Can I afford public or private school for my family? Should we purchase that larger home next year? These are the types of questions small and midsized business owners must ask themselves. The division between personal and professional is often unclear and the business consumes most of their day – and their future. Much is at stake. Given this, what can a business owner do to ease the burden of their worries?
Don’t supersize me – and then charge me for it
In the modern world, a variety of tools are available to help a small business run smoothly. But small business owners often draw boundaries between what they view as tools for “big business” and the tools they believe are relevant to their needs. Even the naming of some of these tools can be confusing: How can software known as enterprise resource planning (ERP), for example, be a good fit for a one-person operation, or even a 10-person operation?
Instead of viewing business software as a single entity, it’s helpful to frame it as a collection of individual tools. An enterprise-level business may be able to afford the whole tool chest at once, but small businesses often don’t need quite so much right away. Instead, they focus on being able to purchase technology in “bite size” pieces, choosing tools as needed, rather than all at once.
While software isn’t a cure-all for a small business, at the end of the day it simply helps life run more smoothly by making it easier to manage finances, employees, and the never-ending regulatory changes, among other concerns. The freedom to mix and match is key, using only the useful tools with no obligation to explore the entire world of enterprise-level software right away.
Compliment my “gut feel” decision making
Software is often the tool that allow a business owner to keep their personal and professional worlds separate, while still ensuring both worlds are well managed. Whether it’s bookkeeping, taxes, marketing, or more, being able to turn to software that holds objective, unbiased information is a blessing in many forms. It provides data-based decision making and encourages less reliance on the inconsistent “gut feeling” that so many business owners have relied on for years.
In particular, it’s vital to be able to turn to data that has no relation to the often-subjective world that characterizes a business owner’s personal life. Whether a business manager or employee is calm or upset, stressed or relaxed, tools will present clear, unbiased information, making it easier to pivot back into the objective business owner mindset and make smart decisions.
Notably, midsized business are often better at making use of technology than small businesses, as research shows that only 18% of small business owners use Big Data analytics to make informed decisions, in comparison to 57% of midsized businesses. This indicates that small business owners may feel overwhelmed at the prospect of using technology tools, when they should embrace the potential for that technology to make their lives easier, instead.
By leveraging the right tools, and using them in the right way, business owners are able to find some solstice in their decision making. Since the risk of success sits squarely on their shoulders, any comfort they can find via greater insight and data, as well as tools build for them (that can grow with them) are key. They allow for planning and data to accompany the gut feel. Together, these are a powerful combination.
“Every time I get another data point, I’ve added another piece to the jigsaw puzzle, and I’m closer to seeing the answer. And then, one day, the overall picture suddenly comes to me.”- Joel Pittman, founder, MTV
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About Jennifer Schulze
Jennifer Schulze is Vice President of marketing for SAP. In her role, she manages customer marketing as part of the office of the COO. She has over 15 years of technology marketing and management experience and is a small business owner in the San Francisco Bay area.
Sounds like a great idea. Your mind generates pleasant images – soft lighting, satisfying food, a break from the standard home life, no dishes to wash. It is an idealized scenario.
In picturing it, customers tend to overlook some of the less-enjoyable but very common annoyances of dining out, such as waiting in line, waiting to order, and waiting to pay. We forget about the challenges of limited menus, especially for people with food allergies, or the tendency for the tab to creep substantially upwards, especially when one glass of wine becomes two.
We accept these inconveniences as a regular part of restaurant dining, but they do not have to stay that way. A few restaurants around the world are now experimenting with a digital menu that will change the dining experience entirely.
It appears on a customers’ phone or tablet as an app, and it handles many of the supporting aspects of the dining experience, from booking a table to placing an order, investigating a meal’s nutritional information, receiving pairing suggestions, and paying digitally without having to wait for the server to return.
This is an example of how high-tech innovation improves service for the dining customer while giving restaurant management greater access to vital data. Management can observe the way customers browse the electronic menus, the items they choose, those they pass on, and their methods of researching, decision-making, and payment.
After capturing and analyzing this data, a restaurant could then opt to share it with other channel partners like food distributors, beverage and liquor suppliers, advertising agencies, and property managers. The list of potential partners in the data-sharing exercise is huge, even those whose apparent relationship to actual dining might be distant.
Movie theaters, for example, might share data with restaurants to better coordinate show times and to present highly individualized offers to convince those diners who may not have considered seeing a movie after their meal to do so.
When they share customer data with their suppliers, forward-thinking restaurateurs enter into multi-sided business relationships, a staple of the new high-tech economy. They start to pull away from the traditional siloed approach to data retention and lay out a path for repeat business, long-term monetization, and more creative relationships with industry partners.
The multi-sided business relationship is just one of the opportunities available. It creates a more agile culture, better attuned to the social media-dominated marketplace. Real-time analysis and the refinement of data identify mobile moments for customers, help in the design of new processes for enhanced engagement, and most importantly, tailor the relationships – both retail and B2B – by leveraging “in-the-moment” personalization capabilities.
As a CIO in the automotive industry, I am often asked, “What’s the difference between digitalization and automation? Isn’t the hoopla about going digital just old wine in a new bottle?” After all, the auto industry is no stranger to automation – assembly lines and robots that require little or no human intervention have been standard features in our business for a while now.
In reality, there’s a world of difference between IT automation and the wave of digitalization sweeping the globe today. Here are six critical dimensions, in my view, that differentiate automation from digitalization:
The democratization of sensors: Traditionally, IT embedded sensors into equipment and machinery to create PLC-enabled automation of manufacturing lines. But in today’s digitally connected world, almost anything around us can be. Sensors are cheaper than ever as they move from factories and robotic lines to everyday objects, creating entirely new value propositions unleashed by the reimagination of the purpose of things. We have smartphones that function with over 15 sensors. Smart coffee mugs that report daily calories, sugar, and liquid intake. Even a smart basketball that can improve a player’s skills and drills. And these are just a few examples of sensors creating value by making things smarter.
Personalization driven by Big Data analytics: Analytics is not a new science. In fact, IT has always handled and deciphered large amounts of business data to deliver reports and insights. But thanks to Big Data that can leverage large and multiple sources of data – both structured and unstructured – today we have contextual insights to radically personalize the customer experience. Take, for example, the enormous amount of personalization online shoppers benefit from because marketers are analyzing clickstreams on browsers and mobile apps, location data, sensor data, social media profiles, and interactions to generate those “Wow!” moments.
Mobile solutions that are changing our lives forever: Never before have users enjoyed such an intuitive, functional, and technically comprehensive device. Our desktops and laptops cannot compare to mobile in terms of technology, content, or user experience. Just consider how GPS and location-enabled services have enabled a compelling customer use-case scenario. Mobile devices and solutions allow today’s IT teams to deliver anytime, anywhere connectivity – something unimaginable only a few years ago.
The infinite computing power of the cloud: Classic IT system delivery was time-consuming and primarily constrained by large infrastructure BOMs, software licenses, and high upfront costs. In the digital age, the cloud has created infinite computing resources at the disposal of users on a pay-per-use basis. This has resulted in software-as-a-service (SaaS) solutions for practically any process, platform-as-a-service (PaaS) development platforms, and virtual servers running on demand softwares – all available on an as-needed basis. Cloud solutions have allowed IT teams to speedily apply infinite hardware and software resources to satisfy business demands seamlessly.
Cost of experimentation: Historically, the IT organization developed solutions for existing problems posed by businesses. In essence, it was not known for trying out new solutions, due in large part to internal costs and process constraints. Thanks to cloud computing, technology functionalities are no longer developed from scratch. IT now has access to data, code, and developer communities that can help unleash unlimited opportunities for experimentation. A multitude of APIs has created a data economy where ready-to-use codes enable faster solution delivery. With standard ecosystems and plug-and-play options, the overall cost and time of experimentation has drastically been reduced – increasing the opportunity to innovate.
IT as an innovation driver: This brings me to the most important difference between the world of IT automation and the digital world of IT. In the old world, IT always started out with a well-defined business problem for which it had to provide a solution from known monolith technology options. Juxtapose this to the current scenario, in which digital technology helps solve benign problems or areas of inconvenience that have not yet become actual problems. Uber and Airbnb are great examples of solving benign problems never voiced by consumers. At the same time, such innovation has delivered completely new efficiencies, creating customer delight even when the customer was not actively looking for it.
Digitalization is a far more powerful – if not ubiquitous – phenomenon compared to the automation solutions of the past. When integrated appropriately, digital solutions have the potential to raise the equity of IT as an innovation partner to business like never before.
I think the over rendered jargon of “SMAC” (smart computing, mobile, analytics, and cloud) – and now the Internet of Things – has made us cynical. CIOs should junk the jargon and leverage the real value inherent in these technologies for delivering great new age solutions. CIOs need to work on architecture, learning curves, adoption, and competency building to effectively drive digital technology-led transformation.
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About Jagdish Belwal
Jagdish Belwal is CIO of Tata Motors. He is current;y the digital journey of Tata Motors Information Technology with aggressive adoption of new age technologies for greater value creation for business. Based on his 21 years of experience spanning customer service, dealer management, CRM, and IT management, Jagdish has led successful programs in CRM, outsourcing, BPM, global outsourcing, analytics, supply chain, and manufacturing systems for Tata Motors – driving realization of business value through focus on change management. Jagdish is an avid trekker and loves playing badminton, squash, and golf. He is an avid reader as well.
The lines between the digital and physical customer experience today are largely artificial. Customers shop in retail stores with their devices at the ready. They expect online-like personalization and recommendations in the aisles. They’re looking for instant gratification and better sensory experiences from digital channels. It’s an omnichannel world and companies must figure out how to live in it: delivering a superior customer experience regardless of the entry point.
Luxury fashion brand Rebecca Minkoff, for example, opened its first three retail stores with the intent of taking customers’ best online experiences and bringing them to life. “In the past, you had this brick-and-mortar experience, and you had the online experience,” says company president Uri Minkoff. “There were such great advantages and efficiencies that emerged with shopping online. You could get recommendations, see how something should be styled, create wish lists, access user-generated content. In the store, it was still just you and the product, and maybe a sales associate. But [unlike online] you had all five of your senses.”
Rebecca Minkoff’s new stores still stimulate those senses while incorporating some of the intelligence that online channels typically bring to bear. Each store features a large interactive screen at the entrance, where customers can browse products or order a beverage. Shoppers can interact with salespeople or they can make purchases on a mobile app without ever talking to a soul. Inside a fitting room, RFID-tagged merchandise is displayed on an interactive mirror, where customers can request new sizes or the designer’s recommended coordinates (a real-life recommendation engine).
The company has found that 30% of women ask for additional items based on the recommendations. It has also sold three times more of its new ready-to-wear line than it anticipated. “We were an accessories-dominant brand,” says Minkoff. “But we’ve been able to build this direct relationship with our customers, helping them with outfit completers and also getting a better sense of what they want based on what’s actually happening in our fitting rooms.”
Each piece of technology adds to the experience while capturing the details. Rebecca Minkoff’s integrated systems can remember a customer’s previous visits and preferred colors and sizes, and can enable associates to set up a fitting room with appropriate garments. On the back end, the company gets the kind of visibility into in-store conversions once possible only in digital transactions. “The technology gives us the ability to create the kind of experience each customer wants. She can shop anonymously or be treated like a VIP,” says Minkoff.
Build Around a Big Idea
Rebecca Minkoff’s approach is a bellwether. It’s not enough simply to provide continuity or consistency from one channel to another. Customers don’t think in terms of channels, and neither should companies. Rather, it’s about defining the overarching experience you want to deliver to customers and then building the appropriate offline and online elements to achieve that intended outcome.
As more goods and even services are commoditized, companies must compete on the experiences they create (see The ROI of Customer Experience). That means coming up with a big idea that drives the design of the customer experience. “Every great experience needs to have a theme,” says Joe Pine, consultant and coauthor of The Experience Economy and Infinite Possibility: Creating Customer Value on the Digital Frontier. “That’s the organizing principle of the experience. It’s how you decide what’s in and what’s out.”
For example, Rebecca Minkoff serves as an image consultant to its Millennial customers, who expect personalization, recognition, and tech innovation, using a mix of online and offline techniques. To stand apart, companies must come up with their own unifying idea and then integrate data and systems, rework organizational models, and rethink key strategic metrics and employee incentives in order to integrate the physical and digital worlds around that idea.
Here are some examples of companies that have created a theme-driven experience using online and offline elements.
Nespresso: Imparting a Sense of Luxury
At the most basic level, Nespresso is a manufacturer of coffee and coffee machines. But the company has successfully turned what it sells and how it sells it into a very specific type of experience. Nespresso strives to impart a feeling of quality, exclusivity, even luxury in a host of ways.
The company has created the Nespresso Club, which maintains direct relationships with thousands of customers. Its customer service centers are staffed by 1,000 highly trained coffee experts who don’t just push products but offer advice and guidance as a sommelier might do with wine. Its 450 retail stores (up from just one Parisian in 2000) are called boutiques; the largely inventory-free showrooms are built around tasting and learning.
Online, the focus is on efficiency and service. Customers who prefer digital interactions can order through the web site or mobile app, which offers the option of courier delivery within a two-hour window. The company also recently introduced a Bluetooth-enabled coffee machine, which when paired with a smartphone app, can track a customer’s usage, simplify machine maintenance, and as Wired pointed out, enable remote brewing.
Success didn’t happen overnight, but today Nespresso is one of Nestlé’s fastest growing and most profitable brands, according to Bloomberg.
QVC: Using Online to Complement the Experience
The theme that has driven television-shopping giant QVC’s customer experience for decades has been “inspiration and entertainment.” Traditionally that was delivered through the joy of spontaneous discovery while watching the channel.
Matching that experience online has been difficult, however. At a digital retail conference in 2015, QVC’s CEO explained that in the past the company had failed to deliver the same rich interactions online that it had developed with its TV audiences, according to Total Retail. So the company decided to rethink its use of digital tools to focus on complementing the experience it delivers through TV screens, according to RetailWire.
For example, after enticing TV viewers with products, QVC introduces the next step in the buying journey—“impulse to buy”—in which viewers are spurred on with televised countdown clocks or limited merchandise availability. Online, the company has been experimenting with second-screen content (for instance, recipes that compliment a cooking product being sold on TV) to further propel purchases. The QVC app features the same item that is on-air along with a prompt that reveals all the items featured on TV in recent hours. On Apple devices equipped with Touch ID, customers can check out in less than 10 seconds with the fingerprint-enabled “speed buy” button. The third phase—“purchase and receive”—is complemented by a simple and reliable online browsing and purchasing platform. The last stage—“own and enjoy”—is accompanied by follow-on e-mail communication with tips on how to use products.
Last year, the company reported that 44% of total QVC sales came from online channels (up from 40% in 2014), and nearly half of those were completed on a mobile device. In fact, QVC is currently the tenth largest mobile commerce retailer in the United States, according to Internet Retailer.
Domino’s: Focusing on Speed and Convenience
Domino’s Pizza built a fast-food empire not necessarily on the quality of its pies but instead on the experience of getting hot food delivered quickly. What started out as a promise to deliver a pizza within 30 minutes to customers who phoned in their order is now a themed experience of efficient food delivery that can be fulfilled a number of ways. Domino’s AnyWare project enables customers to order pizzas from their TV, their Twitter account, their smartwatch, or their connected car, for starters. The Domino’s app features zero-click ordering functionality: Domino’s will start fulfilling the usual order for customers who opt in 10 seconds after opening the app.
Domino’s Australian stores are piloting GPS tracking whereby employees begin working on an order only when the customer enters the “cook zone”—a dynamically updated area around a given store that results in the customer arriving to a just-prepared order. The tool builds upon previously developed GPS-based technology for tracking delivery drivers, according to ZDNet. And the company that came up with the corrugated pizza box and the Heatwave Bag to keep pies warm is now building the DXP—a delivery car with a built-in warming oven. All in the name of the fast- and hot-food delivery experience.
Mohawk Industries: Using Social to Streamline Customer Interactions
Mohawk Industries grew to become a US$8 billion flooring manufacturer by relying on customers to visit its dealers’ retail locations to see, touch, and feel the carpet, hardwood, laminate, or tile they planned to purchase.
Today, instead of waiting for customers to find Mohawk, it has redesigned its experience to find them. It has adopted new technology and reworked its sales processes to reflect that new focus. The company’s 1,200 sales representatives have access to a 360-degree view of each customer, complete with analytics and sales tools on their tablets, enabling them to capture and follow through on leads generated through social media engagement.
By analyzing online discussions in real time, representatives can jump into the conversation and help customers find the product they may be searching for and direct the consumer to a retailer to finish the sale. In one episode, a woman was posting about her interest in a particular leopard rug on Twitter. Mohawk’s team surfaced the tweet, passed it on to a channel partner who contacted the woman and closed the sale within two minutes. Today, the company boasts an 80% close rate on sales started and guided in social media and has made $8 million on 14,000 such social leads. Mohawk Industries expects an increase of $25 million in sales year-over-year, thanks to its new customer-centric approach.
Customer Experience Design: Where to Begin
Developing a unique, valuable, and relevant customer experience that combines the best of offline and online capabilities is a huge undertaking. All corporate functions, including marketing, customer service, sales, operations, finance, and HR as well as product or business lines—all of which typically have competing metrics and agendas—must buy into the experience and collaborate to make it happen. And the ideal mix of digital and physical components will vary by company. But there are some best practices to get companies started on their own journeys.
Start at the Top
Without leadership buy-in, changes will not happen. “Customer experience is not a feature, it’s not a shiny button. It’s a concept that sometimes is tough to grasp. But we believe that if done right, it will keep customers loyal. And so we put a lot of effort into it,” says Kevin Scanlon, director of total customer experience at tech company EMC. “That’s why having that top-down support is paramount. If you don’t have it, you’re spinning your wheels. It’s going to give you the resources, the focus, and the attention that you need to design that consistent experience.”
To demonstrate its commitment, every VP and above at EMC has a customer experience metric as part of their quarterly goal.
Begin with the End in Mind
Companies can take a page from the design-thinking approach to product development, starting with the experience they want customers to have with their company and then putting in place the people, processes, and systems to make that happen across various touchpoints. Uber didn’t start by buying 1,000 cars. It started with a completely new customer experience it wanted to deliver—straddling the digital and physical—and then built the organization around that. Uber ultimately leveraged people, process, and technology to bring that to life, but it started with a unique customer journey.
Design for the Customer, Not the Company
To date, most corporate processes have been designed for internal efficiency or cost savings with little consideration for the impact on the customer. Companies that want to design for consistent experiences have to reexamine those business processes from the customer perspective. In order to deliver a standout and consistent experience, enterprises must bring together an assortment of data from a variety of systems—including POS transactions, mobile purchases, call center activity, notes from sales calls, and social media.
The average retailer has customer data in more than a dozen different systems. But it’s not just the front-end customer-facing systems that need orchestrating; back office systems and processes, from your supply chain to fulfillment to customer service, must be designed to deliver the intended experience. For example, Nespresso has to orchestrate a number of back-end and front-end systems to offer customers premium courier delivery within two-hour windows.
Put Someone in Charge
Companies that are truly invested in creating integrated, standout customer experiences often create a centralized function that can bring together the people, processes, and technology to bring them to life. Sometimes there is a chief customer officer or head of customer experience. But unless these people are really empowered, they’re toothless.
EMC’s Scanlon is empowered. He heads up a function that has been transformed from focusing on product quality into a centralized customer experience center of excellence staffed with 60 full-time professionals. The center has translated into “more focus, more energy, more insight to our customers,” says Scanlon. “And we can deliver that insight to our internal stakeholders, which trickles down to our account teams and lets them have more meaningful conversations that benefit our customers—and benefit the company over time.”
Centralize Customer Data
Even if there is no central customer experience function, there needs to be a central data repository and analytics system: a digital foundation that everyone can use to improve their piece of that experience. EMC’s customer experience group has a data governance function that maintains a single source of customer truth. “They’re able to pull all relevant data sources into one location and get past the typical customer data challenges,” says Scanlon.
Invest in People
Companies that care about the customer experience invest in the people who deliver it. Human beings are the clearest signposts on the customer journey. Companies must hire the best, train for desired outcomes, and reward based on experience metrics: for being brand ambassadors and for going above and beyond on behalf of the customer.
Rethink Metrics and Incentives
One major bank was having trouble driving adoption of its online banking tools. The customers that used the tools loved them, but the tools weren’t getting traction. The problem? The branch managers had no interest in promoting digital banking. They wanted to drive as much traffic as possible to their physical branches because this was one of their key performance metrics.
The solution was to change the compensation approach in order to reward employees for the entire customer experience, including online banking adoption. Branch managers were measured on online and offline customer behavior in their regions. That became a single and critical KPI, and it boosted the desired behaviors and improved overall customer satisfaction.
Create a Single View of the Company
For years, companies have talked about the importance of understanding the customer. And that remains true, particularly when it comes to delivering a valuable customer experience online and off. But successful customer experience design is just as much about giving customers a clear understanding of the company through coordinated experiences that deliver on the brand’s theme and bring it to life in various ways in bricks and mortar, through devices, in online interactions, and everywhere in between. D!
Millennials have been entering the workforce in droves over the past decade. They have been gaining experience, learning to succeed, and rising steadily through the corporate ranks. Every day for the next 19 years, 10,000 baby boomers will reach retirement age, leaving opportunities for new leaders to take the reins of the global economy. Many of those new leaders will be millennials.
It’s an exciting time for the business community as millennials bring new perspectives and changing priorities to leadership roles. New methodologies, innovative practices, and cultural change are poised to remake the landscape of modern business.
Are you ready?
What skills do millennial leaders value and what experience do they need? Review the infographic below to determine what characteristics the new leader will need as industries shift and new talent rises to the top.