Enhancing the Customer Experience Drives Business
By Samuel Greengard
Not long ago, retailers looking to forge stronger customer relationships focused mostly on a few core issues: where they located a store; which products they placed on shelves; how they displayed these items; the friendliness and knowledge level of their employees; and how to optimize prices and promotions. Interactions typically took place through one of three channels: in a physical store, over the telephone or by mail.
Fast forward to the present. "Today, shopper loyalty is tied to an overall experience across multiple channels," observes Brian Girouard, vice president and leader for North America Consumer Products at Capgemini. "Retailers are accessible via a Website, mobile apps, email, social media channels and kiosks. A shopper may access a combination of these channels at various steps along their shopping journey."
As a result, retailers—as well as firms in other industries such as health care and financial services—must understand customers in a way that hasn't been necessary in the past. It's critical to know what stage customers are at in the buying and consumption cycle, which other retailers they have done business with in the past, and their preferences and intentions.
"The ability of a business to understand and manage the overall customer experience determines whether people will shop with that retailer in the future," Girouard explains.
Welcome to the new normal of customer experience management (CEM). Adopting a customer-centric approach is now a critical factor in determining whether a business flourishes or flounders. It's crucial to understand a customer's shopping journey across myriad physical and digital touch points.
"CEM is a fundamentally different way to approach customer relationships," notes Lior Arussy, founder and president at customer experience strategy consulting firm Strativity Group.
At the heart of the problem, according to Arussy, is growing commoditization among retailers. "Many companies, despite what executives think, simply aren't relevant to their customers," he says. Typically, only a couple of options exist: lowering prices or increasing the value proposition.
"CEM attempts to move retailers and other businesses away from commoditization," Arussy says. It provides insights that drive differentiation. And, as the thinking goes, differentiation translates into higher margins for the business.
Taking a Strategic View
CEM prompts organizations to take a holistic and strategic view of customers across all departments and job functions. When it's used effectively, CEM provides deep visibility into everything from marketing and sales to customer service and compliance.
A Harris Interactive survey found that eight in 10 consumers experience difficulties online. What's more, 32 percent of consumers abandon transactions when they experience problems. This accounts for upward of $47.6 billion in annual sales. And Capgemini reports that half of shoppers believe that most retailers are not consistent in the way they present themselves across channels.
By plugging in appropriate data, it's possible to get answers to key but elusive questions. Among other things, an organization might examine why conversion rates are declining; why site visits and mobile app use are on the rise, but orders are smaller; why social media attention is waning; and why the number of complaint letters is increasing, while surveys indicate a high level of customer satisfaction. "There are many points where delivering an excellent customer experience can break down," says Capgemini's Girouard.
In fact, a number of common problems exist, he notes. For one thing, businesses often possess multiple records for the same customer, and none of them are complete. They also attempt to use data that is inaccurate or out of date, making it next to impossible to deliver a differentiated customer experience.
Even when data is accurate and timely, employees in a store or customer service reps in a contact center sometimes don't know how to use it. "In many cases, they haven't been trained on what to do with the data," Girouard explains. "They are unable to make it actionable."
Using Customer Data Effectively
One company taking aim at the problem is Wehkamp.nl, the largest online retailer in the Netherlands, tallying nearly $800 million in revenues annually. The company handles close to 125 million online sessions a year, and 100 percent of its sales take place over the Internet. In the past, half of all sales involved the company's contact center.
"We had a lot of verbal interaction with customers," notes Ewald Hoppen, Web analytics team leader. "When we moved primarily to the Internet, the personal touch wasn't there."
Wehkamp.nl depends heavily on loyal customers and repeat sales, but attempting to route more calls through the contact center and have reps spend more time with customers wasn't the answer. "It's too expensive," Hoppen says. "We had to find a way to use all the customer data we have and put it to use more effectively."
The company turned to Coremetrics in 2006, and Unica and Tealeaf in 2007 (all now owned by IBM). The Coremetrics and Unica software tools provide sophisticated analytics and campaign management capabilities. Analysts are able to combine historical data and clickstream data in order to examine behavioral patterns associated with browsing, buying and other activities. They also are able to pinpoint key factors and then personalize and target communications more effectively, which leads to higher clickthrough rates and improved ROI, according to Hoppen.
Meanwhile, the TeaLeaf solution allows managers to review sessions from all angles. For example, a Web analyst might review a session in a different way than an e-commerce manager or customer relations specialist.
Managers can examine random interactions, but they're also able to identify problem sessions by matching audio and Web recordings with Twitter tweets, e-mails and complaint calls. In addition, a Web analytics feature identifies unusual patterns that might indicate a problem.
In some cases, executives assemble different people from different teams to better understand what's going on within a session. "We have different people viewing the same problem from different perspectives," Hoppen explains. "So we are better able to identify a solution."
In fact, Wehkamp.nl has trimmed the time required for problem resolution by 40 to 60 percent, while improving customer responses. This comprehensive approach to CEM also helped the firm better identify problems and structure training in a more targeted manner.
Finally, the company is able to use the data to better optimize its Website. It has captured three customer usability awards in the Netherlands during the last five years. "CEM has made us a much better company," Hoppen concludes.
Full Sale Ahead
Capgemini's Girouard says that when organizations use CEM effectively they typically witness an increase in sales, higher customer satisfaction rates, better results from promotions, fewer abandoned online shopping carts, better customer advocacy on social media channels and increased employee satisfaction. "CEM can tie all the pieces together" and create "an all-channel experience," he notes.
For IT, the challenge is to build out a more flexible IT platform that supports a single view of customer data. This means tying systems together in a more integrated and comprehensive way, along with tapping clouds, mobility and big data in new and innovative ways. "Tight collaboration of functional and IT leadership is critical to CEM," Girouard says.
"Organizations must achieve a single view of the customer," adds Strativity Group's Arussy. "Technology is critical to CEM, but it also requires a strategic framework based on identifying and understanding key issues and metrics.
"When a company maps out the entire customer experience and puts tools and systems in place to assess all the different touch points across channels, it is in a much better position to succeed."