Consumer Experience Study January, 2012
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THE SAMPLE CONTAINS EXCERPTS FROM A STUDY CONDUCTED BY SUTHERLAND GLOBAL SERVICES FOR ITS CLIENT. THE SAMPLE MAY NOT CONTAIN ALL THE PAGES OF THE ORIGINAL DOCUMENT THIS SAMPLE HAS BEEN PREPARED BY SUTHERLAND GLOBAL SERVICES INC. OR ITS ASSOCIATES OR AFFILIATES (“SUTHERLAND GLOBAL SERVICES”) EXCLUSIVELY AS AN ILLUSTRATIVE SAMPLE ONLY AND IS SENT TO AUTHORISED RECIPIENTS SOLELY FOR THE PURPOSE OF EVALUATING SUTHERLAND GLOBAL SERVICES’S SUPPORT SERVICE CAPABILITIES. THIS SAMPLE SHOULD NOT BE CONSIDERED AS AN OFFER TO SELL, A SOLICITATION TO BUY, OR AN ENDORSEMENT OR RECOMMENDATION OF ANY COMPANY. SUTHERLAND GLOBAL SERVICES DOES NOT GUARANTY THE ACCURACY, COMPLETENESS OR OTHER CHARACTERISTICS OF THE DATA / INFORMATION OF THE REPORT. This Sample may not be reproduced or distributed (in whole or in part) to any third party without the express prior permission of Sutherland Global Services. Sutherland Global Services may also have (or have had) arrangements with entities whereby Sutherland Global Services receives or is in receipt of information relating to the subject matter of this Sample that is confidential or proprietary to a third party, and thus may not be utilized. Accordingly, Sutherland Global Services may be in receipt of relevant information that is not reflected in this Sample.
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Customer Experience Study Client • Client is a leading retailer based out of U.S.; as a part of ‘Customer Experience Enhancement’ initiative, client needed to understand the experience of customers for one of its competitors
Project Scope • Key objective of the study was to provide a brief overview of the competitor as well as select financial information. Highlighting customers’ satisfaction and concerns with regards to the competitor’s services was also an added requirement
Sutherland’s Solution • SGS conducted extensive secondary research to prepare the brief overview of the competitor and further deep dived to understand the satisfaction level and concerns of the customers • A ‘Customer satisfaction ratings study’ done by a third party vendor was also used in order to draw comparison across various service and operational parameters • Additionally, voices of the competitor’s customers on social media were captured as a part of the collated report
• Benefits to the Client • The research provided significant and exclusive intelligence to the client with regards to the ‘customer experience’ for the required competitor; and helped the client upgrade its customer service strategy
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Company Overview Company Background
Revenue Mix (FY11) – U.S.
About Prospect • Prospect is a multinational retailer of consumer electronics, home office products, entertainment products, appliances and related services • The Company operates in the U.S. (64% of revenue) and in other international markets such as Canada, China, U.K. and other European nations. Its European business is a joint venture between the prospect and a U.K. based mobile phone retailer • At the end of FY11, prospect employed approximately 171,000 full-time, parttime and seasonal employees worldwide and generated revenues of $55.7B • The Company operates retail stores and conducts online retail operations under a variety of brand names,
Revenue FY11 - $33.7B Entertainment 13%
Home Office 41%
Services 6% Appliances 5%
Customer Electronics 33%
Other 2%
Revenue Mix (FY11) – International Revenue FY11 - $18.3B Entertainment 10% Home Office 51% Services 7% Appliances 8% Customer Electronics 23%
Other <1%
Source: Company Fillings, Gartner © 2011 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc.
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Financial Snapshot Revenue ($ M) & Revenue Growth (%) - 1.8% 60,000 55,000 50,000 45,000 40,000 35,000 30,000 25,000
0.5% 12.4%
-1.5% 2.2%
11.5%
$45,510
$49,496
$50,772
FY09
FY10
FY11
Revenue
In FY10, a large part of prospectâ&#x20AC;&#x2122;s revenue growth was achieved through the organic route. Of the total increase of 10.4% (YoY) in revenue, 5.8% was due to the acquisition of an European company and 4.3% was due to the opening of new stores
Operating Income ($ M) & Operating Margin (%) Same Store Sales (Growth %)
20.0% 10.0% 0.0% -10.0% -20.0% -30.0% -40.0% -50.0% -60.0%
3,000
4.7%
4.5%
5.0% 4.5%
2,500
4.0%
2,000
3.2%
3.5%
1,500
3.0%
1,000
2.5% $1,780
$2,325
$2,141
FY09
FY10
FY11
500
YOY Growth
The modest increase of 1.2% in revenue in FY11 was primarily driven by the net addition of 147 new stores and favorable impact of foreign currency fluctuation Declining (or flat) Same Stores Sales of the prospect indicates that the organic growth of the company has been muted over the past 3 years
2.0% EBIT
EBIT Margin
Operating income margin in FY11 declined from 4.5% to 4.2% despite improvement in the gross profit margin. The decline in operating profit margin can be attributed to the 70bps increase in SG&A expenses as % of revenue
Source: Company Fillings Š 2011 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc.
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Customer Satisfaction Ratings (1/2) Customer Satisfaction Score – Specialty Retailers (2010)
Online Purchase Intent Score – Specialty Retailers (2010)
Barnes & Noble
82
Costo
Costco
82
Barnes & Noble
87
Staples
87
Lowe's
87
Staples
81
Office Depot
81
Sam's Club
90
78
Best Buy
77
Lowe's
77
Home Depot 75
Data from American Customer Satisfaction Index (ACSI) indicates prospect’s rating is relatively poor when compared to most other retailers in the specialty retail segment Over the last four years prospect’s customer satisfaction score has been consistently below the Specialty Retail category average
85
Best Buy
85
OfficeDepot
75 70
HomeDepot.com
80
85
82 75
Online purchase intent score measures the likelihood that an individual will purchase from any channel of the store (online or physical transaction) as a result of their website visit. Purchase intent is an outcome of satisfaction
80
85
90
95
Prospect’s low ‘online purchase intent score’ is an indicator of the low customer satisfaction levels for its online customers
Prospect would need to improve its online customer satisfaction going forward as the online channel has become the key influencer of future growth across all channels
Source: American Customer Satisfaction Index, ForeSee © 2011 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc.
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Customer Satisfaction Ratings (2/2) Indicative Only Home Appliance Retailer Ratings - 2011 Overall Satisfaction
Company
Store Facility
Sales Staff and Service
Merchandise
Price
Delivery Service
Installation Service
Best Buy hhgregg Lowe‘s Sears The Home Depot
Prospect’s customer satisfaction ratings in the Home Appliance category is one of the lowest. Its low rating of the ‘Sales Staff and Service’ parameter is indicator of the poor customer service as compared to its peers
Among the best
Over the telephone, staff at hhgregg, Lowe’s and Sears perform well in assessing customer needs, and are more likely than staff at other retailers to ask about the customer’s budget and appliance use habits, which leads to better advice to customers
Better than most
Although revenues from the appliances segment only contribute for ~6% of prospect’s U.S. business, the above ratings provide an indication of the customer satisfaction levels at prospect across various parameters
About average
The rest
Source: JD Power © 2011 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc.
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User Reviews of the prospect’s Customer Service (1/2) Indicative Only “I placed an order for a laptop on 12/11/2011 and got an email that it's back ordered. On 12/16 got an email that your order will be cancelled. When I called them, they put me on hold for 15 minutes and was then asked to submit a request online on bestbuy.com a was given a reference#. I haven't heard from them since then. When I call them I am told that you can cancel your order or wait until they get shipment from the manufacturer” -Anonymous, 12/29/11
Several customers have expressed dissatisfaction about the way prospect has managed orders. There have been several instances where prospect has cancelled customer orders
“Horrible Customer Service, Please Order elsewhere if you can. I would not, repeat NOT shop here again! I ordered a camera for my daughter, and 2 weeks later after calling several times I got an email saying it is on backorder. I got hung up on twice by Customer Service Agents after waiting 20 minutes to talk to someone live! Frustrating, and Horrible Service! Spend your hard earned money someplace that appreciates it!” - Mel B, 12/19/11
“Yesterday was my first and last customer service experience with the prospect. I called customer service to order a mobile phone as a gift for store pickup in another state. It toke the first rep more than 40 mins to take the order, the second rep more than 30 mins to correct what the first rep did incorrectly. Then after following their instructions, I found out today that a 3rd party could not pick up a phone. So I cancelled the order and found the same phone, for a reduce price with another vendor. Prospect needs to train all staffers much better to avoid lost of revenue and bad word of mouth by consumers” - First Now Last, 11/26/11
Several customers complain of long waiting period to get to a customer service agent
Source: CustomerService ScoreBoard © 2011 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc.
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Customer Comments on Social Media Indicative Only
Several instances of customers tweeting about rude customer service experiences
Several customers have tweeted about the dissatisfied customer service experience with the prospect and several mention they would not shop going forward due to poor customer service
Source: Twitter Š 2011 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc.
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End of Presentation
Š 2011 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc.
www.sutherlandglobal.com 5 June 2013
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