Where do you want to focus first? To create a set of pain points, analyze the voice of the customer, starting with the driver model above. But extend it into specific operational surveys, focus groups with customers who recently undertook the journey in question, and deep structured interviews to highlight pain points, missed expectations, and opportunities to differentiate.
In parallel, the voice of the employee will help you gather the experience of those who know customers best—the front line.
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Use site visits, employee focus groups, and supervisor interviews to construct a map of the current journey and a short list of pain points, complexities, and opportunities to streamline. Once you have listed the pain points, size the potential impact of each, using three measures: reducing the cost to serve, capturing longer-term revenues and loyalty, and improving overall satisfaction.
In the customer-experience area, the most concrete business cases are often built on a near-term reduction in the cost to serve: fewer calls, escalations, technician visits, and so on. These moves remove both customer pain points and costs from the system. Then measure longer-term outcomes. For example, mobile customers who dispute their first bill are less likely to remain active 12 months later—a lagging effect common across many industries. Finally, for each journey, size the potential impact of improvements at every pain point on overall customer-satisfaction scores.
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Moreover, what does the model you have created suggest about the value of customer-satisfaction improvements over time? Taken together, the near-term cost, medium-term loyalty, and overall-satisfaction analysis will help you set priorities for addressing specific pain points in the journeys that matter. Identify opportunities to innovate and disrupt in competitive white spaces.
While eliminating pain points for customers is important, it is equally critical to identify areas where you can differentiate your company from competitors as customer expectations change. For example, retail-banking customers increasingly want a digital, branchless, and paperless experience. Getting ahead of that trend is far more important than incrementally improving the branch experience.
Voice-of-customer analysis can provide a starting list of disruptive ideas. How else can you decide where to innovate? First, focus innovation resources either on important customer-experience journeys where you have a large gap against competitors or on reasonably important journeys where the gap is narrow or unclear. The model described above will help you estimate the potential for disruption in those areas.
Second, look at your operational data for digital-innovation opportunities. Which customer journeys drive the largest number of calls? For example, a typical banking customer of the diversified financial-services group United Services Automobile Association would make multiple calls to obtain a new car loan. USAA turned this process into an online digital-loan-origination solution. Journeys that generate more than six calls per customer are leading opportunities for digital innovation; you can build an economic case around reducing the cost to serve customers and promoting loyalty by engaging them more intensely.
Third, conduct ethnographic research to follow customers in their daily lives and identify unmet needs and innovation ideas. Then assess these ideas against the customer-satisfaction model to estimate the potential impact.
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So far, you have analyzed what matters to customers, set your priorities for customer journeys, and weighed the importance of initiatives. Now you can construct a transformation road map backed by a clear business case. Many customer-experience efforts lose momentum because the path to impact is too slow or too vague. Efforts to improve near-term quarterly performance can therefore sweep aside initiatives to improve customer-satisfaction scores.
To overcome that risk, successful efforts construct road maps that ring the cash register in the near term, fund themselves in the medium term, and make a long-term impact anchored in a model of the things that matter most to customers. To create that road map, it can help to follow these steps. The exploration of what matters most to customers should unearth the value of initiatives under consideration and help to crystallize a short list of priority efforts. By contrast, surprise billing changes are less severe as individual events but happen all the time.
Addressing the customer shock from billing changes almost always represents greater overall value. For each of these examples and others , a cross-functional team must then estimate the time needed to capture the value at stake. If the expected benefit is reducing customer churn or boosting future revenues, a payoff may not be visible for more than 12 months. Finally, estimate implementation costs.
In a smart sequencing, you want to order and balance multiple initiatives: those that will affect the largest number of customers, that will pay off quickly, and that address the most severe problems or the most important areas to exploit. To achieve the right balance and sequence, two dimensions are critical. First, some initiatives, such as simplifying billing or revising rules on issuing customer credits, will be policy driven. Others, such as enhancing the skills and training of field technicians or boosting customer-service skills at a retail bank, will require a frontline field rollout.
In general, policy initiatives can be directed centrally and are therefore faster to implement than field-driven initiatives requiring disciplined rollouts in waves. A well-sequenced road map balances both types of initiatives throughout. Second, some initiatives will affect nearly all customers, and some will be severe opportunities that affect only a few. A good sequencing balances both because companies must ensure that a majority of their customers experience the change in some way.
An overemphasis on severe incidents and opportunities is a common blind spot. With the expected value, cost, and impact timetable for each initiative in hand, and with a clear sense of which initiatives can be undertaken centrally and which require a rollout in the field, operators will have enough information to build a well-sequenced road map. Keep in mind a few design principles:. Many companies begin customer-experience efforts with lofty ambitions but a poor grounding in linking programs to value.
There is a better way. Take the time to construct a self-funding business case and you will reap company-wide buy-in as your reward. That will anchor your customer-experience program and pay dividends long after the up-front months needed to do it right have passed into history.
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Subscribe Sign In. Linking the customer experience to value. By Joel Maynes and Alex Rawson. McKinsey principal Kevin Neher explains how companies can meet changing consumer expectations. Related Articles.
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Responding to all customer feedback , acknowledging concerns, and thanking customers for compliments typically through reviews will let your customers know you care about their opinion and appreciate their choice to dine with you, which will set you apart from the nameless and faceless competition. Providing incentives for coming back or rewarding for a return visit reinforces the value you see in a returning customer. Would you like to order an appetizer before your meal? I can recommend a great bottle of wine that would be perfect with both of your meals.
Can I interest you in dessert? Seasoned fries with your burger?