Inside Jobs, May 30, 2008

Why Customer Experience Matters Most

Companies have long competed on manufacturing capabilities, innovation, or traditional customer service. But finding new ways to create a differentiated offering in those areas are increasingly difficult to find. As a result, customer experience has emerged as the new battleground to create long, broad and deep customer relationships; relationships which can differentiate your company and deliver significant value to the bottom line.

Strategically, a unique customer experience can differentiate your company in the marketplace. In a marketplace where competitive parity and/or commoditization have set in, customer experience becomes one of the few alternatives for strategic differentiation. Perhaps an over-cited example is Starbuck’s, where they have converted coffee from a commodity into a destination site that plays to customer’s emotions, tastes, and a feeling of prestige – mostly based on a unique customer experience (and some pretty good coffee, too.)

Optimizing the customer experience may sound like another noble cause, but the results can be real. Let’s take a simple example of two truck stops along a major interstate highway that both sell gasoline at the same price. The first station is clean, well lit, and has a pay-at-the-pump features. The second station has paint chipping, a broken sign, and requires that you pre-pay for gasoline. It’s pretty easy to guess that while the second station may have an occasional customer wander in, the first station has more repeat customers and customers who are willing to buy other products and services. Simply put, that means more revenue (more customers for longer) and higher profits (selling more products and services to the same customer for the same attraction costs).

Achieving real results from an improved customer experience is as straight forward as a-b-c. The revenue that you realize from each customer is determined by a) depth, b) breadth, and c) duration of your relationship. Improve upon any of these key factors and you can realize significant results.

The depth of your customer experience is the level of commitment, loyalty, and meaningfulness of your customer relationships. Customer relationship depth can be measured in several ways, but perhaps the most obvious is the frequency of customer visits or transactions. For example, a customer may get his hardware supplies at a local hardware store for smaller items, but shop the big-box hardware store for larger items. Increasing the depth of the relationship means converting those transactions from the other store to yours by delivering a substantially better customer experience.

The breadth of your customer experience is the number of reasons that your customers transact with your company. Customer breadth can be measured by the total portfolio of products or services purchased by each individual customer. For example, the big box retailers such as Wal-Mart, Target, and K-mart have all added product lines, such as groceries, to expand the breadth of their relationship with their customers. Their intent: To be the one-stop shop for everything.

The duration of your customer experience is the total time, from first recognition to final defection, that your customer has a relationship with your company. Customer duration can be measured by the total time that a customer has interacted with your company. The value of increasing customer duration is clear; serving your existing customers is almost always more profitable than attracting new ones. In one example during my consulting career, we spent nearly as much on getting the sale than the total sale was worth. Obviously, expensive customer attraction activities are not profitable for your company. Keep the customers you have.

During the initial incubation stages of your project, you shouldn’t expect to have a complete, detailed and final business case. We address that activity in depth in the following chapter. However, establishing the intent of your project based on the potential value gains can help to formulate the vision, goals, and objectives for the project and properly align your executive sponsors’ expectations and support.

We focus on the value associated with improved customer experiences because it matters. It matters to your customers that make a conscious decision every time they choose to spend their dollars. It matters to your company as you seek to increase revenues and profit margin. And it matters to your stakeholders to know that your company has an unbeatable competitive advantage in the marketplace.

Focus on the value of the customer experience – because it matters more than anything.

Inside Jobs, May 22, 2008

Inside Jobs, May 8, 2008

Taming the Customer Data Beast

Your business is growing; more products & services are being sold to more customers at more locations and across more channels. Behind the scenes, your customer data challenge is growing too; customer data becomes scattered across departments, divisions and locations; your employees can’t access the right information at the right time; and few – if any – data standards exist.

“Let’s build a massive
customer data warehouse
to solve all of our problems,”
shouts your CIO.

On the surface, his approach sounds reasonable. A single centralized database sure would be nice; create a common data repository where anyone in the company could get the most up-t0-date and accurate customer information. By doing so, you could provide better customer service, improve retention, and up-sell or cross-sell more products.

Does it sound too good to be true? It just might be.

Beware The Tar Baby

Building a comprehensive customer data warehouse for any company can be a daunting task. Don’t make the same mistake as Br’er Rabbit in the classic children’s story of Br’er Rabbit and the Tar Baby. Underestimating the challenges of a customer data warehouse can be a real tar baby; once you stick your hands in it, it’s not easy to get out:

• The existing customer data will likely be in multiple formats that require significant cleansing and standardization.
• Different stakeholders will likely have unique data needs that will need to be reconciled.
• The number, type, and complexity of the customer data attributes that your employees would ‘really like to have’ will grow exponentially.
• Data warehouse solutions often require highly specialized technicians to design, build and maintain the monster on an ongoing basis.
• Your existing customer facing solutions likely won’t play well with a 3rd party data warehouse.
• Once you get the data into the data warehouse, it may be difficult to get it out in an easy, useful, or timely manner.

Despite the inevitable and oft-times obvious challenges with such an endeavor, many companies take on the tar baby and get stuck. Companies can spend a mountain of money to create their own holy grail of customer data. They buy expensive technology and hire highly specialized technicians to nurture and maintain it. The customer data warehouse takes on a life of its own and they lose sight of why they were building it in the first place.

Perhaps you turn to your CIO and ask,
“Now that we’ve built it,
what do we do with it?”

Taming the Beast

To effectively tame the customer data beast, companies must be able to develop and maintain an unrelenting focus on the customer experience. The ultimate customer experience is the ends while customer data is simply the means. Too often, companies can lose sight of the true goal when they’re in the midst of a building a comprehensive customer data warehouse.

To overcome this pitfall, companies should first develop a compelling customer experience strategy and define and optimize their end-to-end customer experience processes. By doing so, any customer data requirements will be framed by how they enable the customer experience strategy and process.

For example, you may all agree that you need to collect and maintain customer demographic information. But before you go through the effort of finding, dissecting, cleansing, migrating, and storing that information, make sure you know how, when and where that information will be utilized throughout your customer experience process.

In order to tame the customer data beast, you must use your customer experience strategy and process as your guide. Building the customer data warehouse without framing it around your customer experience process is a risky endeavor. Instead, your company’s customer experience process requirements should drive your customer data needs, not visa-versa.

Integration is the Key

Perhaps your company already has a customer data warehouse and you are looking for ways to use it more effectively. The key is data integration.

Since the early stages of the computer age, data has been king. Database management systems fetched top dollar and were in high demand. Remember the meteoric rise of Oracle, Sybase, and Informix in the 1990’s? Database administrators were also in high demand, and any individual with this highly specialized skill often fetched a top salary.

But the king has been dethroned.

Move over data, there is a new king and his name is integration. Having timely and accurate data continues to be very important. However, getting the right customer data in the right place and in the right context is how companies today are looking to make a difference:

Data is just data.
Data in context is information.
Information with relevance is knowledge.
And knowledge is power.

Today, companies must consider how to effectively share, move, and synchronize their customer data. Data quality and quantity are table stakes; the real differentiator is how you use it.

Realistically, you can’t have a conversation about customer care, customer service, or customer relationship management without talking about customer data. If you’re serious about becoming more customer centric, you will likely find yourself building a customer data warehouse (if you haven’t already). Before you begin, be aware of the complexities and make sure that you have a clear plan for using the data to effectively enable your end-to-end customer experience.

Inside Jobs, May 1, 2008

Secrets To Success In A Soft Economy

Businesses finding it difficult to compete on product, price, placement, or promotion can turn to customer experience management for differentiation.

Lenexa, Kansas – May 1, 2008… With a continuing bleak economic outlook and weakening consumer sentiment, business are looking for an edge anywhere they can get one. Businesses that are finding it difficult to compete on product, price, placement, or promotion in this environment can now turn to customer experience management for differentiation.

Robert G. Howard and ClearBrick LLC introduced today 7 Steps to Customer Experience Domination; a step-by-step guide to help any company to develop and implement a compelling customer experience differentiation strategy. The newly released business solution outlines seven clear steps that can help any business to develop a compelling customer experience strategy, identify opportunities, and translate ideas into actionable results.

In today’s economy, businesses are competing hard to gain any competitive advantage. “By establishing an emotional connection with the customer, businesses can improve loyalty, increase wallet share, improve advocacy, and grow revenue and profits,” said Robert G. Howard, Founder & Chief Executive of ClearBrick LLC. With so much at stake, customer experience management is quickly becoming the new competitive battleground for businesses seeking an edge.

Without a compelling and differentiated customer experience, consumers tend to revert to commodity buying behaviors; the consumer will tend to wait for the next sale or promotion and buy from the lowest bidder with little or no loyalty to any single business. Conversely, customers are willing to pay a premium for goods and services that are emotionally important to them; a phenomenon that was covered in depth in the best selling book Trading Up by Michael Silverstein and Neil Fiske. To compete in a soft economy, businesses are turning to customer experience management to create that increasingly important emotional connection with their customers.

ClearBrick’s latest business solution helps companies to navigate the complexities associated with customer experience management. 7 Steps to Customer Experience Domination incorporates proven methods into clear and pragmatic recommendations to help businesses to succeed with customer experience management. The solution is highly adaptable and configurable to meet the unique needs of any business. “ClearBrick has the perfect solution for the do-it-yourself project manager trying to resolve a company’s Customer Experience dilemma,” said Jack Bowerman of Bowerman Consulting LLC.

Robert G. Howard is the Founder and Chief Executive of ClearBrick LLC. ClearBrick blends field-proven business experience with timely and relevant market research to create pragmatic solutions that are packaged for execution. ClearBrick can be found online at www.clearbrick.com.

About ClearBrick LLC: ClearBrick was founded by Robert G. Howard in 2006. Mr. Howard is an experienced business advisor and management consultant with over 20 years of experience. ClearBrick is committed to providing quality products and services for the do-it-yourself business professional. ClearBrick is headquartered in Lenexa, Kansas and is supported by business professionals across the United States.