Customer Experience as the next decade competitive battlefield Kaspar Roos Director of InfoTrends ’ Customer Engagement Technology Advisory Service June, 2015 1
Agenda 1. Introduction 2. Customer Communications – State of the Market 3. Customer Experience: The New Holy Grail 4. Capture, Measure, Grow! 5. Conclusions & Recommendations 2
Introduction
Background Industry analyst firm focused on the document imaging and customer communications industries London Boston Tokyo Tel Aviv Shanghai Focused Credible Responsive Visionary
About myself • Director at InfoTrends – Industry Analyst Firm headquartered in Boston, MA – Key offices in London and Tokyo – Client base include technology companies, enterprises, and investment firms • Area of Expertise – Customer Engagement Technologies – Digital Marketing & Publishing – Print Production Workflows @kasparroos • Technology Analyst – Market Research, Sizing & Forecasting kaspar.roos@infotrends.com – Consulting & Speaking Engagements linkedin.com/in/kasparroos
State of the Market
Customer Communications Evolution State of the Market Customer Engagement Mobile, Cloud/SaaS Nearly 50% of businesses have mobile app Self-Service 35% of businesses have self-service Line of Business Marketing/LOB initiate over half of CCM investments IT Automation Less than 30% of documents originate from legacy systems Manual Generation 1990 1995 2000 2005 2010 2015 2020 2025 FROM: Communications TO: Customer Engagement Printed Documents Interactive, multi-channel messages Structured & Outbound Real-time, high frequency, data-driven Regulated & Formal Supporting business growth
CCM Investment Drivers Changing from Cost Reduction to Engagement Q: What are the most important business objectives your company wants to achieve by investing in CCM? Increase customer loyalty 38% Better understanding of customer behavior 33% Improve customer experience 31% Reduce customer churn 22% Increase upsell/cross-sell 22% Reduce risk 20% Reduce operational cost 19% Reduce IT cost 19% Drive behavioral change in customers 19% Reduce strain on IT 18% Reduce overall communications cost 17% Freedom/agility for business users to manage comms 9% Compliance w/ changing regulatory or legal requirements 9% Other 1% Multiple Responses Permitted 0% 10% 20% 30% 40% N = 400 Respondents Western European Enterprises Source: Customer Engagement State of the Market Study, InfoTrends, 2015
Communications Overview Customer Promotional Communications Transactional Communications Communications Space ~$15B ~$60B Bills Direct mail E-mail newsletters Statements Catalogues Direct mail Policies Brochures Onserts/inserts Renewals/Cancellations E-mail Welcome kits Claim correspondence Posters, banners Mobile messages Pension overviews Etc. Etc. Etc. Existing customer relationship Campaign-driven Customer Acquisition Customer Retention Maximizing life time value Maximizing conversion rates Source: Customer Engagement State of the Market Study, InfoTrends, 2015
Traditional View on Customer Communications Mgmt Data Capture & Customer Analytics Customer Communications Life-Cycle Content Composition Response Management Multi-channel Distribution Source: CCM Implementation Challenges in Enterprises, InfoTrends, 2013
Align Communications around Customer Journey Evaluate Advocate Acquire Retain Engage Learn Engage Buy/Subscribe Consume Find Data-driven, personalized, multi-channel communications Customer journey: pre-purchase process Customer journey: post-purchase process Business objectives Source: Customer Engagement State of the Market Study, InfoTrends, 2015
Marketing and Structured Communications Are Converging Customer Lifetime Value Loyalty Offers Upsell / Cross Sell Newsletter / Emails Statements Contact Center Calls Returned Customer Onboarding Reminders / Notifications Welcome Kits Renewal Offers Time Conversion Offer Lead Generation Lost Customer Customer Communications Interactions Lead Nurturing Inactive Prospect Active Customer Lost Customer Customer Source: Customer Engagement State of the Market Study, InfoTrends, 2015
Chief Marketing Officer Getting More Important Q: Who in your company is ultimately responsible Q: Do you expect the Chief Marketing Officer (CMO) for the creation, management and delivery of to play a more important role in how the business Customer Communications? engages with existing customers? CCM Ownership Future Role of the CMO Don't know, No, 19.4% 15.0% Yes, CMO CIO, 26.5% Other, 4.5% Yes, as takes more advisor to ownership, CXO/CDO, 37.1% 9.7% CXO/CDO, 7.8% CMO, 20.5% CCO, 10.8% Yes, as advisor to COO, 15.0% CIO/COO, 33.8% N = 400 Enterprises in Western Europe N = 340 Enterprises in Western Europe Source: Customer Engagement State of the Market Study, InfoTrends, 2015
Influence of CMO Consistent Across Countries France and Germany have somewhat lower share of CMO ownership but not dramatic 100% 9% 9% 11% Don’t know 13% 13% 19% 23% Other 80% CMO 36% 40% 35% 42% 46% CIO 38% 31% 60% 20% 16% 21% 40% 21% 18% 23% 25% 20% 35% 34% 31% 27% 26% 24% 16% 0% Western Europe United States Germany Great Britain France Italy Netherlands N= 400 320 80 80 80 80 80 Source: Customer Engagement State of the Market Study, InfoTrends, 2015
Rise of the Marketing Technologist Software & Services CMO Providers Chief Marketing Technologist Marketing CIO Coms & Legal Source: Adapted from The Rise of the CMT, Harvard Business Review July-August 2014
Customer Experience: The New Holy Grail
Customer Engagement vs. Customer Experience Customer Engagement is how a business engages with its customers. By engaging, Relational the business provides an experience and builds relationships. Loyalty Advocacy Product Usage Lifetime Value Customer Customer Customer ------------------------ Interaction Interaction Interaction Relevancy Multi-Channel Synchronization Ease of Use Customer Experience is the perception that customers have of all of their (previous) Transactional interactions with an organization.
Customer Satisfaction is the Net Results of all CXs Performance Level Customer Experience Level More than Delight acceptable Acceptable Satisfaction Unacceptable Dissatisfaction = Zone of Tolerance = Customer Interaction Time Source: Based on Zone of Tolerance, Robert Johnston & Graham Clark, 2008
The Customer’s “Zone of Tolerance” is Shifting Performance Level Customer Experience Level Delight More than acceptable CX = ENGAGEMENT Delight More than Shift acceptable CX = SERVICE Acceptable Satisfaction Acceptable Satisfaction Shift Unacceptable Dissatisfaction = Zone of Tolerance = Customer Interaction Time Source: Based on Zone of Tolerance, Robert Johnston & Graham Clark, 2008
Relevancy, Personalization & Self-Service Key for CX Q: How does your company plan to improve customer experience as it relates to customer communications? Offering or expanding digital self-service capabilities 43% Better tailored offerings 43% Better data-driven personalization and relevant comms 40% Better social media monitoring and responding 30% Offering or expanding mobile communications 26% Offering digital mailboxes 25% More billing or payment options, e.g., mobile payments 23% Proving customer-facing staff with real-time comms history 21% Synchronizing CX across multiple touch points 20% Better channel preference management 19% Multiple Responses Permitted Access improvements for disabled customers, e.g., braille 5% 0% 10% 20% 30% 40% 50% N = 124 Western European Respondents who invest in CCM to improve customer experience Source: Customer Engagement State of the Market Study, InfoTrends, 2015
Importance of Customer Experience Synchronized Customer Experience Interview quote: “That is something that we’re starting to work on. If you call the call center today and would call them tomorrow with the same issue we do tracking on that. But it’s channel specific. You can go to a branch and then to the web, we’ll never know you went to the branch and then to the web. The contact center does not see that. We’re trying to get the look and feel the same. Retail is really driving this. From operations we’re trying to attach ourselves there; we want our inserts to match with what you see at the branch. That the mobile and the internet experience will match the branch experience and the paper experience… that’s two years away. But we’re doing the ground work now. There’s a plan for it. ” Regional Bank, United States
Complex Communications Are Difficult to Manage Impacting customer 1. Managing Risks experience & loyalty 2. IT/Data Challenges 3. Funding • 19% of customer preferences 4. Legal Restrictions cannot be honoured because of outdated IT systems 5. Control/Coordination of Communications ? Customer Contact Center
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