customer-led transformation · 2020. 9. 1. · a customer’s best experience anywhere becomes...

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Customer-ledtransformation

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You can open the largest office and assemble the strongest team, but without customers at the core of your strategy, you may be doing business on borrowed time.

Customer-led transformation

KPMG annually conducts extensive global research on the rise of the customer, their habits, attitudes and expectations of those companies they choose to engage with. Invariably, we see the rise of the customer as one of the most significant driving forces in how leading brands have succeeded or receded in a very short time.

It is therefore not surprising that rapidly changing customer expectations and corresponding investments are making way for a new type of transformation, the ‘Customer-led transformation’.

To determine the starting point for a customer-led transformation, an organization must isolate where it believes its starting point is as there is no one size fits all model. Most can find their starting point on one of three categories:

1. We know we need to do something but we don’t know what to do

2. We know what to do but we don’t know how to do it (or don’t have the skills)

3. We have always been focused on the customer, but we need to up our game

The path to begin establishing this starting point must be anchored around addressing three fundamental concepts: What is your ambition; what are your priorities; and what is your urgency?

Ambition

Organizations must first establish their ambition as a customer-led organization. Without clear ambitions the ‘Compass’ cannot be set. And more importantly, if those ambitions are not defined and embraced by the entire organization, they’re nothing more than words.

Priority

Any ambition must be anchored to a set of priorities which align to the objectives of an organization. Do investments in customer centricity need to deliver more revenue; lower costs; enable geographic expansion; create new products and services? And if you can agree on those priorities, can you prioritize the priorities – not everything can be achieved.

Urgency

With ambition set, priorities established, the next big topic to address is urgency for embarking on a customer-led transformation. Is the time to act and invest now as competitors are passing you by and customers are even harder to retain? Or, are you a market leader and feel like there is time to act? Or perhaps you’ll strive to create an even greater gap between you and the competition.

© 2019 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

A customer’s best experience anywhere becomes their expectations everywhere

KPMG International’s research has identified six key pillars that top-performing brands work continuously to build into their pursuit of exceptional customer service: personalization, integrity, expectations, resolution, time and effort, and empathy.

Research has shown that most companies that excel across these six pillars enjoy significant benefits in terms of revenue growth and operational efficiency. Even still, a critical step towards transformation is defining which pillars matter most to your organization and which you can afford to shift focus to down the road.

Breaking down the six pillars to customer excellence

The six pillars represent the central elements that define an exceptional client experience. They are what your customers, business clients, and end-users expect when interacting with your business, whether you are aware of it or not.

Ahead are breakdowns of each pillar with insights as to how each contributes to customer excellence, and considerations to get you started. Read ahead to learn more about the pillar that matters most to your business and, when you’re ready, let’s do this.

The customer related statistics cited in this piece were sourced from KPMG’s 2019 Me, my life, my wallet study.

The Six Pillars are based on nearly a decade of research and more than 2 million evaluations across multiple markets, conducted by KPMG International.

© 2019 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.© 2019 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

https://home.kpmg/ca/en/home/campaigns/2018/11/me-my-canadian-life-my-wallet.html

https://home.kpmg/xx/en/home/insights/2018/06/tomorrows-experience-today-the-six-pillars.html

Using individualized attention to drive an emotional connection

Being trustworthy and engendering trust

Integrity comes from consistent organizational behavior that demonstrates trustworthiness. There are trust-building events where organizations have the need to publicly react to a difficult situation, and trust building moments where individual actions by staff add up to create trust in the organization as a whole. For all customers, it is the degree to which the organization delivers on its promises that is consistently top of mind.

Customers are time poor and increasingly looking for instant gratification. Removing unnecessary obstacles, impediments and bureaucracy to enable the customer to achieve their objectives quickly and easily have been shown to increase loyalty. Many companies are discovering how to use time as a source of competitive advantage. Equally, there are clear cost advantages to saving time, as long as the other pillars are not compromised.

Personalization is the most valuable component of most experiences. It involves demonstrating that you understand the customer’s specific circumstances and will adapt the experience accordingly. Use of name, individualized attention, knowledge of preferences and past interactions all add up to an experience that feels personal.

Minimizing customer effort and creating frictionless processes

Unpack the fundamental components of every great customer experience.

Based on nearly a decade of research and more than 2 million evaluations across multiple markets, we have identified and validated six fundamental components of every great customer experience – they are The Six Pillars of customer experience excellence.

Click the boxes to learn more about the pillars that matter most to your business. And, when you’re ready,

Let’s do this.


4Customer-led transformation

Managing, meeting and exceeding customer expectations

Turning a poor experience to a great one

Achieving an understanding of the customer’s circumstances to drive deep rapport

Customer recovery is highly important. Even with the best processes and procedures, things will go wrong. Great companies have a process that not only puts the customer back in the position they should have been in as rapidly as possible, but also make the customer feel really good about the experience. A sincere apology and acting with urgency are two crucial elements of successful resolution.

Customers have expectations about how their needs will be met, and these are increasingly being set by the best brands they have encountered. Great organizations understand, deliver and – if possible – exceed expectations. Some are able to make statements of clear intent that set expectations (“never knowingly undersold”) while others set the expectation accurately (“delivery in 48 hours”) and then delight the customer when they exceed it.

Empathy is the emotional capacity to show you understand someone else’s experience. Empathy creating behaviors are central to establishing a strong relationship and involve reflecting back to the customer that you know how they feel; then going that one extra step because you understand how they feel.

“ The Six Pillars are rooted in human psychology and motivation and, as such, are relevant across B2B and B2C. They are also as relevant for employees as they are customers.”



What it means: Today’s customers expect you to know them. They want their product and service providers to cater to their preferences. They have spent years giving their data to countless retailers, agencies, and service providers (whether willingly or not) and now expect richer and more tailored experiences in return.

To excel in personalization is to meet or exceed this expectation by wielding customer data and real-world insights to understand their lives, anticipate their needs, and craft your offerings to match. It’s to focus on the market of ‘one’ by understanding how end users in every demographic spend their focus, time, and money.

What it looks like: Companies that get personalization right are those that demonstrate a deep understanding of their end users at every interaction. It’s the retailers who keep customers up to speed on promotions and new arrivals specific to their tastes, the airlines that track travel preferences and offer compelling package deals, or financial partners that reach out first with new products or strategies based on their client’s life milestones. The leaders in personalization have an acute, data-driven understanding of what makes their customers tick and are continually adapting their products, services, and channels to match.

The challenge: Personalization relies on the ability to collect, secure, and analyze large volumes of customer data. That can be difficult in an age where Canadians are growing more cautious about with whom they share that data, and less likely to align with parties that appear intrusive or over-reaching. In KPMG’s 2019 Me, my life, my wallet study, over a third of Canadians admitted they were highly concerned about identity theft or having their personal information hacked; and nearly a quarter said that trading their data for anything was not worth it. Companies must balance the fine line between obtaining the data they need to craft more personal experiences, and doing so in a way that will not erode trust.

Moreover, there is a cost and effort to personalization. Specific technologies and talents are needed to acquire and manage data and drive genuine customer insights, and they don’t come free. Moving forward on this pillar requires ongoing investment and a game plan for turning that data into actionable insights.

PersonalizationUsing individualized attention to drive an emotional connection

of Canadians like/expect companies to personalize

all interactions (69% of millennials)

53%




Where do you stand?

– Do you know your customer? What are they looking for? What’s most important to them? What do they expect from your business, and how can you meet these expectations through their channel of preference (e.g., online, in-store, on-site, etc.)?

– Have you mapped their journey? Have you designed that journey based on data and genuine insights? Are you putting customers at the core of the journey? Are you developing strategies based on their wants, beliefs, and preferences?

– Is your customers’ data in good hands? Are you doing everything in your power to protect the safety and integrity of the data being shared with you? Are you explicit and transparent about how that information is collected and used? Are you using the insights to deliver value to your clients (e.g., personalized promotions, custom information, intuitive services, etc.)?

– Are you always listening? Do you involve your customers in the growth of your company? Are you taking their feedback seriously? Are you drawing inspiration from your community for new ideas or improvements? Are you letting customers customize their experiences? While ‘co-creation’ may not be suitable for all business strategies, it is always worth looking at how you can integrate your customers’ ideas and feedback into product and service design.

“ Companies that get personalization right are those that demonstrate a deep understanding of their end users at every interaction.”





IntegrityBeing trustworthy and engendering trust

What it means: Integrity is the lynchpin of a customer-led strategy. It’s the bedrock for trust without which everything falls apart. It doesn’t matter how adept your organization is at knowing its customers or how reputed it is for its services; if you are found to be corrupt, untrustworthy, or unable to fulfill customer promises, your end users will take their business to someone they can trust.

The byproduct of integrity is trust. And trust is what holds everything together. As KPMG discovered in its 2019

Me, my life, my wallet study, Canadians are inherently wearier than their global counterparts when it comes to trusting their institutions. They aren’t as willing to part with their personal data for fears of becoming the next victim of a hack or data breach. Herein, demonstrating one’s integrity is critical to building and maintaining that trust.

What it looks like: Integrity is demonstrated through every customer interaction, be it an online order, an in-store transaction, or an in-office consultation. It is demonstrated in

the professionalism with which your frontline staff conducts themselves and their ability to provide accurate and relevant advice. It’s investment advisors who offer consistently credible advice, telecommunications firms which avoid billing ‘surprises’, or big brands that deliver on even the smallest promises.

Companies that demonstrate integrity also go to great lengths to solve problems. They don’t make excuses or put up barriers between customers and fair resolutions. They ensure every end user has a direct line to representatives that will treat them with fairness, empathy, and respect.

Those that excel in this pillar also demonstrate that they aren’t merely focused on their bottom line. More and more, customers want to know they’re supporting organizations who are using their skills and influence to improve their communities, promote ethical business practices, and foster a fair and rewarding workforce.

The challenge: Integrity takes a long time to build up and seconds to destroy. Social media has introduced a degree of risk to one’s brand that most organizations have never dealt with before. One person’s bad experience today can quickly become tomorrow’s viral post, and one errant tweet or Facebook post (public or private) can land an entire organization on the wrong side of the news. Companies must be ready to act on these situations, as well as apply the customer lens to their business decisions.

say that trustworthiness of a brand is a leading driver of their brand

loyalty

56%




Where do you stand?

– What is your first impression? Is your team acting in the organization’s best interests? Do they respect your customers and seek to provide meaningful service at every interaction? Are they aligned to your values and goals?

– What do you stand for? What does your organization believe in? What values does it hold dear? What causes does it champion? Customers want to deal with companies who care about more than profit, so what actions are you taking to demonstrate that?

– How are you ensuring quality? What are your quality control issues? How do you handle errors or missed expectations? What checks and balances are in play to make sure you aren’t breaking your promises to your customer? If you do make a mistake, how do you show your customer you are both owning and driving the resolution?

“ Integrity takes a long time to build up and seconds to destroy.”

of Canadians wouldn’t share their data for anything, including

money

31%

of Canadians expect companies to protect

their data

87%





Time and EffortMinimizing customer effort and creating frictionless processes

What it means: Today, customers have options. And more often than not, customers will gravitate to product and service providers that maximize their time and minimize their effort. This is exemplified in KPMG’s 2019 Me, my life, my wallet report where over a third of Canadians reported feeling overworked, and nearly half feel their work/life is out of balance. It is important to create experiences that can ease those stresses.

What it looks like: Customers neither want nor expect a clunky, time-consuming process. They don’t want to navigate complex websites, get lost in labyrinthine phone directories, and have to fill out countless forms with the same information. They want

to do business with companies that understand every moment counts.

Leaders in this pillar recognize the value of understanding how each demographic allocates their time and effort. They recognize that younger demographics (e.g., Gen Zs, millennials) often prefer to transact online, and gravitate towards services which allow them to browse, compare, and purchase effortlessly. They understand that baby boomers are becoming equally tech-savvy, but still value quick and efficient face-to-face service. They get that Gen X’ers (aka the ‘sandwich generation’) are stretched thin between caring for their families and aging parents, and aren’t as willing (or able) to part with the extra time they may have.

Overall, understanding these differences is key to personalizing their offerings and optimizing every interaction. Any effort to make doing business with them easier will pay off in long-term relationships.

The challenge: Catering to customers’ time and effort means understanding how they relate to each. In a market of diverse demographics and endless trends, this can be challenging to track. Here again, adopting the tools and methodologies to better understand your customer and map their journey will go a long way towards tailoring your products, services, and interactions in a way that will win their loyalty.

of Canadians expect companies to make things

as easy as possible for them (60% of Millennials)

57%





Where do you stand?

– How easy are you to work with? How long is a typical transaction? Is your website easy to read? Is your store easy to navigate? Are you burying promotions where customers might not find them?

– How fast can you respond? When a customer needs help, how quickly can they access it? Are your customer service pathways clearly defined and simple to access?

– Are your employees on the same page? Does your team have the skills and resources to help their customers effectively? Are they empowered to use their best judgment? Do they know how to maneuver your back-office systems and processes to complete the interaction quickly?

– Do you know your audience? What demographics do you serve? How do they prefer to deal with you? Are you respecting their time and effort as they would prefer?

“ Customers will gravitate to product and service providers that maximize their time and minimize their effort.”

46%

of Canadians expect companies to value

their time





ResolutionTurning a poor experience into a great one

What it means: Mistakes will happen. Promotions will misfire. And despite best efforts, expectations will be broken. Organizations need to be continually thinking of not just how to avoid mistakes, but how to address them effectively when they inevitably occur. That requires investments in staff training, risk-management controls, and clear-cut processes for handling customer conflicts in a timely and holistic manner. Additionally, it means empowering staff members at all levels with the resources and access to resolve disputes in a way that leaves

the customer feeling as if they’ve been treated with the utmost fairness – even if the result isn’t perfectly ideal.

To be proactive in this pillar is to avoid costly reputational missteps. Customers who feel as though their problems were dealt with to the best of the company’s ability are less inclined to share their bad experience. They’re also less likely to turn a one-off negative encounter into a social media exposé.

What it looks like: Companies that excel in effective resolutions are ones which empower everyone on their team to “make it right”. Consider how Starbucks provides frontline staff the leeway to offer free drinks to ease a situation, or how Amazon equips its online client representatives the tools and access to resolve issues quickly and with one point of contact.

Humility can also be an asset. In the age of online reviews and instant social media feedback, companies that maintain their reputation are those that respond to negative reviews (e.g., Yelp) by publically acknowledging their missed potential, making direct contact with their unsatisfied customers, and taking transparent steps to make it right.

Champions in resolutions don’t start fresh with every conflict. Instead, they have an operating model which clearly define the people, responsibilities, and actions needed to solve issues quickly and consistently. What’s more, they have the measures in place to track and monitor customer issues to prevent repeat occurrences.

of Canadians say that when it comes to customer experience, quick resolution

is important

91%



The challenge: Sometimes the court of public opinion can get it wrong. Companies can be held accountable for events that did not happen as described, or for expectations that were set by the customer and not the organization. In these instances, the challenge is bringing everyone on the same page and reaching a resolution that will satisfy all.

Nevertheless, there will always be issues that don’t end in the customer’s favour. When this happens, the challenge is to find a way to protect the relationship (e.g., through discounts, added service, etc.) or respectfully part ways without giving the customer the motivation to injure your brand.

In short: Companies aren’t expected to be perfect, but they are expected to respect their customers and be honest in their actions.

Where do you stand?

– How do you respond to customer conflicts? Do you have a clear resolution policy and return policy? Do you have a “SWAT” team ready to move for more significant events?

– Is your team on board? Are your employees empowered to fix the problems? Are you arming them with access to the right information to help them resolve issues?

– Are you thinking ahead? Are you tracking and monitoring customer complaints? Are you proactively trying to fix them moving forward? How do you measure your progress?

“ Customers who feel as though their problems were dealt with to the best of the company’s ability are less inclined to share their bad experience.”





ExpectationsManaging, meeting and exceeding customer expectations

What it means: Organizations must know explicitly what they are in the business to do and, by extension, what its end users want from them. Delivery services, for example, are expected to move items from point A to point B on schedule and without damages. Restaurants are supposed to offer attentive service and serve their meals as advertised. Utility providers are expected to keep the lights on and wi-fi working no matter the conditions – or act quickly when their systems fail.

Expectations are set throughout every stage of the customer journey. Even still, over-promising on expectations is a sure way to leave customers feeling underwhelmed, while failing to define those expectations can lead customers to make their own assumptions. Organizations that do well know what their end users anticipate from them and are continually striving to match (and, ideally, exceed) those expectations.

What it looks like: Businesses that do well in this pillar take a user-centered design approach which reflects an understanding of what customer expectations are and how their organization is delivering on them. They know explicitly what they’re in the business of doing, why their customers choose to interact with them, and what they expect to happen when they do.

Being good at this pillar isn’t about always having the answer the customer wants to hear, either. It’s about managing expectations and then taking ownership when they aren’t met. Moreover, excellence in this pillar means going above expectations – be it to improve wait times, offer higher value, or enhance ones in-store or online presence to the surprise of their customers.

The challenge: Lack of communication and transparency ultimately gives way to assumptions. Fair or not, these assumptions can cause customers to judge your brand by their own metrics. Therefore, it’s important to play a role in setting those expectations and put in the work and investments to rise above them.

of Canadians expect companies to have a

web presence (77% of millennials)

71%

62%

of Canadians expect to be able to track all interactions

with a company (“uberization of the world”)

say that a company’s ability to meet and exceed

their expectations is a leading driver of their

brand loyalty

54%



Where do you stand?

– What do your customers expect? How do they see you? Are you aligned with those expectations?

– What assumptions are being made? Are you actively managing and communicating expectations? Are you addressing misconceptions?

– Do you have top-down engagement? Is your team aligned on expectations? Are C-suite leaders and frontline staff working from the same ‘playbook’? Are departments contradicting one another?

“ Over-promising on expectations is a sure way to leave customers feeling underwhelmed, while failing to define those expectations can lead customers to make their own assumptions.”

45%

expect an app (57% of millennials)





EmpathyWhat it means: Empathy is the most important and over-arching pillar of a meaningful client experience. It’s about understanding who you are, what you do, and how well you ‘get’ the people who come through your door. It’s the ability of an entire team – from the back office to the front – to put themselves in the shoes of their end users, recognize their expectations and challenges, and adjust their strategies accordingly.

In many ways, empathy is the ‘heart’ of the organization. It transcends departments, supply chains, and industry networks. It’s the inner core of a company that cannot be replicated by artificial intelligence or robo-reps, but shown through every human interaction. More importantly, empathy feeds into all other pillars. It is the catalyst for trust, integrity, and positive customer experiences. Only when a culture of empathy takes root can other pillars flourish.

What it looks like: Organizations that crack this pillar are those who go to lengths to embed human-centered approaches throughout their eco-system. It’s an airport that recognizes the stress of the security checkpoint and flight delays and responds accordingly. It’s the e-commerce business that understands the inconvenience of a late or incorrect order. It’s the telecommunications firm that understands the headaches of customer service and the sting of hidden fees and takes measures to mitigate both. It can take time to instill, but those that make an effort build stronger and more sustainable customer ties.

The challenge: Empathy can be hard to maintain as teams grow and businesses expand. Customer perspectives can become an afterthought in key business decisions, or the need to remain empathetic can fall by the wayside in stressful day-to-day activities. As we hand off control of our customer-facing channels and processes to machines, the challenge is keeping the human element in play and remaining empathetic to how customers are relating to every step of their experience.

Achieving an understanding of the customer’s circumstances to drive deep rapport

of Canadians say that when it comes to customer experience, it is important to be speaking with someone

that empathizes with them

71%



Where do you stand?

– Is your team empathetic? Does your organization understand its customers? Their needs? Their situations? Are you training employees to be compassionate? Are you hiring employees with this skill in mind?

– Have you tried customer-led design? Do you understand how your customer relates to working with your company? Are you designing your strategies with those perspectives in mind? Are you taking your customer’s preferences, frustrations, and challenges in mind when making fundamental changes?

– Are you continually growing? Are you tailoring your communication, services, and interactions with your customers’ needs? Are you providing your services and products where, when, and how the customer wants it?

“ Only when a culture of empathy takes root can other pillars flourish.”

of millennials are willing to pay more to buy from an

ethical retailer

55%





Executing on excellence Generally speaking, leaders in customer excellence pursue all six pillars in some form or another. They may excel in one more than the other, and they may dial one up or down based on their immediate priorities, but they keep each in their sights as they transform. And even if they aren’t making progress in one of the pillars today, they have prioritized plans and roadmaps to do so when the time is right.

We’ve offered some perspectives on how to begin building and strengthening each pillar. Nevertheless, there are “must haves” that apply to each that every organization must consider along with their customer-led transformation.

They include:

– Top-down commitment: The commitment to customer excellence must live at the top. It must be taken to heart by the presidents, department heads, and supervisors who themselves need to be empowered to keep that commitment at the top of mind across their corners of the organization. While it’s all too easy to write down one’s customer excellence goals in a binder and shelve it away until the next boardroom meeting, real change occurs when those words are put into action every day and shouted from the top.

– The outside-in perspective: Knowing your customer is central to customer-led transformation. As such, it’s important to encourage that “outside-in perspective” through customer feedback and then build that ‘customer voice’ into one’s strategies.

– Employee engagement: Common throughout the pillars is the need to get your entire team on board. Those who score high across all six pillars are typically ones that have active employee engagement and again are committed to excellent employee experience. They are authentic in their values, have a culture that is aligned to putting the customer first, and focus on both customer and employee journeys.

– The connected enterprise: Consistency and transparency are key to building a customer-led organization. That can be difficult in companies where departments are siloed and disconnected from one another. This can create incongruences in the way customers are being handled, how transactions are being processed, and how important issues are being resolved. When everyone is on board, then the customer experience becomes consistent. And when the customer experience becomes consistent, trust and loyalties strengthen.



– A commitment to monitoring: Monitoring and measuring one’s transformational initiatives is essential to making sure they’re improving the customer experience and maximizing investments. Having metrics tied to each pillar helps organizations adjust their strategies or pursue improvements if those initiatives fail or programs plateau.

A continuous journey

There is no checkered flag in the journey to becoming a customer-led organization. There is no winners’ circle or end-game trophy. Instead, transformation – digital or otherwise – is an ongoing journey that requires a business to be agile, innovative, and at peace with change.

We’ve taken a bird’s eye view of the ways organizations can become customer-led. Take the next step by contacting us. And when you’re ready, let’s do this.

“ Having an objective or being a client obsessed organization is a never-ending exercise. You don’t need to be exceptional at all of these things, but you need to be exceptional at things you deem most critical to your business.”

Peter Hughes Partner, Canadian Digital Practice Lead Management Consulting KPMG in Canada

“ The leaders in customer service excellence know their customer needs better than anyone else. And not just those needs today, but what they’ll be one, five, or ten years down the road.”

Katie Bolla Associate Principal Management Consulting KPMG in Canada



The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

© 2019 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 22514

The KPMG name and logo are registered trademarks or trademarks of KPMG International.

Contact

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Peter HughesPartner, Canadian Digital Practice Lead Management Consulting KPMG in [email protected]

Katie BollaAssociate Principal Management ConsultingKPMG in [email protected]

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customer-led transformation · 2020. 9. 1. · a customer’s best experience anywhere becomes...

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