CEN March

cust merengagement

i s s u e s e v e n M a r c h 2 0 1 2

The official magazine of the

Customer Engagement Network

www.customerengagementnetwork.com

2012 Customer Engagement SummitN O V E M B E R 2 6 / 2 7 L O N D O N

Bian Salins and

the BTCare story

engage

at the Customer

Engagement

Summit

26-27 november 2012

Park Plaza Victoria, London

The retail sector is in a state of flux. While thesqueeze on consumer spending is having a largelydetrimental impact on the High Street, online retailsales are continuing to enjoy strong growth. Andwhile a number of well known retail brands havedisappeared over the past couple of years, othersare not only surviving but thriving as they adoptwinning customer engagement strategies.

This Directors Forum will take a look at the key issues,challenges and trends in this fast moving and volatile industrysector. It will spotlight the developing dynamic in relationshipsbetween retailers and their customers in an increasinglymultichannel environment, and how fundamental changes inconsumer behaviour are impacting on retailers as they strive forsustainable success.

Customer Engagement in the

Retail Sector Directors Forum 20th June 2012, London

Delegates will learn:

• How world class retailers are deploying winning customer engagement strategies that are designed to engender consumer loyalty and greater wallet share

• The latest trends in consumer behaviour and how retailers are having to adapt their offerings in a multichannel retail environment

• How the rise and rise of online retailing is impacting the High Street and the strategies retailers are deploying to make the best of both worlds

• How social and mobile customer engagement technologies and initiatives are impacting on the retail sector in an age where customers trust their peers more than brands

• The commercial benefits that come from adopting a joined-up approach to retailing through giving consumers the choice they demand in how they purchase and the channels they choose to make those purchases

Time: 9:00am – 5:00pmVenue: Gallup Consulting, The Adelphi,

1-11 John Adam Street, London, WC2N 6HS

For more information contact Chris Wood: [email protected] +44 (0) 1932 341828 or visit our website:


Register

FREE TO ATTENDFOR CUSTOMERENGAGEMENT

PROFESSIONALS

We have had fantastically encouragingresponse from our community network toour ethos of encouraging organisations tocut across their internal silos and take amore holistic view of their customers andtheir people. We feel that we have struck areal nerve in our proposition that takingthis more customer focussed view todeliver consistent and appropriate

customer engagement and experience across all service andcommunication channels - be they offline, online, social ormobile -will translate into competitive advantage.

We have also since day one stressed the importance ofemployee engagement and the dynamic links between engagedemployees, great service, and high levels of performanceand profitability - and this stance will remain acornerstone of our approach moving forward.

This has been our consistent messaging –and indeed was one of the key reasons weformed the Customer Engagement Club in the firstplace – and if anything we feel that this approachto customer relationships and interaction is evenmore relevant now than it was two years ago.Customer engagement is more critical to businessesnow than ever before, and customers have morechoices and more say than ever before. They are alsomore likely to vote with their feet when it comes tobeing unhappy with products and services.

Against that backdrop we have a number of new initiativesafoot. We are launching a new highly interactive website underthe new Customer Engagement Network (CEN) banner andincreasing the frequency of our highly regarded CustomerEngagement Directors Forums.

We are also launching our first Customer EngagementSummit this autumn which will effectively be a ‘mash-up’ of the

key elements from our Directors Forums – and much more. TheSummit will bring all the key elements together that go to makethe recipe for any organisation to devise and implementsuccessful and sustainable customer engagement strategies.

We are also fully committed to the further development ofCustomer Engagement magazine, which we publish bothdigitally and in print form at the behest of you our customers.This is the first of our new look issues of Customer Engagementmagazine with more world class case studies, more incisiveopinion, more leading edge research and more of everything thatrelates to successful and sustainable customer engagement.

These are challenging and exciting times for us all, witheconomic conditions as tricky and volatile as in living memory,and with customers against that backcloth continuing todemand more from their product and service providers andexpecting to be interacted with on the channel(s) of theirchoosing. These days you have to be where your customersare or you will simply lose them to those of your competitorsthat do so.

Here at the Customer Engagement Networkwe will continue to do all we can to helpprovide our community with the strategies,the tools and the techniques designed toproduce successful and sustainableemployee and customer engagementacross the board. We look forward tohelping our network in achieving

successful customer engagementand the business success

that goes hand in handwith it.

Steve Hurst,Editorial Director

Customer Engagement Network

As the Customer Engagement Club approaches its second birthday we have had a long hard think about how best tohelp shape the offering to our community going forward - and with the crucial aid of valuable feedback from ourmembers and also our new Editorial Advisory Board we are delighted to report that we are going to be furtherramping up our activities considerably over the next year - under our new name the Customer Engagement Network

These are challenging and

exciting times for us all

I S S U E S E V E N • M A R C H 2 0 1 23

Customer Engagement

Club gets Networked

a word

from the

editor

haveyour say

Have your say - if you have any feedback onthis issue of Customer Engagement share itwith us by sending a text message, startingwith the word ‘Engage’ to 66099.

From the organisers of the hugely successfulDirectors Forums series and the CustomerEngagement Network a two-day Summit providingcustomer engagement and employee engagementinsights and solutions across all channels.

This high level Summit will bring together senior executives from all the keydepartments within large organisations who are responsible across allchannels for customer service, CRM, contact centres, marketing, social media,operations and human resources.

The programme of over 60 leading speakers will help delegates gain firsthand insight into finding the best solutions to challenges and opportunitiesaround customer relationships in a rapidly changing, volatile businessenvironment. The Summit will focus on the need for organisations to take aholistic view of their customers in order to drive business performance andprofitability.

Content will include:• Customer feedback, measurement and insight• Voice Of the Customer strategies• Employee and customer engagement• Social, digital and mobile customer engagement• Multi-channel engagement in contact centres• Customer engagement across industry sectors • The customer of the future

engage

at the Customer

Engagement

Summit

26-27 november 2012

Park Plaza Victoria, London

The only joined-up customerexperience event to drive customerand employee engagement solutions,performance and profitability

For more information contact Chris Wood: [email protected]: 01932 341828 • www.customerengagementsummit.com

Customer

Engagement

Summit

26-27 november 2012

Park Plaza Victoria,

London

Who should attend:Senior executives responsible forcustomer service and customer andemployee engagement• Customer Service Directors/Senior

Management• Customer Loyalty Directors/Senior

Management• Contact Centre Directors/Senior

Management• Social Media Directors/Senior

Management• CRM Directors/Senior Management• Marketing Directors/Senior

Management• Direct Marketing Directors/Senior

Management• Digital Marketing Specialists• HR Directors/Senior Management• Operational Directors/Senior

Management

registerinterest

contentsTo join the Network (free membership) and receive weekly Alerts,

Digital Magazines and Invitations to the Directors Forums go towww.customerengagementnetwork.com

www.directorsforums.comEditorial Director: Steve Hurst [email protected]

Sales & Marketing Director: Chris Wood [email protected]: +44 (0) 1932 341828

Customer Engagement ©ICT Communications Ltd

Customer Engagement magazine is published by the Customer EngagementNetwork, the organisers of the Customer Engagement Directors Forums.



News BeatBritish Airways has an app for that - customer service. Mobile shoppingenjoying a meteoric rise. CEO buy-in crucial to boost engagement levels.

Cover Story: Customer feedback the criticalengagement measure

Kyle McNabb and Suresh Vittal look at how ever-more empoweredcustomers mean that in an increasingly commoditised world customer

feedback and sentiment now define the brand

Why collaboration is the wayforward for outsourcing

Creating collaborative relationships between clients and outsourceproviders is the best solution to the outsourcing problem says Paul Scott

The Big Interview:

Customer Engagement Directors ForumIn the first in our new series of interviews with presenters at our

Directors Forums we ask the key questions of Bian Salins head ofsocial media innovation at BT

Why customer segmentation is a thing of the pastDavid Excell says that organisations should stop refining

segmentations of customers and instead abandon them altogether

The joined-up customer service futurefor multichannel contact centres

Contact centres are set to be viewed as a profit centre rather than acost centre in the future as they deliver on a joined-up single view of

the customer according to the latest Customer Engagement ClubDirectors Forum. Steve Hurst reports.

How going digital can enhance customerexperience and employee engagement

With consumers and employees increasingly using a range of smartdevices and social networking sites in their private lives, digital

technologies are familiar to all says Mark Pigou

How to build trust through customer engagementOrganisations today have to be relevant authentic and trustworthy if

they are to have a chance of sustainable success says Richard Anderson

Final Word: Is your Voice of theCustomer really being listened to

Colin Shaw has a healthy cynicism for the way organisationsapproach their VOC strategies which he contends is just a

‘tick box’ exercise for too many

Editorial Advisory BoardDr Guy Fielding, Richard Sedley, Rod Butcher, Hugh Griffiths,

Marcus Hickman, Karine Del Moro, David Cottam, James Rapinac,Crispin Manners, Professor Moira Clarke, Professor Katie Truss, Mike Havard.

6-7

8-10

11-13

14-15

16-17

18-20

21-23

24-25

26

Colin Shaw

I S S U E S E V E N • M A R C H 2 0 1 2 6

Mobile shopping enjoying a meteoric rise

Use of mobile phones for shopping hasmore than doubled over the past two yearsand the rise and rise of mobile is set tocontinue according to latest researchForeSee, the leading customer experienceanalytics firm, has announced the findingsof its latest mobile shopping report,revealing key trends on retailers' futurebusiness.

ForeSee's methodology is able to showhow customers' satisfaction with variousinteractions with a company (includingmobile shopping and applications) impactstheir purchase intent, loyalty, andrecommendations across all channels.• Mobile phone use for shopping is on therise - 49% of all UK survey respondentsindicated that they had accessed a retailer'swebsite using a mobile phone (compared to32% in 2010 and 23% in 2009) and anadditional 28% indicate that they plan touse their mobile phone to access a retailer'swebsite, mobile website, or mobile app inthe future. In short, more than three-quarters of all online shoppers are eitheralready using or plan to use their phones forretail purposes. This finding indicates a hugeopportunity for retailers with sophisticated,user-centric mobile sites and apps. • Multiple device shopping - Shopping viaa mobile phone has become as common asshopping from a computer at work, andmany people are shopping using multipledevices, underscoring the critical

importance of providing a mobile experiencethat reinforces and supports a retailer'sbrand and reputation rather thanundermining it. • Traditional websites still outperformmobile sites and apps - Even though mobileshopping is clearly catching on, shoppersare still not quite as satisfied with the mobileexperiences provided by UK e-retailers.Traditional e-retail websites in the UK rate a73 on the study's 100-point scale, up onepoint from last year. However, UK

customers rate their satisfaction with themobile experience significantly lower: 70(which is still a positive increase from lastyear's mobile satisfaction score of 67).

"The research clearly found that the useof mobile phones to access companies'websites, mobile websites and applicationsfor shopping purposes is increasingdramatically in the UK, indicating that anyretailer who is not wholeheartedlyembracing the mobile trend is leavingmoney on the table for competitors," saidLarry Freed, CEO at ForeSee.

"Given the widespread and growingusage of mobile websites, it is no longeracceptable for a retailer to have asubstandard mobile site no matter howgood their traditional site is. If shoppers

aren't having a good mobile experience witha given retailer, they will simply goelsewhere."

ForeSee's Senior Director of Mobile,Media and Entertainment Eric Feinberg,added, "It is pleasing to see that thesatisfaction gap between traditionalwebsites and the mobile experience isnarrowing: last year there was a five-pointgap; this year, there is a three-point gap.However, satisfaction with mobile still lags. This presents retailers who do manage to

provide an excellent mobile experience witha great opportunity to continue to improve,and it also creates a big incentive for thosewho don't have their house in order to doso. Meanwhile, expectations are being setby the best retail websites - the others willhave to catch up quickly."

Feinberg gives a final pointer for retailersworking in - and looking at mobileshopping: "Don't be tempted to measuresatisfaction by tracking sales, appdownloads, or mobile site traffic. Customersatisfaction is the result of meeting acustomer needs and expectations - theprinciples are the same regardless of thecustomer touch point. You can only find outabout satisfaction by asking the customersthemselves."

Customer feedback is critical to brands – but budgets a major issue

Nearly 90 per cent of brands monitor onlineconversations and feedback while 80 percent respond to feedback, according toresearch by online community software firmGet Satisfaction.

More than three quarters of those polledalso distribute customer feedback internallyand nearly two thirds of companies thinkthat listening and engaging on social mediahas raised brand awareness.

More than two fifths cited availability ofbudget as the greatest internal challenge tolistening and engagement, while more thana third said the same about difficulty inmanaging programmes across multipleplatforms. Almost a fifth cited privacy issuesas the greatest challenge, while 30 per centsaid the same about availability of talent.The top five departments that createstrategies to listen to consumers are, in

order, the social media team, marketing orpublic relations, web-interactive marketing,product marketing and marketingoperations.

Half of businesses say that listening totheir customers on social media is not acore function of their business. Just six percent of companies said that listening anddigital engagement initiatives are integral totheir organisation, the report says.

newsbeat

“Any retailer who is not wholeheartedly embracing the

mobile trend is leaving money on the table for competitors”

customerengagement


British Airways has an app for that - customer service that is

Can deploying a user-friendly enterpriseapplication solve customer serviceproblems? For British Airways, the answerappears to be yes

Last summer the airline conducted apilot test in which about 100 crew memberswere given iPads loaded with its newEnhanced Service Platform app. After asuccessful test, the airline is nowdistributing 2,000 iPads with the app tosenior crew members across its routenetwork.

The iPads and the app are intended toreplace long scrolls of paper that list thepassengers on board and provideinformation such as airline club status, ticketclass and special dietary requirements, ifany. The iPads, updated over a mobilenetwork just before takeoff and afterlanding, give cabin crews a much moresophisticated tool.

"There's a lot more information aboutthat passenger," says Mike Croucher, headof IT architecture and delivery at BritishAirways. "For instance, they may see thaton a previous journey, the passenger was infirst class, but the entertainment centerdidn't work. The crew member can see anycorrespondence we've had about that."Registration is free, and gives you fullaccess to our extensive white paper library,

case studies & analysis, downloads &speciality areas, and more.

The iPad programme was inspired bythe desire to improve customer service.Over the past few years, relations betweenthe airline and its cabin crews have beenfraught with strikes and near-strikes, andthe ill feelings were bleeding over intocustomer service, Croucher explains. Toserve customers better, "we wanted tore-establish our engagement first with the

cabin crew," he says.British Airways uses the Agile software

development methodology, so IT has beenregularly releasing updates, typically once amonth, since the app launched. IT solicitsfeedback from crew members and followstheir suggestions for improvements. Onesuch improvement now allows crews to tellif there are several employees from thesame company on a flight, even if theyaren't sitting together.

"You often get a group of people wherethe managing director is in first class orbusiness class with colleagues in economy,"Croucher notes. In another improvement,seats with passengers who have beendowngraded from first or business classdue to overbooking are color-coded forquick identification.

"We're doing a lot of tuning aroundmessaging, format and the colors on thescreen," he adds. "It's a constant processof prioritization and enhancements. We'realways evolving the application in manydifferent directions."

CEO buy-in crucial toboosting engagement levels

The spearheading of change programmesby senior leaders can make the difference toimproving employee and customerengagement levels.

Eric Collins, managing director ofNampak Plastics, told the CIPD annualconference that the employee advocacyscore had increased from 20 per cent to 81per cent in three years, after he drove acultural shift at the packaging manufacturer.

He explained that the company hadalready gone through a successful period ofcost-cutting and was at its leanest, but hewanted to improve business performanceby using people to help make a difference

Despite initial resistance from somemembers of the board who were used to atraditional command and control structure,Collins pressed ahead with staff feedbacksessions, which he fronted personally.

“Sometimes people block changesbecause they can’t see it for themselves.”said Collins, “But behaviour has to comefrom the top”

A lack of performance feedback, teammeetings and departmental co-operationwere the main issues highlighted by staff, aswell as a low level of employeeengagement.

Initiatives introduced included leadershiptraining for line managers, a staff suggestionscheme, an employee awards ceremonyand a heightened awareness of CSR, linkingthe company’s 10 sites more closely withcommunity and educational activities.

As a result absence levels fell by 26 percent, labour turnover rates were reduced by38 per cent and overhead costs per millionbottles were cut by 7 per cent between2007 and 2011.

The iPad programme was

inspired by the desire to

improve customer service.


Ever changing and maturing digitaltechnologies, powered by software,empower your customers. Thistechnology-fuelled disruption allowscustomers to find products andservices they want, at the prices theywant, anywhere in the world. Digital technologies and their softwareapplications put substitutes within easyreach, and social networking sites andonline reviews accessible throughmobile applications put moreinformation about company productsand services in customers’ hands thanyou likely have available to you.

Kyle McNabb and SureshVittal look at how ever-more empoweredcustomers mean that in anincreasingly commoditisedworld customer feedbackand sentiment now definethe brand

coverstory

�


“Building and utilising customer knowledge throws a wrench intotoday’s data management strategies. To build customer knowledge,

firms have to tackle ‘Big Data’ problems in order to harness data frominternal systems and the Internet, capturing discussions people have

about your company, your products, and your services”

customerengagement

Competing in this age requires more than being simply‘customer-centric.’ Today, customer feedback and sentimentdefine your brand. Many of the strategies you’ve historicallyused to compete have been commoditised – for example,supply chains and manufacturing processes. Now, cloudservices can provide you all the computing power andresources you need, commoditising years and years of ITinvestments. Being customer-centric on top of nowcommoditised historical areas of differentiation means nothing.

But customer obsession, relentlessly pursuing understanding,delighting, connecting, and servicing customers can providetrue advantage. Being customer obsessed requiresorganisations to shift investments in order to build and act oncustomer knowledge, an asset resistant to technologydisruption.

Tapping into and sharing customer data from all sources, bethem internal, from third parties, or from social sites likeFacebook, allows your organisation to see your customers in adifferent light. Exploiting this information can lead to new waysof servicing customers.

For example, New York City based FreshDirect’s SmartStoreproduct provides food recommendations based on a shopper’spersonal shopping history. Exploiting this information can alsohelp you establish stronger connections with customers to helpyou design future products, like Kraft’s ‘Innovate with KraftFoods’ initiative.

Procter & Gamble havethe consumer pulseCustomer knowledge informs corporate strategy. Procter &Gamble uses real-time analytics to understand customersentiments about their products and brands based oncomments and feedback posted throughout the Internet. The“consumer pulse” that P&G executives now have, informs theirstrategy daily, prompting continued changes in investmentsand actions based on what’s happening now.Delivering customer knowledge isn’t easy. Investments inbusiness intelligence, analytics, and data warehousing

technologies, all core to building and delivering customerknowledge, has remained a top priority for IT organisations foryears. Yet despite the billions spent annually on thesetechnologies, many organisations tell Forrester they’re nocloser today to solving their customer data managementproblems than they were five years ago, largely due toimmature strategies, lack of skills, and misconceptions.

Big data – bigger problemToday’s data management strategies simply aren’t ready forcustomer obsession problems. Data management strategieshave been defined and implemented largely in response tohelping chief executives and chief financial officers deliveraccurate and transparent financial reporting. These datamanagement strategies stress stewardship, compliance,rigorous governance, and limits on who can access, use, andmake decisions using data. The result: Organisations centralisetheir data management and governance.

Building and utilising customer knowledge throws a wrenchinto today’s data management strategies. To build customerknowledge, firms have to tackle ‘Big Data’ problems in order toharness data from internal systems and the Internet, capturingdiscussions people have about your company, your products,and your services.

Acting on and utilising customer knowledge calls into questionthe rigorous governance and usage limits enforced by today’sdata management strategies. Forrester’s research shows firmsthat open access to customer data to a broad set ofemployees, and share it with their partners, respond moreeffectively to increasing customer experience demands.

Customer knowledge takesmore than technologyData literacy skills needed to turn customer data into customerknowledge either don’t exist, or suffer from functional andchannel myopia. Building customer knowledge takes morethan technology. You must invest in skills helping you identifywhat questions need to be answered, how to analyse data toanswer those questions, and how to analyse data to help �

I S S U E S E V E N • M A R C H 2 0 1 2 1 0

derive answers to questions yet to beasked. Firms need business analysts, dataanalysts and architects, and people skilled inquantitative analysis to work hand in hand withbusiness leaders and turn customer data intocustomer knowledge.

Today, people competent in these areas often sit in disparatefunctions, ranging from customer and market intelligence to IT,collaborating more with their functional peers than each other.Years of outsourcing has put additional constraints on ITorganisations that now lack needed business and data analysisskills and people that are intimately familiar with the firm’sbusiness and its customers.

Command and control old hatOld models of channel and product specific ‘command andcontrol’ just don’t cut it. These anachronistic approaches, inwhich channel owners can’t see beyond the channel de jourand product owners build from the inside out, don’t set theorganisation up for success in a customer-driven world.Customer obsessed marketers rethink business structures,reward methods and organisational design - all focused on thecustomer.

Technologists think that arming ‘tech challenged’ marketersaddresses the problem. This in turn has driven increasedinvestment and interest in technologies like Hadoop (an open-source application framework), Aster Data, and Neteeza. Thesetechnologies and approaches can help capture and put datainto the hands of decision makers, however, they don’t addressroot cause of what’s challenging marketers.

Marketers are not ‘tech challenged’ because they don’tunderstand technology. What makes them ‘tech challenged’rests with how your customers use technology. Only whenconsumer tech innovation stops, will marketing and customerintelligence professionals have an opportunity to catch up. Untilthen, they will remain tech challenged, perpetually in catch up

mode and needing continual assistance to capture, analyse,and make sense of customer data to create customerknowledge.

Forget the old silo mentalityInstead companies should forget functional silos and create ateam consisting of the right roles, competencies, andresources to build and deliver customer knowledge. Identifyhow you will organise, analyse and most importantly apply thiscustomer knowledge to deliver value to the organisation andthe customer. Don’t just focus on the obvious marketing issueslike personalisation, relevance, and targeting. Force the team tolook at adjacent applications of this data that drives the nextgeneration of innovation.

Arm this team with new technologies and approaches likeHadoop, NoSQL, and predictive analytics. On their own, theydon’t address the root cause of ‘tech challenged’ marketers.But in the hands of a team, these technologies – once solely inthe hands of tech innovators like Google and Amazon – canhelp you establish true competitive advantage.

Kyle McNabb and Suresh Vittal are Vice Presidents andPractice Leaders serving Application Development &Delivery and Customer Intelligence Professionals,respectively, at Forrester Research.

“Companies should forget functional silos and create a team consistingof the right roles, competencies, and resources to build and deliver

customer knowledge. Identify how you will organise, analyse and mostimportantly apply this customer knowledge to deliver value to the

organisation and the customer”

coverstory


customerengagement

Creatingcollaborative

relationships betweenclients and outsourced

service Providers is the bestsolution to the outsourcing

‘problem’ says Paul Scottwho suggests that thecurrent challenges areactually rooted inthe past

feature


feature

A stagnant economy is highlighting tensions in relationshipsbetween outsourced service providers (OSP’s) and their clients.Businesses focused on cost reduction are applying pressure toOSP margins, while imposing stringent productivity targets. OSPs,keen to hold on to business in an environment where capacity ischeap, struggle to comply. Customers are suffering as a result.

If the cycle is to be broken, outsourcers and clients need toachieve a paradigm shift in their relationships, replacing ‘priceleverage’ with ‘transformational expectation’ and abandoning the‘master slave’ dynamic in favour of collaboration.

A lesson from the National Health ServiceIn 2003 the then labour government embarked on a hugelyambitious project to transform the National Patient Recordssystem. It has gone down in folklore as one of the most disastrouspublic sector procurements of all time.

The idea was simple; make all patient records available to healthworkers online. In July 2010 the coalition government tried tocancel the project which was by then two years late and £2 billionover budget. They have so far failed to do so and still don’t have aworking system.

What has this to do with customer management outsourcing? Wellthere are parallels to be drawn. Both are complex procurements.Both require supplier and client to work closely together to managerisk and deliver success on time and on budget. And perhapsmost importantly, both require a high degree of trust and alignmentaround agreed success factors.

The principle reason why the Patient Records project failedappears to be the lack of trust and respect between supplier andclient. In short, the government’s procurement advisers negotiatedsuch a punitive contract, the supplier was left with no choice but toinvoke the very clause the procurement chiefs dreaded most: payus for what we’ve done to date and we’ll go away. This has left thegovernment with a £12 billion bill for a non-working system.

Why outsourcing relationships failAs long ago as 2004 research by the Outsourcing Center revealedthat poor communication and mis-aligned objectives accounted for55% of failed outsourcing relationships.

Consistent communication and shared understanding of objectivesare vitally important for any relationship. The Global ContactCentre Benchmarking (GCCB) Report, Dimension Data’s annualsurvey of over 500 contact centres globally, shows the principlereason organisations don’t outsource is that they believe thecustomer management function is simply so important to thebusiness it cannot be given to a third party to manage. Put anotherway, the company hasn’t worked out how to embed the samebeliefs and values in a third party to do something which is deeplyingrained in their culture and their way of doing things.

So quite a number of organisations either haven’t worked out arationale for outsourcing or simply don’t buy-in to the benefits.Those that do still have to work out what the critical successfactors are for building a sustainable long term relationship. Whathappened in the NHS is far from unique. Many outsourcingcontracts end prematurely simply because the outsourcer hasbeen pinned so tightly to the contract terms for operational delivery,they can’t find room to add value or even make a profit. As aconsequence the client feels the supplier isn’t making enough effortto innovate even if they are delivering demanding operational results.

The root cause of many outsourcing relationship failures can betracked back to the role procurement has played in supplierselection and contract negotiations.

Procurement departments have been around in business since theend of the 19th century. Back then procurement was very much aclerical function; gathering requirements for raw materials andseeking out suppliers. It wasn’t until the 1980’s that the purchasingfunction began to do more than buy commodities. Facilitiesmanagement of IT and data centres became procurement targets.They then took on a broader supply chain management role and, inthe 1990’s, became responsible for procuring outsourced services.

Procurement todaySo just how effective are procurement functions today? In 2011research by Ardent Partners determined that the averageprocurement function only accounted for 61% of all external spendand saved their businesses around 6.7% on operating and capitalexpenditure each year. Not a lot when one considers mostoutsourcers are asked to save a minimum of 15% on equivalentoperating costs when they provide a solution.

Like most business functions, procurement has had to adapt andchange to meet organisational needs, but is it changing fastenough? Everyone expects procurement to save money, cut costsand reduce contractual risk, but is there more it could do?

Bizarrely it was the accounting profession that first thoughtprocurement might have a more strategic role to play. In 1990 theValue Based Management model (VBM) emerged. It stated that,while strategy should be principally involved in delivering valueback to shareholders, it should focus not on specific numbers, buton actions which would create value through organic growth orcollaboration with suppliers. Advocates of VBM believe it’s an idealplatform for forming strategic procurement engagements, as itforces stakeholders to focus on the value they can create, not justthe money they can save.

There is evidence that procurement initiatives can be carried out inways that balance cost saving and value creation. But perhapsprocurement managers need some help to understand the newbehaviours that support value-based relationships. AT Kearneyproduced a model in 1996 called the House of Purchasing and

Supply. It sets out the key pillars forsuccessful procurement. For the firsttime it named ‘value creation’ as aprinciple objective for the procurementfunction and detailed the behavioursneeded for successful value-basedrelationships. It identified thatorganisational alignment, both strategic andcultural, between supplier and customer isthe most critical success factor.

In short, today’s leading procurement functionsshould focus on value creation with suppliers and buildmutually beneficial relationships with shared risks and rewards.They must also engage with the ‘soft stuff’ – relationshipmanagement, culture, mutual understanding, equanimity andshared values.

The evolution of customermanagement outsourcingWhile the procurement world has evolved over decades, customermanagement outsourcing has really only been significant since themid 90’s when the internet emerged and telecommunicationsbegan to offer viable low cost connectivity to locations widelydispersed around the globe. Whether at home or offshore,outsourcers deliver a number of other benefits in-house operationsoften struggle to deliver.

The GCCB Report has tracked how enterprises understand thebenefits of customer management outsourcing for over 12 years.In the late 90’s cost saving was still the number one reason foroutsourcing. By 2011 flexibility and scalability were most in demand.This perhaps indicates the way the industry itself is maturing.

Merchants developed a model to illustrate this maturation, whichdescribes three generations of outsourcing. In the first generation,which dominated in the late 80’s to mid 90’s, performance wasdriven by stringent Service Level Agreements (SLAs), operationalcost savings and rigid contracts that punished suppliers for non-conformance to productivity targets. Unsurprisingly, this didn’tlead to long term, value based, equitable relationships.

The second generation emergedin the mid to late 90’s and showedsigns of a little more trust andopenness. Key performanceindicators were used to track not justoperational performance, but customersatisfaction and loyalty. Open bookengagements became popular.

The third generation, which emerged in the midnoughties, changed the rules significantly. Focusswitched to the delivery of ‘business outcomes’,which could be market share, loyalty or share ofwallet. For the first time contact centre outsourcerswere being recognised for their potential to act as valuecreators, sharing risks and the rewards with their clients.The contract terms for 3rd generation contact centres areoften 6-10 years and cover a wide range of front and back officeprocesses.

So if BPO providers are now at the 3rd generation andprocurement has undergone its own catharsis, why aren’t alloutsourcing relationships delivering long-term value? Well, thereare still far too many 1st and 2nd generation outsourcers outthere, and too many procurement departments still wedded to themantra of cut costs and squeeze suppliers. It takes two to tango.Both parties need to find safe ground to explore these ideas inorder to create partnerships based on value creation rather thancommodity supply.

I believe it’s up to the OSPs to push the agenda by demonstratingthe benefits of value based relationships. After all, clients can’t buysomething until it’s offered.

Paul Scott is Director of Strategic Partnerships forMerchants. Contact him at [email protected]


customerengagement

“In the late 90’s costsaving was still the number

one reason for outsourcing.By 2011 flexibility and scalabilitywere most in demand. Thisperhaps indicates the way the

industry itself is maturing”

Three generation of outsourcing

1st 2nd 3rdGeneration Generation Generation

Performance SLA KPI BusinessMetrics Outcome

Operational Cost Lean SustainableApproach

Relationship Contact Open Shared Risk/Book Reward


First off Bian tell us a bitabout your backgroundand how you came to therole of Head of SocialMedia Innovationat BT

‘My background is really injournalism but my love fortechnology began when Istarted out as a reporter

for India’s first online venture Rediff.com where wehad already begun to use interactive media to create strongstories and communicate with our readers. From then on, Iwent on to work for brands like ELLE and the Times EducationSupplement before joining BT as an editor and producer. Ireally came in to the social space within BT through my role asManaging Editor for BT Tradespace (a social networkingplatform for SMEs). In 2007/8 – social in the UK was still in its

infancy so we were able to try new things and build ourknowledge of this space in a relatively safe way and once thatproject had reached its maturity, I moved into my current roleas Head of Social Media Innovation.

How does the BTCare social media strategy fit in to youroverall customer offering and how do you measure theeffectiveness of this strategy?

BTCare is core to our objective of wanting to be ‘Number 1 forCustomer Service’. We see social as core to making thingseasy for our customers – because we’re taking ourconversations to where they’re at. We also believe in creatingtransparency and honesty around our brand and that’s exactlywhat our own forums provide customers with – a place on ourown digital estate where they can bring their issues and gethelp from the community or the BTCare team. We measure theeffectiveness of this strategy through soft measures: Likegrowth in fans/followers/users and volume of queries,

In the first in our new series of interviews with presenters atour Customer Engagement Directors Forums we ask the keyquestions of Bian Salins head of Social Media Innovation atBT who delivered a highly rated presentation on the BTCaresocial media customer engagement journey at theMultichannel Customer Engagement for Contact CentresDirectors Forum

�

casestudy

Bian Salins, head of Social

Media Innovation at BT


engagement through positive mentions, likes, shares and thenwe have some hard business metrics like customer effort,churn, satisfaction and advocacy. The good news is that theresults we’re seeing on all these areas is highly positive andreassuring that offering our customers service through social in2009 was the right move for our brand. Plus, it reinforces thefact that we need to be investing more in BTCare.

Tell us about some of the innovations you have used insocial media - and how do you measure customerinvolvement and response?

There are a few ways we’ve used social innovatively. Firstly, wewere one of the rare brands that have embedded socialengagement within our call centres. Our agents are our socialbrand ambassadors and do our community managementacross the board. Secondly, in 2009, the social monitoringmarket was still a growing one, so we developed our ownlistening and workflow tool (Debatescape) to allow our businessto engage in a safe, efficient way. Till today, I accrue core partof our success to having an operational tool like that. Thirdly,we have been known to be honest and transparent in the waywe communicate crises. Apart from having a policy that’sembedded within our real-time reporting function, we’ve usedmedia like imagery of fires/floods at exchanges tocommunicate the extent of damage and we’ve found ourcustomers have appreciated that level of honesty from us.Another innovative way we’re using social media is the superuser programme we have through our community forumswhere we’ve begun to collaborate with our most trustedcommunity leaders to drive improvement in our products andservice - and really, I see them as an extension of our BTCaresocial ambassador team.

With regards to measurement for these, apart from what I’vealready mentioned, we measure reach of our tweets,responses, growth in following as a result of specific activity.With our super user programme, we measure the activity andcontribution of our community leaders within the community asa result of our programme and finally, there’s nothing likefeedback to help assess how you’re doing.

How do you monitor and interact with social media activityaround your organisation and your brand?

Debatescape is our listening tool which we built to help usmonitor and engage. However, we are going to layer this withanother external monitoring tool soon – to bring some deeperinsight and analytics to the business.

What are the major challenges you have faced with yoursocial media strategy and how have you overcome them?

I think the challenges we faced are no different to any otherbusiness. We probably had it easier because we took a leap offaith and were backed by our MD, Warren Buckley. This issomething most other brands struggle with. However, inimplementing a social strategy, you need budget, you need tosometimes create new processes, you need to work effectivelyacross your organisation and we had to overcome hurdlesalong the way. For example, it took me nearly a year to build aROI model that demonstrated the financial return of what wewere doing but working with our finance team, we were able todevelop a pretty robust model. With regards to working acrossthe organisation, we had to build solid relationships into ourPR, service operations and real time reporting teams to beeffective in crises situations. It’s a rocky road but it’s doable ifyou’re determined to get to the other, brighter, end.

What impact has your social media strategy had on yourbusiness and your customer relationships?

As mentioned earlier, we’ve seen some really positive results.Satisfaction has more than doubled from when I first beganmeasuring it, most of our customers who participate in oursurvey say they’re more likely to stay with BT as a result ofdealing with BTCare and nearly 100% of the growth in peopleengaging with us as been through organic word of mouthbecause we haven’t advertised our BTCare as a servicechannel as yet. From a business perspective, through ourbenefits reporting, we’re also saving our business money so it’sa win-win really. What’s been fantastic is that our customershave voted us in to the Top 100 social brands last year andagain this year and we’ve been finalists as 5 different industryawards (two of which are coming up) for our use of socialmedia for customer service – so that’s an added bonus.

At your presentation to the Customer EngagementDirectors Forum you made it clear that you are on acustomer journey - what are the next steps in that journey?

Absolutely - it’s most definitely a journey but this time we’remaking it with and for our customers. Our next steps are reallyto look at how we can widen our approach so that we becomemore of a social business. We want to take our approach ofmaking things easy, engaging and rewarding for our customersinto every area of the business so that we’re not just showingourselves to be a social brand, we’re driving change for ourbusiness from within as a result of social insight andengagement with our customers… so watch this space.

customerengagement

The chances are that you do not know your customers as wellas you think. Sure, you know your customer base as a whole,but what about individual customers? If the latest economicforecasts are to be believed, this year is expected to be yetanother difficult one for businesses so it is vital that consumer-facing companies implement direct marketing that delivers thebest possible return on investment.

To ensure this happens, marketing strategies have to be costefficient, ensuring a high rate of success for customerengagement and increased sales. Changing the scope of yourinsight is likely to be fundamental to maintainingcompetitiveness. Any marketer will be able to tell you that themost cost effective forms of marketing are those that interactwith customers you already have a relationship with, ratherthan trying to attract new ones. Furthermore, time is of theessence, as the longer you leave it to interact with a customerfollowing the first signs of churning, the more expensive itbecomes to reactivate or retain them.

Companies looking to optimise the performance of campaignsto retain their customers and provoke cross- or up- sell buyinghave to provide the individual with offers that directly meet theirneeds. This is recognised by field marketers, who are alwayslooking to leverage greater insight and understanding of theircustomers’ buying behaviour to better identify patterns, definemore accurate segments and stimulate predictable responses.As a consequence of this - particularly as competition in themarketplace becomes ever more intense - focus is shiftingfrom front-end activities, which include creative execution,towards those at the back-end, such as forensic data mining.

Missing the targetHowever, despite this extra effort to create a more accuratesegmentation, research highlights that direct marketing is stillmissing its target. A recent survey, conducted by YouGov inconjunction with Featurespace, asked 2,057 consumers inGreat Britain about their thoughts and attitudes towardstargeted marketing and how it affects their purchasingdecisions. It found that eight out of 10 consumers (82%) stillbelieve that at least half of all the direct marketing they receiveis indiscriminate spam, i.e. correspondence that is consideredto be unsolicited bulk messages sent indiscriminately. Admittedlynot every piece of direct marketing is generated from atargeted approach, so such results could be understandable.But even when targeted marketing is taken into consideration,54% of respondents say that the majority of it is presented atthe wrong time with irrelevant offers or promotions.

Traditional insight methods not enoughThese findings show that traditional methods of insight areinsufficient to build reliable understanding of customermotivation and allow pinpoint targeting. If companies insist onusing the targeted marketing methods they currently employ,they will continue to see a poor return on investment and, evenworse, they could have an adverse effect on their relationshipswith customers.

Perhaps the most worrying reading for marketers in the surveyis that even when marketing is accurate, appropriate andtimely, 39% of consumers would still not consider themselves‘more likely’ to buy a product. In the face of such limitations,one response could be to give up on targeting altogether.

David Excell, co-founder and CEO, Featurespace says that organisations should stoprefining segmentations of customers and instead abandon them altogether

�

feature

“In essence, the key to more effective targeted marketing doesn’t lie inrefining a segmentation – the answer is to completely abandon segmentsaltogether and treat each individual customer as what they are – an individual”


Perhaps this could be one of the reasons behind loyaltymarketing specialist Tesco’s decision to scale back its spendingon targeted incentives through its Clubcard programme, toreinvest the money saved elsewhere. Last autumn, thesupermarket giant said that it would halve the value of itsClubcard points and would instead focus on providing pricecuts across 1,000s of products, a much less-focusedincentive. Whether this approach will offer a better return oninvestment and generate the profits to which Tesco aspiresover the long term, remains to be seen. What’s clear is thatloyalty schemes can certainly be expensive, both operationallyand promotionally, driving significant value from the bottom line,especially in those simply offering straight-line rebates.

Building and maintaining loyalty at a time when dissatisfiedcustomers can easily find alternatives and shop elsewhere, iscertainly difficult. Indeed, the survey highlights that consumersare being presented with direct marketing on a regular basis, with69% of respondents saying that they receive at least one pieceof such marketing a day, with 15% having more than 10 a day.So there is no shortage of competing offers to tempt consumersaway from those with whom they currently do business.

Customers want to be understoodHowever, despite the somewhat depressing reading formarketers in some of the YouGov survey results, theconsumers interviewed indicated that loyalty is not dead,indeed those interviewed tended to agree that there is actuallya good opportunity for companies to enhance customer loyaltyand encourage repeat business. A substantial 63% ofrespondents agreed that companies could significantlyincrease customer loyalty by understanding the needs of theircustomer and demonstrating that understanding bycommunicating the most relevant offers and promotions in theright format at the right time.

In essence, the key to more effective targeted marketingdoesn’t lie in refining a segmentation – the answer is tocompletely abandon segments altogether and treat eachindividual customer as what they are – an individual! Gatheringdeeper insight, building greater customer understanding and

achievingeven fineraccuracy ofbehaviour predictionmay seem like anarduous task. Fortunately, there aresolutions available out therethat enable marketing analysts todeploy the type of highlysophisticated, extremely granular andexceptionally accurate predictive behaviouralmodelling needed for effective campaigns - all without the needfor a doctorate in statistics.

Learning without a doctorateThese easy-to-use, configurable applications offer marketersthe ability to utilise powerful mathematics and statisticalmodelling to gain extremely detailed and accurate knowledgeof their customers. The best solutions are also able tounderstand that opportunities can be ephemeral, updatingbehavioural models in real time to allow marketers to respondalmost instantly with appropriate offers.

These systems ‘learn’ what makes an individual tick through ananalysis of the entire history of that customer’s relationship,using real-time data from live feeds to further refine accuracyover time. As a result, marketers can now access faster, moreaccurate predictive insight into, for instance, customers withthe highest probability of churning (and when), those with ahigh propensity to respond to a specific offer (and at what leveland when) and those individuals who are most likely to deliverthe highest lifetime value, at various stages in the relationship.

In the tough economic climate we are all experiencing at themoment, and with little sign of it improving anytime soon, aloyal customer base is vital for businesses to survive. Butforward-thinking businesses can do more than this; using theright marketing tools to truly understand-in real-time-whatmotivates their individual customers, they can actuallyempower the business to thrive.



The contact centre is undergoing a multichannel revolution thatis set to gather pace as customers increasingly are in control ofthe channels they choose. This revolution will place the contactcentre firmly at the heart of businesses and will ultimatelychange the way organisations view them for the better.

These were just a couple of the key findings from the latestCustomer Engagement Directors Forum on MultichannelCustomer Engagement for Contact Centres hosted at Gallup’sConference Centre in London and sponsored by InteractiveIntelligence and Sword Ciboodle.

The Directors Forum included a mix of case studies, expertanalysis, leading edge research and a lively panel debate – withdelegates giving a unanimous thumbs-up to the excellentquality of proceedings.

Customer contact at a tipping pointThe opening keynote on Trends in Multichannel Contact wasdelivered by Steve Morrell principal analyst at ContactBabel,and acknowledged as one of the UK’s leading experts on the

contact centre space, who delivered his findings on the verylatest research into the marketplace. Steve said that customercontact is as a tipping point and that while the telephone willremain the dominant form of contact centre communication forthe foreseeable future other channels such as email, web chatand social media will come increasingly to the fore.

Following Steve was Leslie Rowlands senior man agingconsultant at Gallup Consulting whose presentation ‘BrandAmbassadors: engaging customers across all channel’s,concentrated on the people aspects of multichannelengagement and on how fully engaged employees and fullyengaged customers can combine to result in competitiveadvantage – the main challenge being that the number of fullyengaged brand ambassadors in contact centres is fairlyminiscule and employee engagement strategies need to beemployed to impropve the situation.

Aviva transforming its customer approachThe first case study of the day was delivered by Jen Allardand Tom Baggaley at Aviva UK Direct Insurance and focussed

Contact centres are set to benefit from operating in an increasingly multichannel environment and aremore likely to be viewed as a profit centre rather than a cost centre in the future as they deliver on ajoined-up single view of the customer according to the latest Customer Engagement Directors Forum.Steve Hurst reports

�

reviewMultichannel Customer Engagement for Contact Centres 26th January 2012, London

Presentation Review


on the transformation Aviva is making through its contactcentres using systems thinking to improve employeeengagement, advocacy and performance. It showed how Avivais taking a new ‘outside-in’ approach focussing on itscustomers to understand the issues they have and theproblems they are experiencing and then delivering a joined-upapproach to improve customer service and generate greaterloyalty.

This inspirational case study demonstrated clearly how taking amultichannel approach including the use of social media canhelp to deliver a single view of the customer and adapt to theirneeds.

Following on from Aviva was a presentation based on newresearch from Steven Thurlow technical director at SwordCiboodle which shows that companies that offer true channelchoice and let customers make their own decisions about howthey interact with organisations are making real cost savingsand winnings the hearts and minds of customers along the way– a real Holy Grail.

Following was a look at consumer trends in multi-channel fromMarcus Hickman chief exec of David Hickman partners and arenowned expert in the contact centre area. Marcus identifiedseven key trends in consumer attitudes and behaviours andstressed that if organisations organise themselves aroundconsumers and their needs then customer loyalty will follow.

Following the networking lunch session an hour long paneldebate on the Future for Multichannel in Contact Centreslooked at how social media and mobile are contributing to thechanging role of the contact centre moving forward.

Then Conrad Simpson of Interactive Intelligence looked at thetechnology aspects of multichannel contact centre solutions –he used real life case study examples to show howmultichannel strategies are improving customer service andhelping organisations in a joined up view of their customers.

BT proves it does CareThe final presentation – last but by no means least - was acase study on BT Care delivered by Bian Salins the head ofsocial media innovation at BT. In an excellent closing sessionBian took delegates through the story of BTCare and how is ithelping change for the better BT’s reputation for customerservice across channels.

BTCare has used social media including Twitter and Facebookextensively in its customer service operations and through itscustomer community offering – with the result that BTCare hasbeen voted one of the top 100 social media brands andrecently ran the most successful Facebook campaign to datefor a major UK brand.

Bian’s presentation was a fitting end to and a highlight of anincisive and thought provoking day. Steve Hurst, chairman ofthe Directors Forum and editorial director at the CustomerEngagement Club, in his summing up, said that the future formultichannel contact centres is looking positive providingcustomer centric organisations with the opportunity to improveboth customer satisfaction and loyalty and employeeengagement. A win-win for service and product providers andtheir customers.

The next Directors Forum on May 16 will examine the issues,challenges and opportunities around both social and mobilecustomer engagement and how savvy organisations are workingwith these rapidly evolving channels to market to gain competitiveadvantage. Click here for more details and to register.

customerengagement


Multichannel Customer Engagement for Contact Centres

26th January 2012, London

SPEAKER PRESENTATIONS

9:35Keynote: “Trends inMultichannel Contact” -latest research findings fromthe UK contact centreindustrySteve Morrell, Principal Analyst,ContactBabel

Customer contact is at a tipping-point. Socialmedia has become a de facto customerservice channel; emails account for more than10% of inbound interactions; self-service viawebsites and smartphone apps has becomeubiquitous; IVR is used by most businessesand web chat is becoming increasinglypopular. Through extensive primary research,this presentation shows the reality of things asthey are today, and highlights commercial andtechnological drivers that will change the faceof customer contact for years to come.

10:15Brand Ambassadors:Engaging customersacross all channels Leslie Rowlands, SeniorManaging Consultant,Gallup Consulting

Brand Ambassadors are employees who arehighly engaged, knowledgeable andpassionate about their organisation’sproducts and services. In contact centres andother customer-facing environments theydeliver consistently superior customer servicethat is reflected in higher levels of customerengagement across all channels. How cancompanies hire and create more BrandAmbassadors, and what is their potentialimpact on customer engagement andfinancial performance?

10:55Case Study:Aviva - Transformingthe contact centreTom Baggaley, Social Mediaand Ecommerce Manager AvivaUK Direct Insurance

Tom’s presentation covers the transformationAviva has made online and outlines the workthe organisation is doing with system thinking

and how it is also transforming the contactcentre, demonstrating improvements inemployee engagement, advocacy, NetPromoter Score, and performance. Ithighlights how Aviva is focusing very much onits customers to understand what problemsthey are experiencing , and to then have ajoined-up approach internally to resolve. Itdescribes the different methods of contactAviva offers, Telephone, Inbound andOutbound, Email, Live chat and Social Mediaoutreach and how its teams flex across thesechannels, consistently growing and adaptingto suit customers’ needs.

11:50Why multi-channel mustmean multiple choice. Steven Thurlow, TechnicalDirector, Sword Ciboodle

You might think forcing customers to uselower-cost contact channels by restrictingtheir access to phone the contact centre isbound to save you money. You’d be wrong.New original research proves it’s thecompanies that offer true channel choice, andlet customers make their own decisions abouthow they interact, that are making the realsavings. And they’re winning the hearts andminds of customers along the way. Listen toSteven discuss• What dictates customers’ channel choices

– and how those choices can work to your advantage

• How you can encourage channel shift without alienating customers

• How pro-active use of alternative channels can reduce calls to your contact centre

• Why the multi-channel contact centre remains a key point of service differentiation

12:30Consumer trends inmulti-channel customer contactMarcus Hickman, ChiefExecutive Davies HickmanPartners and former Director ofthe CCA and The Henley Centre

The presentation focuses on 7 vital trends in

consumer attitudes and behaviours which areimpacting the way that organisation delivercustomer service today, in both sales andservice. In all the excitement about socialmedia, speech analytics and smartphones,what is it that today’s consumers are lookingfor when it comes to customer engagement?Based on extensive consumer research anddata analysis, the presentation looks at futurebehaviours to help guide your customerinteraction strategy for 2012 and beyond.

15:15Case Study: Cloud-based oron-premise multichannelcontact centre solutionsConrad Simpson, Director,Interactive Intelligence

With contact centres featuring in the mediarecently this presentation takes a look atstrategies to deliver multi channel customerengagement . Increasing complexity inevitablybrings challenges, and it’s the navigation ofthese challenges that determine the successof your technology deployments. So whetheryour strategies are cloud or premise based,multi-channel is a pre-requisite for serviceexcellence and technology does have a roleto play. The question is…how ready is yourtechnology ? This session uses case studiesto illustrate the real world approaches thatwork in theory and in practice.

16:15Case Study: From effortand satisfaction to loyalty– The BTCare storyBian Salins, Head of SocialMedia Innovation, BT

So everyone wants to know the value ofsocial media. In truth, every individualbusiness that dares to take a risk will find outand know the answer. For BT, using socialmedia for service has more than proved itselfby driving down customer effort, increasingsatisfaction and yes, has even set them onthe path to customer loyalty. If you’re one ofthose asking – is it truly possible? Don’t missthe BT story and insight on how it can bedone as told by BT’s Head of Social MediaInnovation, Bian Salins.

Steve Morrell

Steven

Thurlow

Conrad

Simpson

Bian Salins

Marcus

Hickman

Leslie

Rowlands

Tom

Baggaley

To download presentation go to:http://www.customerengagementclub.com/mccc_presentations

With consumers and employees increasingly using arange of smart devices and social networking sites intheir private lives, digital technologies are familiar to all.Mark Pigou, organiser of IR Expo looks at howbusinesses can harness this digital enthusiasm toenhance both the customer experience and employeeengagement

customerengagementfeature


Travel on any commuter train, stroll down any high street or linger inthe aisles of any supermarket and you can be very sure that within afew minutes the number of people you see using a smartphone, tabletor eReader will soon outstrip your fingers.

Digital technologies are rapidly transforming not just homeentertainment and shopping choices but every aspect of our lives. AsOfcom reported back in August, over a quarter of UK adults andalmost half of all teenagers now own a smartphone while 76% ofhomes are connected to the Internet compared with just 25% in 2000.In addition, almost half of all adults have a social networking profile.

For many of these, both smartphones and social media arenow a significant part of their lives – especially for those in the“digital generation” who have been using computers since theirearliest school days. While Facebook calculates that theaverage active user spends 15 hours a month on the site manyFacebook aficionados in the blogosphere claim to spend up to10 hours a day or more logged onto the site. Certainly,anecdotal evidence suggests that a great many people useFacebook as their first choice search tool and will rathercontact their “friends” that way than by ‘phone, text or e-mail.

Digital is dailyWhatever the truth of the statistics it is clear that using digitaltechnology is no longer an esoteric pursuit confined to geeksand nerds: it is something almost everyone does every day.And the enthusiasm is not confined to the younger age groups:one recent report highlighted a care home that had installed aSkype connection proving extremely popular with residents intheir 90s while Ann Widdicombe has even been found in thenational media waxing lyrical about the joys of her iPhone.

So, given that digital technologies are an everyday part of ourlives why do so many businesses lag behind when it comes toexploiting the new media for greater customer or employeeengagement? In part – and given our current economic woesit’s not surprising – it comes down to priorities. Making a profitand staying in business are usually at the top of the Board’s list,while learning to exploit social media or explore potentialbusiness uses for iPads or mobile apps are left to junior ormiddle managers in marketing and IT. After all, it is not thatmany years ago that a great many CEOs eschewed computersentirely leaving such mundane devices to their PAs at work ortheir teenage children at home.

At the leading edgeWhile these attitudes are changing there is still a long way to goespecially since consumer use of digital and social media hasgrown so rapidly. Businesses, such as retailers and CPGsuppliers, whose very existence depends on daily interactionand engagement with customers, are at the leading edge whenit comes to adopting these new technologies. Most have hadtransactional websites for years; many have optimised mobilesites and a Facebook presence, while others haveimplemented employee portals or equipped staff with mobiledevices to improve product knowledge and efficiency. Webkiosks and digital signage are familiar devices in high streetstores and there is growing interest in mobile apps to enhancecustomer interaction.

In-store web kiosks, for example, not only act as informationpoints for shoppers but can easily be switched into training

mode for staff or can double as a portal to interact with HR tobook holiday dates or check on overtime payments. Mobileapps are also proliferating: Tesco, for example, launched amobile app portal in September where shoppers can downloadsmartphone tools giving access to home delivery information,eCoupons, store location details or ClubCard accounts andthey even have an iPad application offering daily recipes andthe ability to download details of the ingredients directly to yourshopping list.

While e-commerce is well established, retailers today talk notjust of mobile “m-commerce” but of “f-commerce”, for thebusiness that comes via Facebook, and the likely importanceof “t-commerce” as use of interactive digital television grows:click on the dress worn by your favourite East Enders star andup pops the relevant website with price, promotional and stockavailability information ready for the customer to order a lookalike.

Customer preference the keyFashion companies are especially enthusiastic and are currentlyseeing 30% or more year-on-year growth in their onlinebusiness. Typical is Aurora, whose brands include Oasis,Coast, Karen Millen and Warehouse, and the company isquickly learning that customer preferences are key. As IshPatel, group strategic development director, explained at theannual Internet Retailing conference in October, the companyinitially thought that mobile retailing would be rather like itsonline operations but it soon found that its customers hadother ideas.

Rather than simply browsing a website, Aurora learned thatmobile shoppers were more interested in targeted offers, storelocation information or using their ‘phones for self-checkout – apotentially important growth area with the advent of contactlesscards and near field technology and typical of the self-servicepreference that digital technology empowers.

Aurora staff, too, are taking to mobile with the company triallingiPads for use in assisted selling and mobile point of sale. As IshPatel says “These devices put staff on an equal footing withcustomers”: while in-store shoppers can access price andcompetitor information via their smartphones, staff now havesimilar tools to argue their corner, highlight benefits and make asale. Significantly, as Patel told the conference audience, therewas no need for extensive training or even a training manualwhen it introduced iPads: many staff already had iPhones soadopting the same technology in store was as easy as fallingoff the proverbial log.

Retailers are also enthusiasts for Facebook not just as a


feature

“Customer databases that were once only accessible centrally or at a callcentre can now be reached in-store from an iPad, while shoppers can checkon stock availability from their smartphones before heading for the store”

promotional medium but for encouraging feedback and findingnew recruits: if thousands of people have registered as your“fans” then looking for new employees among this self-selectedpool has obvious advantages. Equally, feedback on bothFacebook and Twitter is proving relevant for productdevelopment and test marketing: asking your “fans” what sortof new lines they’d like to see or monitoring more negativecriticism can help both product development and damagelimitation when things go wrong.

While many of these “new technologies” have been with us foryears – in-store kiosks first appeared in the 1980s and theWorldWide Web was, after all, launched 20 years ago – thelatest generation of digital devices and developments that willbe on show at IR Expo in March, highlight several significantchanges in the way people view and use technology and theways in which businesses can use technology to improveengagement and experience.

Familiarity but no contemptFirst there is the obvious familiarity and usability: smartphonesand home computers are commonplace so, be they staff orcustomers, many people have a very good idea about thepossibilities new technologies offer. As another speaker atOctober’s Internet Retailing conference – Richard Weaver, e-commerce director at Majestic Wine Warehouses pointed out –a key driver for developing specific store pages on its websiteand for using Twitter was demand from store staff themselveswho were eager to raise their particular outlet’s online profileand knew just how technology could help.

Secondly, there is multi-functionality. In-store kiosks may havebeen with us for almost 30 years but they used to be dedicateddevices with limited capabilities. Today a retailer can use thesame unit as a cash register, to display fashion catwalk videos,double as an employee portal for training, switch into webkiosk mode to explore the company’s website or even provideface recognition capability to identify high-spending shoppersas they enter the store, based on the photographs they poston Facebook.

Hand-held terminals have similarly been used in stores since atleast the 1970s but today, instead of simply checking prices orlogging stock, the same unit can be used for productinformation, assisted selling, as a web browser, or even to takepayments – although question marks do remain over thereliability and security of in-store Wi-Fi.

One-to-one engagementThirdly there is personalisation: the ever-present mobile phoneis a conduit for one-to-one engagement at all time. Permission

marketing combined with geolocation and SMS, for example,means that shoppers can be targeted with special offers asthey stroll past an outlet or as they enter its doors. The phonealso puts power in the hands of the user to access theinformation they want when they need it: QR (quick response)codes may still be something of a novelty but within two yearsthey are expected to be ubiquitous so that a quick scan by thephone of these two-dimensional bar codes can instantly relayinformation about products, promotions, provenance orwhatever. On the horizon is augmented reality: simply pointyour phone’s camera at a store or office block to see assortedpop-ups on the image telling you all about what is to be foundwithin.

Fourthly there is convergence: not just between telephonesand computers, as in smartphones, but in the home withtelevision and entertainment devices as well or in organisationswith a raft of cross-department functionalities availableeverywhere at any time thanks to the omnipresence of cloudcomputing. Customer databases, for example, that were onceonly accessible centrally or at a call centre can now be reachedin-store from an iPad, while shoppers can check on stockavailability from their smartphones before heading for the store.

Look up “engagement” in a thesaurus and it can be replacedby words like commitment or arrangement as well as skirmish,battle or dogfight. Our digital age is bringing increasedemphasis on satisfying individual needs and wants – be thatthrough self-service applications, one-to-one marketing or24x7 availability – and woe betide anyone who keeps animpatient digital enthusiast waiting. Adopting the technologiesyour customers love and empowering your employees with thesame tools can ensure that “engagement” becomes a mutualcommitment rather than a battleground.

At IR Expo customer engagement will be at the heart of our

focus on multichannel retail. Get in touch with your thoughts

via [email protected] or follow us on Twitter @etail.

For more information or to register, please visit

www.internetretailingexpo.com.


customerengagement


Customers have always been at the core of business, but theexpectations of consumers and business customers aresoaring. Getting closer to customers is now a prerequisite forsuccess in the twenty-first century. The combination of thesocial media revolution and the current economic uncertaintyreinforces the view that it is the empowered customer who isnow in control of the business relationship.

Customer feedback makes the online shopping experiencequicker and easier for shoppers. Brands displaying user-

generated content (UGC) provide the peace-of-mind requiredfor customers to feel confident in their purchasing decisions.Displaying simple and transparent ratings or reviews fromcustomers on product pages is an important first step, butengaging customers in those conversations and using thatinsight is the lynch-pin for companies that want to become trulycustomer-centric.

Transparency leads to transformation, and by going beyondusing social media and review platforms as a single channel of

Organisations today have to be relevant, authentic and trustworthy if they are to havea chance of sustainable success – and transparency and trust are more importantnow than ever says Richard Anderson

feature

�


communication to truly integrating them into all facets of theorganisation, brands can create a community of trusted andauthentic influencers.

How to get it rightCompanies have traditionally had a level of control aroundcustomer and influencer engagement. In A global study by IBMchief marketing officers (CMOs) highlighted four trends aspervasive, universal game-changers – namely the dataexplosion, social media, proliferation of channels and devicesand shifting consumer demographics.

IBM’s research also revealed that CMOs are still focusing onthe transaction, rather than building customer relationships,and using customer data for segmentation and targetingpurposes. By not creating advocates, these organisations aremissing the opportunity to learn from the other phases of thecustomer lifecycle.

Thanks to voice-of-customerprogrammes and the growing demandfor user-generated content (UGC),customers will now define a brand withor without its input, so it’s up to thecompany to engage in that conversation

and take that feedback on board and integrate it seamlesslyacross all aspects of the business. By putting customers at thecore of the brand, companies can constantly realignthemselves to best suit their audiences.

Facebook now boasts over 800 million active users and theaverage user posts 90 pieces of content a month, while Twitterprocesses around 250 million tweets a day. Even though only apercentage of this content involves a brand or product, theimpact on businesses is immense.

By taking all feedback on board, no matter what the tone,these brands ensure they are responding to customer opinionand allowing it to shape the organisation’s image and future inmuch faster and more agile way than ever before.

When talking about brand and product experiences, vocalcommenters tend to be very polarised, either extolling love orsevere dislike. With the proper tools to monitor, analyse andshare this feedback, innovative product improvement ideas, aswell as flaws, can be found just as readily in positive reviews asin negative reviews. Companies can opt to treat negative

reviews as a gift, as this can provide the intelligence with whichthey can better the brand for customers, turning critics intoadvocates and ultimately driving more sales.

UGC is not only an asset for a company’s marketingdepartment, it’s invaluable across the entire organisation – fromproduct planning and development to help shape futureproducts, designs or features, to customer support teams whocan more quickly act on developing issues once a product orservice is in the marketplace.

Which brands are getting it rightDell is recognised worldwide as an early mover and thoughtleader in social. As a company it highlights how to go beyondjust traditional customer engagement, and deliver truetransparency and authenticity. When customers approach Dell,they usually speak with service people. For those customersthat are hardcore gamers or really into technology, they willoften know product solutions better than the service personthey’re speaking to. Rather than just receiving genericmessages, Dell extends the conversation to include productengineers, who understand the product and can communicatein a way that is authentic and accurate. In this casetransparency means people can go into the company andspeak to those that know best, even if they aren’t on thecustomer service front line.

Urban Outfitters takes a similar approach. When customers askquestions about specific products online, often the productdesigner will respond directly to the question. The brand alsotakes user-generated content to the drawing board. Ifcustomers take pictures of themselves wearing products in acertain way, the design team creates new items of apparel tobetter align the retailer with its audience and its ever-changingfashion choices.

Leading manufacturer QVC noticed through customer-generated content that a top selling product, an ice creammaker, was getting a 1.3 rating. Some 10,500 of the productswere sold but because it was inexpensive, return rates werevery low. Social data revealed that customers were actuallythrowing the product away. Therefore, QVC decided to stopselling the popular product, putting the customer at the heart ofthe manufacturing process.

Richard Anderson is VP of client services inEMEA at Bazaarvoice

customerengagement

RichardAnderson


Sometimes things never change…. a number of years ago, when I was a SeniorExecutive responsible for Customer Experience at BT, I was presenting to mycolleagues on our Customer satisfaction survey results. I informed the team I feltthe ‘Voice of the Customer’ was being ignored by people in our organization andno one was really doing anything to improve the scores.

I made the case that because the ‘Voice of the Customer’ score only accountedfor 5% of people’s bonus everyone effectively ignored it. I went on to explain thatthe excepted culture was to prioritise other targets ie: sales revenue.

This was because people could earn much more money by focussing on theseareas and ignore the ‘Voice of the Customer’. The room was silent. As I lookedaround I could see the ambivalence in people’s faces. I wasn’t expecting whathappened next.

Flabbergasted!One of my fellow Senior Exec members said “I agree with you Colin, we don’t

do anything with it. In fact I agree with you so much that I think we should stopundertaking the Voice of the Customer survey and save the money, it’s a waste oftime.” I was flabbergasted.

But the reality was this what most people thought. It was an annoyance. Theirjob was to sell stuff. Customer satisfaction was nice in theory, but didn’t form partof their daily life. I knew my work was cut out for me following that meeting….

In my experience of working in Customer Experience for ten years, I have beengratified to see that more and more companies are implementing a ‘Voice of thecustomer’ programme. My worry is many organizations suffer from the sameissue .

I do not believe most organisations are really ‘bought into’ the actions andchanges required. My experience shows that in far too many cases theattitude I faced 10 years ago is still prevalent today.

Colin Shaw is founder & CEO of Beyond Philosophy, [www.beyondphilosophy.com] one of world’s firstorganisations devoted to customer experience. Colin is an international author of four best-selling books.Follow Colin Shaw on Twitter ColinShaw_CX

Tick box mentalityThe danger is that a ‘Voice of the Customerprogramme’ becomes a ‘tick the box’mentality. In other words, people see everyoneelse is doing it, so they decide to do it as it’sthe ‘right thing to do’. But then nothinghappens with the results. The real question isnot ‘do you have a Voice of the Customerprogramme’, but what do you do with it!

To do something with it, you need to make itimportant to people. We all know the oldphrase ‘what gets measured gets done’. Iagree but I would add, ‘and what people getpaid for gets done even more!’

This is a critical point. It is vital that youmake ‘Voice of the Customer’ measures partof everyone’s measures, and I mean everyone;Finance, HR, everyone. But you should alsomake it part of people’s pay.

A recent client which Forrester has recentlywritten a case study on is a good example.Whilst their CE programme was multi faceted itcritically included changing employee’smeasures and making Customer Experiencemeasures account for upwards of 30% of theirbonus.

In just two years they have moved their NetPromoter score from -10 to +30.A 40 point move! You can do the same, if yourcompany takes ‘Voice of the Customer’measures as seriously asthey did.

Colin Shaw has a healthy cynicism for the wayorganisations approach their Voice of the Customerstrategies which he contends is still just a ‘tick box’exercise for too many ... and here he explains why

IS YOUR VOICE OF THECUSTOMER REALLYBEING LISTENED TOO?

customerengagement

the

finalword

Customer Engagement

Club Gets NetworkedTry our new Customer Engagement

Network website for size


The rise and rise of social and mobile customerengagement has been instrumental in changing thewhole face of customer relationships. Today’scustomer has more power, a greater say in how anorganisation designs its products and services and ismore likely to take the opportunity to have their say.

This Directors Forum will examine the issues, challenges andopportunities around both social and mobile customer engagementand how savvy organisations are working with these rapidlyevolving channels to market to gain competitive advantage.

Social Media and Mobile Customer

Engagement Directors Forum16th May 2012, London

Delegates will learn:• How world class organisations are

successfully implementing social media and mobile customer engagement strategies to improve their customer service offering and enhance customer loyalty

• How social and mobile customer engagement is changing the way organisations and customers interact across those channels as the dynamics of the relationships evolve

• Where social and mobile customer engagement fits into an holistic viewof customers and how joined up engagement strategies are being translated into greater customer insight and competitive advantage

• The latest trends in social and mobile customer engagement and how changing customer behaviour and expectations are impacting on organisations as they strive for a single customer view

• How to deal with and find successful outcomes to the myriad of challenges that are thrown up through interactions of social and mobile channels and gain greater share of wallet

• Real life case study examples of those organisations which are getting it right when it comes to social and mobile customer engagement and how they are achieving it.

Time: 9:00am – 5:00pmVenue: Gallup Consulting, The Adelphi,

1-11 John Adam Street, London, WC2N 6HS

For more information contact Chris Wood: [email protected] +44 (0) 1932 341828 or visit our website:


Register

FREE TO ATTENDFOR CUSTOMERENGAGEMENT

PROFESSIONALS

Documents

CEN March