Extreme makeover: Three remarkable customer experience recoveries

Forrester's Harley Manning examines what measures Office Depot, Sprint and Fidelity Investments took to turn around their customer experience and reap financial rewards.

For those still in need of convincing of the correlation between customer experience and financial results, “Outside In: The Power of Putting Your Customers at the Center of Your Business” presents a compelling argument.

Co-authored by Forrester Research experts Harley Manning and Kerry Bodine, the new book not only provides statistical evidence by comparing total returns from a portfolio of customer experience leaders to customer experience laggards, but also via case study examples demonstrating how brands cut costs and/or increased revenue through CEM programmes.

Boasting more than 80 case studies and examples from 15 industries in 16 countries, the evidence is overwhelming, with brands including the likes of Boeing, FedEx, JetBlue and Virgin Media all demonstrating improvements in fortune following customer experience overhauls.
 Manning, VP research director at Forrester, spoke with MyCustomer.com recently about the most basic errors that organisations make when it comes to customer experience– and how they can be addressed. Here, he shares three case studies that examine what measures Office Depot, Sprint and Fidelity Investments took to turn around their customer experience and reap financial rewards.

Office Depot: The importance of getting the right staff

“If you don’t have a customer-centric culture, it is very hard to change and it takes time – and it takes being very purposeful,” explains Manning. “The Office Depot president Kevin Peters visited dozens of stores undercover, walking around, looking at the stores, talking to customers, because he wanted to get a sense of what customers were really experiencing in his stores. And he reached the conclusion that the experience was poor in the stores.

“He assembled a larger team to analyse his findings and one of the things they concluded was that for years they had been hiring people for task orientation – people who wanted to stack shelves, people who wanted to keep the floors clean. And while it is important that the shelves are stocked and the floors are clean, they don’t really matter all that much to the customers as it turns out. What matters to the customers (who are small business owners) is that they are able to get in, find the products that they want and need, buy them easily, and get out.

“And so Kevin had his store associates take a psychological profile test and he found that a fairly significant percentage of them did not want to interact with customers. They actually said quite clearly that if their job changed so that they would be spending their time interacting with customers and serving customers, they wouldn’t want that job. And so now he is helping them not have that job! He is going through and managing those people out of the business and Office Depot is hiring people and screening them for customer-centric attitudes.”

Sprint: Ensuring you are making it easy for your customers

“When Dan Hesse took over as CEO of Sprint in 2008, the company was bleeding red ink. They had the lowest score in the American Customer Satisfaction Index (ACSI) of any of the big wireless service providers by far. They had lots of unhappy customers and what those unhappy customers were doing (besides leaving Sprint) was calling up the call centre with problems. Sprint was having to cut all kinds of contracts with outsourced call centres, so they were spending lots of money, plus when you call a centre with a problem, in addition to trying to solve your problem they also give you a credit by way of an apology.

“So when Hesse took over he pledged to break this cycle of madness, and decided to assign a reason code (the reason for the call) for every one of those problematic calls, and look at the top reason for the causes of customer unhappiness and then assign executives to solve those problems and report to him. And with that attention and focus, those problems got knocked down, and as the problems got knocked down, the call centre volumes went down, and as the call centre volumes went down they were able to close one call centre after another.

“An example of one of the problems was that a lot of customers were calling in about having the wrong bill. If Sprint had simply taken this at a superficial level, it would have just spent time looking at the billing system. But it queried why customers thought they had the wrong bill, who was responsible for the bill, and what happened when customers originally signed up to it, and traced that back, looking within the organisation. And Sprint found that that the root cause of the problem was something that had nothing to do with people calling in about the bill.
“It established that the problem was that it had way too many plans that customers could sign up for and so they were singing up for plans that didn’t meet their needs because they were confused. So rather than just staff up the call centres, Hesse decided to greatly reduce the number of plans.

“About two months ago, Hesse gave his annual report to the shareholders and in his speech he highlighted two interesting facts – one is that Sprint how has the highest customer satisfaction score in the ACSI of any wireless service provider, whereas before it was by far the lowest, and secondly the company now saves $1.7bn per year from reduced contact centre costs. That is real money for any company on the planet.”

Fidelity Investments: Going the extra mile for high value customers

“Fidelity is the second largest mutual fund company in the world, and it has appointed a chief customer experience officer as well as senior vice presidents of customer experience in each of their business units, one of which is Parrish Arturi.

“Parrish has done a number of things and piloted programmes including a study of the high net worth customers who were calling either because they wanted to open an account or get some advice or resolve a problem. And Parrish did research - because it really starts with really understanding the customer and taking it out of the land of the ‘squishy’ – and what they found was that these customers were not terribly happy because they were getting bounced around from expert to expert. From Fidelity’s point of view this was the right thing to do - you have tax advice advisors, you have investment advisors, you need this and that. But from a customer’s point of view it was very easy to get lost and confused.

“So Parish piloted a programme so that when some of the high net worth clients called in, they would be assigned a case manager that would navigate them through the process and make sure that they got a good resolution – open an account, resolve a problem, whatever. And after he had been running this programme for a while he was able to look at the behaviour of clients who had had this upgraded customer experience versus ones who hadn’t had this treatment, and he found that the customers who said they had a good customer experience as a result of this treatment, invested billions of dollars net more in their accounts in total. Overall, they invested four-and-a-half times more with Fidelity than customers who hadn’t – and this added up to billions of dollars over the course of two years.”

Posted by Neil Davey in Customer experience on Mon, 01/10/2012 - 01:08