Technology drives Customer Experience

Technology drives Customer Experience

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. This was the central idea of the "FedEx Spirit of Success" seminar presented in association with The Economic Times General Management Review.

No matter how much business dynamics change the customer will always be the king. Modern managers must realise that marketing today, more than ever before, is customer-centric. And because today’s customers are more technologically savvier than before, their expectations of service and value-for-money have also grown shaping a more competitive business backdrop. With instant access to all the information on any product, the customers of today can make informed decisions. Unlike in the past when products and services created or destroyed value, today that is done by events and experiences, say C K Prahalad and Venkat Ramaswamy, authors of The Future of Competition: Co-Creating Unique Value with Customers (HBS Press, 2004).

But 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. 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 us and our customers, and not the other way around.

A Hi-tech Experience
Technology-driven customer service and a corporate culture relentlessly focussed on exceeding service goals has been at the core of FedEx since Fred Smith first founded the company in 1971. Smith, who is Chairman, President and CEO of FedEx Corp., believes that change is permanent. Ever increasing customer expectations must be met with ever improving customer service. According to Smith, "Change is shorthand for opportunity, and if you can be a little bit ahead of shifts in business, the opportunities can be big."

To be ahead of shifts in business, you need knowledge. It is this need for the knowledge that The Economic Times General Management Review (GMR) fulfils. The knowledge of key managers and their ability to apply it is at the heart of all successful organisations. Year after year, evidence grows that those enterprises which proactively manage their intellectual assets see bottom-line results. Knowledge is now not only equated to power but also profits. Every quarter, GMR empowers its readers with high potency doses of business intelligence. As a multi-disciplinary platform for sharing and disseminating business intelligence, GMR captures the latest in global management best practices and the techniques to implement them.

The "FedEx Spirit of Success" forum, presented in association with The Economic Times General Management Review, was the third in the series of seminars organised jointly by FedEx and The Economic Times. The purpose of the forum was to bring out the growing importance of "customer experience in marketing and the use of technology in enabling such an experience".

Held at Bangalore, the technology hub of India, the forum showcased leading names from the industry. The Trinity Hall of the Taj Residency in Bangalore was filled with managers from the Bangalore business latitude as Shombit Sengupta, Ashok Waran and Vivek Gokarn shared their experiences. We present to you the excerpts.

Have technology, will build relationships
Ashok Waran, senior director of Oracle’s North America India Operations, spoke about the role of technology in managing customers. He started his presentation by revealing some interesting figures of the US auto industry. The marketing costs of the top three car manufacturers rose 87 per cent between 1996 and 2000, translating into an extra outflow of about 3000 dollars per vehicle. In the same period, the combined market share of the top three giants dropped four percent. This was in spite of the fact that 55 per cent of the marketing budgets are used for promotions – discounts and incentives.

According to Waran, push strategies are not as effective in these days of media saturation. Proliferation in TV channels and the emergence and growth of the Internet have shrunk the average attention span of the customer and it is much more difficult to reach the customer using these. There is need to understand the customer and his behaviour.

This is where Customer Relationship Management comes into picture. Waran said that business realities have changed. Customer today, armed with information, demands higher value. He has increased purchasing power, and a higher technological aptitude. It is easier to reach him one-to-one than via the mass media. On the organisational front, marketing budgets are being tighter due to higher media costs resulting in falling marketing effectiveness. Moving to a customer-centric approach from the traditional product-centric approach is a real challenge. The technological reality is that today customer data is available more easily than ever before. The data processing too is faster and more reliable leading to improved analysis quality.

Keeping these realities in mind, relationship marketing emerges as a strategic response and CRM deployment is as the strategic tool to implement it. However,   Waran warned that majority of CRM initiatives fail not because of poor technology but due to the "the three Ps" – people, process and politics. What is required for successful CRM initiative is an executive sponsorship of an enterprise CRM vision, investment in employee training and focus on processes.

Success recipe: Mix technology with human ergonomics
When international management consultant and founder of Shining Emotional Surplus, Shombit Sengupta took the stage, the audiences instinctively sensed an unusual presentation is in the offing. And their expectations were not wrong. Sengupta presentation was as colourful and cheerful as his attire and helped him deliver his message with solid impact.

Sengupta’s focus was on balancing technology with the human factor to deliver the ultimate customer experience. He fervently declared that to be truly effective, technology must blend with human ergonomics, or human engineering is it is popularly known.

He explained this using a four-dimensional model of technology-service design, which includes rational, functional and emotional attributes that are needed to address the ergonomic character of a human being. The output is the formation of a subliminal connection to the consumer. Later, he said, "The task is to make business appealing using technology as the rational factor." He beautifully demonstrated that technology is a necessary but not a sufficient aspect of delivering customer experience by showing a skeleton and a nude picture of Marilyn Monroe and asking a simple question: How do you prefer Marilyn – this way (skeleton) or that way (with flesh)?

Using several real-life examples, he explained that technology is the rational aspect, the non-visible system, which is like the skeleton, whereas work-enabling environment is the functional aspect, which gives the usage advantage and proactive service is the emotional aspect, which connects with the consumer. So, a luxury hotel with a powerful backend technology will fail to impress if there is a never ending queue of guests for checking in. Similarly, even after his 69th visit to your company, the receptionist asks the customer for a business card, will leave him rather disappointed, never mind how technologically sophisticated your company may be. Sometimes technology itself creates a problem. A customer is hungry and wishes to order food but simply cannot use the advanced (read complicated) phone system installed by the hotel. Or, a customer returns from the
freezing cold of Moscow, only to find himself freezing in the hotel room because he can’t figure out how to use the thermostat of the AC. Unfriendly technology is as bad as poor service quality, and together they make for inferior customer experience.

Sengupta ended his presentation by emphasising that technology should be employed to create outstanding experience for the customer. And to do so, it must blend with human ergonomics, he once again stressed.

The Marketing Loop
As he began the third and final presentation of the evening, Vivek Gokarn, CEO and managing director of SAS India, confessed that he had the unenviable task of keeping people’s interest from food and beverages. Besides, he was following Sengupta’s presentation, whose vibrant presentation even featured Marilyn Monroe in one of the slides! Gokarn who holds joint responsibility as CEO and managing director for both the SAS subsidiaries in India, namely SAS India and SAS Global Services, spoke about the role of technology in enabling superior customer intelligence.

Accoding to Gokarn, pain is endemic and pointed out that organisations use technology to alleviate corporate pains. All top managers – CEO, CFO, CIO, COO or CMO – have their own set of pains. The CMO’s pains include losing market share, increased advertising expenses, declining advertising response rates, losing touch with the customer etc.  

Gokarn focussed on the closed loop marketing process of "plan, target, act and learn" to explain how customer intelligence can be used to develop effective marketing strategies. Organisations develop their marketing strategies driven by various internal and external pressures such as profit objectives, competition, market and environmental forces etc. The objective of your marketing campaign could be acquisition of new customers or retention of existing ones or even cross selling/ up selling to the existing customers. The marketing and sales set up of your organisations supports your strategy objectives and reaches out to your customers using various channels like advertising, direct marketing, internet/email and SMS. The customer is right in the middle. He has a behaviour and risk pattern and also a profit potential, as seen from the organisation’s perspective. The essence of your marketing campaign is to learn from customers and use that learning to plan your strategy, and then target it back to the customers.  
 
You typically begin by creating customer insight using, for example, web analysis, surveys, media spend analysis, billed and unbilled call behaviour. Then you use this insight to create new intelligence by determining which of the solutions is most suitable in your case: customer acquisition, retention or (prevent attrition), cross sell/up sell, and so on. Based on this you adopt one or more of the many solutions like marketing automation, e-intelligence, web personalisation, campaign management, real-time interaction management, market/channel optimisation and so on. For example, marketing automation enables you to understand your customer information, optimise your customer interactions, and more efficiently plan, target, act and learn from your marketing campaigns, thereby increasing campaign efficiency and profitability. Gokarn highlighted the importance of maintaining a competitive differentiator throughout the marketing campaign. He also urged that key marketing performance indicators, must be used to measure marketing effectiveness at all stages.

Gokarn’s gave several with case examples of successful companies that have excelled in their endeavours to harness customer intelligence, and have used this intelligence to drive customer relationships and to enhance customer buying by understanding behaviour pattern of customers. Among the examples were Amazon.com (online bookstore), FedEx Express, 1-800 Flowers.com (a gift and convenience store in the US), Marks and Spencer and GE Capital.

For example, Amazon wanted to enhance shopping experience to improve profitability because they were unable to measure the impact of their ongoing efforts to improve personalisation for customers. Using the above method of acquiring and applying customer intelligence, Amazon.com now has a way to measure the impact of innovation, enabling them to roll-out something which is of value to the customers and profitable for their business.

The FedEx Way
In his vote of thanks, Jacques Creeten, managing director of FedEx India, revealed some interesting facts about FedEx’s thrust on technology. Creeten said, "Technology is one of the key drivers in our business. We spend about USD 1.3 billion per annum on technology development and we employ close to 5,000 information technology professionals who develop this technology." These IT professionals develop both internal technology needed by FedEx and external technology which FedEx uses to integrate itself with its customers. Technology is a great enabler and it allows you to do a lot of things – whether your objective is cost efficiency or better targeting of your customer base – you can build these synergies.

Creeten spoke about how FedEx started using technology to improve efficiencies inside 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.
Technology not only enables your organisation but also your customer. It gives your customer much more power and much more flexibility than ever before. The customer experience that you provide becomes evermore important and 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.

Without naming the company, Creeten gave the example of a European airline that conducted market research in the nineties and they found out that more and more passengers were using laptops on the planes. The research told them that their customers were unhappy and that they would like sockets on their seats so that they could plug in their laptops and work while travelling, because the laptop batteries were lasting about 30 minutes. Over the next two years, they installed sockets on the entire fleet of 200 aircraft. By the time they finished, there were laptops with improved battery life that lasted for five hours. This demonstrates that market research doesn’t replace vision.

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