Contributed on November 3, 2014

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Driving Growth and Profitability through Customer Experience & Process Transformation

Description

A Customer Experience revolution is transforming the business landscape catalyzed by redesigning the ’Process’ that connects customers with their channel partners both up- and down-stream. Remarkably, Customer Experience transformation has proven to generate 30-50% revenue and profit improvement for companies, by driving revenues AND reducing expenses. Business Process professionals have a major role to play in this transformation – but new approaches, stakeholders, and technologies are needed to create breakthrough results.

Transcript

Driving Growth and Profitability through
Customer Experience & Process Transformation
Customer Experience & Business Process Improvement
2
 Complementary – or Conflicting – Approaches?
 Different – or similar – toolkits?
 Same stakeholders?
Case Example:
Reed Construction Company
3
Revenue Growth
(Millions)
Growth Challenges
$150
$120
$90
$60
$30
 $150MM growth objective
 Business Development capacity
 Project Execution discipline and
scalability
 Lack of infrastructure – process
or technology
$0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Customer Experience Approach to Transformation
4
CX &
Economic
Baseline
Leverage
Points for
Improvement
Customer
Experience &
Process
Transformation
Plan
Measurement
& Plan
Refinements
Implementation
and Employee
Engagement
Customer Experience Baseline
5
Customer Loyalty is high … Happy customers spend more each year
Average Revenue per Year
$1,221
(,000)
$952
$477
$1,500
$1,000
$500
$-
Promoters Passives Detractors
8%
32%
60%
Promoters
Passives
Detractors
Net Promoter Score
NPS = 52
Happy customers are far more profitable
over their lifecycle
Average Lifecycle Profitability
$914
(,000)
$639
$289
$1,000
$800
$600
$400
$200
$-
Promoters Passives Detractors
Customers identified their key pain points
Responsiveness
Project Team / Company…
0% 20% 40% 60% 80% 100%
Quality of Supervision
Quality of construction
“Competitive” Project Cost
Ability to meet schedule
Project close-out (“punchlist”)
Sub-contractor mgmt.
Better than Competition Worse than Competition
Construction Company – Enterprise Process Model
CLOSEOUT
& FINAL
COMPLETION
6
PROJECT SCOPE/
DESIGN
GC INQUIRY &
QUALIFICATION
RFP  AWARD
PROJECT

C U S T O M E R E X P E R I E N C E C Y C L E

MANAGE CAPITAL
AND FINANCIALS
CLOSEOUT-TO-REFERRAL
MANAGE EQUIPMENT
& FACILITIES
MANAGE
SUBCONTRACTORS
D E V E L O P P R O J E C T
M A N A G E M E N T C A P A B I L I T I E S E N A B L I N G P R O C E S S E S
AWARENESS-TO-INQUIRY
DEVELOP/MANAGE
IT / TECHNOLOGY
PROPOSAL
REVIEW
 
POST-CONSTR.
SERVICES
A C Q U I R E C U S T O M E R S
REFERRAL
INQUIRY – TO – AWARD CONTRACT-TO-CLOSEOUT
EXTEND CUSTOMER
RELATIONSHIP
ESTABLISH
PROJECT
SCOPE
REVIEW RFQ
RESPONSES
PROPOSAL
DEV.
D E L I V E R P R O J E C T S
CONTRACT
REVIEW
GENERATE/
LEVERAGE
REFERRALS
SELL POST-CONSTRUCTION
SERVICES
DEVELOP & FOSTER A CUSTOMER-DRIVEN CULTURE
DEVELOP/ MAINTAIN
ARCHITECT CHANNEL
DEVELOP/ MAINTAIN
CHANNEL COMMUNICATIONS
D E V E L O P & M A N A G E
C U S T O M E R S & C H A N N E L S
MANAGE PEOPLE
DEVELOP/ MAINTAIN
BROKER CHANNEL
ISSUE
RFQ
CONSTRUCTION
PROCESS
PROJECT
CLOSE-OUT
DELIVER
PROPOSAL
B&F
PROPOSAL
 
BUILD BROKER /
ARCHITECT
RELATIONSHIPS
PRE-RFP
ACTIVITIES
SUBSTANTIONAL
COMPLETION
 
BUYOUT &
SCHEDULING
PROJECT
MOBIL-IZATION
WEEKLY /
MONTHLY
REVIEWS
PROJECT ACCOUNTING
& BILLING
PROJECT PLANNING &
DOCUMENTATION
PROJECT REPORTING
Projects drag
out at the end
– needlessly
Good subcontractors
inspire confidence in
your work
Good supervisors
understand the job upfront
– and handle issues early
Quality of management is highly
variable – everyone has their
own way of doing business
We rely on the network
of two people to secure
projects
7
Construction Company – Actions and Results
Key Actions Company Results
$160
$140
$120
$100
$80
$60
$40
$20
$0
Revenues
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
 Core Process Redesign
 Construction process, end-to-end
 New technology design & implementation
 Leverage of internal & external best
practices
 Business development process design
 Lead generation and tracking
 Salesforce.com installed
 DocuSign to streamline contracts and
paperwork
 Employee engagement
 Employee engagement survey
 Linkage to CX
 Training & Onboarding
 Talent mgmt. & career planning processes
 Revenue up 60% +
 Profits up 50%
 Customer NPS up +10 points
Case Example:
Security Software Company
8
Revenue Growth
(Millions)
2007 2008 2009 2010 2011 2012
Growth Situation
$150
$120
$90
$60
$30
$0
 Strong product position (Forrester)
 Technology delivery process is
undisciplined and internally-driven
 Drivers of customer decision-making
unknown
 Lack business process maturity
leading to inconsistent service
Customer Experience Baseline
Security Software company
9
Customer Loyalty is high … Happy customers spend more each year
Average Revenue per Year
$117,678
$77,759
$56,963
$140,000
$120,000
$100,000
$80,000
$60,000
$40,000
$20,000
$0
Promoters Passives Detractors
24%
14%
63%
Promoters
Passives
Detractors
Net Promoter Score
NPS = 49
Happy customers are far more profitable
over their lifecycle
Average Lifecycle Profitability
$470,712
(,000)
$272,157
$170,889
$500,000
$400,000
$300,000
$200,000
$100,000
$-
Promoters Passives Detractors
Key Driver of NPS and Profitability
NPS by ROI Performance
-14
48
87
100
50
0
-50
Met
Barely met /
Did not meet
Surpassed /
Overwhelmingly
Exceeded
“How well did we meet your ROI/TCO expectations?”
Customer Lifecycle Metrics support increased technical investment
– that drives loyalty and profitability
POC / Scope /
System Design
Quote /
Revisions
Purchase &
Contracting
Operation &
Trained Customers:
– 10% better support scores
– 15% more satisfied
– Represent only 50% of
Total customers
Transition
Support
Renewal /
Repurchase/
Referral
Customer Experience
Awareness
(Prospect)
Consideration &
Inquiry
(Evaluation)
Configuration /
Implementation
(Post-award
execution)
Training
(Post-award
execution)
Support customers have
NPS scores 30 points
higher than others
Customers with higher levels of
Professional Services have NPS
scores 40 points higher than others
High ROI customers have
NPS scores 40-80 points
higher than others –
Profitability is $55k – $75K
higher
Highly Satisfied clients
are 50%-100% MORE
profitable ($40k-$60k
per year increase)
11
Enterprise Process Model & Customer-driven Priorities
SECURITY NEEDS/
AWARENESS
 INQUIRY  SCOPE /
DESIGN
RFP /
RFQ
 INSTALL
 ORDER TRAIN
  USE
PRODUCT

C U S T O M E R E X P E R I E N C E C Y C L E


NEXT GEN
PRODUCT
INPUT
S E R V I C E C U S T O M E R S
DEVELOP/MANAGE
ACQUISITIONS & ALLIANCES
MANAGE PROJECT
EXECUTION & OUTCOMES
MANAGE CAPITAL
AND FINANCIALS
UPGRADE/
REPURCHASE/
RETENTION
INSTALL-TO-REFERRAL
MANAGE VENDOR
RELATIONSHIPS
MANAGE EQUIPMENT
& FACILITIES
A C Q U I R E C U S T O M E R S
AWARENESS-TO-
INQUIRY
CREATE
AWARENESS
GENERATE
LEAD/
INQUIRY
USERS
MANAGE
RFQ
DEVELOP/ MAINTAIN
PARTNER CHANNEL
M A N A G E
P R O D U C T S E N A B L I N G P R O C E S S E S
 REFERRAL
INQUIRY-TO-ORDER ORDER-TO-INSTALL
DEEPEN CUSTOMER
RELATIONSHIP
MANAGE
LEAD
DESIGN
& QUOTE
ORDER
SUPPORT
UPGRADE/FIX/
FEATURE
REQUESTS
ONBOARDING
GENERATE/
LEVERAGE
REFERRALS
CROSS-SELL
EXISTING
CLIENTS
DEVELOP/ MAINTAIN
SALES REP CHANNEL
DEVELOP/ MAINTAIN
CHANNEL COMMUNICATIONS
D E V E L O P & M A N A G E
C U S T O M E R S & C H A N N E L S
MANAGE TALENT
MANAGE PRODUCT
STRATEGY/LEFECYCLE
MANAGE PRODUCT LAUNCH PRODUCTS
PROFITABILITY
D E V E L O P
P R O D U C T S
RELEASE / GA
VALIDATION/
BETA TESTING
DEVELOPMENT
& QA/TESTING
RELEASE
PLANNING
FEATURE
REQUESTS
Install it perfectly + fix it right the first
time approach
Scope and Design
for High ROI
Customer-driven
product priorities
12
Security Software Company
Actions and Results
Key Actions Company Results
 Implementation & Support quality
 Focus on First- contact resolution
 Virtual staffing model with improved
onboarding
 Online database of solutions
 ROI-focused sales efforts
 Design and Proof-of-concept scope
 Salesforce.com installed
 Engineering support to sales efforts
 Customer-input to Product
development priorities
 Customer council to prioritize efforts
 Enterprise-driven solution landscape
$200
$150
$100
$50
$0
Annual Revenue Growth (MM)
 Revenue up 80%
 Profits up 80%
 Customer NPS up +10 points
Business Process vs. Customer Experience
Differences experienced as CPO and CXO
13
Business Process
Transformation
• Operations mgmt.
• Customer Service
• Product managers
• HR, IT, Finance
• Vendors
• Financial: unit costs, ABC, cost
savings, ROI
• Time: Cycle time
• Quality: Defect rate, error rate
• ERP / core operational systems
• Financial and HRIS systems data
• CRM / go-to-market systems
Customer Experience
Transformation
• Sales and Marketing
• Customer Service
• Product managers
• HR, IT, Finance
• Customers / Segments / Personas
• Distributors / Channel partners / Vendors
• Financial : CPL, CPA, CLV, Revenue growth,
Share of Wallet, ROI
• Time: Cycle time, SLA performance
• Quality: Conversion rate, CSAT/NPS, %
Detractors
• ERP / core operational systems
• Financial and HRIS systems data
• CRM / email marketing systems
• Website analytics & UX
• Social media sites
• VoC systems
Primary
Stakeholders
Common
Metrics
Systems
typically in
scope
Business Process vs. Customer Experience
Common Tools and Approaches
14
Business Process
Transformation
• SIPOC / Process mapping
• Pareto / Histogram
• Fishbone / Root cause
analysis
• Activity-based costing
• Control / Run charts
• 5-S
• CTQ
• Kaizen / Work-Out
sessions
• Lab, Pilot
• Release planning
Customer Experience
Transformation
• Customer Journey Mapping
• Pareto / Histogram
• VoC driver analysis
• Marketing yield analysis
• KPI / Scorecards
• UX improvements
• Product functionality req.
• Focus Group, Market research,
conjoint analysis
• Alpha, Beta Test
• Product roadmap / plan
Common
Tools
Common
Approaches
+
+
Customer Experience and Business Process improvements
need linkage – and are complementary approaches
Business
Process
Customer
Experience
> Drives Brand differentiation
> Creates customer adoption +
“demand – pull”
> Focuses process priorities
> Drives revenue growth
> Ensures Brand consistency
> Builds sustainability &
scalability
> Drives efficiency &
effectiveness
Customer Experience Strategies have consistently identified 30% – 40% profit
growth – without additional marketing or aggressive cost cutting
40%
35%
40%
30%
32%
27%
33%
35%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
B2B Auto B2B Auto B2B Mfg. B2B
Software
B2B
Construction
B2B Security B2C Fin.
Svcs.
B2C Fin.
Svcs.
Average Margin Improvement Identified
16
Source: Tucker & Company analysis