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cust mer engagement issue seven

March 2012

The official magazine of the Customer Engagement Network

www.customerengagementnetwork.com

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2012 Customer Engagement Summit NOV E M BE R 26/27 LON D ON

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Time: Venue:

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

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

Customer Engagement in the Retail Sector Directors Forum 20th June 2012, London The retail sector is in a state of flux. While the squeeze on consumer spending is having a largely detrimental impact on the High Street, online retail sales are continuing to enjoy strong growth. And while a number of well known retail brands have disappeared over the past couple of years, others are not only surviving but thriving as they adopt winning customer engagement strategies. This Directors Forum will take a look at the key issues, challenges and trends in this fast moving and volatile industry sector. It will spotlight the developing dynamic in relationships between retailers and their customers in an increasingly multichannel environment, and how fundamental changes in consumer behaviour are impacting on retailers as they strive for sustainable success.

Delegates will learn: • How world class retailers are deploying winning customer engagement strategies that are designed to engender consumer loyalty and greater wallet share • The latest trends in consumer behaviour and how retailers are having to adapt their offerings in a multichannel retail environment • How the rise and rise of online retailing is impacting the High Street and the strategies retailers are deploying to make the best of both worlds • How social and mobile customer engagement technologies and initiatives are impacting on the retail sector in an age where customers trust their peers more than brands • The commercial benefits that come from adopting a joined-up approach to retailing through giving consumers the choice they demand in how they purchase and the channels they choose to make those purchases

Register FREE TO ATTEND FOR CUSTOMER ENGAGEMENT PROFESSIONALS


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As the Customer Engagement Club approaches its second birthday we have had a long hard think about how best to help shape the offering to our community going forward - and with the crucial aid of valuable feedback from our members and also our new Editorial Advisory Board we are delighted to report that we are going to be further ramping up our activities considerably over the next year - under our new name the Customer Engagement Network We have had fantastically encouraging response from our community network to our ethos of encouraging organisations to cut across their internal silos and take a more holistic view of their customers and their people. We feel that we have struck a real nerve in our proposition that taking this more customer focussed view to deliver consistent and appropriate customer engagement and experience across all service and communication channels - be they offline, online, social or mobile -will translate into competitive advantage.

These are challenging and exciting times for us all We have also since day one stressed the importance of employee engagement and the dynamic links between engaged employees, great service, and high levels of performance and profitability - and this stance will remain a cornerstone of our approach moving forward. This has been our consistent messaging – and indeed was one of the key reasons we formed the Customer Engagement Club in the first place – and if anything we feel that this approach to customer relationships and interaction is even more relevant now than it was two years ago. Customer engagement is more critical to businesses now than ever before, and customers have more choices and more say than ever before. They are also more likely to vote with their feet when it comes to being unhappy with products and services. Against that backdrop we have a number of new initiatives afoot. We are launching a new highly interactive website under the new Customer Engagement Network (CEN) banner and increasing the frequency of our highly regarded Customer Engagement Directors Forums. We are also launching our first Customer Engagement Summit this autumn which will effectively be a ‘mash-up’ of the

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key elements from our Directors Forums – and much more. The Summit will bring all the key elements together that go to make the recipe for any organisation to devise and implement successful and sustainable customer engagement strategies. We are also fully committed to the further development of Customer Engagement magazine, which we publish both digitally and in print form at the behest of you our customers. This is the first of our new look issues of Customer Engagement magazine with more world class case studies, more incisive opinion, more leading edge research and more of everything that relates to successful and sustainable customer engagement. These are challenging and exciting times for us all, with economic conditions as tricky and volatile as in living memory, and with customers against that backcloth continuing to demand more from their product and service providers and expecting to be interacted with on the channel(s) of their choosing. These days you have to be where your customers are or you will simply lose them to those of your competitors that do so. Here at the Customer Engagement Network we will continue to do all we can to help provide our community with the strategies, the tools and the techniques designed to produce successful and sustainable employee and customer engagement across the board. We look forward to helping our network in achieving successful customer engagement and the business success that goes hand in hand with it. Steve Hurst, Editorial Director Customer Engagement Network

Have your say - if you have any feedback on this issue of Customer Engagement share it with us by sending a text message, starting with the word ‘Engage’ to 66099.

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register interest The only joined-up customer experience event to drive customer and employee engagement solutions, performance and profitability

From the organisers of the hugely successful Directors Forums series and the Customer Engagement Network a two-day Summit providing customer engagement and employee engagement insights and solutions across all channels. This high level Summit will bring together senior executives from all the key departments within large organisations who are responsible across all channels for customer service, CRM, contact centres, marketing, social media, operations and human resources. The programme of over 60 leading speakers will help delegates gain first hand insight into finding the best solutions to challenges and opportunities around customer relationships in a rapidly changing, volatile business environment. The Summit will focus on the need for organisations to take a holistic view of their customers in order to drive business performance and profitability. Content will include: • Customer feedback, measurement and insight • Voice Of the Customer strategies • Employee and customer engagement • Social, digital and mobile customer engagement • Multi-channel engagement in contact centres • Customer engagement across industry sectors • The customer of the future

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Who should attend: Senior executives responsible for customer service and customer and employee engagement • Customer Service Directors/Senior Management • Customer Loyalty Directors/Senior Management • Contact Centre Directors/Senior Management • Social Media Directors/Senior Management • CRM Directors/Senior Management • Marketing Directors/Senior Management • Direct Marketing Directors/Senior Management • Digital Marketing Specialists • HR Directors/Senior Management • Operational Directors/Senior Management

For more information contact Chris Wood: chris@ictcomms.com T: 01932 341828 • www.customerengagementsummit.com


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

www.customerengagementnetwork.com

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

News Beat 6-7 British Airways has an app for that - customer service. Mobile shopping enjoying a meteoric rise. CEO buy-in crucial to boost engagement levels.

Cover Story: Customer feedback the critical 8-10 engagement measure Kyle McNabb and Suresh Vittal look at how ever-more empowered customers mean that in an increasingly commoditised world customer feedback and sentiment now define the brand

Why collaboration is the way 11-13 forward for outsourcing Creating collaborative relationships between clients and outsource providers is the best solution to the outsourcing problem says Paul Scott

The Big Interview: 14-15 Customer Engagement Directors Forum In the first in our new series of interviews with presenters at our Directors Forums we ask the key questions of Bian Salins head of social media innovation at BT

Why customer segmentation is a thing of the past 16-17 David Excell says that organisations should stop refining segmentations of customers and instead abandon them altogether

The joined-up customer service future 18-20 for multichannel contact centres Contact centres are set to be viewed as a profit centre rather than a cost centre in the future as they deliver on a joined-up single view of the customer according to the latest Customer Engagement Club Directors Forum. Steve Hurst reports.

How going digital can enhance customer 21-23 experience and employee engagement With consumers and employees increasingly using a range of smart devices and social networking sites in their private lives, digital technologies are familiar to all says Mark Pigou

How to build trust through customer engagement 24-25 Organisations today have to be relevant authentic and trustworthy if they are to have a chance of sustainable success says Richard Anderson

Final Word: Is your Voice of the 26 Customer really being listened to Colin Shaw has a healthy cynicism for the way organisations approach their VOC strategies which he contends is just a ‘tick box’ exercise for too many

Editorial Advisory Board

Colin Shaw

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

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Mobile shopping enjoying a meteoric rise Use of mobile phones for shopping has more than doubled over the past two years and the rise and rise of mobile is set to continue according to latest research ForeSee, the leading customer experience analytics firm, has announced the findings of its latest mobile shopping report, revealing key trends on retailers' future business. ForeSee's methodology is able to show how customers' satisfaction with various interactions with a company (including mobile shopping and applications) impacts their purchase intent, loyalty, and recommendations across all channels. • Mobile phone use for shopping is on the rise - 49% of all UK survey respondents indicated that they had accessed a retailer's website using a mobile phone (compared to 32% in 2010 and 23% in 2009) and an additional 28% indicate that they plan to use their mobile phone to access a retailer's website, mobile website, or mobile app in the future. In short, more than threequarters of all online shoppers are either already using or plan to use their phones for retail purposes. This finding indicates a huge opportunity for retailers with sophisticated, user-centric mobile sites and apps. • Multiple device shopping - Shopping via a mobile phone has become as common as shopping from a computer at work, and many people are shopping using multiple devices, underscoring the critical

importance of providing a mobile experience that reinforces and supports a retailer's brand and reputation rather than undermining it. • Traditional websites still outperform mobile sites and apps - Even though mobile shopping is clearly catching on, shoppers are still not quite as satisfied with the mobile experiences provided by UK e-retailers. Traditional e-retail websites in the UK rate a 73 on the study's 100-point scale, up one point from last year. However, UK

aren't having a good mobile experience with a given retailer, they will simply go elsewhere." ForeSee's Senior Director of Mobile, Media and Entertainment Eric Feinberg, added, "It is pleasing to see that the satisfaction gap between traditional websites and the mobile experience is narrowing: last year there was a five-point gap; this year, there is a three-point gap. However, satisfaction with mobile still lags. This presents retailers who do manage to

“Any retailer who is not wholeheartedly embracing the mobile trend is leaving money on the table for competitors” customers rate their satisfaction with the mobile experience significantly lower: 70 (which is still a positive increase from last year's mobile satisfaction score of 67). "The research clearly found that the use of mobile phones to access companies' websites, mobile websites and applications for shopping purposes is increasing dramatically in the UK, indicating that any retailer who is not wholeheartedly embracing the mobile trend is leaving money on the table for competitors," said Larry Freed, CEO at ForeSee. "Given the widespread and growing usage of mobile websites, it is no longer acceptable for a retailer to have a substandard mobile site no matter how good their traditional site is. If shoppers

provide an excellent mobile experience with a great opportunity to continue to improve, and it also creates a big incentive for those who don't have their house in order to do so. Meanwhile, expectations are being set by the best retail websites - the others will have to catch up quickly." Feinberg gives a final pointer for retailers working in - and looking at mobile shopping: "Don't be tempted to measure satisfaction by tracking sales, app downloads, or mobile site traffic. Customer satisfaction is the result of meeting a customer needs and expectations - the principles are the same regardless of the customer touch point. You can only find out about satisfaction by asking the customers themselves."

Customer feedback is critical to brands – but budgets a major issue Nearly 90 per cent of brands monitor online conversations and feedback while 80 per cent respond to feedback, according to research by online community software firm Get Satisfaction. More than three quarters of those polled also distribute customer feedback internally and nearly two thirds of companies think that listening and engaging on social media has raised brand awareness.

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More than two fifths cited availability of budget as the greatest internal challenge to listening and engagement, while more than a third said the same about difficulty in managing programmes across multiple platforms. Almost a fifth cited privacy issues as the greatest challenge, while 30 per cent said the same about availability of talent. The top five departments that create strategies to listen to consumers are, in

order, the social media team, marketing or public relations, web-interactive marketing, product marketing and marketing operations. Half of businesses say that listening to their customers on social media is not a core function of their business. Just six per cent of companies said that listening and digital engagement initiatives are integral to their organisation, the report says.

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British Airways has an app for that - customer service that is Can deploying a user-friendly enterprise application solve customer service problems? For British Airways, the answer appears to be yes Last summer the airline conducted a pilot test in which about 100 crew members were given iPads loaded with its new Enhanced Service Platform app. After a successful test, the airline is now distributing 2,000 iPads with the app to senior crew members across its route network. The iPads and the app are intended to replace long scrolls of paper that list the passengers on board and provide information such as airline club status, ticket class and special dietary requirements, if any. The iPads, updated over a mobile network just before takeoff and after landing, give cabin crews a much more sophisticated tool. "There's a lot more information about that passenger," says Mike Croucher, head of IT architecture and delivery at British Airways. "For instance, they may see that on a previous journey, the passenger was in first class, but the entertainment center didn't work. The crew member can see any correspondence we've had about that." Registration is free, and gives you full access to our extensive white paper library,

The iPad programme was inspired by the desire to improve customer service. case studies & analysis, downloads & speciality areas, and more. The iPad programme was inspired by the desire to improve customer service. Over the past few years, relations between the airline and its cabin crews have been fraught with strikes and near-strikes, and the ill feelings were bleeding over into customer service, Croucher explains. To serve customers better, "we wanted to re-establish our engagement first with the

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cabin crew," he says. British Airways uses the Agile software development methodology, so IT has been regularly releasing updates, typically once a month, since the app launched. IT solicits feedback from crew members and follows their suggestions for improvements. One such improvement now allows crews to tell if there are several employees from the same company on a flight, even if they aren't sitting together. "You often get a group of people where the managing director is in first class or business class with colleagues in economy," Croucher notes. In another improvement, seats with passengers who have been downgraded from first or business class due to overbooking are color-coded for quick identification. "We're doing a lot of tuning around messaging, format and the colors on the screen," he adds. "It's a constant process of prioritization and enhancements. We're always evolving the application in many different directions."

CEO buy-in crucial to boosting engagement levels The spearheading of change programmes by senior leaders can make the difference to improving employee and customer engagement levels. Eric Collins, managing director of Nampak Plastics, told the CIPD annual conference that the employee advocacy score had increased from 20 per cent to 81 per cent in three years, after he drove a cultural shift at the packaging manufacturer. He explained that the company had already gone through a successful period of cost-cutting and was at its leanest, but he wanted to improve business performance by using people to help make a difference Despite initial resistance from some members of the board who were used to a traditional command and control structure, Collins pressed ahead with staff feedback sessions, which he fronted personally. “Sometimes people block changes because they can’t see it for themselves.” said Collins, “But behaviour has to come from the top” A lack of performance feedback, team meetings and departmental co-operation were the main issues highlighted by staff, as well as a low level of employee engagement. Initiatives introduced included leadership training for line managers, a staff suggestion scheme, an employee awards ceremony and a heightened awareness of CSR, linking the company’s 10 sites more closely with community and educational activities. As a result absence levels fell by 26 per cent, labour turnover rates were reduced by 38 per cent and overhead costs per million bottles were cut by 7 per cent between 2007 and 2011.

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Kyle McNabb and Suresh Vittal look at how evermore empowered customers mean that in an increasingly commoditised world customer feedback and sentiment now define the brand

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Ever changing and maturing digital technologies, powered by software, empower your customers. This technology-fuelled disruption allows customers to find products and services they want, at the prices they want, anywhere in the world. Digital technologies and their software applications put substitutes within easy reach, and social networking sites and online reviews accessible through mobile applications put more information about company products and services in customers’ hands than you likely have available to you.

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“Building and utilising customer knowledge throws a wrench into today’s data management strategies. To build customer knowledge, firms have to tackle ‘Big Data’ problems in order to harness data from internal systems and the Internet, capturing discussions people have about your company, your products, and your services”

But customer obsession, relentlessly pursuing understanding, delighting, connecting, and servicing customers can provide true advantage. Being customer obsessed requires organisations to shift investments in order to build and act on customer knowledge, an asset resistant to technology disruption. Tapping into and sharing customer data from all sources, be them internal, from third parties, or from social sites like Facebook, allows your organisation to see your customers in a different light. Exploiting this information can lead to new ways of servicing customers. For example, New York City based FreshDirect’s SmartStore product provides food recommendations based on a shopper’s personal shopping history. Exploiting this information can also help you establish stronger connections with customers to help you design future products, like Kraft’s ‘Innovate with Kraft Foods’ initiative.

Procter & Gamble have the consumer pulse Customer knowledge informs corporate strategy. Procter & Gamble uses real-time analytics to understand customer sentiments about their products and brands based on comments and feedback posted throughout the Internet. The “consumer pulse” that P&G executives now have, informs their strategy daily, prompting continued changes in investments and actions based on what’s happening now. Delivering customer knowledge isn’t easy. Investments in business intelligence, analytics, and data warehousing

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technologies, all core to building and delivering customer knowledge, has remained a top priority for IT organisations for years. Yet despite the billions spent annually on these technologies, many organisations tell Forrester they’re no closer today to solving their customer data management problems than they were five years ago, largely due to immature strategies, lack of skills, and misconceptions.

Big data – bigger problem Today’s data management strategies simply aren’t ready for customer obsession problems. Data management strategies have been defined and implemented largely in response to helping chief executives and chief financial officers deliver accurate and transparent financial reporting. These data management strategies stress stewardship, compliance, rigorous governance, and limits on who can access, use, and make decisions using data. The result: Organisations centralise their data management and governance. Building and utilising customer knowledge throws a wrench into today’s data management strategies. To build customer knowledge, firms have to tackle ‘Big Data’ problems in order to harness data from internal systems and the Internet, capturing discussions people have about your company, your products, and your services. Acting on and utilising customer knowledge calls into question the rigorous governance and usage limits enforced by today’s data management strategies. Forrester’s research shows firms that open access to customer data to a broad set of employees, and share it with their partners, respond more effectively to increasing customer experience demands.

Customer knowledge takes more than technology Data literacy skills needed to turn customer data into customer knowledge either don’t exist, or suffer from functional and channel myopia. Building customer knowledge takes more than technology. You must invest in skills helping you identify what questions need to be answered, how to analyse data to answer those questions, and how to analyse data to help

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Competing in this age requires more than being simply ‘customer-centric.’ Today, customer feedback and sentiment define your brand. Many of the strategies you’ve historically used to compete have been commoditised – for example, supply chains and manufacturing processes. Now, cloud services can provide you all the computing power and resources you need, commoditising years and years of IT investments. Being customer-centric on top of now commoditised historical areas of differentiation means nothing.

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derive answers to questions yet to be asked. Firms need business analysts, data analysts and architects, and people skilled in quantitative analysis to work hand in hand with business leaders and turn customer data into customer knowledge. Today, people competent in these areas often sit in disparate functions, ranging from customer and market intelligence to IT, collaborating more with their functional peers than each other. Years of outsourcing has put additional constraints on IT organisations that now lack needed business and data analysis skills and people that are intimately familiar with the firm’s business and its customers.

Command and control old hat Old models of channel and product specific ‘command and control’ just don’t cut it. These anachronistic approaches, in which channel owners can’t see beyond the channel de jour and product owners build from the inside out, don’t set the organisation up for success in a customer-driven world. Customer obsessed marketers rethink business structures, reward methods and organisational design - all focused on the customer. Technologists think that arming ‘tech challenged’ marketers addresses the problem. This in turn has driven increased investment and interest in technologies like Hadoop (an opensource application framework), Aster Data, and Neteeza. These technologies and approaches can help capture and put data into the hands of decision makers, however, they don’t address root cause of what’s challenging marketers. Marketers are not ‘tech challenged’ because they don’t understand technology. What makes them ‘tech challenged’ rests with how your customers use technology. Only when consumer tech innovation stops, will marketing and customer intelligence professionals have an opportunity to catch up. Until then, they will remain tech challenged, perpetually in catch up

mode and needing continual assistance to capture, analyse, and make sense of customer data to create customer knowledge.

Forget the old silo mentality Instead companies should forget functional silos and create a team consisting of the right roles, competencies, and resources to build and deliver customer knowledge. Identify how you will organise, analyse and most importantly apply this customer knowledge to deliver value to the organisation and the customer. Don’t just focus on the obvious marketing issues like personalisation, relevance, and targeting. Force the team to look at adjacent applications of this data that drives the next generation of innovation. Arm this team with new technologies and approaches like Hadoop, NoSQL, and predictive analytics. On their own, they don’t address the root cause of ‘tech challenged’ marketers. But in the hands of a team, these technologies – once solely in the hands of tech innovators like Google and Amazon – can help you establish true competitive advantage. Kyle McNabb and Suresh Vittal are Vice Presidents and Practice Leaders serving Application Development & Delivery and Customer Intelligence Professionals, respectively, at Forrester Research.

“Companies should forget functional silos and create a team consisting of the right roles, competencies, and resources to build and deliver customer knowledge. Identify how you will organise, analyse and most importantly apply this customer knowledge to deliver value to the organisation and the customer”

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Creating collaborative relationships between clients and outsourced service Providers is the best solution to the outsourcing ‘problem’ says Paul Scott who suggests that the current challenges are actually rooted in the past

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A stagnant economy is highlighting tensions in relationships between outsourced service providers (OSP’s) and their clients. Businesses focused on cost reduction are applying pressure to OSP margins, while imposing stringent productivity targets. OSPs, keen to hold on to business in an environment where capacity is cheap, struggle to comply. Customers are suffering as a result. If the cycle is to be broken, outsourcers and clients need to achieve a paradigm shift in their relationships, replacing ‘price leverage’ with ‘transformational expectation’ and abandoning the ‘master slave’ dynamic in favour of collaboration.

A lesson from the National Health Service In 2003 the then labour government embarked on a hugely ambitious project to transform the National Patient Records system. It has gone down in folklore as one of the most disastrous public sector procurements of all time. The idea was simple; make all patient records available to health workers online. In July 2010 the coalition government tried to cancel the project which was by then two years late and £2 billion over budget. They have so far failed to do so and still don’t have a working system. What has this to do with customer management outsourcing? Well there are parallels to be drawn. Both are complex procurements. Both require supplier and client to work closely together to manage risk and deliver success on time and on budget. And perhaps most importantly, both require a high degree of trust and alignment around agreed success factors. The principle reason why the Patient Records project failed appears to be the lack of trust and respect between supplier and client. In short, the government’s procurement advisers negotiated such a punitive contract, the supplier was left with no choice but to invoke the very clause the procurement chiefs dreaded most: pay us for what we’ve done to date and we’ll go away. This has left the government with a £12 billion bill for a non-working system.

Why outsourcing relationships fail As long ago as 2004 research by the Outsourcing Center revealed that poor communication and mis-aligned objectives accounted for 55% of failed outsourcing relationships. Consistent communication and shared understanding of objectives are vitally important for any relationship. The Global Contact Centre Benchmarking (GCCB) Report, Dimension Data’s annual survey of over 500 contact centres globally, shows the principle reason organisations don’t outsource is that they believe the customer management function is simply so important to the business it cannot be given to a third party to manage. Put another way, the company hasn’t worked out how to embed the same beliefs and values in a third party to do something which is deeply ingrained in their culture and their way of doing things. ISSUE SEVEN • MARCH 2012

So quite a number of organisations either haven’t worked out a rationale for outsourcing or simply don’t buy-in to the benefits. Those that do still have to work out what the critical success factors are for building a sustainable long term relationship. What happened in the NHS is far from unique. Many outsourcing contracts end prematurely simply because the outsourcer has been pinned so tightly to the contract terms for operational delivery, they can’t find room to add value or even make a profit. As a consequence the client feels the supplier isn’t making enough effort to innovate even if they are delivering demanding operational results. The root cause of many outsourcing relationship failures can be tracked back to the role procurement has played in supplier selection and contract negotiations. Procurement departments have been around in business since the end of the 19th century. Back then procurement was very much a clerical function; gathering requirements for raw materials and seeking out suppliers. It wasn’t until the 1980’s that the purchasing function began to do more than buy commodities. Facilities management of IT and data centres became procurement targets. They then took on a broader supply chain management role and, in the 1990’s, became responsible for procuring outsourced services.

Procurement today So just how effective are procurement functions today? In 2011 research by Ardent Partners determined that the average procurement function only accounted for 61% of all external spend and saved their businesses around 6.7% on operating and capital expenditure each year. Not a lot when one considers most outsourcers are asked to save a minimum of 15% on equivalent operating costs when they provide a solution. Like most business functions, procurement has had to adapt and change to meet organisational needs, but is it changing fast enough? Everyone expects procurement to save money, cut costs and reduce contractual risk, but is there more it could do? Bizarrely it was the accounting profession that first thought procurement might have a more strategic role to play. In 1990 the Value Based Management model (VBM) emerged. It stated that, while strategy should be principally involved in delivering value back to shareholders, it should focus not on specific numbers, but on actions which would create value through organic growth or collaboration with suppliers. Advocates of VBM believe it’s an ideal platform for forming strategic procurement engagements, as it forces stakeholders to focus on the value they can create, not just the money they can save. There is evidence that procurement initiatives can be carried out in ways that balance cost saving and value creation. But perhaps procurement managers need some help to understand the new behaviours that support value-based relationships. AT Kearney produced a model in 1996 called the House of Purchasing and

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Supply. It sets out the key pillars for successful procurement. For the first time it named ‘value creation’ as a principle objective for the procurement function and detailed the behaviours needed for successful value-based relationships. It identified that organisational alignment, both strategic and cultural, between supplier and customer is the most critical success factor.

“In the late 90’s cost saving was still the number one reason for outsourcing. By 2011 flexibility and scalability were most in demand. This perhaps indicates the way the industry itself is maturing”

In short, today’s leading procurement functions should focus on value creation with suppliers and build mutually beneficial relationships with shared risks and rewards. They must also engage with the ‘soft stuff’ – relationship management, culture, mutual understanding, equanimity and shared values.

The evolution of customer management outsourcing While the procurement world has evolved over decades, customer management outsourcing has really only been significant since the mid 90’s when the internet emerged and telecommunications began to offer viable low cost connectivity to locations widely dispersed around the globe. Whether at home or offshore, outsourcers deliver a number of other benefits in-house operations often struggle to deliver. The GCCB Report has tracked how enterprises understand the benefits of customer management outsourcing for over 12 years. In the late 90’s cost saving was still the number one reason for outsourcing. By 2011 flexibility and scalability were most in demand. This perhaps indicates the way the industry itself is maturing. Merchants developed a model to illustrate this maturation, which describes three generations of outsourcing. In the first generation, which dominated in the late 80’s to mid 90’s, performance was driven by stringent Service Level Agreements (SLAs), operational cost savings and rigid contracts that punished suppliers for nonconformance to productivity targets. Unsurprisingly, this didn’t lead to long term, value based, equitable relationships.

Three generation of outsourcing

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1st Generation

2nd Generation

3rd Generation

Performance Metrics

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Business Outcome

Operational Approach

Cost

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Sustainable

Relationship

Contact

Open Book

Shared Risk/ Reward

The second generation emerged in the mid to late 90’s and showed signs of a little more trust and openness. Key performance indicators were used to track not just operational performance, but customer satisfaction and loyalty. Open book engagements became popular. The third generation, which emerged in the mid noughties, changed the rules significantly. Focus switched to the delivery of ‘business outcomes’, which could be market share, loyalty or share of wallet. For the first time contact centre outsourcers were being recognised for their potential to act as value creators, sharing risks and the rewards with their clients. The contract terms for 3rd generation contact centres are often 6-10 years and cover a wide range of front and back office processes. So if BPO providers are now at the 3rd generation and procurement has undergone its own catharsis, why aren’t all outsourcing relationships delivering long-term value? Well, there are still far too many 1st and 2nd generation outsourcers out there, and too many procurement departments still wedded to the mantra of cut costs and squeeze suppliers. It takes two to tango. Both parties need to find safe ground to explore these ideas in order to create partnerships based on value creation rather than commodity supply. I believe it’s up to the OSPs to push the agenda by demonstrating the benefits of value based relationships. After all, clients can’t buy something until it’s offered. Paul Scott is Director of Strategic Partnerships for Merchants. Contact him at paul.scott@merchants.co.uk. www.merchants.co.uk

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In the first in our new series of interviews with presenters at our Customer Engagement Directors Forums we ask the key questions of Bian Salins head of Social Media Innovation at BT who delivered a highly rated presentation on the BTCare social media customer engagement journey at the Multichannel Customer Engagement for Contact Centres Directors Forum

‘My background is really in journalism but my love for technology began when I started out as a reporter for India’s first online venture Rediff.com where we had already begun to use interactive media to create strong stories and communicate with our readers. From then on, I went on to work for brands like ELLE and the Times Education Supplement before joining BT as an editor and producer. I really came in to the social space within BT through my role as Managing Editor for BT Tradespace (a social networking platform for SMEs). In 2007/8 – social in the UK was still in its ad of Social Bian Salins, he tion at BT Media Innova

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infancy so we were able to try new things and build our knowledge of this space in a relatively safe way and once that project had reached its maturity, I moved into my current role as Head of Social Media Innovation. How does the BTCare social media strategy fit in to your overall customer offering and how do you measure the effectiveness of this strategy? BTCare is core to our objective of wanting to be ‘Number 1 for Customer Service’. We see social as core to making things easy for our customers – because we’re taking our conversations to where they’re at. We also believe in creating transparency and honesty around our brand and that’s exactly what our own forums provide customers with – a place on our own digital estate where they can bring their issues and get help from the community or the BTCare team. We measure the effectiveness of this strategy through soft measures: Like growth in fans/followers/users and volume of queries,

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First off Bian tell us a bit about your background and how you came to the role of Head of Social Media Innovation at BT

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engagement through positive mentions, likes, shares and then we have some hard business metrics like customer effort, churn, satisfaction and advocacy. The good news is that the results we’re seeing on all these areas is highly positive and reassuring that offering our customers service through social in 2009 was the right move for our brand. Plus, it reinforces the fact that we need to be investing more in BTCare. Tell us about some of the innovations you have used in social media - and how do you measure customer involvement and response? There are a few ways we’ve used social innovatively. Firstly, we were one of the rare brands that have embedded social engagement within our call centres. Our agents are our social brand ambassadors and do our community management across the board. Secondly, in 2009, the social monitoring market was still a growing one, so we developed our own listening and workflow tool (Debatescape) to allow our business to engage in a safe, efficient way. Till today, I accrue core part of our success to having an operational tool like that. Thirdly, we have been known to be honest and transparent in the way we communicate crises. Apart from having a policy that’s embedded within our real-time reporting function, we’ve used media like imagery of fires/floods at exchanges to communicate the extent of damage and we’ve found our customers have appreciated that level of honesty from us. Another innovative way we’re using social media is the super user programme we have through our community forums where we’ve begun to collaborate with our most trusted community leaders to drive improvement in our products and service - and really, I see them as an extension of our BTCare social ambassador team. With regards to measurement for these, apart from what I’ve already mentioned, we measure reach of our tweets, responses, growth in following as a result of specific activity. With our super user programme, we measure the activity and contribution of our community leaders within the community as a result of our programme and finally, there’s nothing like feedback to help assess how you’re doing. How do you monitor and interact with social media activity around your organisation and your brand? Debatescape is our listening tool which we built to help us monitor and engage. However, we are going to layer this with another external monitoring tool soon – to bring some deeper insight and analytics to the business.

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What are the major challenges you have faced with your social media strategy and how have you overcome them? I think the challenges we faced are no different to any other business. We probably had it easier because we took a leap of faith and were backed by our MD, Warren Buckley. This is something most other brands struggle with. However, in implementing a social strategy, you need budget, you need to sometimes create new processes, you need to work effectively across your organisation and we had to overcome hurdles along the way. For example, it took me nearly a year to build a ROI model that demonstrated the financial return of what we were doing but working with our finance team, we were able to develop a pretty robust model. With regards to working across the organisation, we had to build solid relationships into our PR, service operations and real time reporting teams to be effective in crises situations. It’s a rocky road but it’s doable if you’re determined to get to the other, brighter, end. What impact has your social media strategy had on your business and your customer relationships? As mentioned earlier, we’ve seen some really positive results. Satisfaction has more than doubled from when I first began measuring it, most of our customers who participate in our survey say they’re more likely to stay with BT as a result of dealing with BTCare and nearly 100% of the growth in people engaging with us as been through organic word of mouth because we haven’t advertised our BTCare as a service channel as yet. From a business perspective, through our benefits reporting, we’re also saving our business money so it’s a win-win really. What’s been fantastic is that our customers have voted us in to the Top 100 social brands last year and again this year and we’ve been finalists as 5 different industry awards (two of which are coming up) for our use of social media for customer service – so that’s an added bonus. At your presentation to the Customer Engagement Directors Forum you made it clear that you are on a customer journey - what are the next steps in that journey? Absolutely - it’s most definitely a journey but this time we’re making it with and for our customers. Our next steps are really to look at how we can widen our approach so that we become more of a social business. We want to take our approach of making things easy, engaging and rewarding for our customers into every area of the business so that we’re not just showing ourselves to be a social brand, we’re driving change for our business from within as a result of social insight and engagement with our customers… so watch this space.

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“In essence, the key to more effective targeted marketing doesn’t lie in refining a segmentation – the answer is to completely abandon segments altogether and treat each individual customer as what they are – an individual”

David Excell, co-founder and CEO, Featurespace says that organisations should stop refining segmentations of customers and instead abandon them altogether

To ensure this happens, marketing strategies have to be cost efficient, ensuring a high rate of success for customer engagement and increased sales. Changing the scope of your insight is likely to be fundamental to maintaining competitiveness. Any marketer will be able to tell you that the most cost effective forms of marketing are those that interact with customers you already have a relationship with, rather than trying to attract new ones. Furthermore, time is of the essence, as the longer you leave it to interact with a customer following the first signs of churning, the more expensive it becomes to reactivate or retain them. Companies looking to optimise the performance of campaigns to retain their customers and provoke cross- or up- sell buying have to provide the individual with offers that directly meet their needs. This is recognised by field marketers, who are always looking to leverage greater insight and understanding of their customers’ buying behaviour to better identify patterns, define more accurate segments and stimulate predictable responses. As a consequence of this - particularly as competition in the marketplace becomes ever more intense - focus is shifting from front-end activities, which include creative execution, towards those at the back-end, such as forensic data mining. ISSUE SEVEN • MARCH 2012

Missing the target However, despite this extra effort to create a more accurate segmentation, research highlights that direct marketing is still missing its target. A recent survey, conducted by YouGov in conjunction with Featurespace, asked 2,057 consumers in Great Britain about their thoughts and attitudes towards targeted marketing and how it affects their purchasing decisions. It found that eight out of 10 consumers (82%) still believe that at least half of all the direct marketing they receive is indiscriminate spam, i.e. correspondence that is considered to be unsolicited bulk messages sent indiscriminately. Admittedly not every piece of direct marketing is generated from a targeted approach, so such results could be understandable. But even when targeted marketing is taken into consideration, 54% of respondents say that the majority of it is presented at the wrong time with irrelevant offers or promotions.

Traditional insight methods not enough These findings show that traditional methods of insight are insufficient to build reliable understanding of customer motivation and allow pinpoint targeting. If companies insist on using the targeted marketing methods they currently employ, they will continue to see a poor return on investment and, even worse, they could have an adverse effect on their relationships with customers. Perhaps the most worrying reading for marketers in the survey is that even when marketing is accurate, appropriate and timely, 39% of consumers would still not consider themselves ‘more likely’ to buy a product. In the face of such limitations, one response could be to give up on targeting altogether.

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The chances are that you do not know your customers as well as you think. Sure, you know your customer base as a whole, but what about individual customers? If the latest economic forecasts are to be believed, this year is expected to be yet another difficult one for businesses so it is vital that consumerfacing companies implement direct marketing that delivers the best possible return on investment.

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Perhaps this could be one of the reasons behind loyalty marketing specialist Tesco’s decision to scale back its spending on targeted incentives through its Clubcard programme, to reinvest the money saved elsewhere. Last autumn, the supermarket giant said that it would halve the value of its Clubcard points and would instead focus on providing price cuts across 1,000s of products, a much less-focused incentive. Whether this approach will offer a better return on investment and generate the profits to which Tesco aspires over the long term, remains to be seen. What’s clear is that loyalty schemes can certainly be expensive, both operationally and promotionally, driving significant value from the bottom line, especially in those simply offering straight-line rebates. Building and maintaining loyalty at a time when dissatisfied customers can easily find alternatives and shop elsewhere, is certainly difficult. Indeed, the survey highlights that consumers are being presented with direct marketing on a regular basis, with 69% of respondents saying that they receive at least one piece of such marketing a day, with 15% having more than 10 a day. So there is no shortage of competing offers to tempt consumers away from those with whom they currently do business.

achieving even finer accuracy of behaviour prediction may seem like an arduous task. Fortunately, there are solutions available out there that enable marketing analysts to deploy the type of highly sophisticated, extremely granular and exceptionally accurate predictive behavioural modelling needed for effective campaigns - all without the need for a doctorate in statistics.

Learning without a doctorate These easy-to-use, configurable applications offer marketers the ability to utilise powerful mathematics and statistical modelling to gain extremely detailed and accurate knowledge of their customers. The best solutions are also able to understand that opportunities can be ephemeral, updating behavioural models in real time to allow marketers to respond almost instantly with appropriate offers.

Customers want to be understood However, despite the somewhat depressing reading for marketers in some of the YouGov survey results, the consumers interviewed indicated that loyalty is not dead, indeed those interviewed tended to agree that there is actually a good opportunity for companies to enhance customer loyalty and encourage repeat business. A substantial 63% of respondents agreed that companies could significantly increase customer loyalty by understanding the needs of their customer and demonstrating that understanding by communicating the most relevant offers and promotions in the right format at the right time. In essence, the key to more effective targeted marketing doesn’t lie in refining a segmentation – the answer is to completely abandon segments altogether and treat each individual customer as what they are – an individual! Gathering deeper insight, building greater customer understanding and 17

These systems ‘learn’ what makes an individual tick through an analysis of the entire history of that customer’s relationship, using real-time data from live feeds to further refine accuracy over time. As a result, marketers can now access faster, more accurate predictive insight into, for instance, customers with the highest probability of churning (and when), those with a high propensity to respond to a specific offer (and at what level and when) and those individuals who are most likely to deliver the highest lifetime value, at various stages in the relationship. In the tough economic climate we are all experiencing at the moment, and with little sign of it improving anytime soon, a loyal customer base is vital for businesses to survive. But forward-thinking businesses can do more than this; using the right marketing tools to truly understand-in real-time-what motivates their individual customers, they can actually empower the business to thrive. ISSUE SEVEN • MARCH 2012


Multichannel Customer Engagement for Contact Centres 26th January 2012, London ew revi

Presentation Review

Contact centres are set to benefit from operating in an increasingly multichannel environment and are more likely to be viewed as a profit centre rather than a cost centre in the future as they deliver on a joined-up single view of the customer according to the latest Customer Engagement Directors Forum. Steve Hurst reports The contact centre is undergoing a multichannel revolution that is set to gather pace as customers increasingly are in control of the channels they choose. This revolution will place the contact centre firmly at the heart of businesses and will ultimately change the way organisations view them for the better. These were just a couple of the key findings from the latest Customer Engagement Directors Forum on Multichannel Customer Engagement for Contact Centres hosted at Gallup’s Conference Centre in London and sponsored by Interactive Intelligence and Sword Ciboodle. The Directors Forum included a mix of case studies, expert analysis, leading edge research and a lively panel debate – with delegates giving a unanimous thumbs-up to the excellent quality of proceedings.

contact centre space, who delivered his findings on the very latest research into the marketplace. Steve said that customer contact is as a tipping point and that while the telephone will remain the dominant form of contact centre communication for the foreseeable future other channels such as email, web chat and social media will come increasingly to the fore. Following Steve was Leslie Rowlands senior man aging consultant at Gallup Consulting whose presentation ‘Brand Ambassadors: engaging customers across all channel’s, concentrated on the people aspects of multichannel engagement and on how fully engaged employees and fully engaged customers can combine to result in competitive advantage – the main challenge being that the number of fully engaged brand ambassadors in contact centres is fairly miniscule and employee engagement strategies need to be employed to impropve the situation.

Customer contact at a tipping point

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Aviva transforming its customer approach The first case study of the day was delivered by Jen Allard and Tom Baggaley at Aviva UK Direct Insurance and focussed

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The opening keynote on Trends in Multichannel Contact was delivered by Steve Morrell principal analyst at ContactBabel, and acknowledged as one of the UK’s leading experts on the


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Following the networking lunch session an hour long panel debate on the Future for Multichannel in Contact Centres looked at how social media and mobile are contributing to the changing role of the contact centre moving forward. Then Conrad Simpson of Interactive Intelligence looked at the technology aspects of multichannel contact centre solutions – he used real life case study examples to show how multichannel strategies are improving customer service and helping organisations in a joined up view of their customers.

BT proves it does Care on the transformation Aviva is making through its contact centres using systems thinking to improve employee engagement, advocacy and performance. It showed how Aviva is taking a new ‘outside-in’ approach focussing on its customers to understand the issues they have and the problems they are experiencing and then delivering a joined-up approach to improve customer service and generate greater loyalty. This inspirational case study demonstrated clearly how taking a multichannel approach including the use of social media can help to deliver a single view of the customer and adapt to their needs. Following on from Aviva was a presentation based on new research from Steven Thurlow technical director at Sword Ciboodle which shows that companies that offer true channel choice and let customers make their own decisions about how they interact with organisations are making real cost savings and winnings the hearts and minds of customers along the way – a real Holy Grail. Following was a look at consumer trends in multi-channel from Marcus Hickman chief exec of David Hickman partners and a renowned expert in the contact centre area. Marcus identified seven key trends in consumer attitudes and behaviours and stressed that if organisations organise themselves around consumers and their needs then customer loyalty will follow.

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The final presentation – last but by no means least - was a case study on BT Care delivered by Bian Salins the head of social media innovation at BT. In an excellent closing session Bian took delegates through the story of BTCare and how is it helping change for the better BT’s reputation for customer service across channels. BTCare has used social media including Twitter and Facebook extensively in its customer service operations and through its customer community offering – with the result that BTCare has been voted one of the top 100 social media brands and recently ran the most successful Facebook campaign to date for a major UK brand. Bian’s presentation was a fitting end to and a highlight of an incisive and thought provoking day. Steve Hurst, chairman of the Directors Forum and editorial director at the Customer Engagement Club, in his summing up, said that the future for multichannel contact centres is looking positive providing customer centric organisations with the opportunity to improve both customer satisfaction and loyalty and employee engagement. A win-win for service and product providers and their customers. The next Directors Forum on May 16 will examine the issues, challenges and opportunities around both social and mobile customer engagement and how savvy organisations are working with these rapidly evolving channels to market to gain competitive advantage. Click here for more details and to register.

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Multichannel Customer Engagement for Contact Centres 26th January 2012, London SPEAKER PRESENTATIONS

9:35 Keynote: “Trends in Multichannel Contact” latest research findings from the UK contact centre industry Steve Morrell Steve Morrell, Principal Analyst, ContactBabel Customer contact is at a tipping-point. Social media has become a de facto customer service channel; emails account for more than 10% of inbound interactions; self-service via websites and smartphone apps has become ubiquitous; IVR is used by most businesses and web chat is becoming increasingly popular. Through extensive primary research, this presentation shows the reality of things as they are today, and highlights commercial and technological drivers that will change the face of customer contact for years to come. 10:15 Brand Ambassadors: Engaging customers across all channels Leslie Rowlands, Senior Managing Consultant, Gallup Consulting

Leslie Rowlands

Brand Ambassadors are employees who are highly engaged, knowledgeable and passionate about their organisation’s products and services. In contact centres and other customer-facing environments they deliver consistently superior customer service that is reflected in higher levels of customer engagement across all channels. How can companies hire and create more Brand Ambassadors, and what is their potential impact on customer engagement and financial performance? 10:55 Case Study: Aviva - Transforming the contact centre Tom Baggaley, Social Media and Ecommerce Manager Aviva Tom Baggaley UK Direct Insurance Tom’s presentation covers the transformation Aviva has made online and outlines the work the organisation is doing with system thinking

and how it is also transforming the contact centre, demonstrating improvements in employee engagement, advocacy, Net Promoter Score, and performance. It highlights how Aviva is focusing very much on its customers to understand what problems they are experiencing , and to then have a joined-up approach internally to resolve. It describes the different methods of contact Aviva offers, Telephone, Inbound and Outbound, Email, Live chat and Social Media outreach and how its teams flex across these channels, consistently growing and adapting to suit customers’ needs. 11:50 Why multi-channel must mean multiple choice. Steven Thurlow, Technical Director, Sword Ciboodle

Steven Thurlow

You might think forcing customers to use lower-cost contact channels by restricting their access to phone the contact centre is bound to save you money. You’d be wrong. New original research proves it’s the companies that offer true channel choice, and let customers make their own decisions about how they interact, that are making the real savings. And they’re winning the hearts and minds of customers along the way. Listen to Steven discuss • What dictates customers’ channel choices – and how those choices can work to your advantage • How you can encourage channel shift without alienating customers • How pro-active use of alternative channels can reduce calls to your contact centre • Why the multi-channel contact centre remains a key point of service differentiation 12:30 Consumer trends in multi-channel customer contact Marcus Hickman, Chief Executive Davies Hickman Partners and former Director of Marcus Hickman the CCA and The Henley Centre The presentation focuses on 7 vital trends in

consumer attitudes and behaviours which are impacting the way that organisation deliver customer service today, in both sales and service. In all the excitement about social media, speech analytics and smartphones, what is it that today’s consumers are looking for when it comes to customer engagement? Based on extensive consumer research and data analysis, the presentation looks at future behaviours to help guide your customer interaction strategy for 2012 and beyond. 15:15 Case Study: Cloud-based or on-premise multichannel contact centre solutions Conrad Simpson, Director, Interactive Intelligence

Conrad Simpson

With contact centres featuring in the media recently this presentation takes a look at strategies to deliver multi channel customer engagement . Increasing complexity inevitably brings challenges, and it’s the navigation of these challenges that determine the success of your technology deployments. So whether your strategies are cloud or premise based, multi-channel is a pre-requisite for service excellence and technology does have a role to play. The question is…how ready is your technology ? This session uses case studies to illustrate the real world approaches that work in theory and in practice. 16:15 Case Study: From effort and satisfaction to loyalty – The BTCare story Bian Salins, Head of Social Media Innovation, BT

Bian Salins

So everyone wants to know the value of social media. In truth, every individual business that dares to take a risk will find out and know the answer. For BT, using social media for service has more than proved itself by driving down customer effort, increasing satisfaction and yes, has even set them on the path to customer loyalty. If you’re one of those asking – is it truly possible? Don’t miss the BT story and insight on how it can be done as told by BT’s Head of Social Media Innovation, Bian Salins.

To download presentation go to:http://www.customerengagementclub.com/mccc_presentations

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With consumers and employees increasingly using a range of smart devices and social networking sites in their private lives, digital technologies are familiar to all. Mark Pigou, organiser of IR Expo looks at how businesses can harness this digital enthusiasm to enhance both the customer experience and employee engagement

Travel on any commuter train, stroll down any high street or linger in the aisles of any supermarket and you can be very sure that within a few minutes the number of people you see using a smartphone, tablet or eReader will soon outstrip your fingers. Digital technologies are rapidly transforming not just home entertainment and shopping choices but every aspect of our lives. As Ofcom reported back in August, over a quarter of UK adults and almost half of all teenagers now own a smartphone while 76% of homes are connected to the Internet compared with just 25% in 2000. In addition, almost half of all adults have a social networking profile. 21

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For many of these, both smartphones and social media are now a significant part of their lives – especially for those in the “digital generation” who have been using computers since their earliest school days. While Facebook calculates that the average active user spends 15 hours a month on the site many Facebook aficionados in the blogosphere claim to spend up to 10 hours a day or more logged onto the site. Certainly, anecdotal evidence suggests that a great many people use Facebook as their first choice search tool and will rather contact their “friends” that way than by ‘phone, text or e-mail.

Digital is daily Whatever the truth of the statistics it is clear that using digital technology is no longer an esoteric pursuit confined to geeks and nerds: it is something almost everyone does every day. And the enthusiasm is not confined to the younger age groups: one recent report highlighted a care home that had installed a Skype connection proving extremely popular with residents in their 90s while Ann Widdicombe has even been found in the national media waxing lyrical about the joys of her iPhone. So, given that digital technologies are an everyday part of our lives why do so many businesses lag behind when it comes to exploiting the new media for greater customer or employee engagement? In part – and given our current economic woes it’s not surprising – it comes down to priorities. Making a profit and staying in business are usually at the top of the Board’s list, while learning to exploit social media or explore potential business uses for iPads or mobile apps are left to junior or middle managers in marketing and IT. After all, it is not that many years ago that a great many CEOs eschewed computers entirely leaving such mundane devices to their PAs at work or their teenage children at home.

At the leading edge While these attitudes are changing there is still a long way to go especially since consumer use of digital and social media has grown so rapidly. Businesses, such as retailers and CPG suppliers, whose very existence depends on daily interaction and engagement with customers, are at the leading edge when it comes to adopting these new technologies. Most have had transactional websites for years; many have optimised mobile sites and a Facebook presence, while others have implemented employee portals or equipped staff with mobile devices to improve product knowledge and efficiency. Web kiosks and digital signage are familiar devices in high street stores and there is growing interest in mobile apps to enhance customer interaction. In-store web kiosks, for example, not only act as information points for shoppers but can easily be switched into training

mode for staff or can double as a portal to interact with HR to book holiday dates or check on overtime payments. Mobile apps are also proliferating: Tesco, for example, launched a mobile app portal in September where shoppers can download smartphone tools giving access to home delivery information, eCoupons, store location details or ClubCard accounts and they even have an iPad application offering daily recipes and the ability to download details of the ingredients directly to your shopping list. While e-commerce is well established, retailers today talk not just of mobile “m-commerce” but of “f-commerce”, for the business that comes via Facebook, and the likely importance of “t-commerce” as use of interactive digital television grows: click on the dress worn by your favourite East Enders star and up pops the relevant website with price, promotional and stock availability information ready for the customer to order a look alike.

Customer preference the key Fashion companies are especially enthusiastic and are currently seeing 30% or more year-on-year growth in their online business. Typical is Aurora, whose brands include Oasis, Coast, Karen Millen and Warehouse, and the company is quickly learning that customer preferences are key. As Ish Patel, group strategic development director, explained at the annual Internet Retailing conference in October, the company initially thought that mobile retailing would be rather like its online operations but it soon found that its customers had other ideas. Rather than simply browsing a website, Aurora learned that mobile shoppers were more interested in targeted offers, store location information or using their ‘phones for self-checkout – a potentially important growth area with the advent of contactless cards and near field technology and typical of the self-service preference that digital technology empowers. Aurora staff, too, are taking to mobile with the company trialling iPads for use in assisted selling and mobile point of sale. As Ish Patel says “These devices put staff on an equal footing with customers”: while in-store shoppers can access price and competitor information via their smartphones, staff now have similar tools to argue their corner, highlight benefits and make a sale. Significantly, as Patel told the conference audience, there was no need for extensive training or even a training manual when it introduced iPads: many staff already had iPhones so adopting the same technology in store was as easy as falling off the proverbial log. Retailers are also enthusiasts for Facebook not just as a

“Customer databases that were once only accessible centrally or at a call centre can now be reached in-store from an iPad, while shoppers can check on stock availability from their smartphones before heading for the store”

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customer engagement promotional medium but for encouraging feedback and finding new recruits: if thousands of people have registered as your “fans” then looking for new employees among this self-selected pool has obvious advantages. Equally, feedback on both Facebook and Twitter is proving relevant for product development and test marketing: asking your “fans” what sort of new lines they’d like to see or monitoring more negative criticism can help both product development and damage limitation when things go wrong. While many of these “new technologies” have been with us for years – in-store kiosks first appeared in the 1980s and the WorldWide Web was, after all, launched 20 years ago – the latest generation of digital devices and developments that will be on show at IR Expo in March, highlight several significant changes in the way people view and use technology and the ways in which businesses can use technology to improve engagement and experience.

Familiarity but no contempt First there is the obvious familiarity and usability: smartphones and home computers are commonplace so, be they staff or customers, many people have a very good idea about the possibilities new technologies offer. As another speaker at October’s Internet Retailing conference – Richard Weaver, ecommerce director at Majestic Wine Warehouses pointed out – a key driver for developing specific store pages on its website and for using Twitter was demand from store staff themselves who were eager to raise their particular outlet’s online profile and knew just how technology could help. Secondly, there is multi-functionality. In-store kiosks may have been with us for almost 30 years but they used to be dedicated devices with limited capabilities. Today a retailer can use the same unit as a cash register, to display fashion catwalk videos, double as an employee portal for training, switch into web kiosk mode to explore the company’s website or even provide face recognition capability to identify high-spending shoppers as they enter the store, based on the photographs they post on Facebook.

marketing combined with geolocation and SMS, for example, means that shoppers can be targeted with special offers as they stroll past an outlet or as they enter its doors. The phone also puts power in the hands of the user to access the information they want when they need it: QR (quick response) codes may still be something of a novelty but within two years they are expected to be ubiquitous so that a quick scan by the phone of these two-dimensional bar codes can instantly relay information about products, promotions, provenance or whatever. On the horizon is augmented reality: simply point your phone’s camera at a store or office block to see assorted pop-ups on the image telling you all about what is to be found within. Fourthly there is convergence: not just between telephones and computers, as in smartphones, but in the home with television and entertainment devices as well or in organisations with a raft of cross-department functionalities available everywhere at any time thanks to the omnipresence of cloud computing. Customer databases, for example, that were once only accessible centrally or at a call centre can now be reached in-store from an iPad, while shoppers can check on stock availability from their smartphones before heading for the store. Look up “engagement” in a thesaurus and it can be replaced by words like commitment or arrangement as well as skirmish, battle or dogfight. Our digital age is bringing increased emphasis on satisfying individual needs and wants – be that through self-service applications, one-to-one marketing or 24x7 availability – and woe betide anyone who keeps an impatient digital enthusiast waiting. Adopting the technologies your customers love and empowering your employees with the same tools can ensure that “engagement” becomes a mutual commitment rather than a battleground. At IR Expo customer engagement will be at the heart of our focus on multichannel retail. Get in touch with your thoughts via mark@internetretailing.net or follow us on Twitter @etail. For more information or to register, please visit www.internetretailingexpo.com.

Hand-held terminals have similarly been used in stores since at least the 1970s but today, instead of simply checking prices or logging stock, the same unit can be used for product information, assisted selling, as a web browser, or even to take payments – although question marks do remain over the reliability and security of in-store Wi-Fi.

One-to-one engagement Thirdly there is personalisation: the ever-present mobile phone is a conduit for one-to-one engagement at all time. Permission

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Organisations today have to be relevant, authentic and trustworthy if they are to have a chance of sustainable success – and transparency and trust are more important now than ever says Richard Anderson generated content (UGC) provide the peace-of-mind required for customers to feel confident in their purchasing decisions. Displaying simple and transparent ratings or reviews from customers on product pages is an important first step, but engaging customers in those conversations and using that insight is the lynch-pin for companies that want to become truly customer-centric.

Customer feedback makes the online shopping experience quicker and easier for shoppers. Brands displaying user-

Transparency leads to transformation, and by going beyond using social media and review platforms as a single channel of

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Customers have always been at the core of business, but the expectations of consumers and business customers are soaring. Getting closer to customers is now a prerequisite for success in the twenty-first century. The combination of the social media revolution and the current economic uncertainty reinforces the view that it is the empowered customer who is now in control of the business relationship.

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customer engagement

Richard Anderson

communication to truly integrating them into all facets of the organisation, brands can create a community of trusted and authentic influencers.

reviews as a gift, as this can provide the intelligence with which they can better the brand for customers, turning critics into advocates and ultimately driving more sales.

How to get it right

UGC is not only an asset for a company’s marketing department, it’s invaluable across the entire organisation – from product planning and development to help shape future products, designs or features, to customer support teams who can more quickly act on developing issues once a product or service is in the marketplace.

Companies have traditionally had a level of control around customer and influencer engagement. In A global study by IBM chief marketing officers (CMOs) highlighted four trends as pervasive, universal game-changers – namely the data explosion, social media, proliferation of channels and devices and shifting consumer demographics. IBM’s research also revealed that CMOs are still focusing on the transaction, rather than building customer relationships, and using customer data for segmentation and targeting purposes. By not creating advocates, these organisations are missing the opportunity to learn from the other phases of the customer lifecycle. Thanks to voice-of-customer programmes and the growing demand for user-generated content (UGC), customers will now define a brand with or without its input, so it’s up to the company to engage in that conversation and take that feedback on board and integrate it seamlessly across all aspects of the business. By putting customers at the core of the brand, companies can constantly realign themselves to best suit their audiences. Facebook now boasts over 800 million active users and the average user posts 90 pieces of content a month, while Twitter processes around 250 million tweets a day. Even though only a percentage of this content involves a brand or product, the impact on businesses is immense. By taking all feedback on board, no matter what the tone, these brands ensure they are responding to customer opinion and allowing it to shape the organisation’s image and future in much faster and more agile way than ever before. When talking about brand and product experiences, vocal commenters tend to be very polarised, either extolling love or severe dislike. With the proper tools to monitor, analyse and share this feedback, innovative product improvement ideas, as well as flaws, can be found just as readily in positive reviews as in negative reviews. Companies can opt to treat negative

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Which brands are getting it right Dell is recognised worldwide as an early mover and thought leader in social. As a company it highlights how to go beyond just traditional customer engagement, and deliver true transparency and authenticity. When customers approach Dell, they usually speak with service people. For those customers that are hardcore gamers or really into technology, they will often know product solutions better than the service person they’re speaking to. Rather than just receiving generic messages, Dell extends the conversation to include product engineers, who understand the product and can communicate in a way that is authentic and accurate. In this case transparency means people can go into the company and speak to those that know best, even if they aren’t on the customer service front line. Urban Outfitters takes a similar approach. When customers ask questions about specific products online, often the product designer will respond directly to the question. The brand also takes user-generated content to the drawing board. If customers take pictures of themselves wearing products in a certain way, the design team creates new items of apparel to better align the retailer with its audience and its ever-changing fashion choices. Leading manufacturer QVC noticed through customergenerated content that a top selling product, an ice cream maker, was getting a 1.3 rating. Some 10,500 of the products were sold but because it was inexpensive, return rates were very low. Social data revealed that customers were actually throwing the product away. Therefore, QVC decided to stop selling the popular product, putting the customer at the heart of the manufacturing process. Richard Anderson is VP of client services in EMEA at Bazaarvoice

ISSUE SEVEN • MARCH 2012


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the l finwaord

IS YOUR VOICE OF THE CUSTOMER REALLY BEING LISTENED TOO? Colin Shaw has a healthy cynicism for the way organisations approach their Voice of the Customer strategies which he contends is still just a ‘tick box’ exercise for too many ... and here he explains why Sometimes things never change…. a number of years ago, when I was a Senior Executive responsible for Customer Experience at BT, I was presenting to my colleagues on our Customer satisfaction survey results. I informed the team I felt the ‘Voice of the Customer’ was being ignored by people in our organization and no one was really doing anything to improve the scores. I made the case that because the ‘Voice of the Customer’ score only accounted for 5% of people’s bonus everyone effectively ignored it. I went on to explain that the excepted culture was to prioritise other targets ie: sales revenue. This was because people could earn much more money by focussing on these areas and ignore the ‘Voice of the Customer’. The room was silent. As I looked around I could see the ambivalence in people’s faces. I wasn’t expecting what happened next. Flabbergasted! One of my fellow Senior Exec members said “I agree with you Colin, we don’t do anything with it. In fact I agree with you so much that I think we should stop undertaking the Voice of the Customer survey and save the money, it’s a waste of time.” I was flabbergasted. But the reality was this what most people thought. It was an annoyance. Their job was to sell stuff. Customer satisfaction was nice in theory, but didn’t form part of their daily life. I knew my work was cut out for me following that meeting…. In my experience of working in Customer Experience for ten years, I have been gratified to see that more and more companies are implementing a ‘Voice of the customer’ programme. My worry is many organizations suffer from the same issue . I do not believe most organisations are really ‘bought into’ the actions and changes required. My experience shows that in far too many cases the attitude I faced 10 years ago is still prevalent today.

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Tick box mentality The danger is that a ‘Voice of the Customer programme’ becomes a ‘tick the box’ mentality. In other words, people see everyone else is doing it, so they decide to do it as it’s the ‘right thing to do’. But then nothing happens with the results. The real question is not ‘do you have a Voice of the Customer programme’, but what do you do with it! To do something with it, you need to make it important to people. We all know the old phrase ‘what gets measured gets done’. I agree but I would add, ‘and what people get paid for gets done even more!’ This is a critical point. It is vital that you make ‘Voice of the Customer’ measures part of everyone’s measures, and I mean everyone; Finance, HR, everyone. But you should also make it part of people’s pay. A recent client which Forrester has recently written a case study on is a good example. Whilst their CE programme was multi faceted it critically included changing employee’s measures and making Customer Experience measures account for upwards of 30% of their bonus. In just two years they have moved their Net Promoter score from -10 to +30. A 40 point move! You can do the same, if your company takes ‘Voice of the Customer’ measures as seriously as they did.

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

ISSUE SEVEN • MARCH 2012

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Customer Engagement Club Gets Networked Try our new Customer Engagement Network website for size www.customerengagementnetwork.com


Time: Venue:

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

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

Social Media and Mobile Customer Engagement Directors Forum 16th May 2012, London Delegates will learn:

The rise and rise of social and mobile customer engagement has been instrumental in changing the whole face of customer relationships. Today’s customer has more power, a greater say in how an organisation designs its products and services and is more likely to take the opportunity to have their say. This Directors Forum will examine the issues, challenges and opportunities around both social and mobile customer engagement and how savvy organisations are working with these rapidly evolving channels to market to gain competitive advantage.

• How world class organisations are successfully implementing social media and mobile customer engagement strategies to improve their customer service offering and enhance customer loyalty • How social and mobile customer engagement is changing the way organisations and customers interact across those channels as the dynamics of the relationships evolve • Where social and mobile customer engagement fits into an holistic view of customers and how joined up engagement strategies are being translated into greater customer insight and competitive advantage • The latest trends in social and mobile customer engagement and how changing customer behaviour and expectations are impacting on organisations as they strive for a single customer view • How to deal with and find successful outcomes to the myriad of challenges that are thrown up through interactions of social and mobile channels and gain greater share of wallet • Real life case study examples of those organisations which are getting it right when it comes to social and mobile customer engagement and how they are achieving it.

Register FREE TO ATTEND FOR CUSTOMER ENGAGEMENT PROFESSIONALS


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