customer experience

www.thecustomerexperience.es

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contents experiences

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foreword

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intro

Customer experience: a framework for the marketing of the future Elena Alfaro

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Partner - EMO Insights

brand and communication

Customer experience from the perspective of the brand and communication Javier Velilla

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Managing Partner - COMUNIZA

management systems

The role of IT systems in managing customer experience Hugo Brunetta

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CEO - Nexting

measurement

How to measure customer experience Carlos Molina

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Innovation Vice President - IZO

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contents employee

The role of employees in customer experience Beatriz Navarro

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Marketing Director - Starbucks

retail

Customer experience from the retail standpoint Lluís Martínez-Ribes

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Professor of Retail and Marketing Innovation ESADE Business School

contact center

Customer experience from the contact center standpoint José Ignacio Ruiz

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Head of Marketing – Orange

on line

Customer experience from the online standpoint Enrique Burgos

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Chief Marketing Officer - QDQ Media

multichannel marketing

Customer experience in multichannel integration Fernando Rivero

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Marketing Director Partner - Tatum

b2b

Customer experience in B2B markets Santiago Solanas

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CEO - Sage España

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contents innovation

Innovation in creating and managing experiences Jaime Castelló

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Principal and Professor of MBA ESADE Business School

key ideas

The key ideas of customer experience Jaime Valverde

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Social Media Strategist - Territorio Creativo

Borja Muñoz

Partner and Day Trader - Factor K

acknowledgements

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authors

120

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experiences Txema – Madrid “The best experience I have ever had was with [satellite TV broadcaster] Digital Plus - when I canceled my subscription, odd though it may sound. I wasn’t expecting it, but when I called and they were busy, it was they who returned the call, even though they knew I wanted to cancel my subscription. This was seven years ago, and I still haven’t forgotten.”

Daniel – Barcelona “I went into the Nike store on Paseo de Gracia in Barcelona. I had a clear picture in mind: I wanted to buy my wife a pair of sneakers. A friendly shop assistant came forward to help, and told me: ‘If you like, we can create a personalized pair of sneakers just for you.’ She guided me to the Nike ID department. We sat in front of a computer, and created the sneakers step by step, specifying all the features I wanted to include. The finished sneaker would be ready in four weeks. I came out of the store with the impression that I had bought a better gift than I had expected to get, and that, even if just for a short time, Nike was working for me. Thank you!”

Noelia – Madrid “I can hardly remember what my life was like before my iPhone. With my iPhone, I get a sense of not missing anything, and I become anxious when the 6

experiences battery dies. And when I look at other smartphones I think, okay, but it’s not an iPhone.”

Carlos – San Sebastián “I’m from Valencia, but for a while now I’ve been living in San Sebastian for work reasons. Whatsapp on my cell phone makes me feel at home, because I am constantly in touch with my closest friends and my family. Whatsapp has meant that, even though I am far from home, I feel a lot closer to my loved ones.”

José Fermín – Madrid “I have had a really good experience every time I have interacted with American Express. Once, while traveling, I had my wallet stolen, with all my cards inside. I called Amex and told them about it. The person taking the call interrupted me to say: ‘Before we go on, José, are you all right? Is there anything you need?’ I explained I was fine, and all I needed to do was cancel my card. He complied, and then offered to handle any paperwork I might need to do: Sending a photocopy of my identity card, bureaucratic formalities, help with reporting the facts to the police, and so forth. Finally, they offered to send me cash at the hotel where I was staying, and promised to send me my new card in a few hours’ time so that I could pay for my stay and my return fare. I was impressed. Getting my card stolen turned out to be a treat!”

David – Sevilla “I spend the week looking forward to Saturday so I can drive my Ducati Monster. That moment is priceless.”

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experiences Ana María – Barcelona “I am touched by the look of joy on my son’s face when he walks into an Imaginarium toyshop through their special child-sized doorway.” Iván – Madrid “Why do I support Atlético de Madrid? It isn’t easy to explain. It comes from the heart, that’s all - whether it makes me weep or jump with joy.”

Alexa – Barcelona “Every week I have my gossip moment with Cuore magazine. It’s like a ritual… Every Wednesday - when the magazine comes out - I go out to buy my copy. In the evening when I get home, I lounge on the sofa and… Time to gossip! I enjoy everything in it and what it teaches me. It’s my moment! And I’m not shy to acknowledge that I love gossip!”

Tamara – Madrid “It’s like being a little girl again, it reminds you of the feeling that fairytales are true. Magic really is out there. Disney.”

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foreword

ZERO / FOREWORD

Customer Experience

Many businesses are facing hard times. Customer profiles and the context in which businesses operate are changing swiftly. This situation is thrown into relief by the current economic downturn and the ongoing crisis of societal values. Today, most companies operate in mature, hypercompetitive markets. Their goods and services are virtually indistinguishable, and they compete chiefly on price. Customers are more demanding, better informed, and look for personalized products. We are facing a paradigm shift. Today’s customer is no longer concerned merely to satisfy her basic needs. She wants to take her purchasing and consumption process to a higher level: she wants emotions and experiences. This is the context for this e-book. You are probably aware of most if not all the following brands: Starbucks, Harley‑Davidson, Desigual, Apple, Disney, Imaginarium, Nespresso. These are some of the businesses that have succeeded in the present climate by creating and managing their customers’ experience to leverage their strategy. Although they are all different, they have one thing in common: they meet their customers’ needs not just rationally, but emotionally. There is an abundance of literature on customer experience, also known as “experience marketing.” However, this e-book offers you a different perspective and a different format. This book is the outcome of a partnership. It brings together and pools the store of experience and know-how of thirteen marketing experts. The authors include #CEMbook

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CEOs, directors and account managers working in a wide range of industries and businesses; and they all share their expertise at leading business schools and universities. Each author is a specialist who contributes his or her own distinctive approach to customer experience to provide a stimulating multidimensional perspective. This e-book is open to everybody, and you are invited to contribute. You can send us your feedback in the form of comments and suggestions. Please share this e-book with others using the available links to various social networks. This e-book is provided free, and is a nonprofit venture. The authors and other contributors are driven by a passion for a new paradigm of marketing. Our reward is to see this book emerge as something real, and to support the excellent work being done by Fundación Vicente Ferrer.1 Finally, we hope you enjoy reading this book, and that it will suggest questions for you and your business to think about. I would like to finish with the famous words of B. Joseph Pine II and James H. Gilmore, “Welcome to the experience economy.”

1 All contributors to this project work on a non-profit basis. Any earnings arising from this e-book will be handed over to Fundación Vicente Ferrer in full. #CEMbook

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one / intro

Customer experience: a framework for the marketing of the future

Elena Alfaro

ONE / INTRO

Customer Experience

“Customer experience,” “experiential marketing,” “emotional marketing.” This is a discipline that has spawned a confusing welter of concepts and terms. I have gone on company visits and talked to professionals in the field of marketing, quality, innovation, and research, and new niches like “customer insights,” “business intelligence” and even “customer experience.” And my sense of a prevailing haze in this area has only grown. One thing is clear, though: quality alone is no longer enough for success. In an increasingly complex and fast-moving environment, it is vital to understand that perceptions set off feelings and emotions within organizations, and those feelings directly impact end results. We need to bear in mind that customers and employees are people: their motives and opinions blend the conscious and the unconscious, and it is this hybrid that drives the dynamic of loyalty, referrals, repeat business, and even impassioned advocacy of a preferred brand or company. vSo organizations are now taking an interest in “experience” and what it means in terms of how they should manage their business. But nobody can agree on what “customer experience” really means. And what about within a specific organization? It gets trickier when the term is used to mean different things at different times. If we regard the concept as related to “use” or “practice,” then “experience” refers to the points of contact between a customer and a business (the Internet, social networks, physical stores, employees, the customer service center, and so on). We can assume that the more a customer uses a product or service, the more experience he or she is building up with that product, with the brand, and, ultimately, with #CEMbook

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the supplier (manufacturer and distributor). However, if we regard the “experience” concept as related to the terms “habit” or “custom,” then its meaning mingles with what has been a source of law for centuries: custom is a source of people’s expectations. And if we view it as related to “life,” then we are linking the term to emotion, and so complicating the message. The literature is rich in suggestions as to what emotion can mean. It can be defined as a state of affect that forms part of our experience; as a subjective reaction to the environment accompanied by physiological changes that are themselves influenced by earlier experience. Emotion helps our body adapt to its surroundings, instantaneously or on a more lasting basis. Experience, then, triggers our emotions and exerts an influence over them. Even a customer’s rational response to a company or brand is hard to measure; the issue is even more complicated when decisions are powerfully influenced by emotion - and this is the case of the customer’s “experience.” Analysis must further contend with the difficulty of the myriad concepts that have evolved in connection with “experience.” The various meanings of the term directly impact the ways in which organizations perceive and manage the fact of experience, and the ways in which the associated research is structured. In fact, it is common to come across companies that think customer experience management comes down to narrowing the customer’s expectation gap with the various channels with which he or she interacts. An increasingly widespread job title is that of the “customer experience manager,” designating the person in charge of a call center taking telephone calls from customers. Interestingly, even the research industry is unable to agree on how best to analyze customer experience. Companies spring up promising to deliver “customer experience” services, but when you look at the detail of what they do you realize they are merely repackaging other philosophies, such as “total quality management,” to embrace the latest buzzword, “experience.” Maybe their market positioning takes a deliberately ambiguous approach. In terms of the history of market research institutions, until recently, when a business wanted an answer to a specific problem (e.g., to ascertain perceptions of the asking price for a given product), it would enlist the assistance of a conventional #CEMbook

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research institution or company to obtain data which would enhance its decisionmaking. A research institute would provide a range of menus comprising fairly standardized blueprints, and would try to shepherd the client toward these patterns to address almost any given query. Typical forms of research included quantitative survey data or information elicited from the client business itself, research based on observing customers in purchasing environments, group-based qualitative inquiries (better known as “focus groups”), and in-depth personal interviews. To date, decision-making was based on research of this kind. We are all used to hearing and reading statements such as “80% of customers are highly satisfied,” “customers are unhappy with the product price,” “there is a problem with complaints,” and so forth. Little thought has been given to the methodology underlying the reported data, the way in which companies took credit for the results or deployed other strategies. But a more accurate awareness of what the figures mean, and a laser-like search for where improvement was needed, prompted us to take our analysis a step further and look for metrics that would reflect real changes in stakeholders’ behavior. For example, we discovered that the distribution of satisfaction surveys was biased toward positive views. Customers who still remained as customers were the people who were returning scores at the higher end of the scale. In addition, the fact that customers gave a low score to a particular feature did not mean that it required improvement - for one thing, the price was one aspect which from the customers’ standpoint always stood to be improved. In the search of metrics intended to monitor customer experience, there was another fad which ultimately proved uninformative. The net promoter score (NPS) was heralded as the indicator to end all indicators. However, it had almost nothing to say about the future. Bearing in mind that in recent years brain science has achieved greater forward strides than in the whole of the previous century, we are strongly placed to gain a more accurate picture of how we humans function. Research and development of innovative solutions are now being undertaken wider afield. Discoveries relating to the role of emotion in decision-making have led to improved solutions that combine conventional techniques with medical technology and neuro-marketing (attention meters, galvanometers, etc.) and even newer methods, such as quantitative approaches to qualitative research (linguistic and semantic analysis of Internet commentary, conversations between customers and call center operators, #CEMbook

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etc.), predictive inferences (use of statistical models that pinpoint the perceptual features shaping certain behaviors), and so forth.

The rise of experiential strategy also involves the emergence of new professional profiles in a research capacity, from the fields of psychology, trend-spotting (“coolhunters”), industry experts and mirror markets (having analogous features), stakeholders and interest groups (customers, suppliers, etc.). The innovation process should be driven by those professionals whose input is needed to resolve the issue in question. For example, some time ago I was involved in creating an experiencebased differential concept for a natural park. The only commodity in view was brute nature. The aim was to create wealth in the vicinity and attract visitors with a higher purchasing power. The concept development process thus enlisted: a professional whose background was in the luxury goods industry (an expert in selling expensive items), an environment professional, a trend-spotter, a local infrastructure professional, information office employees, visitors, and more. All the people involved first experienced the park so that they would be able to discuss it in the first person. The concept underpinning this multidisciplinary involvement is itself in vogue: co-creation. Given this setup, the future of research and consultancy companies is to engage in actively listening to the customer: not to offer the standard recipes of the day referencing size, capabilities and volume of human resources. Yes, that’s right - what I mean is that presentations for consultancy firms typically include phrases such as #CEMbook

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“we are the world leader in product X,” “we have more than Y employees, and Z computer assisted telephone interview workstations, etc.” It is less often heard that they actively listen to the customer, study the customer’s need in-depth and come up with a research solution specifically targeting the problem to be solved. What is more, customers are increasingly short of time to review the information, and want the supplier to play a more active role in resolving the issue. “Don’t believe the recipes” is my message regarding the creation of approaches to understanding stakeholders and, therefore, the people around us. The reality is that we are facing a time of aggressive competition which is leading to price wars in many industries. The speed of the changes we are witnessing and global uncertainty are catalyzed by the Internet, a world information exchange network. In the face of these changes, businesses are seeking new solutions, and the research industry has had to adapt, even if offering the same recipes in a different guise. Thinking through the problem that a given customer needs to solve, and so arriving at an answer, requires an understanding of strategy, psychology, statistics, mathematics, advertising and more. Experiential research has recently been associated with neuro-marketing. However, when addressing an experiential research project, we should think about which techniques and profiles are best suited to arriving at the intended target. Not every research target is best addressed by neuronal marketing, nor can any study population be processed with magnetic resonance imaging to produce brain maps. Research is evolving just like any other form of science: it is driven this way and that by new discoveries and the new reality, which embraces new channels and available technologies. We can neither dismiss the use of long-established techniques, nor stop evolving and rethinking the new reality that surrounds us. Research institutes must adapt to the new reality and come up with solutions that suitably provide the information required by today’s organizations. Due value must be placed on the line of work that has achieved the most significant progress in history: research. If the aim is to transform the industry and evolve in step with global and specific circumstances so as to arrive at new solutions, then an appropriate valuation must be made in terms of price. This is a reality we see every day. The capabilities and skills of two businesses, though widely different, are purportedly compared to one another simply because the goals they pursue are described by similar phrasing - “information for decision-making.” And #CEMbook

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we sometimes refuse to acknowledge and pay the fair value of advice that can save us millions of euros. The immediate consequence of this is a lowering of the caliber of professionals in the industry, and hence a shortfall in the quality of information that would otherwise provide us with an edge. It is urgent for businesses to undergo change in this respect to prevent an outflow of talent and thus of capability from our organizations. Customer experience management is a strategic proposal to deal with situations where the goods or services on offer have become commodities. It sometimes emerges in the form of detecting and managing experiences at all points of contact with the consumer, and sometimes appears in the guise of approaching the sale in terms of helping the customer. Either way, the goal is to set yourself apart from the competition. It is not easy to find professionals whose experiences ranges over disciplines as diverse as strategy, consumer research, operational marketing, psychology, technology solutions, quality, development of metrics and statistical modeling, and so forth: all these subjects form part of the all-embracing discipline of research. The clear outcome of this is that in consultancy only a few boutique companies have a long track record in the field, which need not be highlighted by an internationally known brand. We should not be afraid of innovation. A few years ago I was struck by the following story. In the 1980s, General Motors selected suppliers precisely on the basis that GM was their first-ever customer. Sometimes we ask for too many prior references for a product or service which is in itself new. Finally, I leave you with the following thought: “Only one percent of customers think that companies focus on emotional needs.” This was the conclusion of a study conducted in the UK. In my view, this finding has a corollary: “there is a big opportunity out there to gain an edge by the emotional management of customers’ needs,” because the data shows that this is hardly being worked on at all. I would urge you to try. Don’t be afraid of being first!

#CEMbook

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two

Customer experience from the perspective of the brand and communication

Javier Velilla

TWO / BRANDS AND COMMUNICATION

Customer Experience

A brand isn’t what it says about itself, but what its target market says about it. In short: brands aren’t defined as much by the perception they have of themselves but, and this is the key, by the combination of the individual opinions and experiences of its target markets connected to the perspectives of third-parties such as the mass media, opinion-leaders and social networks. Unfortunately, for years customer experience has been handled in a disjointed way, with brand communication separated from customer service (amongst other divisions), as if what the brand promised and the experience of the consumer and use were two different realities. One of the consequences of this situation is that marketing departments have tended to focus on just one of the variables making up the 4 Ps in their brand strategies: promotion. Brand communication has been limited to one-way mass advertising, leaving out other crucial factors such as product, place and price. This is a reductionist approach that leads to one outcome: on many occasions we have disconnected self-expression of the brand from user experience. Marty Neumeier uses the first pages of the book The Brand Gap (Peachpit Press, 2006) to highlight a number of the sector’s conceptions: a brand is not a logo, an identity or a product. Nor are other signs of the brand identifiable, expressive and easily recalled like the terms associated to the brand (for instance, Nokia’s Connecting people or Nike’s Just do it) or personal charisma (in the case of the late Steve Jobs for Apple, for instance), although achieving an aligned organization to offer a user experience requires both elements. We perceive this role, for example, in people like Howard #CEMbook

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Schultz, Jeff Bezos and Richard Branson, who act as brand guardians so that the user experience is the right one. When Amazon’s CEO Jeff Bezos says that the company mission places the customer at the heart of the company, this is an affirmation that requires a certain kind of behavior. In addition, it decisively affects all of an organization’s departments, which often suffer from a fragmented perspective. In the case of brand management, effort has often focused more on conveying and controlling messages, rather than exerting effort on the quality and consistency of contact points. Luckily, this segmented outlook is changing. A logo is just one of the many signs that a brand uses to express itself. It is a crucial element, but so too should the consumer’s first-hand experience. Both are distinguishing features as well as being hard for the competition or new competitors to imitate. Let’s take an example: there is a bar or restaurant for every 461 inhabitants in Spain. What’s on offer may seem the same: a sign over the door, a bar, cutlery, tables, chairs, food and drink… From this perspective it would be incredibly difficult to make a choice: they all seem to be the same. Yet we know that other factors are at play. The expression of brand (distinction, personality and a whole raft of psychological associations) combines with the user experience (in the form of recall, repetition or loyalty). The combination of both of these elements positions one bar over another bar in such a fiercely competitive ecosystem as our city streets. After all, this isn’t just a bar in the abstract. The brand concept forcefully emerges, generating a new reality in terms of communication and culture with its messages and attributes. The brand acts as a semiotic mechanism which triggers associations to values and ideas. It affords information, differentiation and seduction targeted at the act of buying or recommendation. This value can be pared down to the lowest common denominator of associations shared by a group of users. In this way a brand is the result of distilling associations which add value and shape a space of reference in which to position the product, service or idea in the market as a whole. The user’s experiences shouldn’t be any other reality except the materialization of brand positioning, but this time on specific actions based on consumption and use. Some years ago Stelios Haji-Ioannou, CEO of easyGroup and founder of easyJet, had a big influence on this. But, unfortunately, it isn’t often that way. #CEMbook

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Concept, context and experience A brand generates a complex semiotic construction. It bases itself on a combination of elements such as expectations, experiences, needs, wants and hopes. In this process the perception of value (concept), its position in the market (context) and consumption and use (experience) are essential to create and manage a powerful brand. It is clearly becoming increasingly complicated to achieve a competitive advantage due to the appearance of new companies, goods and services, but also due to a change in some of the rules of the game. Today markets are controlled by hypercompetition: generally speaking, key variables such as price, distribution or availability are no longer differentiated from one company to another. The position of market leaders is continually in jeopardy: looking back at the last fifty years we see that company loyalty is at an all-time low, digitalization leads to disruptive processes, and new competitors and innovators enter the market all the time. One upshot of this phenomenon is that the quality of goods and services isn’t enough to guarantee an organization’s competitiveness or even survival. Quality is taken as a given. The enterprises that survive in this market are probably those that are able to enhance the value delivered to customers without continuously pushing up costs or finding another way of making a profit. The brand should draw together a kind of enhanced experience which combines and unites different experiences of use, consumption, socialization, personalization, transmedia… to equip itself with a brand promise with added value, that is different and memorable. This strategy is being rolled out by Caja Navarra with its ‘Cancha’ branch offices. This concept goes beyond conventional offices by providing spaces with enhanced experiences to meet the public’s needs and which, besides, yields an average profitability that is higher than the bank’s other offices. As Michael Porter said, a brand is, “the principal defense against price competition.” This is why more sophisticated elements push through: intangible elements. Customers don’t just acquire goods and services, in reality target markets are drawn to a particular brand because they share certain values, ideas and mindsets, and because they tie in with an experience. Few products are more undifferentiated and generic than coffee, yet Howard Shultz created a corporate story that was powerful enough to roll out the Starbucks brand across the world. The promise of value is based on an unmistakable concept, context and experience: the third place #CEMbook

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between home and work. This promise represents a commitment to consumers, who need to align themselves to the mission in the form of a long-term guarantee. In this way the brand becomes the perfect agent to hold a long-lasting and profitable relationship with its target market. The brand acts as a compass for the points of contact of user experience: it takes on a competitive discourse to extract and afford optimum value of all points of contact and to all the various channels to connect intelligently and effectively in a solid and long-lasting way. Its function is to generate a long-lasting impression associated to a particular mindset with a goal: establish meanings for the product, good, service or idea and sell them. These meanings clearly generate preferences or loyalties amongst customers or stakeholders in the form of purchasing, preference or choice. In short, we are social and complex beings. We live in dense spaces in meanings and connections with intricate semiotic ecosystems in which brands are related to personal journeys, past experiences, ways of understanding reality and, above all, expectations. The brand as a guide to points of contact The brand establishes a promise and acts to make sure the experience of consumers is satisfied. For years Philips operated under the slogan Let’s make things better, now Sense & Simplicity. Both formulations are excellent brand expressions affording a powerful meaning on a sensible and simple technology that extends to the products and to the corporate brand. Extending the brand to user experience means that the corporate story needs to seamlessly permeate the group of employees, processes and organization. The brand becomes stronger the more the promise on which it is based is fulfilled, that is, the more it acts as a compass of all points of contact. For instance, the Imaginarium chain proposes the following concept: spaces shared by parents and children. This brand promise is linked to a very specific view of the world and type of consumer. Yet it is also genuinely expressed in the interior design of the establishments and in the product range, and it is relevant for its brand territory as it helps decisionmaking in a sensitive environment such as the family setting. The context in which Imaginarium operates is unique and free from competition. Retrieving the terminology of W. Chan Kim and Renée Mauborgne, authors of the best seller Blue Ocean Strategy (Harvard Business Press, 2005), a blue ocean #CEMbook

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is compared to a red one (where brands compete for a bigger portion of a limited demand in water teeming with competitors, with falling profits and fierce and bloody behavior). Blue oceans, say W. Chan Kim and Renée Mauborgne, involve a new way of understanding positioning: they are unique market spaces where the competition becomes irrelevant due to its capacity to reinvent the category. The authors use the examples of Southwest Airlines, Cirque du Soleil and eBay, that propose a brand promise (concept and context) with an aligned, obvious and motivated user experience. Brand management should go beyond the act of selling existing stock to starting before the product or service is designed and continue afterwards in the form of customer service, loyalty and communication. Today’s major brands no longer just advertise thanks to their huge budgets, but they establish relational actions that generate 360º experiences before and after the transactions. It is becoming increasingly common for the brand concept to be rolled out throughout the company’s entire value chain, from products and services to behavior, attitude, communication and thinking of the organization. Branding from the perspective of user experience takes this approach farther as it means consumers require the guarantee that they will have experiences that are satisfactory, meaningful and memorable with the brand values in each interaction they have, in a coherent and consistent way every time. Experience as the basis of the brand The brand acts naturally in this context: it should be the semiotic container for weaving associations and connections in the brain, highlighting certain meanings and practical elements that combine rational, emotional and meaningful factors. The car industry is highly representative of these kinds of connections: Volvo is safety, BMW is the pleasure of driving, Ferrari is Italian sportsmanship and Toyota is innovation. These are connections that often last regardless of user experience and which circulate in the form of social, cultural and symbolic stories. These stories, rather than identifying a particular reference, become the reference itself. We are continuously detecting brands that go beyond the descriptive nature of the product or service: these brands become the basis of a relationship with consumers. The challenge is to not forget that user experience should be a firm basis #CEMbook

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linking a brand’s value promise, providing that it aspires to survive thanks to each person’s personal experience. The process of “positioning” - a term coined in 1972 by Al Ries and Jack Trout - comprises three phases: analyze the offer, ascertain what the consumer values and determine the distinguishing features in a competitive environment. In other words, positioning defines the process that describes what a brand offers its target markets and how. Over time the term has evolved, but its essence remains: it means to occupy a space in the mind of the target markets by way of an idea or concept that is relevant, easy to explain and which is not an intangible or legal property belonging to a competitor. Positioning is nothing more than devising an idea and making it grow with a powerful meaning that is clear and easily distinguishable. Organizations need to know and interact with their customers to find out their needs and expectations, which are of a changing nature. This means keeping an eye on the market and constantly gathering data to find out where the brand can give value and that this value is perceived. One of the brands which has best understood this process is the Malaysian financial entity RHB Bank, which gives small elements of value to users while they are waiting (laying on staff who serve coffee, tea and soft drinks) or depending on the weather (handing out anoraks on rainy days). Even the bank’s call centre sets itself apart thanks to its capacity to process requests simply and at all times on a one-to-one basis. The key of this entity is that it comprises many elements that customers genuinely value in terms of their experiences with the banking sector. Let’s take a specific example: in the professional trucking market, dozens of trucks compete, each with a particular engine size and load capacity, with differing prices and production processes, etc. It’s not easy to choose between them. Let’s imagine a user who is in the middle of the buying process. They might consult their fellow truckers, surf the Internet or buy one of the specialist journals published on this subject. They might also visit a few truck dealers before making their final choice. In other words, they will have spent a significant amount of time before parting with a single euro. This whole process could be a great deal quicker if the user connects with a brand, as they will approach it with a ready supply of data, identification and differentiation. The outcome of this process is a clear decrease in the time and effort spent on the search, evaluation, choice and consumption of a product or service. Paccar, the heavy-duty truck manufacturer, is aware of this type #CEMbook

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of process and provides a memorable user experience to drivers who own their own trucks. They are usually people who have a special relationship with the truck: they pay for it themselves, it can set them apart from the crowd, they live in it, and they want to customize it to some extent. To meet this expectation Paccar produces custom-made seats, cabins, exteriors and numerous features that create identity and are a source of pride. In addition it has set up a roadside assistance network across the United States to easily sort out any technical problems so drivers don’t lose working hours and pay. This brand yields a benefit thanks to the lower effort required for these buyers and of the lower presence of the price as a discriminatory element. In this way the manufacturer achieves a higher profit for each unit sold. In exchange their customers get a whole lot more than just a heavy-duty truck: they are buying a concept that they connect with and that determines their preference; that’s why they are willing to pay a little more. In this case, brand promise slots perfectly into place with positioning and user experience. The price factor falls into second place during the decision-making process, but it does so for two reasons: in this case the Paccar brand acts as a complex warehouse of information that brings together attributes, benefits, values, uses, consumption levels, user profiles... and this semiotic container is validated by user experience. Separating the brand from user experience leads to proposals that do not meet customer expectations, often because of broken promises or even due to contradictory relationships that leave the consumer feeling confused and frustrated. Honestly, no brand strategy is capable of responding to a repeatedly deficient user experience based on a poor product or service. In short, powerful brands ought to manage their customers’ experience from an all-encompassing standpoint structured around five areas: formulate a brand benefit in the shape of an idea-effort; roll out a 360º experiential platform; generate a brand capable of taking this idea on board and expressing it; build a network of interactions with customers; and, lastly, continuously innovate to ensure the correlation between brand and experience in a competitive and everchanging environment.

#CEMbook

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References Chan Kim, W. and Mauborgne, Renée, 2005. Blue Ocean Strategy. Harvard Business Press. Chevalier, Michel and Mazzalovo, Gérald, 2005. Pro Logo. Por qué las marcas son buenas para usted. Barcelona, Belacqua de ediciones y publicaciones. Neumeier, Marty, 2006. The Brand Gap: How to Bridge the Distance Between Business Strategy and Design. Peachpit Press.

Ollé, Ramón and Riu, David, 2009. El nuevo Brand Management: cómo plantar marcas para hacer crecer negocio. Barcelona, Gestión 2000. Pine, B.J. and Gilmore, J.H., 1999. The Experience Economy. Boston: Harvard Business Press. Ries, Al and Trout, Jack. Positioning: The battle for your mind, Warner Books - McGraw-Hill Inc., New York, 1981. Velilla, Javier, 2010. Branding: tendencias y retos en la comunicación de marca. Barcelona, Editorial UOC. #CEMbook

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three

The role of IT systems in managing customer experience

Hugo Brunetta

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Customer Experience

The term CRM program is used indistinctly and erroneously to refer to the strategy and the software that allows us to manage the experience and relationships with the customer. And it has been said so many times that CRM isn’t a software application that we seem to have gone to the other extreme and believe we can just do without the technological tool. Just so it’s clear, whenever we refer to a CRM program in this chapter, we are talking about the information technology, namely the software application. Otherwise we will use the terms CRM strategy or philosophy or customer relationship management. We consider CRM to be a business strategy , therefore, with the ultimate purpose of learning about customers in terms of what they have “told us” to give them what they want, how they want, so that they don’t even consider going to a competitor, or as Tom Siebel once said, “We’d got used to telling the customer how to do business with us and now there’s nothing for it except to do business however the customer wants.” Having made the distinction and going back to the issue of whether or not it is a software application, the answer is a categorical: “of course not, and of course I can’t dispense with one if I want to roll out a successful strategy, which the customer perceives at the end of the day with higher quality in the service and based on a truly memorable experiential sensation.”

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But, more specifically, we ask ourselves what role the CRM system plays in a customer relationship management strategy and the answer has a number of angles, some of which we will try to expand on throughout this chapter. To begin with, to understand that when companies aren’t wholly owned by a parent entity, we can’t believe that information on customers can be shared without using a CRM software application, which processes the information from a single database; regardless of how well we get on with the members of the organization or if we are people who understand the value of sharing information, it’s not really a question of attitude, but a business issue. As customers we quickly realize when an organization is being run as a cluster of airtight compartments, as, amongst other things, they ask us the same questions every time we ring and we speak to a different employee from the one before. Sharing information affords numerous advantages for the customer and the company and just to mention a few of the most significant, let’s take a look at both perspectives: From a customer perspective: • When the customer communicates with the company, it doesn’t matter who the employee happens to be: The conservation continues from where it left off the last time and of course maintains the necessary coherence beyond the origin or cause of the contact. • The customer feels appreciated and perceives that he or she acts according to his or her needs, requirements, tastes and preferences.

• Receive personalized messages, not just individualized ones. The belief that starting a communication by mentioning the customer’s #CEMbook

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name is “personalization” is completely wrong. Customers want to be contacted about issues that interest them, not which the company thinks they should be interested in.

• Receive better service in terms of what the customer considers “good” and the intelligence applied to customers enables us to understand that is “good” for each individual. • In short, it is a customer who looks for total satisfaction in terms of our service and beyond our basic product. From a company perspective: • Increase revenue coming from existing customers through crossselling channels: buy A, but not B.

• Develop customers: we want them to buy our products only and not use up their budgets on our competitors. • Pinpoint opportunities for underlying business.

• Improve customer service, optimizing the available resources. Doing things better doesn’t always mean spending more money or time.

• Precise segmentations to invest the necessary and appropriate effort in each customer. • Decrease the customer drop-out rate. • Raise barriers to competition.

In short, CRM as total integration between systems and strategies contributes to the company’s overall profitability, as no matter what activity you are engaged in, it is highly likely that you spend too much on getting customers and too little on keeping them. And what’s the best CRM system or software? This is probably the question most often repeated at the end of each seminar. And the answer is as simple as it is complex. There are many very good ones, but in your company it won’t make any difference and the challenge is to find which system suits each company. Let’s take a look at some of the features we should be considering when it comes to choosing the best option for our company:

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User-friendly: The system shouldn’t disrupt our day-to-day work too much. We have seen in some cases that one reason for a failed implementation of CRM technology, and with it of course a failed strategy, is the simple fact that the software just isn’t user-friendly enough. Let’s not forget that in many cases, we are implanting a very strong cultural change and if we don’t do it in a simple way at least from a visual point of view, we are just making things more complicated than they need to be. By user-friendly we also mean that we need simplicity in the procedure, in the loading of data, in the general operation. Remember that at first there is a lot of opposition from people whose working methods will change and if we give them the excuse, even unintentionally, that it is tedious and complicated, we can kiss goodbye to the whole project. Easy to implement: As far as possible, of course. We’re not suggesting that just by running a file our CRM software will be up and running in a few hours, working as if it was just a simple spreadsheet. Here we mainly mean that it shouldn’t be so complicated to implement that it takes years, otherwise our interest wanes before the program is even in operation. A good alternative is to organize it in stages so that users get to learn as the process advances, rather than one day after months we are told, “the CRM is up and running, start using it tomorrow please and forget everything you did before.” Easily assimilated: Unless the company is new, there’ll be a wide variety of systems in existence. The ERP, logistics systems, of human resources management, spreadsheets on each pc in the company and who knows how many other systems we’ll find that are related to the customer in one way or other. The CRM system should interact with the company’s formal systems in place, that is why it should be easily assimilated with them. The decision should also be taken regarding what to do with the information that goes through informal channels, such as those files that everyone in the company creates and in which information is stored that is essential for the organization as a whole. We should probably move this data to the integrated systems, and tell people to stop using files which start out as temporary and end up as final, albeit for a given individual only. Personalizable: The software must fit the business, not the other way around. Every process surrounding the interaction between the business and its customers must of course be scrutinized. But this review need not mean that we are invariably doing everything wrong; it just means we can sometimes improve. #CEMbook

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One of these vital properties must be that the system should be promptly synchronizable. Customer data update constantly, and our knowledge of the customer is accordingly changing all the time. Ideally, updating should be in real time. The technology now available on the market makes this readily doable. Flexible and scalable: However much we might plan - and we should plan we’ll always have to make changes along the way, because reality is never a perfect fit with how we imagined it would be. We therefore need to be sure that our software is not so rigid that, once we start moving, any deviation from our plan becomes a real problem. In addition, our software must be scalable: this means that a system - whatever it may be - can be made larger without any loss in service quality. The scalability of a system requires that it be carefully thought through from the outset. CRM software: the moving parts It is common to hear the words “we need CRM software,” but we never hear a reference to a specific module. What does this mean? Simple: operational CRM, collaborative CRM and analytical CRM. Until these three modules are operating an integrated way, we cannot say that our strategy has been properly implemented, nor can we realistically hope that our efforts are ready to be monetized. Operational CRM supports the business processes of the sales and marketing departments; collaborative CRM, however, integrates the various channels of communication with customers, outside of sales and service representatives’ personal calls and visits. Communication can be implemented over a website, by e-mail, IVR, or less conventional but increasingly used channels, such as Twitter. Finally - though this module is frequently bypassed by companies - analytical CRM is, simply put, the technology component that enables us to transform data into knowledge. Specifically, it comprises analysis of a customer’s data for multiple purposes, especially predictive analysis. Objectives can range from marketing campaign design and implementation to special niches and campaigns for specific customers, customer behavior analysis in aid of decision-making on goods and services, and business rulemaking to guide actions in the face of specified events and customers. #CEMbook

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The importance of system integration We spend so much time talking about CRM that we end up imagining that ERP (Enterprise Resource Planning - centralized information software that records and integrates most business processes) is out of fashion or has been superseded. This is far from the truth. Though widely different, CRM and ERP are strongly complementary tools. It is vital to understand that both tools must be integrated and work together like the two blades of a pair of scissors. To put it differently, let’s imagine that our goal is to arrive at a business destination called “total performance control,” which involves the company’s total success in terms of shareholder value and total satisfaction for both internal and external customers. To visualize this concept, we could say that our path takes us along a “highway:” the first stretch of the highway is called ERP, the homestretch is called CRM. Obviously, we need to go along the entire path, travel both stretches of the road, in order to reach our goal. Much of the data handled by our CRM technology must be supplied by our ERP system. If not, we shall be doing little more than operating a powerful contacts and activities diary. Picture a sales representative who obtains a full history of communications with a customer via the CRM system. He is fully aware of the latest issues - e.g., a late delivery - and how they were resolved. He can see the customer’s weighting in terms of multiple variables. And the activities management module tells him that today is a good day to visit this customer. As he arrives, he greets the customer by his first name, asks after the customer’s children by name, and mentions various details making for perfect personalized treatment. So far, so good. The customer places an order, but asks for a special cash payment discount. The sales rep is pleased to comply. But since the ERP system is not integrated with the CRM technology, the sales executive is unaware that the customer still owes three bills past due, one of which carried a discount for payment in cash, which the customer obviously failed to honor. You can probably imagine what ought to have happened when the customer placed his order, and what the sales rep ought to have done, and the implications of this in financial respects. Two days later, the sales representative tells the customer that his order was (quite rightly) rejected. The incident creates unnecessary handling costs and harms the relationship with the customer, regardless of who was at fault. #CEMbook

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This is a simple example of how failure to integrate can hurt you, and it happens all the time. Failure to integrate means that instead of having a 360° view of the customer, we only get a patchwork of partial views, and make “partly right” decisions, so to speak. Operating as a cluster of airtight compartments does no good to customer relationships or to the health of business. When the supplier of a given system tells you that ERP need not be integrated with CRM, be wary. And if someone promises to resolve the integration issue with an interface that is yet to be developed, make sure the interface really happens before starting a project that might grind to a halt before reaching its destination. Software is crucial, but companies must continue to enhance the design of integrated strategies before they make the decision to purchase any given IT technology. Tactics must not come before strategy; don’t put the cart before the horse. Source of competitive edge To conclude this chapter, my aim is to convey the insight that investing in CRM - in terms both of strategic planning and implementation via the right software - is the only source of competitive edge that is still left. It is here that you will achieve a better knowledge of your customer and will start to offer him or her better experiences with your business. Remember that competing on price is easy, and not very smart. Nor is it a strategy that is likely to see you through long term. If you lower your prices, so can your competitors - straight away - and in the end it is a zero-sum game. Competing on the basis of the benefits of a given product will not garner a long-term edge, either. Even as you read this, somebody in China or elsewhere is disassembling or reverse engineering the components of anything remotely innovative, so that they can make the same thing: quicker, possibly better, and certainly cheaper. But the one thing nobody can plagiarize is the relationship you have built with your customers and the experience you offer them. Your competitors can’t copy what they can’t see. And what they can’t see is in your database - a smart repository of relationships built painstakingly over time, brick by brick. #CEMbook

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four

How to measure customer experience

Carlos Molina

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In most organizations, CRM strategy now focuses on customer experience. Measuring customer experience has thus become one of the biggest challenges that businesses face. Let’s take an example: “Somebody goes into a store. It is clean and tidy. The customer finds what she wants and takes it to the checkout counter. The friendly store clerk takes the customer’s money in payment for the goods. Before the customer leaves, the clerk says ‘Have a nice day!’” If we look at the buying process from the service standpoint, we can assume the customer’s perception was positive. It went along without a hitch. If we called the customer and asked her if she was satisfied with her purchase and with the service dispensed by our employee, it is likely she would say yes; if we asked her to rate the experience, she would give a high score. But is this really what customer experience is about? Was her purchase experience in our store something so special that the customer will remember us by it? Crucially, will this experience influence her future buying behaviors and decisions, thus impacting our business earnings? Probably not. A customer experience measurement model must heed the basic indicators. But if what we want to do is manage and use the data effectively and create memorable experiences, we must deploy more advanced models that go beyond satisfaction and make a real fit with business performance. #CEMbook

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Mapping all points of contact Customer experience is an abstract concept. Measuring it requires breaking it down into concrete, tangible elements. One such element is the Moment of Truth, or MOT.

Not all of a customer’s interactions with a business are important to him. So it is not every interaction that gives a chance to really surprise him and create a memorable experience. An experience map - a concept that goes by a variety of names - is an account of a given customer’s experience over the lifecycle of the relationship; this analysis compares the customer’s expectations to his perceived experience. To build an experience map, you must: • Analyze the lifecycle of the relationship and map the main points of contact.

• Design a survey capable of obtaining data on customer experience at each point of contact. We need to ask the customer the following: »» Importance: What are his expectations of the company at that specific moment of the relationship?

»» Experience: How did the actual interaction with the company turn out?

• Generate indicators for each point of contact. It is a good idea to use a numeric scale and focus on the results clustering in the top and bottom boxes. #CEMbook

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• Graphically draw the experience map, comparing results for importance versus satisfaction. Companies must focus their effort and investment on the basis of the lessons drawn from the experience map. • First, it is important that experience basics are fully covered. If there is a point of contact where expectations are low but actual experience falls short nonetheless, these issues need to be resolved first, so we can deliver the basic experience the customer expects to get.

• However, more important even than working on points of contact where the gap is greatest is to work on points of contact where the customer’s expectations are highest. These are the Moments of Truth. This is where it is feasible to impact the customer’s perception and create an experience he will remember. This same concept is also discussed under different terms - customer pathway, customer journey and customer heartbeat - but is not always applied in the same way. But, however one might go about this, it is always important that expectations and experience can be compared at each point of contact of the life cycle. Physical and emotional variables Customer experience comprises various physical variables - time, cleanliness, functionality, temperature, environment, etc. - and various emotional variables, shaped by the character traits of the person involved and her way of perceiving and processing the experience. A variable such as waiting time is open to many different interpretations, depending on the type of experience and on the specific person concerned. By adding emotional variables to our experience assessment model we can better understand how customers perceive and respond to interactions with the company; this in turn enables us to design better experiences. Experience is not measurable by focusing on conventional physical variables only. The variables informing an assessment of a customer’s experience with a company should not be viewed in isolation but with reference to a specified goal. We should accordingly use two tools operating in tandem: #CEMbook

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Correlation analysis: Regression models enable us to compare two data series the experience indicator and the business target - so that we can identify the extent to which they are correlated. Impact matrices: Impact matrices graphically represent indicators by score and correlation index. They enable us to visualize the variables of an experience and clearly distinguish existing strengths from the most urgent opportunities for improvement.

Net Promoter Score: the definitive question? One of the most fashionable metrics in the field of customer experience is the “net promoter score,” or NPS. Valuable information is extracted by a single straightforward question: “Would you recommend this company to a friend or relative?” NPS partly reflects a customer’s emotional loyalty. In addition, it is highly suitable for benchmarking because many companies use it as a standard. These features, coupled with its sheer simplicity, make the NPS a favorite with company boards and executive committees. Most companies use a combination of several metrics - seven on average - to measure and manage customer experience; NPS, however, is the metric picked for presentation to management. #CEMbook

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The hidden challenge in the NPS lies in the post-measurement phase, however. NPS is a general indicator of the company’s health, but it tells you nothing about where and how to improve. In addition, some circles are very skeptical of the NPS, and the scientific community says that there is no proven correlation between NPS and business growth.

Customer Effort Score (CES) & Customer Advocacy (CA) NPS has inspired conceptually similar approaches. One popular metric is Customer Effort Score, which measures the effort a customer must make to do business with a given company, in a bid to reduce that effort. CES is a valuable indicator in all matters relating to customer service interactions. Some research suggests that it is more closely correlated than conventional satisfaction metrics and the NPS with customer decisions and behavior: repeat purchases, increased spend or referral. CES is based on the following question: “How much effort did your request take?” The customer scores the question on a scale of 1 - negligible effort - to 5 - a big effort. Another metric designed to assure correlation between experience indicators and business performance is Customer Advocacy. CA is also based on a single question: “Do you think your company does what’s best for you, or only what’s best for its income statement?” So there are several approaches that reach beyond the “satisfaction” concept and attempt to build a metric that better explains customers’ future behaviors and decisions. Customer experience benchmarks Rather than ad hoc models implemented by individual companies, it is necessary to obtain comparative customer experience data, rankings and research that evaluate all businesses under common criteria. #CEMbook

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There are two leading surveys on customer experience: Forrester Customer Experience Index (CxPi): Conducted annually, the survey evaluates customer experience with over 150 companies in the United States. Forrester defines customer experience into the three levels of the classic needs pyramid: basics, value creation, and, finally, surprising the customer. Forrester publishes the results for leading companies and comparative data for the various industries considered by the survey. IZO Best Customer Experience (BCX): This more recent survey is the only one of its kind that focuses on companies operating in Latin America, offering data and results specific to Latin American customers and brands. The survey considers more than 130 companies in main sectors, operating in Brazil, Chile, Colombia, Spain, Mexico and Venezuela. The BCX index comprises three dimensions, including experience with the brand, experience with the product, and interactions with the company. Relationship economics You can’t measure customer experience without considering the financial angle. Customer experience is a business strategy that ought to be results-oriented. Historically, one of the mistakes made in customer management has been a failure to link metrics to the business. One of the questions we hear most often from company boards is “how much more are we going to earn if we raise our satisfaction score by one point?” We must bear in mind that this is an entirely reasonable question. The objective of an organization is to make money, and customer experience is a strategy the result of which ought to be to maximize the benefit of the relationship for the company. If we have no robust answer to that question, it is unlikely that an organization will make the investment decisions required to create the desired experience. So customer management models and scorecards must be equipped with ways of linking these metrics to business earnings. #CEMbook

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But how? Most companies do in fact have the tools to do this within their grasp: we are simply not using them. CRM systems offer a rich store of information about our customers that will stand us in good stead for achieving these outcomes. The key questions we need to answer are: • Premium price: Are consumers willing to pay more for a better experience?

• Share of wallet: Do consumers enjoying a better experience spend more with the company? Are we passing up business opportunities with our existing customers by not aligning ourselves with their needs and exceeding their expectations?

• Relationship duration: Do customers enjoying a better experience churn less? How much longer will they continue to be our customers if we deliver a better experience? • Referral: Do customers refer our company to other people?

The results of the Best Customer Experience (IZO, Q4-2010) survey for Latin America offer some answers to these questions. If we classify customers into promoters (highly satisfied), indifferent (neutral) and detractors (highly dissatisfied), we clearly see that creating experience powerfully enhances buying intention and loyalty. However, it is important to note that these benefits are achieved only when customer expectations are exceeded. The results show that simply removing the causes of dissatisfaction is not enough to impact consumer behaviors and decisions.

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How can you measure these indicators for your company? You can replicate these survey metrics in your own organization and obtain even more accurate data by using the information available about your customers in your company’s management and information systems. To construct your business case and correlate customer indicators with business performance you need to link customer experience metrics - using some of the indicators discussed above - to real figures on expenditure, profit, customer unsubscribes, etc. drawn from your customer database. To do this, you can follow these steps: • Classify customers into experience-driven categories: detractors, neutrals, promoters. • Extract the business indicators for these customers from the CRM system and calculate them for each category: ARPU, average revenue, average cost, churn, etc. • Analyze how these indicators behave in each category and compare behaviors across categories.

Your results will enable you to determine the business impact of turning detractors into promoters, and thus justify the necessary investment.

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Some thoughts and guidelines Measuring customer experience is one of the main challenges faced by organizations today. This challenge is addressed by a range of indicators designed to implement an evolution from the conventional concept of customer satisfaction to a model that predicts impact on customer behaviors and decisions and thus on company earnings. There are various kinds of metric, each with its fans and skeptics. However, three guidelines always apply when measuring and managing customer experience: • Measure experience throughout the entire customer relationship lifecycle.

• Use international benchmarks so you can compare yourself to others. • Cross-refer experience metrics with customer business data.

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References Dixon M., Freeman K. and Toman N., 2010. Stop Trying to Delight Your Customers. Harvard Business Review. Arussy, L., 2005. Passionate & Profitable: Why Customer Strategies Fail and 10 Steps to Do Them Right! Hoboken, New Jersey. John Wiley & Sons, Inc. Reichheld, F. 2006. The Ultimate Question: Driving Good Profits and True Growth. Boston, Massachusetts. Harvard Business School Press.

Online references Search Crm Customer Think The Marketing Spot Blog Forrester 1 Blog Forrester 2 Izo Systems Strativity Experience Matters Clientesfera Aiarec #CEMbook

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five

The role of employees in customer experience

Beatriz Navarro

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Customer Experience

How many companies regularly ask themselves “Are my employees happy to work here?” The answer is, very few. Yet employee satisfaction automatically impacts the way our customers’ experience is managed. Smiling, “good vibes,” “standing in the customer’s shoes,” empathy… All this can make customer experience rate a 10 or a 1, and our employees are 100% involved. And I can assure you that smiles can’t be faked. How can we be sure that employees create an experiential moment every time they speak to a customer, serve her a latte or show her a pair of pants? How can a truly memorable customer experience be delivered? The first line of approach is the company’s mission statement. The mission statement must make itself felt in all actions taken by any department, and must have a presence in every office and at every level. It needs to be alive! But how many companies out there don’t even have a mission statement? And how many of those that do have one haven’t updated it for years, or have never even read it? At Starbucks, our mission statement is: To inspire and nurture the human spirit: one person, one cup and one neighborhood at a time. These are the principles guiding our day to day work. And the mission statement covers several points, which, in order of importance for the company, are: • Our coffee

• Our partners: We call ourselves “partners” because what we do is #CEMbook

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not just our job - it is our passion. We accept diversity to create an environment in which each of us can be him or herself. We always treat each other respectfully and considerately. We are all responsible for keeping this ideal alive. We all have the same job title and treat one another equally, without regard to hierarchies. We are all equal, and that makes us respect one another.

• Our customers: When we are fully committed to our customers, we connect with them, we laugh together and we cheer up their day even if just for an instant. Our work starts out from the commitment to supply a perfectly made beverage; but it is a lot more than that. In reality, our work is to nurture human relationships. • Our stores

• Our community

• Our shareholders So, ahead of our shareholders and in the second slot of our mission statement, we have our employees. This is because we are a company that believes that “we are not in the coffee business serving people; we are in the people business serving coffee.” These are the ways by which we enable our partners to create the Starbucks Experience every day in each one of our stores: • Giving them the freedom to manage their own business: Talk to your customer; get to know her name and her drink; anticipate what she wants, make her feel good, look after her, and enjoy working in a team.

• Letting employees be themselves, be genuine: We are aware that customer service is conveyed not just by words but also by attitude. How to do it: »» Enjoy your customer and invite him to come back.

»» Exceed expectations. Create details - both large and small - so that your customer feels valued.

»» Anticipate his needs. Use empathy and remember your own experiences as a customer.

• Letting them get involved: Make sure the values are reflected in #CEMbook

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everything the employee does, nurturing the spirit and energy of the store. Be positive; set an example.

• Accepting feedback: We want to hear what they think. Their ideas, views and concerns are always well received. • Establishing recognition schemes: Always saying thank you. »» MUG prizes »» Bravo prizes

»» “Starbucks Spirit” Store Prize

»» Green apron cards: These are cards every employee has. We give them to one another at any time just to express thanks for something you liked about the other person - she helped you out, you liked the way she worked, or you simply want to say “Thank you for being there.” It is vital to give your employees the tools to give and receive thanks for good work. The five steps towards the perfect employee are: • Hiring staff: Look past his CV to see his attitude, potential and willingness to create customer experiences and put himself in the customer’s place. How will he treat customers? Will he sell our goods just because he needs to, or because he really feels the spirit?

• Train them every day to deliver experiences: Don’t just teach them set phrases and scripted conversation. Employees need to understand the crucial importance of their role for the company, and must be free to find new ways to raise the value of the experience delivered to the customer. Employees should always imagine themselves in the customer’s place so that they can personalize the offering of goods and generate experiences every day. • Give incentives and rewards: The stimuli towards creating experiences should include incentives and rewards. Incentives should be more than merely financial. The reward should be sensitive to social and cultural motivations and each employee’s lifestyle.

• Measuring performance in relation to delivered experience: Employees should always get feedback on their performance in terms of experience management. What are their interactions with #CEMbook

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customers like? How do they help build customer relationships that encourage repeat purchases? This aspect of performance is measurable using tools like online questionnaires and mystery shoppers. One of the main challenges being taken on by companies today is to find ways to make employees’ jobs interesting, motivating and stimulating. If an employee thinks her job is boring, she is less likely to deliver a good buying experience to customers. The key here is that employees are the company’s first customers, its “internal customers.” If employees themselves are not the company’s leading advocates, if they do not feel proud of belonging to the company and would never recommend its goods or services, then the company has a real problem on its hands. That is why we need to find out what our employees want, what they are looking for, and what their tastes, attitudes and interests are. Look at each employee as a whole human being, and realize that he or she is the most important part of the company. We need to involve our employees with our brand. Host workshops where employees can discuss the brand and its features. If they can convey the values of the brand, they will be able to satisfy their individual needs. We also need to let them suggest alternative ways in which they can “live” the brand, both throughout their working day and in their personal lives. Companies are imprinted with either one of the two basic customer service attitudes - a positive attitude or a negative attitude. Where a negative attitude takes hold, the customer does not identify the individual employee as the cause of his bad experience; he blames the entire organization. For example, if he has a bad experience with a shop assistant in a given store, he thinks “the staff is terrible at this store and I won’t be coming back.” This judgment directly and negatively links to the brand and everyone working for it. This is why it is vital that a positive service attitude is adopted by each and every one of a firm’s employees. Other considerations relevant to creating customer experiences • Outward appearance: As we all know, most people attach a great deal of importance to personal appearance. The appearance of a company’s employees - the way they dress, their hairstyle, and so forth - therefore critically impacts customers and #CEMbook

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represent a person’s “first experience” of the company. It is the first step in any interaction and often there is only one chance.

• Names: The name of the person helping us in a store is very important. We all like to know who we’re talking to, call them by name and be called by our own name in return. This makes the interaction closer and more human.

• Environment: The environment is vital in creating an experience. Environment has been a powerful force at Starbucks, which has turned its coffeehouses into a “third place” between a person’s home and work, an oasis where she can sit down for a quiet moment, drink a coffee, and listen to good music in a perfect atmosphere. Environment forms part of the company’s success in creating customer experiences. • Words: Tone of voice and words can create a sense of welcoming or, rather, cool or hurt the relationship with a customer. Just saying “Hi” with a smile, or even without a smile, critically changes the customer’s experience. Saying “have a nice day” as the customer leaves can cheer up his whole day. Words are far more powerful than we think. Companies are not doing enough to encourage employees to use words to generate experiences in their customers. What skills do we need to train our employees in to create experiences? Skill 1. Diagnosing Real care must be taken with what is widely known as non-verbal behavior, because this is the first impression the customer gets. The employee needs to be able to read between the lines to guess what the customer needs, since every customer is different. Skill 2. Listening Listening is not the same as just hearing. How often have you felt “not listened to,” when you were trying to explain a situation and felt #CEMbook

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that the person on the other side would just nod and come back with a scripted response, ignoring what has actually happened. Listening to tailor the solution to the customer’s need Skill 3. Asking Asking is the most straightforward way to get information from the person in front of you. It is a means to display interest in and empathy with the person you are speaking to. But you need to be careful about how you frame your question and the wording you use. Skill 4. Feeling The ability to feel conveys empathy. Feeling means putting oneself in the customer’s place; feeling what the other person feels about a specific situation or issue so that we can provide the best solution. Final thoughts Creating an experience that nurtures customer loyalty is a magic blend of three ingredients: products, stores and, especially, people. At Starbucks, customers come to us for coffee, stay with us for the friendly atmosphere and come back for our human connection. That is the experience that the customer wants: every day, every time.

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six

Customer experience from the retail standpoint

Lluís Martínez-Ribes

SIX / RETAIL

Customer Experience

Excuse me, what was it you were selling, again? The implications of the buying experience in the retail setting When you visit Bergen, a city in southwest Norway perched on the banks of a stunning fjord, you can take the Floibanen funicular for a 6-minute trip from the city to a mountaintop commanding spectacular views, as you can see from this webcam. In 2008, Lillian, a former student of mine at ESADE, spent some time there on a study exchange and spoke to the manager of the funicular company. She asked him who his main competitor was. “IKEA,” he replied. “We both offer the same thing: spending time with your family on a Saturday or a weekday evening.” What a notary would say A wholly reliable witness - a notary, perhaps - would say that the funicular is a type of train designed to climb up and down steep slopes, carrying passengers in coaches. The notary would also say that IKEA is a retail chain that sells furniture at prices below the industry average. So how can they be competitors? While the notary’s observations are accurate, they don’t tell the whole story. He merely reports what one can see on the surface, the tip of the iceberg. #CEMbook

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But the hallmark of an effective manager is her ability to perceive reality beyond the obvious. So what is going on? What is the hidden part of the iceberg? Looking further into the matter, we see that these two widely different businesses nonetheless have two things in common: they sell direct to the public they are both retail businesses - and, what’s more, their target public is pursuing a similar purpose in both cases. It is this common denominator that makes them competitors. In the retail world, it is not just what the business has and does that counts, but also what it is, and what it makes you feel. Funicular = furniture? Selling the right to use public transport - a funicular - is not of course the same thing as selling furniture. One thing constitutes a service, while the other represents a sale of goods. You would then assume that each business uses a different sort of marketing. The so-called “marketing mix” would appear to be widely different for each of the two businesses. So different, in fact, that the Norwegian Funicular Operator Society might host its own training course, titled “Marketing the Funicular Business: Keys to Success.” While the Norwegian Guild of Furniture Merchants could run a course titled “The Future of Marketing for Furniture Stores.” Either of these initiatives would make perfect sense. Too much sense, I would add. If one looks underneath the tip of the iceberg to see the core of what’s going on, you find that both businesses mainly target a family-oriented public. In both cases, your target customer is unlikely to be a lone shopper or passenger. And people typically visit these businesses during their time off. The ostensible purpose of the visit is to view the landscape from the top of the mountain - in the case of the funicular - and to buy furniture - in the case of IKEA. But in both cases the visit itself is a major part of the “product.” The experience of the visit is desirable for its own sake, there is “something in it” for the family. Put differently, during the time that the family is there - on the funicular or in IKEA they have an interesting and attractive experience. #CEMbook

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Both businesses succeed not so much because they sell quality goods or services, but because they make their customers’ whole day meaningful. For example: • We all enjoy ourselves, adults and children together.

• We learn stuff. When we leave, we know things we did not when we got there.

• And when we get home - Norway is a fairly rainy country - we’ll have something to do with the children: put together a piece of furniture or send a photo album to the grandparents. And what about selling goods and services? The sales are an offshoot of the fact that the customers achieve that particular meaning they are looking for, though sometimes they would be unable to put it into words. The sale is just the consequence. So it does not seem smart to emphasize the money aspect - “take three funicular trips, pay for two.” Rather, the key is to stimulate customers’ imagination. A less money-oriented approach may attract bigger takings. Does the retail business have to provide a buying experience? Not a week goes by without trade magazines or even - increasingly - the general media asserting that stores must “deliver a buying experience” if they want to please their customers. This assertion is technically inaccurate, however. The buying experience is already there! Whether the seller intends it or not, the customer always has an experience of some sort: it might be fun, slow, boring, surprising, confusing, empathetic, crowded, attentive, rude, high-pressure, and so on. So the operative word in that statement ought really to be the adjective that describes the experience. The buying experience perceived by the customer must reflect on the emotional plane the meaning that the store desires to convey in its capacity as a brand. The origin of the term The “buying experience” concept dates back to 1973, when Philip Kotler noted that “the atmosphere [of a store] is a marketing tool” and suggested that spaces and environments be designed with a view to their triggering certain emotional effects in the customer that influence the likelihood of his making a purchase. #CEMbook

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Almost a decade later, in 1982, Donovan and Rossiter adapted the earlier work of the social psychologists Mehrabian and Russell, widely known as the Stimulus Organism Response (SOR) paradigm, to the retail setting. Stimuli such as lighting, colors or floor plan, to mention just three examples, elicit certain emotional responses, which in turn guide certain behaviors. Ten years on again, in 1992, Baker et al. undertook a more in-depth analysis of the first part of the SOR model to create a far more comprehensive classification of the specific features that could be managed. Factors were divided into three major groups: environmental, social and design. The environmental group of factors included invisible elements such as temperature, lighting, music and smell. The design factor comprised visible elements, which were divided in turn into functional features such as wide corridors, for example, and aesthetic features, the suitability or otherwise of which depends entirely on the target audience. As to social factors, the key point was that they interact strongly with environmental factors, and any given combination of environmental factors may lead to different outcomes depending on the associated social factors. A great deal more could be said about these models, but I do not intend to set out a theoretical or historical treatise. I simply wish to offer a sketch of where this concept came from. Present models adopt the several variables mentioned so far, but take the analysis much further, looking not only to the specific “moment” of the purchase but linking that moment to the brand and the possibility of creating an experience over time that involves an identification with the store/brand. The upshot of the theory might be stated as the proposition that differentiation must be sought by creating the buying experience that the brand/store requires. Can a buying experience be managed? A buying experience is analogous to “quality of life” while in the process of buying. Like any other process that is open to being managed, it should be measured, or measurement should be at least attempted, although most of the components are intangibles. In the field of marketing, “quality” is defined as the extent to which expectation #CEMbook

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is matched by the thing delivered. In some sense, it constitutes the management of expectations. One of the most widely used models in this respect is the “deficiency model” developed on the basis of papers by Parusaraman, Zeithaml and Berry (1985, 1988). For the purposes of this chapter, however, I shall suggest a far simpler but nonetheless highly effective model. Applying the notion of quality to the buying experience, one would say that quality is present if the customer’s perception of her visit to the store (experienced reality) does not fall short of expectations (imagined reality). If the perception does not at least match the customer’s expectations, she will feel disappointed; we should then say the experience was low-quality. These two aspects can be compared in matrix form. The above table shows that the expected key factors are subdivided into two types:

• Key success factors, which in the field of marketing are those that create the customer’s preference over a sustained period. These factors tend to be emotional, non-concious and implicit.

• Key non-failure factors do not prompt the customer to form a preference for the store but, if absent or perceived as poorly executed, undermine the credibility required for continued presence in the market. For example, if a convenience store keeps going out of stock, or a restaurant serves tainted food, or a bank is regarded as unreliable, customers disappear and the store closes down. But the fact that these #CEMbook

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factors are positives does not mean they are capable in themselves of creating a preference for the store. They tend to relate to the proper execution of the so-called “marketing mix.” These two sets of factors must be distinguished with some care, because they can differ widely in each specific industry and for each specific business. A key success factor may over time become a key non-failure factor. The intrinsic quality of a product may create a preference if competition is weak; but when competition strengthens, quality is demoted to a key non-failure factor. This analytical method must be put through its paces in terms of four distinct vectors: • A chronological view of the buying process. When a customer goes shopping, the process takes her through various phases, each with its own tempo and special features. The customer’s expectations are not the same when parking her car on arrival as when she is standing in line to pay at the checkout. Each phase involves a different “mental frame” for the customer, and therefore ought to be analyzed separately. What is more, it must be taken on board that the process starts before the customer even enters the store (e.g., when she plans her shopping trip, searches the Internet for information, etc.) and ends a considerable time after she leaves (e.g., when she brings the packages home, organizes her refrigerator or wardrobe, etc.). By analyzing the process step by distinct step, we maximize the opportunities to innovate. For instance, KLM enables its customers to buy duty-free goods online before boarding the flight; purchases are delivered just before landing, thus saving the customer from being inconvenienced. • The pre- and post-store (the airplane is a store) steps also form part of the buying experience; these steps are later remembered and positively or negatively influence the customer’s next decision as to where she will shop.

• The features of the product and what it may mean in the customer’s life. Expectations are not the same when buying furniture as when buying detergent. • Customer segments the store aims to attract. It is key to understand the expectations and perceptions of each segment (especially priority #CEMbook

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segments), because one and the same reality at a store can give rise to widely different expectations and perceptions. Imagine, for instance, a couple buying a cot for their future newborn child. There is clearly a functional angle, but this does not gainsay other emotions those customers may be having at that moment (“we shan’t get nervous if the baby makes an early arrival”).

• The tone of the customer’s own moment, situation or context. Our price sensitivity is not the same when we are on vacation as in our regular life. Stores located in tourist areas have understood this point well. The context vector and the segment vector can often fuse into one, because one of the most interesting ways of segmenting potential customers is on the basis of the context variable. At a supermarket, for example, you could segment customers into “I’m in a hurry,” “I’m on a splurge,” “I need to fill my refrigerator today,” etc. A buying experience can thus be analyzed on the basis of three vectors:

The score and the concert hall The intended meaning of a given buying experience is analogous to a musical score. It may have wonderful potential, but it sounds different in each different concert hall. The store is the concert hall, and our perception of it can have a considerable effect on the beauty or otherwise of the music. A store can be credited with several roles that impact a customer’s perceived buying experience. • The store is a “buying machine,” a place where customers procure #CEMbook

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supplies. This means that a stockout - a shelf devoid of the goods the customer was expecting to buy - has a serious adverse effect on the buying experience.

• If the store succeeds in becoming a locus for the imagination i.e., for anticipating or visualizing a future desirable situation (e.g., “I’ll be a hit at the party, they’ll be stunned when they see me in this dress”), sales are easier to achieve. Imagination is a distinctively human trait; we do not share it with other animals. If the store does not encourage customers to imagine a future moment, the buying experience becomes flat and functional. As a result, price sensitivity rises. • The store can also be a place where you learn something new. When he leaves, the customer has learned how cakes are made, the differences between various types of cotton, rising fashion trends, and so forth. This aspect is increasingly attractive, because it treats customers as rounded human beings.

• The store can be a space for social interaction. The local supermarket can be a meeting point where one sees and is seen by neighbors and acquaintances. Encouraging the relational and social aspects softens the commoditized perception and humanizes the store. The visit experience can be enriched in many different ways - making a noticeboard available to customers, running an in-store café or providing a venue for talks and presentations. • A store provides a wonderful medium for communicating with visitors. In fact, it is an advertorial, several minutes long, where the message is expressed by means of the five senses simultaneously. Hence the subtle but vast persuasive power that a store can exert. This communicative facet has its minimal expression in the form of info about each product, and can be maximized to embrace theatrical performances.

• Communication ought also to be considered in the vector running from the customer to the vendor. An essential element of the visit experience is to enable customers to express suggestions, views, complaints and congratulations. Some stores reward their associates for attracting and channeling customers’ comments. Others provide a visitors’ books where customers’ written comments are visible to subsequent customers. This practice creates transparency and genuineness, two values which are increasingly appreciated. #CEMbook

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The score and the conductor To continue the analogy with music, it is not enough to have a skillfully transcribed score of notes on a five-line staff. The music must be brought to life and performed. This step depends on the instruments and the musicians, but especially on the conductor, so that customers undergo a coherent and fascinating experience. I believe that the buying experience will increasingly hinge on subtle, implicit, intuitive and anthropologically feminine features. I believe we shall soon be speaking of the “marketing of the implicit,” and this approach will find its fullest expression in retail. Those managers able to define the meaning with which they wish to imbue certain moments of their customers’ lives will write the musical score of the buying experience. And, moreover, they will probably be laying the foundations of innovation in retail.

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References Baker, J. Levy, M. and Grewal, D., 1992. An Experimental Approach to Making Retail Store Environment Decisions, Journal of Retailing. Vol 68, nº 4, p. 445-460. Donovan, R.J; Rossiter, J.R., 1982. Store atmosphere: An environmental psychology approach. Journal of Retailing. Vol 58. nº 1, p. 34-57. Kotler, Philip, 1973. Atmospherics as a Marketing Tool. Journal of Marketing. Vol 49, nº 4, p. 48-64. Parusaraman, A; Zeithaml, V.A; Berry, L.L., 1985. A conceptual Model of Service Quality and its implications for future Research. Journal of Marketing. Vol 49. Autumn, p. 41-50. Parusaraman, A; Zeithaml, V.A; Berry, L.L., 1988. A multiple-item scale for measuring consumer perceptions of Service Quality. Journal of Retailing. Vol 64. Spring, p. 12-40. #CEMbook

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seven

Customer experience from the contact center standpoint

José Ignacio Ruiz

SEVEN / CONTACT CENTER

Customer Experience

The contact center: more than a cost center Call upon call, e-mails and letters, service level and customer care, missed calls, repeat calls, claims, complaints, processes and systems, applications, dimensioning, coding, prerecorded scripts, scorecards and templates, induction training and skills upgrading, ring times, hold times, after-call times, notifications, audits, agents, supervisors and coordinators. The terminology associated with the day-to-day work of a contact center is virtually endless. But is this all a contact center is about? This is the outlook that leads many companies to regard their contact center as a cost center, rather than a profit center. But, although all these terms partake in the definition of a contact center, in reality it is something more than this. A contact center is a major channel for customer service and customer relationships. It is a key source of information and a powerful lever to create and manage our customers’ experience. From this standpoint, we could even come to view our contact center as a competitive advantage in its own right: an element giving us an edge over our competitors. Yet we must first ask ourselves, is customer experience a suitable strategic option for our business? To answer this question we would do well to give thought to at least the following two issues. We must bear in mind that customer experience is a means, not an end in itself. Customer experience is a strategic positioning that may enable us to stand out from the crowd and, leveraging this edge, to earn higher profits. This point needs #CEMbook

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to be made, because customer experience is sometimes discussed from an overly theoretical, romanticized and almost mystical perspective. This may be a corollary of the intrinsic intangibility and subjective quality of experience. But customer experience must be brought down from the firmament of ideas and implemented in concrete actions. And these actions must be measured in terms of earnings, even in the awareness that this strategic bid requires investment and the results are not always visible in the short term. Moreover, we must realize that the responsibility for customer experience does not rest with a single company area, team or person. The responsibility concerns the entire organization, and must take shape within the organization in three dimensions. We might visualize this concept as “Customer Experience in 3-D:” • Vertical dimension: Company management must send a clear message to the whole organization that customer experience is being adopted as a strategic positioning. The message must accordingly find its reflection in the company’s mission statement and vision, in its corporate culture, and in the emergence of an organizational structure oriented to the customer and improving customer experience. The necessary resources must be assigned. • Horizontal dimension: As we said earlier, customer experience is not the exclusive preserve of a single person or department. All company areas must be co-responsible, even those not in direct contact with the customer. In this dimension, it is essential to specify and align objectives, processes and communications and to bring all business areas into full coordination. Any failure of alignment will impair customer experience and, therefore, our business.

• Time dimension: Improving customer experience requires time. We must therefore follow a strategic plan that makes a good fit with our company’s possibilities and can be implemented phase by phase. We should not regard customer experience as a sprint race; it is a marathon, and we need to achieve our milestones gradually and pace ourselves. These three dimensions should lead us to create a context in which the entire organization is sensitive to the customer’s needs, and adopts an attitude that is inquisitive about and willing to improve customer experience. It should be a context in which every employee should ask him or herself “What can I do to improve customer experience?” #CEMbook

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It’s about people, not resources. The topic of customer experience inevitably requires us to consider the importance of the employee’s role. We already know that employees are fundamental in all business sectors, but this truth is all the more powerful in service businesses because of employees’ direct relationship with customers. We should take on board that customer experience is subject to employee experience, and for this reason we must consider and measure employee experience. Running an experience-oriented contact center requires recruiting experienceoriented professionals, and to achieve this we must specify and implement suitable policies for selection, training, motivation, recognition and pay. What is the best form of organization for my contact center? In-house or external staff ? Offshore or inshore? There is no single correct answer. Making a decision requires considering several issues. Questions we should ask ourselves include: Does my company have the necessary technology and know-how to undertake the management of a contact center? What are my goals? What will be the role of customer experience? Should I treat all my customers in the same way? What is our budget? These questions will provide us with the insight that the best solution arises from the specific situation of each company and its own objectives. Whichever model we finally choose, we must recall that one of the keys to success is to work in partnership with the people or suppliers managing the contact center from day to day. Failure to do so will adversely affect our customers and therefore ourselves. Systems, processes and times It would be pointless to speak of customer experience if we were unable to assure the factors that underpin the “health” of the product or service in question. In the contact center framework, these three aspects must be firmly in place: • Systems: This point may seem obvious, but it is important to grasp that systems must be customer-oriented; it is not customers who need to be system-oriented. Remember that the time an operator takes to search and interpret relevant information, or manage an incident or coding event, is time taken away from customer care. We need fast, reliable systems, intuitive and integrated (“one-stop shop”) #CEMbook

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applications, and minimal management and coding steps; and we must then ensure that the information handled by the systems can be usefully exploited. We must also have in place a systems department to provide maintenance and promptly troubleshoot any issue that may arise at the contact center.

• Processes: One of the main shortfalls adversely affecting customer experience in the contact center context is any lack of clear management processes to be followed by operators. When this happens, customers are subjected to long waiting times, procedures are carried out incorrectly, and mistaken information is provided. So it is of the essence to keep in place a framework of clear, intuitive, readily checkable and updated processes. In the field of customer experience, all processes should start and end with the customer. • Times: We have seen that systems and processes alike give rise to a given time during which the customer must wait for the contact center to resolve his or her query or problem. We must therefore monitor waiting times, processing times, and issue resolution times; and we must make sure that we honor any commitment made to the customer.

Systems, processes and times should be viewed as a set of interrelated variables, and we must always consider the implications that each of them has for the other two. Other key aspects involved in improving customer experience We have so far looked at the potentially strategic role of the contact center and the importance of employees, systems, processes and times in the creation and management of experiences. To wrap up, I would like to provide an overview of at least 10 key aspects that may help improve customer experience with a contact center: • Identification: It is a common mistake to assume that you know what the customer thinks or needs. This mistake can prompt us to expend effort and resources to no purpose. We might be wrongfooted because of our recollection of personal experiences, the department’s own interests, the use of unsuitable research methods or a mistaken interpretation of results. It is important to identify the customer’s key #CEMbook

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moments in terms of experience, and to achieve this we need to use a suitable research methodology.

• Planning ahead: The day-to-day work of a contact center is made up of both internal and external issues that we should try to plan ahead for. Examples include: Launching a new product or service, having available an operating procedure in the face of potential problems, and accurately estimating call volume and making sure staff size is appropriate to deal with it. Failure to plan properly may prevent us from suitably responding to the customer, which of course adversely affects his or her experience. • Listening: We need to develop an attitude of listening - not only to the customer, but also to all people or groups within the organization in direct contact with customers, including stakeholders. Communication must be fluid and ongoing, and should enable us to improve or change any points at which customers are dissatisfied with our products or services. Listening also means equipping ourselves with the necessary tools to collect, measure and process what customers tell us. • Response: It is not always feasible to provide an immediate solution to a customer’s query, complaint or problem. A knowledge gap, the need to make checks or the time inevitably required to troubleshoot a problem are some of the reasons for this. However, there are certain intrinsic elements in any response that directly impact customer experience and which we can work on immediately. Answering politely, returning calls, properly and timely reporting on the progress of the issue being resolved, and apologizing when necessary are just a few examples. • Multi-channel operation: This point is addressed in greater depth in another chapter of this e-book. I nonetheless wish to underline the importance of having in place a channels strategy embracing the contact center. The channels conventionally implemented by a contact center include: telephone, text message, e-mail, online chat service, fax or letter. However, customers can relate with the company via points of sale and social networks. Multichannel integration should be a way not only of obtaining information from customers but also of implementing cross-channel strategies for relationship #CEMbook

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building, customer care and sales. This is one of the key challenges faced by companies today, in response to increasing demand by customers; this aspect may help improve customer experience with a given brand.

• Speed of execution: We constantly face new product and service launches, new offers, maneuvering by the competition, and new customer needs. To adopt the terminology of the sociologist and philosopher Zygmunt Bauman, ours is a “liquid reality” to which the contact center must adapt. Adapting requires that the contact center have the flexibility and procedures to rapidly implement any necessary changes: scripts, codings, processes, dimensioning, training, etc.

• Flexibility: The need for control may prompt us to specify procedures for each and every one of the cases that a contact center operator might encounter. While useful in some ways, this approach may undermine the operator’s flexibility in providing the customer with a solution. We need to give operators room to make their own decisions - “empowerment” - in problem solving and compensation procedures. This means taking a controlled risk that directly influences both the customer’s and the operator’s experience. • Consultancy: The consultancy concept has been devalued by a lack of knowledge of customers’ needs and cross- and up-selling actions unrelated to the customer’s profile and moment. Contact centers should be imbued with the essence of consultancy, while bearing in mind that it helps improve customer experience by building relationships. It nurtures trust, enhances personalization, and facilitates sales. Every contact with a customer is an opportunity to get to know them better and confirm that the product or service under contract with us is the one best suited to their needs. • Follow-up: Following up, learning and improving are three principles we must never forget. We should put in place the necessary control mechanisms and related processes to detect, identify, resolve and eliminate the most widespread mistakes arising at a contact center.

• Innovation: The edge that a contact center provides is not the mere result of assuring that the service it offers is operationally healthy. A contact center can stand out from the competition by innovating. We must seek to exceed the customer’s expectations via surprise and #CEMbook

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originality. Innovation may take the form of changes in scripts, new consultancy approaches, cross-channel strategies, or in the way that the solution to an issue is handled, resolved and communicated. We have seen that customer experience may be a strategic option. This option has a major implementation lever in the contact center, because of its direct contact with customers and its ability to create and manage experience. The challenge now is to reflect on the potential that the contact center offers in this field, and to start thinking of it as what it really is: an opportunity for your business.

#CEMbook

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eight

Customer experience from the online standpoint

Enrique Burgos

EIGHT / ONLINE

Customer Experience

Today, a customer’s first interaction with a brand usually happens online. This is the case even if the purchase itself finally takes place offline. This first step in the relationship is crucial, and, increasingly, we need to pay attention to it. The critical points in the process of building a relationship and creating an experience for the user in the online environment are: • Search

• Branding • Usability

• Segmentation

• Multi channel interaction • Conversion

• Relationship Search 95% of all online searches in Spain use Google. So if a business wants to be found, it needs to engage in SEO. This is not an SEO handbook. The topic is dealt with by a whole range of excellent articles, blogs and books, which give you technical pointers on what to do to get the best possible positioning for your website from the standpoint of the world’s leading search engine, Google. The point you need to take away here is that it is a necessity to ensure your #CEMbook

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website is SEO-friendly, appears among the first results listed for a relevant search, and thus exponentially increases the likelihood that your potential customers will come to you instead of your competitors. SEO is not of course the only strategy for optimizing search engine visibility. Investment in Search Engine Marketing (SEM) is just as good an option, or even better; however, for some businesses it is simply too expensive - either they don’t have the cash at all, or the key words relating to the business are so popular (e.g., car insurance, hotels, etc.) that they cannot realistically compete for dominance. These two strategies to attract users interested in your brand or your goods and services can be enhanced by creating and circulating content on social networks, such as Twitter (corporate or product-related), Facebook, Google+, or the new and attractive site Pinterest, whose content segmentation has made it one of the networks driving the most traffic to retailer and e-commerce sites. The basic building block of your various visibility strategies usually should be a blog offering up-to-date and highly focused content about the topic with which your business is concerned. This is one of the best ways to achieve Google visibility. In addition, a blog contributes valuable content that may generate a high level of interaction with potential customers and position you as an opinion leader in the subjects most relevant to your business goals. Branding If you ask the marketing director or CEO of a company what her business dream was, she would tell you it would be to have a brand recognized by most of her potential customers. The harsh truth, however, is that very few businesses achieve the kind of brand awareness where the mere mention of a brand is directly associated with a product - Apple, Nike - or the brand even becomes a generic term - Kleenex, Hoover. The advantage enjoyed by these brands, and even by brands earning only moderate recognition, is that online interaction usually takes place directly: the user types the brand name right into the browser location bar, or googles the brand name directly. And the difficulty inherent in such powerful branding is that a customer’s expectations are much higher than when he visits the site of a brand with which his relationship is less intense, or which he has never seen before. The online experience #CEMbook

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we want for our customers must be in line with what the user expects to see on our site. If we achieve this, we can ensure a high level of satisfaction with the interaction. We need to offer the user uniform exposure to the brand throughout his interaction with the site, on the homepage and every other page he visits, and provide him with a full range of possibilities for communicating with the brand or buying products. Usability Ease of access to our content and products is another key to the success or otherwise of a customer’s experience with our brand. From when the customer first makes a search - as discussed in section 1 - to the ease of interaction we provide when the customer reaches our landing page or homepage, we must ensure the interaction is clear, simple and highly focused on achieving our goals, and that the customer finds what he or she wants or needs. A wealth of information is available to help us make the best decisions on how to optimize our site from the point of view of user experience design. What we need to highlight here is that there are two basic rules: simplicity, and total focus on conversion. The simplicity of design and technology for our landing page (see Anatomy of the perfect landing page) or our corporate or product site must reflect careful thought about the user: how does she browse, what does she expect to find, and how do we need to display the products or services to achieve the highest possible rate of conversion? Segmentation “One size fits all” is not good enough today. User segmentation involves choosing our potential customers and then showing them information tailored to who they are and what they are looking for. These are the keys we should work with when building customer relationships. Customer pre-segmentation involves setting our nets to “catch” potential customers interested in our brand or products. We can use SEO, SEM and social #CEMbook

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network strategies to draw the attention of the target audience to whom we can offer suitable content, products and services, and whom we know will enjoy a highly satisfactory interaction and experience with our brand. In terms of displaying content on our website, we need to be able to lead each target group or profile along a clearly distinct path. This ensures the customer’s experience becomes a relationship rather than a frustrating visit that does nothing for him and nothing for us. Every opportunity for relating to a customer is a unique occasion to create an experience exclusive to that customer, offering him or her a distinctive range of products depending on his or her segment. However obvious all this may seem, there are very few businesses today that are proving capable of implementing this strategy in real time when a user visits their site. Amazon is one of the best-known cases, and perhaps the operator that has arrived at the most accurate customer segmentation and personalization of the user experience. Even relatively simple processes, such as e-mail correspondence, where segmentation can be achieved beforehand, are not often properly implemented (Apple and, again, Amazon are rare exceptions), with a clear focus on satisfying customers in their relationship with the business. All too often, communications are structured back to front: first I communicate something, then I segment my audience. But what I should really do is figure out what my audience is like, and then see what I can offer each customer segment. Nike.com is one of the companies that has best adapted its product range to customer segments. Nike offers customers highly satisfactory experiences by displaying content carefully tailored to customers’ interests.

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Multi channel interaction This guide addresses every facet of the customer relationship where the customer’s experience becomes a critical turning point. Success or failure can be a matter of a split second. Multi channel interaction is hankered after by many companies and is in some sense almost “legendary.” And yet it is necessary, because customers have available a wide range of forms of communication and interaction with vendors. We should make this tough challenge a business priority. To ensure that interactions with customers are uniform across channels we must have the right technological tools and, even more importantly, we must design communication and relationship strategies to make sure the relationship is transparent, uniform and highly satisfactory for the customer. The development of CRM platforms enables the creation of comprehensive databases that contain all the relevant information on our customers. In addition, we can train our customer service employees to suitably interact with customers by telephone, online forms and more novel media like social networks, in particular Twitter (as already practiced by companies like Dell, Comcast, Best Buy, and so forth). These are the new relationship media, and are no longer one-way but two-way streets. Across all these channels, we must ensure that the customer’s experience is uniform - we need to know who each customer is, regardless of whether she telephones us, writes to us or browses our website. This is the only way to achieve higher loyalty rates. Information is knowledge, and knowledge of who each customer is and what she expects to get from us is something we need to use for the health of our business and to achieve higher customer satisfaction. Conversion Conversion is the ultimate goal of our interactions with customers, whether in the form of the online purchase of a product or service or extraction of data to enable us to undertake future marketing actions targeting that customer. We shall be able to guide the user to a conversion action generating a purchase or data serving as the basis for our future relationship only if the user has a satisfactory experience on our website landing page or on the social network where we interact with her. As we saw in section 4, segmentation is key to achieving successful conversion. Social networking platforms like Pinterest and Facebook allow for content segmentation-driven personalization, and consequently high rates of direct conversion to e-commerce and retailer portals, according to the Monetate report. #CEMbook

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Relationship A relationship is the consequence of all the above steps. If we are able to generate a satisfactory experience that enables users to obtain content, products or services in accordance with their needs and interests, and we earn an adequate return on our investment, then we will have achieved the sought-after trophy of a new customer. We should look after our customer over time on the basis of the same parameters: segmentation, value creation and satisfaction in the relationship with our business or our products/services. The entire process is summarized by the following graph:

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nine

Customer experience in multichannel integration

Fernando Rivero

NINE / MULTICHANNEL MARKETING

Customer Experience

Fiction or real life? Your phone rings. You often don’t pick up because you are bored of all the telemarketing. But this time, you’re not quite sure why, you do respond. In fact, you even listen to what the caller has to say, because she speaks to you as if she actually knew you, and knows how to grab your attention. At the end of the call, you give her your e-mail and home address so she can send you more info! After a while, you get her e-mail and you look it over quickly. A few days later, after you have forgotten all about the call and e-mail, you receive a box in the mail. It contains a gift: you remember the marketing rep mentioned it over the phone, and in her e-mail she said she would send it. You like the gift. So you decide to check out the website printed on the box. At the same time, you use your favorite social networking site to find out what people know about this company and its products. You find some positive comments. On various forums, you see people are giving this company rave reviews. So you go to the point of sale recommended on the gift box and the website. When you get there, you get a sense they have been waiting for you. The service they provide is excellent, and they already know the information provided earlier: you don’t have to give it out again. When you leave, you feel happy to have made such a smart buy. Days later, you get a new e-mail telling you when you will receive your product at your home, just as you had been informed at the store. #CEMbook

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The delivery date draws near. You receive a text message confirming the delivery time. However, you have to go out to deal with an emergency, so you text them back and ask them to come by at another time. You get an immediate confirmation that your goods will be delivered at the new time you specified. Back home, you receive your purchase at the scheduled time. It includes a welcome package explaining what the product is and how to use it. The welcome brochure also states the name of the person in charge of customer service for you, and the various ways you can contact them for any query or problem you may have later on: direct line telephone number, personal e-mail, cell phone number and social network accounts. Also included are the data for access to a private website exclusively set up for you and the closest customer service points you can approach if you have any issues. Weeks go by. Then, just before receiving your first bill, you are e-mailed a video that explains in detail how your bill is structured so you know what to expect when you receive it. You are amazed at their efficiency. Months go by, and everything goes smoothly… Customer experience in a multichannel environment As a customer, does this story sound unreal to you? Shouldn’t it always be this way? What if I told you that the person in the story bought insurance? Or a telecommunications product? Or could it be a subscription to a pay-TV channel? In the end, it doesn’t matter which product or service was involved, don’t you think? It has long been said that the customer is the focus of a business organization; the customer is the key element; we need to be customer-oriented; the customer is king. Well, the customer may be king, but it sometimes seems his “court” doesn’t know how to deal with him. Every time he calls, we ask him to confirm data he already gave us on some earlier occasion. At our point of sale, our staff keeps changing. When he visits our website, we bother him with the same advertising he would get if he weren’t a customer at all. On social networks we don’t know if he is already a customer or just a fan. As already seen in other chapters of this book, the critical point of the customer experience is the “moment of truth.” This is when we really need to prove ourselves #CEMbook

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as a business by providing our customer with a meaningful experience. So far, we have looked at what we need to do to create experience in each channel where we have contact with or relate to our customers. But it is not enough to provide an excellent experience in just one channel. We need to offer just as good an experience on every channel we make available to our customers. And that is what we might call a multichannel experience. We must be aware that for our customers our company is the same thing regardless of the channel they use, and that their experience with our brand is shaped by the whole story of their dealings with us. Multichannel strategy, or “lotsa-channels”? Recently, a banking executive told me about his bank’s strategy of offering multiple channels for interacting with customers. But he said that they were privately not calling it “multichannel,” but “lotsa-channels.” While it was true that a customer now had the whole range of communication and operational channels by which to interact with the bank (telephone, physical branch office, ATMs, website, electronic banking, cell phone banking, etc.), the bank had very little information about what the customer was doing across channels overall. This means that sales opportunities pass us by, and the experience we provide customers is not as good as it should be. For example, when our customer walks into a branch office we are unaware of the fact that she has had trouble with an ATM, or that she has already checked out a given product on our website, and so we need to ask her about things she’s already told us elsewhere. We need to be harshly self-critical. Do we really have a multichannel strategy, or is it just a “lotsa-channels” strategy? Is each channel blind to the information being handled by the channel right next to it? But the fact is that there has been a very rapid shift from “mono-channel” to “multichannel.” Formerly, a company had just the one sales or contact channel to communicate with the customer, such as a store, a salesperson, or a telephone number. But the possibilities available today have widened dramatically on the back of technological development. So, although an increasing number of companies enable their customers to contact them by various channels, the establishment of a multichannel strategy is a #CEMbook

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step they have yet to take in any seriousness. There must be genuine integration of data across channels. Ultimately, multichannel contacts can be exploited to enhance earnings and customer experience. A multichannel strategy lies at the crossroads of two main vectors: the sales process and customer experience. This paradigm shift means that channel management must go beyond the sales vector and embrace all points of contact with the customer. If we redesign our point of sale or send an e-mail newsletter, does that represent a sales initiative, or is it just contact with the customer? And what does it mean when someone follows us on a social network? For present purposes, we shall view a company’s channels as the network whereby it “connects” with its customers, whether it does so more in the way of communication or contact than of an attempted sale. Long gone are the days when a company launched a product and its marketing department was ordered to push it hard to make customers buy it. Now it is a matter of placing the customer at the center of our strategy, listening to her and partnering her to create a memorable experience, so that she will buy from us, make repeat purchases, wish to stay with us and refer us to other people. Types of channels Channels can be classified into the following types, in simplified form: Direct channels: The organization reaches the end customer directly, with nobody in between. These channels encompass the sales network, own points of sale, call centers and contact centers, and so forth. Examples include a bank selling its products via its branch network, or an insurance company calling us at home to sell a policy. Indirect channels: A third party is involved. For example, a hotel selling room bookings through a travel agent or a company building a network of agents to offer its products. New channels: This category embraces channels based on new technologies (mainly the Internet) as a means to reach customers. #CEMbook

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New channels can also be direct, such as when we visit a hotel’s website to book a room. Or they can be indirect, such as when we book a room using an online travel portal. This channel type includes e-mail, such as when an offer reaches us encouraging us to make a purchase on promotional terms, text messages sent to our cell phone to tell us that we can buy goods at a store and defer payment by using a credit card, or interactive television, where we can buy pay-per-view sports events. Rather than think of each channel individually, we should regard them all as part of an overall strategy that inter-relates all contact with our customers. It is from this perspective that the concept of multichannel interaction should be viewed. Multichannel customer strategy As mentioned earlier, channel strategy overlaps with customer strategy, which lies at the base of our entire marketing strategy. We should design and dimension our channel model in accordance with the specific market, situation and target customer we are addressing, and even tailor our approach to the use that our customers make of each channel at each step of the buying process, such as in the following example:

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Table: example of segmented purchase process in a multichannel environment In addition to the channels available to us - which increase from day to day, and among which we must begin to choose - we need to bear in mind that our customers’ socializing and buying behavior also changes over time.

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We should analyze all our channels using a DADOS matrix:

Table: Objectives of an optimal channel strategy. Source: Tatum How to set in motion our multichannel strategy in three steps We should follow these steps: • Analyzing and diagnosing:

»» Research moments of truth for each channel and each customer type.

»» Audit and diagnose in depth the strengths and weaknesses of the channels available to us in order to create plans for improvement; identify the opportunities and threats exhibited by new channels we are not presently using. »» Ascertain which types of customer are using which channels most intensely, and which channels are used most at each given step of the buying process. This enables us to prioritize which channels to emphasize (including in budgetary terms) when managing our customers’ experience. »» Research the channel strategies deployed by our competitors and market leaders to identify the best practices.

• Design:

»» Configure our combination of channels on the basis of the selection of the most suitable with reference to our priorities and our overall strategy: markets/areas/segments; direct/indirect/offline/ online, etc. »» Design the right channel model for our various target audiences and segments: consumers, businesses, etc.

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»» Identify priorities for locating points of sale: openings/closings/ transfers based on market potential and specified goals.

»» Design customers’ flow of contacts with our company, and our contacts with customers, bearing in mind all possible channel combinations. »» Identify how best to improve experience at moments of truth in each of the channels in combination.

• Implementing

»» In partnership with the various departments and areas involved, set in motion the elements specified at the design phase. »» Motivate, incentivize and enhance the loyalty of our customers in the use of the channels we are most interested in bolstering. »» Establish a single customer management methodology at various different levels using the tools available to the company (generally CRM).

Conclusions To find our way across the multichannel landscape, we need to keep an eye on the essentials. Our goal is to place customers at the center of our strategy and, based on their behavior, decide how we can give them a meaningful experience in each channel. If companies really are aware of how important customers are, why is it so difficult to give them what they want using the channel most convenient to them? The technology is out there. So is the knowledge of what customers want. So let’s work towards giving our customers “experiences to shout about.”

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References Rivero Duque, F., 2009. Nuevos tiempos: nuevos canales y oportunidades de venta. Harvard Deusto Marketing & Ventas. Ediciones Deusto #CEMbook

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Customer experience in B2B markets

Santiago Solanas

TEN / B2B

Customer Experience

A tough situation… In late 2007, our call center, which provided technical support for accounting, payroll and management applications for small and medium-size businesses, had a staff size designed to take around 3,500 calls a day. On January 2, 2008, we received 104,000 contact attempts, in response to a major shift in Spain’s national chart of accounts. On January 3, we fielded 98,000 attempts. On Friday, January 4, 92,000 attempts were made to contact our company. In all, the first three months of 2008 were very tough for everyone, and 50,000 to 105,000 call attempts were made every day. Customers spent hours trying to get through to technical support to get answers to urgent and important questions about the new statutory requirements. When they finally did get through, the ensuing conversation was tough: “About time! I’ve spent several days trying to get through to you. My contract with your company says you’ll provide me with support, help me out… But you’ve managed to make me feel completely powerless… Is this how you treat your customers?” For our part, we did everything we could. We extended our working time, hired more support technicians, improved our technology and processes in record time, returned the most urgent calls every day, bolstered the information available on our website. Our team made an incredible effort, coupled with our customers’ patience and an investment of €10 million, which was big money for us.

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Customer Experience

And we made it. We finally managed to provide support to all our customers. We cleared up their doubts. We helped them implement the new national chart of accounts and continue to operate normally while complying with the new statutory requirements. Throughout the whole process, we continued to conduct our service quality and satisfaction surveys. After every call, customers were given the opportunity to rate our performance on a scale of 1 (highly dissatisfied) to 5 (highly satisfied). Our scores had traditionally ranged from 4.5 to 4.8, i.e., our customers rated our service highly. Customer satisfaction was one of our hallmarks and our competitive edge. Our support technicians were well-trained and knew how to “smile over the phone.” They had long track records (average length of service was 9 years) and were proud of doing a great job. In fact, in late 2007 we were awarded the “Gold CRC” in our category by the Spanish Association of Customer Contact Center Experts (AEECCC) in recognition of excellence in our relationship with our customers. Surprisingly, in early 2008, while in the midst of the avalanche of calls, the change in our satisfaction survey score was negligible: we slipped just two-tenths of a point, and our ratings ranged from 4.3 to 4.6. It seemed we had successfully got over the hitch: customers had taken a favorable view of our efforts and investment, and acknowledged our technicians’ expertise and great service attitude. We sighed with relief. A few months later, we started to wonder why things had turned out this way. How could our customers, who had spent hours and even days of their time trying to get through to us, nonetheless give us a favorable score? Were the results real? They were based on more than 30,000 survey questionnaires administered in those months. But how could we know for sure? We launched a project specifically to get an answer to these questions. Thanks to the support received from IZO, Strativity and its CEO, Lior Arussy, we had our first brush with the concept of “customer experience.” We conducted the first surveys to measure customer experience based on our “moments of truth.” And we saw the first results. #CEMbook

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Then relief became concern. … and it gets worse In the first quarter of 2009, contract expiration and renewal came up for tens of thousands of customers who had suffered the consequences of our contact center bottleneck the year before. What would happen? Which would turn out to be right, the (highly positive) satisfaction surveys or the (highly negative) experience surveys? Would customers remember what had happened twelve months earlier, or would they acknowledge the changes we had implemented and our significant service quality improvement of the past six months? Our worst fears proved accurate. We were hit by the lowest contract renewal rates in the history of our business. From an average annual rate of 85%, we dipped to less than 75%, and less than 65% for some contract types. This was a hard, direct lesson that taught us two things: • Customer experience is different and much more important than customer satisfaction. • Customer experience impacts earnings.

Experience is more important than satisfaction Our company had always paid a lot of attention to customer satisfaction and service quality. As I mentioned earlier, customers gave us very high scores and we received accolades for our technical support; for many organizations in our industry and elsewhere we were a benchmark to be emulated. When we started our customer experience measurement project, we drew up our “moments of truth” map, showing all points of contact with our customers. The map revealed 17 opportunities to provide experiences, of which only three had to do with access to the telephone support line, which was where we’d had a problem six months earlier. So when in late 2008 the first results came through of our customer experience survey we were surprised to see that our scores were poor at almost all points of contact. #CEMbook

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The first reaction was denial. For successful professionals with many years’ experience, getting an adverse report on one of our historic strengths - customer relationship and customer service - was embarrassing. It was common to hear things like “the report is wrong,” “the results are irrelevant,” “the company helping us take the survey knows nothing about our industry,” or “this is impossible.” The most widespread reflection of all was: “Who cares about experience? It’s satisfaction that counts anyway.” We were soon proved wrong, however. And yet a mistake is a good thing if you learn from it. What did we learn from our mistakes and our later work on the concept of experience? We learned that satisfaction is not enough. Service quality and the rational parameters by which it is measured are a mere threshold we need to fulfill just to be in the game. In our case, market leadership and thousands of customers renewing their contracts every year had given us a false sense of security. When some of our customers had a highly negative experience at some of our points of contact, they decided it was time to reconsider the relationship. We learned that to stand out from the crowd you need to decide how you want your customer to remember his interactions with your business. Every point of contact is an opportunity to turn that desired recall into a reality. If you can’t decide what you want, it is very hard to make this happen. You must lay solid foundations, or the experience you provide is likely to be diffuse and uneven. And high customer satisfaction doesn’t give you an edge: it just means you are in the game. We learned that improving customer experience is hard work. It is important to realize that changing your “moments of truth” isn’t easy, and you can’t do it at short notice. Transforming operations, training people, modifying systems, changing marketing messages, constructing new indicators: it’s a whole new world. It requires great effort and determination, and this is something you need to know before you start. Normally, we are ready to offer quality and satisfaction, not experience. We learned that prioritizing is vital. When you first see that multiple points of contact require improvement, the temptation is promptly to undertake an overall change. We decided to focus on specifying what our overall experience ought to be like in the four most important aspects (out of a total 17) in terms of impact on the customer. This enables you to learn the language and practice of experience gradually, and the people working at the company can process the change at a reasonable pace. #CEMbook

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We learned that experience does give you a competitive edge. What we had not imagined was that working towards improving our customers’ experience would provide us with opportunities to innovate in many respects: product innovation, service innovation, process innovation, infrastructure innovation, organizational innovation. These were incremental, non-disruptive innovations which translated into competitive advantages we could incorporate to our organization. This progress enabled us swiftly to enhance the value perceived by our customers and restore their trust, until we had recovered contract renewal rates prior to the decline of the first quarter of 2009. Service quality does not offer competitive advantages - it is normally a given in the market. It is experience that can make you stand out. We learned that nothing can be done without commitment from the company’s leading executives. The experience path is tough, because it involves developing a new culture and calls for many changes in the received way of doing things within an organization. One clear example is that for our employees to provide extraordinary experiences to customers, they typically need to make decisions above their level of authority and without time to check with a superior. This means that a wide measure of discretion must extend throughout all layers of the company. And cultural changes are unfeasible without getting the green light from the CEO, chairman, managing partner, or proprietor. Service quality and satisfaction can be managed from any position in the company - but experience cannot. Finally, we learned that once you start down this path there is no turning back. When a company sets out to improve its customers’ experience, it sparks a highly interesting cyclical process. First, the need to improve experience is acknowledged. Work is done, progress is made. Customers become aware of this new personality and their perception improves. Over time, customers get used to it, the “new experience” is no longer novel… And you need to start over. The ongoing cycle of improving experience requires a huge cultural change in most organizations. And those changes are the toughest to make. Satisfaction is process-based; experience is culture-based. Experience is just as important in B2B markets as it is in consumer markets. Organizations are people.

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The financial impact of experience: “FIE” In 2009, our customers’ negative experience translated into an adverse financial impact. Thanks to many months of work to improve our customers’ experience we turned the situation around. But could we have done more? The key question for us from then on was: “How can we offer our customers an extraordinary experience and convert it into provably positive financial effects that exceed our historic performance?” Our response took the form of undertaking a veritable internal revolution. Offering “ECE” (Extraordinary Customer Experience) became our main strategic axis. This book provides a wealth of guidelines on how to create a good customer experience. We applied most of them, and continue to do so. But the highpoint of our transformation process came in 2010, when we set in motion the CEI (Customer Experience Index) project. We wanted to evaluate the financial impact of an extraordinarily positive experience so as to ascertain whether we could translate our efforts into improved earnings. We defined two populations, each of 2,000 customers, with regard to which we were going to measure the critical factor displaying their loyalty to our company: the support contract renewal index. The populations were defined as follows: Experience population: We were going to poll these customers on their experience with our company based on three questions (NPS, mentioned in an earlier chapter, and two more questions): • Do you recommend our products and services? (NPS)

• Do you recall your interactions with the company as positive experiences? • Is it being a customer of this company worth your while?

Customers returning a score below 7 (out of 10) would be monitored individually. We would ask them why they had assigned a low rating, and what we could do to turn around their bad experience. Later, we would try to turn their experience into a positive one and proactively follow up that customer. No specific action would be taken regarding the rest. We assumed that a score ranging from 7 to 10 indicated a customer who had had a good experience. (This was less demanding than the NPS concept of only assuming a good experience for scores 9 and 10 - but it seemed adequate to us at the time.) #CEMbook

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Control population: We would treat customers in this group in accordance with the standard lifecycle, which had garnered us excellent results for many years. We approached the project with a blend of enthusiasm and doubt. We had been burned by our customers’ bad experience; we had understood we needed to improve - and we had improved. But would good customer experience turn out to be a positive competitive edge, or was it simply something we needed to do to maintain the status quo? Would customers appreciate our efforts to improve their experience and show this in the form of increased confidence in us? Would it be possible to offer an extraordinary experience while sustaining our company’s profitability? Could this be done in an operationally manageable way, which was vital in an environment where we were dealing with a high volume of customers, each of whom we wanted to treat as if they were unique? The results came through four months later, and they were striking. We found out that customers in the “experience” population exhibited a contract renewal rate 11% higher than customers in the control group. So, if we managed to extend this practice to all our businesses and customers, this would mean a potential impact on earnings of about €10 million a year. We had proved that a positive customer experience is directly associated with a tangible, measurable and readily implementable financial return. That’s some experience! A few months later, our Customer Experience Index enabled us to win the first CEX Prize awarded by the Association of Centers Promoting Excellence, under the title “Connecting emotionally with each customer.” But that is another story… Conclusions The title of this book chapter is “Customer experience in B2B markets,” because customer experience is too often thought of as relevant only to the consumer market. I have chosen to use an experience of my own to show that this is not the case. I’m not an academic or a management guru or an intellectual. I am simply someone who has seen first-hand the fascinating process of improving customer experience. And it was in a B2B environment that I saw it happen. #CEMbook

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My story could be the story of any other company. Your own, perhaps. I hope it has been of interest to you. I should like to end this chapter with a discussion of the following two topics, one of which is dealt with in depth elsewhere in this book: • Employee experience • Loyalty

Employee experience. In the years we spent working towards an improved customer experience, we found that nothing can be done if our employees’ experience does not also improve. The first question we must ask is: “How do the people who work here feel?” If the answer is “not so hot,” then it is better to focus our efforts on improving the experience internal to the company before attempting to offer a good experience to our customers. When we started out, we tried to do this the other way around. It didn’t work. Loyalty. This is something we all know: We are not loyal to what merely satisfies us. We are loyal to what we love. Even in B2B markets.

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References Arussy, Lior, Customer Experience Strategy - The Complete Guide From Innovation to Execution 2010, Strativity Group. ISBN-13: 978-0578047577 Kotter, John P., 1996. Leading Change. Harvard Business Review Press. ISBN-13: 978-0875847474 #CEMbook

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Innovation in creating and managing experiences

Jaime Castelló

ELEVEN / INNOVATION

Customer Experience

Today, innovation is a must for businesses. To survive in the market, the pace of innovation must be sustained or even sped up. In this chapter, we shall first look at the realities surrounding the need to innovate in terms of the experience we offer our customers. We shall then explore the strategies open to companies to develop their innovative capability, with a particular emphasis on the concept of “open innovation.” Is innovation necessary? Innovation seems to be regarded as a cure-all for businesses, and even whole countries and economies (such as Europe), to return to the so-called “growth track.” Not a week goes by without media news items on this topic. At business schools, increasing numbers of executives anxiously ask us to help them design innovation processes and practices. Given this constant pressure, our first question ought to be “Is innovation even necessary?” To answer this question we should first specify what we mean by “innovation.” Innovation was traditionally the preserve of laboratories and company R & D departments. It was a matter of developing new technologies, patterns and processes, which, with a bit of luck, could be launched on the market. Even today, this is the predominant vision of innovation, the “lab coat” paradigm. From the customer experience standpoint, this picture of innovation only partly explains what innovation involves. When we look at the customer’s relationship at all its points of contact with the company, and we think about the full measure of value #CEMbook

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we can create for the customer, there emerges a new kind of innovation, which has nothing to do with laboratory work, and arises at any time and in any situation where the customer is in contact with the company. Let’s think, for example, of a restaurant, which is highly suited to explaining customer experience. Here, “lab coat” innovation happens in the kitchen when the chef creates new dishes, using new combinations of flavors, colors and aromas. While non-laboratory innovation happens in the rest of settings where a customer comes into contact with the restaurant: from how we communicate with customers, through dealings with the maître d’ and the waiters, taking and delivering orders, collecting payment for the bill, and managing patrons’ satisfaction or otherwise. The example also helps us visualize the vast opportunities for non-laboratory innovation - the field is far wider and less expensive in time and money terms than kitchen or “lab coat” innovation. Some authors (lately Ryan and Lowry in their book The Method Method) have called lab coat innovation “hard” innovation, and nonlaboratory innovation “soft innovation.” These authors have further pointed out that hard innovation focuses on technical features and appeals to customers’ left hemisphere, the rational, analytical region of the brain; soft innovation, however, focuses on the circumstances surrounding access to the experience, and appeals to the right hemisphere - feelings and emotions. Following this line of reasoning (which has not been empirically tested), soft innovation is not only less expensive but also better able to nurture customer preferences and loyalty. Having defined what innovation means in the field of customer experience the sum of hard and soft innovation - we can try to answer our original question as to whether innovation is really necessary. By way of a response, in fine Socratic style, we could come back with another question: “Why do customers choose our experience rather than other options available on the market?” The reason is that, unless the market is distorted, and assuming that it is open and competitive, customers choose our experience because it is different and better than what they would find elsewhere. Difference, superiority and relevance (for our customer’s life or business) are the keys to constructing sustainable value models according to the classic authors Anderson and Narus. Our next Socratic question consists of wondering what we can do to build experiences that are different, superior and relevant to our customers. The answer lies in innovation. In 1954, Peter Drucker said that the ultimate aim of every business is to satisfy a customer, and in the absence of this no business makes sense. To this end, according to Drucker, a business needs to equip itself with the two functions necessary for #CEMbook

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innovation, R & D (hard innovation) and marketing (soft innovation). This brief Socratic interlude enables us to answer the original question with a robust “yes.” Innovation is necessary for a business to exist, because innovation holds the key to the business itself, by offering something different than and superior to the competition. Moreover, innovation is vital to the growth of the business, by providing different and superior experiences for new customer segments or new experiences for the same segment that are superior to those offered by the competition. To return to our restaurant example, innovation is not just the sauce flavoring a business: it is the business. Innovation models Having answered the question whether we need to innovate with a resounding yes, the next issue is how to go about it. The problem is traditionally solved by hiring engineers and scientists or copying the innovations of others, all within the hard innovation paradigm. In the 21st century this innovation model has faced the challenge of another model, that looks beyond the resources internal to the company to embrace all resources existing in the market and in the society in which the company operates. The new model has been dubbed “open innovation.” It could be defined by “Joy’s Law” (attributed to the cofounder of Sun Microsystems, Bill Joy), which states that, “No matter who you are, most of the smartest people work for someone else.” Eric Raymond, a Pennsylvania-based software programmer, was one of the first people to define open innovation, at a conference in 1997. Raymond used the metaphor of the cathedral and the bazaar. Both are highly complex projects. The cathedral is majestic and imposing; it is the outcome of a genius and a team working for the genius (his master plans) for many years, using an infinity of resources. The bazaar, however, is the upshot of an informal group of actors; structures are built with reference to each actor’s own interests, and without regard to coordination; the bazaar emerges far more rapidly and using fewer resources; the trade-off is that the result is perhaps less spectacular. The first major example of innovation achieved by this model was the Linux operating system, created on a voluntary basis by a community of developers inspired, rather than led, by a developer called Linus Torvalds. Another example of the “bazaar” model was Wikipedia, which in just a few years has become larger than the venerable Encyclopaedia Britannica, albeit offering a patchy standard of quality. In between these two extremes - the #CEMbook

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cathedral and the bazaar - there is an infinity of intermediate models, where the “open” and “closed” blueprints combine to generate different and innovative experiences for customers. Open innovation poses two key challenges for any company wishing to implement it. First, the openness that the model imposes on the company. Under open innovation, and depending on the extent to which the company approximates a pure instantiation of the bazaar model, the various actors involved in the innovation process (customers, suppliers, employees, general public) enjoy more or less direct access to the company, its resources, its information and its communications. This flies in the face of the traditional conception of what a company is, and requires suitable structures and collaborators. To return to our restaurant example, it would be as if the kitchen itself, ingredient sourcing, the menu and front-of-house were all left to the devices of patrons: the people who wish to partner the restaurant in innovating the experience it offers. The chefs, the maître d’ and the waiters, but also customers and suppliers, would have to be willing to share and co-create with people from “outside.” This can be very hard to do if one is not ready for it. The second major challenge is the quality aimed at. Open innovation processes are intrinsically messy. A large volume of input is attracted, but its quality is highly uneven. Companies wishing to use open innovation must be willing to take on board this quality inconsistency and work around it. In models representing a step away from the pure bazaar paradigm, one of the techniques used is contribution “editing.” This is a standard practice in the Linux community, and Wikipedia is moving in this direction too. Another practice that helps deal with this issue is to specify which tasks will allow open access. The most successful open innovation models are those that define specific, finite tasks that can be implemented in parallel with one another and are sufficiently varied for contributors having a wide range of different profiles to participate. A great example of the open innovation model is Threadless.com. The principle is very simple: Threadless is a new fashion experience. You send your T-shirt design, they manufacture and sell it. The tasks are simple and finite: sending a design for a specific type of garment. The task can be performed in parallel; designs can arrive at the same time without disrupting the operation of the business. Finally, besides sending designs, you can contribute the simpler activity of suggesting color changes or just voting for one design or another. #CEMbook

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The rise of open innovation models has been driven by the development and popularization of information technologies. The growth of the Linux community and project, for example, has gone hand-in-hand with the development and democratization of Internet access. Open innovation models are more readily implemented in purely digital business settings. Nevertheless, some companies have been able to develop atom-based rather than bit-based open innovation models. One such model has been called “mass customization.” It is fairly remote from the bazaar paradigm in its pure form, because the business is opened up to third parties only within the restricted scope of the design of certain product features. This represents a first step in companies adopting open innovation models, and has enabled them to stand apart from the competition by creating far more personalized experiences for customers. One example is “Lego Designed by Me,” from the Lego building-toy company. The experience Lego offers is highly analogous to Threadless, except that the customer’s design need not be shared by others. To facilitate toy design, Lego has created Lego Digital Designer, an application that allows you to create a fully parameterized design. Lego manufactures the item and sends it to the customer in a personalized box. Customization options of this sort are increasingly widespread, and many fashion brands already offer them to their customers (Nike, with its NikeiD project; Oakley with its Custom Sunglasses; and many more a list is available at milkorsugar.com). By containing all the possibilities inherent in a “designer community,” these models have the added dimension of offering customers a unique and personal experience. The brand not only enables the customer to display and show off her creations, but may even include the most successful designs within its own “standard” product catalogue. The second restricted form of the open innovation paradigm, more prevalent in the business-to-business setting, is what we might call “open labs.” Here, the company opens up its labs (under a strongly “hard” vision of innovation) to its customers to develop new projects. Though open, this approach is highly constrained and controlled. Its complexity lies in the fact that tasks and projects are not identified beforehand: they emerge from laboratory-based dialogue between the company and its customers. A pioneer of the “open labs” model is 3M, the makers of Post-it notes and a whole range of other products. In 2009, 3M had 23 “customer innovation centers” #CEMbook

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across the world intended to generate innovative solutions for the “customer’s customer.” Customers present 3M technicians with their business models and then work with them on the various innovation platforms developed by 3M. An interesting feature of this method is that customers are not restricted to the innovation platforms relating directly to their business; they can work on any platform operated by 3M. One example is Visteon, a 3M customer that supplies automobile parts. After visiting one of 3M’s customer innovation centers, it worked on Thinsulate (thermal insulation for textiles) to improve acoustic insulation in the design of automobile dashboards. An analogous way of creating open yet controlled spaces for innovation is to provide an application development platform for a given environment. One of the most successful examples of this is Apple, and third-party apps developed for the iOS cellphone operating system. Under this model, Apple creates a space for independent developers to create apps for the iPhone, iPad and iPod. Much like Lego, Apple provides the software for third parties to develop apps; the ultimate destination, however, is not customization but a market on which the third-party developers can sell their apps (iTunes and iOS App Store). The Apple model has drawn criticism for being overly controlled and too remote from the open innovation paradigm. But it nonetheless provides a good example of how a company which was traditionally closed and jealously guarded its technical innovations found a way to open up to some extent, thus addressing the threat implied by Joy’s Law. Finally, the most radical form of open innovation - which is atom-based, not just bit-based - is crowdsourcing. A crowd-powered platform gets people with ideas in touch with people and companies with production capabilities so that they can develop new customer experiences together. An interesting example of this model is local-motors.com. By opposing the concept of “local” to “general” (a reference to General Motors, the US automobile giant), local-motors.com calls itself a “new generation automotive manufacturer,” and an “open-source community of designers, engineers, fabricators, enthusiasts and onlookers. It is the canvas on which the vehicles and technology of the future are designed. Anyone can participate, and we encourage you to come together to lead the revolution that will forever transform the automotive industry.” This first paragraph on the localmotors.com website neatly encapsulates the spirit of the crowdsourcing model. The company disappears to become a mere container (in this case, a “canvas”) in which #CEMbook

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people (anyone) interact and innovate. And not just to create software or bit-based products, but in something as physical and complex as an automobile. Open innovation and creating customer experiences Having defined innovation as a combination of hard (technical or “lab coat”) aspects and soft (access-related, outside the lab) aspects, and having demonstrated that businesses need to innovate, we have looked at open innovation models. Open innovation is interesting from a product standpoint, and even more fascinating when viewed from the perspective of customer experience. When we create customer experiences, we do so along a variety of vectors: a product or service, certainly, but also access, information, after-sales and disposal - all those points at which the customer is in contact with our solution, or where our solution is present in the customer’s life. From the customer’s standpoint, the experience is intrinsically “multi-stakeholder.” It is not located within a single stakeholder, but typically generated by a range of different stakeholders. Returning to our restaurant example, the patron’s experience is influenced by the dishes she samples, by the way she is served and advised by the wait-staff, by her trip to the restaurant, by how she makes payment for her meal, by the atmosphere and decor of the premises, and so forth. Thinking about innovation from an open perspective enables us to encompass all the stakeholders involved in creating the customer’s experience. We can thus more readily develop proposals and new experiences, because we bring into play a far wider range of talent, from a more diverse spectrum of sources. By way of conclusion, working with open innovation models can be intimidating at first. But there is no need to take a blind leap with no safety net. Take things step by step, learning while we innovate and at a pace commensurate with our partners’ and our customers’ needs.

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twelve

The key ideas of customer experience

Jaime Valverde Borja Muñoz

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Don’t count customers, make customers count Over the course of the preceding 11 chapters we have learned to create consumer experiences for the 21st-century consumer, customer or user. It sometimes seems a miracle for a customer to choose us out of such a wide range of competitors. Everything is being done better every day, and even more so from now on, since we have been equipped with the expertise of 11 experts! Elena Alfaro taught us that we must not base our offer on quality alone, because it is just another commodity. Rather, we need to understand that gaining an edge through emotional management of customer needs should lead to direct effects on earnings going forward which we would not otherwise achieve. Customer experience from the brand perspective prompts us to analyze our offering, identify what the consumer values most about it, and differentiate ourselves in a competitive environment under a brand that brings together experiences relating to use, consumption, socialization and personalization: this will give us an edge, according to Javier Velilla. Hugo Brunetta taught us about the power of using and investing in CRM applications, which will enable us to gain an edge through better awareness of our customers. Your competitors can’t copy what they can’t see. And what they can’t see is in your database - a treasure-house of relationships built painstakingly over time.

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Do we compare customer expectations with perceived experience? How much more will we earn if we raise satisfaction by one point? Carlos Molina suggests we should pay attention to these metrics. They will make it easier for us to measure and manage customer experience. If you have got to this point and after everything you’ve read about customer experience you’ve not yet been to a Starbucks coffeehouse, now is the time to do so, because it’s not the same thing to be told about something as witnessing it firsthand: and Beatriz Navarro and her colleagues are great at their jobs. Few products are more undifferentiated and generic than coffee, yet the Seattle-based company created a corporate story that was powerful enough to roll out the Starbucks brand across the world, draw in fans and create a third place between work and home. One of Professor Lluís Martínez-Ribes’ distinctive skills is his ability to see past appearances, find out why things turn out the way they do, and visualize the hidden nine-tenths of the iceberg. In his chapter, we learned that, in the retail world, it is not just what the business has and does that counts, but also what it is, and what it makes you feel. José Ignacio Ruiz showed us that a customer experience-oriented contact center provides a competitive advantage and a distinctive hallmark; it is a major lever for development, because of its direct contact with customers and its ability to create and manage experience. From Enrique Burgos we learned the importance of making ourselves more accessible in the online setting, ensuring consistency of exposure throughout the customer’s visits to our virtual environment, facilitating customer interaction and adapting our offer to his or her specific needs, while being transparent and supporting the customer’s desired involvement and/or future conversion to retail. Have we had experiences worth telling? If we have, it is because at the “moment of truth” the company exceeded our expectations. To do so, it developed a multichannel strategy, as described by Fernando Rivero, which investigates those moments of truth, audits them and implements best practices. Long gone are the days when a company launched a product and its marketing department was ordered to push it hard to make customers buy it.

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Santiago Solanas encouraged us to consider the question of whether customer experience is more important than customer satisfaction. He showed us that experience impacts the bottom line, and provides multiple opportunities to stand out from the crowd and innovate; and that we are not loyal to what satisfies us, but to what we love. Finally, Professor Jaime Castelló argued persuasively that companies need to innovate, and outlined the features, risks and opportunities of emerging open innovation models. We were also introduced to Joy’s Law, which states that “No matter who you are, most of the smartest people work for someone else.” This e-book is no exception. The path we have followed throughout these 11 chapters will make us more competitive when it comes to creating a unique customer experience. In the last analysis, we need to ask ourselves why we want to design better customer experiences. As we have seen throughout this book, a better experience will make a customer prefer us, encourage him to pay a higher price and even travel a longer distance just to get our product or service, even if he has other available options closer by. But why? We are plainly not rational beings, so if we create the conditions for a person to prefer us, we win a differential value that is difficult to replicate. If we stop thinking about ourselves in order to think about our customers and place them at the center of our organization, we need to stop concentrating on rational features and start focusing on emotional features. 95% of our decisions are emotion-driven - we are unable rationally to account for our response (Zaltman, 2003). This figure alone should suffice to persuade us to make this change: forget about product and processes, think about people. To do so, as we have seen so far, we can activate:

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• People: As we saw in the relevant chapter, the training and, more importantly, the attitude to the brand of the people within the organization is one of the first footholds we need to secure to deliver a distinctive experience to our customers. Our goal is that the people who live and breathe the values of the business from day to day convey this sense of belonging in their interactions with customers. The way forward here is training and incentives. Recognition and empowerment are far more valuable than performance-related pay and bonuses. A purely financial reward is less effective than making people perceive every interaction as vital, giving them the decision-making power to help create better experiences, and recognizing their merit when they achieve these goals. Some hotels allocate a budget to each employee so that she can help build a better customer experience; it is the employee herself who decides when and how to use the money. She has the power to choose; she is genuinely responsible for the experience her customers have. Creating an internal brand that conveys company values, and the way they should be passed on to customers, is a further aid in this respect. Actions to empower employees by making them partake of decisions and the design of their customers’ experience are highly necessary, particularly when the decision-making team includes those people most in contact with customers - they are the ones who know the customer best.

• Processes: Steps taken within companies to implement interactions with customers, and the procedures underlying them, should be redefined. If the customer is to be the focus, a process study analogous to operational bottlenecks should be conducted. Every process should be analyzed, and every step in the process should be measured in terms of what it contributes to the customer. If a step does nothing to enhance the experience, it should be eliminated or minimized. Otherwise, situations will arise that exasperate the customer: a complicated web of procedures that a person must follow to solve a problem that is not his fault. Neither is it good for a business if employees are engrossed in processes that create no value and look at customers from afar, more as an inconvenience than as an asset. • Products and services: Products constitute one of the few physically tangible factors in customer experience. Many years ago, we compared businesses where products are specified by marketing #CEMbook

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and those where products are designed by engineers who operate strictly within the walls of the company and think only about the purely physical attributes of the goods. There are various ways of coping with the asymmetry between what people expect and what they are actually given. One of the most innovative - and now most widespread among brands with highly satisfied customers - is cocreation (also known as crowdsourcing). Allowing customers to participate in some form or another in the creation of products and services creates a bond with them in two key areas: they feel part of the organization, and the outcome comes closer to what they want. Methods include asking customers for help or exploiting the results of analyzing user comments on social networks. We can find out where we can make a contribution by analyzing the consumer’s job map (based on the “job” concept coined by Levitt in 1969), understand the real value we provide, and identify the points of the customer’s own value chain where we can do better. We view this value chain as a set of actions a person carries out to achieve a goal - even if it is just hanging a painting on a wall - and what that person needs to fulfill each step. This is another way of supporting people by offering more value at the subsequent and previous steps of the job map.

• Channels: Reaching people using new forms of communication and sale, product or service delivery, or even after-sales and customer service. It’s less a matter of what is most convenient for us than what is most convenient for customers, in terms of where, how and when. This insight leads to bolstering digital services and widening the range of activities people can perform using their smartphones, interacting with brands how, where and when they want to. Some companies are making the leap from offline to online to broaden the time and geographic window of availability for their customers, while others are making the jump from online to offline, opening physical stores to offer more rounded experiences. Placing people at the center of what we do is a process that requires the entire organization to become involved. It is not just a marketing task. If processes and people are to change, the goal must be pursued by the company’s top management, and the message must make itself felt at every level of the organization. #CEMbook

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acknowledgements First, I should like to thank all the authors. Without their generosity, passion and marketing vision, this e-book would never have come into being. The authors are (in order of respective chapter): Elena Alfaro, Javier Velilla, Hugo Brunetta, Carlos Molina, Beatriz Navarro, Lluís Martínez-Ribes, Enrique Burgos, Fernando Rivero, Santiago Solanas, Jaime Castelló, Jaime Valverde and Borja Muñoz. Special recognition is due to Jaime Valverde, who, in addition to contributing a chapter of his own, has been a mainstay in the design and co-editing of this book. Thanks to Juan Marcos, Samuel López and the whole team at THD Coated for believing in the idea from the outset. Their professionalism and enthusiasm finally took shape in the branding, layout, design and micro-site development for this e-book. Thanks to Candi and the team of translators at Celer Soluciones. It is thanks to them that we can broaden the horizons of this e-book by bringing out an English-language version. I should like to express special thanks to the families and friends of all those of us taking part in this project. Thank you for your encouragement, for your patience, and for the time that this book may have taken from you. Finally, I should like to thank you, “our customer.” Thank you for your interest in this book. Unwittingly, you have motivated us to write it. In the words of Bernd H. Schmitt, relationship is one of the five types of experience that form the basis of experience marketing. It is through the relationship underpinned by this e-book that I invite you to form part of it and share in it with your comments, ideas and experiences. I hope that together we can raise the collaborative and experiential aspects - the essence of this book - to their utmost expression. José Ignacio Ruiz Editor and co-author

authors Elena Alfaro (Madrid, España) Partner - EMO Insights

Elena Alfaro earned a PhD in marketing from the Universidad Complutense de Madrid, awarded cum laude by a unanimous decision of the examining board. Her thesis was selected from among more than 200 papers produced around the world to be read out in front of a panel of Nobel Prize winners at the Campus of Excellence 2007 event. In addition, Elena holds a degree in business science awarded by the Universidad Complutense de Madrid, a master’s degree in marketing and sales management awarded by ESEM, and an executive master’s degree in tourist business management awarded by the IE Business School. Elena Alfaro is a former business development director at the Spanish branch of the CFI Group, the United States multinational responsible for the American Customer Satisfaction Index (ACSI), and a former senior consultant at Daemon Quest. Elena has a long track record in advertising, consultancy and research, having completed projects for more than 30 Spanish and international companies in a range of different industries (heavy industry, pharmaceuticals, transportation, automotive, insurance, consumer goods, banking, distribution and public sector). Today, she is a founding partner at EMO Insights, the first Spanish firm dedicated to emotion and experience research. She helps companies implement customer experience-related practices. Elena is the author of numerous academic articles, a speaker on the international conference circuit, and an associate professor at IE Business School and at ICEMD-ESIC Business School. She was recently named one of the Top Ten Management professionals in Spain, and she has published two books: El ABC del Customer Experience, and her recent work El ABC del Shopping Experience. Blog: Elenaalfaro.com Twitter: @elena_alfaro Linkedin: Elena Alfaro

Javier Velilla (Barcelona, España) Managing Partner - COMUNIZA

Javier Velilla holds a degree in communication science awarded by the Universidad de Navarra, a diploma in advanced political science studies awarded by the Universitat de Barcelona, and a master’s degree in knowledge society awarded by the Universitat Oberta de Catalunya. His career has revolved around brand management, communication and strategic planning. Javier has been a staff writer for Expansión, El Periódico de Catalunya and the Infonomía Group, and has freelanced for various communication and branding agencies. In 2010, he formed the company Comuniza, a consultancy firm specializing in brand strategies and corporate and institutional communication.

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Javier Velilla teaches courses and delivers conferences on branding and communication, and is the academic director of the digital environment business management specialization course of the Business School attached to the Universitat Oberta de Catalunya. He co-hosts the monthly Innosfera innovation event, and is the author of the book Branding: tendencias y retos en la comunicación de marca. Blog: Javiervelilla.es/wordpress Twitter: @javiervelilla Linkedin: Javier Velilla

Hugo Brunetta (Buenos Aires, Argentina) CEO - Nexting

Hugo is a management graduate and holds a master’s degree in strategic management and marketing awarded by the Universidad de Ciencias Empresariales y Sociales at Buenos Aires. He has a long track record in marketing, customer relationships and related management systems. Hugo Brunetta formerly represented Peppers & Rogers Group USA in Argentina and Uruguay, and presided over the first and third Latin American Congress on Customer Loyalty, CRM and Relational Marketing. He is currently the chairman of the Argentine Association of CRM, and the CEO of Nexting, a firm specializing in relationship marketing and CRM and operating in several Latin American countries. Hugo’s passion for marketing and teaching have led him to accept appointments as postgraduate director and professor of relational marketing at the Universidad de Belgrano, the Escuela Internacional de Alta Gestión, UNIBE, and the Universidad Austral, where he teaches classes toward the data mining master’s degree. He is also a professor of relational marketing for the strategic marketing master’s degree at UCES. Hugo Brunetta is an international speaker and the author of numerous articles for business journals and newspapers in Latin America. He is the author of the book Del marketing relacional al CRM, and has a further two books in press. Blog: marketingrelacionalycrm.blogspot.com Twitter: @hbrunetta Linkedin: Hugo Brunetta

Carlos Molina (Madrid, España) Innovation Vice President - IZO

Carlos Molina is a graduate of environmental science, having gained his degree at the Universidad de Alcalá. He is also customer experience-certified by the Strativity Group (NJ, 2008). His career has revolved around customer management strategies for more than 10 years. He is a member of the IZO team, the leading Spanish consultancy firm in customer experience, with a presence #CEMbook

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in Spain and Latin America. He joined IZO in 2001, rising from an executive position to a senior account directorship. In 2002, he became the firm’s Professional Services Director. He undertook the first consultancy projects concerning customer experience in Spain and later led IZO’s international expansion by opening a sales office in Mexico City. Throughout his professional career, Carlos has helped major clients in widely diverse industries to improve their customers’ experience. He has worked with American Express, Banorte, Movistar, Sage, Seguros Bolívar, Sky, Vodafone and Wal-Mart, which has enabled him to acquire a broadly based vision of the creation, management and measurement of customer experience and interactions. Today, Carlos Molina is Corporate Vice President Of Innovation And Practice, and is the senior executive responsible for specifying products and design projects, and for operational certification of all the IZO Group consultancy teams in the various markets where the Group operates. Carlos is a keen blogger, and lectures on customer experience, contact centers and social media at ICEMD/ESIC Business School. Blog: socialmediaexperience.wordpress.com Twitter: @carlos_molina Linkedin: Carlos Molina

Beatriz Navarro (Madrid, España) Marketing Director - Starbucks

Beatriz Navarro gained an information science degree at the Universidad Complutense de Madrid. She was awarded a master’s degree in sales and marketing management by the IE Business School, and has taken a management development program at IESE Business School. Beatriz has a long track record in marketing, sales and communication. She is a former head of World Rally Championship sponsorship at Repsol YPF, and an account director at Bassat & Ogilvy, where she managed accounts for clients including IBM, Kodak and Telefónica. She was head of marketing and sales at the Auna Group, international marketing and communication director at Springfield (Cortefiel Group) and sales director for UNICEF. She is currently the Marketing & Category Director at Starbucks Coffee for Spain and Portugal. Starbucks is a world benchmark for customer experience, and operates 17,000 outlets around the world. Beatriz teaches and speaks on marketing and customer experience at IE Business School and ICEMD-ESIC Business School. Twitter: @BnavarroBeatriz Linkedin: Beatriz Navarro

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Lluís Martínez-Ribes (Barcelona, España) Professor of Retail and Marketing Innovation - ESADE Business School Lluís holds a business science degree and an MBA awarded by ESADE Business School, an MBA in retailing and wholesaling awarded by the University of Stirling, UK, and a certificate awarded in connection with the Colloquium on Participant-Centered Learning at Harvard Business School, United States. Lluís Martínez-Ribes’ career has focused on innovation, on the path to market (commercialization), the final stretch of the market (retail), and the configuration of ways of creating customer preference (marketing). He has pursued this passion in 23 countries, combining it with academic rigor at ESADE Business School and several international universities, including HEC Business School, France, Universidad Católica de Córdoba, Argentina, and Singapore Management University, inter alia. Lluís has completed innovation consultancy projects in the retail and commercialization areas for leading companies, including: Asics, Ausonia, Bayer, Coca-Cola, Goodyear, Danone, Heineken and Zara, among others. He has earned a wide range of accolades and recognition in Spain and internationally for his work on retail research and innovation. He is currently a professor of retail innovation and marketing at ESADE Business School, and a director of the executive master’s degree in marketing & sales at SDA Boconni School of Management, Italy. Lluís is also a partner of m+f=!, retail innovation consultants, a consultancy firm that creates innovative business models in retail and commercialization. Blog: martinez-ribes.com Twitter: @martinezribes Linkedin: Lluís Martínez-Ribes

José Ignacio Ruiz (Madrid, España) Head of Marketing - Orange

José Ignacio studied industrial technical engineering at the Universitat Politècnica de Catalunya and later took an executive master’s degree in marketing and sales management at ESADE Business School, and an International Marketing course at Emory University Goizueta Business School, United States. His professional career and passion has taken shape along three axes: customer service operations, relational marketing, and customer experience. He has held senior positions in all three areas. He started his career as a call center supervisor for customer service operations relating to the launch of the mobile telephony operator Amena (Auna Grupo) in Spain. He later accepted a post as outsourcing coordinator and customer service operations head, leading and developing customer loyalty and retention projects for Orange (France Telecom Group) in Spain and Latin America. He is currently Head of Loyalty Marketing and Customer Base Management for Orange and Yacom (fixed, ADSL and TV ), and an auditor on the Customer Experience Program. #CEMbook

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José Ignacio has a blog and speaks at conferences on topics relating to relational marketing and customer experience. He is a Professor of Marketing for the MBA course run by The European Business School - IEDGE. José Ignacio is the promoter and lead editor of this e-book. Blog: blogdemarketingrelacional.com Twitter: @Inyakiruiz Linkedin: José Ignacio Ruiz

Enrique Burgos (Madrid, España) Chief Marketing Officer - QDQ Media

Enrique Burgos holds a bachelor’s degree in marketing and sales management, and a master’s degree in marketing management, awarded by ESIC Business School. His career has revolved around marketing and sales. He is currently an opinion leader in social media and relational marketing in Spain. Enrique is a former relationship marketing manager at SEUR and director of relationship marketing for digital development at Unidad Editorial, the company that publishes the major Spanish newspapers El Mundo, Marca and Expansión and operates radio and TV broadcasters, including RadioMarca and Veo7. Enrique is currently Chief Marketing Officer at QDQ Media, a firm offering digital solutions for small and medium-size businesses. Enrique Burgos writes a blog, and speaks on and teaches social media and relational marketing at ESIC Business School, ESADE Business School, CEU University and the Escuela de Organización Industrial. He is author of the book Marketing Relacional: Cree un plan de incentivos eficaz and coauthor of Claves del nuevo marketing and Iníciate en el Marketing 2.0. Blog: enriqueburgos.com Twitter: @enriqueburgos Linkedin: Enrique Burgos

Fernando Rivero (Madrid, España) Marketing Director Partner - Tatum

Fernando was awarded a business science degree, with a specialization in marketing, by the Universidad Complutense de Madrid, a master’s degree in marketing management by ESADE Business School, and a master’s degree in marketing for e-commerce by the University of California at Berkeley, United States. Fernando Rivero has more than 15 years’ experience as a marketing and online consultant and trainer. He has led and participated in the design, development and implementation of channel optimization strategies, online and web 2.0 strategy projects, online channel business utilization, and marketing plans for clients including American Express, Banco Popular, Banco Santander, HSBC, ING Direct, and the Ministry of Tourism of El Salvador, inter alia. #CEMbook

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Today, Fernando is a partner and marketing director at Tatum, a consultancy firm specializing in people development, sales and marketing. In addition, Fernando is a director and member of the executive committee of the Spanish Marketing Association, a director of the Marketing Blogosphere Observatory, and a marketing professor at EOI-Escuela de Organización Industrial and CUNEF. Fernando is a regular contributor to MK Marketing + Ventas and Deusto Marketing y Ventas and other publications. He takes part in seminars and conferences, and has co-authored two books: Consultor para la dirección comercial y de marketing and Claves para innovar en marketing y ventas. Blog: Fernandorivero.com Twitter: @Fernando_Rivero Linkedin: Fernando Rivero

Santiago Solanas (Madrid, España) CEO - Sage España

Santiago Solanas holds a degree in telecommunications engineering from the Universidad Politécnica de Madrid, and is a graduate of the Advanced Management Program run by the Harvard Business School, United States. Over the course of his information technology career, Santiago has held various executive positions at major companies including Oracle, Microsoft and IBM. At Oracle, he was head of small and medium-size corporate accounts for Spain and Portugal and then Europe. He was later the mid-market business director at Microsoft Spain, and server brand manager and later PC business head for SMEs at IBM Spain. Santiago spent several years working for Internet companies. He was head of marketing and sales at Adquira, a subsidiary of Telefónica, BBVA, Iberia and Repsol, and sales director at Pymarket, a subsidiary of Banco Santander and BtoB Factory. In the early stages of his career, he held positions at EDS and Procter & Gamble. Today, Santiago Solanas is CEO for Spain and Portugal of Sage Spain, the world leader for business software and management services for small and medium-size enterprises. Sage Spain has earned recognition for its innovative customer experience approach in business-to-business markets, and won the first CEX National Prize for Excellence, among other accolades. Santiago’s passion for teaching led him to accept an appointment in 2003 as International Program Strategic Marketing Professor at EOI Escuela de Negocios. Formerly, he was a professor teaching undergraduate and graduate courses at Universidad Autónoma de Madrid, from 1999 to 2004. Twitter: @santiagosolanas Linkedin: Santiago Solanas

Jaime Castelló (Madrid, España)

Principal and Professor of MBA - ESADE Business School Jaime Castelló holds a degree in economics and business science awarded by the Universidad de Valencia, and an MBA from ESADE Business School. #CEMbook

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Jaime has pursued a career on the sales side of consumer goods companies in Spain and Europe, and rose to senior positions in marketing, trade marketing and sales. He has a long track record in food product marketing for eating leading international brands. He has worked with sales teams at both Spanish and multinational companies and in business-to-business markets, and has managed large multinational distribution accounts. Since 2005, Jaime has been an associate professor at the marketing management department of ESADE Business School, where he was also formerly the principal of the executive master’s degree course in marketing and sales management. Today, he is the principal of the Executive MBA at ESADE Business School in Madrid. Jaime writes a blog hosted by the business daily Cinco Días on innovation, management and new technologies. Blog: Diario Cincodias Twitter: @jaimeESADE Linkedin: Jaime Castelló

Jaime Valverde (Madrid, España)

Social Media Strategist – Territorio Creativo Jaime Valverde is an economics graduate of the Universidad de Málaga, and holds an MBA awarded by the Escuela de Organización Industrial. He took an executive master’s degree in marketing and sales management at ESADE Business School, and an International Marketing course at Emory University Goizueta Business School, United States. Jaime’s career has always been closely linked to his passion: marketing, sales and customer experience consultancy in various industries. He is a former small and medium-size enterprise account executive at Bankinter, business development consultant at Indra Sistemas, and marketing head at Ges Seguros and Sowre Consulting; at the latter company he was also responsible for the pre-sales area. Today, he is Social Media Strategist at Territorio Creativo, the leading social media marketing consultancy. Jaime is a keen blogger, a professor of electronic marketing and new marketing and sales strategies at Instituto Europeo de Posgrado, and an academic contributor at ESADE Business School. Blog: Marketingtakeaway.com Twitter: @mitus82

Linkedin: Jaime Valverde

Borja Muñoz (Madrid, España) Partner and Day Trader – Factor K

Borja Muñoz is a marketing graduate of the Universidad Autónoma de Madrid. He took an executive master’s degree in marketing and sales management at ESADE Business School, and an International Marketing course at Emory University Goizueta Business School, United States. Borja has pursued a professional career in the consultancy and banking industries, always in close connection with marketing. He worked at the marketing department of the Hay Group international #CEMbook

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consultancy firm, and as a financial advisor at Caja Navarra, where he became the head of the bank’s corporate television channel. Today, he is a Day Trader and Partner at El Factor K, a firm engaging in financial and qualified-investor advice with particular reference to the Chicago S&P 500 market. Borja’s passion for marketing, social media and customer experience has encouraged him to blog and work as an academic partner at ESADE Business School. Blog: Marketingtakeaway.com Twitter: @borjatube Linkedin: Borja Muñoz 

#CEMbook

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www.thecustomerexperience.es

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