What leads to un-economic Customer Experience investments?


It’s extraordinarily easy to make uneconomic investments in customer experience – much of the time and money ‘invested’ is wasted because organisations fail to understand the criticality of systems thinking and the need for ‘silo-busting.’ They also focus on how they ‘deliver’ experiences rather than understanding how people ‘have’ experiences. It is how people ‘have’ an experience that influences the choices they make in the pursuit of what they really want. The culprits that lead to uneconomic investments in customer experience include the following:-

o Reliance on customer satisfaction measures – customer experience investments only pay off when behaviour changes – satisfaction is not an emotional state that drives behaviour
o Voice of the Customer – Henry Ford said “If I had asked customers what they wanted, all we’d have is faster horses’
o Touchpoint Mapping – The highest impact insights and opportunities exist at non-touchpoints – companies ‘deliver’ an experience at touchpoints e.g. dropping car off for service at service desk, getting lift to work, getting a call indicating status of service……………….etc etc etc. People have experiences at non-touchpoints………e.g. frame of mind based upon past service experience BEFORE car is dropped off for service, having to wait for a driver to deliver them to work, having to arrange their day without access to mobility because car is in for service, having to arrange collection of vehicle…………etc etc etc. It’s important to consider and recognise behavioural pathways – what do these events make customers think, feel and what does this influence them to do?
o Service Level Improvement – Incremental improvements in service quality generally do not get customers’ attention or influence behaviour
o ‘Fixing’ the front line – The experience customers have is a product of deeply entrenched organisational behaviour. Training and motivating front line employees does not address this

Source: Frank Capek – Customer Innovations

Customer-Centric Transformation: What Good Looks Like – Penetration – Managing High Value Customers – Part 14c of 14c


Designing and executing a customer-centric business model requires end to end organisational alignment. Customer-centric capability development cannot take place in isolation to the rest of the business. The customer-centric journey requires a clear quantified understanding of current organisational capability across all 14 capability areas of the SCHEMA® Customer Management framework in the centre of the REAP Customer-Centric Blueprint below. As important as an understanding of current customer management capability is, so too is an understanding of the capability to which the organisation aspires.

Each week I’ll address another single capability area, sharing with you the Transformation Intent to which your organisation should commit to, as well as ‘What Good Looks Like’ for those organisations that have achieved a fairly high level of maturity in the respective capability area.

The REAP Customer-Centric Organisation Blueprint®

REAP CCOB for Blog

This week  we are dealing with Penetration which is one of the four Execution capability areas represented. The Execution layer relates to the capabilities and control levers needed to optimise customer value and includes Retention, Efficiency (understanding cost to serve), Acquisition and Penetration (customer development, cross-sell and up-sell) – collectively referred to as REAP. These are capabilities and initiatives that can be optimised in the short term.

These capabilities support your ability to implement your chosen customer strategies and rely on the fundamental building blocks (Foundations) as well as the Enabling capabilities already discussed in Part 1 to 10 of this series of blog posts.

Each of the four Execution capability areas is made up of sub-components. The Penetration dimension relates to the ability to develop more value from existing customers through cross-sell and up-sell activities to improve return on customer investment. Formal management of high value customers and key accounts is a critical part of this. It also requires clarity as to how you deal with low value customers from a development perspective, if at all. The 3 sub-components of the Penetration dimension are ‘Understanding Customer Value,’  ‘Increasing Customer Value,’ and ‘Managing High Value Customers.’ Each of these areas is addressed in separate, individual blog posts.

Transformation Intent – Penetration

“Delivering sustainable and superior business performance requires the on-going development and growth in the value of your customer base. To do this you need to have an in-depth understanding of your customer value so that you can identify opportunities to increase this value. This potential uplift is then supported through relevant propositions, cross-selling, up-selling, indirect value creation and expansion of existing product usage. In treating different customers differently, high value customers should also be given special attention so that the right team equipped with the necessary budget can deliver on their specific needs.”

What Good Looks Like – Managing High Value Customers

  • Current and potentially high value customers are identified and managed as a specific category with additional resources and budget, even if there is no formal concept of key accounts, or they do not fall into the definition of key accounts.
  • Planning for customers that do classify as formal key accounts is a meaningful exercise that drives resource allocation, customer activity and relationship development rather than just setting targets and budgets. It involves a wider range of internal stakeholders for each account and is at least transparent to the customer if it does not actively involve them.
  • Key accounts are managed at a deeper and more pro-active level than other customers with regular reviews of the relationship as well as progress against the plan. Opportunities for meaningful collaboration on a shared-risk basis are actively sought.

For more insight into customer-centric business model innovation as well as more insight into this particular area of the REAP Customer-Centric Blueprint, please see my book “The Customer-Centric Blueprint’ – http://amzn.to/ZILg4y

Customer-Centric Transformation: What Good Looks Like – Acquisition – Identifying New Prospects – Part 13b of 14


Designing and executing a customer-centric business model requires end to end organisational alignment. Customer-centric capability development cannot take place in isolation to the rest of the business. The customer-centric journey requires a clear quantified understanding of current organisational capability across all 14 capability areas of the SCHEMA® Customer Management framework in the centre of the REAP Customer-Centric Blueprint below. As important as an understanding of current customer management capability is, so too is an understanding of the capability to which the organisation aspires.

Each week I’ll address another single capability area, sharing with you the Transformation Intent to which your organisation should commit to, as well as ‘What Good Looks Like’ for those organisations that have achieved a fairly high level of maturity in the respective capability area.

The REAP Customer-Centric Organisation Blueprint®

REAP CCOB for Blog

 

 

 

This week we are dealing with Acquisition which is one of the four Execution capability areas represented. The Execution layer relates to the capabilities and control levers needed to optimise customer value and includes Retention, Efficiency (understanding cost to serve), Acquisition and Penetration (customer development, cross-sell and up-sell) – collectively referred to as REAP. These are capabilities and initiatives that can be optimised in the short term.

These capabilities support your ability to implement your chosen customer strategies and rely on the fundamental building blocks (Foundations) as well as the Enabling capabilities already discussed in Part 1 to 10 of this series of blog posts.

Each of the four Execution capability areas is made up of sub-components. The Acquisition dimension focuses on the specific, practical activities that will support you to increase both the quality and volume of new customers. Acquisition explores ways in which you can increase the size of your customer universe and your share of it. The 5 sub-components of the Acquisition dimension are ‘Understanding Acquisition,’  ‘Identifying New Prospects,’ ‘Managing Interest,’ ‘Converting Sales,’ and ‘Setting up & Activating.’  Each of these areas is addressed in separate, individual blog posts.

Transformation Intent – Acquisition

“A customer-centric Acquisition approach begins with a clear and intimate understanding of your customer universe and the factors that impact your ability to sell to them. Acquiring your share of this customer universe is achieved through appropriate targeted marketing activity across a broad range of relevant channels and media, and interest generated is managed effectively so that prospects are kept warm until the sale is closed. While the sales process itself should focus on closing the sale, it should also take into account effective lead management, specific sales targets and rewards and careful controls over pricing. Customer-centricity also recognises that new clients have not been secured until you have taken them through an experience-based initiation process, where they are made to feel welcome and are well informed.”

What Good Looks Like – Identifying New Prospects

  • The nature of target customers is defined and best potential sources (locations, current suppliers, groupings) of these types of potential customer have been identified.
  • Use is made of all relevant channels of influence and referral both at the individual advocate / trusted advisor level and at the level of influencing bodies and networks. This includes the active exploitation of referrals between business units of the organisation.
  • All pro-active acquisition marketing activity, across all media including social media, is tightly targeted to ensure the highest probability of gaining an attractive mix of new customers efficiently and cost effectively. Marketing activity is effectively terminated where it is resulting in the identification of a poor mix of prospects.
  • Good quality customers who have been lost in the past are targeted for appropriate winback activity, using relevant messages for their reason for leaving, at the right time to ensure the best chance of winning back the most valuable ones.

For more insight into customer-centric business model innovation as well as more insight into this particular area of the REAP Customer-Centric Blueprint, please see my book “The Customer-Centric Blueprint’ – http://amzn.to/ZILg4y

Customer-Centric Transformation: What Good Looks Like – Acquisition – Understanding Acquisition – Part 13a of 14


 

Designing and executing a customer-centric business model requires end to end organisational alignment. Customer-centric capability development cannot take place in isolation to the rest of the business. The customer-centric journey requires a clear quantified understanding of current organisational capability across all 14 capability areas of the SCHEMA® Customer Management framework in the centre of the REAP Customer-Centric Blueprint below. As important as an understanding of current customer management capability is, so too is an understanding of the capability to which the organisation aspires.

 

Each week I’ll address another single capability area, sharing with you the Transformation Intent to which your organisation should commit to, as well as ‘What Good Looks Like’ for those organisations that have achieved a fairly high level of maturity in the respective capability area.

 

The REAP Customer-Centric Organisation Blueprint®

 

REAP CCOB for Blog

 

 

 

This week we are dealing with Acquisition which is one of the four Execution capability areas represented. The Execution layer relates to the capabilities and control levers needed to optimise customer value and includes Retention, Efficiency (understanding cost to serve), Acquisition and Penetration (customer development, cross-sell and up-sell) – collectively referred to as REAP. These are capabilities and initiatives that can be optimised in the short term.

 

These capabilities support your ability to implement your chosen customer strategies and rely on the fundamental building blocks (Foundations) as well as the Enabling capabilities already discussed in Part 1 to 10 of this series of blog posts.

 

Each of the four Execution capability areas is made up of sub-components. The Acquisition dimension focuses on the specific, practical activities that will support you to increase both the quality and volume of new customers. Acquisition explores ways in which you can increase the size of your customer universe and your share of it. The 5 sub-components of the Acquisition dimension are ‘Understanding Acquisition,’  ‘Identifying New Prospects,’ ‘Managing Interest,’ ‘Converting Sales,’ and ‘Setting up & Activating.’  Each of these areas is addressed in separate, individual blog posts.

 

Transformation Intent – Acquisition

 

“A customer-centric Acquisition approach begins with a clear and intimate understanding of your customer universe and the factors that impact your ability to sell to them. Acquiring your share of this customer universe is achieved through appropriate targeted marketing activity across a broad range of relevant channels and media, and interest generated is managed effectively so that prospects are kept warm until the sale is closed. While the sales process itself should focus on closing the sale, it should also take into account effective lead management, specific sales targets and rewards and careful controls over pricing. Customer-centricity also recognises that new clients have not been secured until you have taken them through an experience-based initiation process, where they are made to feel welcome and are well informed.”

 

What Good Looks Like – Understanding Acquisition

 

  • The current and potential size of the customer universe/s for the organisation’s market/s is understood, making acquisition planning and targeting realistic and not just based on previous year plus x%. The Universe share (as opposed to market volume share) is fully understood for each of the main competitors.
  • Sales processes are understood in terms of both why they fail and why they succeed, from both the internal and the customer point of view, as well as which internal / market factors most impact on sales success rates.
  • The demographic and socio-graphic nature of newly acquired customers from each channel / source is understood, along with how far and how quickly their value builds up to its peak level. Acquisition activity is increasingly targeted at attracting good customers and not just any customer.

 

For more insight into customer-centric business model innovation as well as more insight into this particular area of the REAP Customer-Centric Blueprint, please see my book “The Customer-Centric Blueprint’ – http://amzn.to/ZILg4y

 

Customer-Centric Transformation: What Good Looks Like – Efficiency – Controlling Costs – Part 12b of 14


Designing and executing a customer-centric business model requires end to end organisational alignment. Customer-centric capability development cannot take place in isolation to the rest of the business. The customer-centric journey requires a clear quantified understanding of current organisational capability across all 14 capability areas of the SCHEMA® Customer Management framework in the centre of the REAP Customer-Centric Blueprint below. As important as an understanding of current customer management capability is, so too is an understanding of the capability to which the organisation aspires.

Each week I’ll address another single capability area, sharing with you the Transformation Intent to which your organisation should commit to, as well as ‘What Good Looks Like’ for those organisations that have achieved a fairly high level of maturity in the respective capability area.

The REAP Customer-Centric Organisation Blueprint®

REAP CCOB for Blog

 

 

 

 

 

 

 

This week we are dealing with Efficiency which is one of the four Execution capability areas represented. The Execution layer relates to the capabilities and control levers needed to optimise customer value and include Retention, Efficiency (understanding cost to serve), Acquisition and Penetration (customer development, cross-sell and up-sell) – collectively referred to as REAP. These are capabilities and initiatives that can be optimised in the short term.

These capabilities support your ability to implement your chosen customer strategies and rely on the fundamental building blocks (Foundations) as well as the Enabling capabilities already discussed in Part 1 to 10 of this series of blog posts.

Each of the four Execution capability areas is made up of sub-components. The Efficiency dimension seeks to manage costs from a customer profitability perspective and evaluates costs in reference to the value of the customer for whom those costs are incurred. The 2 sub-components of the Efficiency dimension are ‘Calculating & Allocating Costs’ and ‘Controlling Costs.’ Each of these areas is addressed in separate, individual blog posts.

Transformation Intent – Efficiency

“In treating different customers differently, your organisation needs to develop the capability to optimise customer profitability through the efficient calculation, allocation and control of customer costs in retaining, acquiring and developing your customers across all segments and channels. This enables you to perform value analysis in a way that supports your customer engagement within the defined profit bands per customer and per segment, and if need be, influencing their behaviour to reduce the cost-to-serve or even terminating them as customers if necessary.”

What Good Looks Like – Controlling Costs

  • The relative costs of acquiring, retaining and developing customers by each channel are understood and have an influence on customers’ allocation / entitlement to each channel. Maximum acceptable acquisition costs are calculated for each customer type and mechanisms in place to stop acquisition activity or hold back sales costs (commissions) if necessary.
  • Marketing costs are controlled by formal optimization, moving towards inbound targeting and by reducing or stopping marketing to some customers where the cost cannot be justified.
  • The drivers of cost-to-serve variations are understood and the overall cost-to-serve level is being reduced by changing buying behaviours and maximizing the use of self-service wherever possible.
  • The various costs of failure and wastage are understood and fully considered in work to improve customer processes.
  • The organisation has an ethos, relevant definition and sensitive processes that allow high cost (compared to revenue) customers to be stimulated to leave.

 

For more insight into customer-centric business model innovation as well as more insight into this particular area of the REAP Customer-Centric Blueprint, please see my book “The Customer-Centric Blueprint’ – http://amzn.to/ZILg4y

Customer-Centric Transformation: What Good Looks Like – Efficiency – Calculating & Allocating Costs – Part 12a of 14


Designing and executing a customer-centric business model requires end to end organisational alignment. Customer-centric capability development cannot take place in isolation to the rest of the business. The customer-centric journey requires a clear quantified understanding of current organisational capability across all 14 capability areas of the SCHEMA® Customer Management framework in the centre of the REAP Customer-Centric Blueprint below. As important as an understanding of current customer management capability is, so too is an understanding of the capability to which the organisation aspires.

Each week I’ll address another single capability area, sharing with you the Transformation Intent to which your organisation should commit to, as well as ‘What Good Looks Like’ for those organisations that have achieved a fairly high level of maturity in the respective capability area.

The REAP Customer-Centric Organisation Blueprint®

REAP CCOB for Blog

 

 

 

 

 

 

 

This week we are dealing with Efficiency which is one of the four Execution capability areas represented. The Execution layer relates to the capabilities and control levers needed to optimise customer value and include Retention, Efficiency (understanding cost to serve), Acquisition and Penetration (customer development, cross-sell and up-sell) – collectively referred to as REAP. These are capabilities and initiatives that can be optimised in the short term.

These capabilities support your ability to implement your chosen customer strategies and rely on the fundamental building blocks (Foundations) as well as the Enabling capabilities already discussed in Part 1 to 10 of this series of blog posts.

Each of the four Execution capability areas is made up of sub-components. The Efficiency dimension seeks to manage costs from a customer profitability perspective and evaluates costs in reference to the value of the customer for whom those costs are incurred. The 2 sub-components of the Efficiency dimension are ‘Calculating & Allocating Costs’ and ‘Controlling Costs.’ Each of these areas is addressed in separate, individual blog posts.

Transformation Intent – Efficiency

“In treating different customers differently, your organisation needs to develop the capability to optimise customer profitability through the efficient calculation, allocation and control of customer costs in retaining, acquiring and developing your customers across all segments and channels. This enables you to perform value analysis in a way that supports your customer engagement within the defined profit bands per customer and per segment, and if need be, influencing their behaviour to reduce the cost-to-serve or even terminating them as customers if necessary.”

 

What Good Looks Like – Calculating & Allocating Costs

  • Communication of dissatisfaction is encouraged from customers both directly and via staff. It is pro-actively drawn out by internal processes, even if there is no formal complaint.
  • Complaints via regulatory bodies are dealt with enthusiastically and in a way that ensures their response standards are always met. Formal complaints received directly from customers are dealt with consistently across the organisation, to clearly defined standards which are themselves transparent to customers.
  • Analysis of complaints extends to deep ‘root-cause’ levels and reporting is reviewed by very senior managers who are told the whole story.
  • Issues likely to cause widespread dissatisfaction are dealt with quickly and incisively, using social and traditional media, making use of advocates and fans wherever possible.
  • Relationship recovery is seen as an integral part of the dissatisfaction management process and is applied re-actively and/or pro-actively against a clear set of criteria of where it should be applied.

 

For more insight into customer-centric business model innovation as well as more insight into this particular area of the REAP Customer-Centric Blueprint, please see my book “The Customer-Centric Blueprint’ – http://amzn.to/ZILg4y

Customer-Centric Transformation: What Good Looks Like – Retention – Managing Dissatisfaction – Part 11d of 14


Designing and executing a customer-centric business model requires end to end organisational alignment. Customer-centric capability development cannot take place in isolation to the rest of the business. The customer-centric journey requires a clear quantified understanding of current organisational capability across all 14 capability areas of the SCHEMA® Customer Management framework in the centre of the REAP Customer-Centric Blueprint below. As important as an understanding of current customer management capability is, so too is an understanding of the capability to which the organisation aspires.

Each week I’ll address another single capability area, sharing with you the Transformation Intent to which your organisation should commit to, as well as ‘What Good Looks Like’ for those organisations that have achieved a fairly high level of maturity in the respective capability area.

The REAP Customer-Centric Organisation Blueprint®

REAP CCOB for Blog

This week we are dealing with Retention which is one of the four Execution capability areas represented. The Execution layer relates to the capabilities and control levers needed to optimise customer value and include Retention, Efficiency (understanding cost to serve), Acquisition and Penetration (customer development, cross-sell and up-sell) – collectively referred to as REAP. These are capabilities and initiatives that can be optimised in the short term.

These capabilities support your ability to implement your chosen customer strategies and rely on the fundamental building blocks (Foundations) as well as the Enabling capabilities already discussed in Part 1 to 10 of this series of blog posts.

Each of the four Execution capability areas is made up of sub-components. In developing Retention capabilities it is important to understand the drivers that create and maintain loyalty as well as the factors that destroy it, important to consider how to retain through business as usual, important to consider pro-active retention activity and how to best manage dissatisfaction. Each of these areas is addressed in separate, individual blog posts.

Transformation Intent – Retention

“Retention is all about understanding your customer base and the drivers that create and maintain loyalty as well as the factors that destroy it. Coupled with this is the need to consistently deliver on your promise while ensuring that over-delivery is balanced against the overriding goal of doing just enough to ensure repurchase. A retention strategy also demands that you are pro-active with your customers, monitoring them for signs of defection and implementing constructive plans to generate customer commitment to repurchase. Should customers become dissatisfied, the right flows of communication alert you so that the issues can be addressed promptly and consistently, whilst solving the problem at a root cause level.”

What Good Looks Like – Managing Dissatisfaction

  • Communication of dissatisfaction is encouraged from customers both directly and via staff. It is pro-actively drawn out by internal processes, even if there is no formal complaint.
  • Complaints via regulatory bodies are dealt with enthusiastically and in a way that ensures their response standards are always met. Formal complaints received directly from customers are dealt with consistently across the organisation, to clearly defined standards which are themselves transparent to customers.
  • Analysis of complaints extends to deep ‘root-cause’ levels and reporting is reviewed by very senior managers who are told the whole story.
  • Issues likely to cause widespread dissatisfaction are dealt with quickly and incisively, using social and traditional media, making use of advocates and fans wherever possible.
  • Relationship recovery is seen as an integral part of the dissatisfaction management process and is applied re-actively and/or pro-actively against a clear set of criteria of where it should be applied.

 

For more insight into customer-centric business model innovation as well as more insight into this particular area of the REAP Customer-Centric Blueprint, please see my book “The Customer-Centric Blueprint’ – http://amzn.to/ZILg4y