Superior customer experience, courtesy technology

Superior customer experience, courtesy technology

In this era of parity in product quality and product price, the only distinct competitive advantage is superior customer service. If employed sensibly, technology can be a potent instrument in effectively enabling organisations to provide superior customer service consistently.

Realising this, organisations are using technology as a competitive tool to create the customer experience that differentiates them in the market. But experts concur that technology must be used prudently, for sometimes what is designed to serve the customers ends up doing the exact opposite: disservice. Unfriendly technology, however sophisticated it might be, is as bad as poor quality service and can prove detrimental to your organisation’s image and long term survival. Organisations that employ technology will do well to remember that in the end, it is only a means to an end, not the end itself. Technology should serve the organisations and its customers, and not the other way around.

"Using technology to enable superior Customer Service" was the theme of FedEx Spirit of Success forum presented in association with The Economic Times General Management Review. Held at the Taj Residency in Bangalore, the technology hub of India, the forum showcased leading names from the industry. In exclusive post-forum interviews with the speakers Manoj Khatri asked them to elaborate on the ideas they presented at the forum. Excerpts:

Back to the Future
In December 2003, Corporate Dossier presented the first instalment of FedEx Spirit of Success in Mumbai and Delhi. Internationally acclaimed futurist Patrick Dixon took us into a journey of time and showed us a glimpse of the exciting future. He emphasised that speed will be a critical factor in managing tomorrow. "The world is changing faster than boards can contemplate. Organisations will have to become incredibly flexible, and plan for more than one vision and keep more than one business plan ready," Dixon predicted.

The Indian futurists, who accompanied Dixon in his crystal-gazing, included Sunil Mittal, the CMD of Bharti Enterprises, R Gopalakrishnan, Executive Director of Tata Sons, Arun Jain, CEO of Polaris and Deepak Puri, MD of Moser Baer. Mittal believed that "the clues to the shape the future will take are to be found in the present". Gopalakrishnan warned that low inflation and low interest rates coupled with high growth is a different reality system, but one that is here to stay. He asserted that taking a spiral approach against the traditionally taught straight line approach will be the key to unlock the future. Jain spoke about the philosophy of Lakshya, an exercise where everyone in the company was asked to predict the future of Polaris after five years. According to Jain, every organisation faces Lethargy and needs some disruptions to move ahead and shake itself out of complacency. Puri was bullish about India, the land of opportunity and the entrepreneurial spirit found in her people. In his experience in a technology-intensive domain, Puri found that the biggest problem is the short time lag between making an investment and the obsolescence of the product.

"Technology is the skeleton and customer experience, the flesh" – Shombit Sengupta, international management consultant and founder of Shining Emotional Surplus,  

In a competitive scenario, how important do you think is customer experience as a value proposition?

The service component in any business is intangible. It is employee passion that determines customer experience. Unless employees ingrain in their attitude, action and behaviour that they want to serve a customer, delivery will fail.

Technology plays a key role in the service industry, but as a skeleton. The most sophisticated technology cannot improve business if the front end of this skeleton is not endowed with flesh.

Let me demonstrate customer service experience through a luxury hotel example. Arriving at the hotel after a hard day’s work, the front desk makes you wait because international flight passengers are queuing up to check in. Then you get a digital key card that doesn’t work at first swipe, irritating you to call a passing butler for help. Once inside, your hunger awaits your figuring out the complicated telephone system that will connect room service. Your difficulty in adjusting the hotel air conditioning knob takes you back to Moscow’s -32 degree temperature you escaped from last week.

A preconceived notion exists that imposing high technology will improve a service business. But this can fall short if only the engineers, not the facilitators, understand the developed software. In the 20 or 30 customer touch points of a service business, the strategic focus should be on how to build technology to primarily deliver those 30 touch points. If technology is not designed to interface the customer’s needs and desires, it remains a mere skeleton which is totally nerveless and without flesh.

What are the special challenges of marketing and managing customer experience in a technology-driven environment?

The challenge is to first observe and diagnose the latent socio-cultural perspective of society, and see how the target customer fits in there. This enables trend identification. Understanding socio-cultural trends is the fundamental diagnosis required to cater to tomorrow’s demanding world.

Marketing strategy derived from gut feel and bolstered with expensive technology can never work. To understand real customer experience, you need micro diagnosis of the targeted and potential customer, not quantified databases or international competitive analysis gathered from surfing the Internet.

People often think that because the service industry is people driven and has minimal infrastructure investment, it can be managed very easily. So, based on this unreal idea, the service business quickly gathers competition, and a price war ensues. The spectrum of the customer’s eye is always open to this competitive world.

In marketing a service business, every different aspect of competitors needs to be minutely watched. The challenge is to understand the customer microscopically in his sociological, psychological and historical background in the enlarged competitive environment. The customer’s sociological platform comprises the class of society and environment he comes from; his psychological paradigm is his desire, need, hedonism and distress; and the historical background means the traditions followed in his country, which would obviously be different for customers in America, Europe, India or Japan.

In the price sensitive Indian market, how can companies compete effectively on technology-enabled customer service?  

If companies have not clearly understood customer need, how can they surprise the customer with service? In general the service business in India does not remunerate people properly. In the west, if a service company is asked to perform even a minor secondary service not contracted for, like couriering a letter, that company will charge handling charges for getting that secondary service executed.  

A service business must establish a tangible character and focus on it. If a service is intangible, the Indian customer does not value it. Designing a service that’s efficient at every customer touch point is a big science. The attitude, behaviour, actions and deliverables of service companies should first address customer needs and desire, and physically manifest these service qualities in customer interaction.

When the service network is driven by technology it will never work. It has to be driven by the customer’s conscious and subconscious requirement. A manual of customer service needs to be designed and the architecture of this manual must have an extensive dimension of discipline that will positively surprise the customer. It needs a tremendous micro research to be in tu
ne with a customer’s physical and psychological requirement, and make the manual accordingly.

Can technology completely replace the human factor in delivering superior experience to customers? Why?

Till the time human beings need to make physical love, technology cannot replace any delivery superiority. Technological superiority cannot give or sustain a differentiating character. It can only be the skeleton. Technology will need to be given a structure. Flesh has to be developed around it so it can be appropriated for human utilisation. It will be very difficult to have flesh devoid of human warmth in a technology enabled service.  

"Use technology to generate actionable customer intelligence" – Vivek Gokarn, CEO and managing director of SAS India

How does technology help in enabling improved customer intelligence for an organisation?

Technology plays a pivotal role in deriving customer intelligence and is catalytic in improving efficiency & effectiveness, measuring the impact of customer interactions, and effectively allocating resources; resulting in increase in customer profitability and above all increased customer satisfaction. Business Executives, Channel Managers, Product Managers, Sales and Marketing Directors all face a common challenge in deriving intelligence interpretations from their large sources of data. They need intelligence to drive their business and improve customer satisfaction, but they seldom achieve it.

To ensure that the organisations have a ‘single-view’ of all their customers, organisations need technology solutions that can collect customer data from multiple sources, analyse it, interpret customer information, and communicate the results enterprise-wide. This would enable an organisation to maximise the value and impact of every customer interaction, and provide measurable return on investment.

For organisations to achieve a sustainable competitive advantage, it is therefore imperative that they have technology solutions that can generate actionable customer intelligence, to better understand their customers and maximise customer profitability.

Which industries are most likely to benefit from using technology to serve customers directly? And which sectors can use technology only as an indirect value add to the customer?

Only by gaining deeper insight about your customers can you expect to serve them better and make their buying experience a pleasurable one. Technology is an important crux to gaining this insight. SAS today has more than 42,000 customer sites across the globe and our experience with companies across various industries – Automotive, Banking, Financial Services, Government & Education, Healthcare, Insurance, Life Sciences, Manufacturing, Media & Entertainment, Pharmaceutical, Retail, and Telecommunications – clearly establishes the role of technology to improve customer intelligence in order to improve their business performance.

In what circumstances does technology fail? What measures must an organisation take to minimise the impact of failure of technology?

We believe that the four cornerstones for success of any technology are Usability, Manageability, Scalability and Interoperability. Usability ensures that the user experience is appropriate for every audience – saves businesses time and money in training; Manageability means that the organisation can easily manage the entire system with a minimum of resources and training; Scalability of technology signifies that the product set can grow with an enterprise without losing efficiency no matter what the data requirements are or may become; and Interoperability defines the Integration and communication with software and data from different data sources.

With these cornerstones in place, technology solutions can combine enterprise data management, advanced analytics, and campaign planning and management, to synthesise customer data across various lines of business and across all customer interaction points, including Internet, call centre, and Point-of-Sale data. By integrating online and offline customer information, organisations will have the ability to predict customer’s behaviour across all channels, targeting the right customer at the right time.

"Exploit technology to forge strong customer relationships" – Ashok Waran, Senior Director of Oracle, North America India Operations

What role is technology playing in the changing marketing dynamics? How important is it to manage customers in the current competitive scenario?

Customers are closer to companies than ever before, whether the company knows it or not. They know your processes, your competitive advantages and your competition better than ever before. They have access to information in an unprecedented scale with the advent of Internet.

There is also an information overload happening at the same time. Traditional methods of reaching out to customers may not be as effective and there is a need to change the game. The very technology that makes for information overload can be harnessed by companies to differentiate. This necessitates a new way of looking at business and ensuring that a holistic approach is taken to strengthen each and every arm of the enterprise. This means, "everyone does marketing". Marketing is then all about building customer satisfaction, value and retention. Technology enables the way we interact with our customers and allows companies to do things they never attempted before. Today, almost any level of customer interaction can be conceivably achieved through technology. It is up to the enterprise to re-design their operational models and tap into what is available. A sterling example of this is how Dell’s business model differentiated itself with other traditional computer manufacturers by reaching out to each customer to create a value proposition for that customer. Technology is the primary enabler for Dell.

You referred to customer, organisational and technology realities as factors for evolution of CRM as a strategic response. Can you elaborate on this?

The customers of today are more demanding than ever before: they are smarter, more price conscious, less forgiving, more prone to change their suppliers and are approached by many more competitors with equal or better offers. This means that that the organisational response must be holistic, working across departmental boundaries. They need all advantages they can muster, to create an effective value delivery chain that increases the product’s, or service’s, perceived value at each step of the system. Technology enables this, but the culture is something only the organisation as a whole can deliver. With increasing globalisation of businesses and technology the product as a sole differentiator is a rare phenomenon. More likely than not, there are several close competitors and the differentiator is the end-to-end service. There is no greater commoditised product than a PC, and Dell’s business model is a great example that builds differentiation.

In what circumstances does CRM fail? And when does it succeed?

The best relationship marketing today is driven by technology. CRM fails when it is seen as a point solution or a "me-too" implementation. It succeeds when it is implemented as a business strategy encompassing people, processes, making it cross functional and creating a customer-oriented corporate culture.
 
Using a case example, can you demonstrate the positive impact of CRM on the bottom line?
 
Take one of the most price competitive, non-differentiated products – the PC as an example. Let’s take the Dell story to illustrate how understanding your customer’s needs can create a consistent positive bottom-line.

The Dell model is a very efficient "made-to-order",
highly efficient, low cost distribution system characterised by direct customer relationships, build-to-order manufacturing and products and services targeted at specific market segments – the quintessential CRM. Dell broadly segmented its customers as "transactional" or "relationship" or a blend of both. Dell targeted the educated "transactional" customer rather than the neophyte. "Relationship" customers were a key component of Dell’s success story. Dell allowed these customers to configure, price and buy systems at approved, discounted prices, track orders and inventory through detailed reports and gave access to service and support teams.

The results of this approach were that in three years since Dell adopted this model, its stock climbed 2000% and ROIC was 186% – the highest in the industry by a long margin.

Capital One’s 40% year-by-year growth is another case in point.

Technology is a key driver
According to managing director of FedEx India Jacques Creeten, FedEx relies heavily on technology to deliver superior customer service. Technology is one of key drivers of FedEx and it spends about USD 1.3 billion per annum on technology development, employing close to 5,000 information technology professionals to develop this technology.

Creeten spoke about how FedEx has always used technology to improve efficiencies inside as well as outside the organisation. But he insisted that even though technology is extremely important, the human factor cannot be disregarded. "Even today, if you make a mistake, the way you react and the way you recover and fast and efficiently you do that, still requires the human element. To facilitate superior customer service requires, you require not only technology but also reorganisation and redeployment of people to make the organisation more customer-friendly and the people more customer-focussed," Creeten emphasised.

Creeten believes that technology not only enables your organisation but also your customer. It gives your customer much more power and much more flexibility than ever before. But, as customer experience becomes evermore important, you cannot count on just technology to make that happen for you. It is, in the end, just a tool that helps you run your business in a better way. You still need to hire excellent people and invest in building their skill sets to enable to them to use technology to make the right decisions.

One Reply to “Superior customer experience, courtesy technology”

Leave a Reply

Your email address will not be published. Required fields are marked *