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Connected Customer Experience

Why B2B Capital Equipment Companies Should Not Automatically Link Performance Pay To Satisfaction Metrics

Author Sam Klaidman on Apr-23-2019

This article is guest post from Sam Klaidman. He is the Principal Adviser at Middlesex Consulting

Many business leaders link their employee’s variable compensation to satisfaction or loyalty survey results with a view to improving the customer experience provided by their company or just to game the survey results.

In this article I assume the business leaders actually want to improve their customer’s experiences.

Why you should not automatically link survey results with variable compensation?

The fundamental reason is that metrics and compensation should only be linked to influence behavior that will result in the business achieving its desired business outcomes.  Some of these outcomes are increase profitability, grow customer lifetime value, and mitigate business risks.

With many capital equipment products the cost of changing brands is so high as to make the likelihood of change non-existent and therefore the impact on the desired business outcomes also non-existent.  

B2B capital equipment products generally have very high switching costs.  For example, airlines that fly the Boeing Max 8 or 9,  or have them on order, cannot easily stop purchasing new ones as their needs grow.  Crew training, maintenance and logistics, and long deliveries from Airbus mean that existing users and customers who await delivery will be flying the Boeing planes from many years.

When a company has selected brand X products for one manufacturing site and decides to increase capacity by duplicating the production line at another location, they will usually buy the same equipment; it will reduce startup time and costs and make it easy to benchmark each facility against the other.  Intel has used a practice it calls Copy Exactly! for many years to deploy each new generation of manufacturing equipment.  They not only duplicate equipment but also use the same exact paint (color, manufacturer, and type) and flooring so they can troubleshoot production problems by eliminating everything that is the same across their factories. Standardization overrides experiences.

Another useful data point.  In their article “CX Metrics Aren’t Customer-Centric, But Should Be. Learn How”, Peter Fader and Sarah E. Toms describe how companies with high switching costs break their customers into three segments based on any CX metric.  The three segments are:

Segment Name Hostile Hostages Neutral Hostages Caged Loyalists
CX Metric Bad Neutral Good

Either your customers are hostages or are at least caged.  In either case, they have to be extremely upset to even consider switching, if it is at all possible.

You might be wondering “what about referrals?”  In my survey work, I find many people who rate a company 9 or 10 on the NPS question but never actually refer.  There are many reasons why but their behavior doesn’t match their intent.  I have also found people who rate a company with a 0 or 1 NPS score who referred the company to associates.  When I asked about the difference, I heard things like “They were not good for us but would be perfect for my friend.”  The takeaway – intent does not always match behavior.

Why improve the customer’s experiences with your company?

Even though your B2B capital equipment customers are likely locked-in to your products, you should still work to improve all the experiences you create. There are still the referrals (some people actually do what they say) and when the current product reaches end-of-life, they will make a new purchasing decision. They will still purchase the product they believe is the best for their intended use but, if the final choice between you and a competitor is close, service experience may be the deciding factor.

Where to invest your CX money?

You should invest your time and money motivating your teams to improve on the actions that will help your customers extract the most value from your products because this is why they originally purchased from you. Their business outcomes are much more important than how they feel about the intangible interactions with the service engineers. Areas to invest in include:

  • Improve product ease of use and reliability
  • Minimize call center handling time so invest in a knowledge base and chat
  • Add more value to your contracts and/or reduce the price
  • Help the customers improve how your product fits into their overall operation
  • Status tracking and notifications
  • Become proactive with predictive maintenance
  • Increase spare parts holdings to improve first call fix rates
  • Employee training – both hard and soft skills
In other words, with B2B customers using products with high switching costs, fixing down equipment is much more important then employee empathy for their situation.
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Why The Customer Experience Should Be At The Heart Of Marketing and Selling Services

Author Michael R Blumberg on Feb-13-2018

Consumers now reside in a digital world where instant gratification is the new currency. The rise of Spotify, Netflix, Amazon Prime Now and Uber ensures they can avoid any pain points and get what they want and when they want it in a new on demand economy.

However, the ‘we want it now’ consumer continues to evolve and now expects a personalized experience too. If online services know what their favorite movies, TV shows and music they like, surely retailers will know what they like too.

Tech savvy users are looking for businesses to lead the way with new technology that continues to treat them as unique individuals. A generic marketing e-mail with their name pasted at the top in a different font is no longer going to cut it.

The evolution of the customer experience has even given birth to the phrase Martech which is the blending of marketing and technology. Industries across multiple industries are all facing the same problem as the digital transformation of everything gathers pace.

Keeping up with all the latest trends across the digital landscape is no longer an option it should be compulsory for anyone serious about the future of their business. The good news is that you are not alone and the fact that 76% of field service providers were reportedly struggling to achieve revenue growth should be the only wake-up call that you need to take this seriously.

However, there are numerous field service winners here too. For example, in 2017 there are many organizations providing seamless digital experiences and delivering faster resolution times. It is often said that technology works best when it brings together and here is a selection of great examples.

The Value of Improving the Customer Journey

Personalization is much more than just another industry buzzword but a reaction to the demand driven by consumers. Providing the right experience at the right time is an art that many are still learning to master. But, the ability to increase 15% percent of revenue and lower the cost of serving customers by 20% is a language that every member of the boardroom will understand.

Do Not Underestimate the Importance of Customer Service

According to Microsoft, an incredible 97% of consumers advised customer service is critical to their choice or loyalty to a brand. But it’s also crucial to remember how this is across self-service, social, phone, mobile and a plethora of devices.

The divide between offline and online is disappearing. No matter what device we have at hand, wherever we are located and if we are using our keyboard, touchscreen or even voice, the experience should be the same.

Poor Customer Service Will Be Punished

It is well understood that it costs businesses more to acquire a new customer than it does to keep an existing one. Savvy consumers will happily shop around for the best deal. Ironically many companies seem to treat their current clients with contempt arrogantly and assume they will stay with them regardless.

The reality here in 2017 is that 64% of consumers have switched providers in at least one industry due to poor customer service according to Accenture. We no longer suffer fools gladly, and a lack of patience or frustration will ensure most consumers will switch providers after only one negative experience.

In this digital age, loyalty must now be earned rather than taken for granted. The only question that remains is what are you doing about it?

Time Is Money

An Amazon Prime account makes one-click ordering and delivery within 2 hours a reality. Maybe, we shouldn’t be too surprised how our time is becoming increasingly valuable. Forrester recently advised that 73% of consumers will happily admit that their time is the most important factor where businesses need to focus.

Pain points such as long-winded automated phone menus, cumbersome online chats or waiting around between 9 am and 6 pm for somebody to call you will no longer be tolerated. Organizations need to manage the expectations of their customers and remove friction to offer a truly simplified service in a timely manner.

Make Way for The Internet of Things (IoT)

With 50 Billion internet-connected devices by 2020, the time to take IoT seriously is right now. Consumers do not care about your product roadmaps; they now expect the same experience with any of their devices.

There is already a long line of competitors offering similar services. Failing to keep up will leave your brand looking like a tired Sears or J. C. Penney store that failed to keep up with the speed of hyper change across the digital landscape.

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What does Connected Customer Experience mean?

Author Eric Marlan on Dec-20-2016

Connected Customer Experience means:

  • Knowing who your customers are, understanding how customers use your products, and being there when customers need help
  • Making it easier to do business with you, implementing customer-centric processes, and eliminating frictions and gaps in the customer interactions
  • Improving customer satisfaction, retaining more of your customers for long term and maximizing the customer lifetime value of the loyal customer base
  • Supporting customers across all channels, devices, and screens, bridging the silos of knowledge, applications, and systems, and connecting all service interactions throughout the customer lifecycle

We look at five ways Connected Customer Experience enables you to build a sustainable competitive advantage and maximize customer lifetime value.

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Why is Warranty considered a cost center but Marketing is not?

Author Eric Marlan on Aug-26-2016

Companies spend on average 11% of revenues on marketing and 1.5% of revenues on Warranty. Despite the higher cost of marketing, why is warranty considered a cost center, but marketing is not.

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Orchestrating the Own stage of Customer Journey

Author Eric Marlan on Jun-23-2016

Gartner has identified that the new buyer’s journey encompasses three simple, but intimately related, parts: Buy, Own, and Advocate. In the article "Improve the Customer Experience by Knowing the (New) Customer Journey, Gartner analyst explains "Today’s customer buying journey spans buying, owning and advocating. It is progressive so that if brands do the right thing in the buy and own stage, they earn customer advocacy."

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