Customer Experience Is A Matter Of Survival

By Michael Brenner, Published on October 24, 2013

We kicked off our customer experience interviews with the insights that real-time analyticshuman relationships, and scalable personalization will drive the future of customer experience.

But we also wanted to get the perspectives of the greatest minds on this topic from around the world. One of our top contributors on the subject is the Founder of RR Marketing Advisory and author of www.futuristCMO.comRamesh Ramakrishnan (@Ramesh_Ramki).

How do you define a customer-focused company these days?

Customer-focused companies are those where their customers perceive and experience the organizational orientation towards ‘satisfying their needs, wants’ and ‘creating extended/new value experiences’. The former focuses on ‘current customer experience’ (of say Nike products) and the latter focuses on ‘extended customer experience’ by enhancing how these products/service impacts the usage ecosystem (i.e., Nike +).

How do you balance the need for a better customer experience with the return on that investment?

To balance it, one has to be clear that customer experience (CX) is a path to achieve better business results and it’s not an isolated program to give a feel good experience to customers without a business benefit.  Also it’s critical to have top managements buy-in, especially the CFOs, in terms of the importance of customer experience for the company’s future and the long term nature of CX ROI, without this it will become a list of isolated customer experience programs with questionable returns.

It’s important to have a clear “customer experience” vision and road map, then go for a phase-wise transformation in order to get better adoption and self- / partial-funding situation for the next phase based on the returns from the previous phase(s), instead of a big-bang approach where course correction, adoption might be difficult. Starting with top-priority phases from the customer segments perspective (based on the business goals – market share etc.) will energize internal members and the management and create a pull effect for cross-departmental collaboration. Also building customer portfolio based P&Ls would be critical to have an enterprise view on current and potential value of a customer in order to allocate resources and achieve better customer experience levels.

We live in an increasingly networked age. At what point do the traditional ways of organizing companies to deliver customer experiences (headquarters, field, online, call centers, resellers, etc.) get rethought or replaced?

When the pace and relevance at which business value is consumed by customers changes faster than the intent and pace at which it is created/delivered, that’s the inflection point.  Also when technology enables people inside and outside the enterprise to do multiple things quickly through a single window, it will eliminate organizational/departmental overlaps forcing re-alignment.

We’re hearing that customers want to be part of the development process, especially for consumer products. But people are also lazy and pressed for time. Are they really going to get involved? Why and how?

Few decades back, people would retire in the same job, now people change jobs about 7 times, in future people will perhaps do 7 jobs at the same time. I’m sure there are many people today with great ideas of doing something new or improving something, but do not go down that path due to lack of funds, other skills required to run the business. Imagine customers just pooling in their ideas with an enterprise which has the resources to make it happen and once the best idea gets selected the customer gets something in return. Once it picks up, the contributing customer can turn into a sales/service personnel as well and also raise funds through kick start crowd-sourcing in their community.

What is the most extreme future that you could envision for the customer experience?

Right from ideation, to funding, to awareness to purchase to advocacy of the product / service a customer purchases, there is someone in social networks first circle to serve the value or receive their feedback/ideas and a system will create a customer experience index ( like Klout) based on the aggregation of data within ones social network. And the experience will be seamless and matching the expectations set within the social network, as if it was a shop down their street that they knew for decades.

The extended Enterprise is the new Enterprise and connected business is the new corner shop.

Will companies stop selling products and services and start selling experiences?

Yes and No. Yes, because ‘Experience’ will become the differentiator and this needs to be built by a network of stakeholders. No, because the concept of a company will erode, and transform into a network of stakeholders (just like a company being carried by shareholders buying/selling their stock or like customers / fans carrying the singer at a concert who is crowd-surfing) where they’ll start/stop their contribution to the core idea of a company, once this happens, it’s the network that passes and shares their experience within their network and a sale happens through a pull rather than a push.

If we go back to the 1950’s when companies like Procter and Gamble, General Foods developed the discipline of brand management and had to do so because the industry progressed to a level where most of the companies passed a level of quality standards, hence couldn’t differentiate, hence companies created a concept of branding to build an emotional connect to differentiate. Now after 60 plus years, we’ve graduated to the next level – customer experience. The only difference now is, it’s the network that’s going to contribute or to a certain level build the experience, product/service.

Research says that customers are going to want things extremely personalized and customized to them and that 3-D printers and distributed manufacturing will increase that urge. Do you agree?

Fully agree. “Mass customization” is the next wave, its already happening in few industries. Human beings like personalization and are keen to build/project a particular identity and when technology enables them to achieve high degrees of customization, then the products they use/wear will become an ‘extended self’ created by themselves instead of purchasing what someone else thought/created.

In the mid-term, I see 3-D printer businesses mushrooming in local areas just like how Internet cafes were coming up in late 1980′s and early 90′s. As the cost reduces and functionality diversifies, it would then move into the personal 3D printer category. On one end of the spectrum – its replacement solutions – 3D printing is disrupting the market and replacing traditional business models where companies like Protos Eyewear, use an algorithm to make glasses that suit individual customers and then print and ship it to their customers. If you extend this to a situation where there are 3D printers in your locality similar to Internet Café or personal 3D printers at home, then the value offered is the algorithm and customer co-creation. On the other end of the spectrum- it’s new solutions to problems – Layerwise, a Belgian metal parts manufacturer designed and built a 3D printed artificial jawbone for a 83 year old women and the operation was successful.

How important is customer experience for B2B companies?

My view is that B2B customer experience is equally critical, if not more, when compared to B2C companies. Reason being, in the connected world where change is happening at such a pace leaving B2B companies vulnerable (due to their complexity) as the market is not giving them the same time to respond as earlier. So it’s not only a matter of better customer satisfaction and experience, it’s also a matter of survival. I’d look at customer experience for B2B companies from 3 angles.

1) Customer mind-shift due to consumerization

B2B customers in their professional life are B2C customers in their personal life, so the B2C disruption in terms of ease of use, accessibility, responsiveness, relevance, reliability, seamlessness and frictionless experience will create a mind-shift where they’ll start expecting similar attributes in their professional life. Simply put it will be table stakes in few years from now and companies that don’t get it right will be fighting for their survival and the ones that crack this will take a lead.

2) Complex buyer-seller-competitor relationship – it’s as strong as the weakest link

B2B companies tend to have complex, long sales cycles where different departments from both sides have to come together to offer a good customer experience, which calls for better systems enabling better enterprise and extended-enterprise collaboration. Also sometimes the buyer also is the seller to the same company. For example, Lenova might buy Intel chips and also sell its finished products to Intel.

Or the seller and buyer might be competitors. For instance, Samsung sells key components such as flash memory, DRAM memory, and more to Apple for iPhone 4. (Apple is one of Samsung’s biggest customers for processors and memory chips.)But, they also compete in the B2C market. So when end value is built based on some value from multiple companies – if few companies in the value chain fall behind due to poor customer experience, lack of visibility, and hence lack of innovation and there are no replacements – then it slows down the entire chain. In B2B, a company is as strong as its weakest link.

3) And also the entry of Millennials

The entry of the Millennials will drive the new normal in B2B customer experience. Imagine a start-up B2B company run by Millennials serving other start-up companies run by Millennials. Will they engage using the traditional routes? Perhaps not. The traditional B2B companies not only have a technology legacy when it comes to technology that enables customer experience, they also have a structural and cultural legacy that might slow them down during their transformation to the new normal.

What technologies do you see as enabling better customer experience?

Right-data or real-time predictive analytics, in-memory computing, and data security, that help predictive relevance and bring reliability across the entire customer journey, will be key. All the other attributes – such as ease of use, accessibility, responsiveness, seamlessness, and frictionless experience – can be enabled using current CXM suites and integrating them with new or best-of-breed solutions. So as far as a customer is concerned, relevance and reliability will stand out a key differentiators given the number of other companies that are going to target a customer in this digital age.

What are your thoughts on the opportunity to use your purchase history to improve customer experience versus privacy concerns?

The digital revolution has given 2 key things to customers: 1) control and 2) options. The customer experience strategy of the company should make sure these two elements are not compromised by the company and their partner network, otherwise they lose customers trust. Using purchase history to offer better customer experience becomes acceptable when the customer has control and options to opt-in, opt-out, re-opt-in. There will be a customer segment which will be comfortable with this idea in order to receive relevant or good offers, so it’s a trading approach in a way. Another segment might be on the fence and once their awareness increases and are confident that the data won’t be misused, they might also join the opt-in program.

In terms of Millennials, purchase-data usage for receiving offers is “normal,” whereas it is the new normal for customers from the previous generations. Value should be based on how the customer sees it – not how the company wants their customers to see it in order to achieve their predetermined targets.

Regulation and reliability on the data usage will play a key role in shaping the privacy concern in future. Bad press about data misuse and theft won’t help the adoption phase.

How do large companies optimize the customer experience across all the channels available today?

The first step is to keep business results in mind and understand the high priority-high impact customer experience scenarios (which could involve one or more channels), agree on which ones to focus on, and communicate it across the company to instill a sense of urgency or importance and then execute.

Customer experience is a complex optimization across people, process, policies, and technology and without top managements involvement and drive – cross-departmental issues will slow down the project.

Some CX examples include:

  • Solve break-downs that require expensive channel jumping and poor experiences:Fidelity’s experience improvement system in 2011 handled 160 projects, which totaled to an annual savings of more than $24 million. The team identified that customers were having problems logging into their accounts through an automated phone system, they spent $20,000 to fix it and saved about $4 million by averting calls to customer service.
  • Attack top issues that require cross-departmental collaboration to solve negative feedback and expensive solutions: Sprint looked into the root causes of customer complaints they worked out a solution with relevant departments. This reduced the number of calls to customer service and amount of customer credits both totaling to about $1.7 billion per year.

( This article originally appeared on SAP Business Innovation)


Ramesh Ramakrishnan, a marketing and organisation culture enthusiast, is the Founder of RR Marketing Advisory and author of He focuses on marketing/ad/social media technology, IT industry and emerging business models. He has held various leadership positions across EMEA marketing, 3rd party advisory and analyst relations in the enterprise information technology products and services sector. Follow Ramesh @Ramesh_Ramki on Twitter, LinkedInGoogle+

About Ramesh Ramakrishnan

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