Omnichannel Commerce & The Customer Experience - Featuring Don Peppers

COPYRIGHT © 2016. ALL RIGHTS PROTECTED AND RESERVED. 1

Beyond CRM: Omnichannel Commerce and

the Customer Experience

16 March 2016

Singapore

@DonPeppers

2

New technologies rapidly undermine old ones

What do Coca-Cola and J.P. Morgan Chase have

in common?

Voice-mail is so…

20th Century!

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Disruptive innovations are hazardous to every existing company’s health

Rob Nail CEO and Co-Founder

Six Qualities Required Of a Digital CEO Leading a Disruptive Start-up:

1. Visionary customer advocate

2. Data-driven experimentalist

3. Optimistic realist

4. Extremely adaptable

5. Radically open

6. Hyper-confident

Source: Exponential Organizations (2014), Salim Ismail, et. al.

1. Visionary customer advocate

Now think about what this actually means for today’s business environment

It means that customers are the biggest disruptors of all!

The largest hotelier in the world today is…

Source: Exponential Organizations, Ismail, Malone & van Geest, 2015

More than 1.5 m listings in 34,000+ cities in 190 countries

$25b valuation today, 5X bigger than Hyatt’s

1500 employees (97% fewer than Hyatt)

Airbnb’s only real asset: CUSTOMERS

Customers now create more value, more quickly, than any other single kind of business asset

By 2010 less than 50% was tangible. >30% was in customers.

Tangible Intangible

In 1980 nearly 100% of the S&P 500 market cap was tangible assets.

Tangible

Intangible

Source: Grow (2011), by Jim Stengel

Strategy. Execution. Results.


The Culprit: Moore’s Law

Uganda has more mobile phones than lightbulbs, and more Indians have access to a mobile phone than to a private a toilet

British scientists are developing an “appetite app” – a Bluetooth-enabled microchip implanted near the vagus nerve

Every 20 years, computers get a thousand times more powerful

In 1999 it cost $15m+ to do an online company start-up in Silicon Valley. Today it costs ~$150K



Consumers are completely informed, all by themselves

Customers

demand real-time

interaction with

the companies

they buy from Sales, service and marketing have been smashed together into the

“customer experience”

The Culprit: Moore’s Law



Technology changes the dimension of business competition

Product Centricity Market share

Customer Needs

Satisfied

Customers Reached

Share of customer

Cu

sto

me

r Ce

ntr

icity

Treating different customers differently

Relationships are required

COPYRIGHT © 2016. ALL RIGHTS PROTECTED AND RESERVED. 11 11

“Executing true 1-to-1 marketing at scale has been shown to lift overall revenues by more than 5%.”

- SAP Voice, September 2015


1-to-1 marketing ≠ Random acts of service

Moral of the story: If you don’t remember your customers, then even the

most well-intended service can be worse than nothing!

What one business hotel taught me with their “VIP Guest” program



Technology changes the dimension of business competition


Customer Needs

Satisfied

Customers Reached

Share of customer

Cu

sto

me

r Ce

ntr

icity

Managing each customer’s experience

Managing the public’s perception



How a different hotel managed my customer experience…

“Customer experience is the greatest untapped source of both decreased costs and increased revenue in most industries.”

- Harley Manning, Forrester analyst


So what is a “good” experience?

In a word:

Frictionless


Satisfaction and loyalty are not highly correlated

Source: The Effortless Customer Experience, 2013

However, customer dis-loyalty is highly correlated with a poor customer experience!

The secret to customer loyalty is a frictionless experience that removes obstacles


The secret to customer loyalty is a frictionless experience that removes obstacles



Forrester’s Customer Experience Pyramid

Meets need

Easy

Enjoyable

Source: Outside In, 2012


The upside and downside of CX

Source: The Effortless Customer Experience, 2013

Product experience

Likelihood of telling a friend

Customer service experience

Likelihood of telling a friend

Eliminate the friction in your customer service

Delight the customer with your product



Meets need

Enjoyable

Easy

The upside and downside of CX

This is where you want to be

But this is where you have to start

Eliminate the friction in your customer service

Delight the customer with your product

Like electricity and water, customers will always seek the path of least resistance

Reliable

Valuable

Relevant

Trustable

Four qualities in a truly frictionless customer experience:



Competence

Of course, it’s always been important to have

your customer’s trust

Good Intentions

Doing things right

Doing the right thing



But Moore’s Law has a corollary…

Every 20 years, computers get a thousand times more powerful



Every 20 years, we interact a thousand times more with others!

…Zuckerberg’s Law



The average American teenager sends 180 text messages every day



The more we interact, the more trust we demand

Trust makes interactions efficient

Interactions generate transparency



A new standard: Extreme Trust

Proactive trustworthiness

It’s no longer enough simply to refrain from cheating or deceiving customers

“Trustability”



Competence

Good Intentions

Doing things right

Doing the right thing

Proactively

Extreme Trust

“Trustability”



Extreme Trust characterizes the most successful digital commerce companies…



What set of tasks does a business have to undertake to be successful?


Customer Needs

Satisfied

Customers Reached

Share of customer

Cu

sto

me

r Ce

ntr

icity





Product Centricity

Customer Needs

Satisfied

Customers Reached




Customer Needs

Satisfied

Customers Reached

Cu

sto

me

r Ce

ntr

icity


Omnichannel technologies

Data management and analytics

Customer service and CRM

Product content management

Order management

Supply chain integration

Enterprise resource planning



Customer Needs

Satisfied

Customers Reached

Cu

sto

me

r Ce

ntr

icity

Omnichannel technologies

Data management and analytics

Customer service and CRM

Product content management

Order management

Supply chain integration

Enterprise resource planning

Front-end processes

Back-end processes


Delivering a frictionless CX is hard!

Information integration and accessibility

Configuration of organization, including structure, incentives, and accountabilities

Orientation: attitude and culture


Actions to deal with these obstacles:

Capabilities Obstacle

Technology upgrade and integration, omnichannel interaction, customer analytics, knowledge management, lead generation and conversion process improvement…

Assessment, roadmap, customer journey mapping, workforce management, metrics, incentives…

Change management, executive coaching and training, corporate culture transformation, social collaboration tools…

Alignment Obstacle

Mind-set Obstacle


“Omnichannel” can refer to several issues:

“Omnichannel” Capabilities Obstacle

ü  Technologies that work well with each other, so that customer interactions are more frictionless

ü  Interactions from a company’s marketing, sales, and service channels, fully coordinated with each other

ü  Best definition: Seamless interaction from the customer’s perspective, across whatever channels the customer chooses


In most businesses today, the vast majority of inbound customer calls are preceded by a web site session!

“Omnichannel” Capabilities Obstacle


Four ways to integrate the online CX with the contact center or retail CX

Proactive chat

“Call Me” button

Temporal number

Click to call

Capabilities Obstacle


…at a telecom client

Managers were tasked with delivering higher NPS numbers

But when financial results fell off during one quarter, threatening profit margins…

…the finance department unilaterally decided to eliminate nearly all refunds to customers!

Alignment Obstacle

Problem: How to align non-financial customer metrics with corporate financial metrics



Computers will never do everything

Mind-set Obstacle


Routine and non-routine customer experiences

High Low

Consumer Engagement

Process Standardization

High

Low Business as usual

Predictable customer

lifecycle events Surprises, trials and tribulations

Threats to cost efficiency

Employees making non-routine decisions

Effective decisions require employees to be:

v  Engaged v  Enabled

High

High

Low

Low


The real secret to a successful digital business…

The “Mechanical Turk”


There has to be a person in there

What you want: Self-organization

Your employees need to be

Engaged in their work and

Enabled to accomplish their mission


What one Australian company told me

When a customer problem is encountered for which there is no good policy or solution…

What you want: Self-organization

…a customer service rep can devise their own solution and get agreement from any other rep!



“Culture eats strategy for breakfast” - Peter Drucker (1909 – 2005)


At Toyota, culture is a deliberate act

Every worker, no matter how far down, is a “knowledge worker”

Everyone is asked to think creatively about improving his job


The “Toyota Way” Kaizen. Continuous improvement

Challenge. Don’t view problems negatively, but as a way to improve performance

Teamwork. Company's interests first

Genchi genbutsu (GG). “Go to the source”

Respect for others. Express differences, respectfully

“If two employees always agree, then one of them is redundant”


The “Toyota Way” depends on trust

Management trusts employees, and employees trust management and each other

Suppliers trust Toyota to “do the right thing”

A 1997 fire at a Tier One supplier threatened to shut down Toyota’s production

But then a network of suppliers fixed the problem themselves, with little or no direction from Toyota!


Strong cultures inspire workers to want to provide a better customer experience

What I heard from a marketing exec at one hotel chain…

And motivated workers themselves can often overcome alignment and capabilities obstacles


Peppers & Rogers Group Customer strategy consultants with offices around the world

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