Delivering Preferred Customer Experience

7/31/2019 Delivering Preferred Customer Experience

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SALES, MARKETING, AND COMMUNICATIONS PRACTICE

MARKETING LEADERSHIP COUNCIL

2009 The Corporate Executive Board Company. All Rights Reserved.

This study may not be reproduced or redistributed without the expressed permission of The Corporate Executive Board Company.

Delivering a Preferred

Customer Experience


2/20

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and the Marketing Leadership Council cannot guarantee the accuracy of the information or its analysis in all cases. Furthermore, the Marketing Leadership Council is not engaged in

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From the MARKETING LEADERSHIP COUNCIL

of the SALES, MARKETING, AND

COMMUNICATIONS PRACTICE

www.mlc.executiveboard.com

2009 The Corporate Executive Board Company.

All Rights Reserved.MLC5873944668

This study may not be reproduced or redistributed without

the expressed permission of The Corporate Executive Board

Company.

LEFT WITH FEW DEVICES

Potential Commercial Levers to Pull in Response to a Down Economy

Deep recession has

eroded the power of

traditional commercial

levers, leading marketers

to focus on customer

experience.

New business pipelines haverozen as customers cut back

on capital expenditures,

ruling out reliance on new

business as a commercial

driver.

Cost-conscious customersview product quality and

reliability as table stakes

and are unwilling to pay ornuanced product diferences.

Increased scrutiny intobudgets and expenditures

has put relationship-driven

demand in jeopardy.

B2B marketers are lookingto customer experience to

drive stronger commercial

perormance, especially withexisting customers.

Product

Improvements

None o our customers

are willing to pay or the

product improvements

they were asking us to

und three years ago.

SVP Marketing

Medical Devices

Acquiring

New Customers

Contribution to Prot,

New Customers

2007 2008 2009 All OtherSelling

Strategies

Relationship-Based Sales

Personal

Relationships

Likelihood of Being a High

Performer by Sales Rep Prole

Customer Experience

In our industry no one makes a product that doesnt workwe have to win on

customer experience i we dont want to be the low-price player.

23%

7%

?

Source: Integrated Sales Executive Council research.


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Company.

Voice of the

Customer Audits

CustomerExperience Councils

Touchpoint

Mapping

Net PromoterScore Metrics

In recent years, B2B

marketers have made

notable advancements

in customer experience

management.

DOWN THE EXPERIENCE PATH

Advances in Customer Experience Management

Sales Finance MarketingOps

Council Resources

Voice of the

Customer Audit

Experience

Storyboards

Net Promoter

Program Essentials

Acquisition Serv ice Retent ionAwareness

KeyService

Moments

RelevantResearchandData

One-on-One

Interactions

MarComm

Best-in-Class

Competition

SegmentA

$

$

$

$

@

@

@

@

Customer

Experience Council

O rde ri ng S er vi ce s C ust ome r Se rv ic esB il li ng R em ar ke ti ng

MeetEst.Delv.Date

TimelyOrder

Confirmation

TimelyStatusUpdate

TagBeforeExp.Date

TimelyFuelCard

Delivery

VehicleMaintenance

AccountServicing

HoldTime

Knowledgeand

ConsistentAnswer

ResponseTime

ImportanceLevel

Customer

#1

#2

0

6.9 3.0 3.3 1.0 2.7 3.0 1.0 5.2 1.0

9 3 3 NA 1 1 9 1 3 1 3

Customer

Requirements

(CTQs)

#2 9 3 3 1 3 1 1 9 1 1

Process

#2 9 3 3 1 1 1

#3 9 9 3 3 1 1 1

#20 9 9 3 3 1 1 1

Total 435 2 28 2 8 81 76 6 5 46 18 2 161 52

FrequencyofMentionScores

Priority 2 8 4 5 10 7 9 11 3 61

11

1 Pseudonym.


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Company.

Customer experience

eorts to date have

provided questionable

returns for many

companies.

UNREQUITED LOVE

Assessments of Customer Experience Investments

Investment ReturnBain & Company Survey of 362 B2B Companies and Their Customers

Financial resources Sta time and eort Opportunity cost Political capital

2006 2007 2008 2009 2010

$

?

Where Do We Go Next?

We know weve made some progress to date, but I cant imagine thatanother 10% improvement to our Web site or a ew seconds of o our call

center response time will pay ofwe really dont know what to do next.

SVP Marketing

Banking Services

80% of Marketers BelieveThey Oer a SuperiorCustomer Experience

8% of Customers Agree

Source: Bain & Company.


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Company.

Marketers looking for

the next opportunity

to improve customer

experience start from

one of two perspectives:

Touchpoints or Benets.

TWO EXPERIENCE LENSES

Two Perspectives for Evaluating the Customer Experience

Touchpoints

How eective are we across the range

of typical company-to-customer interactions?

Benets

What benets are we trying to deliver

across the course of our customer experience?

Example Touchpoints

Customer service Technical support Online experience Day-to-day product use experience Sales interactions Product literature Marketing communications

Example Benets

Is responsive to feedback Simplies my supply chain Is easy to do business with Removes costs from my business Keeps my technicians productive Adapts to my unique needs Oers a great out-of-the-boxgetting started experience


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All Rights Reserved. MLC5873944668



Company.

COMMERCIAL SUCCESS

The Council created

a model to uncover

successful approaches

to customer experience

management.

The Council asked customers

to evaluate the customer

experience provided by

member companies at two

levels:

Touchpoints

Benets

Customers were also asked aseries o questions to measure:

Preerence or a companyrelative to competitors

Intent to continue buyingrom a company in the

coming year

WHERE DO WE REALLY NEED TO FOCUS?

MLC Customer Experience Model

Touchpoints

Specic interactions between a

customer and the company

Customer Preference

Do customers prefer us over our

direct competitors?

Intent to Repurchase

Do customers plan to continue

buying from us in the coming year?

Benets

Perceptions we create across the

customer experience

Survey Population

We surveyed customers of 15 B2B member companies regarding their experiencewith the member.

Council analysis is based on more than 9,000 customer responses. The survey was administered to a broad cross-section of stakeholders within customercompanies, including decision makers, end-customers, inuencers, consultants, and

procurement ocers.

Sample industries included: Business Software Financial Services

Scientic Equipment Packaging

Building Materials Chemicals


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Company.

Benets are much

stronger drivers of

preference and intent

to repurchase than are

Touchpoints.

Customer assessments ospecic touchpoints are

a marginal driver o their

preerence and intent to

repurchase.

Customer assessmentso benets are powerul

predictors o both

preerence and intent to

repurchase.

FINDING 1: BENEFITS OUTPERFORM TOUCHPOINTS

Model Results: Relative Power of Touchpoints and Benets

Touchpoints

Benets

Benets

Customer assessments o benets have four times

greater impact on preerence and customer intent

to repurchase than do touchpoint assessments.

Touchpoints

Customer assessments o specic

interactions are a poor driver o both

preerence and customer intent to spend.

Strong

Strong

Weak

Preference

Intent to

Repurchase

Weak

(e.g., customer service)

(e.g., responsive to my feedback)


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Company.

Both Common and

Unique Benets are

important drivers of

preference and intent

to repurchase.

DISTINGUISHING BETWEEN COMMON

AND UNIQUE BENEFITS

Model Results: Common and Unique Benets

Common

Benets

Benets that are

relevant in almost any

commercial relationship.

Benets that are specic

to an individual companys

customer experience.

Unique

Benets

CommonBenets

Unique

Benets

(e.g., responsive

to my feedback)

(e.g., simplies my

supply chain)

Strong

Strong

Weak

Preference

Intent to

Repurchase

Weak

Both Common and Unique

Benets are powerul

drivers o preerence and

customer intent to spend.

Touchpoints



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Company.

LEARNING FROM SUCCESS

Distribution of Preference, 15 Member Companies

Focusing on highly-

preferred companies

allows us to understand

how they approach

customer experience

dierently.

Levels o customer preerence

difered dramatically across the

15 participating companies, with

the top companies achieving

levels o preerence ve times

greater than that o trailing

companies.

Percentag

eof

High-Preference

Customers

Lowest Observed Preference:11% of Customer Base

Highest Observed Preference:

62% of Customer Base

Companies with Low Preference

(Between 11% and 32% of existing

customers prefer these companies

to their competitors)

Companies with High Preference

(Between 35% and 62% of existing

customers prefer these companies

to their competitors)

High Preference Companies

Focusing on high-preerence companies

allows us to isolate how their approach

to customer experience difers rom the

broader population.


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Company.

FINDING 2: HIGH-PREFERENCE COMPANIES WIN

WITH UNIQUE BENEFITS

High-preference

companies rely on

Unique Benets to build

customer preference and

intent to repurchase.

Analysis o high-preerence

companies leads to three

conclusions:

Unique Benets emerge asthe most signicant source

o both preerence and

uture spend intentions.

Common Benetsdrive signicant levels

o preerence but areoutperormed by the

importance o Unique

Benets.

Touchpoints are the weakestdriver or high-preerence

companies in keeping with

the ndings o the broader

population.

Low

Preference

High

Preference

Looking Specically at

High-Preference Companies

Common Benets

Play an important role in getting

us into the consideration set. Unique Benets

Allow high-preerence companies

to distinguish themselves rom

other viable competitors.

2

3

Unique Benets are twice as powerul

as Common Benets in driving

preerence and intent to repurchase.

1

Common

Benets

Unique

Benets

(e.g., responsive

to my feedback)

(e.g., simplies my

supply chain)

Strong

Strong

Weak

Preference

Intent to

Repurchase

WeakTouchpoints


Model Results:



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Company.

High-preference

companies have found

opportunities to deliver

Unique Benets across

a wide-spectrum of

markets.

UNIQUE BENEFIT EXAMPLES

Unique Benets, MLC Member Companies

COMMERCIAL FOOD INGREDIENTS

Sample Unique Benet:

Oers commercial ingredients

vetted by demanding consumers.

PETRO-CHEMICALS


Provides the technical expertise

needed to back our marketingclaims.

SCIENTIFIC INSTRUMENTS


Provides a great out-of-the-box

getting started experience.

Source: National Instruments Corporation; Afton Chemical Corporation; McCormick & Company, Inc.


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Company.

Marketers often fall

short of dierentiation

when setting a customer

experience strategy.

When asked what benets

separate their customer

experience rom that o

competitors, marketers

requently cited a very amiliar

set o benets.

SEEING DOUBLE

Lack of Dierentiation in Typical Unique Benets

Medical Supply Company AProvides genuine, personal service,

above and beyond what you expect.

Medical Supply Company BDelivers on promises while providing

a personal touch.

From the customers perspective, its six o one, hal dozeno the otherthey deault to buying based on price.

SVP, Marketing

Medical Supply Industry

Most Frequently Reported Unique Benets Surfaced in Council Interviews

Trustworthy Innovative Personal Service Reliable Valued Partner


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Company.

To drive commercial

success, Unique Benets

must pass two tests:

relevance and delivery.

FEW AND FAR BETWEEN

Two Typical Unique Benet Failure Points

Relevance

Does the benet drive Preference?

Relevance and Delivery

Delivery

Do customers agree that the company

consistently provides the benet?

Relevant Benets

Only 57% o the Unique Benets

tested across companies showed

substantial correlation to preerence.

Consistently Delivered Benets

33% o benets are delivered

consistently enough to drive

high levels o agreement.

Relevance

Delivery

High

Low

43% 14%

24% 19%

Low High

Only 14% o Unique Benets

achieve both relevance and

consistent delivery.


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Company.

Improving our delivery

of Unique Benets

drives several positive

outcomes.

FINDING 3: EVEN WINNING COMPANIES CAN PROFIT

FROM IMPROVED DELIVERY ON UNIQUE BENEFITS

Delivery: Customer Assessment of Company Performance on Unique Benets

Customer-Stated Preference

Moderate

Agreement

Moderate

Agreement

Moderate

Agreement

Moderate

Agreement

High

Agreement

High

Agreement

High

Agreement

High

Agreement

+36%

Intent to Repurchase

+41%

Willingness to Recommend

+30%

Willingness to Try New Oers

+24%

Attitudes and

purchase intentions o

customers who agree

with Unique Benets.

Moderate

Agreement

High

Agreement

Low

Preference

High

Preference

Looking Specically at


Representative Distribution of a Unique Benet,

e.g., Simplies My Supply Chain


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of the SALES, MARKETING, AND COMMUNICATIONS PRACTICE





SUMMARY FINDINGS

Conclusions from Our Analysis

Common Failure Points of Unique Benets

Finding 1: Benets outperform Touchpoints.

Finding 2: High-preference companies win with Unique Benets.

Finding 3: Even winning companies can prot from improved delivery of Unique Benets.

Failure Point 1: ProximityMost marketers overestimate the uniqueness of the benets they deliver.

Failure Point 2: RelevanceMany Unique Benets fail to drive customer preference.

Failure Point 3: DeliveryFew companies deliver on Unique Benets consistently enough to drive widespread customer agreement.


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Company.

SOLVING FOR CUSTOMER SUCCESS

Council Assessment of Competing Customer Experience Strategies

A Unique Benet-driven

approach provides

the focus necessary to

achieve dierentiation

across the customer

experience.

Touchpoint-Driven ApproachA focus on optimizing each touchpoint individually

in pursuit of the exceptional customer experience.

Unique Benet-Driven ApproachA focus on selecting and improving touchpoints in a way

that delivers a specic Unique Benet for customers.

Touchpoint 1

Touchpoint 1 Touchpoint 3 Touchpoint 5

Touchpoint 2 Touchpoint 4

Touchpoint 2

Best-in-Class

Customer

Experience

?

Unique Benet

Touchpoint 3

Touchpoint 4

Touchpoint 5

+

+

+

+

=

KEY DECISION

How do we need to invest to get to best-in-class

at each touchpoint?

Limitations of a Touchpoint-Driven Approach

Unlimited number of touchpoints potentiallyneed improvement

Multiple competing options for investment ateach touchpoint

Limited interconnectivity across touchpoints Fails to drive preference and intent torepurchase

KEY DECISIONHow do we optimize critical touchpoints to move our

customers closer to realizing our Unique Benet?

Upside of a Unique Benet-Driven Approach

Narrows the set of potential investments Claries the direction of improvement for criticaltouchpoints

Provides a common aligning principle fororganizing the full experience

Drives high preference and intent to repurchase


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Company.

WRITTEN IN OUR DNA

National Instruments Dierentiated Customer Experience

High-preference

companies reect Unique

Benets across the entire

experience.

Efective Unique Benetslink directly to the outcomes

target customers are trying

to achieve.

Each touchpoint is viewed asan opportunity to reinorce a

Unique Benet.

Unique BenetOers user-friendly technology

Unique BenetProvides a great out-of-the-box

getting started experience

USB-equipped

products simplify

day-to-day usage

Online trialability allows

customers to experience the user-

friendly nature of NI software

Three clicks to data

installation process

No-frills packaging is easy to remove

and generates little waste

Our Identity

We help customers minimize time spent setting up equipment and maximize time spent working.

Source: National Instruments Corporation.

1

2

3


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of the SALES, MARKETING, AND COMMUNICATIONS PRACTICE





IWhat Is Our

Unique Identity?

2Where Do We Invest

to Bring Our Unique Benets to Life?

3How Do We Coordinate

the Full Experience?

1

Example

Company

Customer Jobs

Touchpoint Assessment

Targeted Experience

Improvement Guidelines

Identity

Renement Workshop

Loyalty

Driver Analysis

Outcomes-Based

Touchpoint Planning

Dealer of

Tomorrow Scorecard

DELIVERING A PREFERRED CUSTOMER EXPERIENCE

1 Pseudonym.


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SALES, MARKETING, AND COMMUNICATIONS PRACTICE

MARKETING LEADERSHIP COUNCIL


All Rights Reserved. MLC5873944668This study may not be reproduced or redistributed without the expressed permission of The Corporate Executive Board Company.

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Delivering Preferred Customer Experience