MARKETING LEADERSHIP COUNCIL®
Delivering a Preferred
Customer Experience
Annual Executive Retreat
Sydney
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LEGAL CAVEAT
The Marketing Leadership Council has worked to ensure the accuracy of the information it provides to its members. This report relies upon data obtained from many sources, however, 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 rendering legal, accounting, or other professional services. Its reports should not be construed as professional advice on any particular set of facts or circumstances. Members requiring such services are advised to consult an appropriate professional. Neither The Corporate Executive Board Company nor its programs are responsible for any claims or losses that may
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 have
frozen as customers cut back on capital expenditures, ruling out reliance on new business as a commercial driver.
■ Cost-conscious customers
view product quality and reliability as table stakes and are unwilling to pay for nuanced product differences.
■ Increased scrutiny into
budgets and expenditures has put relationship-driven demand in jeopardy.
■ B2B marketers are looking
to customer experience to drive stronger commercial performance, especially with existing customers.
Product Improvements
“None of our customers are willing to pay for the product improvements they were asking us to fund three years ago.” SVP Marketing Medical Devices Acquiring New Customers Contribution to Profit, New Customers 2007 2008 2009 All Other Selling Strategies Relationship-Based Sales Personal Relationships
Likelihood of Being a High Performer by Sales Rep Profile
Customer Experience
“In our industry no one makes a product that doesn’t work—we have to win on
customer experience if we don’t want to be the low-price player.”
23%
7%
?
From the MARKETING LEADERSHIP COUNCIL® of the SALES, MARKETING, AND COMMUNICATIONS PRACTICE www.mlc.executiveboard.com Voice of the Customer Audits Customer Experience Councils Touchpoint Mapping Net Promoter Score 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 Ops Marketing
Council Resources Voice of the Customer Audit Experience Storyboards Net Promoter Program Essentials
Acquisition Service Retention Awareness Key Service Moments Relevant Research and Data One-on-One Interactions MarComm Best-in-Class Competition Segment A $ $ $ $ @ @ @ @ Customer Experience Council Ordering Billing Services RemarketingCustomer Services
Meet Est. Delv
. Da te Ti mely Or der
Confirmation Timely Status Upda
te Tag Bef or e Exp. Da te Ti
mely Fuel Car
d Deliv er y V ehicle Main te nanc e A cc ount Servicing Hold Ti me Kno wledge an d Consistent Answ er Response T ime Importance Level Customer #1 #20 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 435 228 28 81 76 6 5 46 18 2 161 52
Frequency of Mention Scores
Customer experience
efforts to date have
provided questionable
returns for many
companies.
UNREQUITED LOVE
Assessments of Customer Experience Investments
Investment Return
Bain & Company Survey of 362 B2B Companies and Their Customers
■ Financial resources
■ Staff time and effort
■ Opportunity cost ■ Political capital 2006 2007 2008 2009 2010 $ ? Where Do We Go Next?
“We know we’ve made some progress to date, but I can’t imagine that
another 10% improvement to our Web site or a few seconds off of our call
center response time will pay off—we really don’t know what to do next.”
SVP Marketing Banking Services
80% of Marketers Believe They Offer a Superior Customer Experience
8% of Customers Agree
From the MARKETING LEADERSHIP COUNCIL® of the SALES, MARKETING, AND COMMUNICATIONS PRACTICE www.mlc.executiveboard.com
Marketers looking for
the next opportunity
to improve customer
experience start from
one of two perspectives:
Touchpoints or Benefits.
TWO EXPERIENCE LENSES
Two Perspectives for Evaluating the Customer Experience
Touchpoints
How effective are we across the range of typical company-to-customer interactions?
Benefits
What benefits 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 Benefits
■ “Is responsive to feedback”
■ “Simplifies my supply chain”
■ “Is easy to do business with”
■ “Removes costs from my business”
■ “Keeps my technicians productive”
■ “Adapts to my unique needs”
■ “Offers a great out-of-the-box
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
■ Benefits
Customers were also asked a series of questions to measure:
■ Preference for a company
relative to competitors
■ Intent to continue buying
from a company in the coming year
WHERE DO WE REALLY NEED TO FOCUS?
MLC Customer Experience Model
Touchpoints
Specific 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?
Benefits
Perceptions we create across the customer experience
Survey Population
■ We surveyed customers of 15 B2B member companies regarding their experience
with 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 customer
companies, including decision makers, end-customers, influencers, consultants, and procurement officers.
■ Sample industries included:
– Business Software – Financial Services – Scientific Equipment – Packaging – Building Materials – Chemicals
From the MARKETING LEADERSHIP COUNCIL® of the SALES, MARKETING, AND COMMUNICATIONS PRACTICE www.mlc.executiveboard.com
Benefits are much
stronger drivers of
preference and intent
to repurchase than are
Touchpoints.
■ Customer assessments of
specific touchpoints are a marginal driver of their preference and intent to repurchase.
■ Customer assessments
of benefits are powerful predictors of both preference and intent to repurchase.
FINDING 1: BENEFITS OUTPERFORM TOUCHPOINTS
Model Results: Relative Power of Touchpoints and Benefits
Touchpoints
Benefits
Benefits
Customer assessments of benefits have four times
greater impact on preference and customer intent to repurchase than do touchpoint assessments.
Touchpoints
Customer assessments of specific interactions are a poor driver of both preference and customer intent to spend.
Strong Strong Weak Preference Intent to Repurchase Weak
(e.g., customer service)
Both Common and
Unique Benefits are
important drivers of
preference and intent
to repurchase.
DISTINGUISHING BETWEEN COMMON
AND UNIQUE BENEFITS
Model Results: Common and Unique Benefits
Common Benefits
Benefits that are relevant in almost any commercial relationship.
Benefits that are specific to an individual company’s customer experience. Unique Benefits Common Benefits Unique Benefits (e.g., “responsive to my feedback”) (e.g., “simplifies my supply chain”) Strong Strong Weak Preference Intent to Repurchase Weak
Both Common and Unique Benefits are powerful drivers of preference and customer intent to spend.
Touchpoints
From the MARKETING LEADERSHIP COUNCIL® of the SALES, MARKETING, AND COMMUNICATIONS PRACTICE www.mlc.executiveboard.com
LEARNING FROM SUCCESS
Distribution of Preference, 15 Member Companies
Focusing on
highly-preferred companies
allows us to understand
how they approach
customer experience
differently.
Levels of customer preference differed dramatically across the 15 participating companies, with the top companies achieving levels of preference five times greater than that of trailing companies. P er centage of High-Pr ef er enc e Cus tomers
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-preference companies allows us to isolate how their approach to customer experience differs from the broader population.
FINDING 2: HIGH-PREFERENCE COMPANIES WIN
WITH UNIQUE BENEFITS
High-preference
companies rely on
Unique Benefits to build
customer preference and
intent to repurchase.
Analysis of high-preference companies leads to three conclusions:
■ Unique Benefits emerge as
the most significant source of both preference and future spend intentions.
■ Common Benefits
drive significant levels of preference but are outperformed by the importance of Unique Benefits.
■ Touchpoints are the weakest
driver for high-preference companies in keeping with the findings of the broader population.
Low
Preference High Preference
Looking Specifically at High-Preference Companies
Common Benefits
Play an important role in getting
us into the consideration set. Unique Benefits
Allow high-preference companies to distinguish themselves from other viable competitors.
2
3
Unique Benefits are twice as powerful as Common Benefits in driving preference and intent to repurchase.
1
Common Benefits Unique Benefits (e.g., “responsive to my feedback”) (e.g., “simplifies my supply chain”) Strong Strong Weak Preference Intent to Repurchase Weak Touchpoints(e.g., customer service)
Model Results:
From the MARKETING LEADERSHIP COUNCIL® of the SALES, MARKETING, AND COMMUNICATIONS PRACTICE www.mlc.executiveboard.com
High-preference
companies have found
opportunities to deliver
Unique Benefits across
a wide-spectrum of
markets.
UNIQUE BENEFIT EXAMPLES
Unique Benefits, MLC Member Companies
COMMERCIAL FOOD INGREDIENTS
Sample Unique Benefit: “Offers commercial ingredients
vetted by demanding consumers.”
PETRO-CHEMICALS
Sample Unique Benefit:
“Provides the technical expertise needed to back our marketing claims.”
SCIENTIFIC INSTRUMENTS
Sample Unique Benefit:
“Provides a great out-of-the-box ‘getting started’ experience.”
Proximity Bias
leads marketers to
overestimate the
uniqueness of their
company’s experience.
Marketers often suffer from a form of proximity bias— assuming that the differences they see between their
company and their competitors are also perceptible to
customers.
CLOSE TO HOME
Proximity Bias
The tendency to over-value information that is close or familiar.
From the MARKETING LEADERSHIP COUNCIL® of the SALES, MARKETING, AND COMMUNICATIONS PRACTICE www.mlc.executiveboard.com
Marketers often fall
short of differentiation
when setting a customer
experience strategy.
When asked what benefits separate their customer experience from that of competitors, marketers frequently cited a very familiar set of benefits.
SEEING DOUBLE
Lack of Differentiation in Typical “Unique” Benefits
Medical Supply Company A “Provides genuine, personal service,
above and beyond what you expect.”
Medical Supply Company B “Delivers on promises while providing
a personal touch.”
“From the customer’s perspective, it’s six of one, half dozen
of the other—they default to buying based on price.”
SVP, Marketing
Medical Supply Industry
Most Frequently Reported “Unique” Benefits Surfaced in Council Interviews
While marketers are
naturally compelled to
showcase benefits with
obvious value, these
benefits are nearly
impossible to “own” in
the marketplace.
INNOVATION HAS MANY NAMES
Sample “Unique” Benefits Highlighted in B2B Marketing Claims
HOOF TRIMMING TOOLS
Sample Unique Benefit: “Innovation has a name: Merlin.”
COMMERCIAL HOT WATER HEATERS
Sample Unique Benefit:
“Innovation has a name: A. O. Smith.”
STEEL CUTTING EQUIPMENT
Sample Unique Benefit:
“Innovation has a name: ByStronic.”
From the MARKETING LEADERSHIP COUNCIL® of the SALES, MARKETING, AND COMMUNICATIONS PRACTICE www.mlc.executiveboard.com
To drive commercial
success, Unique Benefits
must pass two tests:
relevance and delivery.
FEW AND FAR BETWEEN
Two Typical Unique Benefit Failure Points
Relevance
Does the benefit drive Preference?
Relevance and Delivery
Delivery
Do customers agree that the company consistently provides the benefit? Relevant Benefits
Only 57% of the Unique Benefits tested across companies showed substantial correlation to preference.
Consistently Delivered Benefits
33% of benefits are delivered consistently enough to drive high levels of agreement.
Relevance High Low
43%
14%
24%
19%
Low HighOnly 14% of Unique Benefits achieve both relevance and consistent delivery.
“THE LOOK”
Even high performers
are capable of
making remarkable
improvements.
From the MARKETING LEADERSHIP COUNCIL® of the SALES, MARKETING, AND COMMUNICATIONS PRACTICE www.mlc.executiveboard.com
Improving our delivery
of Unique Benefits
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 Benefits
Customer-Stated Preference Moderate Agreement Moderate Agreement Moderate Agreement Moderate High Agreement High Agreement High Agreement High +36% Intent to Repurchase +41% Willingness to Recommend +30%
Willingness to Try New Offers
+24% Attitudes and
purchase intentions of customers who agree with Unique Benefits.
Moderate
Agreement AgreementHigh
Low
Preference High Preference
Looking Specifically at High-Preference Companies Representative Distribution of a Unique Benefit, e.g., “Simplifies My Supply Chain”
SUMMARY FINDINGS
Conclusions from Our Analysis
Common Failure Points of Unique Benefits
■
Finding 1: Benefits outperform Touchpoints.
■
Finding 2: High-preference companies win with Unique Benefits.
■
Finding 3: Even winning companies can profit from improved delivery of Unique Benefits.
■
Failure Point 1: Proximity—Most marketers overestimate the uniqueness of the benefits they deliver.
■
Failure Point 2: Relevance—Many Unique Benefits fail to drive customer preference.
From the MARKETING LEADERSHIP COUNCIL® of the SALES, MARKETING, AND COMMUNICATIONS PRACTICE www.mlc.executiveboard.com
SOLVING FOR CUSTOMER SUCCESS
Council Assessment of Competing Customer Experience Strategies
A Unique Benefit-driven
approach provides
the focus necessary to
achieve differentiation
across the customer
experience.
Touchpoint-Driven Approach
A focus on optimizing each touchpoint individually in pursuit of the exceptional customer experience.
Unique Benefit-Driven Approach
A focus on selecting and improving touchpoints in a way that delivers a specific Unique Benefit for customers.
Touchpoint 1
Touchpoint 1 Touchpoint 3 Touchpoint 5
Touchpoint 2 Touchpoint 4 Touchpoint 2 Best-in-Class Customer Experience
?
Unique Benefit Touchpoint 3 Touchpoint 4 Touchpoint 5+
+
+
+
=
KEY DECISIONHow do we need to invest to get to best-in-class at each touchpoint?
Limitations of a Touchpoint-Driven Approach
■ Unlimited number of touchpoints potentially
need improvement
■ Multiple competing options for investment at
each touchpoint
■ Limited interconnectivity across touchpoints
Fails to drive preference and intent to
KEY DECISION
How do we optimize critical touchpoints to move our customers closer to realizing our Unique Benefit?
Upside of a Unique Benefit-Driven Approach
■ Narrows the set of potential investments
■ Clarifies the direction of improvement for critical
touchpoints
■ Provides a common aligning principle for
organizing the full experience
WRITTEN IN OUR DNA
National Instrument’s Differentiated Customer Experience
High-preference
companies reflect Unique
Benefits across the entire
experience.
■ Effective Unique Benefits
link directly to the outcomes target customers are trying to achieve.
■ Each touchpoint is viewed as
an opportunity to reinforce a Unique Benefit.
Unique Benefit
Offers user-friendly technology
Unique Benefit
Provides 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
1
2
3
From the MARKETING LEADERSHIP COUNCIL®
of the SALES, MARKETING, AND COMMUNICATIONS PRACTICE www.mlc.executiveboard.com
