How Are Organizations Winning Customer Loyalty?

The most elusive yet desired phase in a customer lifecycle that organizations are grappling to achieve, is ‘Customer Loyalty’!

But what does it take for organizations to operationalize customer experience and win the holy grail of business today – customer loyalty?

The following is a transcript of the insights shared by the experts Karthikeyan Natarajan, Global Head – Engineering, IOT and Enterprise Mobility Company, Tech Mahindra, Menaka Menon, Chief Strategy Officer, Pensaar Design, Munish Kanchan, Vice President-Engineering, Noida Site Leader, Pitney Bowes Software India Pvt. Ltd., Nilesh Thakker, Partner & Head of US Operations Company, Zinnov, and Snigdha Ghosh Ray, Head, Billing Portfolio (Product & Technology), PayPal, on operationalizing customer experience, at Zinnov Confluence, 2019.

Nilesh Thakker: Successful companies like Apple, Google, and Amazon have one thing in common – they offer great customer experience, which has further led to customer loyalty.

Though organizations today know that customer experience is crucial, some of the old, traditional companies are not able to adapt.
How has customer experience evolved over time and how do companies adapt to it?

Menaka: We do a lot of work in designing customer-centric organizations, and enabling them to win customer loyalty. Customers today, have multiple options and less patience.

When we were working with a technology organization to transform them into working in a customer-centric way, we recommended a basic shift in mindset. Companies miss out on finding answers to the following questions:

• Why the customer wants a particular product/service?
• What is the deep-rooted insight?
• What is the customer pain point that you are trying to solve for?
• What benefit are you providing?

Every company has a lot of data to analyze. The question is, is it just about analyzing data, or does it require digging deeper?

Organizations like Spotify that are highly customer-centric and experience-driven, analyze big data and generate consumer traits, and arrive upon the persona of an end consumer. Hence, customization is critical. One-size-fits-all doesn’t work anymore.

Nilesh: How do you define customer experience, and how do you operationalize that?

Vijay Khandelwal: There are two ways to look at it. One is with respect to consumers/end users. Digitization has enabled omnichannel, and consumers want the same experience across all channels.

We have empowered the consumers through transparency. For e.g., Initially, to check on the billing status, the customers had to depend on the call centers or wait for the monthly bill, but today, they get updates every day. We are constantly working to deliver the kind of services that consumers expect and are entitled to.

Now, coming to the other segment of customers that we work with – e.g., telecom operators. Over the years, it has been cross-functional learning for us, and we are understanding from an operations point of view as to how our customers can be empowered to address the needs of the end consumer.

Initially, we use to freeze the solution which will take a year to be deployed. Over this time, a lot of requirements change, but it was difficult for us to alter the solution accordingly. But now with the advent of technologies like Microservices, our deployments have become more frequent and customer-centric.

Snigdha: Customer segmentation techniques have seen a major shift. Initially, our segments were based on demographics – small business, mid-sized market, and large enterprise. We customized the solutions that fit these three segments. But we have learned that demographic segmentation is not the best segmentation technique. We need to analyze the motivations, aspirations, and the associated behaviors of the end consumer.

Hence, we started creating the micro-segments. We tried to understand what the businesses were trying to do – Are they trying to set up? Are they trying to start-up? Do they have a lot of technical knowledge? What kind of integrations would help them? Are they looking for simple solutions? Are they experimenting in the market? Or are they in an aggressive-growth zone where they despite wanting to invest more in the business and understand their consumers better, are not able to invest in an IT workforce that would do CRM analytics for them?

Take for instance, a global enterprise in a steady-growth phase; their core motivation is operational efficiency. Then there are individual sellers like housewives who want to sell their products and are serious sellers. So, each program that we execute is far more customized and personalized to suit the needs of these microsegments.

Nilesh: Pitney Bowes, a 99-year-old company, which was making stamp machines, is now a data company. How do you make sure that your employees understand the customer and bring about that change?

Munish: Companies that have not adapted to change have not sustained. So, the key thing is, organizations need to adapt to change, to sustain.
An iconic 1920 invention postage meter is still going strong, giving us 3.4 Bn USD annual revenue. So, what has changed?

The client journey mapping exercise has changed. This includes various dimensions such as client experience, innovation, processes, performance management; we moved from an on-premise model to a SaaS-based cloud model. We use IoT sensors that get us real-time data. We were able to run predictive algorithms using this data and position numerous benefits to our customers.

Partnering with Google, we got an open Android ecosystem on all our mailing meters which helped us leverage the advantage of the open system and make use of the applications.

One use case of leveraging digital to provide the best customer experience is the ‘auto-healing’ device. In case of a paper jam or an ink cartridge issue, the machine will try to heal automatically. There is a help section that aids the user to resolve the issue, and a chat section to address the queries, eliminating the need for the user to contact the client care. This has increased our NPS (Net Promoter Score) and Customer Satisfaction score.

Nilesh: Give us examples of unique cases of customer experience. How do you enable your team to understand and empathize with your customers?

Karthik: We had a purpose defined which was to solve complex engineering problems. When we reviewed our goals, we understood that we are not here to solve complex engineering problems, but to enhance customer experiences and enable our customers to be future-ready.
Given the fact that we work on car components, we worked on sensors that tracked the friction coefficient of the tyres and warned the users on unsafe road conditions and also indicated the need for tyre-replacement. This is an example of how we delivered safety as a customer experience.
We also have examples of how customers vividly remember bad experiences. This makes it imperative for us to work with our design experience teams and ensure an integrated and seamless customer experience.

Nilesh: How do you measure customer experience?

Menaka: Different organizations use different metrics to assess customer experience. NPS is one metric that is used across industries. But, NPS can be limiting as it comes from quantitative data. Customer-centric organizations try to build qualitative metrics as well. Are your customers truly engaged with your product? How do you measure engagement? Are customers renewing your product? Is there a way to create a moment of value for your customer? These questions help add a qualitative dimension to measuring customer experience.

Assessing the customer journey, identifying dropout points and analyzing the reasons for the dropout, are some measures that can be taken to add meaningful insights whilst measuring customer experience.

Nilesh: How do you identify a good customer experience?

Vijay: One of our customers employs a metric called ‘Customer Frustration Index’ to understand the pain points of the customer, and the index is tracked every day by the management. Focusing more on what doesn’t go well rather than what works well with respect to customer experience, is something that we consider as a best practice in tracking customer experience.

Snigdha: One efficient practice to assess customer experience is to get the feedback during the transaction. It is emotional, qualitative, and is also influenced by the recency effect. To extract meaningful insights from the data, the data must be mined by employing various tools and machine learning techniques.

Client-driven indicators are good indicators. There are also leading indicators – for e.g. how many new consumers are signing up with Paypal? How many consumers are dropping off at various points of the journey (funnel analysis)? What was the last time a consumer did a transaction on Paypal? This data gives us insights on whether a recently launched product, or an optimization initiative has worked well or not.
Employing scientific techniques to validate our assumptions is also critical in ensuring good customer experience.

Nilesh: There are cases where the business might want to have a feature/service because it is profitable, but the engineering team wants to remove it. How do you solve for such problems?

Munish: We have customer experience engineers, a horizontal BU that ensures compliance, and a market intelligence team to understand the pulse of the consumers. Despite all these efforts, it was difficult for us to gauge what the customers wanted.

In our shipping business we have employed Optical Character Recognition systems that captured the addresses and fed them into our CRM systems. It worked well with our clients, and we wanted to better the experience. We introduced the voice engine to replace the OCRs. We had a test-run and rolled it out. A few issues that surfaced were:

• The customers did not want to talk into a device
• There were problems in comprehending various accents
• The latency invalidation of the addresses by the API

Through this experience, we learned that technology should be employed to enable user-friendliness rather than increasing complexities.

Nilesh: Is it important for the engineering team to be close to the customers or is proximity not a must with respect to designing customer experience?

Karthik: It is important for us to understand the customers’ customers – be it their demographics, preferences or lifestyles. We make our engineers travel to the customer’s place and join the call center calls and enable them to understand customer complaints.

The last 100 years were ruled by-products, but today it is about providing the best customer experience, doing it consistently, and making it an addictive experience. This makes it essential for the culture of the organization to be aligned to the end-user.

It is the age of digital media and grapevine where ‘word of mouth’ has assumed unprecedented potential to make or break businesses. Customer experience is clearly a key differentiator and a convincing competitive advantage, and operationalizing it has become more critical than it has ever been.