How to keep customers long term customer-adaptive enterprise maturity research -10-13
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© Copyright Ovum. All rights reserved. Ovum is a subsidiary of Informa plc.1
What it takes to keep customers coming back
Jeremy Cox
Jeremy.cox@ovum.com
@jeremycoxcrm
October 8th 2013
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Agenda
What question should every organisation answer?
Answer the question
Pilot research findings – current maturity levels
Recommendations
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What question should every organisation answer?
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Where will we be in 5 - 10 years time perhaps?
• 87% companies from1955 Fortune 500 list have gone bankrupt.
Source: S.Denning Forbes Magazine
• Life expectancy of a firm since then reduced from 75 to 15 years
Source: S.Denning Forbes Magazine
• CEO tenure has dropped to 6.6 years from 8.1 years in 2003
Source: Booz & Co
Source: Ovum Customer-Adaptive Enterprise preliminary research to September 2013
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The future of a commercial organisation is assured only if it can maintain its relevance to its customers
existingcustomers
existing prospects
new and existingcustomers
Time
LifetimeValue
Future cash-flows
retain - attract - develop
IncreasingShareholderreturns
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We all have to answer the same question:
How can we remain persistently relevant to our customers?
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Today it’s even more challenging…..
Source: Ovum Customer-Adaptive Enterprise preliminary research to September 2013
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What should we do?
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Answer the question
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What attributes do we need?
Visionary leadership
Engaged
Collaborative
Insightful
Positive
experienceInnovative
Connected
Architected
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Examples leading Organizations displaying customer-adaptive attributes
All display the ability to continuously refresh the value they deliver to customers and move at pace
=++
+ + =
= 60,000++
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Pilot research findings
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< 50 38%
>50 - 50032%
>50030%
Organization Size US$ Millions
< 50 >50 - 500 >500
18%
71%
11%
Sectors represented
Public Sector Private Sector Charities & Education
Organization & respondent segmentation
Source: Ovum Customer-Adaptive Enterprise preliminary research to September 2013
Total number of respondents 73
CEO
Other C-suite
CIO, VP/IT Director
Senior Manager
0 5 10 15 20 25 30
Respondent profiles
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The top 5% are doing well but the majority of organisations are at risk
Lead
ersh
ip
Wor
kforc
e en
gage
men
t
Colla
bora
tion
Sensin
g
Custo
mer
exp
erie
nce
Inno
vatio
n m
anag
emen
t
Conne
cted
proc
esse
s
Enter
prise
arc
hite
cture
0
10
20
30
40
50
60
70
80
90
100
Composite best = top performers (5%) Average
Breakthrough
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Organizations are largely disconnected from their customers, putting their futures at risk
Critical areas of weakness identified Leadership ‒ Slow decision making
Partially engaged workforce - 60%
Collaboration – Lack tools & encouragement
Weak sensing capabilities ‒ Fragmented view
Fragmented/disjointed customer experience ‒ could impact reputation and retention
Innovation is haphazard ‒ No process
Poorly aligned or connected mission critical processes ‒ Operational silos & inefficient
Lack an adaptive enterprise architecture ‒ No insight into how vision is to be delivered
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Decision cycles are too slow
See The Customer-Adaptive Future, and Agile and Lean Business Transformation, (February 2013)
Customer Vision articulated
Provides sense of purpose
Clear values guide workforce decision making
Front line able to respond fast to customers
Use continuous planning
Workforce trusts leadership
Leadership attributes
Positives:
• Most have customer visions
Negatives:
• Slow decision cycles
• Inability to redeploy resources fast enough
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Workforce engagement levels need attentionWorkforce engagement
See Supporting The Next Generation of Information Workers, IT007-000712 (August 2013)
Engaged workforce
High satisfaction
EmpoweredCustomer 1st dep’t 2nd
Has right tools
Personal growth encouraged Positives:
• 60% engagement – could be worse
Negatives:
• Silos
• Lack of contribution
• Impacts CX
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More determined ESN adoption required
See Checklist: Implementing Your Own Internal Social Network, IT018-001422 (July 2013)
Collaboration
Enterprise-wide ESN
Readily identify expertise
Customer communities
Knowledge sharing
Ideas encouraged
Peer recognition fosters collaboration
Positives:
• Collaboration seen as essential
Negatives:
• Lack of supporting tools like ESN
• Missing out on customer communities
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Majority of organizations are flying blindSensing capabilities
See Creating the Infrastructure for Big Data and Analytics, (July 2013)
Monitor customer environment
Easy access to intelligence
Operational BI
Aware of customer context
Predictive
Harvest Insights from social/web
Positives:
• Top 5% using analytics extensively
Negatives:
• 95% are not
• Lack insight and foresight = major risk
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Organizations deliver fragmented experienceCustomer experience (CX)
See Redefining the Customer Experience (June 2012) Also see the October 2013 Ovum report on state-of-the-art VoC programs.
Mapped customer journeys
CX metrics vs. time
Analytics to inform interactions
Integrated voice/chat/self-service and mobile
Closed-loop VOC all channels
CSAT 90%+
Positive NPS
Positives:
• Top 5% offer seamless CX
Negatives:
• 95% provide fragmented experience
• Retention and reputations at risk
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Organizations too reliant on luckInnovation management
See Creating an Environment for Continuous Innovation (April 2013)
New innovations contribute high share of revenue
Seen as innovators
Workforce contributes to ideas
Enterprise-wide Innovation Mgt
Collaborate with partners
Co-innovate with customers
Positives:
• Only top 3% have CEO led innovation management process
Negatives:
• 97% take an ad hoc approach
• Commoditisation & eventual obsolescence
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Recommendations
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Integrated CRM provides a solid foundation for CX which in turn provides the same for CAE
CAE
CX
Integrated CRM
Point solution
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So consider where your organisation is today and aim for the next stage
Transactional Engaged
• Single department focus e.g. SFA, campaigns, service
Stage 1
Depart-mental
• 360 transactional view of the customer
Stage 2 integrated with back-
office
• Context aware & personalized
• harvest external data to generate insights
• Multiple integrated applications
Stage 3 all-channel
seamless and relevant
• Persistently relevant
• Ability to adapt at speed
• Continuous innovation
Stage 4
Customer-Adaptive
Customer centricity continuum
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Then develop your roadmap to move forward towards your customer-centric vision
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Recommendations from customer-adaptive maturity research findings: 1
• Deploy ESN purposefully
• Foster adoption
• Encourage expertise sharing
• Vision – put customer at the centre
• Adaptive planning
• Empower front line decision making
• Orchestrate 8 attributes
• Involve workforce in direction
• Monitor morale
• Identify and remove inhibitors
• Coordinate to create a ‘nervous system’
• Monitor inside and outside
• Make analytics accessible
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Recommendations from customer-adaptive maturity research findings: 2
• Map value chain to identify critical processes
• Assign process owners
• Connect
• C-level CX leader
• Map customer journey
• Embed enterprise wide VOC & measurements
• Set agenda from top
• Encourage experimentation
• Use innovation mgt integrated with ESN
• Invest – set aside budget
• Create blueprint to support vision
• Ensure open to future technologies
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You can draw on our analyst community for a deeper exploration into areas of particular focus
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THANK YOU
''If you’re not prepared for the future today, you're history tomorrow''
Peter Hasler Chairman
Jeremy.cox@ovum.com @jeremycoxcrm
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Values
Skills &Empowerment
Collaboration
Organization design
Processes
Customers
Technologies
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