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Managing Customer Experience — The Next Competitive Frontier
Based on Interviews With
• Dr. Donald Norman, Co-Founder, Consultant
Nielsen Norman Group (U.S.)
• Dr. Eric Schaffer, CEO
Human Factors International (U.S.)
• Dr. Donald Lessard, Deputy Dean
MIT Sloan School of Management (U.S.)
• Irene Au, Head of User Experience
Google (U.S.)
• Kevin Cai, CIO
China Eastern Airlines (China)
• Willie Stegman, Program Director, Core Banking Transformation
Standard Bank (South Africa)
• Tsukasa Makino, CIO
Tokio Marine & Nichido Fire Insurance (Japan)
Definition of "Customer Experience"
The customer experience (CX) is the customer's perceptions and related feelings caused by the one-off and cumulative effect of interactions with a supplier's employees, channels, systems, or products.
Key Issues
1. Why is the focus on managing the "customer
experience" increasing?
2. What are the challenges in addressing this issue?
3. What are the approaches CIOs should use to
enhance the customer experience?
Key Issues
1. Why is the focus on managing the "customer
experience" increasing?
2. What are the challenges in addressing this issue?
3. What are the approaches CIOs should use to
enhance the customer experience?
The Quality of CX Increasingly Determines Enterprise Success
• The percentage of people who discontinued their business with a company
after a negative CX climbed from 68% in 2006 to 89% in 2011.
• 86% of consumers would pay more for a better CX.
• 73% of consumers would expand their purchases with a vendor by 10% or more if a
superior CX was delivered.
• 44% of consumers would pay a premium of 5% or more for a superior CX.
• 58% of consumers would recommend companies that deliver a superior CX.
"Apple's stock price has risen 500% over the last five years and more than 4,500% since 2002, soon after Steve Jobs introduced the iPod, the first of his path-breaking trio of mobile devices that later included the iPhone and the iPad. The company posted revenue of $46.3 billion in the quarter ended 31 Dec, one of the largest quarterly hauls
ever for a technology firm." — LA Times, 29 Feb 2012.
Strong Correlation of CX Excellence and Enterprise Success
NPS used as a proxy measure of the CX quality
14
-5
18
-5
3
1
102
1
62
107
33
23
32
32
32
38
56
114
128
224
328
382
-50 0 50 100 150 200 250 300 350 400 450
Kaiser Permamente-Health Insurance
USAA-Homeowners Insurance
USAA-Banking
USAA-Auto Insurance
Costco-Department/Speciality Stroes
Safelite AutoGlass-Auto Service/repair
TripAdvisor-Travel Websites
Google-Online Search/Information
Amazon.com-Online Shopping
Apple-Computer Software
Apple-Computer Hardware
Revenue Growth ComparisonNPS Leader vs. Industry Average (%)
Industry Average
NPS Leader
CIOs See Customer Experience as Greatest Opportunity for IT Innovation
Source: Gartner CIO Survey, 2012
Ranked First Ranked Last
35%
32%
24%
18%
15%
16%
12%
6%
13%
9%
10%
11 %
Customer engagement, marketing and sales
The manufacturing and service creation process
How we learn and change as a business
The way we get ideas and make decisions
The way we extract value from customers
Distribution of Respondents
Customer experience (products, services, etc.)
Case Study: Recognition of the Problem — Standard Bank (South Africa)
• High levels of competition and regulatory pressures in
the retail banking space
• Review of operating and business model in light of
declining revenue and market share
• Conclusion: The bank had "lost touch" with customer
expectations
• Facing challenges from new competitors with simpler
products and pricing models...
• ...Which forced a strategic focus on the customer
experience
— Willie Stegman, Program Director, Core Banking Transformation, Standard Bank
Key Issues
1. Why is the focus on managing the "customer
experience" increasing?
2. What are the challenges in addressing this issue?