Throwing Out the Old Playbook
For almost three-quarters of companies, the top
barriers to improving customer experience are
related to disconnections in processes, applications,
customer information and social media channels.
Reza Soudagar, Vinay Iyer, and Dr. Volker G. Hildebrand
—BLOOMBERG BUSINESSWEEK
RESEARCH SERVICES SURVEY, 2010
A SUCCESSFUL AND PROFITABLE CUSTOMER experience does not happen at the margins of the organization; instead, these initiatives are holistic, involving the entire enterprise and transforming the corporate mindset. Stretching far beyond “customer service,” the customer experience edge encompasses each and every customer interaction, whether it’s through the call center, the supply chain, the website, social media, or the product or service itself.
Even more critical, it’s the customer—not the product or service—who should be at the center of the corporate universe. This means tossing out old ways of doing business and gutting or transforming many of the systems, processes, and organizational structures under which you have been accustomed to operating. The new playbook—the one leading to the customer experience edge—is based on enabling deeper, richer, and ultimately more fulfilling customer interactions. Essentially, “business as usual” has been flipped on its head. For instance:
- Product centricity is out; customer centricity is in.
- Processes need to be designed from the customer’s perspective, not just for internal efficiencies.
- Your purpose is to provide customers with relevant value, not to sell products and services.
- Customers don’t need to listen to you; you need to listen to customers and incorporate those new insights into your processes.
- You no longer call the shots. Customers will choose to interact and engage with their social network and the companies they purchase from wherever, whenever, and however they want.
- Employees at all levels need to be empowered to provide a great and economical customer experience.
Does this sound radical? It is. But this is what it takes to create a customer experience that translates into profits and differentiation for your company. Otherwise, as Strativity Group’s Lior Arussy says, “You’re just sitting at the children’s table, playing with toys.”
Two types of companies engage in customer experience initiatives, Arussy explains: those who pursue the customer experience as a fullcompany effort and embed the initiative in their business strategy, and those who are forced into dealing with the customer experience as a reaction to an event, such as poor customer satisfaction scores or an embarrassing social media fiasco. In the first case, the customer experience is a total value proposition, not just a customer service, marketing, or PR concern. These companies are designing a value proposition across multiple business divisions: product design, marketing, billing, fulfillment, customer care, and company-generated communications.
“The ones who ‘get it’ are trying to create new and relevant value for customers, and the more relevant they are, the better their chance of retaining customers, upselling products and services, and lowering their cost of doing business,” Arussy tells us.
Changing Roles, Changing Rules
This new way of doing business will change the rules and roles for everyone in the corporate ecosystem, including the customers themselves. For instance, consider the following areas.
Leadership
Company leaders now need to be engaged with and even passionate about customers. Too often, businesses throw money at customer experience initiatives. But without passion at a high level—and clear direction as to how to turn that passion into long-term customer loyalty and profitability— these efforts don’t always pay off. Top executives and customer experience leaders need to motivate people in business units throughout the organization to rally around the customers, getting to know them and their needs. “There has to be a love for people and a core belief that serving them well will drive desired business outcomes,” says Leigh Durst, principal of Live Path, a customer experience consultancy. “For too long, we’ve been focused on other aims first.”
According to Forrester Research, Inc., one vital ingredient of highperforming customer experience organizations is inspiring leaders. “Because the customer experience organization gets most of its work done through others, the ability of its leaders to influence people across the business is critical to long-term success,” Forrester says in its report, “Three Secrets of Success for Customer Experience Organizations.”1 To permanently shift the corporate culture, customer experience (CE) leaders must make employees at all levels of the company want to change themselves, Forrester concludes.
Employees
Organizations can no longer limit employee authority. The old “that isn’t my department” just doesn’t fly anymore, as it leaves customers frustrated and angry, and then what happens? They flame you on their favorite social channel. Today, employees need to be “agents of experience,” which requires enabling them to access information to answer customers’ questions and empowering them with tools to fulfill unexpected needs. All employees (and particularly frontline employees) should also be seen as prime sources of insights that can be fed back into product development, marketing, and customer service. “We all deliver experience, and in some way, we shape that experience with what we do,” says Frank Eliason, who famously helped move Comcast’s customer service operations onto social media and is now senior vice president of social media at Citi.
Employee empowerment often requires cultural change within the company, as the environment itself needs to foster customer experience– focused behavior. There may be no better example of this than Zappos, whose CEO, Tony Hsieh, goes so far as to say that his company’s culture is its brand. The Zappos culture is laid out in its 10 core values, which include an “obsession” with customer service and bringing passion, fun, and a sense of adventure to the job.
Customer service reps at Zappos are given the freedom to offer all customers the highest levels of personalized service, including delivering flowers to a customer whose mother had recently died.3 When employees are hired, they take an intensive four-week training course that immerses them in the company’s culture and processes. At the end of the training, they are offered a $3,000 bonus to quit that day, with the idea being that only those who are truly passionate about the company’s approach will stay. According to Hsieh, only about 2 or 3 percent of people take the offer, on average.
“It may sound like our top priority is customer service, but it’s about the culture,” says Aaron Magness, senior director of brand marketing and business development at Zappos. Instead of weighing employees down with bureaucracy and policies, “We just allow employees to do what they do best,” he says. “They are naturally empowered—you can’t do that if you have a policy in place for every interaction.”
Zappos also experiments with employee performance measurement. Eschewing traditional call center metrics such as average call-handling time, it has developed an employee dashboard to show people how they’re doing from a cultural perspective and in terms of living up to the company’s 10 core values. All companies can learn from this variation on performance measurement. True customer centricity requires that employees be compensated on driving outcomes, not just carrying out a set of prescribed tasks. This requires new types of performance measurement, as we’ll discuss in Measures of Success, “Measures of Success.”
Customers
Customers themselves are in a new role. There’s been a shift in the balance of power between customer and company, as digitally engaged and alwaysconnected customers rely on their peers and social media commentary to conduct research and make buying decisions. According to a 2009 Nielsen Global Online Consumer Survey, the forms of advertising most trusted by respondents were recommendations from personal acquaintances (90 percent of respondents) and opinions posted online by consumers (70 percent).
Customers are increasingly using mobile devices and the Web as a primary source of product and pricing information, as well as for opinions on which products and services to choose. And they increasingly expect to contact the company, obtain information, and make transactions through any channel they desire, whether that is the phone, the Web, in person, tweets, instant messaging, or something else. No longer is the customercompany relationship a one-way street, with the company broadcasting marketing messages and product and pricing information; the new relationship is two-way, with customers expecting to make their personal preferences known and have them fulfilled. With so much information available at any given time—through search engines, social media commentary, online forums, and shopping comparison websites—there is a new transparency of price and product information that puts the customer in the driver’s seat.
What’s more, customers are no longer simply consumers of products and services; companies will increasingly work to involve customers more directly in co-creating new products and services. The aim is to co-innovate on more successful offerings and encourage word-of-mouth advertising, as engaged customers become natural advocates of the products and services they helped develop.
Breaking Down Organizational Barriers
Amid all this change, organizations also need to undergo a transformation: they need to break down the corporate silos that served companies well in industrial times but cause big problems today. Traditionally, business departments have operated as separate fiefdoms, with their own performance goals, processes, programs, and information, and with little meaningful connection or communication among them. Rather than being accountable to one enterprisewide set of goals and values, each often marched to its own set of orders. Structuring business activities by specialty might have worked well in the Industrial Age, when efficiency was the goal, but this approach doesn’t lend itself to fulfilling the needs of people— both customers and employees—and that’s what customer centricity is all about.
Customer centricity cannot be achieved by one business department or even several departments acting independently. The company needs to act as one organization, presenting a single face to customers and employees. There needs to be consistency across all customer touch points and all channels of communication, so that when customers call for support, for instance, they get the same treatment and information as they would get if they opted for self-service or visited the company’s corporate Facebook page.
Goals and strategies also need to be aligned and synchronized among all business functions. There needs to be one organizationwide sense of purpose, mission, and values, and it needs to be embraced by everyone. This cannot happen when business functions perceive themselves as separate from one another and are not accountable for something bigger than performing their own individual tasks and showing how their performance meets the overall business purpose.
A classic example is when, say, the purchasing department opts for less expensive and thus lower-quality components in an attempt to meet costcutting goals. The downstream impact on manufacturing and customer support is, of course, detrimental, as both have to deal with the increased costs that result from customer complaints or products not passing quality assurance tests. The same is true for customer service and eventually every customer interaction. The bottom line is, pursuing efficiency gains (or any other goal) without awareness of how these actions fit into the larger picture will backfire.
When business functions are aligned and synchronized, they are better able to collaborate with each other, as well. An example is the common disconnect between the call center, which is dealing directly with customers, and the marketing department, which tends to gain an understanding of customers in more indirect ways. “Marketing is doing focus groups and obtaining customer research, while the frontline [call center] employees are gathering this data in real time,” Durst says. This sort of fragmentation does not have the best interests of the customer at heart; indeed, these groups often work at cross-purposes because they are measured based on different metrics.
TIP
To encourage intercompany collaboration, some companies locate product development adjacent to the call center so that input from customers can be applied to product design more rapidly. Unfortunately, these types of fragmentation seem to be the rule; in the Bloomberg Businessweek Research Services (BBRS) survey, the top barriers to improving customer experience all relate to disconnections and silos in processes, applications, customer information, and social media channels (see Figure 4.1).
FIGURE 4.1: Disconnections, Silos Are Biggest Barrier to Improving Customer Experience
Which of the following are obstacles to your company improving the experience customers encounter when doing business with you?
Base: 307 director-level and above executives at midsize and large companies.
Source: Bloomberg Businessweek Research Services, 2010.
Removing these obstacles and smoothing the way to better communication and collaboration is an essential requirement of moving to the new customer-centered paradigm. For instance, Eliason was integral in Comcast’s current practice of using Twitter to monitor and resolve customer problems. Adopting Twitter as a window into customer issues ultimately led to a cultural shift and other transformational events at the company, such as a corporate restructuring that broke down departmental silos. “It created a whole new company,” he says. Today, Comcast sees customer experience reaching far beyond fixing customer issues and extending into how consumers behave and how that translates into new services. “We are focused on providing a great experience end-to-end—it’s not just phone calls and truck rolls, but our brand image and how we design our product suite,” says Rick Germano, senior vice president of national customer operations.
In addition to introducing the Comcast Customer Guarantee, the company recently hired a senior vice president of customer experience and has invested almost $2 billion in the customer experience over the last few years, Germano says. These investments include improvements to its network infrastructure, online self-help, ongoing enhancements to its products and services, and even creating a dedicated digital care team. According to Germano, the number of customer problems has dropped by more than 20 percent, the company’s “get it right the first time” commitment has improved by more than 33 percent, and technicians’ ontime arrival is now at 95 percent.
At Zappos, customer service and the customer experience are not relegated to one part of the company, but “are part of what everyone in the company does,” Magness says. In marketing, that translates into communicating the company’s service-level commitments to customers. In the Customer Loyalty Team (or call center), it’s the freedom to lavish customers with extra service. In merchandising, it’s a focus on supplying the products that customers want. “It’s not one department—everyone is measured on their ability to enhance the customer experience,” Magness says.
And at Cardinal Health, the $99 billion health-care services company, the implementation of a problem tracking and resolution system was instrumental in helping to break down the barriers across its business units, support teams, operations staff, and distribution centers. Previously, Cardinal Health had had “a patchwork of systems” across its pharmaceutical and medical departments, according to Deborah Dexter, director of customer service for business operating systems. “We heard some concerns from our customer service reps that it was challenging to work across multiple applications,” she says. Now with a system that holds all customer data and “the foundational capabilities for our organization,” employees gets a 360-degree view of customers from all of Cardinal Health’s customer service, operations, and inventory support teams.
Business processes often need to be redesigned to reflect customer centricity, as well. In the past, the main idea behind process design was to maximize efficiency and reduce costs. And certainly efficient operations, as well as balancing the impact of costs on revenues, continue to be important, even in a business that stresses customer centricity. But in the end, efficiency cannot get in the way of doing the right things from a customer perspective.
To strike the right balance between efficiency and customer centricity, we like to juxtapose efficiency and effectiveness. Think of it as needing to use a ladder to fix a hole in the wall that’s beyond arm’s reach. You can climb the ladder as quickly as you can, and you can have all the right tools in your toolbelt, but none of that matters if you put the ladder against the wrong wall. Similarly, if your processes are not designed to fulfill customer needs, it doesn’t matter how well you tune them or how efficiently they run. Making a bad process run faster doesn’t help anyone. You’ve got to put the ladder against the right wall, and then start thinking about efficiency.
When you’re reengineering processes for customer centricity, you need to look at your processes from the outside looking in rather than the converse. What would make most sense for the customer? For many companies, the customer is seen as an unwelcome disruption that interferes with their otherwise smooth-running processes. After all, it’s easy to define an order-processing system if the customer never changes his mind and never needs to return or exchange something. But in a customer-centric approach, not only do processes need to take these types of events into account, but flexibility needs to be designed in from the beginning, with the expectation that exceptions will occur at any point during the process, from start to finish. If the process cannot accommodate a disruption, then the process is not designed correctly. Business processes (and the underlying technology that automates these processes) need to treat customers and the unexpected actions they might take not as a problem, but as an expected disruption.
Companies that deliver a great customer experience have thought through the many ways in which customers behave and realize that customers do not behave in predetermined ways. They’ve analyzed their processes from the customer’s perspective and redefined them with the customer in mind. They realize that they cannot train customers to take certain actions. For instance, even though they’ve developed a self-service component on their website, they still invest in their phone-based customer support. And the experience that customers get on the one is reflected on the other, even if they start on the website, move to chat, and end up with a representative on the phone. That is the difference between an organization with the customer experience edge and one without it.
So, how do you begin to see your business processes through the eyes of customers? For most companies, this means creating mechanisms to listen to actual customers, analyzing this feedback, and then acting on it. These programs—often referred to as “voice of the customer” programs— can use a number of “listening” mechanisms that capture both solicited and unsolicited feedback, including surveys, social media monitoring, customer e-mails, calls into the call center, comments on company blogs, and feedback on third-party sites, according to Temkin Group’s Bruce Temkin.
Most important, you need to create feedback loops so that you can take action on the input you receive. The insights you collect from customers through these various mechanisms are valuable only to the degree that you act on those insights, either by redefining your processes or by improving or redesigning the products and services that you offer.
An example is Sony Canada, which in 2010 revamped its customer feedback system as part of its effort to differentiate itself through the customer experience. It began surveying customers, through an automated function in its customer relationship management (CRM) system, after customers had called into its call center. The survey includes five questions that focus on touch points that Sony determined are important to customers, as well as an opportunity for open comments. The questions are: Was the employee knowledgeable? Friendly? Patient? Did the employee get a resolution for you? How likely are you to recommend Sony Canada to someone else?
Sony acts on the responses in several ways. Customer support agents call every customer who scores low (0 to 6 on a 10-point scale) on whether she would recommend the company. High-scoring customers receive a coupon toward future purchases. In addition, company presidents receive daily feedback reports, and the marketing department can track results on the CRM home page. Sony is clearly a company that meets the CE essential of “responsiveness.”
Letting Customers Have Their Way
Customer centricity also breaks down traditional boundaries between customers and organizational processes, as companies invite customers to provide input directly into their processes, such as in the practices of realtime demand planning and product co-creation. This idea of directly involving customers in personalizing products and services based on their preferences and even helping to co-innovate new ones has historically been called mass customization. Although it’s not a new concept, the idea of providing personalization and customization—what we might today call “engaging the segment of ‘one,’”—is now exploding in industries from apparel to retail to communications to financial services. It is a vibrant example of how some companies have become hyperresponsive and hyperrelevant to their customers, fulfilling the “relevance” and “responsiveness” customer experience essentials.
TIP
It’s one thing to monitor social media; it’s another to incorporate those insights into improving the customer experience. Citi’s Frank Eliason encourages companies to create feedback loops to take action on what they hear from customers. “Ninety percent of companies that are listening to social media aren’t doing anything with that information,” Eliason says. “They’re usually listening within their own silos. What’s the point of listening if you’re doing nothing with it?”
Personalization and customization require an organization’s underlying systems and processes to be integrated and flexible in a whole new way. Companies that can pull this off are functioning at a high level of customer experience, and their reward for this achievement is higher market share and more engaged, loyal customers.
In the early days of mass customization, McDonald’s, Burger King, and other fast-food purveyors encouraged customized food, adding and subtracting pickles on burgers and the like at will. Levi’s caused a stir in the mid-1990s when it offered its Personal Pair customized jeans (not that consumers adopted this first venture en masse). The key factor to be learned from these examples is that allowing customization does not bankrupt the company. Early on, these quick-serve restaurants were able to reengineer their systems and processes to allow efficient flexibility, within reason.
Now, personalization and customization have really taken off, including in the business-to-business (B2B) market, but particularly in consumer goods. For instance, while it’s been possible for automobile buyers to order the options they wanted if they were willing to wait months for the custom car, now they can receive alerts to key moments of the assembly process and watch footage of the car being built. Customers can “curate” their own clothing collection with items culled from millions of Web clothing stores and share their taste with the world in their own “boutique” on Googlebacked Boutiques.com. And Nike and Reebok are pushing customized shoes as the next wave of cool.
In configuring your own special ZigSlash basketball sneakers, you can choose from dozens of colors for each component of the shoe—everything from the laces to the sole and each part of the Reebok “slash” logo. (The freedom to create an eye-burning pair of sneakers combining pink, olive, and teal blue patent leather with accents of acid yellow is apparently now the consumer’s inalienable right.) Customers who are not ready to take the plunge can order models designed by other customers or by their favorite basketball player instead. Browsing others’ creations lends a nice social media touch to the Reebok store, with the feeling of belonging to an exclusive group.
Customized ZigSlash sneakers sell for nearly $140 and take six to seven weeks from configuration to production to package delivery. The fact that at least a certain segment of the market accepts the comparatively long lead times and high price is an indication of just how powerful the lure of customization is.
WHAT IS: The Segment of ‘One’?
Mass customization, or what today we might call “engaging the segment of ‘one,’” is the principle of enabling customers to decide the exact specifications or personal attributes of a product or service, at or after the time of purchase, and to have that product or service supplied to them at a price close to that for an ordinary mass-produced alternative. Alternatively, they can have this exact requirement supplied using the vendor’s knowledge of the individual customer’s needs.
Source: MadeForOne.com.
According to Cognizant Technology Services, financial services customers are also increasingly interested in designing their own products and services, from putting their photo on a credit card and designing the layout of their mobile banking graphical user interface (GUI) to tailoring their retirement investment portfolios.12 Going further, Progressive Insurance offers customers the option to pick their own monthly premium cost and coverage. And in the hospitality industry, Marriott International, Inc., now emphasizes personalized experiences for its Rewards members. When a frequent customer calls to make a reservation, call center agents have at their fingertips enough information about that person’s preferences that they can deliver a personalized, and therefore more satisfying, experience. Much hinges on the 360-degree visibility afforded by integrated systems.
For example, if the call center gets a call from a frequent business traveler who often stays at Marriott properties at a prenegotiated corporate rate, the system immediately recognizes the person (and therefore his status and preferences) by his phone number or Rewards number. That customer is then routed to the right service desk, where he will receive personalized service. There, the agent can see in the customer’s file that this no-nonsense road warrior wants nothing more than confirmation of dates at the agreedupon rate and then to get off the phone. If that person has opted in his customer profile to receive an e-mail confirmation, one will be dispatched. If he hasn’t, it won’t be. Electronic communication is cheap for the communicator, but in our world of information overload, companies need to be judicious about how they use this tool.
Traditional service industries, such as cable television, are coming around to the idea that customers call the shots. Mass customization expert David Gardner points out that consumers should be able to choose from a menu of channels to create their own bundles, allowing them to focus on a few preset channels (as you would have in a car radio, for example). This would be a major improvement over the inflexible approach today, under which consumers have to accept and pay for providers’ “platinum deluxe” packages, which give them dozens, if not hundreds, of channels that they will never watch.
These companies and others have every reason to move toward customer centricity; the problem is that their legacy systems and processes (the old playbook) do not allow customers freedom of choice. Customization requires complex order management capabilities that most established companies do not currently have, including seamless crosschannel ordering, simplified ordering of complex products and bundles, better collaboration with internal/third-party partners, order fulfillment across multiple enterprises, and process/systems integration. This might seem to be a daunting task, but changing the organizational mindset is even more challenging. Once employees begin to view the world from the customer’s point of view, things can begin to change.
B2B: Engaging the Segment of One
Personalization and customization are an equally critical capability in the B2B world. Smaller, younger B2Bs often have the advantage of being nimbler than their larger, more established counterparts. Take Interior Concepts of Spring Lake, Michigan. A small manufacturer of furniture used in call centers and schools, the company not only custom-makes every product, but also custom-designs every product. Customers choose the colors and materials that they prefer, typically requesting and configuring a completely different product with each order. This degree of individualized service is the core of Interior Concepts’s value proposition to its customers, and it would have been impossible without implementing an engineer-toorder solution. This type of software is invaluable in helping manufacturers cope with customers’ increasing appetite for customization.
As markets continue to shift to being demand (a.k.a. customer)-driven, as opposed to supply (a.k.a. company)-driven, other types of innovative software will become increasingly important. Product configuration and customer ordering software have progressed to the point where companies can provide customized goods for consumers and businesses. On the web you can order shirts, shoes, and other clothes exactly as you would want them.
There are organizational implications as well. The product engineers enter approximately 500 to 600 business rules at the beginning of the process of building a furniture model, reusing sections from one model in another. The business rules reside in the system so that nothing can be lost in translation from one engineer to another.
That was the rub. The engineers had a lot of reservations. They thought their jobs might be taken away, especially given the clouded economy at the time of the implementation of the process in 2003. Rather than displacing human expertise, however, automating Interior Concepts’s quoting and engineering process allowed the engineers to fully utilize their knowledge by moving into value-added tasks such as product development, which had previously been outsourced. Postimplementation, engineers no longer functioned as order processors. They created and modified models—a much more valuable use of their time.
Being able to deliver custom-designed and custom-made office furniture at a reasonable cost allowed Interior Concepts to differentiate itself from offshore contract manufacturers, back when offshore was viewed as the only game in town. Given that today, high energy and logistics costs have weakened the benefits of producing in low-labor-cost regions, especially for heavy goods like office furniture, Interior Concepts is now in a rather enviable position.
Increasingly, developing the customer experience edge will include some ability to personalize products, services, or the delivery of the experience itself. And that will require operating from a new playbook, with new processes and rules that enable deeper and richer customer engagement and collaboration.
CASE STUDY: CARDINAL HEALTH, INC.
Cardinal Health Transforms Customer Experience with a Cross- Company Service System
Cardinal Health, Inc., has long recognized the importance of delivering “an exceptional customer experience”—in fact, it’s one of the company’s top priorities, says Deborah Dexter, director of customer service for business operating systems at the Dublin, Ohio–based health-care services company. Cardinal Health is one of the largest companies in the United States, with $99 billion in revenue. While the company has operations in Asia, Canada, and South America, the vast majority of its revenues come from domestic organizations.
Cardinal Health’s customers include pharmacies, physicians’ offices, hospitals, and ambulatory care sites. “We touch just about every part of the health-care industry with our products and services,” Dexter says. “We are shipping products to all those points of care and more.”
CE ESSENTIALS
• Reliability. Cardinal Health’s Interaction Center measures key performance indicators, such as service level agreements, to ensure that requests are serviced in a timely manner. The system also tracks trends and makes needed modifications quickly.
• Convenience. When a customer calls with a problem or question, customer service reps across the company can access a complete record of that customer’s interactions with Cardinal Health and service her needs.
• Relevance. Cardinal Health relies on feedback from voice of the customer (VoC) surveys and advisory council meetings with customers and continuously improves its processes to meet the changing demands of all customers (pharmacies, physicians, hospitals, and others).
• Responsiveness. Customers with shipment inquiries get a quick response, as the CRM system allows service reps to route inquiries to the right distribution center.
Delivering exceptional customer service was a challenge. Cardinal Health had “a patchwork of systems” across its pharmaceutical and medical departments, Dexter says. The pharmaceutical segment acts as a wholesaler to retail independent and chain pharmacies, while the medical unit provides supplies to hospitals, physicians’ offices, laboratories, and ambulatory care sites.
“We heard some concerns from our customer service reps that it was challenging to work across multiple applications,” says Dexter. “We wanted to be able to streamline to one tool across the business.”
Since 2009, Cardinal Health has been working on a phased implementation across its business units of a problem-tracking and resolution tool it has dubbed SAP CRM Interaction Center. The system contains customer data and “the foundational capabilities for our organization,” says Dexter. It also provides a 360-degree view of our customers from all of Cardinal Health’s customer service, operations, and inventory support teams. Incoming requests may include inquiries about customer orders, products, or delivery status. “We work very hard to solve these requests very quickly,” she says.
The tool also has a tracking mechanism that Dexter’s group can use to see how long it took to service the request. “We wanted to make sure we can document the interaction with the customer,” she explains.
The Interaction Center provides automation to record each inquiry, noting which agent received the inquiry and who else was involved in responding to it, enabling everyone involved to track a customer’s request. That way, whoever receives a follow-up can see all service requests and inquiries from the customer by pulling up the interaction record. “The tool provides the automation we need for visibility on customer requests and enhanced automation to make the process very seamless for the customer,” Dexter says.
CE PILLARS
• Operational excellence. Cardinal Health’s problem resolution system breaks down the barriers across its business units, support teams, operations staff, and distribution centers.
• Interaction excellence. Through the Interaction Center, any customer service rep can access a customer’s relevant history to help resolve a problem.
• Decision-making excellence. Because the CRM system incorporates knowledge management and analytics, decisions are based on relevant, real-time data.
For a full discussion of the CE Pillars, see The Underlying Foundation for the Customer Experience Edge
If the inquiry is related to a shipment, a customer service rep can create a service ticket and route it to one of Cardinal Health’s distribution centers across the country. Based on the system’s routing capabilities, customer service reps can document the customer’s inquiry and account information, allowing the tool to route the inquiry to the appropriate distribution center automatically. The company has established minimum response times for responding to service requests, which enables the company to be more responsive to customer needs very quickly, Dexter says.
While the Interaction Center has not been completely rolled out to the entire company, the implementation of the first two phases has already delivered important improvements in the customer experience. By mid- 2011, about 1,400 customer support reps were using the interaction tool. This included employees in the operations organization and distribution centers, as well. Dexter notes that the company has already exceeded its service-level goals by more than 10 percent.
Employee feedback on the Interaction Center has been very positive. “We are receiving rave reviews around case management and the accountability that the tool drives across all of the teams,” says Dexter. “Our employees are saying it is definitely benefiting our customers.”
That feedback is based on voice of the customer surveys and advisory council meetings with customers. These are the channels that let us know that “we are moving the needle in the right direction,” says Dexter.
The metrics that Dexter’s group has established are service-level agreements to ensure that customer requests are serviced by Cardinal Health in a timely manner. The goal is that when a customer calls, the customer service reps are armed with everything they need to ensure a positive customer experience, she says.
Lessons Learned
There were important lessons learned from this experience. Dexter says that three critical success factors for the Interaction Center are
- The incorporation of knowledge management and analytics into the system. A superior customer experience for Cardinal Health customers was achieved in large part because the Interaction Center was able to provide real-time customer information, Dexter says.
- Involvement of all stakeholders early in the development and deployment process. As with any project, some unexpected issues cropped up. But thanks to leadership buy-in and strong partnerships, the “decision points” were turned around in a very timely manner, Dexter says. “That happened by aligning our leaders ahead of time on plans and shared metrics” and determining roles and responsibilities at the outset.
- Organizational change management techniques. When looking at new technologies and new processes, it is critical that the organization is prepared for the change. Also, all stakeholders must be working together to get a clear understanding of the needs of end users, Dexter says.
Overall, the Interaction Center has had a positive impact on the customer experience and on internal operations at Cardinal Health. Says Dexter, “We’re pretty pleased.”
Notes
Quoted material that is not referenced is from personal interviews.
1. “Three Secrets of Success for Customer Experience Organizations,”
Forrester Research, Inc., April 29, 2010,
www.forrester.com/rb/Research/three_secrets_of_success_for_customer_experience/q/id/55871/t/2.
2. Tony Hsieh, “Your Culture is Your Brand,” Huffington Post, November 17, 2010, http://www.huffingtonpost.com/tonyhsieh/zappos-founder-tony-hsieh_1_b_783333.html.
3. Keith McFarland, “Why Zappos Offers New Hires $2,000 to Quit,” Bloomberg Businessweek, September 16, 2008, http://www.businessweek.com/smallbiz/content/sep2008/sb20080916_288698.htm.
4. “Big Think Interview with Tony Hsieh,” BigThink.com, October 11, 2010, http://bigthink.com/ideas/24388.
5. “Customers Trust Real Friends and Virtual Strangers the Most,”
Nielsen Global Online Consumer Survey, NielsenWire, July 7, 2009, http://blog.nielsen.com/nielsenwire/consumer/global-advertisingconsumers-trust-real-friends-and-virtualstrangers-the-most/. The study surveyed more than 25,000 Internet consumers in 50 countries.
6. Rebecca Reisner, “Comcast’s Twitter Man,” Bloomberg Businessweek,
January 13, 2009, http://www.businessweek.com/managing/content/jan2009/ca20090113_373506.htm.
7. Rick Germano, “Your Call Is Important to Us,” Comcast Voices blog, November 5, 2010, http://blog.comcast.com/2010/11/your-call-isimportant-to-us.html#more.
8. Barney Beal, “NPS, Follow-Up Helps SONY Canada Improve Customer Experience,” SearchCRM.com, May 20, 2010, http://searchcrm.techtarget.com/news/2240018770/NPS-follow-uphelps-Sony-Canada-improve-customer-experience.
9. Derek Kreindler, “Saab to Let Customers Watch Their Cars Get Built via Webcam,” AutoGuide.com, October 18, 2010, http://www.autoguide.com/auto-news/2010/10/saab-to-let-customerswatch-their-cars-get-built-via-webcam.html.
10. “Introducing Boutiques: A New Way to Shop for Fashion Online,” Google blog, November 17, 2010, http://googleblog.blogspot.com/2010/11/introducing-boutiques-newway-to-shop.html.
11. http://www.reebok.com/US/custom-shoes/mens/listing?f.ProductId=50.
12. Cognizanti Journal, vol. 4, no. 1, March 2011, http://itunes.apple.com/us/book/cognizanti-journalvolume/id426466251?mt=11.
13. Lauren Gibbons Paul, “Made to Order,” Managing Automation, November 3, 2006, http://www.managingautomation.com/maonline/magazine/read/view/Made_to_Order_917515.
Bibliography
1. Lior Arussy, Customer Experience Strategy: The Complete Guide from Innovation to Execution (Strativity Group, Inc., 2010).
Arussy provides a practical soup-to-nuts blueprint for understanding what the customer experience is, determining how to measure current experiences, and coming up with an action plan for developing greater customer experiences.
2. Shaun Smith and Joe Wheeler, Managing the Customer Experience: Turning Customers into Advocates (London: FT Press, 2002).
The authors offer practical advice on how companies can build the power of the brand, not through advertising, but by the experience and value that they offer their customers. The book provides analysis and concrete methods for increasing loyalty and advocacy in customer experience in a targeted way.
3. Shaun Smith and Andy Milligan, Bold: How to Be Brave in Business and Win (Philadelphia: Kogan Page, 2011).
This book highlights 14 businesses that illustrate what the authors say is necessary to stand out in business today: putting purpose before profit, going beyond what customers expect, and relentlessly differentiating.
4. John A. Goodman, Strategic Customer Service: Managing the Customer Experience to Increase Positive Word of Mouth, Build Loyalty and Maximize Profits (New York: AMACOM, 2009).
This book focuses on the strategic alignment of customer service with overall corporate strategy. It draws on research from the author’s work with the likes of Chik-Fil-A, USAA, Coca-Cola, FedEx, GE, Cisco, Nieman Marcus, Toyota, and Cisco Systems. It includes both case studies and formal research. Many aspects of conventional wisdom are challenged with hard data that show how any company can increase loyalty, win customers, and improve the bottom line.
5. Patricia Seybold, Outside Innovation: How Your Customers Will Co-Design Your Company’s Future (New York: HarperCollins, 2006). Seybold explores how businesses can unleash innovation by
inviting customers to co-design what they do and make.
6. Denis Pombriant, Hello Ladies: Dispatches from the Social CRM Frontier (lulu.com, 2010).
7. Paul Greenberg, CRM at the Speed of Light, 4th ed. (New York: McGraw-Hill, 2009).
Greenberg reveals best practices for a successful social CRM implementation and provides examples of the new strategies for customer engagement and collaboration being used by cutting-edge companies, along with expert guidance on how your organization can and should adopt these innovations.
8. Seth Godin, Purple Cow: Transform Your Business by Being Remarkable (New York: Portfolio, 2009).
Run-of-the-mill TV commercials and newspaper ads are no longer effective for reaching consumers because consumers are tuning them out. So you have to toss everything and do something remarkable, the way a purple cow in a field of Guernseys would be remarkable, according to Godin. He uses examples of companies including HBO, Starbucks, and JetBlue to illustrate new ways of doing standard business with measurable results.
9. Frederick Reichheld, The Ultimate Question: Driving Good Profits and True Growth (Boston: Harvard Business School Press, 2006).
Reichheld argues that customer satisfaction is more important than any other business criterion except profits and that the best measurement of customer satisfaction is whether you would recommend a business to a friend—the foundation of the widely used net promoter score.
10. Tony Hsieh, Delivering Happiness: A Path to Profits, Passion, and Purpose (New York: Business Plus, 2010).
The CEO of online shoe giant Zappos, Hsieh details his rise from Harvard student entrepreneur to the creator of a hugely successful brand. Customer service became the focus of the start-up retailer, even when funding dried up. The book recounts how Zappos survived, eventually being acquired by Amazon for more than $1.2 billion in 2009.
11. Jim Joseph, The Experience Effect (New York: AMACOM, 2010).
Joseph focuses on how to create “the experience effect,” which is a combination of marketing message, advertising, sales approach, website, interaction with company personnel, and more.
12. Brian Solis, Engage! The Complete Guide for Brands and Businesses to Build, Cultivate, and Measure Success in the New Web, rev. & updated (Hoboken, N.J.: Wiley, 2011).
Solis’s updated primer focuses on how to use social media to succeed in business. Learn about the psychology, behavior, and influence of the new social consumer, and define and measure the success of your social media campaigns. It features a foreword by actor Ashton Kutcher, who has more than five million followers on Twitter.
13. Bernd H. Schmitt, Customer Experience Management: A Revolutionary Approach to Connecting with Your Customers, (New York: Wiley, 2003).
Schmitt examines how customer experience management increases growth and revenues and remakes companies’ image and brands. The book offers a five-step approach to customer experience to connect with customers at every touch point, and offers case studies in various B2B and consumer industries.
14. Gerald Zaltman, How Customers Think: Essential Insights into the Mind of the Market (Boston: Harvard Business School Press, 2003).
Zaltman, a Harvard Business School professor, says that about 80 percent of all new products either fail within six months or fall short of their profit forecast. The reason? A disconnect between the customer experience and the way marketers collect information about how customers view their world. Analysis, success stories, and advice on rethinking marketing approaches are included.
15. Joseph Pine and James Gilmore, The Experience Economy: Work Is Theater and Every Business a Stage (Boston: Harvard Business School Press, 1999).
The authors make a case for focusing on the service economy and learning “to stage a rich, compelling experience” by adding service to differentiate products.
16. Chip Bell and John R. Patterson, Take Their Breath Away: How Imaginative Service Creates Devoted Customers (Hoboken, N.J.: Wiley, 2009).
A comprehensive look at what it takes to keep customers in today’s market as well as gain new customers. The book provides real-world examples of how 12 brands create customer practices leading to “irrational loyalty,” and explains how these techniques work and how to implement them.
17. John R. DiJulius, What’s the Secret? To Providing a World-Class Customer Experience (Hoboken, N.J.: Wiley, 2008).
An inside look at world-class customer service strategies at top companies, such as Disney, Nordstrom, and Ritz-Carlton. The book provides steps, best practices, and service standards needed to build a customer service machine that consistently delivers.
18. Jeanne Bliss, Chief Customer Officer: Getting Past Lip Service to Passionate Action (San Francisco: Jossey-Bass, 2006).
The author offers advice to companies that think they’ve committed to customer experience but haven’t.
Resources
1. Ashwin Nayan Rai, “From Brick to Click: E-Commerce Trends in Industrial Manufacturing.” Cognizant Technology Solutions, 2010, http://www.cognizant.com/InsightsWhitepapers/From-Brick-to- Click.pdf.
2. “Customer Experience Boosts Revenue,” Forrester Research, Inc., June 22, 2009.
3. “The State of Customer Experience, 2010,” Forrester Research, Inc., February 19, 2010.
4. “Three Secrets of Success for Customer Experience Organizations,” Forrester Research, Inc., April 29, 2010.
5. “What Is the Right Customer Experience Strategy?” Forrester Research, Inc., September 28, 2010.
6. “The Six Laws of Customer Experience: The Fundamental Truths That Define How Organizations Treat Customers,” Temkin Group, July 2010.
7. “Profiling Customer Experience Leaders,” Temkin Group, September 2010.
8. “The Evolution of Voice of the Customer Programs,” Temkin Group, September 2010.
9. “2010 Consumer Experience Study,” Strativity Group, September 2010.
10. “2010 Customer Scorecard Series,” Convergys, 2010.
11. “Q1 2010 Customer Experience Tracker,” Beyond Philosophy, 2010.
12. “Social CRM: The New Rules of Relationship Management,” Altimeter Group, March 5, 2010.
13. “Empathica Consumer Insights Panel: 2010 Year in Review,” Empathica, 2010.
14. “2010 State of Marketing,” CMO Council and Deloitte, 2010.
15. “Global Consumer Research Executive Summary 2010,” Accenture, 2010.
16. “Worldwide CRM Applications 2010–2014 Forecast: First Look at a Market in Recovery,” International Data Corp., May 2010.