Omnichannel Commerce & The Customer Experience - Featuring Don Peppers

COPYRIGHT © 2016. ALL RIGHTS PROTECTED AND RESERVED. 1
Beyond CRM:
Omnichannel Commerce and
the Customer Experience
16 March 2016
Singapore
@DonPeppers

2
New technologies rapidly undermine old ones
What do Coca-Cola and
J.P. Morgan Chase have
in common?
Voice-mail is so…
20th Century!

COPYRIGHT © 2016 PEPPERS & ROGERS GROUP|ALL RIGHTS PROTECTED AND RESERVED |
3
Disruptive innovations are hazardous to
every existing company’s health

Rob Nail
CEO and Co-Founder
Six Qualities Required Of a Digital CEO
Leading a Disruptive Start-up:
1.  Visionary customer advocate
2.  Data-driven experimentalist
3.  Optimistic realist
4.  Extremely adaptable
5.  Radically open
6.  Hyper-confident
Source: Exponential Organizations (2014), Salim Ismail, et. al.

1.  Visionary customer advocate
Now think about what this actually means
for today’s business environment
It means that customers are
the biggest disruptors of all!

The largest hotelier in the world today is…
More than 1.5 m listings in 34,000+ cities in 190 countries
$25b valuation today, 5X bigger than Hyatt’s
1500 employees (97% fewer than Hyatt)
Airbnb’s only real asset: CUSTOMERS

Customers now create more value, more quickly,
than any other single kind of business asset
By 2010 less than 50% was
tangible. >30% was in customers.
TangibleIntangible
In 1980 nearly 100% of the S&P 500
market cap was tangible assets.
Tangible
Intangible
Source: Grow (2011), by Jim Stengel

Strategy. Execution. Results.
The Culprit: Moore’s Law
Uganda has more mobile phones than lightbulbs, and more
Indians have access to a mobile phone than to a private a toilet
British scientists are developing an “appetite app” – a
Bluetooth-enabled microchip implanted near the vagus nerve
Every 20 years, computers get a
thousand times more powerful
In 1999 it cost $15m+ to do an online company
start-up in Silicon Valley. Today it costs ~$150K

Consumers arecompletelyinformed, all bythemselves
Customers
demand real-time
interaction with
the companies
they buy from
Sales, service andmarketing have been
smashed together into the
“customer experience”
The Culprit: Moore’s Law

Technology changes the dimension
of business competition
Product Centricity
Market share
Customer
Needs
Satisfied
Customers Reached
Share of
customer
CustomerCentricity
Treating different
customers differently
Relationships
are required

“Executing true 1-to-1 marketing at scale has been
shown to lift overall revenues by more than 5%.”
- SAP Voice, September 2015

1-to-1 marketing ≠ Random acts of service
Moral of the story:
If you don’t remember your customers, then even the
most well-intended service can be worse than nothing!
What one business hotel taught me
with their “VIP Guest” program

Technology changes the dimension
of business competition
Product Centricity
Market share
Customer
Needs
Satisfied
Customers Reached
Share of
customer
CustomerCentricity
Managing each
customer’s experience
Managing the
public’s perception

How a different hotel managed
my customer experience…
“Customer experience is the greatest untapped
source of both decreased costs and increased
revenue in most industries.”
- Harley Manning, Forrester analyst

So what is a “good” experience?
In a word:
Frictionless

Satisfaction and loyalty are not highly correlated
Source: The Effortless Customer Experience, 2013
However, customer dis-loyalty is highly
correlated with a poor customer experience!
The secret to customer loyalty is a frictionless
experience that removes obstacles

The secret to customer loyalty is a frictionless
experience that removes obstacles

Forrester’s Customer Experience Pyramid
Meets need
Easy
Enjoyable
Source: Outside In, 2012

The upside and downside of CX
Source: The Effortless Customer Experience, 2013
Product experience
Likelihood of telling a friend
Customer service
experience
Likelihood of telling a friend
Eliminate the friction in
your customer service
Delight the customer
with your product

Meets need
Enjoyable
Easy
The upside and downside of CX
This is where
you want to be
But this is where
you have to start
Eliminate the friction in
your customer service
Delight the customer
with your product

Like electricity and water, customers will
always seek the path of least resistance
Reliable
Valuable
Relevant
Trustable
Four qualities in a truly frictionless customer experience:

Competence
Of course, it’s always
been important to have
your customer’s trust
Good Intentions
Doing things right
Doing the right thing

But Moore’s Law has a corollary…
Every 20 years, computers get a
thousand times more powerful

Every 20 years, we interact a thousand
times more with others!
…Zuckerberg’s Law

The average American teenager
sends 180 text messages every day

The more we interact, the
more trust we demand
Trust makes interactions efficient
Interactions generate transparency

A new standard: Extreme Trust
Proactive trustworthiness
It’s no longer enough simply to refrain from
cheating or deceiving customers
“Trustability”

Competence
Good Intentions
Doing things right
Doing the right thing
Proactively
Extreme Trust
“Trustability”

Extreme Trust characterizes the most
successful digital commerce companies…

What set of tasks does a business have
to undertake to be successful?
Product Centricity
Market share
Customer
Needs
Satisfied
Customers Reached
Share of
customer
CustomerCentricity
Managing each
Managing the

Product Centricity
Customer
Needs
Satisfied
Customers Reached
Managing the

Customer
Needs
Satisfied
Customers Reached
CustomerCentricity
Managing each
Omnichannel technologies
Data management and analytics
Customer service and CRM
Product content management
Order management
Supply chain integration
Enterprise resource planning

Customer
Needs
Satisfied
Customers Reached
CustomerCentricity
Omnichannel technologies
Data management and analytics
Customer service and CRM
Product content management
Order management
Supply chain integration
Enterprise resource planning
Front-end
processes
Back-end
processes

Delivering a frictionless CX is hard!
Information integration and accessibility
Configuration of organization, including
structure, incentives, and accountabilities
Orientation: attitude and culture

Actions to deal with these obstacles:
Capabilities Obstacle
Technology upgrade and integration, omnichannel interaction,
customer analytics, knowledge management, lead generation
and conversion process improvement…
Assessment, roadmap, customer journey mapping,
workforce management, metrics, incentives…
Change management, executive coaching and training,
corporate culture transformation, social collaboration tools…
Alignment Obstacle
Mind-set Obstacle

“Omnichannel” can refer to several issues:
“Omnichannel”
ü  Technologies that work well with each other, so that
customer interactions are more frictionless
ü  Interactions from a company’s marketing, sales, and
service channels, fully coordinated with each other
ü  Best definition:
Seamless interaction from the customer’s perspective,
across whatever channels the customer chooses

In most businesses today, the vast
majority of inbound customer calls
are preceded by a web site session!
“Omnichannel”

Four ways to integrate the online CX
with the contact center or retail CX
Proactive chat
“Call Me” button
Temporal number
Click to call

…at a telecom client
Managers were tasked with delivering higher
NPS numbers
But when financial results fell off during one
quarter, threatening profit margins…
…the finance department unilaterally decided
to eliminate nearly all refunds to customers!
Alignment Obstacle
Problem: How to align non-financial customer
metrics with corporate financial metrics

Computers will never do everything
Mind-set Obstacle

Routine and non-routine customer experiences
HighLow
Consumer
Engagement
Process Standardization
High
Low Business as
usual
Predictable
customer
lifecycle events
Surprises, trials
and tribulations
Threats to cost
efficiency
Employees making
non-routine decisions
Effective decisions
require employees to be:
v  Engaged
v  Enabled
High
High
Low
Low

The real secret to a successful
digital business…
The
“Mechanical Turk”

There has to be a person in there
What you want:
Self-organization
Your employees need to be
Engaged in their work and
Enabled to accomplish their mission

What one Australian company told me
When a customer problem is encountered for
which there is no good policy or solution…
What you want:
Self-organization
…a customer service rep can devise their own
solution and get agreement from any other rep!

“Culture eats strategy for breakfast”
- Peter Drucker (1909 – 2005)

At Toyota, culture is a deliberate act
Every worker, no matter how far down,
is a “knowledge worker”
Everyone is asked to think creatively
about improving his job

The “Toyota Way”
Kaizen. Continuous improvement
Challenge. Don’t view problems negatively,
but as a way to improve performance
Teamwork. Company's interests first
Genchi genbutsu (GG). “Go to the source”
Respect for others. Express differences,
respectfully
“If two employees always agree,
then one of them is redundant”

The “Toyota Way” depends on trust
Management trusts employees, and employees trust
management and each other
Suppliers trust Toyota to “do the right thing”
A 1997 fire at a Tier One supplier threatened to shut
down Toyota’s production
But then a network of suppliers fixed the problem
themselves, with little or no direction from Toyota!

Strong cultures inspire workers to want to
provide a better customer experience
What I heard from a marketing
exec at one hotel chain…
And motivated workers themselves can often
overcome alignment and capabilities obstacles

Peppers & Rogers Group
Customer strategy consultants
with offices around the world
1to1 Media
Magazines, newsletters,
research white papers
@DonPeppers
www.bit.ly/donpeppers
See all Don Peppers’ posts on Linked In and follow him at:
To subscribe to the “1to1 Weekly” email
newsletter: dpeppers@1to1.com

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