At the end of the month, Customer Experience Edge, a new how-to book on customer experience management will come to the market. The authors Vinay Iyer, Volker Hildebrand and Reza Soudagar developed a new framework that goes beyond traditional CRM based on research and over 15 customer case studies. Mark Johnson, President & CEO of Loyalty 360 spoke with Vinay Iyer, one of the authors, about their new approach to successful and profitable customer experience management.
Mark Johnson: What inspired you and your colleagues to write the book?
Vinay Iyer : The journey of our book began with some startling statistics. According to a survey by Bloomberg Businessweek Research Services 80 percent of companies say getting closer to customers and providing them with a differentiated experience is a top strategic objective. Their average rating of the customer experience they provide, however, is just 3.6 on a scale of 1 to 5. There are companies that deliver great customer service. But they are more the exception than the rule. And then there are companies that deliver great customer service but are unable to do so profitably or consistently. This inspired us to find an answer for the following business challenge: how can companies deliver great customer experience consistently and profitably.
Johnson: In the book you present a frame work for customer experience management. Can you please shortly elaborate how you arrived to the four pillars of reliability, relevance, responsiveness, and convenience?
Iyer : The foundation of establishing customer relationships and creating customer experience is the concept of trust. Without trust, companies cannot hope to generate loyalty, advocacy, engagement, or participation. For example, only a customer who has developed trust will be inclined to provide feedback on how they would like to see a product or service evolve. Based on our research, we determined four building blocks of trust. We call these the essentials of the customer experience edge. These four customer experience essentials are reliability, convenience, responsiveness, and relevance
Johnson: Based on your research, is there one pillar that is significantly more difficult to achieve than the others?
Iyer : Of these four essentials, reliability is the most fundamental one. It is a prerequisite to the other three. After all, if a company cannot consistently deliver on the promises it makes, no customer will care about convenience, responsiveness, or relevance. Once a company can deliver on reliability, it can look to the other three essentials to develop its differentiation.
Johnson: Trust is an integral part of loyalty management. Where does loyalty management fit into your approach?
Iyer : Customer loyalty, often defined in terms of customer referral rates and repeat purchase behavior, is one of the key desired outcomes of developing customer trust; however, it is not a given because customers are not always predictable, and certainly don’t all behave alike. So, there is a certain element of unpredictability to achieving customer loyalty. Customers who trust you can, however, also contribute to your success beyond this traditional definition of loyalty. For example, they may give you certain business insights and collaborate to exploit new market opportunities through new products and services; they may give you competitive insights that could shape your business towards better success, etc. So, yes, loyalty is important to develop and measure, but, trust is more foundational and broader in scope and the impact it can have.
Johnson: Does this approach equally apply to B2B and B2C companies?
Iyer : Yes, the four pillars of trust are equally applicable to B2B and B2C companies. In the book we talk about more than 15 case studies from diverse industries. Let me give you two examples.
CEMEX USA, a leading provider of cement and concrete products to construction projects, realized that creating a superior customer experience can provide them a competitive edge in a commoditized industry. The company’s Customer Experience Initiative simplified and enhanced how its 25,000 B2B customers interact with CEMEX with a single point of contact, from ordering to delivery and billing.
When CEMEX determined that on-time delivery was its customers’ top priority, it revamped its processes and centralized its business applications to ensure it could meet that expectation. This involved increasing visibility into its delivery operations, streamlining its bill of lading process, installing cameras on its truck loading docks and setting system alerts when delays were likely. The result: It has boosted order accuracy from 92% to 99.9%. Thanks to efficiency improvements and incremental sales as a result of the initiative, CEMEX has achieved an ROI of 30%.
A B2C example is Switzerland’s largest grocery retailer Coop. Customers typically commute by train to the 1,800 Coop stores and are time-pressed. By researching actual customer behavior, Coop discovered that customers value primarily convenience and relevance. To cater to their needs, Coop developed an iPhone grocery-shopping application that complements the already existing online store, coop@home, and puts grocery shopping literally in the hands of customers for maximum convenience. Customers can shop and schedule the delivery of organic groceries and wine during their commute by using their iPhone. coop@home increased the grocer’s customer satisfaction levels and overall “stickiness”.
Johnson: What role does technology play to help achieve an edge in customer experience management?
Iyer : Technology is at the heart of delivering the customer experience edge, consistently across all channels of customer engagement, and doing it profitably. In fact, technology can act as a catalyst for the customer experience transformation. Customer experience initiatives are cross-organizational pursuits that depend on connecting processes around a unified view of the customer. Technology has the power to bring together individual perspectives from across the organization, balance their various needs and bring them into alignment unified view that can be shared by all. Further, technology provides the ability to easily share information across the enterprise, and also to enable process automation and efficiency. . In today’s world, technology is key to enable the four pillars of customer experience: reliability, convenience, responsiveness and relevance.
Johnson: We commonly hear CRM as the key driver of Customer Experience Management. Where does CRM fit into all this?
Iyer : CRM is no doubt a key component of customer experience delivery since many of the applications that assist in the engagement with customers typically fall in the CRM domain. However, Customer Experience Edge neither starts nor stops with CRM. The ability to offer reliability, relevance, responsiveness and convenience has to be pervasive across every department in the company, not just something that marketing and sales care about. Product developers, engineering, finance, legal, the shipping department, and even store associates have to care about creating trust, too. This is why true 360 degree management of customer experience spans beyond CRM into other areas of the enterprise where solutions like ERP, Supply Chain, and HR, etc. come into play.
Johnson: Were there any ‘aha’ findings as you worked through your book project?
Iyer : Sure, there were several. However, one major “aha” moment was realizing the importance of employee empowerment. By human nature, the majority of people (employees) are motivated to do good. But, it is often frustrating when they are unable to do it because they do not have the necessary technology tools, data access or empowerment. In the rush to do something to fix a problem, a band-aid is often applied with little or no thought put into the different aspects of employee empowerment – both technical and motivational. We found that organizations that had succeeded, and succeeded greatly, had put a lot of thought into proper employee empowerment in additional to the customers. We consequently strongly believe that both the customer and the employees who engage with the customer need to be empowered for customer experience to really work!
To view playback to a recent Webinar with Vinay Iyer on customer experience management in the “new normal”, please click here.