Profit-Focused Customer Care: Seven Proven Strategies

Presented by: John Goodman, Vice Chairman, TARP WorldwideHosted by: Sally Hurley, President, VIPdesk

September 15, 2009

View The Webinar

This presentation is the intellectual property of TARP Worldwide and for use only to illustrate TARP’s methodology. Use of or distribution beyond that purpose is forbidden. 2

About TARP• Founded in 1971—38 years of customer experience leadership

– White House Complaint Studies 1970s-80s (instigated 800#s and GE Answer Center)

– Assisted 6 Baldrige Winners and 43 Fortune 100 Companies– Initiated concept of “word of mouth” (TARP/Coca-Cola 1978 Study) and

“word of mouse” (eCare and Click & Mortar studies 1999)

• Offices in Wash., D.C. and London • Credited with developing the approach

for quantifying the impact of quality on revenue, cost & WOM for companies like Toyota/Lexus, Farmers Insurance, USAA, American Express, HSBC, USAA, 3M, IBM, Compass Bank, Allstate, AARP, FedEx, Canadian Tire Financial Services, SunTrust, Neiman Marcus, & Chick-Fil-A.

This presentation is the intellectual property of TARP Worldwide and for use only to illustrate TARP’s methodology. Use of or distribution beyond that purpose is forbidden. 3

About VIPdesk

VIPdesk’s full suite of Brand Experience Management solutions include

Virtual Concierge and Contact Center Services, Social Media

Management, Experiential Programs, IVR Services and Voice of the

Customer Surveying & Analytics. Global industry leaders trust

VIPdesk to enhance their brands through our customer care and

loyalty programs.

This presentation is the intellectual property of TARP Worldwide and for use only to illustrate TARP’s methodology. Use of or distribution beyond that purpose is forbidden. 4

Customers, donors, citizens will:

Use again

Use or donate more

Tell others to use or donate

Try your other products & services

+ =DOING

THE RIGHT JOB

RIGHT THE FIRST TIME

MAXIMUM CUSTOMER

SATISFACTION & LOYALTY

ImprovedProduct & Service

Quality

Respond toIndividual Customers

Identify Sourcesof Dissatisfaction

Conduct RootCause Analysis

Feedback onPrevention

EFFECTIVECUSTOMERCONTACT

MANAGEMENT

Formula For Maximizing Customer Satisfaction

This presentation is the intellectual property of TARP Worldwide and for use only to illustrate TARP’s methodology. Use of or distribution beyond that purpose is forbidden. 5

Employees Do Not Cause Most Customer Dissatisfaction

- Fails to followpolicy

The majority of customer dissatisfaction is NOT caused by employee error or attitude but by products that cause disappointment and broken processes*

Customer20%-30%

Employee20%

- Wrong expectations- Customer error

-Fails to followpolicy

-Attitude

Company 40%-60%- Products and servicesdon’t meet expectations

- Marketing miscommunication- Broken processes

Poorly designed products,Processes, and marketingcreate most unmet expectations. Further, employees are often notequipped with effective responses to problems.

Customer expectationsmust be set and they mustbe educated on howto avoid problemsand surprises.

*Finding based upon TARP analysis problem cause data in over 200 consumer and B2B environments.

At least 30% of

contacts are preventable

This presentation is the intellectual property of TARP Worldwide and for use only to illustrate TARP’s methodology. Use of or distribution beyond that purpose is forbidden. 6

Seven Strategies

1. Set proper customer expectations2. Quantify impact for the CFO & CMO3. Reduce Risk expenses4. Gaining the CEO’s ear – becoming the Chief

Customer Officer5. Enhance your front line success6. Implement technology that customers will enjoy –

delivering psychic pizza7. Sensibly creating remarkable delight

This presentation is the intellectual property of TARP Worldwide and for use only to illustrate TARP’s methodology. Use of or distribution beyond that purpose is forbidden. 7

1. Set Proper Expectations• Welcome packages• Welcome calls• Encourage questions before customers get

into trouble• Confirmations• Reconnect

This presentation is the intellectual property of TARP Worldwide and for use only to illustrate TARP’s methodology. Use of or distribution beyond that purpose is forbidden. 8

=

=

=

=

=

2,000

6,000

9,000

40,000

57,000Total Customers At Risk

200,000Customers

withProblems

20%Dissatisfied

Many NotRepurchasing

Some NotRepurchasing

50%Satisfied

MostRepurchasing

75% Do NotComplain

25%Complain

30%Mollified

Some NotRepurchasing

2. Demonstrating Financial Impact Of Prevention And Response To The CFO

Enhance revenue via preventing problems, soliciting more complaints and Increasing percentage satisfied when they do contact you

This presentation is the intellectual property of TARP Worldwide and for use only to illustrate TARP’s methodology. Use of or distribution beyond that purpose is forbidden. 9

Show Fewer Problems Drive Higher Margins

10%

22%

46%

74%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

No problems 1 problem 2 to 5 problems 6 problems ormore

Percent of customers dissatisfied with fees rises with number of problems.

This presentation is the intellectual property of TARP Worldwide and for use only to illustrate TARP’s methodology. Use of or distribution beyond that purpose is forbidden. 10

Identify Transactions That Systematically Cause Dissatisfaction

Problem reports % Loyal (Top 2 Box) # Contacts

Routine order 98 1.1 Shipment status 91 1.2 Product return 93 2.1 Shipping charges 88 2.1 Backorder status * 67 3.3 Call center overall average 91 1.9

Transaction which is biggest opportunity for improvement

Misuse of resources to intensively measure this transaction

Tie Survey Results to Call Monitoring Form**See tarp paper: Your monitoring and coaching may be doing more damage than good

This presentation is the intellectual property of TARP Worldwide and for use only to illustrate TARP’s methodology. Use of or distribution beyond that purpose is forbidden. 11

Getting the CMO on Board: Show Service Is A Word of Mouth Management Mechanism

10%delighted

70%satisfied

Telltwo

Tell one

=

=

2,000

7,000

-3,000

10,000customers

Example calculation of potential impact

20%dissatisfied

Tell six

= -12,000

20% dissatisfaction can counter 80% satisfaction

This presentation is the intellectual property of TARP Worldwide and for use only to illustrate TARP’s methodology. Use of or distribution beyond that purpose is forbidden. 12

Getting the CMO on Board: Show Service Is A Word of Mouth Management Mechanism

10%delighted

80%satisfied

Telltwo

Tell one

=

=

2,000

8,000

4,000

10,000customers

Example calculation of potential impact

10%dissatisfied

Tell six

= -6,000

10% decrease in dissatisfaction results in net positive WOM

This presentation is the intellectual property of TARP Worldwide and for use only to illustrate TARP’s methodology. Use of or distribution beyond that purpose is forbidden. 13

3. Reduce Risk Expenses

Exacerbating Factors

Not Escalated

Expected Claim/

Lawsuit

Injury, But No Claim/

Lawsuit

Surprise Claim/

Lawsuit

EscalatedReported

Warned of Potential Problem

Problem Occurs

Not Reported

Negative WOM Consumers/

PCP

Well Handled

Poorly Handling

Contributing Factors

This presentation is the intellectual property of TARP Worldwide and for use only to illustrate TARP’s methodology. Use of or distribution beyond that purpose is forbidden. 1414

4. Become The Focal Point The Voice Of The Customer

• Customer surveys• Customer contact and interaction data• Internal operations process and quality measures• Together, these elements are used to identify

opportunities for product and service quality improvement

+ = Total view of the customer

experienceInternal process and quality data

+ Customer contact and

interaction data

Surveys of customer

satisfaction and loyalty

Take The Role Of Chief Customer Officer

This presentation is the intellectual property of TARP Worldwide and for use only to illustrate TARP’s methodology. Use of or distribution beyond that purpose is forbidden. 15

5. Make People Successful• Stellar Leaders and Culture Are Great, But..• Attitude - hiring• Tools – flexible solution spaces & information• Training – story telling• Motivation – victory sessions & promotability

This presentation is the intellectual property of TARP Worldwide and for use only to illustrate TARP’s methodology. Use of or distribution beyond that purpose is forbidden. 16

6. Deliver Technology People Enjoy

• Why people hate technology

• Why they love it

• Delivering psychic pizza

This presentation is the intellectual property of TARP Worldwide and for use only to illustrate TARP’s methodology. Use of or distribution beyond that purpose is forbidden. 17

7. Inexpensively Create Delight

Delight experience Average lift to repurchase or recommend (Top Box)

Service beyond expectation - heroics 12%

Friendly 90-second staff interaction 25%

Personal relationship over months 26%

Tell me of new product or service I can really use

30%

Proactively provide information on how to avoid problems or get more out of your product

32%

This presentation is the intellectual property of TARP Worldwide and for use only to illustrate TARP’s methodology. Use of or distribution beyond that purpose is forbidden. 18

Average Change In Account BalanceAver age Change In Mut ual Fund Accoun t Balance

• The average increase in mutual fund account balance during the pilot was 2.7 timeshigher for customers who received a courtesy call versus those who did not.

Avg Change in MF Accoun t Balance ( Oct -Jan )

$1,638

-$778

$1,184

$3,805

$1,364

$3,221

-$2,000

-$1,000

$0

$1,000

$2,000

$3,000

$4,000

$5,000

Non-Orphan Orphan Overall

Orphan Indicator

No Contact Contact

This presentation is the intellectual property of TARP Worldwide and for use only to illustrate TARP’s methodology. Use of or distribution beyond that purpose is forbidden.

This presentation is the intellectual property of TARP Worldwide and for use only to illustrate TARP’s methodology. Use of or distribution beyond that purpose is forbidden. 19

Ten Myths About Service1. Always exceed customer expectations2. Answering the phone really fast is the key to success3. People always prefer talking to people4. The customer is always right5. Complaints are down, things are getting better6. Employees are the cause of most dissatisfaction7. Price and cost cutting is the key to success8. We’re at 90% satisfaction – let’s declare victory!9. Measure Net Promoter and we’re done10. We have a 100% satisfaction guarantee – everyone is

happy.

This presentation is the intellectual property of TARP Worldwide and for use only to illustrate TARP’s methodology. Use of or distribution beyond that purpose is forbidden. 20

Summary• Look across the whole customer experience and quantify in a

way the CFO and CMO accept• Proactively deliver psychic pizza for prevention• Measure satisfaction by issue to identify opportunities• Measurement and VOC data are the key to support• Better a Small Success Than a Big Disaster:

Practice Continuous Experimentation

• Outlined in detail in Strategic Customer Service published by AMACOM• jgoodman@tarp.com or 703-284-9253

Questions?

21

This presentation is the intellectual property of TARP Worldwide and for use only to illustrate TARP’s methodology. Use of or distribution beyond that purpose is forbidden. 22

For More Information

• More Questions about Presentation or TARP?– John Goodman: jgoodman@tarp.com or

703-284-9253

• More information about VIPdesk or home-based customer care?– Sally Hurley: shurley@vipdesk.com or

703-837-3518

This presentation is the intellectual property of TARP Worldwide and for use only to illustrate TARP’s methodology. Use of or distribution beyond that purpose is forbidden. 23

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