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Customer experience management must be built on trust, SAP exec says

Today’s companies have a range of tools and technology they can use to create a sense of trust with their customers, according to a new book on customer experience management (CEM).

Today’s customers have more information at their fingertips and demand a better customer experience, according to three SAP CRM executives who have written a new book on customer experience management (CEM). While an effective CRM strategy is an important part of that CEM plan, things like logistics and payment processing play critical roles as well, according to authors Vinay Iyer, Reza Soudagar, and Volker Hildebrand. sat down with Iyer, a vice president of CRM global marketing at SAP, to talk about The Customer Experience Edge: Technology and Techniques for Delivering an Enduring, Profitable, and Positive Experience to Your Customers, what companies need to know about creating a better customer experience and why he thinks the four “pillars” of trust are important.

Why did you and the others write the book?

Vinay Iyer: There’s a current industry trend [for companies] to become more customer centric -- to refocus their business activities toward the customers’ needs.

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Read and download Chapter 2: The Four Essentials of a Profitable Customer Experience

In a 2010 survey of over 3,000 CEOs, IBM found that the No.1 topic at the board level was getting closer to the customer. The challenge is how do you translate that desire to the operational level, where you not only treat your top 100 customers very well, but you also treat your 1,000, 10,000, 100,000 customers just as well -- and also be profitable. We’re trying to bridge the gap between business vision and reality and also make the case for how technology can play a key role in [deploying] that transformation in a scalable and profitable way.  

How is that customer experience changing? 

Iyer: The way consumers behave now is vastly different from how they behaved five, 10 years ago. We have more information on our hands. We can access information on the fly, on our phones. Customers today are way more informed and way more empowered.

What companies are realizing is they’re no longer in control of the conversation with the customer. They’re no longer in charge of their brand image. In this dynamic, and along with things like increased global competition, it becomes difficult for companies to differentiate themselves and offer superior value to their customers in order to attract and retain them.

Right, the book goes on at length about companies using technology to differentiate themselves, but how do they do that effectively?

Iyer: There are four key pillars that we’ve identified through our research and customer interviews. Those four pillars are built around the concept of trust. One of those is reliability -- what are the promises you make to your customers and how reliably do you meet those expectations? The second one is relevance -- how well do you know your customer’s likes and preferences? Present them with relevant marketing, billing or supply chain information, instead of a lot of junk. The third one is responsiveness. In a world where we all want instant information and an instantaneous response, how well are you equipped to listen to those customer demands and react to them? The need for speed is very critical. The last pillar is the element of convenience and how do you make information accessible, anytime, anywhere, any channel.

Can you cite some practical examples?

Iyer: Let’s take reliability and the example of Cemex, a cement manufacturer. One of the key [things they’ve focused on is] accurately placing and taking orders. The value proposition is delivering the right quantity at the right time at the right location. If you deliver too early, it becomes an issue of keeping stock for the customer. If you deliver it too late, it becomes an issue of wasted time and money. It’s all about logistics. When it comes to Cemex delivering a superior customer experience, one thing they do is take the right order, bill the customer for the right amount and manage the process. 

If I can give another example for convenience, there’s a retailer in Switzerland called Coop. It’s a grocery retailer and they’ve found that Switzerland has one of the highest iPhone penetrations [in Europe]. They wanted to make it convenient for consumers to place orders during their commute times, instead of having to do it on their desktop at their home or their office. You pay for the groceries and select the delivery window within which you want the groceries delivered to your home. Making this kind of price commitment, quantity commitment and delivery commitment requires the right deployment of the right combination of solutions including CRM, logistics and payment processing.

Your book also talks about the right combination of traditional and disruptive technologies. What did you mean by that?

Iyer: In today’s world, with the hype of social media and mobility and so on, people rush into something because everyone else is there. But they often don’t think it through. But let’s assume you ran a successful promotion on Facebook. Like you have 100,000 units of something, but maybe 200,000 people have responded. Then you’ve disappointed 100,000 people.

Disruptive technology is important. But before you embark down that path, look at the foundations. Nail down business processes, your execution and capabilities. Creative use of disruptive technologies is critical, but being able to deliver on the promises you make is even more important.

What about being able to scale and sustain that customer experience?

Iyer: It’s easy for companies to say “hey, we know who our top 100 or 1,000 customers are and we can put a plan in place that treats those customers in a superior way.” The reality is that the word has changed. All customers have expectations about what they need.

You have to scale the level of promises you make across your entire customer base, across your ecosystem or retailers, et cetera. There’s a need for leveraging technology, because only technology has the power of reach and being able to deliver the right information at the right time. If you have to do all of this in a manual way, which companies can do for a selected population of their customers, it suddenly becomes very expensive, and suddenly you don’t have enough resources to do that.

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