Fs forum june 2010

Our business delivers Intellectual Capital

MeasurementAction

for Customer Experience

What’s the Big Idea?

Jamie LywoodCEO – Harding &Yorke

EMPATHY

- So what is empathy?

http://www.empathy.co.uk/index.html

- So what is empathy?

The Greek - PATHEA

- Feelings

Wikipedia

“Is the capability to share another being’s emotions and feelings as if they were your own”

EM

- FEELINGS

and then do something about it!

Existing Customer?

New Customer?

Tom Peters: “Every Board should have a ten year old on it!”

80%

20%

Lie

Manipulate

Play Politics “Because you

Promised!”

GURU

2

8

The Retailer’s Dilemma

The HYM Sheet

The Traditional Approach to Customer Service

Harding & Yorke

Matrix

FAILFAIL SUCCEEDSUCCEED

THE WAY THE WAY YOU DO YOU DO

IT!IT!

PPLLEEAASSAANNTTAALLIIEENNAATTEE

WHAT YOU DO!WHAT YOU DO!




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FAILFAIL SUCCEEDSUCCEED EXCEEDEXCEED



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EEMMPPAATTHHYY


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EEMMPPAATTHHYY

Trad

ition

al C

ustom

er S

atisf

actio

n


IT!IT!


Can we measure Empathy?

•High Ratio

•Statistically Significant

•Easily Segmented

•Comparable

•Highly Focussed

•Validated

•Easily Actionable

A typical approach to Customer CentricityA better approach

Have: Needs / Wants / Problems

Satisfies: Needs / Wants / Problems

Marketing / Awareness

Communication

PHYSICAL & EMOTIONAL

Meet Physical

needs well

Poor Emotional understanding

SURVEY CUSTOMERSCUSTOMERS RESPOND

Based on:•Logic•Expectation•In the moment•Outcome•Knowledge

Missing:•Emotion•How it feels•Relationship•Moment of Truth

VALIDATEFEED BACKRECOMMENDIMPLEMENT

ANALYSE

EMPATHY

Web

Email, SMS

Mail, Fax, etc

Voice

Face to face

ANALYSEEMPATHY

-PHYSICAL

EMOTIONAL


How we feelFeel

GutFeeling

Empathy

Warm

Willing

Happy

Friendly

How they feel

EmotionalEmotional ResponseResponse

How we feelFeel

EmpathyEmpathy

Respond

GutFeeling

Clarity

Volume

Tone

Pace

Warm

Willing

Happy

Friendly

How it’s said / written

Voice / Text Qualities

How they feel

Emotional Response

How we feel

Listen / ReadRespond

Feel

Empathy

GutFeeling

Clarity

Language

Content

Words Facts

Volume

Tone

Pace

Warm

Willing

Happy

Friendly

Quantitative Attention

Hear what’s saidHow it’s said


How they feel

Emotional Response

How we feel

Hear / Re-readListen / Read

RespondFeel

Empathy

GutFeeling

Clarity

Language

Content

Words Facts

Volume

Tone

Pace

Warm

Willing

Happy

Friendly

Quantitative Attention

Hear what’s saidHow it’s said


How they feel

Emotional Response

How we feel

Hear / Re-readListen / Read

RespondFeel

GutFeeling

EmpathyGo directly

to th

e Gut Feelin

g

0

5

10

15

20

25

30

35

40

%

ExtremeExtreme

DissatisfactionDissatisfaction DissatisfactionDissatisfaction NeutralNeutral SatisfactionSatisfactionExtremeExtreme

SatisfactionSatisfaction

11 22 33 44 55 66 77 88 99 1010

Couldn’Couldn’ttFeel WorseFeel Worse Feels BadFeels Bad NeutralNeutral Feels GoodFeels Good

Couldn’tCouldn’t

Feel BetterFeel BetterCouldn’t feel Couldn’t feel

less less WelcomedWelcomed

UnwelcomedUnwelcomed NeutralNeutral WelcomedWelcomedCouldn’t feel Couldn’t feel

more Welcomedmore Welcomed

How welcomed do I feel by the initial words of the Greeting?

Average

5.7

COMMON VALUES

HANDLING THE

TASK

DEVELOPING THE

RELATIONSHIP

Overall SUB-CONSCIOUS

IMPRESSION

Overall

CONSCIOUSIMPRESSION

WRAP UP

FACTS AND

FEELINGS

PROMOTION / RETENTION


6.02 6.02 8.28.222

How you make us

‘Feel’

How you ‘Process’

us

The Importance of Empathy

Alliance & Leicester (4)

Aviva (3)AXA (1)

Barclays (4)Bradford & Bingley

(1)Churchill (2)

Direct line (3)HBoS (7)

ING Direct (3)Lloyds TSB (4)

MBNA (1)NatWest (4)

Post Office (1)RAC (1)RBS (5)

RBS Insurance (1)Sainsbury’s (6)

Santander (Abbey) (5)

Scottish Widows (1)Standard life (3)Virgin Money (2)

Prof. Merlin Stone

Dr. Yuksel Ekinci


Financial business performance indicators downloaded from the AMEDEUS database

Empathy ratings downloaded from Harding & Yorke

Univariate & multivariate statistical techniques used for assessing validity and reliability of ERIC. These included:

Linear Correlations

Exploratory Factor Analysis (EFA)

Multiple Regression (Ordinary Least

Squares)

Cronbach’s Alpha (Reliability)

Another

GURU

A man with a very high

forehead

Key Findings:

Process:•No correlation with profit•4 dimensional

Empathy:•Very strong correlation with Return on Capital Employed at .85•Uni-dimensional

Reliability:•98.9% reliable

0.32 0.55 1.0 0.75

NONE WEAK GOOD STRONG

STRENGTH OF CORRELATION


++

--

£/$£/$

RR

EE

TT

UU

RR

NN

11 22 33 44 55 66 77 88 99 1010

Commitment / InvestmentCommitment / Investment

first directVirginRBSStandard LifeEtc.


2004

11 22 33 44 55 66 77 88 99 1010

100%

80%

60%

40%

20%

0%

-20%

-40%

-60%

-80%

-100%

Conclusion:

For every point increase on the Empathy index, there will be 16.4 % improvement on ROCE.

£/$£/$

RR

OO

CC

EE

EMPATHYEMPATHY



Increased value of products

purchased at Bank

58%

Purchased new product

29%

Perception of bank

improved but did nothing

13%

Bought product at

another Bank23%

Stopped Product

20%

Switched main Bank

15%

Decreased Value of products

14%

Perception of Bank

worsened but did nothing

28%

Positive Moment of Truth Negative Moment of Truth

Source: McKinsey

Advanced Predictive Analysis - Benchmarkinge.g. ACSI

Advocacy Measurese.g. NPS

‘Stakeholder Value’ – Claus Fornell

‘Revenue Growth’ - Fred Reichheld

‘Profit’ - Prof. Merlin Stone

The Importance of Customers recognisede.g. Customer Satisfaction

1983

Chronology

High 6.75Catalogue Clothing - Dec’08

Life Insurance - Jun’09

Savings - May’09

Home Insurance - Jul’09

Loans – Jul’09

Motor Insurance- Feb’09

Mobile Phone - Mar’09

Credit Cards - Apr’09

Health Insurance - Oct’09

Telephone Banking - Mar’10

Low 5.69 Average 6.18

Low 6.26 High 6.83Average 6.42


Low 5.93 High 6.53Av. 6.29

Low 5.61

High 6.44

Average 6.03




Low 5.92 High 6.77Av 6.39


Low 5.86 High 6.69Av. 6.23Mortgages - Feb’09





Low 7.66

High 8.56

Average 8.15







65 7 8 9 10 PROCESS

OPPORTUNITY

EMPATHY

OPPORTUNITY

6.5+ Makes us FEEL ‘good’7.5+ A ‘good’ PROCESS

Bank Branch ScoresNatWest has done particularly well in efforts to attain a high and consistent score within their Branch Network. Lloyds Banking Group (Lloyds TSB & Halifax) stand out through their inconsistency by having both the lowest and highest scores.

Lloyds TSB

HSBC

HBoS

NationwideAlliance & Leicester

First Direct

RBSBarclays

Data is taken from H&Y’s ERIC™ competitor benchmarking programme (Telephone Banking - Sales)

Lloyds TSBBarclays

HBoS

HSBCNationwide

NatWest

NatWest

Alliance & Leicester

First Direct

Contact Centre Banking – Over Time

RBS

Telephony

Physical Retail / Meetings / Interviews / Home visits etc.

Web / Mobile / Television / Email etc.Digital

Self Service

Inbound/outbound / IVR / ISR / Auto messages etc.

ATM’s / Handsets / Posters / Environments etc.

COMPETITION

The Versatility of Empathy

Dare to be Different – The Ritz CarltonSome ideas to explore

Empathy in Action!

Empathy in Action!

Empathy in Action!

Key messages to take away Direct and academically proven correlation with PROFIT (ROCE)

Proposition appeals to highest Execs, but is also practical and supportable throughout organisations and unions

Empathy is evidence based measurement for all offline and online channels and provides clear recommendations for action

Valid, Reliable and Sensitive data supported by proven solutions for improvement – not-dependent on consultancies!

Enables built-in measurement and proof of progress and can be integrated with internal Quality Performance Measures

Outputs are comparable through industries, channels, functions and across borders

Common Sense!

Our business delivers Intellectual Capital

MeasurementAction

for Customer Experience

What’s the Big Idea?

Jamie LywoodCEO – Harding &[email protected]+44 (0)7850 20 20 30

EMPATHY

- Is it!

mailto:[email protected]

http://www.empathy.co.uk/index.html

Business

Fs forum june 2010