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Customer Experience Management Executive Summary
Global Customer Experience Management Survey 2011 Research Paper
Beyond Philosophy
Who is Beyond Philosophy?
Beyond Philosophy is a Customer Experience Management (CEM) consulting, training and research firm. With headquarters based in Tampa, Florida (USA), we have global reach. Founded in 2002, the company has led the market in CEM working for many well-known Fortune 500 and FTSE brands. What is the Global Leaders of Customer Experience Management Survey 2011? The GLS is an annual global survey of the Customer Experience Management market. Its focus is on the current thinking of ‘Global Leaders of CEM’ i.e., leading analysts, corporate leaders of CEM and managers charged with implementation. As such this is a qualitative report, determining how leaders perceive the key market trends.
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Abstract From May- July 2011, Beyond Philosophy undertook a comprehensive review of the
state of the global market for Customer Experience Management (CEM). This was
based on a sample of 8,000 Customer Experience (CE) executives from 239 countries
and regions of the world as well as in-depth interviews of 53 leading authorities on
Customer Experience from all continents.
A webinar of the results can be found here:
http://www.youtube.com/watch?v=R1f6kTQHbBI The findings were also featured in the media, including Huffington Post & CNN to name a few.
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Contents
Abstract 2
1.1 Methodology 5
1.2 Quantitative 5
1.3 Qualitative 5
1.4 Sample 6
2.1 Insights 9
2.2 What is the background of Customer Experience leaders 9
2.3 How is Customer Experience defined 9
2.4 What is the level of adoption of Customer Experience Management around the 9
world?
2.5 Can you provide a model of adoption? Maturity Index 10
2.6 What is the level of adoption of Customer Experience management by company, 12
sector and level of maturity?
2.7 What are the drivers to growth in CE? 12
2.8 What are the challenges to growth in CE? 14
2.9 What is the most admired firm in Customer Experience? 15
3.1 Management Implications 16
3.2 What are the 5 Major Risks? 16
3.3 What is the strategy to manage these risks? 16
3.4 What are the 5 Major Drivers? 18
3.5 A Final View 19
Contacts 21
Figures and Tables
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Table 1: Distribution of the 53 in-depth interviews including by title 6
Table 2: Summary Distribution of the 53 in-depth interviews by regional percentage 7
Figure 1: Distribution of the 53 in-depth interviews by sector 8
Figure 2: Distribution of 53 Expert Interviews by industry 8
Figure 3: The 7 Stage Maturity Model 10
Figure 4: The Acquisition, Relationship, Retention Stages 11
Figure 5: Key areas of a CE implementation 17
1.0 Methodology
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1.1 Quantitative Beyond Philosophy undertook an analysis of 8,000 Customer Experience executives.
These executives were sourced from a country by country LinkedIn search; comprising
in-depth analysis of 239 countries and regions i.e., the globe as defined by LinkedIn and
Google drop down country/ region search list.
To qualify for inclusion, the LinkedIn respondents had to have ‘Customer Experience’ in
their ‘current’ job title: note that as a networking tool and to maximize coverage of
possible LinkedIn contacts, all main Customer Experience groups were joined. Likewise
the search was conducted from a well networked Customer Experience consulting group
(LinkedIn contacts were not used for marketing purposes, purely as a means of
research).
In addition, Beyond Philosophy conducted a Google search for firms that apply
Customer Experience across each of the 239 country and region web pages. In this
search, Beyond Philosophy set specific criteria for acceptance as a CE focused firm.
Companies had to have an active presence in Customer Experience ‘within the last year’
and ‘within the country pages’. This was to avoid the presence of non-active firms that
engaged in Customer Experience over one year ago.
2,106 companies were identified as active in Customer Experience Management
from around the world. This equates to an average of around 4 CE executives
per company.
1.2 Qualitative
From the quantitative database, Beyond Philosophy sourced 53 experts to conduct an
in-depth interview on Customer Experience. Experts had to have either overall line
responsibility for managing customer experience on-the-ground (Lead PM) or be at CxO
level (i.e., Director or VP of customer experience). In addition CE experts were sourced
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i.e., individuals who had deep regional or vertical understanding of CE and were
recognized experts in Customer Experience.
All depth interviews were conducted by phone; excluding one interview that involved a
face to face meeting: Interviews typically lasted 20-25 minutes.
1.3 Sample
Beyond Philosophy interviewed 53 experts from around the world. These were
distributed by job title (see table 1) and by region (see table 2).
Table 1: Distribution of the 53 in-depth interviews including by title
Region Country Number Percent CE Expert CxO Lead PM
NAM USA 8 15% 1 7
NAM
Canada
2
4%
1
1
CARIB Bahamas 1 2% 1
SAM Brazil 2 4% 2 SAM Peru 1 2% 1
EUW UK 9 17% 1 6 2
EUW Netherlands 1 2% 1 EUW France 1 2% 1 EUW Portugal 1 2% 1 EUW Switzerland 1 2% 1 EUW Belgium 1 2% 1 EUE Poland 1 2% 1 RUS Russia 3 6% 3 RUS Azerbaijan 1 2% 1
ME Saudi Arabia 3 6% 2 1
ME UEA 1 2% 1 ME Turkey 1 2% 1
AFR Nigeria 2 4% 1 1
AFR Kenya 1 2% 1 AFR South Africa 1 2% 1 IND India 3 6% 2 1 SEA Singapore 2 4% 1 1 SEA Indonesia 1 2% 1 CHI China 2 4% 1 1
AUST Australia 2 4% 1 1
AUST New Zealand 1 2% 1
Total 53 16 25 12
Total% 100% 30% 47% 23%
Source: 53 CE professionals
Note: Experts can be general all round or by specific industry
Table 2: Summary Distribution of the 53 in-depth interviews by regional percentage
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Region Total%
EUW 26%
NAM 19%
ME 9%
RUS 8%
AFR 8%
SAM 6%
IND 6%
SEA 6%
AUS 6%
CHI 4%
CARIB 2%
EUE 2%
Total 100% Source: 53 CE professionals
Note: NAM (North America): CARIB (Caribbean); SAM (South America); EUW (Western Europe); EUE
(Eastern Europe); RUS (Russia); ME (Middle East); AFR (Africa); IND (India); SEA (South-East Asia); CHI
(China); AUS (Australia).
The two tables above demonstrate the broad spread of interviews geographically. All
continents were represented in the sample to ensure its global exposure. This dispersal
is disclosed in figure 1:
Figure 1: Distribution of the 53 in-depth interviews by sector
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Source: 53 CE professionals
Figure 2: Distribution of 53 Expert Interviews by industry
Oil, 2%
Healthcare, 2%
Logistics, 2%
Charity, 2%
Construction, 2%
Utilities, 2%
Experts , 19%
Car, 6%
Retail,
6%
Banking, 19%
Insurance, 9%
Telcommunications
, 23%
Manufacturing, 6%
Outsourcing, 2%
Source: 53 CE professionals
Figure 2 shows the industrial distribution of interviewees: these are focused on Banking
and Telecommunications. However, a broad cross-section of other industries was
chosen alongside CE experts.
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2.0 Insights
2.1 What is the background of Customer Experience leaders?
1. 78 percent of VP’s and Directors of Customer Experience have no background in
Customer Experience Management. The top previous roles are Operational
Management and Customer Service (N=136).
2.2 How is Customer Experience Defined?
2. Overall, 60 percent of respondents give a touchpoint definition of Customer
Experience while 28 percent define CE through customer research programmes. The
third highest is a definition that includes reference to emotional engagement. In
general while there is consensus, there are some key differences, such as the
greater focus on internal company process and mindset change amongst CxOs and
the customer research bias of Lead PMs (project managers).
2.3 What is the level of adoption of Customer Experience Management around the
world?
3. At least in the use of the term, Customer Experience is a global phenomenon.
4. 2,106 companies have been identified as being active in Customer Experience
Management from around the world. This equates to an average of around 4 CE
executives per company.
5. Regionally 58 percent of CE active companies come from 2 regions: North America
and Western Europe. 42 percent are active outside these regions with the next most
important region being Australasia (Australia and New Zealand) at 7 percent.
6. Some countries have an unexpectedly large number of CE companies. These
countries are India, Singapore, Australia and New Zealand.
7. Customer experience language exists even in countries with lower levels of
economic development such as Bhutan, Fiji and Afghanistan – this reflects its spread
through MnC’s(Multi National Companies), Telecommunications and through a
process of copying best practice from ‘the West.’
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2.4 Can you provide a model of adoption? Maturity Index
8. Globally, countries and regions can be divided into 7 states of maturity: high; high-
mid; mid; mid-low; low; very low and no presence.
Figure 3: The 7 Stage Maturity Model
9. A noticeable feature of development is an expected ‘telescoping’ i.e., timeframes to
maturity are less than they were in the mature countries.
10. The Maturity Index is underpinned by a 3 stage model of development from a
customer acquisition focus thorough to relationship and then retention. Key
movements are currently being seen from acquisition to relationship in several mid to
low tier countries that are undergoing changing customer expectations with a
burgeoning middle class exposed to western styles of service as well as cross-
vertical expansion prospects in the B2B market.
Figure 4: The Acquisition, Relationship, Retention Stages
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11. There is a large base of ‘nascent’ countries i.e., those at the tipping point to high
growth – this is the mid-low mature zone and represents countries such as South
Africa, Brazil, China and India as well as key countries in the mid mature zone such
as Turkey and the United Arab Emirates. These represent the best opportunities for
growth in the next 5 years.
12. Other countries to watch are Australia and New Zealand that have a firm platform of
awareness of CEM,
13. The most mature zones still reflect and Anglo-Saxon cultural foundation: UK, USA,
Canada, and Singapore.
14. Customer Experience is spreading out from its Anglo-Saxon centric base but still
remains most mature within this culture and cultures that have a strong English
speaking background (this is not a function of the research method as there are
strongly growing areas such as Brazil, China and Turkey).
15. Customer Experience is a function of levels of comparative economic development
and cultural acceptance e.g., service cultures form a basis for an Experience focus.
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16. High mature does not mean high adoption as can be seen by the number of
companies covered as ‘actives.’ Indeed, adoption appears to be quite low.
17. Key trends in terms of future CE developments are exhibited at the High mature end.
18. Other less mature countries tend to be ‘me-to’ followers in terms of implementations
and understanding of Customer Experience.
2.5 What is the level of adoption of Customer Experience management by
company, sector and level of maturity?
19. Globally, over 60% of companies that have adopted CE are in four sectors,
Telecommunication, Banking, Retail and IT and services. There are also significant
sectors in Insurance, Motor and Airlines.
20. The 10 most active Global firms in Customer Experience are respectively: HP;
HSBC; Vodafone/ Vodacom; GAP; American Express; Dell; Citibank; Best Buy;
Sprint Nextel and AT&T.
21. In addition a number of key players ex UK and USA are in-country dominant and
becoming increasingly important e.g., Telstra and Turkcell.
22. In Telecommunications, there are a number of pivotal regional CE players such as
LIME in the Caribbean, MTN and Airtel in Africa.
23. In Banking there are a number of pivotal regional CE players such as Standard Bank
in Africa, Standard Chartered in Asia.
24. Several key investments in Customer Experience are noted from aviation (Boeing
and Delta ‘http://news.delta.com/index.php?s=43&item=870’).
25. 41 percent of interviewees state competitive intensity in Customer Experience as
strong; 43 percent state it as moderate and 16 percent as weak.
26. Management consultancies and research houses have been active in promoting
CEM alongside the Multi-National Corporations and brand promotion from leading
HQs.
2.6 What are the drivers to growth in CE?
27. In total, 65 percent of respondents stated that Customer Experience was a key
strategy for their company i.e., score of 7 out of 7 on importance. Only 14 percent
stated it as less than 4 out of 7 in terms of importance.
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28. There is a clear pattern of support for continuing growth of Customer Experience in
Banking and Telecommunications. The other industry sectors do not exhibit a decline
in growth, more a ‘stay the same’ investment level.
29. 73.5 percent of interviewees expect increasing investment within their firms at an
average rate of 15 percent over the next year; 24.5 percent expect investment to be
maintained and 2 percent expect a fall.
30. The top driver to growth in CE remains the importance of differentiating under
conditions of commoditization. However, this is not the only reason, second in the
list are financial considerations around loyalty, retention and churn i.e., to defensively
prevent customers from leaving. Second equal is a new and key driver, the rising
trend of customer empowerment as customers have raised their expectations
through rising incomes and awareness of service quality gained via social media and
travel overseas. Of the customer empowerment drivers 38 percent of respondents
mention specifically the growing importance of Social Media: interestingly in
countries like Peru, Brazil and Turkey this is seen as essential – in effect these mid
to low tier mature countries are leapfrogging a technology.
31. Rates of growth are lower in B2B industries and those with a traditionally lower
customer service baseline.
32. There is a certain nervousness in stated investments i.e., slight, in current projects,
bi-model growth in some banks matched by cutting costs in others.
33. Companies are seeking to invest in the High Mature segment within ‘Stabilization’
projects e.g., IT systems, joining up systems to improve information flow HR and
training. Some international projects are deemed high investment, apportioned to
HQ but in fact driven to expand in High-Low Mature countries.
34. Companies are seeking to invest in the other segments within ‘Growth and
Optimization’ projects e.g., projects to establish Customer Experience or projects to
train in CE. Some of these are kick-started by international branding projects out of
HQ or through Government Regulation.
35. The general view is that these growth rates will be apparent in the third of business
who are interested in Customer Experience. There will be no change in terms of
‘interested industries.’
36. The industry that spends the most is the Telecommunications industry – although
this is by dint of its size in the first place. This is based on the CE investment views
of the 53 experts and the degree of networked arrangements these industries hold
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i.e., the degree of ‘brand’ and ‘mission’ spread from HQ to other countries. To some
degree this is also symptomatic of a large software push which to a large extent has
been branded as part of corporate CEM initiatives.
2.7 What are the challenges to growth in CE
37. The main challenge to Customer Experience is quite simply whether it is an
operational priority: faced with a cost cutting agenda, legacy metrics and a sales
focus, CE risks falling by the wayside. This is a problem when the returns on
experience are couched in the long-term through increased customer loyalty and
experience adjustments are perceived as cost intensive or difficult. In short, setting
an agenda around fundamental change risks losing executive support.
38. Based on the 53 interviews (103 implementations or circa 2 implementations per
interviewee) the main areas of activity were focused on IT and software
implementations followed by training and customer research.
39. There is a serious disconnect between appreciating the importance of emotion and
how it is actually measured and therefore understood. The majority of interviewees
only undertook qualitative measurement through focus group, sentiment analysis,
verbatim analysis and journey mapping approaches or critical incident type
techniques. The situation quantitatively is even worse, respondents not adapting
current measures and just using Customer Satisfaction or loyalty indicators (NPS,
TRIM) as proxies for emotion. Some avoided the issue as too difficult or of
importance only as an outcome of other measures.
40. In total 65 percent of respondents have heard of NPS and know an organisation
(whether their own or another in their country) that uses it. 35 percent are not aware
of it or are aware of it but do not use it/ believe it should be used.
41. Interestingly, of those organizations that use NPS, there is some conflict starting to
develop in its application.
42. The one question interviewees wanted answering about Customer Experience
comprised: how to implement CE and how to demonstrate a link to financial return.
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2.8 What is the most admired firm in Customer Experience? 43. Apple was the most admired CE firm.
44. Organisations not well recognised globally but admired regionally include in Brazil,
Brabesco Bank, Ludique et Badin and Natura; in Germany Berlin Airlines; Shoppers
Stop and Jet Airways in India and Turkcell in Turkey; and companies in the UK and
USA such as Screwfix Direct, Bank West, Metro Bank and Denny Marie.
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3.0 Management Implications
3.1 What are the 5 Major Risks?
1. Risk 1: Use of the term as a rebrand for current operations - Customer
Experience is a well used term as demonstrated by the global spread of
executives with CE in their title. However, there is a disparity between use of the
term and the actual implementation of a CE programme.
2. Risk 2: Misappropriation of the term for vendor sales - Another risk is the active
misappropriation of the term ‘Customer Experience’ by some vendors as a front
for rebranding CRM as CEM in order to sell more solutions.
3. Risk 3: Failure to take account of the customer’s emotional viewpoint e.g., in ROI
- Customer Experience tends to follow a touchpoint definition. This is quite a
defensive position to take.
4. Risk 4: Limitation in its adoption - Beyond Philosophy concludes that the term
Customer Experience has achieved global acceptance. However, this
acceptance is limited to a few key verticals: Telecommunications, Banking, Retail
and several of the smaller sectors with increasing adoption in Aviation, Motor and
Insurance.
5. Risk 5: Timeframe to execute - One of the major problems with CE is that it
depends on the long-term. Its economic basis around loyalty is all about long-
term return, its advantages in terms of being more customer-centric also require
levels of corporate transformation that take years.
3.2 What is the strategy to manage these risks?
6. To avoid the risks companies have to realise that at its heart Customer
Experience is an organisational strategy based upon a holistic approach to the
customer using emotion as a key differentiator. This means embedding from the
very start the message that this is a transformational approach not just one
based on tinkering with the IT infrastructure, adapting call centres or measuring
numerous touchpoints. These may be part of a solution but they are not CE.
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Figure 5: Key areas of a CE implementation
Understanding CE – get leadership buy-in and understanding as to what exactly
Customer Experience is!
Setting the strategy – define where your organisation is in terms of the
Customer Experience and your organisations understanding of the customer
journey from an emotional perspective and the emotion drivers and destroyers of
value. Build out a case study based on ROI and how CE will reach your
corporate objectives, usually towards competitive differentiation. Develop a
roadmap to change.
Engage the organisation – start to train the organisation in the principles of
customer experience and design in the organisational foundations to support it
long-term e.g., governance.
Embed the CE culture – focus on cultural alignment within the organisation
through training, recruitment, embedding CE in the employee experience and
leadership buy-in and support.
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Process Improvement - only after the company has started to ‘get it’ should you
move to process improvement. Clearly with time lags, some IT system can be
planned in, but the stage of Cultural engagement should be in place prior to
delivery of a new CE process infrastructure for without employee support no
system emplacement will succeed.
Redesign experiences - finally, pilot implementations of specific customer
initiatives within the first 12 months to ensure proof of concept and the perception
that change at the customer level is happening i.e., we are starting to see how
we can get a return. Use Emotion Journey Maps and Emotional Measurement to
assist in the redesign but critically ensure creative execution.
3.3 What are the 5 Major Drivers?
7. Major Driver 1: Increasing need to respond to customer empowerment -
Customer Experience Management used to be driven mainly by concerns over
commoditisation: CE in effect being used as a means to differentiation. However,
a new key driver - customer empowerment - has come to the fore globally. This
makes CE a necessity rather than an option:
a. The 10 customer empowerment drivers are: social media; fast society;
burgeoning middle class; development of high value segments; demand
for international brands; deregulation of markets; increased travel;
regulation in favour of the customer; cultural sensitivity and web
aggregator sites.
8. Major Driver 2: Increasing need to manage organisational complexity - Customer
Experience Management is mainly, but not exclusively, a phenomenon of Multi-
National Corporations. Faced with a proliferation of multiple channels and
increasing complexity in terms of IT infrastructure and expansion into new
territories the current siloed structure of organisations is facing breakdown. With
marketing focused on the 4Ps and customer service on service delivery and IT
on the web infrastructure there is a problem of control and communication. This
failure leads to breakage points.
9. Major Driver 3: Increasing awareness of the importance of emotion and how this
translates into loyalty gains - The way of operating marketing has changed from
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one focused on the 4Ps to one that increasingly looks at emotion as a platform
for differentiation. In part this is driven by the commoditisation challenge, but
also by the evidence from neuroscience and advanced research, that emotions
drive behaviour.
10. Major Driver 4: Move from product based to service based organisations - In
general, the focus of CE is on verticals with a high customer facing base. These
are industries that would have used the term customer service but now use
customer experience instead. Less apparent has been the B2B industries.
However, as many product based organisations face margin collapse with
commoditisation, so they will look to CE as a means to target and develop new
service related propositions. Here, the ability to manage relationships will be
uppermost as the space for differentiation along product lines declines. This is a
trend focused on new wave Customer Experience verticals in the B2B space
e.g., Manufacturing, Logistics, Construction and as current B2C providers
integrate CE into their supply chain.
11. Major Driver 5: Web Experience- The focus on Web enablement is allowing
companies in less mature regions to leapfrog a technology and play on a more
even playing field with the more mature countries. Indeed, in some cases the
Web experience is deemed of greater importance e.g., Brazil.
3.4 A Final View
12. Growth in CE is intimately linked to organisational consciousness of the
customer. This is why some sectors such as Telecoms ‘get it’, there is no where
to hide, while others often in B2B are behind the curve. With increasing push
from regulation and pull from commoditisation, Beyond Philosophy see an
increasing number of firms becoming conscious of the need to organise
themselves towards the customer .
13. In the current market those sectors coming from a low base (such as
manufacturing); facing fast innovation (such as E-tail) and regulatory push (such
as healthcare) will experience the highest growth. However, there is a
comprehensive need even in the first generation to reconsider what Customer
Experience is i.e., are you really doing it!
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14. it is no good taking a defensive position around measuring touchpoints or
rebranding service and research, organisations need to ensure they ‘truly’
consider the meaning of Customer Experience based on its founding notions of
organisational redesign and an emotional commitment to loyalty.
15. It seems for now CE is standing at a crossroads between success and failure.
The message should be ‘rejuvenate or die.’
16. Companies that have emotions inside understand the customer experience far
better than those that assume customers are always rational. With an emotional
understanding firms are better able to control complexity through customer
action, rather than more controlling measurements.
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