Foviance Multichannel Customer Experience Survey Report 2011 by Richard Sedley

2nd Annual Multichannel Customer Experience Report 2012

www.foviance.com

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Contents About Econsultancy ............................................................... 1 About Foviance ...................................................................... 2 Executive Summary and Highlights ..................................... 3 Introduction by Foviance ...................................................... 5 Expert commentaries ............................................................ 6 14,000 multichannel customer experiences and counting .................... 6 The multichannel customer experience journey .................................... 7 Data will set you free ............................................................................... 7

1. Multichannel Customer Experience: Maturity Model .... 9 2. Methodology ............. Error! Bookmark not defined. 3. Findings .................... Error! Bookmark not defined.

3.1. How companies stack up against the maturity modelError! Bookmark n 3.1.1. Systems and processes ............. Error! Bookmark not defined. 3.1.2. Leadership and culture ............ Error! Bookmark not defined. 3.1.3. Alignment with brand .............. Error! Bookmark not defined. 3.1.4. Use of insight............................ Error! Bookmark not defined. 3.1.5. Customer touch points ............. Error! Bookmark not defined.

3.2. 3.3. 3.4. 3.5.

Integration of customer touch pointsError! Bookmark not defined. Most important attributes for customer experienceError! Bookmark no How well do companies deliver against attributesError! Bookmark not Customer experience strategy Error! Bookmark not defined.

3.5.1. Importance of multichannel customer experience strategyError! Bookmar 3.5.2. How well developed is strategy?Error! Bookmark not defined. 3.5.3. Recognition of link between business performance and customer experience ............................. Error! Bookmark not defined.

3.6. Barriers .................................... Error! Bookmark not defined.

3.6.1. Greatest barriers to improving the multichannel experienceError! Bookma 3.6.2. Problems improving the customer experienceError! Bookmark not defin 3.6.3. How to improve the customer experienceError! Bookmark not defined.

3.7. Measurement .......................... Error! Bookmark not defined. 3.7.1. Metrics used to measure effectiveness of customer experience ............................................. Error! Bookmark not defined. Multichannel Customer Experience Report All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without prior permission in writing from the publisher. Copyright ÂŠ Econsultancy.com Ltd | Foviance Ltd 2011

3.7.2. 3.7.3.

Sources of data for measuring customer experienceError! Bookmark not Technology used to gain insightError! Bookmark not defined.

3.8. Ownership and budget ........... Error! Bookmark not defined.

3.8.1. Ownership of multichannel customer experienceError! Bookmark not de 3.8.2. Dedicated budget for improving customer experienceError! Bookmark no 3.8.3. Which department is driving customer experience?Error! Bookmark not

4. Appendix ................... Error! Bookmark not defined. 4.1. Respondent profiles ................ Error! Bookmark not defined. 4.1.1. Geography................................. Error! Bookmark not defined. 4.1.2. Annual company turnover ....... Error! Bookmark not defined. 4.1.3. Business sector ......................... Error! Bookmark not defined. 4.1.4. Job role ..................................... Error! Bookmark not defined. 4.1.5. Type of agency .......................... Error! Bookmark not defined.

About Econsultancy Econsultancy is a global independent community-based publisher, focused on best practice digital marketing and ecommerce, and used by over 240,000 internet professionals every month. Our hub has 105,000+ members worldwide from clients, agencies and suppliers alike with over 90% member retention rate. We help our members build their internal capabilities via a combination of research reports and how-to guides, training and development, consultancy, face-to-face conferences, forums and professional networking. For the last ten years, our resources have helped members learn, make better decisions, build business cases, find the best suppliers, accelerate their careers and lead the way in best practice and innovation. Econsultancy has offices in London, New York and Dubai and we are a leading provider of digital marketing training and consultancy. We are providing consultancy and custom training in the Middle East, and extensively across Europe and Asia. We trained over 3,000 marketers and ran over 200 public training courses in 2010. Join Econsultancy today to learn whatâ&#x20AC;&#x2122;s happening in digital marketing â&#x20AC;&#x201C; and what works. Call us to find out more on +44 (0)20 7269 1450 (London) or +1 212 699 3626 (New York). You can also contact us online.

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All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without prior permission in writing from the publisher. Copyright ÂŠ Econsultancy.com Ltd 2012 | Foviance Ltd 2012

About Foviance Foviance is a multichannel customer experience consultancy to the world's leading brands. We help clients drive business performance through better:  Customer relationships  Marketing effectiveness  Use of technology  Customer focused culture We use our proprietary Foviance Framework© to help clients understand, define, assess and make improvements to their customer experience.

The Foviance Framework:

Our expertise includes:  Customer experience strategy  Customer insight  Customer experience testing  Customer analytics  Customer experience and services design  Client knowledge development Foviance works with each client to solve their single or multichannel challenges in the area of customer experience using a range of established tools or proprietary solutions. For further information: Tel:+44 (0)8450 546 500, e-mail: info@foviance.com, web: www.foviance.com

Executive Summary and Highlights This second annual Multichannel Customer Experience Report, published by Econsultancy in association with Foviance, is based on a survey of more than 650 companies and agencies carried out in 2011. The research gives a state-of-the-nation perspective on the extent to which organisations are committed to delivering an integrated experience in a world where the customer journey is becoming increasingly complex due to evolving technology and the proliferation of devices.  Complexity is now seen as the greatest barrier to improving multichannel customer experience, overtaking organisational structure since 2010. As part of this year’s research, we asked responding organisations to rate themselves across five key areas which are crucial for delivering a joined-up and compelling multichannel customer experience, namely systems & processes, leadership & culture, alignment with brand, customer touch points and use of insight. Encouragingly, leadership & culture is the area where companies are most likely to regard themselves as being at the most advanced stage. It is also seen as the most important attribute for delivering a positive customer experience.  Just over a quarter (28%) of companies say there is ownership at board or ‘c- level’, but without full commitment across leadership teams. Almost a fifth of companies (18%) say there is ‘c-level ownership of the total customer experience’.  A commitment to customer experience from the top of the organisation is regarded as a key requirement by just under half of companies (46%), higher than for all other organisational attributes. More than half of responding companies rate themselves either as ‘excellent’ (21%) or ‘good’ (37%) on this front. The downside is that evidence of ownership of customer experience at the top of the organisation has not necessarily translated into clearly-defined strategies, frameworks and processes for making it happen.  Only 26% of companies have a well-developed strategy in place for improving customer experience, just a slight increase on 22% last year. In order to provide more insight around what successful multichannel companies are doing differently, we created a top segment of (unidentified) ‘mature’ companies which comprised the 25% of organisations which scored the most highly across the five key pillars of the Foviance Multichannel Customer Experience Maturity Model.  Our analysis found that the gap between mature companies and others is typically more pronounced for integration of digital channels such website, email and internet advertising into the overall customer experience.  The gap is less obvious for offline touch points (for example retail outlets, direct marketing and events), with the notable exception of telephone support and sales where mature companies are way ahead of the curve. The research also shows how mature and ‘immature’ companies have a different perception of the attributes required for delivering a positive customer experience.  Mature companies are far more likely than the least mature organisations to regard motivated and empowered staff and efficient customer service as being among the most important attributes.  In contrast, immature companies are more focused on visibility of customer behaviour across channels and the need for a single or joined-up customer database.

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Mature companies are more likely to have overcome technology and data-related issues, which means they are less fixated by these areas because they regard them as hygiene factors. Immature companies, because they are still worried about technology and systems, are losing sight of the importance of customer service and empowered staff. With the technology and processes more readily in place, and with widespread commitment from the top of their organisations, mature companies are more likely to be exceeding customer expectations thanks to motivated and empowered staff. ď Ź Mature companies are also much better than other companies at using a full range of data sources to understand the customer experience. These companies have been able to widen their data pool from web analytics to voice of customer (i.e. customer satisfaction surveys), ad campaign data, CRM and social. ď Ź These data sources provide a wider view of the whole customer journey, with mature companies understanding the importance of data in delivering on multichannel analysis. In parallel with our survey of businesses, we also carried out five consumer surveys about customer experience, covering retail, travel, online banking, mobile phone providers and gaming / gambling. Our Customer Experience Consumer Survey Report is also available from this URL. http://econsultancy.com/reports/multichannel-customer-experience-report

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Introduction by Foviance Welcome to this, our second Annual Multichannel Customer Experience Report. As you are reading this report the first thing you need to understand is that multichannel is not a popular subject. There aren’t many boardrooms that host endless discussions on the subject. The number of regularly published research and white papers on the subject are few and far between. Globally less than 130,000 English searches are undertaken on Google for ‘multichannel’ each month, for ‘multichannel customer experience’ it is less than 150 a month. Multichannel customer experience is not a popular subject. However it is an important subject. There have never been more channels through which our customers can potentially experience us. There are now more mobile phones in the world than toothbrushes 1. Of the UK total population of 61,800,000 Facebook appears to have accounts for 30,481,3002. Over the last 10 years this explosion of channels has dramatically changed our customers’ behaviour. While mobile and social are just two of the more recent and high profile channels that our customers are using they are possibly the most important in setting customer expectations and establishing new customer behaviours. At the start of the century the Internet had the effect of disintermediation – allowing customers to relate directly to many brands for the first time. Now our customers’ adoption of social media has had similar effects on customer-to-customer interactions. Much of this customer-tocustomer exchange happens digitally but the subject of those exchanges cover every, and all, customer touch-points; on and offline, managed and unmanaged. Online is now the place to share. The net effect is an amplification of the impact of both positive and negative customer experiences. At Foviance we spend a great deal of time with customers. We talk to them, we watch them, we test them, we survey them and we listen to them. Time and again we see their frustrations when they experience disruptions in their engagement with brands, but equally their awe and wonder when their journey’s are frictionless and occasionally even enjoyable. There aren’t many people out there focused on what is required to make customer experience management truly multichannel. That is a shame but also an opportunity for those that are. If you’re reading this consider yourself one of the elite and recognise that despite the challenges ahead the benefits of our journey are worth the effort. It just leaves me to thanks those involved in the report’s creation and analysis; Linus and Jake at Econsultancy, and my Foviance colleagues Jade Evans, John D’Arcy and Tina Ubhi. We hope you find this report useful.

Richard Sedley Commercial Director, Foviance

1 2

Bupa Digital Awareness Conference, October 2011 Facebook advertising platform, 25 October 2011

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Expert commentaries 14,000 multichannel customer experiences and counting Author: David Hughes, Director User Experience, Expedia Affiliate Networks As always this report makes for fascinating reading. It’s clear that a good multichannel experience is important, if not vital, to business success in this day and age. It’s also clear that for many the multichannel experience is still an aspiration or a work in progress. Why is this? Why have so few businesses got this nailed? Because, quite simply, it’s hard, that's why. So if it’s hard to deliver a good multichannel experience for a single brand imagine how hard it is to do so for over 14,000. Expedia Affiliate Network provides white label travel products for over 14,000 affiliates worldwide; ranging in size from international airlines to sole-traders, and every one of these 14,000+ customers has access to our multichannel services. But why is a multichannel customer experience important for an online business such as an online travel agent? Because our affiliate’s customers, that’s you, say it is. This is confirmed by this report’s accompanying customer based survey*. The first question in the travel section is: “In order to provide the best experience for you as a customer, what are the most important areas for a travel company to focus on?” Now, as a User Experience practitioner and professional I’m not sure I should be pointing this out, but a user-friendly website is considered important by only 20% of those asked. Whereas quick resolution of problems is seen important by 35%, and efficient customer service is seen as most important of all the areas being selected by 57% of participants. Which confirms what, as a UX guy, I’m a little reluctant to say: it is still difficult to provide excellent customer service through online channels only. Customers still want to be able to deal with a person via the phone, email, live chat or other one to one channels. Problems are more quickly resolved by two people talking, and customers feel valued when they can communicate directly with the company. So a multichannel customer experience is clearly vital even to an online business. Now imagine delivering that experience 14,000 times.

David Hughes Online experience Director fascinated by the powerful combination of amazing user experiences, social media and mobile in delivering the perfect online customer experience. www.expediaaffiliate.com | www.davidhughes.org * Contact charlotte.wilberforce@foviance.com for a copy of our sibling report that surveyed over 5,000 customers on their multichannel experiences.

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The multichannel customer experience journey Author: Mark Nicholson, Head of E-Commerce Marketing and E-Experience, BSkyB Having read last year’s Multichannel Customer Experience Report I was intrigued to see how the trends might have developed throughout 2011. Whilst last year a number of business owners ranked a joined up database and subsequent view of customer behaviour as the most important attributes, it was good to see that “C level commitment” and “exceeding Customer expectations” came out strongly this year. Suggesting that companies have really grasped the importance and are making progress through short term actionable means rather than letting infrastructural projects slow them down. With these sorts of studies I am always interested to look for contrary data that could impede progress, and the fact that only 36% of respondents say that their customer experience and brand values are synchronised indicates that there is still a long way to go from an internal alignment perspective. At Sky we have seen a number of similar trends. The Customer focused strategy is clear and the organisation has re-orientated appropriately, enabling the channels to work symbiotically to deliver an enhanced experience, and an ROI greater than the sum of their parts. We have a number of major platform enhancements in flight but this is not impeding the execution of an increasingly joined up experience. We are certainly not at the end of our journey, but we probably never will be, as organisations will need to continue to raise the bar as Customer expectations heighten and new channels emerge. So now we have that C level buy in and the gauntlet has been thrust firmly into the Marketing department’s hand, it will be fascinating to see how these virtual organisations within organisations will continue to make progress. Indeed will the transition into 2012 herald the formalisation of aligned objectives, organisational structures and budgets to properly address the multichannel Customer experience agenda, and to what extent the barriers of internal complexity, silo’s and unsynchronised data will be blown away. Watch this space, exciting times ahead!

Mark Nicholson www.sky.com

Data will set you free Author: John D’Arcy, Practice Director – Analytics and Insight, Foviance There are some great insights from our multichannel report but, as analysts, what we found fascinating was to delve deeper into the data to uncover trends that aren’t so easy to spot first time out. We wanted to understand the behaviours of companies that were successful at implementing a multi-channel experience – these are the people you should learn from as you try to solve your multichannel problems. Were the best companies ones who had lots of budget to throw at the problem? No, they were all sizes and from all industries. Were they companies who didn’t need to invest time in technology or data? No, they all said technology was important to their business and had invested time and people in delivering on a single view of the customer.

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The best companies believe customer service is key but recognise that to understand their customers they need supporting data & technologies that don’t over-complicate their work. They have already solved a lot of issues around their data. And for me that was a key learning. We found that immature companies are still worried about technology and are losing sight of the importance of the customer experience. They are struggling to understand the vast amounts of data they have collected and get bogged down trying to build technology solutions, consequently forgetting about delivering a good experience for their most important asset – their customers. Mature companies have been able to widen their data pool but focus on the ones that will add immediate value to their understanding of the customer journey like web analytics, voice-ofcustomer (VOC) and ad campaign data. We’ve worked on a lot of projects this year where we’ve helped clients integrate multiple data sources like advertising, VOC, web analytics and Social and certain industries are doing better than others. Finance have the resource but are hampered by legacy systems. Media and Telecoms are in similar positions as they have spent two decades acquiring and now know that they need to focus on retention. Consequently they have begun to aggressively mine their data. Gaming companies are waking up to the vast array of data that they are sitting on but need to do more in extracting value. My experience is that the majority of companies are still beginning to get to grips with the problem of understanding multi-channel data. When trying to get a single customer view it’s difficult to decide where to start. You need a clear measurement strategy that will tell you what are metrics you need to track to measure success. You can then focus on answering; “where do I find this data?” and “what technologies do I need to collect and analyse the data?”. This helps you prioritise on data sources that will make an impact to understand the customer journey, otherwise you are at risk of drowning in a sea of data. Building a single view of the customer is never going to be simple but progress is being made in getting actionable data that can be used to optimise advertising, operations and product development and understand how customers behave in a multi-channel world. Solve your data problems and you are free to focus on the one thing that really makes a difference to your business – your customers.

John D’Arcy www.foviance.com

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Multichannel Customer Experience: Maturity Model Foviance believes there are five key areas that need to be addressed if an organisation is to improve business performance by adopting a more customer-centric strategy. These are:  Systems and processes  Leadership and culture  Alignment with brand  Customer touch points  Customer insight By establishing the degree to which these areas are addressed and integrated towards the goal of customer-centricity, an organisation can be positioned on the customer experience maturity model. A road-map can be created to move them forward.

The Foviance “Customer Experience Maturity Model”

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This matrix below describes in more detail the four stages of customer experience maturity for each of the five key areas identified above. As part of last year’s Multichannel Customer Experience Survey, we asked companies to indicate which description best described their own organisation (or their clients) specifically in the context of systems and processes. This year we broadened the survey by asking companies and agencies to evaluate themselves (or their clients) across all five pillars of the Customer Experience maturity model, as described in this table. The results are shown in the first section of the findings below.

Cluttered

Considered

Capable

Cultural

Systems & Processes

Operational systems and processes are tactical and singlechannel driven

Individual systems and processes are customer focused but lack links cross channel

Integrated systems and processes but not fully harnessed crosschannel

Fully integrated systems and processes harnessed cross-channel

Leadership & Culture

Decentralised and delegated

Local champions exist but not cross channel or across markets

Ownership at C-level but not totally embraced by leadership team

C-level ownership of the total customer experience

Alignment with Brand

Product driven. Link between brand & customer experience not recognised

Recognises need but doesn’t systematically manage link

Manage link between customer experience and brand but not consistently across channels

Competes on customer experience across all channels

Customer Touch points

Managed in silos. Inconsistent delivery

Customer journey understood but little management across touch points

Integrated across channels but channel (not customer) focused

Seamless integration of channels allows exploitation of opportunities

Use of Insight

Unplanned and disjointed

Framework for planned collection adopted but often localised

Systematically collected across channels, but not fully integrated in decision making

Integrated into decision making at all levels

In order to provide more insight around what successful multichannel companies are doing differently, we identified a top segment of ‘mature’ companies. (Please note that we have not identified any individual companies) Our definition of ‘mature' is an organisation which falls in the top 25% of companies across the five key pillars of the maturity model, i.e. those who have scored highly across the areas outlined above (namely Systems & Processes, Leadership & Culture , Alignment with Brand, Customer Touch Points and Use of Insight). By the same token, we identified a segment of ‘immature' organisations who fall in the bottom 25% on companies surveyed across these five aspects of multichannel maturity.

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Methodology This report is based on a survey of more than 650 respondents to an online survey3 carried out in June and July 2011. Respondents included both client-side (in-house) and supply-side respondents (i.e. those working for agencies, consultancies or technology companies with an interest in customer experience). The findings are shown for both client-side (“company respondents”) and supply-side (“agency respondents”) separately. Around two thirds of respondents are based in the UK. Information about the survey, including the link, was emailed to Econsultancy’s user base. The incentive for taking part was access to a complimentary copy of this report just before its publication on the Econsultancy website. In parallel with our survey of businesses, we also carried out five consumer surveys about customer experience, covering retail, travel, online banking, mobile phone providers and gaming / gambling. More detail about this research is provided in a separate document4. If you have any questions about the research, please email Econsultancy’s Research Director, Linus Gregoriadis (Linus@econsultancy.com). More than half of survey respondents (61%) work for an organisation “interested in improving the customer experience”, while 39% work for agencies, consultancies or technology vendors (i.e. supply-side. For more profiling information on respondents, please see Appendix to this report.

Figure 1: Which of the following most accurately reflects your company?

Response 2010: 541 Response 2011: 657

Econsultancy uses Clicktools for its online surveys See Econsultancy’s Customer Experience Consumer Survey. http://econsultancy.com/reports/multichannel-customer-experience-report 3

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Findings

2.1.

How companies stack up against the maturity model

2.1.1.

Systems and processes Figure 2 shows how respondents rate the maturity of their own organisations (or their clients), in the context of how systems and processes contribute to customer-centricity across channels. The majority of organisations (client-side respondents) are either at the ‘cluttered’ (28%) or ‘considered’ stage (38%), and are therefore lacking joined-up systems and processes. Looking only at client-side respondents, Figure 3 shows that there hasn’t been any improvement since the 2010 survey. In fact, companies this year are more likely to be stuck on the first rung of the ladder, with 28% of companies now ‘cluttered’ versus 24% last year. Just under a third of companies (30%) say they are now at the ‘capable’ stage, with integrated systems and processes which are customer-focused but not fully harnessed cross-channel. As was the case last year, only 4% say they have fully integrated systems and processes which are being fully harnessed across channels. Almost half (48%) of supply-side respondents [Figure 2] say their clients are at the ‘considered’ stage, i.e. with systems and processes which are customer-focused but which lack links crosschannel.

Figure 2: Thinking about systems and processes, which of the following statements best describes your organisation (or clients)? Cluttered

Considered

Capable

Cultural

Companies response: 289 Agencies response: 191

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Companies (comparison with 2010) Figure 3: Thinking about systems and processes, which of the following statements best describes your organisation? Cluttered

Considered

Capable

Cultural

Response 2010: 263 Response 2011: 289

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2.1.2.

Leadership and culture A similar pattern is evident when looking specifically at the leadership and culture dimension of the multichannel customer experience maturity model. Companies are more likely to be at the cluttered and considered stages, i.e. with ‘decentralised and delegated’ leadership or with ‘local champions’ operating in silos. Just over a quarter (28%) of companies say there is ownership at board or ‘c- level’, but without full commitment across leadership teams. Almost a fifth of companies (18%) say there is ‘c-level ownership of the total customer experience’, which is a significantly higher percentage in the top bracket than was seen above for joined-up systems and processes (4%). In fact, this is the dimension of the maturity model where companies are most likely to regard themselves as being at the most advanced stage. However, agencies are significantly less likely to report this level of buy-in at the top of the organisation (7% compared to 18% of company respondents). Half of supply-side respondents say their clients are typically at the considered stage of maturity. It can be seen in Figure 11 below that commitment to customer experience from the top of the organisation is regarded by respondents as the single most important company attribute for delivering on customer experience.

Figure 4: How would you describe the leadership and culture within your organisation (or within client organisations)?

Cluttered

Considered

Capable

Cultural

Companies response: 290 Agencies response: 192

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2.1.3.

Alignment with brand Figure 5 shows a widespread lack of alignment between customer experience and brand values. One in nine companies (11%) say the link between brand and customer experience is not recognised, and a further 42% say the link is recognised but not systematically managed. Almost two thirds (64%) of agency respondents say their clients recognise but donâ&#x20AC;&#x2122;t manage the link.

Figure 5: How well is customer experience aligned with your brand values (or those of your clients)? Cluttered

Considered

Capable

Cultural

Company response: 314 Agency response: 205

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Figure 6 shows the extent to which customer experience is part of brand values. More than two thirds of company respondents say that customer experience is ‘very much’ part of their brand values, but few companies actually align customer experience properly across channels. Agencies are less convinced that customer experience is part of their clients’ brand values [Figure 6].

Companies Figure 6: Is customer experience part of your brand values or those of your clients?

Companies response: 315 Agencies response: 206

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2.1.4.

Use of insight The fourth dimension of the customer experience maturity model is use of insight. A third of companies (34%) say they are ‘unplanned and disjointed’ in this respect (i.e. cluttered), and a further third (31%) say they have ‘adopted a framework for planned collection, but that this is often localised’ (i.e. considered). Just over a quarter (27%) of companies say they ‘systematically collect insights across channels’, but that this isn’t integrated into decision-marking. Only 8% say that customer insight is integrated into decision-making at all levels. Section 7.7 looks in more detail at the methods which are used to measure the effectiveness of customer experience, as well as sources of data and technology used for insight.

Figure 7: How well is customer insight integrated into your customer experience activity (or your clients’ customer experience activity)? Cluttered

Considered

Capable

Cultural

Company response: 289 Company response: 192

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2.1.5.

Customer touch points Managing customer touch points and ensuring consistency across channels is a huge challenge for businesses which isnâ&#x20AC;&#x2122;t going away. The customer journey is becoming more complex due to evolving technology and new devices. At the same time, consumer expectations about what should be possible are getting higher all the time. Separate research5 by Econsultancy earlier this year has found that the proliferation of devices and platforms is the single most important trend affecting digital marketers. Given these complications, and despite a determination within many businesses to focus on customer experience, it is no surprise that only around a quarter of companies (27%) say they have reached the capable (22%) or cultural (5%) stages of customer experience maturity where they have seamlessly integrated channels [Figure 8]. More than a third (35%) of companies say that customer touch points are managed in silos, and that delivery is inconsistent (cluttered). A similar proportion (38%) say that the customer journey is understood but with little management across touch points (considered).

Figure 8: How integrated are customer touch points across different channels?

Cluttered

Considered

Capable

Cultural

Companies response: 274 Agencies response: 182

Quarterly Digital Intelligence Briefing http://econsultancy.com/reports/quarterly-digital-intelligence-briefing 5

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2.2.

Integration of customer touch points Figure 9 shows the extent to which specific customer touch points are integrated into the overall customer experience. Website (32%), telephone support / sales (29%) and retail outlets (26%) are most likely to be ‘very integrated’. At the other end of the spectrum the touch points least likely to be integrated are mobile apps and SMS / MMS, with almost half of respondents saying these channels are ‘not integrated’ (48% for mobile apps and 47% for text messaging). Companies clearly struggle to integrate offline communication into the customer experience. Only a fifth (20%) say that mail order catalogues are fully integrated, compared to 40% who say they are not integrated. A quarter of respondents say that offline brand advertising (26%) and offline direct marketing (24%) are not integrated. The supply-side findings [Figure 11] tell a similar story, though for most touch points there is more scepticism about the extent to which they are typically integrated.

Companies Figure 9: How integrated are the following customer touch points into the overall customer experience?

Response: 277

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Figure 10 shows how mature companies (i.e. the top 25% of organisations measured across the five pillars of the maturity model) are integrating different customer touch points compared to the wider base of all companies surveyed. It can be seen that mature companies are more integrated than average across all touch points, apart from mail order catalogues where perceived integration is below average. The gap between mature companies and others is typically more pronounced for integration of digital channels such website, email and digital advertising. The gap is less obvious for offline touch points (for example retail outlets, direct marketing and events), with the notable exception of telephone support and sales where mature companies are way ahead of the curve.

Companies Figure 10: Proportion of companies saying that customer touch points are â&#x20AC;&#x2DC;very integratedâ&#x20AC;&#x2122; into overall customer experience (Mature companies versus all companies)

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Agencies Figure 11: From your experience of clients, how integrated are the following customer touch points into the overall customer experience?

Response: 186

Voice of the expert “Customers still want to be able to deal with a person via the phone, email, live chat or other one-to-one channels. Problems are more quickly resolved by two people talking, and customers feel valued when they can communicate directly with the company. So a multichannel customer experience is clearly vital even to an online business.” David Hughes, Director User Experience, Expedia Affiliate Networks

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2.3.

Most important attributes for customer experience Survey respondents were asked to indicate the three attributes they regard as being most important within an organisation for delivering a positive customer experience. A commitment to customer experience from the top of the organisation is regarded as a key requirement by just under half of companies (46%). The next most important attribute also relates to people rather than technology or processes. Just over a third of respondents (35%) say that having a motivated and empowered work force is among the three most important attributes. The third most important attribute is enabling customers to interact seamlessly across channels (33%). The chart for supply-side respondents [Figure 14] shows a similar hierarchy of attributes, with the same top three requirements. However, agency respondents rank seamless interaction across channels as being more important than motivated and empowered staff.

Companies Figure 12: What are the most important attributes within an organisation when delivering a positive customer experience?

Response: 332 Respondents could select up to three options

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Figure 13 shows how mature and immature companies have a different perception of the attributes required for delivering a positive customer experience. Mature companies are far more likely than the least mature organisations to regard motivated and empowered staff and efficient customer service as being among the three most important attributes. In contrast, immature companies are more focused on visibility of customer behaviour across channels and the need for a single or joined-up customer database. Mature companies are more likely to have overcome technical and data-related issues, which means they are less fixated by these areas because they regard them as a given. Immature companies, because they are still worried about technology and systems, are losing sight of the importance of customer service and empowered staff.

Companies: Figure 13: What are the most important attributes within an organisation when delivering a positive customer experience? (Mature companies versus immature companies)

Methodology note: respondents could check up to three options

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Agencies Figure 14: What are the most important attributes within an organisation when delivering a positive customer experience?

Response: 216

Methodology note: respondents could check up to three options

Voice of the expert “The best companies believe customer service is key, but recognise that to understand their customers they need supporting data & technologies that don’t over-complicate their work.” John D’Arcy, Practice Director: Analytics and Insight, Foviance

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2.4.

How well do companies deliver against attributes? Figure 15 shows how good companies are at delivering against a range of organisational attributes required for delivering a positive customer experience. Companies are most proficient at those attributes they see as being most important. More than half of company respondents say they are either “excellent” (21%) or “good” (37%) in terms of commitment to customer experience from the top of the organisation. Companies also rate themselves relatively highly for customer service and ensuring that staff are motivated and empowered. The biggest weaknesses (in the eyes of both client-side and supply-side respondents) are related to challenges with data, processes, systems and technology. For these attributes which present the biggest challenges, these are the percentages of company respondents rating themselves either as ‘poor’ or ‘very poor’:  Single or joined-up customer database (53%)  Visibility of customer behaviour across channels (51%)  Joined-up internal systems and process (48%)  Enabling customers to interact seamlessly across channels (45%)

Companies Figure 15: How good is your organisation at delivering against these attributes?

Response: 331

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Figure 16 shows that organisations we have classified as mature are delivering more effectively than the average company across the full spectrum of attributes which are important for multichannel customer experience. It also confirms that mature companies are significantly better at the technical and data aspects of multichannel customer experience. These companies are much more likely to know what their customers are doing across all touch points and are keeping their customersâ&#x20AC;&#x2122; needs frontof-mind. With the technology and processes more readily in place, and with widespread commitment from the top of their organisations, mature companies are delivering on customer service and exceeding customer expectations.

Companies Figure 16: Proportion of companies who are 'excellent' or 'good' at delivering against attributes (Mature companies compared to all companies)

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Agencies Figure 17: How good are your clients at delivering against these attributes?

Response: 213

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2.5.

Customer experience strategy

2.5.1.

Importance of multichannel customer experience strategy Since last year’s survey, there is no discernible difference in the importance respondents say their organisations are attaching to multichannel customer experience. Almost half of companies (49%) say a joined-up multichannel customer experience is “very important” to their organisation, and a further 40% say it is “quite important”. There is, however, a significant difference since last year when looking from the perspective of supply-side respondents [Figure 19]. Surprisingly, the proportion of agencies who say that a joined-up multichannel customer experience is “very important” for their clients has decreased from 42% last year to 32% this year. Supply-side respondents are correspondingly more likely to say that this is quite important rather than very important. Why is there a perception that this is becoming a less important issue for clients? It may be that agencies have actually found their clients wanting when it comes to properly investing in multichannel customer experience despite previously talking a very good game. While previously they may have expressed commitment, some companies may have baulked at the complexity and cost of changes required for greater customer-centricity.

Companies Figure 18: How important is a joined-up multichannel customer experience to your organisation?

Response: 316

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Agencies Figure 19: Typically, how important is a joined-up multichannel customer experience to your clients?

Response: 207

Voice of the expert “Companies have really grasped the importance of multichannel customer experience and are making progress through short term actionable means, rather than letting infrastructural projects slow them down.” Mark Nicholson, Head of E-Commerce Marketing and E-Experience, BSkyB

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2.5.2.

How well developed is strategy? While there has been an unwelcome increase since last year in the proportion of companies with no strategy in place for improving customer experience (from 9% to 13%), a more positive development has been the increase in the number of company respondents who say they have a ‘well developed strategy’ (from 22% to 26%). It is interesting to note the gap between this percentage (26%) and the proportion of respondents who say that commitment from the top of the organisation is either ‘excellent’ or ‘good’ (58% in total). It is clear that commitment to customer experience does not necessarily equate to a well-defined strategy in this area. The agency findings [Figure 21] show some client movement from “no strategy” to early development of customer experience strategies.

Companies Figure 20: How well developed is your company’s strategy for improving the customer experience?

Response: 316

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Agencies Figure 21: Typically, do your clients have a well developed strategy for improving the customer experience?

Response: 206

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2.5.3.

Recognition of link between business performance and customer experience As was the case last year, just over two thirds of companies (69%) recognise a ‘strong link’ between long-term business performance and customer experience. This high percentage again begs the question as to why more companies haven’t got a strategic framework in place. Supply-side respondents [Figure 23] are still not as convinced that companies recognise this correlation. Only 44% of agencies say their clients typically recognise a strong link. As we suggested in 2010, agencies may be dealing with a particular silo within an organisation which has not been properly assimilated into a broader company strategy or exposed to senior management thinking.

Companies Figure 22: Does your company recognise a link between long-term business performance and customer experience?

Response 2010: 262 Response 2011: 314

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Agencies Figure 23: Do your clients typically recognise a link between long-term business performance and customer experience?

Response 2010: 198 Response 2011: 205

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2.6.

Barriers

2.6.1.

Greatest barriers to improving the multichannel experience Complexity is now seen as the greatest barrier to improving multichannel customer experience, overtaking organisational structure since 2010. It is clear that the proliferation of customer touch points is presenting a major challenge for companies. The use of different devices including smartphones and tablets has increased significantly in the past year, with the early adopters now being caught up by larger swathes of the consumer population. Respondents were asked to indicate the three biggest obstacles to improvement, with 40% pointing to complexity of customer experience, compared to 38% last year [Figure 27]. Around a third (34%) of companies cited organisational structure, down from 41% a year ago. This suggests that many companies are on their way to moving away from a silo-based approach which is militating against a joined-up customer experience. As noted last year, companies can lessen the problem of non-conducive organisational structures by introducing cross-functional customer experience teams. Focus on short-term profit (-9%) and lack of budget (-10%) also stand out as being notably less of a problem that last year. As well as complexity of experience, respondents are also more likely than last year to cite poor staff training (+4%), lack of overall strategy (+5%) and difficulty unifying sources of data (+3%).

Companies Figure 24: What are the three greatest barriers preventing your organisation from improving the multichannel customer experience?

Response: 268

Methodology note: respondents could check up to three options

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Figure 25 shows the difference between mature and non-mature companies in terms of what they view as barriers to improving the multichannel customer experience. Non-mature companies are significantly more likely to be hamstrung by the lack an overall strategy.

Companies Figure 25: What are the three greatest barriers preventing your organisation from improving the multichannel customer experience?

Methodology note: respondents could check up to three options

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As was the case last year, lack of strategy (39%) is still regarded by agencies as the most significant issue preventing their clients from enabling an improved customer experience. However, fewer supply-side respondents (-8%) cite this as a top-three barrier this year.

Agencies Figure 26: What are the three greatest barriers preventing your clients from improving the multichannel customer experience?

Methodology note: respondents could check up to three options

Response: 185

Voice of the expert â&#x20AC;&#x153;Will the transition into 2012 herald the formalisation of aligned objectives, organisational structures and budgets to properly address the multichannel Customer experience agenda? And, to what extent will the barriers of internal complexity, silos and unsynchronised data be blown away? Watch this space, exciting times ahead!â&#x20AC;? Mark Nicholson, Head of E-Commerce Marketing and E-Experience, BSkyB

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Figure 27: Change since 2010: three greatest barriers preventing your organisation (or your clients) from improving the multichannel customer experience

Methodology note: ‘Channel conflict’ was not given as option in the 2010 survey

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2.6.2.

Problems improving the customer experience Respondents were asked about the single biggest problem they encountered when trying to improve the customer experience. The tag clouds on the following page are a reflection of the challenges around web analytics and data in particular, with respondents frequently citing tools and vendors such as Google Analytics, Webtrends and Omniture (Adobe). The problem is not the tools themselves but integration of disparate sources of data, and a consistent approach to measurement and attribution. Other frequently cited barriers are the increasing complexity of touch points and poor organisational structures. A lack of investment financially and lack of the requisite employee skills are also mentioned frequently by both client-side and supply-side respondents. Some research participants also point to a lack of senior buy-in, which indicates the absence of understanding around the importance of customer experience. Similarly, some agencies appear to have a similar struggle in trying to make their clients realise the importance of addressing this complex area. There also seems to be an underlying problem of objectives being much too focused on shortterm goals instead of considering longer term planning around customer experience.

What is the single biggest problem your organisation – or your clients encounter when trying to improve the customer experience? Client-side respondents “Lack of understanding what value customer experience is to the organisation.” “Disjointed experience between customer touch points.” “Lack of buy-in at the top of the organisation.” “Speed and cost of change.” “Increasing customer expectations.” “Complexity of customer experience.” “Bad internal processes, coupled with old technology.” “It's seen as a cost rather than a benefit.” “Fragmented organisational structure makes it very difficult to deliver a joined-up customer experience.” “Different objectives across departments - doesn't all sit under one area.” Agency respondents “They don’t know where to start.” “Commitment and time across the organisation to ensure it succeeds.” “Individual channel focus rather than multi-channel.” “Complexity of customer experience / number of different touch points.” “Short-term approach to customer satisfaction.” “Lack of strategy around the big picture.” “Focus on product advertising and short term sales over brand and customer experience.” “There is a lack of buy-in at the top of the organisation.”

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What is the single biggest problem encountered when trying to improve the customer experience?

(Client-side)

(Agencies)

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2.6.3.

How to improve the customer experience Respondents were also asked about their thoughts and experiences around how they could improve customer experience “if there were no barriers to change. Agencies expressed a greater desire to see their clients engage in higher-level strategic thinking, whereas companies were more focused on improving existing data and CRM capabilities.

If there were no barriers to change, what is the one thing you would do to improve customer experience? Client-side companies “Improve the content, process and the granularity with which customer responses are issued.” “Study each customer experience touch point.” “Sync the sales data on and offline into a central 'brain' in order to build a clearer picture of our customers’ behaviour.” “Develop a better way of storing and managing customer data to help us develop new products that satisfy their needs and desires. Also, help the organisation get to know each and every one of our customers.” “One person who sits at senior executive level who owns this area and is empowered to changed the culture across the board.” “Automated integration between the CRM system and website activity.” “Make sure that we have an overall strategy that is consistent in all channels so that we have a cross-channel approach more than a multichannel approach.” “Create a long-term strategy.” “Have seamless multichannel capabilities by having customer information consistently available to all channels.” “Bring all the internal people together that need to communicate with each other. Create a vision and strategy that they all understand and can commit to.” Agencies “Bring in a consultancy team to restructure departmental organisation and process.” “Ensure that channels and tactics are chosen based on brand strategy, rather than traditional budget breakdowns, and that digital tactics are part of the initial discussions, rather than an afterthought.” “Integrate data and systems to support strategy and processes.” “Gather continuous feedback and act on it.” “Integrate social media into their services and sales, for direct interaction and execution of service issues.” “Allocate sufficient budget and time.” “Understand the context and capabilities of each touch point.” “Have someone employed specifically to manage it.” “Build a consistent mapping framework of the journey into core decision-making processes and ensure transparent accountability for each step.”

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If there were no barriers to change, what is the one thing you would do to improve customer experience?

(Client-side)

(Agencies)

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2.7.

Measurement

2.7.1.

Metrics used to measure effectiveness of customer experience Figure 28 shows the extent to which different types of metric are used to measure the effectiveness of the customer experience. Two thirds of companies (66%) are using hard financial data (“sales / revenue”) to measure this, and this tallies with a similar level of recognition that there is a strong link between longterm business performance and customer experience. Around half this figure (34%) say they look at ‘profitability’ directly in the context of customer experience effectiveness. A similar percentage of companies (65%) are using customer retention or loyalty metrics to gauge customer experience. More than half (57%) are using customer satisfaction or Net Promoter Score metrics.

Figure 28: What types of metrics do you or your clients use to measure directly the effectiveness of the customer experience?

Companies response: 267 Agencies response: 185

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2.7.2.

Sources of data for measuring customer experience Figure 29 shows the different sources of data used to measure the effectiveness of customer experience. The most widely used data are web analytics, collected for this purpose by more than three quarters (77%) or companies. The challenge many companies face when trying to collect and analyse the right kind of web analytics data was highlighted above. Organisations have more information points at their disposal, in an age where data is described as â&#x20AC;&#x153;the new oilâ&#x20AC;?6. Companies are suffering from data overload7. The challenge for companies is to make sure that they are analysing and integrating the right types of data, in a way which leads to actionable insights for their business. As was seen in Figure 7, many companies are struggling to integrate data into decision-making processes at all levels.

Companies Figure 29: What sources of data do you or your clients use to measure the effectiveness of the customer experience?

Companies response: 275 Agencies response: 185

http://econsultancy.com/uk/blog/7014-digital-marketing-trends-2011-by-econsultancyceo-ashley-friedlein 7 http://econsultancy.com/blog/8067-data-overload-5-key-themes 6

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Figure 30 shows how mature companies are much better than other companies at using a full range of data sources to understand the customer experience. These companies have been able to widen their data pool from web analytics (which dominates responses in our survey) to voice of customer (i.e. customer satisfaction surveys), ad campaign data, CRM and social. These data sources provide a wider view of the whole customer journey and mature companies are showing the importance of data in delivering on multichannel analysis.

Companies Figure 30: What sources of data do you use to measure the effectiveness of the customer experience?

What the experts say “My experience is that the majority of companies are still beginning to get to grips with the problem of understanding multichannel data. When trying to get a single customer view it’s difficult to decide where to start. You need a clear measurement strategy that will tell you what metrics you need to track, to measure success.” John D’Arcy, Practice Director: Analytics and Insight, Foviance

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2.7.3.

Technology used to gain insight Survey respondents were also asked what kinds of technology or tools they currently use to give them insight into how they should be improving the customer experience. Answers were very mixed and give a clear indication about the role of technology (or lack of technology) in effecting improvements. Equally, responses differed to some degree between client-side companies and agencies, but at the heart of all feedback was the use of analytics. Similarly, there was a large focus on the tools that allowed direct insight, especially customer service-centric technologies.

Please tell us about any technology or tools which have helped you gain insight into how to improve the customer experience: Client-side companies “We partner with agencies to establish this.” “Click-and-collect service to merge on and offline channels.” “Social media monitoring allows us to track volume of mentions, sentiment and topics to better understand how we are perceived and what our customers are saying.” “Live web chat. Tele-reps are able to intercept customers who are browsing the web site to offer assistance.” “Text analytics, regression analysis, quadrant analysis, customer experience mapping.” “Customer feedback tools... help us understand the customer experience.” Agencies “Web metrics & analytics, questionnaires.” “Social media, to a limited extent: They monitor but what happens to this data is limited and interaction is just one-way.” “Data-mining and behavioural analysis.” “Simple things, like customer feedback forms & call logging... plus metrics from e-commerce reporting on orders, returns, lifetime value etc.” “Online Customer Service systems e.g. Interactive FAQs and virtual assistants.” “Aligning and integrating marketing (collateral, materials) with sales (people & systems / contact points), and to make that "pull" and customer-centric.” “Significant UX testing and interviews pre- and post-launch for digital initiatives.”

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Please tell us about any technology or tools which have helped you gain insight into how to improve the customer experience:

(Client-side)

(Agencies)

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2.8.

Ownership and budget

2.8.1.

Ownership of multichannel customer experience Figure 31 shows which departments within responding organisations own the multichannel customer experience. The proportion of companies who say that this is the joint responsibility of a mixture of different functions has increased from 38% last year to 45% this year. This is a worrying development because the buck should ultimately stop with one particular department or individual. More encouragingly, the proportion of companies who say that “noone” owns this has declined from 25% to 19%. The proportion of companies who say that marketing and / or sales is responsible has also declined, from 24% to 14%. This may be partly explained by the introduction of leadership team / CEO (11%) as an option for this question in this year’s survey.

Companies Figure 31: Who, if anyone, within your organisation owns the multichannel customer experience?

Leadership team/CEO was not given as option in 2010 survey Response 2010: 238 Response 2011: 263

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Companies Figure 32: Within client companies, who typically owns the multichannel customer experience?

Leadership team/CEO was not given as an option during 2010 survey Response 2010: 180 Response 2011: 183

Voice of the expert “It’s clear that a good multichannel experience is important, if not vital, to business success in this day and age. It’s also clear that for many the multichannel experience is still an aspiration or a work in progress.” David Hughes, Director User Experience, Expedia Affiliate Networks

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2.8.2.

Dedicated budget for improving customer experience Since last year, there has been a small increase in the proportion of companies who have a budget which is dedicated to improving the customer experience, up from 31% to 34%. Correspondingly there has been a slight decrease in the proportion of companies who say there is no budget at all (27%) or that they use budget which was assigned for other things (39%).

Companies Figure 33: Does your organisation have a dedicated budget for improving customer experience?

Response 2010: 239 Response 2011: 265

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Agencies Figure 34: Do clients typically have a dedicated budget for improving the customer experience?

Response 2010: 182 Response 2011: 183

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2.8.3.

Which department is driving customer experience? Respondents were asked which department within their own company (or within their clientsâ&#x20AC;&#x2122; organisations) was doing the most to push forward customer experience. Marketing, cited by 33% of respondents, came out on top, followed by e-commerce (17%), customer experience (13%), digital (11%) and customer service (11%).

Figure 35: Which department is doing the most to push forward customer experience within your organisation?

Companies response: 261 Agencies response: 182

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Appendix

3.1.

Respondent profiles

3.1.1.

Geography Just over two thirds of client-side respondents (68%) are UK-based, while 11% are based elsewhere in Europe. Respondents from North America make up 8% of the sample. “Other” regions represented include Australasia, Africa and the Middle East.

Companies Figure 36: In which country/region are you (personally) based?

Response 2010: 236 Response 2011: 262

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3.1.2.

Annual company turnover Figure 37 shows the spread of responding company by turnover. The majority of companies (53%) surveyed have annual revenues exceeding ÂŁ50 million.

Companies Figure 37: What is your annual company turnover?

Response 2010: 236 Response 2011: 257

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3.1.3.

Business sector Client-side survey respondents are spread across a range of business verticals. The best represented sectors are retail (18% of client-side respondents) and financial services (16%).

Companies Figure 38: In which business sector is your organisation?

Response 2010: 233 Response 2011: 255

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3.1.4.

Job role Survey respondents are most likely to work within their organisationâ&#x20AC;&#x2122;s e-commerce or digital department. This reflects Econsultancyâ&#x20AC;&#x2122;s user base and broad reach within the digital marketing industry. A third (32%) of company respondents work for marketing / sales.

Companies Figure 39: Which part of your organisation do you work for?

Response 2010: 289 Response 2011: 392

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3.1.5.

Type of agency Figure 40 shows the types of agency represented by supply-side respondents. Just under a quarter work for digital agencies, with the remainder spread across a variety of different types of service and technology providers.

Agencies Figure 40: What type of company do you work for?

Response 2011: 255

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