Customer Strategy Gone Bad

Yesterday I received a phone call from a CRM software company whose site I had visited. They were following up to see if I had any questions about the product and (theoretically) to determine if I was likely to buy.

The person knew which white paper I had downloaded as well as the pages I had visited, and we could have had a very meaningful conversation except for one thing: I had visited their site in December 2008.

I didn't even remember visiting their site and asked the caller when I had. She then told me that it was in December 2008. Once reminded, I vaguely remembered visiting the site, but couldn't, for the life of me, remember why I was visiting or what the business need was.

Gathering customer data is necessary to build customer relationships and gain a competitive edge in terms of customer insight. But, those organizations that do so without a plan on how they're going to use it run the risk of missing out on prime opportunities to sell or increase loyalty.

As an organization, it's important to continually ask: why do we want to capture this piece of data? How are we going to use it? How will this piece of data help us better understand our customers, meet their needs, or increase their loyalty and satisfaction with us?

And, just as important: How are we going to integrate this piece of data into our overarching marketing, sales, service and communication strategy and experience for this customer?

The software company that called me obviously didn't have a plan. This was the first time they had reached out to me since I had gone to their site almost a year ago. I had not received any emails from them, no newsletters, nothing...until this call. If I had been a "hot lead" a year ago, that time had passed. It was definitely a lost opportunity for the company.

A Missed Opportunity

I recently went to one of my favorite National Parks, the Muir Woods National Monument, home to California coastal redwoods. I go there frequently, so for the past several years I have bought an annual pass.


It was time for me to renew my annual pass so I took time mid-week to go. At the entrance gate, I told the park employee what I wanted. He took my money and gave me the pass.


What's wrong with this picture?


At no point did the employee ask me for my personal information. My name, address and reason for wanting the annual pass...none of this was asked. What a missed opportunity for the Muir Woods National Monument!


I realize that many visitors to National Parks are tourists in town catching the sights. However, people who purchase annual passes for a National Park are usually either 1) locals who want to be able to visit the park many times during the year, or 2) locals or non-locals who are passionate about what the park stands for and want to support it. In either instance, these are people who are willing to make an above-average donation to the park.


I wonder what other types of donations annual pass holders might be willing to make? For example:

• Perhaps an annual pass holder would be willing to volunteer a couple times during the year to help clean up the park
• Maybe some would welcome the opportunity to use their personal or professional skills to help the park - helping with marketing or accounting functions, as an example
• An annual pass holder might want to "sponsor" a redwood by committing to a monthly donation amount for a year
• Some could team up and put together a large fundraising event to benefit the park
• There might even be a couple annual pass holders that would be willing to leave a large bequest to the park

Of course, in order to identify which pass holders are likely to do any of the above requires that the National Park ask people for their name and contact information, so that they can begin to develop relationships that lead to an increased level of engagement with the park.

This isn't just a problem that the National Parks have. What missed opportunities exist in your business interactions with your customers? It happens more frequently than you think!

Customer Strategy on a Shoestring Budget

Someone asked me if customer strategy could work for a small business that didn't have a lot of resources or technology available. The answer is: of course! Here are some small-business friendly, shoestring budget suggestions on how to begin implementing a customer strategy:

1. Create a list of your top customers. It could be your "Top 10" or your "Top 50" list. Use whatever data you have available - even if it is qualitative in nature - to create this list. Then make sure that everyone in your company has a copy of this list so that they can easily recognize a top customer when they interact with one. One client of mine wrote up their Top 10 list on index cards and taped them to each employee's computer monitor. Low cost, and, it worked.
2. Develop a list of "do no harm" rules for all of your customers. These are the basic customer service rules that you expect your team to abide by so that no customer feels that he hasn't received good service. Make sure your team has input into this list - they're the ones that will be implementing these rules.
3. Develop a list of "do no harm" strategies for your "Top 10" list of customers. How should these customers be treated? How can each of your employees feel empowered to go above and beyond to satisfy these customers? One client I know tells each employee that they are authorized to spend a certain dollar amount to resolve any issue for a top customer, no questions asked and no permission needed. It is rare that an employee uses the full dollar amount, but it has opened the door for employees to take a personal stand in making these customers happy.
4. Define the 3-5 key pieces of information you need to know about your customers. And then build a plan to get that information and use it in your sales, marketing and customer service activities.
5. Be a mystery shopper for your own company. Spend a few hours doing all of the things your customers typically do. Call your office to ask a question. Try to order a product on your website. Pretend to have a problem that needs to be resolved. Keep a list of all the things that are confusing, frustrating, or just don't work - chances are your customers have the same experience. Then fix them.

Each of these ideas is low cost; however, the impact can be huge. For my small-business (and not-so-small-business!) readers out there - I'd love to hear how these ideas work and others you may have.

Customer Strategy in Action: Hospitality Case Study

The situation:

A large hospitality organization relied significantly on referrals to grow its business. Competitive pressures and a saturation of the potential market had led to a decrease in sales and referrals. The organization wanted to:

1. Drive profitable growth by focusing acquisition resources on highest potential prospects and increase revenue streams from individual owners, and
2. Understand vacation-related needs of high-value owners and then tailor strategies to prospects with similar needs.

The solution:

My team and I began by interviewing existing high-value customers to understand their needs from the hospitality organization and vacationing needs overall. Based on the insights from those interviews, we created some initial hypotheses on how customers differed and what their needs were. Using this information, we created a survey and implemented it. The resulting analysis of the survey results revealed that the primary reason why customers did business with the organization was different than the organization had thought.

Based on this information, we helped the company re-define their positioning in the marketplace. This helped them ensure that their marketing and advertising efforts resonated with as many prospects as possible.

A deeper analysis of the survey results yielded five distinct customer segments based on consumer needs, motivations and requirements. Using this information, we created customer experiences across all touch points for each customer segment. We consciously incorporated points in the experience for the organization to request referrals and leads from satisfied customers. By implementing these experiences, the client further positioned itself as a unique experience in the minds of its customers and had the opportunity to increase referrals.

The result:

By implementing the differentiated customer experiences, the client achieved the following:

1. Increased customer satisfaction levels
2. Improved customer retention and usage levels
3. Increased high-quality referrals that resulted in more sales

Building a Customer Strategy from Ground Zero

I’ve spent the last few weeks helping a client define the specifications for their CRM strategy and system. The exciting thing is that this client is a start up organization, so they are able to create their customer strategy (and supporting processes, experiences, and technology) from scratch.

It’s been a great experience, because the client and I are having meaningful conversations such as:

1. What type of data do we want to know about customers and how are we going to use it?
   


2. How do we incorporate the online behavior of a customer into our CRM system? Can we infer needs and motivations based on their behavior and then translate it into marketing and sales activities?
   


3. What is the “correct” view of the customer for each of the customer touch points so that we can ensure that a customer never has to repeat himself?
   


4. How do the various touch points need to interact with each of the databases to ensure that the “correct” view of the customer is always up to date?
   


5. What type of data would allow us to infer a customer’s value – even though we are a new company and have no customer data yet?
   


6. What is the balance between product marketing and customer relationship marketing?
   


7. How can marketing manage the relationship with customers? What types of communications should be sent out and how do we prioritize them? And, how do we measure success?
   


8. How do marketing and sales complement each other in the sales process? Which team is responsible for what? And, how do we ensure that the two touch points don’t step on each other’s toes (and cause confusion for the prospect or customer)?
   

Now, not every company has the luxury to start with a completely blank slate like this company has, but the questions above are thought-provoking ones that all companies should spend time thinking about. These are the foundational questions any organization must answer when embarking on a customer strategy.

The Great Data Debate – To Share or Not To Share: Part 2

In my last blog, I talked about the importance of sharing customer data across all customer touch points so that 1) your customers receive the best possible relevant experience and 2) your organization can leverage that information to offer products and services that best meet the customer’s needs. What about sharing your customer data with other organizations?

My thought is: it depends. If you have business partners that you work with to meet the extended needs of your customers, then sharing customer data might be a good idea. Your two organizations could appear seamless to the customer – something that not many partner organizations have mastered yet.

However, if you are thinking of selling your customer data, say, to a mailing list company, my question would be: why? Why would you want to sell your one true competitive advantage for a short-term gain? Because customer data is truly the only competitive advantage your company will ever have.

Think about it: Your competitors can (and do) easily copy the products you sell and the services you offer. Sure, it may take longer in some industries than others…in the pharmaceutical industry, for example, the patent on a drug may last for years, but eventually that patent expires. Ultimately, your product or service will be replicated. Any marketing program you create can be copied and even improved.

The one thing your competitors can’t duplicate is the information you have on your customers. They have no way of knowing which products your customers have purchased, what their behavior has been on your website, or the details of feedback customers may have provided. Your competitors don’t have access to how frequently your customers purchase or even which customers are the most valuable customers for your company.

Customer information and the insights that come from it is worth its weight in gold and should be guarded as closely as Fort Knox.

The Great Data Debate – To Share or Not to Share

True story: I use the services of a company that I have a long-standing relationship with. Recently, this company was purchased. The new owners of the company have decided to limit the amount of customer information an employee can access when working with a customer. Each employee is given the bare-bones minimum to provide the services the customer has requested FOR THAT DAY. Employees are not given information about past customer requests, preferences, purchases or history. And yet, employees are expected to take detailed notes on their interactions with customers so that the customer information can be captured and stored.

The result is that it is virtually impossible for the employee to provide an exceptional experience for the customer. That’s not to say that the employees don’t provide good service and work – they do – but without having access to more customer information, it is very difficult for them to make recommendations of additional products or services the customer could use since the employees can’t see what had been offered or suggested in the past.

And, it is virtually impossible for an employee to know which customers deserve preferential treatment because of their value to the organization. Case in point: one customer – let’s call her “Sue” – called up this company to reschedule an appointment she had. The receptionist didn’t have access to Sue’s information, so she didn’t know that Sue was an extremely valuable customer who had also referred a number of new customers to them. The receptionist was unwilling to make any time concessions to Sue. Sue was very frustrated – because she knew how valuable a customer she was – and moved her business to a competitor.

This type of situation could easily be avoided if employees had access to the right customer data that would help them do their job better – and improve the customer experience. If the receptionist knew that Sue was a very valuable customer, she would have been more willing to be flexible on the appointment time. If the day-to-day contacts knew the past customer requests, preferences, and history, those employees would be able to sell even more products and services to customers.

Why don’t these new owners want their employees to have access to customer data? They’re afraid. They’re afraid if they share too much information with their employees that the employees will be in a more powerful position than the owners are. Or that if one of their employees left, some customers would follow that employee to a competitor. Or that the cost to serve customers might go up. Or…or…or – there could be dozens of reasons why.

But, the bottom line is: when you withhold important customer data from your employees that provide services to those customers, you are reducing your bottom line.

Pure Genius - Customer Intelligence in Action

Have you been to iTunes lately? I went online to upload some music and saw that iTunes is now offering a service called "Genius" to its customers. Genius creates customized playlists for you, based on the types of music that you like and - get this - recommends other songs or albums that would round out your music library.

Talk about smart! iTunes is using customer intelligence to sell more song downloads to its customers. And, they're getting customer permission to do it. When you sign up for the Genius service, they clearly state that they are going to look at your music selections and then aggregate them (anonymously) with the rest of their customers' music selections.

While I'm not privy to the details behind the scenes, I imagine it works this way:

1. I select a favorite song that I would like to be the basis for a playlist.
   
2. Genius uses the song tagging information (genre, artist, frequency of plays, etc.) to cull through my current play list to find similar songs and create a recommended playlist.
   
3. At the same time, Genius is using predictive modeling to compare my music preferences with its massive database of customers' preferences.
   
4. Once Genius has identified "look-a-like" customers, it compares my music selections with those of the "look-a-like" customers, and makes recommendations for me (similar to the Amazon.com model)
   

This is all done in real-time. Of course, the proof is in the action. I clicked on a favorite song and had Genius create a playlist for me. I liked the way that it grouped together songs and gave me options on the number of songs I could include in the playlist. And the recommended songs and albums? Well, there were a couple albums and songs on the list that I had at home that I hadn't uploaded to iTunes yet, and the bulk of the remaining songs were ones that I genuinely enjoyed and would like to have on my iPod.

iTunes notes that they are in the process of refining this capability and expects that, over time, the Genius tool will become even more focused and relevant in its creation of playlists and recommended songs to download. As customers opt-in to this functionality, their database and customer modeling will only become more accurate in its output.

The idea of customer intelligence has been around for a while - using customer insight and data to drive marketing, sales and service interactions to increase customer profitability - but the technology to make this happen just started catching up in the past few years. Customer intelligence is the basis of relationship marketing. iTunes has recognized a clear need in its customer base - creating playlists that capture a mood or music type - and is using that to increase the purchase activity of its customers.

That's what I call pure Genius!

Real-Time Use of Customer Behavior Increases Positive Experience and Sales

Recently I was trying to book a rather complex international flight on American Airlines' website. Normally, booking my flights online takes just a couple minutes; however, for this flight, I spent several minutes going back and forth between several pages, selecting and de-selecting options. After doing this a couple times, a pop-up box appeared, asking me if I needed help. Simply click on the box, it said, and an American Airlines customer service rep will call you to help you. I thought this was pretty neat, and since I was having some challenges, I clicked. A message box asked me to confirm the number to call or change to a different one. Impressively, the number in the message box was for the location I was in (which wasn't my preferred or home number - I can't even begin to imagine how they got the phone number!).

Within a few seconds, my phone rang. It was the American Airlines customer service rep, calling to ask me how she could help me book my flight. She had all of my recent online activity in front of her, which meant I didn't have to spend a lot of time explaining to her what I had been trying to do. With just a few questions, she booked my flights for me. An email showed up immediately confirming my flight. What could have been a difficult or stressful experience ended up being extremely positive - and took a lot less time, ensuring the sale for American Airlines.

The idea of helping customers move through the life cycle more quickly is extremely timely given the current economy. Organizations are identifying where the customer experience breaks down and putting tactics in place to minimize this. They are actively reaching out to their customers to help them purchase sooner and more easily.

One organization that I worked with is using online customer behavior to not only customize the content of the web page, but also to place targeted ads in front of the customer, real time. These ads have a higher click rate because they are relevant to the customer. Another client is exploring how they can use purchase and payment behavior to identify those customers that have the potential to miss paying their bills and go into collections - and putting in place strategies to prevent that before it even happens. Imagine the cost savings and increased customer profitability!

Think about it. How can you use your customer insights and behavior to make it easier for them to purchase from you?

Using Twitter to Build Customer Relationships

Customers that sign up to follow your company through Twitter are asking to have a relationship with you. How can you tap into this?

Here are some ways that companies can use Twitter to build better customer relationships:

1. Provide updates or information to customers.
   This is probably the most frequent way companies use Twitter. Tweets are sent out about sales, news releases, and product updates, usually with a link for more detailed information. Some recent examples:
   
   UnitedAirlinesWeekend plans looking more like weak-end? Put that missing "E" back in with our E-fares! Check 'em out @ http://tinyurl.com/nl6q9o
   
   cnnbrkTwo American journalists, detained in North Korea since March, were reunited with their families early Wednesday. http://bit.ly/emlzv
   
   amazondealsLightning Deal! $44.99 - Petmate LeBistro Portion Control Automatic Pet Feeder, Black, 10 Pounds http://tinyurl.com/7lnpkg
   
2. Get customer feedback and help shape new products or services.
   Using Twitter to ask customers how they feel about your products or services is a great way to get instant feedback and ensure that you’re meeting their needs. It can also help your company determine new needs customers may have.
   
   HP_SMBRead real user reviews of the HP Officejet Pro 8500 All-in-One printer here and let us know what you think: http://tinyurl.com/nqgjvr
   
   savethechildrenLast day to vote in our holiday card poll! Vote today and then sign up to receive your free holiday cards. http://bit.ly/2htB5W
   
3. Provide an alternative interaction or customer service option.
   Twitter can also be used to interact with your customers and answer their questions on the spot. For customers that have a quick question, this can be an effective way of providing customer service to them.
   
   Ask_WellsFargoGood morning. This is Ian signing on for @Ask_WellsFargo. Please keep personal & account info private. Do not share it on twitter.
   
   HiltonAnaheimRT @HyattIrvine: RT @Anaheim_OC: Coming to Orange County and need visitor information? Just #AskOC
   
4. Build entanglement and create community.
   Finally, companies can use Twitter to create a sense of community by asking customers to participate in their relationship with the company. This can take the form of challenges, providing expertise or sharing experiences, for example.
   
   pepsiLast chance 2 weigh in on #Throwback and share w/the Pepsi team: comment on FB group http://bit.ly/2uSBKD or give us your 2c on Twitter!!
   
   charitywaterWhat if your employees came together and raised $5k like Saks 5th Chicago? This could happen: http://vimeo.com/4247997
   
   JetBlueTravel Tip Tuesday! We've partnered with @PETCO to give 50% off pet travel fees: http://bit.ly/TZX6g What are your pet travel tips? #TTPets
   
   WholeFoodsThink public school lunches could be better? Way better? Join us and @ChefAnnC in the School Lunch Revolution! http://bit.ly/CJvlO

I’d love to hear how your company is using Twitter and the results you’re getting. Feel free to post your experience here or send me a tweet @jennifermonahan.

Customer Strategy in Action - Pharmaceutical Case Study

The idea of creating a customer strategy for your business may sound great, but can it really impact the bottom line? Here's a real-life example:


The situation: A pharmaceutical organization faced declining profits for one of its product lines. The product was no longer covered by patent, and monthly sales had plummeted. The organization had cut costs - including marketing and sales spend, making it difficult for them to serve all of the customers in their supply chain. Even though customers had a positive perception of the product, sales had declined to the point that the organization was considering discontinuing the product altogether.


The solution: Because of the streamlined sales and marketing teams, our initial step was to determine which of the five customer groups to focus on first. The team assessed the customer supply chain to determine which " customer layer" provided the greatest opportunity to impact sales in the shortest amount of time. Each customer group was assessed in terms of reach to other customer types, current and potential sales, and openness to having a relationship with the organization. Based on our findings, we began with the distributors for this product.


Once we had determined to begin with the distributors, we took a look at the types of customer data the pharmaceutical organization had on these customers. While there wasn't much data available, we were able to fill in gaps by interviewing the distributors themselves and the sales reps that called on them. We created a qualitative, proxy-based value model and needs segmentation that formed the basis for a customer strategy. Based on the output from the model and the segmentation, we were armed with two core pieces of insight: 1) which distributors provided the greatest strategic financial value and 2) how those distributors wanted to work with the pharmaceutical organization.


We started by aligning the streamlined staff with those distributors that could provided the greatest strategic financial value. A core account team was created that included sales, marketing, customer care and medical technology. Each was given clear direction on their role in the relationship. For example, we assigned a single-point-of-contact in customer care for each distributor. That meant that top distributors could call one person and have all their needs met and questions answered. This was a big shift - previously, the distributor would have had to make several calls to several different areas. In addition, each sales rep was given a handful of distributors that he or she was responsible for. Training, clear metrics and performance measures were set for each member of the account team to ensure the shift was successful.


We used the output from the needs segmentation to guide the customer experience and strategy for each of the top distributors. Our research identified some foundational needs that were not being met. We built a plan to begin addressing these problems first so that the pharmaceutical organization could rebuild trust with its customers. We also found that there were some common needs shared by the top distributors, and that there was a sub-set of the distributors that were open to having a deep relationship with the organization. Recommendations were developed to address these needs as well.


The result: The pharmaceutical organization was able to maximize its streamlined resources by focusing on those customers that could provide the biggest impact. Within 3 months of implementing the strategy, the downward trend of sales leveled off. The following quarter, the product posted a profit - the first one in over a year. As a result, the organization was able to being exploring ways to replicate this process with other customer types in the supply chain.

Three Steps to Increasing Customer Retention

Customer retention is more important than ever to organizations, given the current economic situation. Here are three areas that each organization needs to look at to improve its customer retention levels.

1. Foundational requirements: these are the "pay to play" requirements for your organization and industry. What things must an organization deliver on in order to be (and stay) in business? For example, the foundational requirements of a restaurant may be to:
   
   a. Ensure that the customer's meal order is prepared correctly
   b. Deliver the meal to the table in a timely manner at the right temperature
   c. Provide prompt and courteous service
   d. Have clean eating areas and restrooms
   e. Ensure that the bill is correct.
   
   Any restaurant that consistently did not deliver on these basic, foundational requirements would soon find itself out of business. What are the foundational requirements for your organization? And, how well is your organization consistently delivering on them?


2. Branding and positioning: how is your organization different from the competition? What does your brand convey to the marketplace? What type of experience promise do you make and deliver to your customers?
   
   Using our hypothetical restaurant example, the restaurant may be the only Mexican restaurant in town, which differs it from the Italian, Japanese and pizza restaurants. The restaurant may further position itself as a healthy, authentic Mexican-food restaurant that delivers food quickly in a relaxing, family environment. These attributes then become the basis for the Mexican restaurant's marketing program, the menu, decor and ambiance in the restaurant, and the planned experience (authentic food, relaxing family environment) for its patrons.
   
   Take a look at your organization's branding and positioning. Are they clearly understood by both your employees and customers? Are they consistent across all customer touch points and interactions? Do your customers "believe" them, or do they have a different image of your organization?


3. Customer relationship management : finally, once an organization has consistently delivered on the foundational requirements and determined its branding and positioning, then, and only then, can the organization begin to build relationships with its customers. And, only if the customers give the organization permission to do so.
   
   Think about it: if you went to a restaurant that couldn't get your order right, had dirty tables and restrooms, and rude wait staff, would you want to have some a relationship with that restaurant? Would you even want to go back?
   
   That's why it is so important to get the foundational requirements right. Many organizations overlook this - it is just not sexy to say that you're allocating part of your budget to keep the restrooms clean, for example. But, if these are the things that are causing your customers to defect, then these are the top priority things your organization should fix. And, if your customers - or even your employees - are confused about who you are, what you do, what you stand for, and how you are different, they are not likely to want to invest the time and energy to have a relationship with your organization.
   
   By building customer relationships, an organization can change the rules of the game and transform the industry. I firmly agree with Don Peppers and Martha Rogers that the only true source of competitive advantage is customer data and how that data is used to create customer strategies and experiences. Any other perceived source of competitive advantage - a product, service or offering; a unique brand positioning; or even a patent - can, eventually, be copied by a competitor. However, your customer data (and insights gleaned from that data) is the one thing that your organization has that your competitors do not. I'm not talking about data that can be purchased, although that type of data can provide some additional insights about your customers. I'm talking about the behavioral, motivational, and needs-based data that allows your organization to truly understand each customer. Using these insights to build lasting, relevant relationships with your top customers increases customer retention.
   
   Our Mexican restaurant, for example, can begin to capture information about food requirements, seating preferences or life events of its top customers. They could then use this information to revise the menu or even create a "custom" birthday experience complete with preferred seating and a tailored menu based on a customer's favorite meals. Credit card numbers could be stored (with approval) to streamline the payment process for those customers that want to minimize that part of their experience. Special marketing promotions based on the primary reason(s) a patron visits could be sent out: for example, for those patrons that are motivated by the authentic food, they could send out a twitter update about a new menu item; for those that like the health benefits, a different campaign could be created. How the Mexican restaurant leverages its customer insight is unlimited.
   
   What data does your organization capture today about its customers? How is that data being used to transform the relationship you have with your customers? Are there ways your organization could begin creating customized interactions based on that data to maximize customer retention? How will you test and measure the impact to ensure the greatest impact?

Feel free to share your experience increasing customer retention levels.

Recognizing and Acting on Customer Differences

Each one of us is unique in his or her individual way. These differences between one person and another add the "spice" to life. Why is it, then, that most organizations don't recognize these differences and use this information to create customer strategies, experiences, and marketing activities that resonate?

Case in point: a co-worker and I are virtually identical - demographically. We are both female, the same age, married, without children. We both own a convertible sports car and our own home. Our income, credit-worthiness, and interests are very similar. Each of us travels extensively. We subscribe to some of the same magazines. We even live in the same town. To most organizations, we would be considered "the same" and marketed to identically. However - we are very different from one other in how we prefer to interact with organizations and buy their products.

I prefer to do everything online. If I can purchase something or pay a bill electronically or manage my finances without ever speaking to someone, I am happy. I feel that it is quicker and more convenient. My co-worker, however, prefers to conduct all business transactions in person. She likes to go to the bank to make a deposit or withdrawal, and doesn't even have an ATM card. She will wait in line at the airport to check in. And, she will drive to a store to purchase an item so that she can have that human interaction. Some of the organizations she conducts business with, such as her bank, have suggested that she work with them virtually. She has declined, because she feels that the "human touch" is more important and helps her feel that the organization values her business.

Understandably, organizations try to push their customers to the least expensive channel in order to conduct business. However, the organization that recognizes even simple differences between customers and uses those differences to make every interaction profitable for the company and relevant and satisfying for the customer will be the one that maintains and grows their customer value. Every organization - regardless of industry and regulations - is capable of customizing some aspect of their product or service based on 1) customer preferences, 2) customer value, and 3) channel in order to maximize customer value.

(previously published on quaero.com on March 9, 2009)

Customer Experience Management – Challenging to Execute Across All Touchpoints

Customer Experience Management focuses on building a consistent, integrated, relevant customer experience across all touchpoints that leverages customer insights to help enable an organization’s customer strategy. It is much broader and larger than just coordinating marketing messages out to customers. Many organizations are considering or implementing Customer Experience Management initiatives. However, as most of these organizations have found out, this is not an easy task. Consider the following real-life example:

This week I flew on United from Redding, California to Philadelphia. On Monday, I was 700 miles away from reaching 1K status in their mileage program – a status that not many of their customers reach, because it requires a minimum of 100,000 miles flown on United in a calendar year. Due to weather conditions in San Francisco, my flight was delayed by 5 hours. The woman at the check in counter proactively reached out to me, discussed alternative connecting flights, and, together, we booked a back-up itinerary in case I missed my connection. Because of my status, she went out of her way to find a red-eye (my only option) that would give me the upgrade to First Class so I could be at the client site somewhat rested.

Because we were delayed so long at the Redding Airport, the woman who helped me initially finished up her work hours and a new person was assigned the gate. Just before we boarded the plane, the new gate agent called me up to the gate and explained that because of weight limits, they were bumping me from the flight. I looked around at the many non-business travelers sitting at the gate, and asked the gate agent if he had looked at my profile. (Yes, I know, very similar to the “Do you know who I am?” question, but I said it nicely.) He had not. I then explained to him that I was a Premier Executive member, 700 miles away from reaching 1K status. He looked my information up in the system, apologized, and then put me back on the flight.

My red-eye was delayed and eventually cancelled due to mechanical issues. I received an email notice of the flight cancellation prior to the announcement made to the passengers sitting on the plane with me. It included a revised itinerary for me the next day. Before I had even gotten off the plane, I was on the phone with United’s Premier Executive customer service line, where the agent I spoke with quickly addressed my question, changed my flight to better meet my needs, seated me in an acceptable seat, and put me on the stand-by upgrade list. However, she could not email me a voucher for lodging – for that, I would have to stand in the extremely long customer service line at the airport.

On Thursday, I traveled on United back to California. I went online to print out my boarding pass. When I logged on, I was greeted with a “Welcome to 1K Status” message, and my profile had been updated to reflect my new status level. However, when I printed my boarding pass, it still said Premier Executive. At the airport, I was told by a less-than-friendly gate agent that I could not pre-board because my boarding pass did not say 1K. I had her look up my information and, together, we saw that it said I had over 100,000 miles (the requirement for 1K). She informed me that even though the computer system said I had the miles for 1K, because it was not printed on my boarding pass, she could not let me pre-board. Eventually, she relented and let me pre-board.

The point here is not to bash United (I’ve had similar experiences with other airlines as well, and I’m sure you have your own set of horror stories), but to demonstrate the disconnection between all of the touchpoints I interacted with this week:

Gate Agent #1 in Redding: used customer data to proactively prioritize treatments based on the value of the customer, worked directly with customer to develop solution that best met customer needs

Gate Agent #2 in Redding: had access to customer data, did not use it initially to guide customer treatment, but quickly revised treatment once data was viewed

Email Status Alerts: used a variety of information to keep me up-to-date on status of flights throughout the day. In some cases, these status updates were more updated than what the United gate agents had, and I found myself giving them and my fellow passengers the correct information.

Telephone Customer Service Agent: used customer data to develop flight plan that best met my needs

Airport Customer Service Agent: didn’t look at customer data, no usage of customer data to prioritize service

Online profile: had latest update of my behavior, activity and data; used to create a relevant web page to reflect – and congratulate me – my new status

Web-based check in: did not have a complete picture of my profile and customer data, resulting in an incorrect boarding pass

Gate Agent in Philadelphia: had access to customer data, used customer data, but did not modify her behavior or treatment – until pushed – based on that customer insight.

As organizations move toward a customer experience model, they need to take into account all of the customer touchpoints, determine “business treatment rules” for each, and provide front-line employees with the flexibility to use both the business treatment rules as well as known customer data to create an experience that meets the overall experience objectives of the organization AND the needs of the customer. In many cases, this requires an organization to invest heavily in front-line employees, since they are the “face of the company” to the customer. An Infoserv research report determined that 40-80% of customer satisfaction and loyalty is determined by the customer-employee relationship (http://www.infosurv.com/employee_satisfaction.htm). Roles, responsibilities, expectations and measures of these employees need to align with the customer strategy and resulting experience. Organizations that ignore this vital touchpoint risk failing in their customer experience initiative.

(previously published on quaero.com on February 20, 2009)

Align Customer Strategy and Experience for Maximum Impact

Many organizations have begun to look at their customer experience with an eye toward increasing the efficiency of their marketing, sales and service efforts while minimizing costs. This can be very effective.

However, organizations that want to maximize their customer experience management activities need to look beyond a “one size fits all” mentality when it comes to the customer experience and incorporate customer intelligence and strategy into the delivery of the customer experience.Customer intelligence provides the insights and understanding of how your customers are different from one another – what their wants, needs, motivators and behaviors are as well as how profitable they are to your organization. Armed with this information, the marketer or experience manager can then determine the following:

1. What strategy should the organization have for a specific customer or group of customers? How does this strategy translate into specific goals and objectives? For example, for one group of customers, the strategy may be to direct those customers to less expensive touchpoints because they have low profitability, and, based on their behaviors, are unlikely to purchase additional products or services. The goal may be to decrease the cost to serve for these customers by 25%. For another group of customers, the strategy may be to increase their profitability through a variety of experiences aimed at cross-selling products that other customers like them had found useful. The cost to serve for these customers may increase, but so would their profitability.
2. How should resources (time, budget and staff) be allocated against these goals?
3. What is currently preventing the organization from realizing these goals? Are there “pain points” or “disconnects” in the customer experience that negatively impact the customer’s experience (and subsequent value to the organization)? Which are most important to the customer and how can they be addressed? How do these priorities vary by customer group?
4. What type of experience should these customer groups have to reach the goals and objectives set by the strategy? What customer needs, feedback or insight backs this? How will this experience vary by customer group and strategy? Which touchpoints will be impacted and how?
5. Finally, how will success be measured? Is it possible to set “behavior milestones” at the customer level that show positive impact? Can you leverage customer input and social networks to learn how well you are addressing customer pains?

By using customer intelligence and building a strategy for groups of your customers, you will be able to modify the customer experience to meet the needs of your customers and reach your sales and marketing objectives. This results in a relevant customer experience – far more impactful than a one-size-fits-all experience – that drives business results.

(previously published on Quaero.com on January 22, 2009)