to implement customer experience management through people with the right mindset and the proper behavior, improved and unified leadership at all levels, and more efficient people related processes. CX is a strategy to fundamentally align with what you offer with what your most valuable customers want. That strategy has a specific aim: more profits in the long run.
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