October 15, 2014
You know what the Holy Grail is for an analyst? It’s results data – especially financial results data. And that’s especially true for analysts who cover customer experience because all too often CX professionals don’t track – or won’t share – their results.
That’s why I’m especially pleased with what I am able to share with you today.
Last week I posted part 1 of Forrester’s customer experience Q&A with Olivier Mourrieas of E.On, one of the world's largest investor-owned electric utility service providers. Olivier will be speaking at Forrester’s Forum for Customer Experience Professionals EMEA in London on November 17 and 18, 2014, and he was kind enough to share some thoughts with us in advance of his appearance.
This week I’m posting part 2 of Olivier’s answers, in which he tells us the tangible business results that the E.On CX program has achieved.
I hope you enjoy what he has to say and I look forward to seeing some of you in London!
Q: How do you measure the success of your customer experience improvement efforts (e.g., higher customer satisfaction, increased revenue, lower costs)? And have you seen progress over time?
There are hard and soft benefits which we are continuously demonstrating:
- Churn reduction: Increasing Net Promoter Score (NPS) leads to increased loyalty. This will help to stabilise the Private Household and SME customer base.
- Cost-to-serve decrease: Example: A higher percentage of satisfied customers (promoters) leads to a lower call volume and duration, and less customer debt, which decreases cost.
- Increase in referrals: In the longer term, with an increase in satisfied customers (promoters), acquisition efforts (cost to acquire) can be reduced based on a higher number of ‘word of mouth’ referrals.
- Each of these was given quantifiable benefits that were signed off by the Financial Controller in each market so we can track progress and calculate ROI. For example in 2012 we estimated ~€15m incremental benefit through reducing customer churn. Total business case was close to €300m NPV. We are ahead on benefits, and undershooting on investment so far, which is great. I am pleased to say that we are ahead of schedule.
- Common language and converging culture
- Greater staff engagement and mobilisation – we are starting to experiment with things like Employee NPS
- Better cross functional collaboration. We understand more and more how to steer/improve the NPS with direct accountability within and beyond Retail, the importance to have more coordinated, customer focused planning and aligned performance objectives, and that we need to elevate the programme even more.
- Vehicle for internal and external communication to drive a customer focused culture
- Sharing best practice around the group.
Q: Where do you think your industry will be with regards to customer experience quality in five years? Will it be a race to the top, on average about the same, big winners and big losers, or…?
We know the standards are rising fast. This is great news for consumers generally. There will be no place for poor customer experience standards across all industries.
Very high operational performance standards and a predictable experience will become the norm, and I think the difference will be made in our capabilities to step in our customers’ shoes and enable them to get all their jobs done more effectively.
The energy industry sees the following changes which are reinforcing higher standards requirements:
- New entrants: The traditional boundaries of businesses focusing on a single sector are fast becoming a thing of the past.
- Bundle services and energy related solutions – defining the relationship with the customer as a partnership and not a pipe of energy to the house. (Trend to small energy world – customer-owned solutions). Customers will spend their energy budget differently than in the past, no more just on kWh.
- E.ON’s retail business needs to become more value-adding, not just billing, and customer focused, relying on a loyal customer base. The NPS programme was set up to transform E.ON’s Retail business into a more customer focused company with more loyal customers. Therefore, the programme focuses the organisation, its behaviours and decisions on the customer to drive profitable organic growth and reduce churn.