How to keep customers long term customer-adaptive enterprise maturity research -10-13

© Copyright Ovum. All rights reserved. Ovum is a subsidiary of Informa plc.1

What it takes to keep customers coming back

Jeremy Cox

[email protected]

@jeremycoxcrm

October 8th 2013

mailto:[email protected]

© Copyright Ovum. All rights reserved. Ovum is an Informa business.2

Agenda

What question should every organisation answer?

Answer the question

Pilot research findings – current maturity levels

Recommendations


What question should every organisation answer?


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


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


We all have to answer the same question:

How can we remain persistently relevant to our customers?


Today it’s even more challenging…..



What should we do?


Answer the question


What attributes do we need?

Visionary leadership

Engaged

Collaborative

Insightful

Positive

experienceInnovative

Connected

Architected


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++


Pilot research findings


< 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


Total number of respondents 73

CEO

Other C-suite

CIO, VP/IT Director

Senior Manager

0 5 10 15 20 25 30

Respondent profiles


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


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


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

http://www.ovumkc.com/Products/IT/Enterprise-Applications/The-Customer-Adaptive-Future/SUMMARY

http://www.ovumkc.com/Products/IT/Software-Lifecycle-and-Integration/Agile-and-Lean-Business-Transformation/


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

http://www.ovumkc.com/Products/IT/Government-Technology/Supporting-the-Next-Generation-of-Information-Workers/SUMMARY


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

http://www.ovumkc.com/Products/IT/Enterprise-IT-Management/Checklist-Implementing-Your-Own-Internal-Social-Network/




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

http://www.ovumkc.com/Product/IT015-001877




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

http://www.ovumkc.com/Product/TE007-000614




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





Recommendations


Integrated CRM provides a solid foundation for CX which in turn provides the same for CAE

CAE

CX

Integrated CRM

Point solution


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


Then develop your roadmap to move forward towards your customer-centric vision


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


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


You can draw on our analyst community for a deeper exploration into areas of particular focus


THANK YOU

''If you’re not prepared for the future today, you're history tomorrow''

Peter Hasler Chairman

[email protected] @jeremycoxcrm

mailto:[email protected]


Values

Skills &Empowerment

Collaboration

Organization design

Processes

Customers

Technologies

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