Innovating the customer experience

Success in business is all about creating an exceptional customer experience, and then enhancing it. But how do we innovate the customer experience to make it exceptional? Larry Crosby, "chief loyalty architect" at Synovate, a global research and consulting firm thinks the answers are in the concept of customer experience itself, and how it evolved. Crosby posed these questions in early February to experts at a panel hosted by the Center for Services Leadership, a think tank at the W. P. Carey School of Business.

Success in business is all about creating an exceptional customer experience, and then enhancing it. But how do we innovate the customer experience to make it exceptional? Larry Crosby, "chief loyalty architect" at Synovate, a global research and consulting firm thinks the answers are in the concept of customer experience itself, and how it evolved.

The idea of customer experience started with customer satisfaction, Crosby says, which led to the development of its companion concepts: customer perceived quality, customer value, customer loyalty and finally, branded experience. But while customer loyalty is still the goal for corporations, studies show that branded experience is the way to get there, he says.

In its 2007 annual Proprietary Hot Spots Survey, Synovate researchers polled 7,196 respondents on whether the companies and brands that they use are doing a better or worse job of earning their loyalty now, compared to three years ago. Results were encouraging: 17 percent reported that companies were doing much better, seven percent reported companies were doing slightly worse and only two percent said things had deteriorated.

Interestingly and disconcertingly for U.S. firms, the bigger gains were achieved in the developing world. For instance, 41 percent of Brazilian respondents said that they perceived companies greatly improving customer loyalty and 20 percent saw companies making slight improvement.

Among South African respondents, 43 percent reported much better efforts and only 21 percent reported slight improvement. In the U.S., a mere 7 percent reported much better efforts to retain customers and 20 percent saw marginal change. In the U.K., 23 percent reported much improvement with 6 percent seeing marginal improvement; Denmark reported 13 percent versus 2 percent.

Case studies on excellent customer loyalty

So how did those companies in developed countries improve, and how can firms think outside of the box? Crosby posed these questions in early February to experts at a panel hosted by the Center for Services Leadership, a think tank at the W. P. Carey School of Business. Neal Bruce is Vice President of Innovation for Monster, the world's first and largest career site.

Monster began as an Internet startup in 1994 and still has that "dot-com mentality," he notes, so innovating customer loyalty might come easier and quicker than it would for a traditional corporation. Monster's customer loyalty has been strong, Bruce says; the company has thousands of customers and offices in 40-plus countries and its customers are often repeats or referrals. The company does this through job seeker feedback, employer feedback and looking at what vendors are doing in the space.

Some web companies in other markets, such as Amazon and Facebook, provide inspiration, Bruce says, and looking at small startups keeps them current on changing trends. When someone contacts Monster's customer service team, a third party company calls back to see how the experience was, what could be done better, what went wrong, etc.

The company also conducts annual surveys on customer loyalty, among other things, and has regular, ongoing one-on-one dialogues with employees. Bruce prefers the direct customer dialogues to aggregate spreadsheet data because it is "more direct, more specific and more real." IBM, a $100 billion company historically associated with computing hardware, also makes a case study for innovating customer loyalty.

From its foundations as a hardware developer and manufacturer, IBM has transformed itself into a services firm, helping companies integrate hardware, software and IT services, offering multi-vendor IT financial solutions and business consulting as well as business process outsourcing. Services now constitute half of the company's revenues. This means that IBM has 100,000 delivery people, technicians and other support staff all dealing with customers — all continuously monitoring customer loyalty, every day.

Saad Toma, general manager of technical support for IBM Global Technology Services, Americas, leads a field workforce of over 5,500 employees whose goal is providing hardware and software maintenance support services to clients. "This direct feedback from the field lets us measure the quality of services." Toma knows that the investment costs millions but says it is well worth it: "Improving service quality leads to higher client satisfaction and improved business model efficiencies."

The challenge, he says, is distilling the information to focus on the nuggets, the best ideas. The merit of each idea is carefully assessed on how it benefits IBM's clients. He thinks also that smaller companies can adopt similar customer satisfaction metrics through selective councils, surveys and industry data. Cardinal Health, a provider of supply chain services to the health care community, has a team and process devoted to creating unique supply chain solutions for their customers.

Vice President, Innovation, Integrated Supply Solutions, Kim Gravell says her group uses research data and customer feedback to develop and improve the solutions they offer. For instance, the company uses customer focus groups led by a neutral facilitator as part of their research process to test new ideas and concepts.

Gravell's team sits behind a one-way glass wall to monitor the group's feedback. The solution concept that evolves out of these sessions might be designed to address issues or problems the customer is facing, but it also must offer some level of improved experience. "Through testing new solutions concepts in this way, we gauge the customer's reaction in advance and are able to assess the true value prior to introducing the new concept to the market."

The right personalities are key

None of this works however without the right personalities. Bruce from Monster notes that customers are more gracious with people-delivered services than with automated tools. "People are the key to a great service." When Monster launched a 20-city tour with customer workshops on how to best utilize their website, he proved this point. The first forums drew frugal crowds but then became huge, partly because they hired a former customer with a great passion for the Monster brand to facilitate.

"The man has a huge personality. He throws Monster trinkets around, people love him and now 500 to 800 people show up," Bruce says. He thinks this helps retain customer loyalty and attract new customers too. "You get the right person with the right temperament and your clients will notice."

And the brand helps

Crosby from Synogate also wagers that the company brand itself helps make customers more loyal. Bruce says the Monster brand helped make them the biggest online job search engine and people trust it. "Anytime people see the Monster icon on my clothing or charge card, they expound on the jobs they found on our site or just that they love us. That is strong branding." For IBM the business model has also changed into something much more global, says Saad.

"IBM has operations in local geographies where the employees are local, serving local or regional customers. IBM's business has been expanding quickly in the emerging markets of China, India, Russia and Brazil with 60,000 employees in India and over 15,000 in China." The flipside is, how do you retain this loyalty when changing the company model? Monster considers this as it transitions from a transactional "find a job" website to a life improvement company.

The company wants people to find value on their site year round, not just when they change jobs every three years. For instance, people go through performance reviews, converse with bosses about pay raises, look for new skills and join new project teams. Monster is creating content that can act as a virtual career advisor, Bruce says. "Throughout 2008, Monster will add more content to deepen this experience. It's our new direction."

Bottom Line:

• Synovate, a global research company, issued its 2007 annual Synovate Proprietary Hot Spots Survey. Over 7,000 respondents were quizzed on whether they thought companies and brands were doing a better or worse job at gaining and retaining customer loyalty now, compared to three years ago. Most respondents reported that companies were working harder at it.
• Respondents in developing countries thought that companies were doing a better job at earning customer loyalty than respondents in developed countries.
• Experts from Monster, Cardinal Health and IBM say their companies work hard at this and agree that a company brand factors deeply into innovating customer loyalty.
• Monster is transitioning this year away from being a job hunting website and more towards becoming a life improvement company. The goal is becoming a site where people visit year round, not just when they need a job. Retaining the fabulous Monster brand will be a key strategy.