While many companies talk about putting the customer at the center of what they do, few have actually reorganized themselves with that goal in mind.
CEMEX USA is an exception. Not only has CEMEX revamped its operations and made improvements up and down the supply chain to improve the customer experience, it has also leveraged customer engagement to turn a commodity business – selling cement products – into a competitive advantage.
Need proof? In 2006, the company ditched its automated voice response system as part of a new customer care center. All calls are answered by live operators who can access complete account information for each customer. The new system has helped increase order accuracy from 92% to over 99%.
More recently, CEMEX began using the insights it has been capturing from deeper customer engagement to drive new programs for an underserved segment: small businesses (see CEMEX: Let’s Get Small).
“Our mission is very simple: How can we make CEMEX the easiest partner to do business with?” says Ven Bontha, CEMEX USA’s vice president of customer experience. “That’s what our vision has been for the last 10 years, and we continue to focus on that.”
CEMEX established a single point of contact for small customers, with specially trained inside-sales professionals in the customer care center who could talk about products instead of just taking orders, as typical agents were trained to do.
CEMEX, with a customer base of about 30,000, has been looking for better ways to extend its customer experience programs to smaller construction firms and contractors.
Its operations, including its direct sales force, are tuned primarily to serve the company’s largest customers – the 20% or so that account for 70% of revenues. But Bontha’s team realized that without programs tuned for small customers, it was leaving a potentially significant amount of revenue on the table.
The company established a single point of contact for small customers, with specially trained inside-sales professionals in the customer care center who could talk about products instead of just taking orders, as typical agents were trained to do.
It also deployed business intelligence to find new ways to re-engage with smaller customers that were dormant or purchased infrequently. For example, business analysts used a combination of internal transaction data, such as purchase histories, and external market data, such as construction permit applications in various cities, to mine new insights about smaller customers and prospects. These efforts helped CEMEX triple revenue from small-business customers between 2012 and 2013.
Culture and Decision Making Are the Keys
As CEMEX has demonstrated, delivering exceptional customer experiences goes much deeper than a mission statement or marketing campaign. While every business leader likes to talk about being customer focused, the real challenge for leadership teams is embedding this mission into the organizational culture and then translating that mindset into the realities of day-to-day decision making.
To the victors go the sales: Forrester’s latest Customer Experience Index report finds that companies that outperform their peers in this area tend to have more customers who will make repeat purchases, won’t take their business elsewhere, and will recommend them to a friend – loyalty metrics that can drive millions in annual revenue.1
Improvements Require Deep Organizational Changes
To become a customer experience–based organization, business leaders must dig into the very fabric of their organizations, revamping structures, processes, and systems to enable a consistent customer experience across all touch points. Many large enterprises find such a challenge nearly impossible to address as they consider the deep-seated cultural and operational barriers that inhibit their ability to drive customer experience throughout the organization.
But by understanding and embracing four key components of a superior customer experience – context, customization, enhancement, and consistency – companies can begin the journey they all must take to remain competitive in a world that’s increasingly driven by customers. The goal is to turn customer insights into one-on-one engagement opportunities that drive positive customer experiences.
The Biggest Problem You Face
Before companies can transform the customer experience, they must understand the most important factor holding them back: silos. For most businesses, every customer-facing channel – the physical store, the Web site, the call center – is usually developed and managed independently, often by different groups within the organization.
Unfortunately, these independent functions are designed to optimize only the slice of the customer experience they directly control. “Too many companies have a huge infrastructure with boundaries that no one is supposed to cross,” says Curtis Bingham, founder and executive director of the Chief Customer Officer Council. “By not allowing people to participate in things outside of their job function, we’ve encouraged a narrow-minded adherence to ‘not my problem.’”
Meanwhile, company leaders encourage employees to do whatever it takes to keep customers happy. That leads to a sense of powerlessness and frustration. “There is nothing worse than convincing all of your employees to play nice with customers and then having your billing department screw something up because some flag was set incorrectly,” says Bingham.
On the flip side, investing in technologies and processes designed to improve the customer experience won’t pay off if employees don’t want to change their own behavior. “If you make operational changes that employees don’t want to [embrace] because they like things the way they are, then the culture will squelch the operational changes,” says Bingham. Fortunately, there are ways to get past these organizational and cultural barriers (see Why the Omnichannel Experience Needs a New Platform).
Why the Omnichannel Experience Needs a New Platform
The Entertainer is the UK’s largest independent toy retailer, with 83 stores across England and Wales, a successful online brand (thetoyshop.com) and partnerships with seven external channels, including Amazon and eBay. Since opening in 1981, it has developed a reputation as the local specialist with a national presence, built on excellent customer service and choice.
However, since online shopping has become more popular, The Entertainer’s customers have begun to switch between locations and channels based on what’s easiest or most convenient at any given moment. And their loyalty lies with toy brands, not with stores. Indeed, ease and convenience have become important for any retailer these days. Consumers are given so many options that any hiccup in the buying process could hurt business. In 2011, The Entertainer’s executives decided to develop a platform that would improve the customer experience across all channels. The company created a single inventory view that combines in-store and online inventories, enabling The Entertainer to create two new cross-channel services for customers:
- Click and Collect. With this option, customers can place orders online and pick up in the store in as little as 30 minutes if products are in
- Shutl 90-minute delivery. Customers in applicable postcode districts can have their online orders delivered to them directly at home via delivery service
With the new ability to view all store inventory in one place, Click and Collect has grown from 10% of orders to more than 30%. Users can also now track their orders online and access product inventory as they shop. With the improved site design and user experience, average time spent on the site has increased from 4 minutes to 5 minutes and overall online sales have increased by 32%.
How to Deliver a Coordinated Experience Across Every Channel
Organizational silos are like superstar athletes: You can’t stop them; you can only hope to contain them. Or at least get them to talk to one another. Here are six ways to get your functional teams – sales, marketing, finance, HR, and the rest – on the same page of the playbook.
Ask four questions. Improving customer engagement requires you to see things from the customer perspective, but how can you know what really matters when customers vary so much?
Research shows that four expectations are fairly universal across segments and demographics:
- Can you rely on us to do what we say we will do?
- Are we convenient to deal with?
- Are our products, services, and marketing offers relevant to you?
- Do we respond to your needs and questions in a timely and helpful way?
Put someone in charge. Organizations need someone to orchestrate the cross-channel experience, even if they don’t own it. This person must be relatively senior in stature and visible across all functions, serving as an internal partner to connect disparate groups around a customer-centric strategy. At some organizations, the CMO is best suited to integrate messages and insights across business units, geographies, and functional groups; other organizations have created chief customer officer positions to coordinate a cohesive approach.
At CEMEX, Bontha has served as vice president of customer experience for the past decade. His customer experience group has evolved from one team doing standard voice-of-the-customer research into three primary teams:
- An operating group that focuses on policies and procedures for customer service
- A sales-support group that helps salespeople in the field
- A strategic planning group that focuses on longer-term innovation
Double down on collaboration. More organizations are moving away from traditional top-down, bottom-up planning. Instead of having sales, marketing, finance, and operations each develop their own strategic plans, these companies have introduced collaborative planning, which puts everyone in the same room to create a shared plan, with the customer at the center.
Talk to the frontliners. Companies should also tap into customer-facing employees, who are a rich source of insights. Whoever heads up customer experience should oversee an effort to ask every frontline employee what’s impeding their ability to deliver excellent service, according to Bingham. These employees have a wealth of information about the processes that inhibit their efforts and, often, suggestions on how to improve customer experience.
Form temporary problem-solving teams. “What if you could quickly put together a team of people from across the organization who know the state of a customer relationship, know the key issues, and know some of the things needed to fix the relationship?” Bingham asks. “What if you allow them to participate in the effort to fix the problem, and then once the problem’s fixed, you allow them to disband and return to their regular work? Most large companies don’t have the ability to create these shadow teams.”
Focus metrics and incentives on long-term retention. Customer experience initiatives should be measured not on short-term transactions but on longer-term measures, such as lifetime value. For example, instead of measuring how quickly a call center agent answers a customer’s question, measure how infrequently customers call back. Instead of calculating return on investment, calculate the cost of doing nothing and falling behind your competition in terms of customer experience. Is the risk of becoming irrelevant worth the money saved in the short term?
Compensation and incentive models must adapt along with business rules and processes. If salespeople are still paid based on volume and quotas, their focus will be on maximizing sales, not on improving customer satisfaction. If half of their compensation is based on how much value they create for the customer, their approach will begin to change quickly.
Breaking Down the Silos Is Only the Beginning
Of course, stopping the internal organizational bickering and freeing up the process and systems blockages are only the beginning. They will get you only to where customers expect you to be anyway. To transform customer engagement in a way that drives superior experiences, you need these key components.
The wealth of data that organizations are able to collect about their customers provides insights well beyond the transactions the customers make. Advances in big data analytics, combined with consumers’ love of digital communications channels, enable companies to develop a more complete picture of their customers’ behaviors, interests, and activities. This context is critical to a company’s ability to engage with customers in relevant and timely ways.
For example, Aviva, a UK-based insurance company, noticed that it was receiving a high volume of calls from customers who had revised their policies. After speaking with a call center agent, 75% of customers would call back within a few days to check on the status of the revised policy documents, resulting in thousands of extra phone calls daily.
A customer-experience team analyzed call logs and pinpointed the problem to one word: should. The agents would tell customers near the end of each call that they should be receiving their documents in four to five business days. The agents thought they were being customer centric by not setting false expectations, due to the uncertain nature of postal delivery. But the word should was making customers anxious, causing three-quarters of them to call back within a few days to ask about the status of the documents. Changing the should arrive to will arrive in the agents’ script caused call-backs to drop to 6% in a matter of weeks.4
Mobile devices are also opening up new pockets of insight that companies can use to improve customer engagement at the time and place when it matters most. For example, at the Société de transport de Montréal (STM), a new mobile app plays a critical role in the organization’s efforts to improve ridership and retention for Montreal’s public transit system (see The Power of the App).
The Power of the App
Most organizations are just beginning to tap the potential of mobile devices as a channel for improving customer engagement. The Société de transport de Montréal (STM) views a new mobile app as a critical piece of its efforts to improve retention rates among its 2.5 million transit cardholders.
STM’s iPhone app, an extension of the agency’s Merci loyalty program, provides a wealth of data about how customers are using public transportation (through their OPUS transit card) as well as demographic and other profile information that users provide. “All of this information gives us a good reading on the individual and allows us to talk with them in a very relevant and specific fashion,” says Pierre Bourbonnière, STM’s marketing director.
For example, the app can send alerts about detours or delays involving specific routes a customer takes or the bus lines or metro stations they use daily. The app even makes recommendations based on rider habits: If a commuter always catches a train during the busiest part of rush hour, for example, the app might suggest arriving 15 minutes earlier or later, when the station is less crowded, to have a better chance of finding a seat. The app will also alert users when their transit account is low on funds. “All of these things are designed to take the frustrations out of public transit,” says Bourbonnière. “By anticipating customers’ needs, we make them feel more like they’re VIPs.”
More Than Schedules and Delay Alerts
STM has partnered with more than 1,000 local retailers and other partners that provide coupons and promotions through the app, which can be targeted based on the users’ home address (if they share that information) and their location as they use public transit.
“STM has created this wonderful ecosystem for precision marketing,” says Francois Silvain, head of engineering for the marketing cloud at SAP. “It is connecting its consumers to an ecosystem of partners that provide great offers in a personalized way.”
The six-month app pilot involved 20,000 riders; half of the users completed their profiles. “As soon as you provide people with value against the information you’re asking for, they are willing to share that information,” says Bourbonnière. Other metrics from the pilot underscore its success:
- Riders accessed the app three to four times a week on average, an indication that they find value in it.
- Click-through rates for partner offers averaged 10%, an extremely high level for these types of promotions. Ten offers had acceptance rates beyond 60%.
- Nearly 25% of customers increased usage of public transit, and 57% discovered new destinations, attributable to the app’s recommendations of local attractions or events.
- Almost half of customers took a friend along on at least one ride, cashing in on 2-for-1 promotional offers.
“Those numbers help us build a business case for taking this program to the next step,” says Bourbonnière. A formal launch of the app is expected early this year, along with an Android version. The short-term goal is 100,000 downloads, which Bourbonnière believes is easily reachable. Beyond 2014, the goal is to convince all 2.5 million OPUS cardholders to join the loyalty program.
Contextual information can be paired with transactional, demographic, and market data to help organizations tailor experiences to specific segments, such as CEMEX’s small-business customers, or even to individuals. The ability to create customized experiences for consumers brings the “segment of one” concept closer to reality.
A new era of more personalized experiences is not that far off. For example, 3D printers will take customization to a new level and are already disrupting markets and replacing traditional business models. Protos Eyewear has developed an algorithm for creating customized, 3D-printed eyeglasses.
LayerWise, a Belgian metal-parts manufacturer, designed and built a 3D-printed artificial jawbone for an 83-year-old woman – the first transplant of its kind in the medical industry.
Successful companies such as Apple, BMW, Virgin Atlantic, and Nike have already made the transition from selling products to selling experiences. The next wave of innovation lies in finding ways to enhance those experiences to create deeper levels of loyalty and to drive retention.
Engagement enhancement can be physical (activating more of a customer’s senses), mental (soliciting the customer’s ideas and influence), emotional (providing peace of mind, laughter, or some other positive feeling), or any combination of the three, according to Steve McKee, president of McKee Wallwork & Co and author of When Growth Stalls and the forthcoming Power Branding.
“Watching race cars is fun. Riding in a race car is more fun. Driving the race car is the most fun. There’s your template,” McKee says. “Viewed through this lens, there’s no end to what we can do.”
Enhancement does not always mean “more,” McKee adds. In some cases, customers might value less engagement, such as at the motor vehicle registry. The principle, he says, is the same: “How can we make customers’ physical, mental, and emotional experience better than it is today?”
A customer’s experience with a business is generally not a one-off event, nor is it delivered through a single channel. As more companies reorganize their businesses around customer centricity, innovation will require a consistently superior experience that spans multiple channels and geographies – in essence, every conceivable touch point between a brand and its customers.
Completely breaking down silos may be too much to ask of most management teams, however. “Silos aren’t going away anytime soon,” says Bodine. “We may start to see some new organizational models emerge in startups and smaller organizations, but we won’t see a legacy bank or giant automaker completely scrap the way it’s been doing business for decades.”
Equal parts culture and process, the ability to deliver consistently positive experiences to customers requires alignment across all parts of the business. The goal, Bodine says, is “to create connections across those silos, along with visibility so that people see how the work of one silo impacts the others and how they collectively impact customer experience.”
“When you get the values you’re trying to foster aligned with the type of vision you’re creating, that will inherently drive more customer-centric decisions across the organization, from technology and operations to marketing and everything else,” Bodine adds.
Reorganize for the Right Reasons
Senior executives will find that transforming their business around these four components will create an organization that can consistently deliver superior customer experiences. The journey is difficult and never really ends, but realigning culture and operations around customer experience will provide a foundation for growth that is far more sustainable than traditional product-centric approaches.
TO LEARN MORE ABOUT HOW COMPANIES ARE TRANSFORMING THEIR BUSINESSES, DOWNLOAD THE FULL REPORT OR READ THE Q&A CUSTOMER EXPERIENCE: HOW TO BALANCE CULTURE AND OPERATIONS.
The authors would also like to acknowledge Jamie Anderson, Gurdeep Dhillon, Anthony Leaper, Herve Pluche, and Francois Silvain for their valuable contributions.
The SAP Center for Business Insight is a program that supports the discovery and development of new research-based thinking to address the challenges of business and technology executives.
- Maxi Schmidt-Subramanian, The Business Impact of Customer Experience, 2013 (Forrester, June 10, 2013), http://www.forrester.com/ The+Business+Impact+Of+Customer+Experience+2013/fulltext/-/E-RES97721.
- Michael Hinshaw, “Customer Journey Mapping: 10 Tips For Beginners,” CMO (October 30, 2012), http://www.cmo.com/articles/2012/10/30/ customer-journey-mapping-10-tips-for-beginners.html.
- “Blueprint,” Service Design Tools, accessed March 11, 2014, http://www.servicedesigntools.org/tools/35.
- “The Subconscious Experience,” Beyond Philosophy, accessed March 11, 2014, http://www.beyondphilosophy.com/customer-experience/ subconscious-experience/.
- “Eyewear 3D Printed to Fit You,” Protos Eyewear, accessed March 11, 2014, http://protoseyewear.com.
- Shane Richmond, “3D Printer Builds New Jaw Bone for Transplant,” The Telegraph, February 7, 2012, http://www.telegraph.co.uk/technology/ news/9066721/3D-printer-builds-new-jaw-bone-for-transplant.html.
- Michael Brenner, “Customer Delight Is the Future of Customer Experience,” SAP Business Innovation, October 30, 2013, https://blogs.sap.com/ innovation/sales-marketing/customer-delight-future-customer-experience-0836281.