Matza Casro Deck

2008 CASRO Client Conference

Voice of the Customer
Value Added – What Does It Mean?

Michael Matza
WaMu Service Excellence Group
June 3, 2008

Agenda
Voice of the Customer and Loyalty System (VOC)
•
Framework to analyze data and identify operational improvements
–
that drive customer loyalty

VOC in Action
•
Case studies and examples
–

WaMu - Michael Matza 2

Voice of the Customer
and Loyalty System (VOC)


WaMu – Voice of the Customer
The Opportunity
High customer expectations necessitated top-notch
•
delivery of service at peak efficiency
Actual customer experience, both product features and service
–
interactions, must meet or exceed brand positioning
Managers must have data on „Critical-to-Customer‟ (CTC) service
–
criteria to drive operational improvement

Business Process Excellence Solution
•
Actionable feedback based on customer or employee experiences
–
across the enterprise
A framework to prioritize critical changes that drive customer
–
loyalty
Voice of the Customer (VOC)
–


Voice of the Customer (VOC)
The Solution
The VOC system utilizes customer insights to identify and
drive improved processes:
Deliver and utilize VOC data and information to discover, analyze,
–
trend, and recommend service improvements to increase ability to
execute superior service processes and experiences as one
company
Consult with and educate business lines and enablers on VOC
–
implications to service delivery and profitability
Design and deliver VOC-based Service Excellence initiatives (e.g.,
–
best practices, problem resolution/service recovery strategies, and
feedback/performance programs)

Provide framework to understand & use data to
create meaningful customer experiences that build
strong customer relationships and loyalty.

Integrated set of tools provide insights to measure, manage,
and effectively improve WaMu’s customer experience.

 Measures all WaMu business lines
Provides a
Comprehensive View  Measures people, process, product, price, and presentation
 Measures contact and steady state (non-contact) touch points
of the customer’s experience

 Provides an understanding of who, what, when, and how the
Focuses on
transaction/contact was conducted
Specific Events  Captures feedback close to the transaction/contact to ensure
of the experience
fresh recollection by the customer

Provides
 Enables WaMu to prioritize performance improvement actions
Priorities for Action based on what will have the greatest impact on customer
based on what is important to satisfaction and loyalty
the customer

Includes  Provides actionable information by highlighting service
Operations or Service- thresholds that support desired customer satisfaction and
Level Diagnostics loyalty levels. These thresholds can be used to drive
improvement targets specific to operations
reported by the customer

Allows for  Provides system to compare and evaluate performance across
Internal and External business lines and business units
Benchmarks  Provides system to benchmark WaMu performance with
competitors
for management insight


VOC Online Reporting
Key Features
•

Drill-down by business
–

Index scores
–

Benchmark
–

Weighted attributes
–

Breakpoint analysis
–

WaMu - Michael Matza 2008 CASRO Client Conference

Voice of the Customer and Loyalty
System In Action
Linkage Analysis
Key Business Drivers


Customer Impact Assessment
Project Prioritization



VOC in Action
What We Wanted to Find Out
STRATEGIC TACTICAL
• Which customer behaviors do • At a project level, how do
we currently influence through “ripple effects” to customers
service experiences? and employees change the
expected project outcome?
– Direction
– Attitudes and intentions
– Magnitude
– Behaviors
– Financial implications
– Financial implications
• How can we demonstrate a
return on service that is
competitive with other
investments?

Customer Impact
Linkage Analysis
Assessment


Path to Profitable Service (In Theory)

$
Attitudes/
Service
Behaviors
Intentions
Experience

• Satisfaction
• Branch • Retention
• Willingness to
• Phone • Referrals
recommend
• Web • More products
• Intention to purchased
• Mail
remain/repurchase • Higher balances
• Intention to switch • Lower cost
from competitor channel usage
• Fewer complaints/
escalations
• More positive/
less negative
word-of-mouth


Does Satisfaction = Attrition?

 Yes
Satisfaction Level vs. Household Attrition
3 Months After Survey
2.7 times higher
Attrition Level

• Look at categories
instead of averages
1.5 times higher
• The effect “wears
off” quickly

Delighted Neutral Dissatisfied


Does Satisfaction = Purchasing?

 No
Satisfaction Level vs. Number of Accounts
3 Months Following Survey

• Delighted customers
Change in number of accounts

Surveyed Month 1 Month 2 Month 3 Month 4
do not “reward” with
more business or
higher balances
• Dissatisfied customers
may “punish” by
dropping accounts



Does Satisfaction = Acquisition?

 Yes
Satisfaction Level vs. # Referrals Made
Within the Last Year

3.2 times more

Estimated conversion
rate of referrals to
1.75 times more new households =
2.5% - 3%



Does Service Climate = Employee Retention?

 Yes
6-month Teller and Rep Attrition by Overall Service
Climate Rating
6-month attrition rate

1.6 times higher
1.8 times higher
A working climate
that supports service
quality also creates
1-6 Rating
measurable financial
7-10 Rating
benefits.

Teller Sales Rep


Customer Impact Assessment (CIA)
A systematic approach for estimating and measuring project
“ripple effects”
CIA helps answer these questions
•
Which customers/employees are likely to be affected?
–
How will their experience be different from today?
–
What specific customer/employee behaviors and attitudes might change?
–
How are those changes to be measured?
–
What effect on revenue or cost will result?
–

CIA program consists of
•
On-line orientation course for executives and project sponsors
–
Full-day training course for project managers
–
Tools for hypothesis-development and impact calculation
–
Company data source directory
–
Project prioritization guidelines
–
CIA categories included in cost-benefit calculation
–


Some CIA case studies . . .
1. Emergency Card Replacement – Cost-saving project
• CIA reveals unexpected revenues

2. Back-office Consolidation – Efficiency project
• CIA mitigates expected negative impacts to customer and employee
satisfaction

3. Teller Training – Service Climate
• CIA reverses cost savings initiative


Case Study 1:
Emergency Card Replacement
Summary
•
As part of a service-level agreement with a new vendor, WaMu introduced
–
a new process for emergency replacement of debit cards

Primary objectives
•
Reduce cycle time to meet vendor requirements
–
Reduce cost of replacement through process efficiency improvements
–

Hypothesized “ripple effects”
•
Lower cost to serve through fewer calls and escalations
–
Greater fee revenue by providing card more quickly
–
Less negative and more positive word-of-mouth
–
Increased customer satisfaction
–


What CIA Uncovered
Decreased cost to serve
•
Savings of ~$12 per instance was achieved through reducing average
–
number of customer contacts required to get card
Savings of ~$1 per instance from fewer teller (rather than ATM)
–
transactions

Increased revenue
•
~$10 of lost fee income/instance was regained as a result of faster debit
–
card replacement

Attitudes and intentions
•
Increased customer satisfaction
–
Increased likelihood to recommend
–
Improved reputation relative to competitors
–
Improved word of mouth
–


Impact to Attitudes/Intentions
Distribution of Customer
Satisfaction Ratings
Before After
Critical incident results in bi-modal
satisfaction curve: they love us or hate us
% of Customers

ng
e

2

3

4

5

6

7

8

9
l
ab

di
an
pt
e

st
cc

ut
na

O
Impact of ECR Satisfaction on Word-of-Mouth
U

Number of People You Told About Your

14

12

10
Experience

8 Positive
Neutral/Mixed
6
Negative
Dissatisfied customers told 4

3 times more people about 2

the experience than 0
2

3

4

5

6

7

8

9

ng
le

delighted customers
b

di
ta

an
p
ce

st
c

ut
Satisfaction with Emergency Card Replacement Experience
na

O
U


Case Study 2:
Back-office Consolidation
Summary
•
Several loan fulfillment centers were closed; one new center was opened;
–
existing loan business was migrated to remaining centers.

Primary objectives
•
Increase operational efficiency
–
Decrease labor costs
–

CIA objective
•
Monitor changes in customer and loan officer satisfaction
–
Mitigate possible negative satisfaction impacts
–


Mitigating Customer Impact
Existing front-line
•
satisfaction survey was
All Fulfillment Centers Weekly OSAT
ramped up from monthly Before After
to weekly monitoring UCL=8.508
8.50

Satisfaction threshold
• 8.25

Individual Value
_
X=8.154
levels agreed on for
8.00
triggering action
LCL=7.799
7.75
Operational task force
•
monitored satisfaction 1
7.50

levels over 4-month 1 3 1 3 1 3 1 3 5 2 4 2 4
k k k k k k k k k k k k k
ee ee ee ee ee ee ee ee ee ee ee ee ee
W W W W W W W W W t W tW t W tW
period until transition ay ay une une July July Aug A ug Aug p p Oc Oc
Se Se
M M J J

reached steady-state C11

Satisfaction levels improved during
transition period


Case Study 3:
Teller Training – Service Climate
Summary
•
Overall Service Climate ratings among one department‟s employees
–
dropped significantly over 6-month period, from 6.56 to 5.98 (10-pt scale)
- Out of 35 questions on the survey, the largest decrease was
“Management encourages me to take training” (7.0 to 6.12)

Reason
•
- Management had cancelled training as a cost reduction effort

Result
•

Statistical analysis shows that employee satisfaction ratings are strongly
–
correlated to employee attrition
Attrition among exempt employees is nearly twice as high if Service
•
Climate rating is lower than 7 out of 10

Short term cost reduction outweighed
by the cost to replace/retrain/motivate staff

Cost of Low Satisfaction
Low Service Climate Rating = Higher Teller and PFR turnover
•
Direct correlation of multi-million dollar save to the business line
•
in replacement costs for tellers and PFRs

6-month Teller and PFR Turnover by
Overall Service Climate Rating
6-month turnover rate

.

Teller PFR

1 - 6 Rating 7 - 10 Rating


Conclusion
WaMu “Voice of the Customer” System in Action
VOC analytics aligned with business lines enables us to quantify
opportunities and risks in efficiency efforts by:
Initiating cross-functional collaboration
•

Facilitating the use of VOC to align initiatives
•

Assessing organizational support for providing effective service
•

Providing on-going analysis of Critical-to-Customer (CTC) priorities to
•
anticipate and monitor the effects of changes in service


Questions?

Thank You


Michael Matza, SVP
Service Excellence
206.849.4727


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