Managing Customer Experience and Relationships. Don Peppers
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and her baby's stage of growth. A month later, the same woman receives a notification of her baby's immunization appointment that is triggered when she leaves the hospital with her newborn.
An insurance company not only handles a claim for property damage but also connects the insured party with a contractor in their area who can bypass the purchasing department and do the repairs directly.
Instead of sending out the same offer to everyone at the same time, a company waits for specific trigger behavior from a customer and increases response rates 25-fold.
When logging in to buy tickets from a website, a father taking his tween daughter to a concert experiences a very different customer journey than does his twenty-something son who logs into the same site.
Through the same phone app they used to check their flight status, an airline passenger in the airport waiting to board is offered an upgrade to business class as an apology for a 45-minute departure delay.
An outdoor gear company sees that their tents are being discussed on a social channel and sends a free tent as a trial sample to a consistent product supporter.
A supervisor orders more computer components by going to a web page that displays the firm's contract terms, their own spending to date, and the departmental authorizations.
Sitting in the call center, a service rep sees a “smart dialogue” suggestion (see Chapter 8) pop onto a monitor during a call with a customer, suggesting a question the company wants to ask that customer. (The company is not asking all customers who call that week the same question.)
A customer service representative sees a complaint a customer has made on a social channel and, at the same time, is able to view their purchasing history and order status. The service rep uses that information to reply to the complaint via the same social channel.
An online cosmetics customer receives personalized offers when they open the company website, and promotional coupons are automatically applied to their shopping cart.
A business sees that a customer has left their website, abandoning a cart with selected products before checkout, and makes sure that when the customer calls up their news online the next day, they get a reminder or a sweetener to go back and complete the order.
Taking customer-specific action, treating different customers differently, improving each customer's experience with the company or product, building the value of the customer base, creating and managing relationships with individual customers that go on through time to get better and deeper—that's what this book is about. Note that in the case of consumers, this can be conducted in a way that is simultaneously customized and yet efficiently automated. In the chapters that follow, we will look at lots of examples. The overall business goal of this strategy is to make the enterprise as profitable as possible over time by taking steps to increase the value of the customer base. The enterprise makes itself, its products, and/or its services so satisfying, convenient, or valuable to the customer that they become more willing to devote their time and money to this enterprise than to any competitor. A customer-strategy enterprise interacts directly with an individual customer. The customer tells the enterprise about how they would like to be served. Based on this interaction, the enterprise, in turn, modifies its behavior with respect to this particular customer. In essence, the concept implies a specific, one-customer-to-one-enterprise relationship, as is the case when the customer's input drives the enterprise's output for that particular customer.4
The overall business goal of this strategy is to make the enterprise as profitable as possible over time by taking steps to increase the value of the customer base.
A suite of buzzwords have come to surround this endeavor, in addition to customer relationship management (CRM): one-to-one marketing, customer experience management, customer value management, customer focus, customer orientation, customer centricity, customer experience journey mapping, and more.
You can see it in the titles on the business cards—chief marketing officer, of course, but also a host of others, such as:
Customer success manager (B2B)
Chief customer officer (B2C)
Chief relationship officer
Customer care leader
Customer experience manager
Customer experience advocate
Director, customer experience and digital design
Customer value management director
Chief revenue officer
Customer revolutionary
As with all new initiatives, this customer approach (different from the strictly financial approach or product-profitability approach of the previous century) suffers when it is poorly understood, improperly applied, and incorrectly measured and managed. But by any name, strategies designed to build the value of the customer base by building relationships with one customer at a time, or with well-defined groups of identifiable customers, are by no means ephemeral trends or fads any more than computers or connectivity are.
A good example of a business offering that benefits from individual customer relationships can be seen in online banking services, in which a consumer spends several hours, usually spread over several sessions, setting up an online account and inputting payee addresses and account numbers, in order to be able to pay bills electronically each month. If a competitor opens a branch in town offering slightly lower checking fees or higher savings rates, this consumer is unlikely to switch banks. They have invested time and energy in a relationship with the first bank, and it is simply more convenient to remain loyal to the first bank than to teach the second bank how to serve them in the same way. In this example, it should also be noted that the bank now has increased the value of the customer to the bank and has simultaneously reduced the cost of serving the customer, as it costs the bank less to serve a customer online than at the teller window or by phone.
Clearly, customer strategy involves much more than marketing, and it cannot deliver optimum return on investment of money or customers without integrating individual customer information into every corporate function, from customer service to production, logistics, and channel management. A formal change in the organizational structure usually is necessary to become an enterprise focused on growing customer value. As this book shows, customer strategy is both an operational and an analytical process. Operational CRM focuses on the software installations and the changes in process affecting the day-to-day operations of a firm—operations that will produce and deliver different treatments to different customers. Analytical CRM focuses on the strategic planning needed to build customer value as well as the cultural, measurement, and organizational changes required to implement that strategy successfully.
How to Think About Relationships and Customer Experience as Key to Business Strategy
The move to a customer-strategy business model has come of age at a critical juncture in business history, when managers are deeply concerned about declining customer loyalty as a result of greater transparency and universal access to information, declining trust in many large institutions and most businesses, and increasing choices for customers. As customer loyalty decreases, profit margins decline, too, because the most frequently used customer acquisition tactic is price cutting. Enterprises are facing a radically different competitive landscape as the information about their customers is becoming more plentiful and as the customers themselves are demanding more interactions with companies and creating more connections with each other. Thus, a coordinated effort to get, keep, and grow valuable customers has taken on a greater and far more relevant role in forging a successful long-term, profitable business strategy.
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