how to build an emotinal connection with your customers
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How to Build an Emotional Connection with Customers2010 Experience Tracker
Steven Walden, Senior Head of Research and Consulting
Kalina Janevska, Consultant, Business Psychologist
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1. Viewer Window 2. Control Panel
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Beyond Philosophy
Customer Experience
is all we do!
Thought leadership is
our differentiator
Offices in London,
Atlanta with Partners in
Europe & Asia
Fourth book will
launch in Fall 2010
Focus on the emotional side
of the Customer ExperienceLinks with
Academia
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We are Proud to Have Helped Some Great Organizations…
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The Study Basics
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• Methodology
• Quarterly online survey via
online panel
• Sample Characteristics
• 1015 respondents
• 50% USA; 50% UK
• Objective
• Understand the best way to
connect emotionally with
your clients and consumers
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Stopping The Leaky Bucket
6
Keeping existing customers is less expensive than acquiring new ones. Reichheld and
Sasser (1990) state that a 5% improvement in customer retention can cause an increase in
profitability between 25% and 85% (in terms of net present value)
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The Problem of Retention ConfirmedBeyond Philosophy Research and Accenture Research (2010)
7
Accenture study (2010) of
3,556 consumers (auto, home
and life):
53 percent are
considering switching to
a new insurance provider
over the next year
UK and German insurance
customers have the least
‘loyalty’ to their current
providers - 71 percent are
either not planning to
purchase their insurance
with their provider or are
unsure and planning to
look around
Per
cen
t of
insu
ran
ce h
old
ers
Percent of customers that have switched provider in the past 3 years
HomeAutoOverall Employment Health Life
29%
41%
39%
20%
34%
8%
30%
40%
50%
20%
10%
0%
This means lost revenue
Source: Beyond Philosophy Experience Tracker Research Q2 2010
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Solution: Focus on Engaging the Right Customers
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Why Segmentation?
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Traditional vs. Emotional Segmentation
10
Segmentation Criteria
Behaviour (switching)
Segments Defined:
High Switchers
Low Switchers
Defining Experience:
Price
Outcome
Short-term
Weaknesses
False loyalty
•Low switch because its
convenient not because
its valued
Segmentation Criteria
Emotion
Segments Defined:
Positives
Negatives
Defining Experience:
Lovemarks
Outcome
Long-term
Weaknesses
Overestimates risk
•Picks up people who
feel negative towards
you but are not ready to
leave you
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Value of Emotional View
Benefits of emotional engagement:
1. Herd instinct: enthused customers encourage other customers to come to them and people
stick with you in the hard times (e.g., SouthWest Airlines)
2. Brand Equity: a positive brand buzz adds to Goodwill (straight onto balance sheet) and brand
halo effects
3. Market Expansion: greater opportunities for diversification (Virgin effect)
4. Staff enthusiasm: benefits to corporate culture that enables differentiation
5. Emotions drive behaviour: it is emotion that drives behaviour! So focus on emotional drivers
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Imprinting Lovemarks in your Customer Experience
12
Brands are running out of juice". Love is
what is needed to rescue brands. Roberts
asks, "What builds Loyalty that goes
Beyond Reason? What makes a truly
great love stand out?”Kevin Roberts, CEO Saatchi and Saatchi
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Done in Brand why not in Experience?
13
“Kevin, we want you to turn Toyota into
the most loved automobile corporation
from the most respected one it is today.”
So we helped them to modify their
advertisement style.
We helped them distance themselves
from the image of the car on the road to
the image of the driver behind the wheel
of a Toyota car. We added a human
touch to their advertisement.
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What Did We Want to Find Out?
14
Too many
different
patterns
Similar
pattern of
decision
making
Can we understand switching behaviour?
TraditionallyEmotional Signature®
way
Group good behaviour and
compare to bad behaviour
Group good feelings and
compare to bad feelings
Low
Switchers
High
SwitchersLovers Detractors
Too many
different
patterns
Similar
pattern of
decision
making
Only 8%
overlap
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What is the Conclusion?
Understand the limitations of traditional
segmentation: I can be loyal but not feel
loyal
Focus on both “High Switchers” and
“Lovers” to understand better your
customers: they explain switching
behaviour
Identify the lovemarks in each group: these
drive action and behaviour
Design your experience around the
differentiated needs/ lovemarks of your
customers
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Glass Half-Full Economics
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A Different Point of View
17
How can I make an emotional connection, not just
what can I get out of this now
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Insurance
Experience
Agent/
Broker
Experience
Extensions
Ease of
Process
Website
Call Centre
…knowledgeable…
…helpful…
…cares about me…
..communicates
information to me
clearly…
…bill easy to
understand…
…application process…
…plan is clear to me…
..renewal process
easy……
…easy to use…
…helpful…
…call centre advisors are
knowledgeable…
…can easily contact…
…call centre advisor is
helpful…
…like the advertising…
…my insurance provider would go
the extra mile for me…
…educates me on how to avoid
risk/stay safe…
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Employment Insurance Resource Allocation
While Agent and Call Centre experiences need to be controlled as these drive switching, what
actually attracts customers and reduces switching is Experience Extensions amongst
Positives and Easy amongst High Switchers
19
Experience
Lovemarks
Opportunity
32% of Market are Positives driving 60% Tenure value
Source: Beyond Philosophy Experience Tracker Research Q2 2010
Lovers Switchers
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Simple Example: Employment Insurance
20
No loyalty incentive or marketing literature sent. Customers are treated
as a direct debit transaction
The vicarious, media experience is underestimated
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Auto-Insurance Resource Allocation
While Call Centre and Website experiences need to be controlled as these drive switching,
what actually attracts customers and reduces switching is Experience Extensions amongst
Positives and Easy amongst High Switchers
21
Experience
Lovemarks
Opportunity
Source: Beyond Philosophy Experience Tracker Research Q2 2010
Lovers Switchers
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Simple Example: Auto Insurance
Propensity to Switch is reduced by injecting experience clues: moments
of delight (going the extra mile), advertising and education.
22
Desire for
Cover
Review Media
Ads/ Offers
Phone
Companies
Discuss
Requirements
Receive
Certificate
Payment (DD,
Check)
Renewal Completion on
Phone
1 Year +
1 2 3 4
5 6 7 8
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Life Insurance Resource Allocation
23
While Call Centre and Website experiences need to be controlled as these drive switching,
what actually attracts customers and reduces switching is Agent amongst Positives and Easy
amongst High Switchers
Experience
Lovemarks
Opportunity
Source: Beyond Philosophy Experience Tracker Research Q2 2010
Lovers Switchers
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Home Insurance Resource Allocation
24
While Website and Agent experiences need to be controlled as these drive switching, what
actually attracts customers and reduces switching is Experience Extension amongst Positives
and Call Centre amongst High Switchers
Experience
Lovemarks
Opportunity
Source: Beyond Philosophy Experience Tracker Research Q2 2010
Lovers Switchers
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Health Insurance Resource Allocation
25
While Experience Extension and Website experiences need to be controlled as these drive
switching, what actually attracts customers and reduces switching is Call Centre amongst
Positives and Agent amongst High Switchers
Experience
Lovemarks
Opportunity
Source: Beyond Philosophy Experience Tracker Research Q2 2010
Lovers Switchers
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Summary Recommendations
Recognize that your customers are different and want different things
Recognize different customers’ take into consideration different aspects
of the experience when deciding whether to switch or not
Customers who feel positively emotionally engaged with their insurance
provider have the same mindset and perception of your experience that
is different to customers that intend to switch
To make that emotional connection with your customers, you need to
identify their lovemarks
26
Lovers Switchers Lovers Switchers Lovers Switchers Lovers Switchers Lovers Switchers
Easy
Website
Agent
Call Centre
Experience Extensions
Employment Auto Life Home Health
Segment emotionally and identify your “Lovers”
Develop a lovemarks experience
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Further Conversation? Contact us...
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