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Driving engagement: What matters most to customers

Sathya Srinivasan

CE Directors Forum

21st March 2012

The fundamentals of customer engagement

In the service

economy, value is

created when an

employee meets –

and interacts with –

a customer

The employee-customer encounter

3

Copyright © 1996-2002, 2012 Gallup, Inc. All rights reserved.

Customer engagement hierarchy

Can’t imagine a world without

Perfect company for people like me

Treats me with respect

Feel proud to be a customer

Fair resolution of any problems

Always treats me fairly

Always delivers on promise

Name I can always trust

Your company is irreplaceable to

me. I feel passionate about you.

Your company is prestigious. It

is part of who I am.

When we have a problem,

you always treat me fairly.

I can safely assume that

you will always keep

your promises.

Passion

Pride

Integrity

Confidence

Rational Foundation

Increased financial and operational effectiveness

Overall satisfaction

Likelihood to recommend

Likelihood to continue

Your company executes

and fulfills my basic

expectations.

Copyright © 1994-2000 Gallup, Inc. All rights reserved.

4

Customer engagement groups - four customers

Engaged

Beginnings of

emotional

attachment but

not strong

Actively

Disengaged

Active

emotional

detachment

and

antagonism

Not

Engaged

Emotionally

and attitudinally

neutral

Fully

Engaged

Strongly

attached and

loyal. Your most

valuable

customers

Copyright © 2012 Gallup, Inc. All rights reserved.

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Our research reveals that -- across

companies of different types --

customers who are Fully Engaged

represent an average 23%

premium in share of wallet,

profitability, revenue, and

relationship growth. In contrast,

Actively Disengaged customers

represent a 13% discount*.


Its all about emotional engagement

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Customers are not strictly rational – healthy, engaged customer relationships have a

significant emotional dimension which must be measured and managed.

“When it comes to customers, feelings are facts.” Simon Cooper, President & COO, Ritz-Carlton Hotel Company LLC.

Simply satisfying customers on a rational basis is not enough to drive

financial performance.


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Case study 1 Delivering business performance in a Thai bank

There was a bank ….

that was in the middle of the

largest financial crisis in their 100

year history

that was lagging behind the

industry in every major category

that needed a new strategy and

leadership team

that chose to be best in class at

customer service

– A daunting challenge for the

market they serve!

This bank chose to be the best and

set out on a course to change it’s

future by focusing on customer and

employee engagement


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More return business

“Passionate”

advocacy

Customer retention

Higher share of wallet

Less price sensitivity

More cross-buying

Higher productivity

Greater employee advocacy

Higher customer engagement

Higher employee retention

Fewer lost work days

Fewer safety incidents

1.8

1.0

3.8

2.5

5.2

4.5

Performance

Multipliers

Maximising employee and customer engagement yields significant returns

Copyright © 2008 Gallup, Inc. All rights reserved. Copyright © 2012 Gallup, Inc. All rights reserved.

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Over 3 years they outperformed the market

Revenue up 25% year over year.

Stock price up 35% over past three years.

Assets up 27% (USD 5.7 billion).

Bank has moved up from #4 to #3 bank in region overall.

– #1 in market cap.

– #1 in retail outlets.

– #1 in credit cards issued.

– #3 in net profit.

– #3 in total assets.

.


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Bank of the Year

Best Retail Bank in Thailand

Best Bank in Thailand

Best Managed Company

Best Bank in Thailand

Best Domestic Bank

Best Investment Bank in SE Asia

........ plus a dozen other awards ........

Their achievement


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Six key success factors

Consistency, consistency, consistency.

Clear vision and well communicated strategy.

Accountability (senior management to local unit).

“Walking the talk” – top leadership lead by example.

Measuring frequently and undertaking targeted improvement (region,

customer type, unit type).

Reward and recognition to drive internal momentum towards goals.


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Case study 2 Creating the change momentum in an Indonesian Bank

What was measured

Passion

Pride

Integrity

Confidence

Rational Loyalty

Customer Engagement Loyalty + Attachment

Branch

Overall

Satisfaction

Branch Service Quality

Service

Reception Teller

Customer

Service

Officer (CSO)

Other Channels

Phone

Bkng

Online

Bkng

Mobile

Bkng

Branch

Problem

Incidence &

Annoyance

Branch

Basics

Customer Branded

Experience

Specific questions around the

‘branded’ customer service –

including questions on relationship

and needs


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What drives engagement – Branches

Understand needs

Easy to bank with

Warm and welcomed

Peace of mindGenuine interest in building relationship Provide solutions and

services fulfilling needs

Leader in innovation

Always find abranch or ATM

Branch OS

Halo OS

Click OS

Mobile OS

20%

40%

60%

80%

2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0

Increase influence on engagement Note:

• Raw influence is based on odds ratio of logistic regression towards driving Fully Engaged

group.

• Size of bubble for service channels indicate usage incidence. Incidence for branch is 100%

since the study is among branch-visiting customers.

TB PERFORMANCE

RAW INFLUENCE on Engagement

Branded Customer Experience

Channel Satisfaction


16

Shoppers (Retailer M)…

Always feel thanked and appreciated

Shopping there is always fun

Staff take great pride in the store

Everything I need in one location

Always have great specials and

promotions

75

20

(Odds Ratios)

Factors that drive customer engagement Mass merchandise retailer

Fully

Engaged

19

12

11

Source: Proprietary data

Copyright © 2012 Gallup, Inc. All rights reserved. Copyright © 2012 Gallup, Inc. All rights reserved.

17

Brand

promise

Brand

experience

Brand

relationship

Does it

connect? Does it

engage?

Managing emotional connections

Brand engagement Customer acquisition (“connecting”)

Customer engagement Customer retention (“engaging”)

Building brand relationships

Passion

Integrity

Confidence

Pride

Compelling

Credible

Connect


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Copyright © 1996-2002, 2012 Gallup, Inc. All rights reserved.

Applied behavioural economics for organisations

Each node is an intervention

point that can be optimised.

Recognises the role that

human nature plays.

Emphasises the essential

emotional connections that

employees and customers

form.

Recognises that employee

and customer engagement

interact to drive even higher

levels of performance.

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the guidance of your company's executives only and is not to be copied, quoted, published, or divulged to others outside of

your organisation. Gallup®, HumanSigma®, Q12®

, CE11®

, StrengthsFinder® and each of the 34 StrengthsFinder talent themes,

are trademarks of The Gallup Organization, Princeton, NJ. All other trademarks are the property of their respective owners.

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No changes may be made to this document without the express written permission of The Gallup Organization.

21

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& Enable your employees to deliver this well

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