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SEYMOUR SLOAN IDEAS THAT MATTER MOVING BEYOND CUSTOMER EXPERIENCE TOWARDS CUSTOMER ENGAGEMENT - A WINNING APPROACH

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SEYMOUR

SLOAN

IDEAS THAT MATTER

MOVING BEYOND CUSTOMER

EXPERIENCE TOWARDS

CUSTOMER ENGAGEMENT - A

WINNING APPROACH

(2)

INTRODUCTION

The traditional discussion within organisations has always focused around the customer ex-perience and engineering a ‘great’ exex-perience. However, the challenge in delivering this lies in the fact that customers usually engage with brands from separate and sometimes opposing start points. As such, the experience is a sub-jective concept, individual to each customer, one in which brands have a meaningful but limited impact.

From a technical perspective, organisations underpin their customer management ap-proach with multiple systems from multiple vendors. These platforms rarely interact with each other, giving an important aspect of cus-tomer management a fragmented look.

Seymour Sloan, following discussions with leading executives believe that the main fo-cus is on how organisations engage with their customers. This moves the thinking from a transmitter/receptor relationship towards an in-tegrated two-way approach where engagement is based more on customer understanding and need.

Business leaders understand that in an in-creasingly competitive market and facing diminishing differentiation, effective customer engagement is the key to sustainable develop-ment.

89% of CEOs aspire to be

cus-tomer engagement leaders in

their market, yet 59% are yet

to commence a customer

en-gagement initiative

SEYMOUR SLOAN RESEARCH 2014

One of the challenges currently is moving the focus from the technology available towards focusing on the psychology and emotion of the engagement. With the proliferation of new technologies, CEOs are looking for ways to play on each platform, chasing the technology when, in fact, focusing on customer impact would prove more effective.

Seymour Sloan understand that defining the correct engagement framework will allow or-ganisations to make platforms work for them. This is likely to drive creative ways to use existing and upcoming developments in tech-nology.

Below we outline 7 areas of focus to enhance the development of a leading customer en-gagement model. As the market moves slightly away from products towards brands, delivering effective customer engagement becomes the significant differentiator.

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Ultimately, successful organisations will max-imise all three elements in an integrated man-ner and it at this point that customer engage-ment becomes a powerful tool for sustained growth.

Some touchpoints may include:

• Social media engagement

• Customer rewards and loyalty schemes • Promotions

• Corporate and retail websites • Physical stores

The significant aspect of customer engage-ment and one that is often forgotten is the abili-ty to understand and maximise the ‘moment.’ The moment is defined as, the instance where the customer requires the organisation to pro-vide the outcome, but an outcome consistent with the broader context of the customer inter-action and wider customer journey.

#1

UNDERSTANDING

CUSTOMER

ENGAGEMENT

Customer engagement, in its simplest form, is the totality of brand – customer interactions. It is more than to touchpoints and more than the service, it is about the customers’ emotional response to the customer journey.

In terms of start point, it commences with initial customer engagement with the brand. This can be the initial advertisement or the first website visit.

In reality, any stage in the journey could serve as the start point, which presents a strong case for having no weaknesses in any aspect of the proposition.

The diagram below illustrates the interaction between the key elements of customer en-gagement and the key outcomes from each.

PEOPLE (CONSUMPTION) (CONSUMPTION)

TECHNOLOGY (FACILITATION) BUSINESS

(CREATION)

BUILDING AN EMOTIONAL CONNECTION

Branding

Relationship Management Social Media

OPERATIONAL EFFECTIVENESS

Process efficiency Automation Data Cost Reduction

SERVICE EFFECTIVENESS

Ecommerce Self-service

Customer collaboration and communication

EFFECTIVE ENGAGEMENT

Interaction Products and Services Communication Feedback Refinement

Figure 1: The elements of customer engagement. Organ-isations must aim to fi nd that sweet spot where all the elements combine neatly and this combination is what the customer experiences. The aim is to make life as easy for the customer as possible.

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#2

DEFINING THE

CUSTOMER

ENGAGEMENT

FRAMEWORK

Successful customer engagement is only 30% strategy and 70% culture. Reshaping culture is what will embed the right behaviours and processes to deliver effective customer en-gagement.

Organisations must define the elements by which they want their engagement to be de-fined. These will vary by organisation and available resources.

These high-level elements should be reflected in each customer touchpoint to a consistent level of quality.

A significant consideration is understanding the key moment and the wider context that sur-rounds it in order to deliver the right solution for each customer.

Supporting that is the need to capture all relevant customer data to inform subsequent decision making.

With this definition, requirements are set for each touchpoint, from there; it is easier to es-tablish the appropriate platform to use. It is vital that these are developed separately but tested together and against the original high-level requirements.

This creates a proactive approach to dealing with the changing IT landscape and provides an easier framework by which to monitor and assess performance.

DEVELOP AN AMAZING

PRODUCT

DEVELOP HIGH QUALITY PACKAGAING

AND MARKETING

DELIVER AN AMAZING LEVEL AND QUALITY OF ENGAGEMENT

PRODUCT

Internally focused organisation

SERVICE

Brand focused organisation

ENGAGEMENT

Customer aware and focused organisation

Figure 2: The stages customer engagement. In the journey from a product-led business to a customer-led business it is wise to understands the requirements of each step from moving from product, to service and fi nally engagement as the focus of customer strategy. Each will place de-mands on your business and having the correct capabilities at each stage is essential.

Figure 2: The stages customer engagement. In the journey from a product-led business to a customer-led business it is wise to understands the requirements of each step from moving from product, to service and fi nally engagement as the focus of customer strategy. Each will place de-mands on your business and having the correct capabilities at each stage is essential.

Figure 2: The stages customer engagement. In the journey from a product-led business to a customer-led business it is wise to understands the requirements of each step from moving from product, to service and fi nally engagement as the focus of customer strategy. Each will place de-mands on your business and having the correct capabilities at each stage is essential.

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#3

PLACING VALUE

ON CUSTOMER

ENGAGEMENT

To deliver market leading customer en-gagement, the whole organisation must understand and buy into the value that it will create both both customer and organi-sation.

In terms of individual moments, identify-ing the value can prove difficult. However, when aggregated and multiplied through multiple iterations, the effect is significant and can improve the following:

• Customer retention • Increased wallet spend

• Increased brand advocacy and

• Reduced complaints volumes

These factors all drive growth and once the momentum is built it becomes an upward spiral of success.

With that considered, the rverse is true.

Poor customer engagement creates a

negative spiral that can see a business become extinct with two years, particularly in the fast moving marlket that has become the ‘new normal.’

Understanding these factors is also impor-tant in order to know what value metric to measure and monitor. Once the value met-rics are agreed, staff can assess progress against these and see their contribution to enhanced customer value.

• Sales traffic / volume

• Customer loyalty

• Sales conversion rate

• Customer satisfaction

• Customer advocacy

• Average order value

• Brand Value

• Differentiation

• Price sensitivity

• Customer loss ratio

• Customer support costs

• Customer retention costs

• Service costs

The main Benefits of Effective Customer Engagement

Figure 3: Benefi ts of successful customer engagement. Bove are some of the benefi ts associated with good customer engagement. In its simplest form it is an essential platform for successful and sustained growth.

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#4

MOVING INTO THE

OMNICHNNEL

ENGAGEMENT

MODEL

In a world where we interact with brands across a number of devices, organisations must be capable of delivering a consistent and fluid service across all channels. This is the ‘holy grail’ for all organisations, but is limited by existing organisational structures.

A seamless world requires an organisation without silos where information and insight flow freely across the whole organisation. In many clients we have seen that the physical and online retail functions are spoken of separately as are the telephone and online servicing fnctions. This is not a sustainable model as inovative start-ups fight to get ever closer to their customers. It is also time for the larger brands to care about their customers.

We see four dimensions as being key in moving into the omnichannel world

1. Data Flows - an essential element is the ability to access the customer data from any channel, allowing purchasing and ser-vicing interactions to happen on any plat-form at any time.

2. Effective Data - as much data to build the individual customer view, as is reason-able, should be collected. this may also include external data. What is key is that all the customer ineractions should link to the individual customer so that their actual value is known.

3. Segmentation - based on the dad held, customers should be semented based on their value to the organisation and the ser-vicing, up-selling and cross-selling can be aligned to the customer personally. tis rill increase rates of return on investment and in our experience is 5 times more effective that most other marketing spend.

4. Scalability - it is vital to create a model that can grow with you with no sacrifice in quality, effectiveness or responsiveness. The omnichannel world is one where no organisation will want to lose. Failure to adapt will leave brands behind the com-petition and even eliminate them from the market.

2. Effective Data - as much data to build the individual customer view, as is reason-able, should be collected. this may also include external data. What is key is that all the customer ineractions should link to the individual customer so that their actual value is known.

3. Segmentation - based on the dad held, customers should be semented based on their value to the organisation and the ser-vicing, up-selling and cross-selling can be aligned to the customer personally. tis rill increase rates of return on investment and in our experience is 5 times more effective that most other marketing spend.

4. Scalability - it is vital to create a model that can grow with you with no sacrifice in quality, effectiveness or responsiveness.

2. Effective Data - as much data to build the individual customer view, as is

reason-the individual customer so that reason-their actual value is known.

3. Segmentation - based on the dad held, customers should be semented based on their value to the organisation and the ser-vicing, up-selling and cross-selling can be

that most other marketing spend.

4. Scalability - it is vital to create a model that can grow with you with no sacrifice in quality, effectiveness or responsiveness. 2. Effective Data - as much data to build the individual customer view, as is reason-able, should be collected. this may also include external data. What is key is that all the customer ineractions should link to the individual customer so that their actual value is known.

3. Segmentation - based on the dad held, customers should be semented based on their value to the organisation and the ser-vicing, up-selling and cross-selling can be aligned to the customer personally. tis rill increase rates of return on investment and in our experience is 5 times more effective that most other marketing spend.

4. Scalability - it is vital to create a model that can grow with you with no sacrifice in quality, effectiveness or responsiveness.

1. Data Flows - an essential element is the ability to access the customer data from any channel, allowing purchasing and ser-vicing interactions to happen on any plat-form at any time.

vicing interactions to happen on any plat-form at any time.

ability to access the customer data from any channel, allowing purchasing and ser-vicing interactions to happen on any plat-form at any time.

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#5

DATA, DATA AND

MORE DATA

At the heart of the revolution in customer engagement is a deeper understanding of the customer.

This exists at many levels, at the individual level, segment level and as a whole cus-tomer base. To do this, organisations must make better use of the data they currently have.

The two current challenges in a rapidly changing data landscape are, data quality and data analysis.

Currently, most senior executives admit that the quality of the data they currently hold is not to the standards they would like and this has a direct impact of obscuring the customer view. Limited data also affects what analysis can be done with the data.

The progress in data volumes and sources has been so rapid that the supporting skills are yet to appear in the right volumes to allow all organisations to explore this new frontier fully.

The limited analytical capability has meant that, while organisations say they are in the Big Data world, vey few are.

Finding the right skills, or developing them internally, will unlock the insight required to provide a true customer view and one that informs the customer engagement framework. It is this capability that will allow organisations to truly listen to the customer.

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#6

GOVERNANCE

AND

ACCOUNTABILITY

Successful customer engagement is as much about governance as it is about strat-egy and culture. Effective governance will support sustainability and keep customer engagement as a consideration in business planning.

There are some that call for a specific Chief Experience Officer (CXO), a role we feel complicates rather than simplifies govern-ance. Instead we feel customer engage-ment should be owned at board level by the CEO, CIO, COO and CMO.

As the experience will impact these depart-ments, it is right that they are all deeply invested in the process and that they all offer support in terms of cross functional working, management and accountability. There is even a powerful argument that the CEO should really be the CXO and the customer champion. Elon Musk CEO of te-sla is an example of a customer evangelist who places the customer experience at the heart of what the organisation does.

Such a structure allows organisations to make decisions with due considerations to the impact on customer experience, anoth-er way to ensure the sustainability of the framework.

Data from our survey suggests there is no clear rule on how to govern customer en-gagement. this is to be expected and as a orthodoxy emerges, Executives will be better place to reassess their governance framework.

55%

45% YESNO

85%

15%

YES NO

35%

65%

YES NO

Do you see there being a role for a Chief Customer within 7 years?

Are you currently considering a Chief Customer Officer role?

Is the current lead-ership team aligned to common and con-sistent Customer Engagement objec-tives.

Seymour Sloan Executive Survey

Results

55%

45% YESNO

85% 15%

YES NO

35% 65%

YES NO

Do you see there being a role for a Chief Customer within 7 years?

Are you currently considering a Chief Customer Officer role?

Is the current lead-ership team aligned to common and con-sistent Customer Engagement objec-tives.

Seymour Sloan Executive Survey

Results

Figure 4: Our survey results present a mixed picture, one we expect to solidify as customer engagement is better under-stood and receives greater traction. successful and sustained

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#7

CREATE,

ITERATE AND

REINVENT

As business cycles shorten and markets change with increasing regularity, it be-comes essential to review and reinvent customer engagement regularly.

With the right internal data framework cus-tomers changing needs should be easier to identify and with the right governance, changes should be swift and targeted. It is also worth considering changes in the external environment. Customers now compare experiences across industries and even geographies and any new innovations in unconnected markets can shape cus-tomer expectations.

At Seymour Sloan we have identified 5 key stages in enhancing and developing the customer engagement framework.

1) Current-state assessment of customer engagement framework – Understand the internal framework and assess, via so-cial media and other feedback channels customers, how customers perceive your brand based on experience.

2) Identify objectives and measures of suc-cess – Understand what sucsuc-cessful cus-tomer engagement looks like to the

customer and the internal capabilities re-quired to deliver that. In addition, identify key measures of success and how these are monitored.

3) Disrupt – Understand what the competi-tion are doing. Identify how to deliver it fast-er and more effectively. The improvement can be incremental. It is not necessary that it is groundbreaking.

4) Reinvent – Use customers and employ-ees as vital sounding boards for innovative ideas. Test and test often, looking to im-prove iteration by iteration.

5) Look to the Future – It is essential to have an eye to the future and identify both, internal and external drivers for change and how best to maximize the opportunities that they present.

The future of customer engagement in-novation is around the idea of continuous learning and improvement. It will move from being a series of initiatives and pro-grammes towards a continuous spiral of improvement. This is an initiative that should be owned at board level, reflecting its importance to long-term growth.

1) Current-state assessment of customer engagement framework – Understand the internal framework and assess, via so-cial media and other feedback channels customers, how customers perceive your brand based on experience.

2) Identify objectives and measures of suc-cess – Understand what sucsuc-cessful cus-tomer engagement looks like to the

engagement framework – Understand the internal framework and assess, via so-cial media and other feedback channels customers, how customers perceive your brand based on experience.

2) Identify objectives and measures of suc-cess – Understand what sucsuc-cessful cus-tomer engagement looks like to the

customer and the internal capabilities re-quired to deliver that. In addition, identify key measures of success and how these are monitored.

3) Disrupt – Understand what the competi-tion are doing. Identify how to deliver it fast-er and more effectively. The improvement can be incremental. It is not necessary that it is groundbreaking.

4) Reinvent – Use customers and employ-ees as vital sounding boards for innovative ideas. Test and test often, looking to im-prove iteration by iteration.

5) Look to the Future – It is essential to have an eye to the future and identify both, internal and external drivers for change and how best to maximize the opportunities that they present.

internal and external drivers for change and customer and the internal capabilities re-quired to deliver that. In addition, identify key measures of success and how these are monitored.

3) Disrupt – Understand what the competi-tion are doing. Identify how to deliver it fast-er and more effectively. The improvement can be incremental. It is not necessary that it is groundbreaking.

4) Reinvent – Use customers and employ-ees as vital sounding boards for innovative ideas. Test and test often, looking to im-prove iteration by iteration.

5) Look to the Future – It is essential to have an eye to the future and identify both, internal and external drivers for change and how best to maximize the opportunities that they present.

(10)

LOOKING

TOWARDS AN

EXCITING FUTURE

As we have discussed, customers usually engage with brands from separate and some-times opposing start points. This makes creating an experience challenging with a di-verse customer base.

As we have discussed, we favour a broader approach, looking at customer engagement as a means to build the right relationships with customers. Seymour Sloan see the future shaped by an integrated two-way approach where engagement is based more on cus-tomer understanding and need.

Business leaders understand that in an increasingly competitive market and facing di-minishing differentiation, effective customer engagement is the key to sustainable devel-opment.

We favour focusing on the psychology and emotion of the engagement as well as allow-ing the objectives to shape the solution and not the other way around.

Above, we outlined 7 areas of focus to enhance the development of a leading customer engagement model. We feel these will provide the right platform for growth in a challeng-ing but excitchalleng-ing new era.

Figure

Figure 1: The elements of customer engagement. Organ- Organ-isations must aim to fi nd that sweet spot where all the  elements combine neatly and this combination is what  the customer experiences
Figure 2: The stages customer engagement.
Figure 3: Benefi ts of successful customer engagement. Bove are some of the benefi ts associated with  good customer engagement
Figure 4: Our survey results present a mixed picture, one we  expect to solidify as customer engagement is better  under-stood and receives greater traction

References

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