5 Ways Field Service Supports Top-Notch Customer Service

Lisa James

Sales organizations are often well-oiled machines, delivering the right product at the right time to customers. Keeping customers happy after the sale, by providing customer care that positively reflects the promises made during sales and by the larger brand, can be more challenging. Field service either delivers on these promises or undermines these efforts and brings down customer satisfaction.

Successful field service delivers the right people to the right jobs and is backed by the right parts and knowledge to get the job done. Ultimately, customers should consistently get the results they need, regardless of whether service is over the phone, in the field, or via chat, online messaging, social media, or email.

To build a successful field service model that provides excellent customer service throughout the customer lifecycle, put these five top field service considerations on your agenda.

1. Proactive service

A proactive field service model offers more to the customer, reducing the time between insight and action, while providing greater product knowledge for maintenance and repair. From knowing what service level agreements are needed to having remote sensors tip off field service techs when a repair or maintenance action is required, proactive field service stays ahead of the customer. This intelligence relieves the customer of work and increases satisfaction with service.

Field service technicians encounter unpredictable situations – stalled equipment, overheating equipment, malfunctioning systems, and insufficient safety protection. Even when unpredictable problems arise, having customer insight and data accessible to field service more ably addresses any issues and prevents further equipment damage.

2. Transparency

Scheduling field service is often the first hurdle customers and managers have to overcome. Nothing creates customer dissatisfaction faster than repair delays, which cause operational outages and lost revenue. In oil and gas, for example, idle equipment can cost millions. The right systems create transparency between customers, technicians, managers, and other key parties, so there are no mysteries about why a tech is running late or a part isn’t yet delivered. A tool that gives customers, technicians, and managers insight into scheduling goes a long way to smoothing out scheduling problems, both in terms of technician workload and reducing customer wait times.

By offering your customers the ability to schedule appointments based on their availability, then syncing that appointment to the technicians’ and managers’ calendars, removes a significant roadblock to customer satisfaction.

3. On-site and off-site collaboration

Providing links between off-site field service technicians and in-office expertise and data is critical. At a customer site, field technician calls plagued by limited access to customer service history, parts, and repairs knowledge and predictive maintenance data are more costly for the customer. The faster and more effective field service can deliver customer service, the happier the customer.

Create systems to streamline and automate collaboration between mobile technicians, managers, and in-office experts. Give technicians access to service history, equipment knowledge, and all the tools they need to make the repairs and move on to the next customer. Get control of field service by leveraging technology to create bridges between knowledge silos within an organization.

4. Flexibility

The onsite technician is the first point of in-person contact with the customer. The ability to access service data, check stock, take surveys, generate billing, get relevant signatures, access knowledge, and communicate directly with the right people at the right time requires access to the right tools. Having the flexibility to respond across channels to real-time issues is invaluable.

Field service technicians who can access needed data only when online, but who are outside the reach of wireless connections, deep within the bowels of an HVAC system, are stuck. A technician armed with the mobile tools they need, regardless of the ability to access online resources, is better prepared to meet whatever contingency arises.

5. Actionable performance improvements

Excellent customer service that’s constantly improving and responding to changing circumstances in the wider industry and within a customer’s organization can identify, address, and fix logjams in short order. Identifying KPIs and measuring them consistently is one thing. Turning them into actionable performance improvements is the more difficult task.

Measuring service delivery (time onsite, customer satisfaction, predictive and preventive maintenance outcomes, cost of repairs over time, field service safety, etc.) against targets highlights problematic areas, people, and products and helps organizations identify solutions more quickly.

Resolving field service technician performance problems, critical equipment supply issues, ongoing safety concerns, and systemic service delivery revenue shortfalls are only a few of the issues field service organizations face. Creating the right KPIs with the right feedback loops increases efficiency and ultimately increases customer satisfaction.

Getting control of field service management isn’t easy. Taking actions on these considerations lays the groundwork for operational improvements and increased customer loyalty and happiness.

Artificial intelligence is a key element in customer experience delivery. To use it successfully, try these 5 Steps to Your Customer’s Heart with Emotionally Aware Computing.

Comments

Lisa James

About Lisa James

Lisa James develops suitable strategy, messaging and positioning to support respective business and pipeline objectives for SAP Hybris solutions. She is an expert and recognized thought leader and evangelist inside SAP, influencing internal solution innovations, core marketing strategies, and external company perception.

Are Your Customer Service Reps Eating The Marshmallow?

Adam Toporek

In yesterday’s Monday Motivation, a Monday email sent to subscribers to our eNewsletter The Customer Conversation, we spoke about Walter Mischel’s famous  experiment on self-control marshamallowsand delayed gratification in children. Here is part of the email:

Researcher Walter Mischel at Stanford devised an ingenious experience back in the 60’s to test self-control and the ability to delay gratification in children. He put a marshmallow in front of a child and told them they could either eat the marshmallow or wait up to 20 minutes and then get two marshmallows. Most kids couldn’t wait.

However, a few could, and the researchers found something interesting about those who could: Later in life they seemed more successful across every metric measured than those who could not delay gratification. Those who gave in quickly:

  • Got lower S.A.T. Scores
  • Struggled in stressful situations
  • Had trouble paying attention
  • Had difficulty maintaining friendships

Easy service marshmallows

In Mischel’s study, those who could delay gratification got higher rewards in the end. Unfortunately, frontline service reps take the one easy marshmallow too often and cost organizations and themselves the two marshmallows that would follow from delaying gratification.

In customer service, this dynamic occurs in a number of ways. For instance, it is practiced by the frontline rep who…

  • Gives a comp or refund early to fix a problem but never addresses the underlying issue
  • Doesn’t take the extra time to document a service issue so that the next rep will have the whole story
  • Tells the customer that they’re unable to accommodate their request without taking the time to tell them what they can do

In customer service, easy marshmallows are all around. It’s easy to offer an apology and a sincere word to get you through the moment, without putting forth the effort to uncover issues beneath the surface or (in an act requiring even more self discipline) attempting to preempt or forward resolve future issues.

Two-marshmallow thinking

What can organizational leaders do to encourage two-marshmallow thinking?

First, encourage reps to ask open-ended questions — to care about understanding the customer and not just resolving the issue at hand.

Second, make sure operational metrics are not encouraging one-marshmallow thinking. For example, a call center that blindly focuses on first contact resolution to the exclusion of everything else will generally discourage any attempt to uncover other issues or to try to preempt future issues. The drive to check the “resolved” box is too strong.

In customer service, it’s always easiest to eat the marshmallow on the table in front of us. It’s just rarely the way to get the biggest payoff.

Want more customer-focused strategies that drive business? See 4 Ways to Make Customer Experience the Heart of Your Business.

Comments

Are Your Customer Service Reps Eating The Marshmallow?

Adam Toporek

In yesterday’s Monday Motivation, a Monday email sent to subscribers to our eNewsletter The Customer Conversation, we spoke about Walter Mischel’s famous  experiment on self-control marshamallowsand delayed gratification in children. Here is part of the email:

Researcher Walter Mischel at Stanford devised an ingenious experience back in the 60’s to test self-control and the ability to delay gratification in children. He put a marshmallow in front of a child and told them they could either eat the marshmallow or wait up to 20 minutes and then get two marshmallows. Most kids couldn’t wait.

However, a few could, and the researchers found something interesting about those who could: Later in life they seemed more successful across every metric measured than those who could not delay gratification. Those who gave in quickly:

  • Got lower S.A.T. Scores
  • Struggled in stressful situations
  • Had trouble paying attention
  • Had difficulty maintaining friendships

Easy service marshmallows

In Mischel’s study, those who could delay gratification got higher rewards in the end. Unfortunately, frontline service reps take the one easy marshmallow too often and cost organizations and themselves the two marshmallows that would follow from delaying gratification.

In customer service, this dynamic occurs in a number of ways. For instance, it is practiced by the frontline rep who…

  • Gives a comp or refund early to fix a problem but never addresses the underlying issue
  • Doesn’t take the extra time to document a service issue so that the next rep will have the whole story
  • Tells the customer that they’re unable to accommodate their request without taking the time to tell them what they can do

In customer service, easy marshmallows are all around. It’s easy to offer an apology and a sincere word to get you through the moment, without putting forth the effort to uncover issues beneath the surface or (in an act requiring even more self discipline) attempting to preempt or forward resolve future issues.

Two-marshmallow thinking

What can organizational leaders do to encourage two-marshmallow thinking?

First, encourage reps to ask open-ended questions — to care about understanding the customer and not just resolving the issue at hand.

Second, make sure operational metrics are not encouraging one-marshmallow thinking. For example, a call center that blindly focuses on first contact resolution to the exclusion of everything else will generally discourage any attempt to uncover other issues or to try to preempt future issues. The drive to check the “resolved” box is too strong.

In customer service, it’s always easiest to eat the marshmallow on the table in front of us. It’s just rarely the way to get the biggest payoff.

Want more customer-focused strategies that drive business? See 4 Ways to Make Customer Experience the Heart of Your Business.

Comments

Julie Stoughton

About Julie Stoughton

Julie Stoughton is the Head of Telecommunications Marketing & Communications at SAP. She is a seasoned professional with 16 years of marketing and product marketing experience in software and media technologies. Julie's specialties include strategic market development, positioning and messaging, customer segmentation, product launches, ROI analysis, and go-to-market execution.

Are Your Customer Service Reps Eating The Marshmallow?

Adam Toporek

In yesterday’s Monday Motivation, a Monday email sent to subscribers to our eNewsletter The Customer Conversation, we spoke about Walter Mischel’s famous  experiment on self-control marshamallowsand delayed gratification in children. Here is part of the email:

Researcher Walter Mischel at Stanford devised an ingenious experience back in the 60’s to test self-control and the ability to delay gratification in children. He put a marshmallow in front of a child and told them they could either eat the marshmallow or wait up to 20 minutes and then get two marshmallows. Most kids couldn’t wait.

However, a few could, and the researchers found something interesting about those who could: Later in life they seemed more successful across every metric measured than those who could not delay gratification. Those who gave in quickly:

  • Got lower S.A.T. Scores
  • Struggled in stressful situations
  • Had trouble paying attention
  • Had difficulty maintaining friendships

Easy service marshmallows

In Mischel’s study, those who could delay gratification got higher rewards in the end. Unfortunately, frontline service reps take the one easy marshmallow too often and cost organizations and themselves the two marshmallows that would follow from delaying gratification.

In customer service, this dynamic occurs in a number of ways. For instance, it is practiced by the frontline rep who…

  • Gives a comp or refund early to fix a problem but never addresses the underlying issue
  • Doesn’t take the extra time to document a service issue so that the next rep will have the whole story
  • Tells the customer that they’re unable to accommodate their request without taking the time to tell them what they can do

In customer service, easy marshmallows are all around. It’s easy to offer an apology and a sincere word to get you through the moment, without putting forth the effort to uncover issues beneath the surface or (in an act requiring even more self discipline) attempting to preempt or forward resolve future issues.

Two-marshmallow thinking

What can organizational leaders do to encourage two-marshmallow thinking?

First, encourage reps to ask open-ended questions — to care about understanding the customer and not just resolving the issue at hand.

Second, make sure operational metrics are not encouraging one-marshmallow thinking. For example, a call center that blindly focuses on first contact resolution to the exclusion of everything else will generally discourage any attempt to uncover other issues or to try to preempt future issues. The drive to check the “resolved” box is too strong.

In customer service, it’s always easiest to eat the marshmallow on the table in front of us. It’s just rarely the way to get the biggest payoff.

Want more customer-focused strategies that drive business? See 4 Ways to Make Customer Experience the Heart of Your Business.

Comments

Are Your Customer Service Reps Eating The Marshmallow?

Adam Toporek

In yesterday’s Monday Motivation, a Monday email sent to subscribers to our eNewsletter The Customer Conversation, we spoke about Walter Mischel’s famous  experiment on self-control marshamallowsand delayed gratification in children. Here is part of the email:

Researcher Walter Mischel at Stanford devised an ingenious experience back in the 60’s to test self-control and the ability to delay gratification in children. He put a marshmallow in front of a child and told them they could either eat the marshmallow or wait up to 20 minutes and then get two marshmallows. Most kids couldn’t wait.

However, a few could, and the researchers found something interesting about those who could: Later in life they seemed more successful across every metric measured than those who could not delay gratification. Those who gave in quickly:

  • Got lower S.A.T. Scores
  • Struggled in stressful situations
  • Had trouble paying attention
  • Had difficulty maintaining friendships

Easy service marshmallows

In Mischel’s study, those who could delay gratification got higher rewards in the end. Unfortunately, frontline service reps take the one easy marshmallow too often and cost organizations and themselves the two marshmallows that would follow from delaying gratification.

In customer service, this dynamic occurs in a number of ways. For instance, it is practiced by the frontline rep who…

  • Gives a comp or refund early to fix a problem but never addresses the underlying issue
  • Doesn’t take the extra time to document a service issue so that the next rep will have the whole story
  • Tells the customer that they’re unable to accommodate their request without taking the time to tell them what they can do

In customer service, easy marshmallows are all around. It’s easy to offer an apology and a sincere word to get you through the moment, without putting forth the effort to uncover issues beneath the surface or (in an act requiring even more self discipline) attempting to preempt or forward resolve future issues.

Two-marshmallow thinking

What can organizational leaders do to encourage two-marshmallow thinking?

First, encourage reps to ask open-ended questions — to care about understanding the customer and not just resolving the issue at hand.

Second, make sure operational metrics are not encouraging one-marshmallow thinking. For example, a call center that blindly focuses on first contact resolution to the exclusion of everything else will generally discourage any attempt to uncover other issues or to try to preempt future issues. The drive to check the “resolved” box is too strong.

In customer service, it’s always easiest to eat the marshmallow on the table in front of us. It’s just rarely the way to get the biggest payoff.

Want more customer-focused strategies that drive business? See 4 Ways to Make Customer Experience the Heart of Your Business.

Comments

Jennifer Horowitz

About Jennifer Horowitz

Jennifer Horowitz is a journalist with over 15 years of experience working in the technology, financial, hospitality, real estate, healthcare, manufacturing, not for profit, and retail sectors. She specializes in the field of analytics, offering management consulting serving global clients from midsize to large-scale organizations. Within the field of analytics, she helps higher-level organizations define their metrics strategies, create concepts, define problems, conduct analysis, problem solve, and execute.

Are Your Customer Service Reps Eating The Marshmallow?

Adam Toporek

In yesterday’s Monday Motivation, a Monday email sent to subscribers to our eNewsletter The Customer Conversation, we spoke about Walter Mischel’s famous  experiment on self-control marshamallowsand delayed gratification in children. Here is part of the email:

Researcher Walter Mischel at Stanford devised an ingenious experience back in the 60’s to test self-control and the ability to delay gratification in children. He put a marshmallow in front of a child and told them they could either eat the marshmallow or wait up to 20 minutes and then get two marshmallows. Most kids couldn’t wait.

However, a few could, and the researchers found something interesting about those who could: Later in life they seemed more successful across every metric measured than those who could not delay gratification. Those who gave in quickly:

  • Got lower S.A.T. Scores
  • Struggled in stressful situations
  • Had trouble paying attention
  • Had difficulty maintaining friendships

Easy service marshmallows

In Mischel’s study, those who could delay gratification got higher rewards in the end. Unfortunately, frontline service reps take the one easy marshmallow too often and cost organizations and themselves the two marshmallows that would follow from delaying gratification.

In customer service, this dynamic occurs in a number of ways. For instance, it is practiced by the frontline rep who…

  • Gives a comp or refund early to fix a problem but never addresses the underlying issue
  • Doesn’t take the extra time to document a service issue so that the next rep will have the whole story
  • Tells the customer that they’re unable to accommodate their request without taking the time to tell them what they can do

In customer service, easy marshmallows are all around. It’s easy to offer an apology and a sincere word to get you through the moment, without putting forth the effort to uncover issues beneath the surface or (in an act requiring even more self discipline) attempting to preempt or forward resolve future issues.

Two-marshmallow thinking

What can organizational leaders do to encourage two-marshmallow thinking?

First, encourage reps to ask open-ended questions — to care about understanding the customer and not just resolving the issue at hand.

Second, make sure operational metrics are not encouraging one-marshmallow thinking. For example, a call center that blindly focuses on first contact resolution to the exclusion of everything else will generally discourage any attempt to uncover other issues or to try to preempt future issues. The drive to check the “resolved” box is too strong.

In customer service, it’s always easiest to eat the marshmallow on the table in front of us. It’s just rarely the way to get the biggest payoff.

Want more customer-focused strategies that drive business? See 4 Ways to Make Customer Experience the Heart of Your Business.

Comments

Phil King

About Phil King

Drawing from his 30 years of experience in IT and public sector organizations, Phil King is the Sales Director for the Public Sector in the UK and Ireland at SAP. He is passionate about working with the public sector to drive innovation that improves people’s lives and makes the world a better place.

Are Your Customer Service Reps Eating The Marshmallow?

Adam Toporek

In yesterday’s Monday Motivation, a Monday email sent to subscribers to our eNewsletter The Customer Conversation, we spoke about Walter Mischel’s famous  experiment on self-control marshamallowsand delayed gratification in children. Here is part of the email:

Researcher Walter Mischel at Stanford devised an ingenious experience back in the 60’s to test self-control and the ability to delay gratification in children. He put a marshmallow in front of a child and told them they could either eat the marshmallow or wait up to 20 minutes and then get two marshmallows. Most kids couldn’t wait.

However, a few could, and the researchers found something interesting about those who could: Later in life they seemed more successful across every metric measured than those who could not delay gratification. Those who gave in quickly:

  • Got lower S.A.T. Scores
  • Struggled in stressful situations
  • Had trouble paying attention
  • Had difficulty maintaining friendships

Easy service marshmallows

In Mischel’s study, those who could delay gratification got higher rewards in the end. Unfortunately, frontline service reps take the one easy marshmallow too often and cost organizations and themselves the two marshmallows that would follow from delaying gratification.

In customer service, this dynamic occurs in a number of ways. For instance, it is practiced by the frontline rep who…

  • Gives a comp or refund early to fix a problem but never addresses the underlying issue
  • Doesn’t take the extra time to document a service issue so that the next rep will have the whole story
  • Tells the customer that they’re unable to accommodate their request without taking the time to tell them what they can do

In customer service, easy marshmallows are all around. It’s easy to offer an apology and a sincere word to get you through the moment, without putting forth the effort to uncover issues beneath the surface or (in an act requiring even more self discipline) attempting to preempt or forward resolve future issues.

Two-marshmallow thinking

What can organizational leaders do to encourage two-marshmallow thinking?

First, encourage reps to ask open-ended questions — to care about understanding the customer and not just resolving the issue at hand.

Second, make sure operational metrics are not encouraging one-marshmallow thinking. For example, a call center that blindly focuses on first contact resolution to the exclusion of everything else will generally discourage any attempt to uncover other issues or to try to preempt future issues. The drive to check the “resolved” box is too strong.

In customer service, it’s always easiest to eat the marshmallow on the table in front of us. It’s just rarely the way to get the biggest payoff.

Want more customer-focused strategies that drive business? See 4 Ways to Make Customer Experience the Heart of Your Business.

Comments

Richard McLean

About Richard McLean

Richard McLean, regional CFO for SAP Asia Pacific Japan, oversees all key finance and administrative functions for field and regional headquarters, supporting more than 16,000 employees. He has more than 20 years of experience in senior finance roles with leading global companies across a range of industries, including financial services, investment banking, automotive, and IT. He joined SAP in 2008.

Are Your Customer Service Reps Eating The Marshmallow?

Adam Toporek

In yesterday’s Monday Motivation, a Monday email sent to subscribers to our eNewsletter The Customer Conversation, we spoke about Walter Mischel’s famous  experiment on self-control marshamallowsand delayed gratification in children. Here is part of the email:

Researcher Walter Mischel at Stanford devised an ingenious experience back in the 60’s to test self-control and the ability to delay gratification in children. He put a marshmallow in front of a child and told them they could either eat the marshmallow or wait up to 20 minutes and then get two marshmallows. Most kids couldn’t wait.

However, a few could, and the researchers found something interesting about those who could: Later in life they seemed more successful across every metric measured than those who could not delay gratification. Those who gave in quickly:

  • Got lower S.A.T. Scores
  • Struggled in stressful situations
  • Had trouble paying attention
  • Had difficulty maintaining friendships

Easy service marshmallows

In Mischel’s study, those who could delay gratification got higher rewards in the end. Unfortunately, frontline service reps take the one easy marshmallow too often and cost organizations and themselves the two marshmallows that would follow from delaying gratification.

In customer service, this dynamic occurs in a number of ways. For instance, it is practiced by the frontline rep who…

  • Gives a comp or refund early to fix a problem but never addresses the underlying issue
  • Doesn’t take the extra time to document a service issue so that the next rep will have the whole story
  • Tells the customer that they’re unable to accommodate their request without taking the time to tell them what they can do

In customer service, easy marshmallows are all around. It’s easy to offer an apology and a sincere word to get you through the moment, without putting forth the effort to uncover issues beneath the surface or (in an act requiring even more self discipline) attempting to preempt or forward resolve future issues.

Two-marshmallow thinking

What can organizational leaders do to encourage two-marshmallow thinking?

First, encourage reps to ask open-ended questions — to care about understanding the customer and not just resolving the issue at hand.

Second, make sure operational metrics are not encouraging one-marshmallow thinking. For example, a call center that blindly focuses on first contact resolution to the exclusion of everything else will generally discourage any attempt to uncover other issues or to try to preempt future issues. The drive to check the “resolved” box is too strong.

In customer service, it’s always easiest to eat the marshmallow on the table in front of us. It’s just rarely the way to get the biggest payoff.

Want more customer-focused strategies that drive business? See 4 Ways to Make Customer Experience the Heart of Your Business.

Comments

Catherine Lynch

About Catherine Lynch

Catherine Lynch is a Senior Director of Industry Cloud Marketing at SAP. She is a content marketing specialist with a particular focus on the professional services and media industries globally. Catherine has a wide international experience of working with enterprise application vendors in global roles, creating thought leadership and is a social media practitioner.

Are Your Customer Service Reps Eating The Marshmallow?

Adam Toporek

In yesterday’s Monday Motivation, a Monday email sent to subscribers to our eNewsletter The Customer Conversation, we spoke about Walter Mischel’s famous  experiment on self-control marshamallowsand delayed gratification in children. Here is part of the email:

Researcher Walter Mischel at Stanford devised an ingenious experience back in the 60’s to test self-control and the ability to delay gratification in children. He put a marshmallow in front of a child and told them they could either eat the marshmallow or wait up to 20 minutes and then get two marshmallows. Most kids couldn’t wait.

However, a few could, and the researchers found something interesting about those who could: Later in life they seemed more successful across every metric measured than those who could not delay gratification. Those who gave in quickly:

  • Got lower S.A.T. Scores
  • Struggled in stressful situations
  • Had trouble paying attention
  • Had difficulty maintaining friendships

Easy service marshmallows

In Mischel’s study, those who could delay gratification got higher rewards in the end. Unfortunately, frontline service reps take the one easy marshmallow too often and cost organizations and themselves the two marshmallows that would follow from delaying gratification.

In customer service, this dynamic occurs in a number of ways. For instance, it is practiced by the frontline rep who…

  • Gives a comp or refund early to fix a problem but never addresses the underlying issue
  • Doesn’t take the extra time to document a service issue so that the next rep will have the whole story
  • Tells the customer that they’re unable to accommodate their request without taking the time to tell them what they can do

In customer service, easy marshmallows are all around. It’s easy to offer an apology and a sincere word to get you through the moment, without putting forth the effort to uncover issues beneath the surface or (in an act requiring even more self discipline) attempting to preempt or forward resolve future issues.

Two-marshmallow thinking

What can organizational leaders do to encourage two-marshmallow thinking?

First, encourage reps to ask open-ended questions — to care about understanding the customer and not just resolving the issue at hand.

Second, make sure operational metrics are not encouraging one-marshmallow thinking. For example, a call center that blindly focuses on first contact resolution to the exclusion of everything else will generally discourage any attempt to uncover other issues or to try to preempt future issues. The drive to check the “resolved” box is too strong.

In customer service, it’s always easiest to eat the marshmallow on the table in front of us. It’s just rarely the way to get the biggest payoff.

Want more customer-focused strategies that drive business? See 4 Ways to Make Customer Experience the Heart of Your Business.

Comments

Are Your Customer Service Reps Eating The Marshmallow?

Adam Toporek

In yesterday’s Monday Motivation, a Monday email sent to subscribers to our eNewsletter The Customer Conversation, we spoke about Walter Mischel’s famous  experiment on self-control marshamallowsand delayed gratification in children. Here is part of the email:

Researcher Walter Mischel at Stanford devised an ingenious experience back in the 60’s to test self-control and the ability to delay gratification in children. He put a marshmallow in front of a child and told them they could either eat the marshmallow or wait up to 20 minutes and then get two marshmallows. Most kids couldn’t wait.

However, a few could, and the researchers found something interesting about those who could: Later in life they seemed more successful across every metric measured than those who could not delay gratification. Those who gave in quickly:

  • Got lower S.A.T. Scores
  • Struggled in stressful situations
  • Had trouble paying attention
  • Had difficulty maintaining friendships

Easy service marshmallows

In Mischel’s study, those who could delay gratification got higher rewards in the end. Unfortunately, frontline service reps take the one easy marshmallow too often and cost organizations and themselves the two marshmallows that would follow from delaying gratification.

In customer service, this dynamic occurs in a number of ways. For instance, it is practiced by the frontline rep who…

  • Gives a comp or refund early to fix a problem but never addresses the underlying issue
  • Doesn’t take the extra time to document a service issue so that the next rep will have the whole story
  • Tells the customer that they’re unable to accommodate their request without taking the time to tell them what they can do

In customer service, easy marshmallows are all around. It’s easy to offer an apology and a sincere word to get you through the moment, without putting forth the effort to uncover issues beneath the surface or (in an act requiring even more self discipline) attempting to preempt or forward resolve future issues.

Two-marshmallow thinking

What can organizational leaders do to encourage two-marshmallow thinking?

First, encourage reps to ask open-ended questions — to care about understanding the customer and not just resolving the issue at hand.

Second, make sure operational metrics are not encouraging one-marshmallow thinking. For example, a call center that blindly focuses on first contact resolution to the exclusion of everything else will generally discourage any attempt to uncover other issues or to try to preempt future issues. The drive to check the “resolved” box is too strong.

In customer service, it’s always easiest to eat the marshmallow on the table in front of us. It’s just rarely the way to get the biggest payoff.

Want more customer-focused strategies that drive business? See 4 Ways to Make Customer Experience the Heart of Your Business.

Comments

Paul Kurchina

About Paul Kurchina

Paul Kurchina is a community builder and evangelist with the Americas’ SAP Users Group (ASUG), responsible for developing a change management program for ASUG members.

Are Your Customer Service Reps Eating The Marshmallow?

Adam Toporek

In yesterday’s Monday Motivation, a Monday email sent to subscribers to our eNewsletter The Customer Conversation, we spoke about Walter Mischel’s famous  experiment on self-control marshamallowsand delayed gratification in children. Here is part of the email:

Researcher Walter Mischel at Stanford devised an ingenious experience back in the 60’s to test self-control and the ability to delay gratification in children. He put a marshmallow in front of a child and told them they could either eat the marshmallow or wait up to 20 minutes and then get two marshmallows. Most kids couldn’t wait.

However, a few could, and the researchers found something interesting about those who could: Later in life they seemed more successful across every metric measured than those who could not delay gratification. Those who gave in quickly:

  • Got lower S.A.T. Scores
  • Struggled in stressful situations
  • Had trouble paying attention
  • Had difficulty maintaining friendships

Easy service marshmallows

In Mischel’s study, those who could delay gratification got higher rewards in the end. Unfortunately, frontline service reps take the one easy marshmallow too often and cost organizations and themselves the two marshmallows that would follow from delaying gratification.

In customer service, this dynamic occurs in a number of ways. For instance, it is practiced by the frontline rep who…

  • Gives a comp or refund early to fix a problem but never addresses the underlying issue
  • Doesn’t take the extra time to document a service issue so that the next rep will have the whole story
  • Tells the customer that they’re unable to accommodate their request without taking the time to tell them what they can do

In customer service, easy marshmallows are all around. It’s easy to offer an apology and a sincere word to get you through the moment, without putting forth the effort to uncover issues beneath the surface or (in an act requiring even more self discipline) attempting to preempt or forward resolve future issues.

Two-marshmallow thinking

What can organizational leaders do to encourage two-marshmallow thinking?

First, encourage reps to ask open-ended questions — to care about understanding the customer and not just resolving the issue at hand.

Second, make sure operational metrics are not encouraging one-marshmallow thinking. For example, a call center that blindly focuses on first contact resolution to the exclusion of everything else will generally discourage any attempt to uncover other issues or to try to preempt future issues. The drive to check the “resolved” box is too strong.

In customer service, it’s always easiest to eat the marshmallow on the table in front of us. It’s just rarely the way to get the biggest payoff.

Want more customer-focused strategies that drive business? See 4 Ways to Make Customer Experience the Heart of Your Business.

Comments

Cheap Gas, Electric Cars, And Customer Experience

gregory yankelovich

Even if you sell a commodity, customer experience often outweighs price considerations. Just because the term customer experience management (CEM) is  relatively new to corporate vocabulary, the power of “experience” is not lost on marketing professionals. The world of marketing is drastically changing, moving away from the hype of novelty and awareness-building through branding and advertising and toward  the creation of loyalty through great customer experiences.

As oil prices impact every element of the world Cheap gaseconomy, and markets expect the depressed levels to last for at least a decade, the future of alternative energy technologies being questioned. Sales of electric and hybrid cars  are dipping, seemingly in concert with oil prices, and auto industry analysts are trying to assess whether or not cheap gas will kill the demand for such vehicles.

It is important to remember that even at the near-record high of gas prices, customer retention of hybrid vehicles was only 35%. Specifically, Prius owners’ loyalty in 2012 was only 25%.

“Only 30.9% of hybrid drivers traded in for another gas-electric model in the third quarter of 2011, when gas prices were stable. But as prices at the pump surged in the final three months of that year, so did hybrid car repurchases, leading to a 40.1% loyalty rate.”

It is easy to see correlations between gas prices and sales of electric vehicles, but perhaps it is a mistake to take these as the causation.

It is true that sales of electric cars from Nissan (Leaf) are 20% down this year and gas-electric hybrid Chevy Volt’s are down 50%. However, the demand for Tesla Model S is stronger than ever, and sales are up 35% during the first quarter of 2015.

Mining online reviews posted by customers who have purchased these cars reveal a much stronger correlation between customer experience and retention/loyalty than the correlation between sales of electric cars and price of gas. As the novelty of electric/hybrid cars and the social cache of environmentalism fade, the underwhelming customer experience these vehicles delivered to their owners compels customers to return to familiar fossil-fuel vehicles. That will continue until the electric cars sold provide better customer experience than conventional ones at the same or better price. The energy that drives these cars may be alternative, but it is not a substitute for the delivery of superior customer experience.

For more effective customer experience strategies, see Customer Experience: How to Balance Culture and Operations.

Comments

Tags:

#CustExp

Cheap Gas, Electric Cars, And Customer Experience

gregory yankelovich

Even if you sell a commodity, customer experience often outweighs price considerations. Just because the term customer experience management (CEM) is  relatively new to corporate vocabulary, the power of “experience” is not lost on marketing professionals. The world of marketing is drastically changing, moving away from the hype of novelty and awareness-building through branding and advertising and toward  the creation of loyalty through great customer experiences.

As oil prices impact every element of the world Cheap gaseconomy, and markets expect the depressed levels to last for at least a decade, the future of alternative energy technologies being questioned. Sales of electric and hybrid cars  are dipping, seemingly in concert with oil prices, and auto industry analysts are trying to assess whether or not cheap gas will kill the demand for such vehicles.

It is important to remember that even at the near-record high of gas prices, customer retention of hybrid vehicles was only 35%. Specifically, Prius owners’ loyalty in 2012 was only 25%.

“Only 30.9% of hybrid drivers traded in for another gas-electric model in the third quarter of 2011, when gas prices were stable. But as prices at the pump surged in the final three months of that year, so did hybrid car repurchases, leading to a 40.1% loyalty rate.”

It is easy to see correlations between gas prices and sales of electric vehicles, but perhaps it is a mistake to take these as the causation.

It is true that sales of electric cars from Nissan (Leaf) are 20% down this year and gas-electric hybrid Chevy Volt’s are down 50%. However, the demand for Tesla Model S is stronger than ever, and sales are up 35% during the first quarter of 2015.

Mining online reviews posted by customers who have purchased these cars reveal a much stronger correlation between customer experience and retention/loyalty than the correlation between sales of electric cars and price of gas. As the novelty of electric/hybrid cars and the social cache of environmentalism fade, the underwhelming customer experience these vehicles delivered to their owners compels customers to return to familiar fossil-fuel vehicles. That will continue until the electric cars sold provide better customer experience than conventional ones at the same or better price. The energy that drives these cars may be alternative, but it is not a substitute for the delivery of superior customer experience.

For more effective customer experience strategies, see Customer Experience: How to Balance Culture and Operations.

Comments

Julie Stoughton

About Julie Stoughton

Julie Stoughton is the Head of Telecommunications Marketing & Communications at SAP. She is a seasoned professional with 16 years of marketing and product marketing experience in software and media technologies. Julie's specialties include strategic market development, positioning and messaging, customer segmentation, product launches, ROI analysis, and go-to-market execution.

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#CustExp

Cheap Gas, Electric Cars, And Customer Experience

gregory yankelovich

Even if you sell a commodity, customer experience often outweighs price considerations. Just because the term customer experience management (CEM) is  relatively new to corporate vocabulary, the power of “experience” is not lost on marketing professionals. The world of marketing is drastically changing, moving away from the hype of novelty and awareness-building through branding and advertising and toward  the creation of loyalty through great customer experiences.

As oil prices impact every element of the world Cheap gaseconomy, and markets expect the depressed levels to last for at least a decade, the future of alternative energy technologies being questioned. Sales of electric and hybrid cars  are dipping, seemingly in concert with oil prices, and auto industry analysts are trying to assess whether or not cheap gas will kill the demand for such vehicles.

It is important to remember that even at the near-record high of gas prices, customer retention of hybrid vehicles was only 35%. Specifically, Prius owners’ loyalty in 2012 was only 25%.

“Only 30.9% of hybrid drivers traded in for another gas-electric model in the third quarter of 2011, when gas prices were stable. But as prices at the pump surged in the final three months of that year, so did hybrid car repurchases, leading to a 40.1% loyalty rate.”

It is easy to see correlations between gas prices and sales of electric vehicles, but perhaps it is a mistake to take these as the causation.

It is true that sales of electric cars from Nissan (Leaf) are 20% down this year and gas-electric hybrid Chevy Volt’s are down 50%. However, the demand for Tesla Model S is stronger than ever, and sales are up 35% during the first quarter of 2015.

Mining online reviews posted by customers who have purchased these cars reveal a much stronger correlation between customer experience and retention/loyalty than the correlation between sales of electric cars and price of gas. As the novelty of electric/hybrid cars and the social cache of environmentalism fade, the underwhelming customer experience these vehicles delivered to their owners compels customers to return to familiar fossil-fuel vehicles. That will continue until the electric cars sold provide better customer experience than conventional ones at the same or better price. The energy that drives these cars may be alternative, but it is not a substitute for the delivery of superior customer experience.

For more effective customer experience strategies, see Customer Experience: How to Balance Culture and Operations.

Comments

Tags:

#CustExp

Cheap Gas, Electric Cars, And Customer Experience

gregory yankelovich

Even if you sell a commodity, customer experience often outweighs price considerations. Just because the term customer experience management (CEM) is  relatively new to corporate vocabulary, the power of “experience” is not lost on marketing professionals. The world of marketing is drastically changing, moving away from the hype of novelty and awareness-building through branding and advertising and toward  the creation of loyalty through great customer experiences.

As oil prices impact every element of the world Cheap gaseconomy, and markets expect the depressed levels to last for at least a decade, the future of alternative energy technologies being questioned. Sales of electric and hybrid cars  are dipping, seemingly in concert with oil prices, and auto industry analysts are trying to assess whether or not cheap gas will kill the demand for such vehicles.

It is important to remember that even at the near-record high of gas prices, customer retention of hybrid vehicles was only 35%. Specifically, Prius owners’ loyalty in 2012 was only 25%.

“Only 30.9% of hybrid drivers traded in for another gas-electric model in the third quarter of 2011, when gas prices were stable. But as prices at the pump surged in the final three months of that year, so did hybrid car repurchases, leading to a 40.1% loyalty rate.”

It is easy to see correlations between gas prices and sales of electric vehicles, but perhaps it is a mistake to take these as the causation.

It is true that sales of electric cars from Nissan (Leaf) are 20% down this year and gas-electric hybrid Chevy Volt’s are down 50%. However, the demand for Tesla Model S is stronger than ever, and sales are up 35% during the first quarter of 2015.

Mining online reviews posted by customers who have purchased these cars reveal a much stronger correlation between customer experience and retention/loyalty than the correlation between sales of electric cars and price of gas. As the novelty of electric/hybrid cars and the social cache of environmentalism fade, the underwhelming customer experience these vehicles delivered to their owners compels customers to return to familiar fossil-fuel vehicles. That will continue until the electric cars sold provide better customer experience than conventional ones at the same or better price. The energy that drives these cars may be alternative, but it is not a substitute for the delivery of superior customer experience.

For more effective customer experience strategies, see Customer Experience: How to Balance Culture and Operations.

Comments

Jennifer Horowitz

About Jennifer Horowitz

Jennifer Horowitz is a journalist with over 15 years of experience working in the technology, financial, hospitality, real estate, healthcare, manufacturing, not for profit, and retail sectors. She specializes in the field of analytics, offering management consulting serving global clients from midsize to large-scale organizations. Within the field of analytics, she helps higher-level organizations define their metrics strategies, create concepts, define problems, conduct analysis, problem solve, and execute.

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#CustExp

Cheap Gas, Electric Cars, And Customer Experience

gregory yankelovich

Even if you sell a commodity, customer experience often outweighs price considerations. Just because the term customer experience management (CEM) is  relatively new to corporate vocabulary, the power of “experience” is not lost on marketing professionals. The world of marketing is drastically changing, moving away from the hype of novelty and awareness-building through branding and advertising and toward  the creation of loyalty through great customer experiences.

As oil prices impact every element of the world Cheap gaseconomy, and markets expect the depressed levels to last for at least a decade, the future of alternative energy technologies being questioned. Sales of electric and hybrid cars  are dipping, seemingly in concert with oil prices, and auto industry analysts are trying to assess whether or not cheap gas will kill the demand for such vehicles.

It is important to remember that even at the near-record high of gas prices, customer retention of hybrid vehicles was only 35%. Specifically, Prius owners’ loyalty in 2012 was only 25%.

“Only 30.9% of hybrid drivers traded in for another gas-electric model in the third quarter of 2011, when gas prices were stable. But as prices at the pump surged in the final three months of that year, so did hybrid car repurchases, leading to a 40.1% loyalty rate.”

It is easy to see correlations between gas prices and sales of electric vehicles, but perhaps it is a mistake to take these as the causation.

It is true that sales of electric cars from Nissan (Leaf) are 20% down this year and gas-electric hybrid Chevy Volt’s are down 50%. However, the demand for Tesla Model S is stronger than ever, and sales are up 35% during the first quarter of 2015.

Mining online reviews posted by customers who have purchased these cars reveal a much stronger correlation between customer experience and retention/loyalty than the correlation between sales of electric cars and price of gas. As the novelty of electric/hybrid cars and the social cache of environmentalism fade, the underwhelming customer experience these vehicles delivered to their owners compels customers to return to familiar fossil-fuel vehicles. That will continue until the electric cars sold provide better customer experience than conventional ones at the same or better price. The energy that drives these cars may be alternative, but it is not a substitute for the delivery of superior customer experience.

For more effective customer experience strategies, see Customer Experience: How to Balance Culture and Operations.

Comments

Phil King

About Phil King

Drawing from his 30 years of experience in IT and public sector organizations, Phil King is the Sales Director for the Public Sector in the UK and Ireland at SAP. He is passionate about working with the public sector to drive innovation that improves people’s lives and makes the world a better place.

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#CustExp

Cheap Gas, Electric Cars, And Customer Experience

gregory yankelovich

Even if you sell a commodity, customer experience often outweighs price considerations. Just because the term customer experience management (CEM) is  relatively new to corporate vocabulary, the power of “experience” is not lost on marketing professionals. The world of marketing is drastically changing, moving away from the hype of novelty and awareness-building through branding and advertising and toward  the creation of loyalty through great customer experiences.

As oil prices impact every element of the world Cheap gaseconomy, and markets expect the depressed levels to last for at least a decade, the future of alternative energy technologies being questioned. Sales of electric and hybrid cars  are dipping, seemingly in concert with oil prices, and auto industry analysts are trying to assess whether or not cheap gas will kill the demand for such vehicles.

It is important to remember that even at the near-record high of gas prices, customer retention of hybrid vehicles was only 35%. Specifically, Prius owners’ loyalty in 2012 was only 25%.

“Only 30.9% of hybrid drivers traded in for another gas-electric model in the third quarter of 2011, when gas prices were stable. But as prices at the pump surged in the final three months of that year, so did hybrid car repurchases, leading to a 40.1% loyalty rate.”

It is easy to see correlations between gas prices and sales of electric vehicles, but perhaps it is a mistake to take these as the causation.

It is true that sales of electric cars from Nissan (Leaf) are 20% down this year and gas-electric hybrid Chevy Volt’s are down 50%. However, the demand for Tesla Model S is stronger than ever, and sales are up 35% during the first quarter of 2015.

Mining online reviews posted by customers who have purchased these cars reveal a much stronger correlation between customer experience and retention/loyalty than the correlation between sales of electric cars and price of gas. As the novelty of electric/hybrid cars and the social cache of environmentalism fade, the underwhelming customer experience these vehicles delivered to their owners compels customers to return to familiar fossil-fuel vehicles. That will continue until the electric cars sold provide better customer experience than conventional ones at the same or better price. The energy that drives these cars may be alternative, but it is not a substitute for the delivery of superior customer experience.

For more effective customer experience strategies, see Customer Experience: How to Balance Culture and Operations.

Comments

Richard McLean

About Richard McLean

Richard McLean, regional CFO for SAP Asia Pacific Japan, oversees all key finance and administrative functions for field and regional headquarters, supporting more than 16,000 employees. He has more than 20 years of experience in senior finance roles with leading global companies across a range of industries, including financial services, investment banking, automotive, and IT. He joined SAP in 2008.

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#CustExp

Cheap Gas, Electric Cars, And Customer Experience

gregory yankelovich

Even if you sell a commodity, customer experience often outweighs price considerations. Just because the term customer experience management (CEM) is  relatively new to corporate vocabulary, the power of “experience” is not lost on marketing professionals. The world of marketing is drastically changing, moving away from the hype of novelty and awareness-building through branding and advertising and toward  the creation of loyalty through great customer experiences.

As oil prices impact every element of the world Cheap gaseconomy, and markets expect the depressed levels to last for at least a decade, the future of alternative energy technologies being questioned. Sales of electric and hybrid cars  are dipping, seemingly in concert with oil prices, and auto industry analysts are trying to assess whether or not cheap gas will kill the demand for such vehicles.

It is important to remember that even at the near-record high of gas prices, customer retention of hybrid vehicles was only 35%. Specifically, Prius owners’ loyalty in 2012 was only 25%.

“Only 30.9% of hybrid drivers traded in for another gas-electric model in the third quarter of 2011, when gas prices were stable. But as prices at the pump surged in the final three months of that year, so did hybrid car repurchases, leading to a 40.1% loyalty rate.”

It is easy to see correlations between gas prices and sales of electric vehicles, but perhaps it is a mistake to take these as the causation.

It is true that sales of electric cars from Nissan (Leaf) are 20% down this year and gas-electric hybrid Chevy Volt’s are down 50%. However, the demand for Tesla Model S is stronger than ever, and sales are up 35% during the first quarter of 2015.

Mining online reviews posted by customers who have purchased these cars reveal a much stronger correlation between customer experience and retention/loyalty than the correlation between sales of electric cars and price of gas. As the novelty of electric/hybrid cars and the social cache of environmentalism fade, the underwhelming customer experience these vehicles delivered to their owners compels customers to return to familiar fossil-fuel vehicles. That will continue until the electric cars sold provide better customer experience than conventional ones at the same or better price. The energy that drives these cars may be alternative, but it is not a substitute for the delivery of superior customer experience.

For more effective customer experience strategies, see Customer Experience: How to Balance Culture and Operations.

Comments

Catherine Lynch

About Catherine Lynch

Catherine Lynch is a Senior Director of Industry Cloud Marketing at SAP. She is a content marketing specialist with a particular focus on the professional services and media industries globally. Catherine has a wide international experience of working with enterprise application vendors in global roles, creating thought leadership and is a social media practitioner.

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#CustExp

Cheap Gas, Electric Cars, And Customer Experience

gregory yankelovich

Even if you sell a commodity, customer experience often outweighs price considerations. Just because the term customer experience management (CEM) is  relatively new to corporate vocabulary, the power of “experience” is not lost on marketing professionals. The world of marketing is drastically changing, moving away from the hype of novelty and awareness-building through branding and advertising and toward  the creation of loyalty through great customer experiences.

As oil prices impact every element of the world Cheap gaseconomy, and markets expect the depressed levels to last for at least a decade, the future of alternative energy technologies being questioned. Sales of electric and hybrid cars  are dipping, seemingly in concert with oil prices, and auto industry analysts are trying to assess whether or not cheap gas will kill the demand for such vehicles.

It is important to remember that even at the near-record high of gas prices, customer retention of hybrid vehicles was only 35%. Specifically, Prius owners’ loyalty in 2012 was only 25%.

“Only 30.9% of hybrid drivers traded in for another gas-electric model in the third quarter of 2011, when gas prices were stable. But as prices at the pump surged in the final three months of that year, so did hybrid car repurchases, leading to a 40.1% loyalty rate.”

It is easy to see correlations between gas prices and sales of electric vehicles, but perhaps it is a mistake to take these as the causation.

It is true that sales of electric cars from Nissan (Leaf) are 20% down this year and gas-electric hybrid Chevy Volt’s are down 50%. However, the demand for Tesla Model S is stronger than ever, and sales are up 35% during the first quarter of 2015.

Mining online reviews posted by customers who have purchased these cars reveal a much stronger correlation between customer experience and retention/loyalty than the correlation between sales of electric cars and price of gas. As the novelty of electric/hybrid cars and the social cache of environmentalism fade, the underwhelming customer experience these vehicles delivered to their owners compels customers to return to familiar fossil-fuel vehicles. That will continue until the electric cars sold provide better customer experience than conventional ones at the same or better price. The energy that drives these cars may be alternative, but it is not a substitute for the delivery of superior customer experience.

For more effective customer experience strategies, see Customer Experience: How to Balance Culture and Operations.

Comments

Tags:

#CustExp

Cheap Gas, Electric Cars, And Customer Experience

gregory yankelovich

Even if you sell a commodity, customer experience often outweighs price considerations. Just because the term customer experience management (CEM) is  relatively new to corporate vocabulary, the power of “experience” is not lost on marketing professionals. The world of marketing is drastically changing, moving away from the hype of novelty and awareness-building through branding and advertising and toward  the creation of loyalty through great customer experiences.

As oil prices impact every element of the world Cheap gaseconomy, and markets expect the depressed levels to last for at least a decade, the future of alternative energy technologies being questioned. Sales of electric and hybrid cars  are dipping, seemingly in concert with oil prices, and auto industry analysts are trying to assess whether or not cheap gas will kill the demand for such vehicles.

It is important to remember that even at the near-record high of gas prices, customer retention of hybrid vehicles was only 35%. Specifically, Prius owners’ loyalty in 2012 was only 25%.

“Only 30.9% of hybrid drivers traded in for another gas-electric model in the third quarter of 2011, when gas prices were stable. But as prices at the pump surged in the final three months of that year, so did hybrid car repurchases, leading to a 40.1% loyalty rate.”

It is easy to see correlations between gas prices and sales of electric vehicles, but perhaps it is a mistake to take these as the causation.

It is true that sales of electric cars from Nissan (Leaf) are 20% down this year and gas-electric hybrid Chevy Volt’s are down 50%. However, the demand for Tesla Model S is stronger than ever, and sales are up 35% during the first quarter of 2015.

Mining online reviews posted by customers who have purchased these cars reveal a much stronger correlation between customer experience and retention/loyalty than the correlation between sales of electric cars and price of gas. As the novelty of electric/hybrid cars and the social cache of environmentalism fade, the underwhelming customer experience these vehicles delivered to their owners compels customers to return to familiar fossil-fuel vehicles. That will continue until the electric cars sold provide better customer experience than conventional ones at the same or better price. The energy that drives these cars may be alternative, but it is not a substitute for the delivery of superior customer experience.

For more effective customer experience strategies, see Customer Experience: How to Balance Culture and Operations.

Comments

Paul Kurchina

About Paul Kurchina

Paul Kurchina is a community builder and evangelist with the Americas’ SAP Users Group (ASUG), responsible for developing a change management program for ASUG members.

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#CustExp

Cheap Gas, Electric Cars, And Customer Experience

gregory yankelovich

Even if you sell a commodity, customer experience often outweighs price considerations. Just because the term customer experience management (CEM) is  relatively new to corporate vocabulary, the power of “experience” is not lost on marketing professionals. The world of marketing is drastically changing, moving away from the hype of novelty and awareness-building through branding and advertising and toward  the creation of loyalty through great customer experiences.

As oil prices impact every element of the world Cheap gaseconomy, and markets expect the depressed levels to last for at least a decade, the future of alternative energy technologies being questioned. Sales of electric and hybrid cars  are dipping, seemingly in concert with oil prices, and auto industry analysts are trying to assess whether or not cheap gas will kill the demand for such vehicles.

It is important to remember that even at the near-record high of gas prices, customer retention of hybrid vehicles was only 35%. Specifically, Prius owners’ loyalty in 2012 was only 25%.

“Only 30.9% of hybrid drivers traded in for another gas-electric model in the third quarter of 2011, when gas prices were stable. But as prices at the pump surged in the final three months of that year, so did hybrid car repurchases, leading to a 40.1% loyalty rate.”

It is easy to see correlations between gas prices and sales of electric vehicles, but perhaps it is a mistake to take these as the causation.

It is true that sales of electric cars from Nissan (Leaf) are 20% down this year and gas-electric hybrid Chevy Volt’s are down 50%. However, the demand for Tesla Model S is stronger than ever, and sales are up 35% during the first quarter of 2015.

Mining online reviews posted by customers who have purchased these cars reveal a much stronger correlation between customer experience and retention/loyalty than the correlation between sales of electric cars and price of gas. As the novelty of electric/hybrid cars and the social cache of environmentalism fade, the underwhelming customer experience these vehicles delivered to their owners compels customers to return to familiar fossil-fuel vehicles. That will continue until the electric cars sold provide better customer experience than conventional ones at the same or better price. The energy that drives these cars may be alternative, but it is not a substitute for the delivery of superior customer experience.

For more effective customer experience strategies, see Customer Experience: How to Balance Culture and Operations.

Comments

Tags:

#CustExp

Hack the CIO

By Thomas Saueressig, Timo Elliott, Sam Yen, and Bennett Voyles

For nerds, the weeks right before finals are a Cinderella moment. Suddenly they’re stars. Pocket protectors are fashionable; people find their jokes a whole lot funnier; Dungeons & Dragons sounds cool.

Many CIOs are enjoying this kind of moment now, as companies everywhere face the business equivalent of a final exam for a vital class they have managed to mostly avoid so far: digital transformation.

But as always, there is a limit to nerdy magic. No matter how helpful CIOs try to be, their classmates still won’t pass if they don’t learn the material. With IT increasingly central to every business—from the customer experience to the offering to the business model itself—we all need to start thinking like CIOs.

Pass the digital transformation exam, and you probably have a bright future ahead. A recent SAP-Oxford Economics study of 3,100 organizations in a variety of industries across 17 countries found that the companies that have taken the lead in digital transformation earn higher profits and revenues and have more competitive differentiation than their peers. They also expect 23% more revenue growth from their digital initiatives over the next two years—an estimate 2.5 to 4 times larger than the average company’s.

But the market is grading on a steep curve: this same SAP-Oxford study found that only 3% have completed some degree of digital transformation across their organization. Other surveys also suggest that most companies won’t be graduating anytime soon: in one recent survey of 450 heads of digital transformation for enterprises in the United States, United Kingdom, France, and Germany by technology company Couchbase, 90% agreed that most digital projects fail to meet expectations and deliver only incremental improvements. Worse: over half (54%) believe that organizations that don’t succeed with their transformation project will fail or be absorbed by a savvier competitor within four years.

Companies that are making the grade understand that unlike earlier technical advances, digital transformation doesn’t just support the business, it’s the future of the business. That’s why 60% of digital leading companies have entrusted the leadership of their transformation to their CIO, and that’s why experts say businesspeople must do more than have a vague understanding of the technology. They must also master a way of thinking and looking at business challenges that is unfamiliar to most people outside the IT department.

In other words, if you don’t think like a CIO yet, now is a very good time to learn.

However, given that you probably don’t have a spare 15 years to learn what your CIO knows, we asked the experts what makes CIO thinking distinctive. Here are the top eight mind hacks.

1. Think in Systems

A lot of businesspeople are used to seeing their organization as a series of loosely joined silos. But in the world of digital business, everything is part of a larger system.

CIOs have known for a long time that smart processes win. Whether they were installing enterprise resource planning systems or working with the business to imagine the customer’s journey, they always had to think in holistic ways that crossed traditional departmental, functional, and operational boundaries.

Unlike other business leaders, CIOs spend their careers looking across systems. Why did our supply chain go down? How can we support this new business initiative beyond a single department or function? Now supported by end-to-end process methodologies such as design thinking, good CIOs have developed a way of looking at the company that can lead to radical simplifications that can reduce cost and improve performance at the same time.

They are also used to thinking beyond temporal boundaries. “This idea that the power of technology doubles every two years means that as you’re planning ahead you can’t think in terms of a linear process, you have to think in terms of huge jumps,” says Jay Ferro, CIO of TransPerfect, a New York–based global translation firm.

No wonder the SAP-Oxford transformation study found that one of the values transformational leaders shared was a tendency to look beyond silos and view the digital transformation as a company-wide initiative.

This will come in handy because in digital transformation, not only do business processes evolve but the company’s entire value proposition changes, says Jeanne Ross, principal research scientist at the Center for Information Systems Research at the Massachusetts Institute of Technology (MIT). “It either already has or it’s going to, because digital technologies make things possible that weren’t possible before,” she explains.

2. Work in Diverse Teams

When it comes to large projects, CIOs have always needed input from a diverse collection of businesspeople to be successful. The best have developed ways to convince and cajole reluctant participants to come to the table. They seek out technology enthusiasts in the business and those who are respected by their peers to help build passion and commitment among the halfhearted.

Digital transformation amps up the urgency for building diverse teams even further. “A small, focused group simply won’t have the same breadth of perspective as a team that includes a salesperson and a service person and a development person, as well as an IT person,” says Ross.

At Lenovo, the global technology giant, many of these cross-functional teams become so used to working together that it’s hard to tell where each member originally belonged: “You can’t tell who is business or IT; you can’t tell who is product, IT, or design,” says the company’s CIO, Arthur Hu.

One interesting corollary of this trend toward broader teamwork is that talent is a priority among digital leaders: they spend more on training their employees and partners than ordinary companies, as well as on hiring the people they need, according to the SAP-Oxford Economics survey. They’re also already being rewarded for their faith in their teams: 71% of leaders say that their successful digital transformation has made it easier for them to attract and retain talent, and 64% say that their employees are now more engaged than they were before the transformation.

3. Become a Consultant

Good CIOs have long needed to be internal consultants to the business. Ever since technology moved out of the glasshouse and onto employees’ desks, CIOs have not only needed a deep understanding of the goals of a given project but also to make sure that the project didn’t stray from those goals, even after the businesspeople who had ordered the project went back to their day jobs. “Businesspeople didn’t really need to get into the details of what IT was really doing,” recalls Ferro. “They just had a set of demands and said, ‘Hey, IT, go do that.’”

Now software has become so integral to the business that nobody can afford to walk away. Businesspeople must join the ranks of the IT consultants.

But that was then. Now software has become so integral to the business that nobody can afford to walk away. Businesspeople must join the ranks of the IT consultants. “If you’re building a house, you don’t just disappear for six months and come back and go, ‘Oh, it looks pretty good,’” says Ferro. “You’re on that work site constantly and all of a sudden you’re looking at something, going, ‘Well, that looked really good on the blueprint, not sure it makes sense in reality. Let’s move that over six feet.’ Or, ‘I don’t know if I like that anymore.’ It’s really not much different in application development or for IT or technical projects, where on paper it looked really good and three weeks in, in that second sprint, you’re going, ‘Oh, now that I look at it, that’s really stupid.’”

4. Learn Horizontal Leadership

CIOs have always needed the ability to educate and influence other leaders that they don’t directly control. For major IT projects to be successful, they need other leaders to contribute budget, time, and resources from multiple areas of the business.

It’s a kind of horizontal leadership that will become critical for businesspeople to acquire in digital transformation. “The leadership role becomes one much more of coaching others across the organization—encouraging people to be creative, making sure everybody knows how to use data well,” Ross says.

In this team-based environment, having all the answers becomes less important. “It used to be that the best business executives and leaders had the best answers. Today that is no longer the case,” observes Gary Cokins, a technology consultant who focuses on analytics-based performance management. “Increasingly, it’s the executives and leaders who ask the best questions. There is too much volatility and uncertainty for them to rely on their intuition or past experiences.”

Many experts expect this trend to continue as the confluence of automation and data keeps chipping away at the organizational pyramid. “Hierarchical, command-and-control leadership will become obsolete,” says Edward Hess, professor of business administration and Batten executive-in-residence at the Darden School of Business at the University of Virginia. “Flatter, distributive leadership via teams will become the dominant structure.”

5. Understand Process Design

When business processes were simpler, IT could analyze the process and improve it without input from the business. But today many processes are triggered on the fly by the customer, making a seamless customer experience more difficult to build without the benefit of a larger, multifunctional team. In a highly digitalized organization like Amazon, which releases thousands of new software programs each year, IT can no longer do it all.

While businesspeople aren’t expected to start coding, their involvement in process design is crucial. One of the techniques that many organizations have adopted to help IT and businesspeople visualize business processes together is design thinking (for more on design thinking techniques, see “A Cult of Creation“).

Customers aren’t the only ones who benefit from better processes. Among the 100 companies the SAP-Oxford Economics researchers have identified as digital leaders, two-thirds say that they are making their employees’ lives easier by eliminating process roadblocks that interfere with their ability to do their jobs. Ninety percent of leaders surveyed expect to see value from these projects in the next two years alone.

6. Learn to Keep Learning

The ability to learn and keep learning has been a part of IT from the start. Since the first mainframes in the 1950s, technologists have understood that they need to keep reinventing themselves and their skills to adapt to the changes around them.

Now that’s starting to become part of other job descriptions too. Many companies are investing in teaching their employees new digital skills. One South American auto products company, for example, has created a custom-education institute that trained 20,000 employees and partner-employees in 2016. In addition to training current staff, many leading digital companies are also hiring new employees and creating new roles, such as a chief robotics officer, to support their digital transformation efforts.

Nicolas van Zeebroeck, professor of information systems and digital business innovation at the Solvay Brussels School of Economics and Management at the Free University of Brussels, says that he expects the ability to learn quickly will remain crucial. “If I had to think of one critical skill,” he explains, “I would have to say it’s the ability to learn and keep learning—the ability to challenge the status quo and question what you take for granted.”

7. Fail Smarter

Traditionally, CIOs tended to be good at thinking through tests that would allow the company to experiment with new technology without risking the entire network.

This is another unfamiliar skill that smart managers are trying to pick up. “There’s a lot of trial and error in the best companies right now,” notes MIT’s Ross. But there’s a catch, she adds. “Most companies aren’t designed for trial and error—they’re trying to avoid an error,” she says.

To learn how to do it better, take your lead from IT, where many people have already learned to work in small, innovative teams that use agile development principles, advises Ross.

For example, business managers must learn how to think in terms of a minimum viable product: build a simple version of what you have in mind, test it, and if it works start building. You don’t build the whole thing at once anymore.… It’s really important to build things incrementally,” Ross says.

Flexibility and the ability to capitalize on accidental discoveries during experimentation are more important than having a concrete project plan, says Ross. At Spotify, the music service, and CarMax, the used-car retailer, change is driven not from the center but from small teams that have developed something new. “The thing you have to get comfortable with is not having the formalized plan that we would have traditionally relied on, because as soon as you insist on that, you limit your ability to keep learning,” Ross warns.

8. Understand the True Cost—and Speed—of Data

Gut instincts have never had much to do with being a CIO; now they should have less to do with being an ordinary manager as well, as data becomes more important.

As part of that calculation, businesspeople must have the ability to analyze the value of the data that they seek. “You’ll need to apply a pinch of knowledge salt to your data,” advises Solvay’s van Zeebroeck. “What really matters is the ability not just to tap into data but to see what is behind the data. Is it a fair representation? Is it impartial?”

Increasingly, businesspeople will need to do their analysis in real time, just as CIOs have always had to manage live systems and processes. Moving toward real-time reports and away from paper-based decisions increases accuracy and effectiveness—and leaves less time for long meetings and PowerPoint presentations (let us all rejoice).

Not Every CIO Is Ready

Of course, not all CIOs are ready for these changes. Just as high school has a lot of false positives—genius nerds who turn out to be merely nearsighted—so there are many CIOs who aren’t good role models for transformation.

Success as a CIO these days requires more than delivering near-perfect uptime, says Lenovo’s Hu. You need to be able to understand the business as well. Some CIOs simply don’t have all the business skills that are needed to succeed in the transformation. Others lack the internal clout: a 2016 KPMG study found that only 34% of CIOs report directly to the CEO.

This lack of a strategic perspective is holding back digital transformation at many organizations. They approach digital transformation as a cool, one-off project: we’re going to put this new mobile app in place and we’re done. But that’s not a systematic approach; it’s an island of innovation that doesn’t join up with the other islands of innovation. In the longer term, this kind of development creates more problems than it fixes.

Such organizations are not building in the capacity for change; they’re trying to get away with just doing it once rather than thinking about how they’re going to use digitalization as a means to constantly experiment and become a better company over the long term.

As a result, in some companies, the most interesting tech developments are happening despite IT, not because of it. “There’s an alarming digital divide within many companies. Marketers are developing nimble software to give customers an engaging, personalized experience, while IT departments remain focused on the legacy infrastructure. The front and back ends aren’t working together, resulting in appealing web sites and apps that don’t quite deliver,” writes George Colony, founder, chairman, and CEO of Forrester Research, in the MIT Sloan Management Review.

Thanks to cloud computing and easier development tools, many departments are developing on their own, without IT’s support. These days, anybody with a credit card can do it.

Traditionally, IT departments looked askance at these kinds of do-it-yourself shadow IT programs, but that’s changing. Ferro, for one, says that it’s better to look at those teams not as rogue groups but as people who are trying to help. “It’s less about ‘Hey, something’s escaped,’ and more about ‘No, we just actually grew our capacity and grew our ability to innovate,’” he explains.

“I don’t like the term ‘shadow IT,’” agrees Lenovo’s Hu. “I think it’s an artifact of a very traditional CIO team. If you think of it as shadow IT, you’re out of step with reality,” he says.

The reality today is that a company needs both a strong IT department and strong digital capacities outside its IT department. If the relationship is good, the CIO and IT become valuable allies in helping businesspeople add digital capabilities without disrupting or duplicating existing IT infrastructure.

If a company already has strong digital capacities, it should be able to move forward quickly, according to Ross. But many companies are still playing catch-up and aren’t even ready to begin transforming, as the SAP-Oxford Economics survey shows.

For enterprises where business and IT are unable to get their collective act together, Ross predicts that the next few years will be rough. “I think these companies ought to panic,” she says. D!


About the Authors

Thomas Saueressig is Chief Information Officer at SAP.

Timo Elliott is an Innovation Evangelist at SAP.

Sam Yen is Chief Design Officer at SAP and Managing Director of SAP Labs.

Bennett Voyles is a Berlin-based business writer.

Read more thought provoking articles in the latest issue of the Digitalist Magazine, Executive Quarterly.
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CEO Priorities And Challenges In The Digital World

Dr. Chakib Bouhdary

Digital transformation is here, and it is moving fast. Companies are starting to realize the enormous power of digital technologies like artificial intelligence (AI), Internet of things (IoT) and blockchain. These technologies will drive massive opportunities—and threats—for every company, and they will impact all aspects of business, including the business model. In fact, business velocity has never been this fast, yet it will never be this slow again.

To move quickly, companies need to be clear on what they want to achieve through digital transformation and understand the possible roadblocks. Based on my meetings with customer executives across regions and industries, I have learned that CEOs often have the same three priorities and face the same three challenges:

1. Customer experience – No longer defined by omnichannel and personalized marketing.

Not surprisingly, 92 percent of digital leaders focus on customer experience. However, this is no longer just about omnichannel and personalized marketing – it is about the total customer experience. Businesses are realizing that they need to reimagine their value proposition and orchestrate changes across the value chain – from the first point of interaction to manufacturing, to shipment, to service – and be able to deliver the total customer experience. In some cases, it will even be necessary to change the core product or service itself.

2. Step change in productivity – Transform productivity and cost structure through digital technologies.

Businesses have been using technology to achieve growth for decades, but by combining emerging technologies, they can now achieve a significant productivity boost and reduce costs. For this to happen, companies must first identify the scenarios that will drive significant change in productivity, prioritize them based on value, and then determine the right technologies and solutions. Both Mckinsey and Boston Consulting Group expect a 15 to 30 percent improvement in productivity through digital advancements – blowing the doors off business-as-usual and its incremental productivity growth of 1 to 2 percent.

3. Employee engagement – Fostering a culture of innovation should be at the core of any business.

Companies are looking to create an environment that encourages creativity and innovation. Leaders are attracting the needed talent and building the right skill sets. Additionally, they aim for ways to attract a diverse workforce, improve collaborations, and empower employees – because engaged employees are crucial in order to achieve the best results. This Gallup study reveals that approximately 85 percent of employees worldwide are performing below their potential due to engagement issues.

As CEOs work towards achieving these three desired outcomes, they face some critical challenges that they must address. I define the top three challenges as follows: run vs. innovate, corporate cholesterol, and digital transformation roadmap.

1. Run vs. innovate – To be successful you must prioritize the future.

The foremost challenge that CEOs are facing is how they can keep running current profitable businesses while investing in future innovations. Quite often these two conflict as most executives mistakenly prioritize the first and spend much less time on the latter. This must change. CEOs and their management teams need to spend more time thinking about what digital is for them, discuss new ideas, and reimagine the future. According to Gartner, approximately 50 percent of boards are pushing their CEOs to make progress on digital. Although this is a promising sign, digital must become a priority on every CEOs agenda.

2. Corporate cholesterol – Do not let company culture get in the way of change.

The older the company is, the more stuck it likely is with policies, procedures, layers of management, and risk averseness. When a company’s own processes get in the way of change, that is what I call “corporate cholesterol.” CEOs need to change the culture, encourage cross-team collaborations, and bring in more diverse thinking to reduce the cholesterol levels. In fact, both Mckinsey and Capgemini conclude that culture is the number-one obstacle to digital effectiveness.

3. Digital transformation roadmap – Digital transformation is a journey without a destination.

Many CEOs struggle with their digital roadmap. Questions like: Where do I start? Can a CDO or another executive run this innovation for me? What is my three- to five-year roadmap? often come up during the conversations. Most companies think that there is a set roadmap, or a silver bullet, for digital transformation, but that is not the case. Digital transformation is a journey without a destination, and each company must start small, acquire the necessary skills and knowledge, and continue to innovate.

It is time to face the digital reality and make it a priority. According to KPMG, 70 percent to 80 percent of CEOs believe that the next three years are more critical for their company than the last fifty. And there is good reason to worry, as 75 percent of S&P 500 companies from 2012 will be replaced by 2027 at the current disruption rate.

Download this short executive document. 

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Dr. Chakib Bouhdary

About Dr. Chakib Bouhdary

Dr. Chakib Bouhdary is the Digital Transformation Officer at SAP. Chakib spearheads thought leadership for the SAP digital strategy and advises on the SAP business model, having led its transformation in 2010. He also engages with strategic customers and prospects on digital strategy and chairs Executive Digital Exchange (EDX), which is a global community of digital innovation leaders. Follow Chakib on LinkedIn and Twitter