State Of CX 2015 – Nunwood’s UK Analysis: What Are the Key ‘Findings’ (Part 1)

It’s the time of the year where I share my take on the latest CX research published by Nunwood. Worth pointing out that Nunwood has been acquired by KPMG so is now KPMG-Nunwood. Back to the research titled: A New Era of Experience Branding. You can download this by going to the KPMG-Nunwood website.

Today, I went to kick of this series of conversations by sharing what I consider to be the key ‘findings’  (conclusions and/or assertions) that come out in the research paper published by KPMG-Nunwood.  In no particular order, these are:

The UK is being outperformed particularly by the USA:

Our US report showed that the leading US firms are some five years ahead of the UK. The average US consumer is 10 times more likely to have an excellent experience than UK counterparts.

UK, as a whole, has made scant progress over the last two years:

This year’s analysis is a story of “diamonds in the rough”: shining examples of best practice surrounded by mediocrity.  The great customer experience project is failing for many organisations….the overall score remains static for the second year in succession.

No silver bullet that leads to CX transformation:

… there is no silver bullet, no single idea that will lead to transformation.

UK firms are failing because they are not doing the right things in the right order:

… much of the lacklustre performance in the 2015 UK results is due to the premature focus on rich, complex experiences at the expense of business basics…… It requires a progressive approach which, in NPS terms, deals with the causes of detraction first, before attending to the drivers of promotion

CX excellence is more of a marathon than a sprint:

Mistakenly, many UK brands promise to be ‘best in class’ within challenging timescales, damaging their internal and external credibility. Much like training for a marathon, the most effective focus should be on….

No substitute for a controlling idea that animates the whole organisation:

At the very centre of the most successful customer experiences lies an idea….. so powerful and motivating that it infuses and energises all it touches.

A controlling ideas is different to a brand idea because it shapes the mind-set of the whole organisation, not just the marketing and sales teams.

Our research shows that the keepers of the flame have to be the CEO and the executive team.

Employees matter, they are the gateway to CX excellence:

The employee experience precedes the customer experience. Culture, engagement and enablement all play a vital role.  The great organisations start with these factors first.

Organisations which aspire to be CX leaders must master omni-channel:

.. the US corporates have a largely different approach to the adoption of digital technologies. In the US, it is simply an extension of the business model – an additional way to engage with the customer – in an integrated ecosystem with the customer at the centre. In the UK, by contrast, digital…. seen … as a separate line of sight to the customer, a different channel with different products, prices, and costs.

The next conversation in this series will be about the five customer experience themes (trends) that KPMG-Nunwood consider to be key.  Until then I wish you the very best and thanks for listening.

2014 State of Customer Experience: Who Are UK’s 2014 Leaders And What Can We Learn From Them? (Part 1)

Yesterday, I received one of the few publications I find worth reading. Which publication? The 2014 UK Analysis put together by Nunwood‘s Customer Experience Excellence Centre.  In this series of posts, I will be sharing with you my take on this report and its findings and recommendations.  Let’s start with the dominant themes.

Little Change In The State of Customer Experience Excellence From 2013

The foreword by Marketing Week is full of the kind of exaggeration-hype that goes with much of marketing:

With customer experience now firmly established as the main competitive battleground for ambitious leaders, this is a uniquely rich insight into the best practices needed for success…..

– Mindi Chahal, Features Writer, MarketingWeek

Did you get the clue?  The clue lies in the adjective ambitious as in ‘ambitious leaders’. It turns out that of the 250+ brands surveyed by Nunwood only a very small number are ‘ambitious’. And as such little has improved overall as regards the state of customer experience excellence in the UK.  Which kind of makes me question the claim that customer experience is now firmly established as the main competitive battleground. My experience is that whilst it is talked about, that is pretty much all that happens: talk.

What do the folks at Nunwood say on this matter? This is what they say (bolding is my work):

A minority of brands are shining every brighter …… These examples of brilliance are dimmed by the larger set of brands whose efforts have stalled. Either because they have hit cultural glass ceilings …… or the ambition of their leaders has failed to match the rising expectations of UK consumers … This has meant that across all 263 brands analysed the overall improvement in performance was less than 1%. 

The Biggest Improvement In Customer Experience Excellence Has Occurred In The Financial Services Sector

Which sectors show an improvement? Three of them: financial services, entertainment & leisure, and travel & notes.

Which sectors are stagnant? Three of them: telecommunications, restaurants & food, and non-food retailing.

Which sectors have declined? Two: utilities, and grocery retailing.

Did the financial services sector make the 2.2% improvement due to benevolent-enlightened leadership? Or a new found love of the customer? Or was it because some teeth have been put into a regulator and regulation?  Here is Nunwood’s take on the situation (bolding is my work):

The financial services sector sees the largest improvement in performance …. This is in no small part due to the burning platform created by the government, media and regulators. New FCA-mandated focus on customer outcomes … has led to massive investments and exhaustive leadership attention.

It occurs to me that here we have a clue as to why there has been little or no change in all the other industry sectors. Organisations and the Tops that lead them do not willingly stop screwing their customers and employees. And so switch from the easy and established way of making ‘bad profits’ to doing the hard stuff of generating superior customer value and thus reaping ‘good profits’. This kind of behaviour is arrested and weakened through a combination of effective regulation and sustained media pressure. Which may explain why it is that the utilities sector, which has been the weakest in terms of customer experience excellence has slipped further down the rankings. In my view-experience the Ofgem, the regulator for gas+electricity market, is about as toothless as you can get.

The Same Brands Continue To Shine And Some Shine Less Brightly

By now, I suspect that you may really want to know who the UK’s Customer Experience leaders are. Here are the top 10:

1. First Direct (bank without high street presence)

2. John Lewis (multichannel retailer)

3. QVC (tv based shopping channel)

4. Lush (retailer)

5. Amazon (online retailer)

6. Appliances Online (online retailer of appliances)

7. Waitrose (grocery retailer)

8. Nationwide (building society, financial services)

9. Specsavers (retailer)

10. M+S Simply Food (grocery retailer)

10. Your M+S (retailer)

Here are my take on this Top 10 list in comparison with 2013:

  • Virgin Atlantic and Ocado have dropped out of the Top 10. Virgin is now at number 21, and Ocado just outside the Top 10 at number 12.
  • Appliances Online, Nationwide, and Specsavers are new to the Top 10. This is what Nunwood says about Appliances Online (ao.com):

A clear value proposition wedded to an excellent service culture sets the brand apart.

  • Amazon continues its slide down the rankings here is what Nunwoods says:

Amazon …… continues to slip slightly in the rankings for the third year in a row, as consumers react to declining perceptions of its integrity and the performance of its delivery companies.

  • Waitrose ascends the rankings moving from being number ten (2013) to being number 7 (2014).

  • M+S (both Simply Food, and Your M+S) descend towards the bottom of the Top 10 in 2014.

My personal take is that Your M+S is a retailer in trouble. Management, probably in desperation, are bullying store managers. This then cascades down to the people on the shop flower. And in turn impacts the customer experience. So it will be interesting to see where Your M+S stands in the 2015 rankings.

The Secret of Customer Experience Success: Put Your Customers Second

You may have noticed that I insist on the need for and the critical importance of the human dimension: calling forth and putting into play the best of our humanity in order to orchestrate great relationships and generate great experiences. In short, to create a better world, a world that works for all: employees, suppliers, management, customers, shareholders, and the community.

More than once I have spelled out that the access to great customer experience lies through the folks that actually interact with and serve customers: the people working in the business and especially those who interact with and serve customers on a daily basis.  Not technology! Technology can enable or hinder the customer experience. It is merely a tool.

Which means that there cannot be excellence in Customer Experience without excellence in Employee Experience. And these two have to be in tune with one another.

What does Nunwood say on the matter?  Here is what Nunwood says (bolding is my work):

With only a single exception, the top 10 ‘Champion’ brands are characterised by their evangelical employees and superior cultures. Employees who are exceptionally proud of the brand they represent and the job they do each and every day for customers. Their culture plays a pivotal role in creating outstanding customer experience and they value that some culture first and foremost. In a very real sense, employees come first and customers come second. 

Which is the single exception? I take it to be Amazon. And in the longer term this could be the undoing of Amazon.

Enough for today, I will continue this conversation in the next post. In that conversation I propose to explore the underlying factors that show a correlation with Customer Experience excellence.  Until then I wish you the very best.

Who Are the UK’s 2013 Customer Experience Leaders And What Can We Learn From Them? (Part 1)

I have been studying the 2013 UK report by Nunwood’s Customer Experience Centre and in this post I share with you what shows up for me.

Which are the UK’s Top 10 Customer Experience brands and why?

CEE Top10 2013

Comparing to last year I notice that:

1. Amazon has dropped to fourth place. Why? The report suggests that this is due to two factors: reputation damage related to tax avoidance and performance of delivery companies.

2. QVC (TV centred shopping channel) comes in at no 2. It appears that in previous years the responses failed to meet the minimum required and so QVC was excluded.

3. The Co-operative Bank has not just fallen out of the Top 10, it has fallen out of the Top 100. Given it’s much publicised troubles centred on its finances this does not come as a surprise. Above all, it occurs to me, that a bank has to have a reputation for being financially sound.

4. M&S, one of the UK’s traditional and loved brands, has moved into the Top 10. 

5. Four out of the Top 10 positions are held by two organisations – The John Lewis Partnership and M&S: organisations that have a reputation for caring about their people, caring about their customers and showing this through the quality-range- vfm of their products, and the quality of their service.

Which industries dominate the Top 100 Customer Experience brands?

Given that Nunwood has not done an analysis by industry, it occurred to me that it would be useful to do one. Here is what shows up:

CEE Top100 by Industry

The retail industry leads in the sense that 44 out of the Top 100 places are filled by retail brands. And 10 of the Top 22 customer experience brands are in retail (as classified by Nunwood).  Please note I have not listed all of the retail brands in the Top 100 – too many brands.

The supermarkets take 3 out of the Top 10 places, 7 out of the Top 20 places, and 11 out of the Top 100 places. That is quite some domination given the relatively small number of players in this category.  It’s interesting that all of the big names are in the Top 20 except for Tesco (47), Morrisons (29) and Lidl (53).

The food & eatery industry takes 14 out of the Top 100 places. None of the brands in this category is in the Top 50. It is interesting to note that Starbucks is missing from the Top 100. Could this be due to the brand damage that Starbucks has suffered due to the tax avoidance issue that has hit Starbucks much harder than say Amazon? Who says life is fair?

The travel & tourism industry takes 16  out of the Top 100 places. There is only one brand in the Top 10 (Virgin Atlantic) and three in the Top 20 (Virgin Atlantic, Butlins, Emirates).  Looks like airline travel experience is not that hard to get right if you are committed to getting it right like Virgin Atlantic and Emirates.  The surprise appearance (for me) is Butlins. It looks like Butlins have invested in their staff and their hotels and this is paying off.

The telecoms & media industry only takes 3 out of the Top 100 places.  Do you notice who is missing? All the big brands like Vodafone, Sky, EE, BT, O2, TalkTalk, Virgin Media …… yet these are the very brands that do much talking about customer service, customer experience, customer-centricity. Seems to me that all this customer talk could just be ‘marketing talk’.

The financial services industry takes 12 out of the Top 100 places. And like the telecoms industry none of the big brands – Barclays, RBS, Lloyds, Santander – are present.  It will be interesting to see how much headway the supermarket brands  – M&S Bank (23), Sainsburys Bank (83) – can make in this industry.  Given the shift to digital-mobile banking, it would be interesting to see what will happen when the likes of Amazon decide to go into that market.

The energy & utilities industry. Have you noticed that not one of the energy and utility players is in the Top 100?  No British Gas, no EDF, no Npower, no E.on, no Thames Water, no Severn Trent ….. If the energy industry proves anything it proves this, you don’t need to pay attention to customers when you have structured the industry into an oligopoly and customers have to come to you to buy an essential product.

What does it take to be a Customer Experience leader? 

If there is one thing I am clear on it is this, one cannot become a customer experience leader by bolting on customer experience trinkets to the existing way of being-doing.  This is about as effective as taking a  frigate, adding bits and piece of a fighter plane (say wings), and expecting the frigate to be a great fighter plane. That is just stupid. Most of us can see this stupidity when it comes to warships and fighter places. When it comes to organisations, it is amazing how few see the stupidity of taking this route. What does the Nunwood report say?

Culture and climate are the foundation stone of great experiences. Experiences are delivered through people, the above companies are focusing on creating a culture and climate that starts with meeting all of the customer’s needs, emotional, rational and transactional and then replicating across channels.

Customer experience has many moving parts the key is an integrated approach across a business. It demands an intense focus over the long term. It has to be kept on everyone’s daily agenda. 

This requires customer experience to be woven into the fabric of the company, reward, performance management and planning.

Coming next

Enough for today. In the next post, I will take a more detailed look at some of the more interesting brands in the Top 100.  Until then I wish you the very best.