Why do companies need to manage the entire customer experience? New analysis reveals that the entire customer journey - the series of interactions with a brand - is more important than any single touchpoint experience. Leading companies identify and effectively manage a few "key journeys." When companies perfect managing the entire customer journey, they reap significant benefits—including enhanced customer and employee satisfaction, reduced customer churn, increased revenue, lower costs, improved organizational collaboration, and competitive advantage. Presented at the Harvard Business Review webinar. For more on customer decision journeys: http://mckinseyonmarketingandsales.com/topics/customer-decision-journey

1. Customer Journey
Transformation:
The idea, the impact & how to start
Any use of this material without specific permission of McKinsey & Company is strictly prohibited
September 2013
Presented on Harvard Business Review webinar

2. McKinsey & Company | 1
Today’s discussion
1
A Journey-based approach to customer
experience: what it is, and why it’s a better way
2 The path to impact: multiple wins across
CSAT, cost, revenue, and employee sat
3
How to get started: a practical approach to a
journey-based transformation

3. McKinsey & Company | 2
The Customer Journey concept
Product Marketing Online Retail Care
Customers interact with organizations on journeys that cut across individual
touchpoints that different functions tend to optimize
Onboarding journey
Problem resolution journey
Renewal and repurchase journey
1

4. McKinsey & Company | 3
Journey examples
▪ Onboarding
▪ Technical service
▪ Contract rolloff
▪ Address change
▪ Product upgrade
▪ Repair
▪ Billing
Anchored in how customers
think about it
An event that marks the
defining experience of key
life-cycles of a customer
Typically multi-touch, multi-
channel and cross-functional
An evolution in thinking over
traditional touchpoint (or
“moment of truth”) approaches
of customer interactions happen during
a multi-event, multi-channel journey>50%
What is a Customer Journey and how is it
different?
Customer
Journey
1

5. McKinsey & Company | 4
Touchpoints matter, but journeys matter
more
100
0
Day 90
CSAT performance at touchpoints vs. overall
Journey
Field services touch point CSAT
90
+
80
+
40
Onboarding journey
CSAT – 50% drop
over 1st 90 days
Day 1
Call center touch point CSAT
85
Percent first-time-right at each stage of
Installation journey
1
65%
90%
85%
95%
90%Logistics
Network
Field force
Sales
End-to-end
delivery

6. McKinsey & Company | 5
Journeys are 30% more strongly
correlated with business outcomes
Customer satisfaction
Willingness to Recommend
0.58
+36%0.43
0.60
+28%0.47
+19%
0.59
0.50
-0.25 +33%
-0.33
Likelihood to stay/renew
Likelihood to cancel/churn
1 Touchpoints
Journeys

7. McKinsey & Company | 6
Most companies face challenges in
delivering a full end-to-end experience
▪ Typically more than one person is responsible for the E2E experience
▪ Most companies are organized functionally and hard-wired to deliver
touchpoints
▪ At the frontline, limited visibility into customer outcomes and cross-
functional handoffs
▪ Metrics and incentives often touchpoint-based (e.g., first call
resolution, AHT, transactional satisfaction)
▪ Performance data often stored in silos and challenging to assess E2E
performance
1

8. McKinsey & Company | 7
Journey-led transformations deliver impact
across multiple dimensions
FUEL REVENUE GROWTH
Churn, upsell, acquisition
IMPROVE CUSTOMER SATISFACTION
ENGAGE EMPLOYEESLOWER COST TO SERVE
20 to 30%
15 to 20%
20% 10 to 15%
2

9. McKinsey & Company | 8
0%
2%
4%
6%
8%
10%
12%
14%
6.0 6.5 7.0 7.5 8.0
-2%
0%
2%
4%
6%
8%
8.0 8.4 8.8 9.2 9.6
Companies that excel in delivering journeys
tend to win in the market
SOURCE: 2011 McKinsey Multi-Industry Survey; company financial statements
1 Average of satisfaction with each company’s three key journeys
L
D
J
I
H
Journey satisfaction1, 2011
G
F
Revenue growth – PayTV industry
2011 vs. 2010
Revenue growth – Insurance industry
2011 vs. 2010
Journey satisfaction1, 2011
N
M
E
K
C
B
A
2

10. McKinsey & Company | 9
Customer
“Journeys”
3
6
5
4
1
Define a clear, compelling value
proposition-delivered through Journeys
Continuously
innovate the end-
to-end Journey
experiences
Use Journeys
to define
metrics and
governance
system
Optimize
operational
processes &
systems to ensure
consistent delivery
Use Journeys to reinforce
front-line culture
Companies who excel at delivering customer
experience display six hallmarks
2
2
Know the Journeys
that matter, and
why they matter

11. McKinsey & Company | 10
Sign up (sales) Welcome (care) Install (field)
First Bill
(care, billing)
Journey
Leakage
100%
90% 81%
72%
63%
90%
90%
90% 90%
One company transformed their onboarding
journey
Pain
points
▪ Long call, many
T&Cs
▪ Many options
on pricing/
product
▪ Multiple
handoffs
▪ Multiple calls
for new
customers
▪ Missed
appointments
▪ Sales price vs.
what is billed
▪ How to use
2

12. McKinsey & Company | 11
Impact
A car rental company worked to
deliver speed in the airport pickup journey
▪ Identified “on-site rental” as journey that
mattered and speed as key driver
▪ Journey fundamentally multi-touch – web
booking, call center, bus, car
selection, checkout – no one touch owned
“speed”
▪ Drove cross-functional program to
differentiate on speed:
– Pilot program in several locations with all
functions
– Frontline-led, lean process management to
generate innovation ideas
– Developed “playbook” for all locations
– Each region sponsored by one member of
exec team
On-site rental CSAT
Index
Growth
in service
revenue
Labor cost
-10%+
5%+
2
100
AfterBefore
190

13. McKinsey & Company | 12
78%
100% -22%
80
100 -20%7,8+13%
End of pilotBaseline
6,9
2,7
+35%
After the pilotBefore the pilot
2,0
17%
100%
-83%
End of pilotBaseline
Overall CSAT
Index
Employee satisfaction score
(sales back-office)
Response average (scale of 1 to 4)
Installation waiting time
Index
Repeat work rate
index
Problem calls
Clients with 4+ calls in 6 days, indexed
SOURCE: McKinsey
A telecom redesigned their installation
journey to drive efficiency
2

14. McKinsey & Company | 13
A four-part approach to Journey-based
transformation
TIMING
SOURCE: McKinsey Customer Experience Service Line
Identify key journeys
Understand current
performance
Redesign experience and
engage front line
Sustain at scale
▪ Define clear CE
objective
▪ Top-down Exec
sessions
▪ Launch bottom-up
quant research
▪ Map key journeys
▪ Diagnose
performance
▪ Identify pain points
▪ Size, prioritize
opportunities
▪ Launch cross-
functional teams
(root cause analysis)
▪ Engage frontline &
pilot
▪ Engage customers
▪ Track impact
▪ Set longer-term
impact aspiration
▪ Cascade journey
metrics
▪ Adjust organization
(if needed)
▪ Implement
solutions at scale
▪ Drive continuous
improvement
3-6 months 12-18 months
3

15. McKinsey & Company | 14
Top-down approach: pick 1-2 journeys to
start
SOURCE: McKinsey Customer Experience Service Line
JOURNEY EXAMPLES COMPANY OBJECTIVE CUSTOMER OBJECTIVE
▪ Acquire the right customer, build
engagement, and bill with minimal
cost
Onboarding
▪ Get up and running painlessly at my
own pace, with no surprises and minimal
effort
▪ Bill and collect accurately and quickly
Making a
payment
▪ Consistent, transparent bill, with flexible
options; company willing to work with
me to maximize value
▪ Set up the move, retain the right
customers, complete the move, and
collect payment
Moving
▪ Simple, smooth, hassle-free move with
no hidden fees or administrative burden
▪ Identify, communicate, and
implement the required change in a
timely manner
Changes
Price, terms, or
product
▪ Easy to flex product to meet evolving
needs, mine to manage, with transparent
pricing and recognized loyalty
▪ Take the call, fix the issue, teach
self-help over time
Resolving a
problem
▪ Solve my problem, help me understand
why it happened and how to
prevent, and follow through to confirm
the fix
3

16. McKinsey & Company | 15
Bottom-up analysis to capture customer
priorities
3
How to get started
▪ Select subset of journeys to
focus on, with narrow scope of
channels and touchpoints
▪ Assemble cross-functional
dataset
▪ Ensure data across all sources
can be linked at subscriber
level
▪ Identify most common paths,
sources of leakage, and
contribution to end-objective

17. McKinsey & Company | 16
Drive cross-functional performance in each
Journey, all the way to the front line
▪ Take a customer perspective across the chain
▪ Capture as much customer feedback as possible
▪ Simplify and standardize end-to-end process
▪ Define a cadence for end-to-end improvements
▪ Set clear objectives for the entire end-to-end chain
▪ Translate objectives into cascading KPIs
▪ Define clear governance, roles and responsibilities
▪ Build capabilities, e.g., problem-solving, advocacy
▪ Work together across the entire chain
▪ Increase role-modeling and coaching by managers
Process
Efficiency
Voice of the
Customer
Organization
& Skills
Mindsets &
Behavior
Performance
Management
3

18. McKinsey & Company | 17
Why this approach works
SOURCE: McKinsey Customer Experience Service Line
▪ End-to-end Journey teams inherently cross-functional
▪ Journey-based approach forces a rethinking of org boundaries
▪ Outcomes & metrics cut across silos, often in new ways
Forces cross-
functional
design at
working level
▪ Program typically sponsored by CEO, with dedicated CE leader
▪ All executive team members sponsor cross-functional initiatives
▪ Single journey fact base forces all functions/execs to come to the table
Drives top-
down
leadership
commitment
Engages the
frontline
▪ Frontline teams empowered to design & test solutions
▪ Creates culture of innovation and ownership
Forces focus
and
prioritization
▪ Prioritizes initiatives for rapid impact at scale
▪ Strained process/policy/IT roadmaps have to be streamlined
▪ Sacred cows within siloes cannot be hidden / defended
3

19. McKinsey & Company | 18
A recap of our discussion:
1
A Journey-based approach to customer
experience: what it is, and why it’s a better way
2 The path to impact: multiple wins across
CSAT, cost, revenue, and employee sat
3
How to get started: a practical approach to a
journey-based transformation

20. McKinsey & Company | 19
Questions?

21. McKinsey & Company | 20
Staying Connected
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@EwanRDuncan
@McK_MktgSales
www.McKinseyonMarketing&Sales.com
www.youtube.com/McKinseyCMSO
Forum
www.slideshare.net/
McK_CMSOForum
Principal, Dublin
Conor_Jones@mckinsey.com
Principal, Seattle
Alex_Rawson@mckinsey.com