The Business Impact of

Customer Experience
February 7, 2012

Presented by: Featuring:

Scott Buchanan Megan Burns

Marketing Director Principal Analyst
Medallia, Inc. Forrester Research, Inc.

© 2012, Medallia, Inc.

   UNIFIED
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  Highest score for Usability

  RESULTS
  98% customer renewal rate
  Highest score for Client Satisfaction Read the Report:
www.medallia.com/wave

Source: Forrester report “The Forrester WaveTM: EFM Satisfaction And Loyalty Solutions, Q3 2011” Sept. 27, 2011
The Forrester Wave™ is copyrighted by Forrester Research, Inc. Forrester and Forrester Wave™ are trademarks of Forrester Research,
Inc. The Forrester Wave™ is a graphical representation of Forrester's call on a market and is plotted using a detailed spreadsheet with
exposed scores, weightings, and comments. Forrester does not endorse any vendor, product, or service depicted in the Forrester Wave.
© 2012, Medallia, Inc. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change.
Agenda

What is customer experience?

How does customer experience affect business results?

Success stories—business impact in practice

What's the best way to get started?

Questions and answers

3 © 2010 Forrester Research, Inc. Reproduction Prohibited

Agenda

What is customer experience?

How does customer experience affect business results?

Success stories—business impact in practice

What's the best way to get started?

Questions and answers

4 © 2010 Forrester Research, Inc. Reproduction Prohibited

 How customers perceive their
interactions with a company

5 © 2010 Forrester Research, Inc. Reproduction Prohibited

6 © 2010 Forrester Research, Inc. Reproduction Prohibited
Agenda

What is customer experience?

How does customer experience affect business results?

Success stories—business impact in practice

What's the best way to get started?

Questions and answers

7 © 2010 Forrester Research, Inc. Reproduction Prohibited

 Customer
experience
correlates to
loyalty

8 © 2010 Forrester Research, Inc. Reproduction Prohibited

Customer Experience Correlates to Loyalty

Low High

Source: North American Technographics® Customer Experience Online Survey, Q4 2010

9 © 2010 Forrester Research, Inc. Reproduction Prohibited
Banks
Customer Customer
experience experience
laggards leaders
Willingness to
consider for 11 pps*
another purchase

Likelihood to
switch away - 9 pps

Likelihood to
recommend 14 pps
* Percentage points

Source: North American Technographics® Customer Experience Online Survey, Q4 2010

10 © 2010 Forrester Research, Inc. Reproduction Prohibited
Repeat Purchases Drive Revenue Growth

ACME Bank
Total Customers 10,000,000

Willing to consider: 70% Willing to consider: 81%

1.1 million more considerations

50%

550k more purchases

$500
$275 million revenue benefit
11 © 2010 Forrester Research, Inc. Reproduction Prohibited
Word of Mouth Drives Revenue Benefit

MegaWireless
Total Customers 75,000,000

Likely to recommend: 50% Likely to recommend: 60%

7.5 million more potential recommenders

69% 3.6
18.6 million more recommendations

2% $600

$223.5 million revenue benefit

12 © 2010 Forrester Research, Inc. Reproduction Prohibited
 Total impact
Industry
(in millions)
Wireless service providers $1,574
Hotels $1,068
Airlines $784
Insurance providers $260
Credit card providers $245
Banks $217
Investment firms $149
TV service providers $81
Health insurance plans $70
Internet service providers $70
Retailers $27

Source: Forrester report “The Business Impact of Customer Experience, 2011” July 7, 2011
13 © 2010 Forrester Research, Inc. Reproduction Prohibited
 Bad customer
experiences
cost firms a
lot of money

14 © 2010 Forrester Research, Inc. Reproduction Prohibited

Customers Escalate to More Expensive Channels
When the Website Doesn't Support Them

75%

Base: 1,863 US consumers

Source: North American Technographics® Retail, Travel, Customer Experience, and Financial Services Benchmark Survey,
Q3 2009 (US, Canada)
15 © 2010 Forrester Research, Inc. Reproduction Prohibited
Prospects Walk Away If the Experience Is Bad

Base: 1,706 US consumers

Source: North American Technographics® Retail, Travel, Customer Experience, And Financial Services Benchmark Survey,
Q3 2009 (US, Canada)
16 © 2010 Forrester Research, Inc. Reproduction Prohibited
Lost and Wasted Dollars Add Up Fast

Lost sales $30 million

Avoidable sales costs $9.6 million

Avoidable service costs $13 million

Wasted money $52.6 million

Source: Forrester report “Web Sites That Don’t Support Customer Goals Waste Millions” February 17, 2010
17 © 2010 Forrester Research, Inc. Reproduction Prohibited
Agenda

What is customer experience?

How does customer experience affect business results?

Success stories—business impact in practice

What's the best way to get started?

Questions and answers

18 © 2010 Forrester Research, Inc. Reproduction Prohibited

 Framework: Assessing Business Impact!
Consider all dimensions. Paint complete, compelling picture.!

INCREASE REVENUE DECREASE COST

DIRECT

•  Greater share of wallet •  Fewer calls / complaints

•  Reduced churn •  More self-solving

INDIRECT

•  Word-of-mouth referral •  Community / forum solutions

•  Social media recommendations •  Replace marketing spend

© 2012, Medallia, Inc.

 Increase Revenue—DIRECT !
Best practice: Break down feedback silos

SALES SERVICE SUPPORT

FEEDBACK FEEDBACK FEEDBACK

© 2012, Medallia, Inc.

 Increase Revenue—DIRECT !
Best practice: Introduce real-time alerts to enable recovery

INTEGRATED FEEDBACK:

SALES + SERVICE + SUPPORT

REAL-TIME CLOSED-LOOP RECOVERY

© 2012, Medallia, Inc.

 Increase Revenue—DIRECT !
Design in the measures of success at the outset

First 12 Months…

INTEGRATION CLOSED LOOP

Net Promoter Score Share of Wallet Assets Under Mgmt

+ 43% + 20% + $519M

© 2012, Medallia, Inc.
 Increase Revenue—INDIRECT !
Best practice: Encourage social word-of-mouth

Customer likelihood to recommend = 9 or 10 (out of 10)

Thank you for your feedback—now spread the word!

Online reviews are key to helping others discover our company. Will you share your experience?

Post to Facebook Post to Google +

Post to Twitter Review us on Yelp

© 2012, Medallia, Inc.

 Increase Revenue—INDIRECT !
Leverage the power of social recommendations

Business impact on a single (representative) retail location

Before WOM After 3 Months WOM

12 Posts + 46 Posts

2 Tweets + 21 Tweets

16 Reviews (3.5 / 5) + 28 Reviews (4.5 / 5)

Every 1-point increase on Yelp = +5% to 9% in revenue [HBS, 2011]

© 2012, Medallia, Inc.

 Decrease Costs—DIRECT & INDIRECT!
Best practice: Encourage satisfied customers to contribute

Customer
Phone Support Email Support

“Satisfied? Help others find answers”

Support Forum Contributors

Sbuchanan
Creating Forms 21 posts
Exporting Data
Mburns
Attaching Documents 34 posts

© 2012, Medallia, Inc.

 Decrease Costs—DIRECT & INDIRECT!
Best practice: Intercept dissatisfied customers early

It looks like you could use some help

finding answers.!

Have you tried our Forum? Itʼs filled with

answers from customers just like you.!

CLICK HERE!

© 2012, Medallia, Inc.

 Decrease Costs—DIRECT & INDIRECT!
Business impact of highly engaged customers

Call Volume Call Length First Call Resolution

“Expected
wait time
is 28
minutes.”!

- 24% - 12% + 19%

© 2012, Medallia, Inc.
Agenda

What is customer experience?

How does customer experience affect business results?

Success stories—business impact in practice

What's the best way to get started?

Questions and answers

28 © 2010 Forrester Research, Inc. Reproduction Prohibited

 Start measuring how
customers perceive their
interactions with you

29 © 2010 Forrester Research, Inc. Reproduction Prohibited

Measure All Three Levels of Customer Experience

Lifetime experience with the company

A specific Website Call Center

………
interaction Visit Call

A set of interactions
required to accomplish a
key customer goal.

30 © 2010 Forrester Research, Inc. Reproduction Prohibited

Map the Ecosystem of People and Processes That
Drive Negative Customer Perceptions

Source: Forrester Research

31 © 2010 Forrester Research, Inc. Reproduction Prohibited
 Start by Fixing What’s Wrong Today, But Don’t Stop
There or the Problems Will Just Come Back

Sustain
customer experience quality

Transform

Improve

time
Source: Forrester Research
32 © 2010 Forrester Research, Inc. Reproduction Prohibited
Work to Implement the 40 Practices That Lead to
Lasting Customer Experience Maturity

Forrester’s Customer
Experience Maturity
Framework

Source: “Scorecard: Forrester’s Customer Experience Maturity Assessment 1.0,” December 8, 2011
33 © 2010 Forrester Research, Inc. Reproduction Prohibited
Agenda

What is customer experience?

How does customer experience affect business results?

Success stories—business impact in practice

What's the best way to get started?

Questions and answers

34 © 2010 Forrester Research, Inc. Reproduction Prohibited

 Questions & Answers!
Presented by: Featuring:

Scott Buchanan Megan Burns

Marketing Director Principal Analyst
Medallia, Inc. Forrester Research, Inc.

650-223-7709 617.613.6294
[email protected] [email protected]
@mbcxp
www.customerexperience.org http://blogs.forrester.com/megan_burns

© 2012, Medallia, Inc.

 Stay in Touch!
Upcoming webinars and contact information

How Feedback Management Technology Can

1! Transform Your Company!
Thursday, March 1, 2012, 10:00AM PST!

Make Sense of Customer Experience Metrics: How to

2! Use Metrics to Drive Business Results!
Thursday, March 29, 2012, 10:00AM PST!

Web: www.medallia.com/resources !
3! Email: [email protected]!
Phone: 650-223-7777!

© 2012, Medallia, Inc.