Nailing customer obsession in the tech industry | Turtl
Why tech companies can't hang around when it comes to putting the customer at the center of what they do, and how they go about doing it.
Nailing customer obsession in the tech industry
Why and how to put the customer at the heart of your organization
The CX race is on
The tech sector has led the way in customer experience, but there's no room to slow down
Welcome to the experience age
The rise of customer-obsession in the technology sector
The tech industry has always led the way when it comes to innovations in customer experience. Brands like Apple, HP, and Dell have repeatedly disrupted markets with a relentless focus on the needs of the customer. Steve Jobs famously highlighted the importance of customer experience at the Apple Developer Conference way back in 1997, saying: “You have to start with the customer experience and work backward to the technology. You can’t start with the technology and figure out where you are going to try to sell it.”
The Experience Age is defined by greater complexity, omnichannel being the only channel, technology becoming more human and, in turn, brands being more important than ever
Former Global head of marketing, personal systems, HP
Silicon Valley pioneers like Apple may have led the way, but the stakes have been turned up a notch in the last few years; Markets have become increasingly saturated, disruptive startups like Amazon, Slack and Netflix have ruthlessly challenged the status quo, and emerging technologies such as mobile, AI, machine learning and data analytics have transformed consumer expectations and engagement. Companies are in a race to digitize their operations from top to bottom, ramping up the pressure to deliver a seamless CX.
How central is the customer to your company culture?
- We're fully obsessed
- We're working on it
- What's the customer got to do with it?
It is no longer enough to provide a good product and a smile; consumers today expect constantly connected, hyper-personalized, interactive experiences, delivered directly to their consciousness, wherever in the world they happen to be. Give them what they want, and they’ll keep coming back, spend more money and introduce you to their network. Disappoint and they won’t delay in seeking out another option – making sure to tell their friends in the process.
of companies regard themselves as very advanced at CX
Source: Econsultancy/Adobe, 2019
Alex Craddock, former global head of marketing for personal systems at HP, describes this shift as a transition into a new age, following the Industrial and Information Ages that came before. “Now we have transitioned to the Experience Age where the experience is key, in everything across both our physical and digital lives,” he says. “We believe the Experience Age is defined by greater complexity, omnichannel being the only channel, technology becoming more human and, in turn, brands being more important than ever and our experiences becoming more personal.”
So, why have tech brands become so obsessed with customer obsession and how can they make a success of it?
Why customer obsession pays
Four major benefits you can use to help build your case
why customer obsession is a no-brainer
Four reasons why customer obsession is a no-brainer
Customer obsession has rapidly risen up the business agenda in recent years, with more than two-thirds of marketers now saying that their business competes solely on the basis of CX. And for good reason, with a recent Adobe report showing that organizations classified as ‘very advanced’ at customer experience are almost three times more likely than their peers to have exceeded their business goals by a significant margin.
“In the Age of the Customer, customer-obsessed businesses have a competitive advantage,” says Maria Martinez, former President of Customer Success Group and Success Cloud at Salesforce. “Now more than ever, it is imperative that customer experience is top of mind: Businesses that do not put the customer first will struggle for relevance in an increasingly competitive market.”
So, what exactly are the benefits of a customer obsession strategy?
Customers who feel well supported and understood by a business are more forgiving and less likely to churn
1. Consumer loyalty
Thanks to the internet, customers today have greater choice about the brands they engage with, and the subscription service model that has become so prevalent means that if they’re dissatisfied with any aspect of the service they receive, they aren’t scared to vote with their feet. In fact, according to PwC, one in three consumers (32%) say they will walk away from a brand they love after just one bad experience - meaning there really is no margin for error.
On the flip side, customers who feel well supported and understood by a business are more forgiving, less likely to churn and more likely to spread the word and endorse your brand to others. Research by Qualtrics found that positive experiences correlate strongly with both repurchasing and Net Promoter Score, which measures how likely respondents are to recommend a company.
“Companies today need to create lifetime customers, customers that keep coming back, that become brand advocates,” says Chief Marketing Officer for Oracle CX, Des Cahill. “So, all the experiences from marketing to sales to service to commerce, all those experiences must be integrated and knitted together and personalized, to deliver on the promise of the brand.”
Social media and peer review sites mean that consumers today are also more suspicious of the brands they engage with and have the ability to shop around, do their research and look beyond the shiny marketing messages. Brands that show customers that they live up to their promises and do what they say they will, are therefore at a huge advantage, commanding higher spend and, again, that all-important loyalty.
“Customer experience is a company delivering on its brand promise,” explains Cahill. “It's the totality of all the experiences that a customer has, from the moment they start getting advertising from your company to when they buy your product when they use your product and they get service in your product.”
The trust gained through consistently great customer experiences also encourages customers to try out new products, supporting greater experimentation in your business and your offering, something that is critical for tech companies to remain successful. Furthermore, customers who have confidence in your brand are more open to greater engagement, with 63% of U.S. consumers saying they’d share more information with a company that offers a great experience.
Laurie Aquilante, Director Customer Marketing at Hubspot, says: “We’ve all heard the old adage that it costs more to acquire a new customer than it does to retain an existing one. It is much easier to sell to your existing stall base than it is to go out and get new customers. They already know your brand and trust you. If you’ve delivered a great experience throughout their journey, that becomes a much easier conversation. So now your customers become a source, not only of retention but of additional revenue as well.”
3. Higher spend
The upshot of all of this, of course, is the impact on the bottom-line, and research shows that customer obsession doesn’t disappoint. PwC estimates that delivering a great customer experience could equate to a 16% price premium on products and services, with 43% of all consumers saying they would pay more for greater convenience and 42% for a friendly, welcoming experience. And crucially for the tech sector, Qualtrics found that software companies actually have the most to gain from customer obsession, with figures showing that, for those with revenues of $1bn, just a modest boost in CX would lead to a $1bn increase in new revenue and a $347m increase in retained revenue.
If we’re able to increase client satisfaction by five points on an account, we see an extra 20% in revenue, on average
Diane Gherson, Head of HR at IBM
4. Employee engagement
Finally, customer obsession can also create its own virtuous circle, by influencing how your employees feel about their role and therefore the quality of service they provide. While a customer-centric culture isn’t possible without happy and engaged employees, empowering employees to deliver a customer-led experience can in itself drive engagement, motivation, and retention, with research finding that companies with above-average CX have 60% more engaged employees. And if your employees are engaged then they’re more likely to deliver a great customer experience, so it’s a win-win.
“We’ve found that employee engagement explains two-thirds of our client experience scores,” says Diane Gherson, Head of HR at IBM. “And if we’re able to increase client satisfaction by five points on an account, we see an extra 20% in revenue, on average.”
It’s easy to see why those organizations that have pioneered customer obsession have reaped the rewards in terms of unwavering brand loyalty, consumer trust and market-leading, sustainable profits. But seamless customer experience is no longer a nice to have, or just for those with big budgets to invest. As competition gets fiercer and customers become ever more discerning, it is critical for business survival.
The blueprint for a customer-obsessed business
The steps you need to take<br> to make this kind of culture a reality
The case for customer obsession is clear but executing a customer-centric strategy across a large, complex organization requires vision and long-term commitment.
Delivering a seamless customer experience that doesn’t just meet, but exceeds expectations, encompasses every department and team, from product development right through to marketing, point of sale and crucially, nurturing ongoing relationships. What’s more, with constantly evolving technology capabilities, a growing mountain of data and increasing consumer demands, the goalposts are constantly on the move.
While there is no one-size-fits-all route to success with customer obsession, there a few core elements that all CX leaders have in place:
1. Set the vision from the top
Customer obsession must be driven from the very top, through a vision and value proposition that clearly articulate what top-class customer experience looks like and why it’s important while defining standards and expectations for every employee in the business. Implementing a customer-centric strategy requires a significant culture shift, and this kind of wholesale change can only happen through an authentic, long-term commitment at the board and executive level.
HP’s former global head of innovation and customer strategies, JC Quintana, explains that responsibility for CX can’t just fall on the marketing function. “We’re seeing CMOs take more of the leadership role over customer experience, but this must be a shared role across the C-level of the company,” he says.
Business leaders have to be prepared to take a step back and empower their teams to take risks
Hubspot’s Customer Code is a good example of how business leaders can set the agenda, laying out a range of behaviors, values, and attitudes that employees must live by. “The customer code has become a living and breathing part of the organization,” explains Aquilante at Hubspot. “It’s become an integral part of how we talk about new projects, how we prioritize projects and how we figure out where to collaborate.”
However, while business leaders must set the agenda, customer obsession can only become a reality if they also instill a culture of innovation and experimentation amongst all employees, giving those who are closest to the customer the autonomy to make decisions. That means business leaders have to be prepared to take a step back and empower their teams to take risks, test out their own ideas and fail fast, to learn quickly in response to customer feedback.
How empowered are you to take risks at work?
- Extremely empowered - it's how we innovate and learn fast
- Somewhat empowered - we take very calculated risks
- Not at all - our leadership team is highly risk-averse
2. Connect the dots between customer & data
At the core of a successful customer obsession strategy are the insights and data that tell you about the wants and needs of your customers. Every customer is unique, with a whole range of constantly evolving motivations, emotional and practical needs. Brands must, therefore, develop the ability to respond to those needs in real-time by investing in the infrastructure, technology, and processes that enable them to listen to and track customer feedback and behavior. “In an era of complexity, human insight will be key,” says Alex Craddock, former global head of marketing for personal systems, HP. “Being able to synthesize the data and identify human insight will be critical.”
What’s really important is getting the right customer to the right product
At the frontline, customer feedback systems make it easy for customers to share their thoughts, comments, and complaints, using channels ranging from surveys to web intercepts and conversations with customer-facing employees. Qualitative customer and employee insights must also then be combined with operational data around sales, customer acquisition, churn, social dialogue, referral rates, brand engagement, clicks etc. to provide a detailed picture of each and every customer, their behavior and individual customer journey. Finally, all of this information should be distributed across the organization, where it can be used to guide decisions around ongoing innovation and execution, drive personalized customer experiences, and show return on investment.
Does your business have a data strategy implemented?
- Yes, we have a fully connected ecosystem. Data is at the heart of our operations
- We're in the process of designing and implementing our strategy to become data-driven.
- No, but we launching a data strategy project in 2020.
- No, and we have no immediate plans to launch one
“What’s really important is getting the right customer to the right product,” says HP’s Chief Marketing Officer, Vikrant Batra. “No bombarding people with lots of stuff. Data-based marketing should be intelligent marketing. We’re fundamentally changing the structure of our marketing teams. A country that had five brand managers in the past may need two brand managers, one data scientist, one data analyst, and one content specialist in the future. We’ve been on that journey for over a year, and we’re accelerating that change.”
Executing on insights calls for collaboration at an epic scale across large organizations
3. Align operations to customer journey
Research shows that customer journey management (33%) is the top digital-related priority for larger organizations, as they aim to deliver an omnichannel experience to the customer. And while data provides the foundations for delivering personalized experiences across the customer lifecycle, executing on these insights calls for collaboration at an epic scale across large organizations, and frequently demands major structural changes to how businesses are run.
Where previously, different departments focused on their own specialist areas of the business, regrouping occasionally to review the quarterly sales figures or discuss long-term plans, a customer-obsessed culture demands much closer integration, particularly between sales, marketing, and customer service teams. At Kimble, which specializes in professional services automation software, this integration has been facilitated through implementing cross-functional, agile teams, which are empowered to work on distinct CX projects.
“In the last 20 years, agile has gone from being a software method to a way of working which is adopted by brands such as Netflix, Apple, and Bosch as a way of actually being more customer-centric in the way that they operate,” says Sarah Edwards, CEO, International at Kimble. “And the good news is that it doesn’t require waterfall change. What it actually requires is that you identify areas within the business that you think will benefit most from customer-centricity, which you think probably require the most innovation, and you just create a team and they just get started.”
4. Hire for customer focus
Needless to say, hiring the right people is integral to rolling out a successful customer obsession strategy. That means focusing on attracting candidates with customer-focused skills and values who are naturally empathetic and service-orientated – even in roles that aren’t traditionally customer-facing.
Kirsty Traill, VP Customer Support at Hootsuite, says that this is a core priority for the business when hiring: “We’ve included a customer experience or customer focus question in every single one of our interviews, across the entire Hootsuite organization. So, regardless of whether you work in product or development or support or finance or sales, everybody at Hootsuite or candidate interviewing with Hootsuite is asked the question — can you give an example of when you may have had an impact on the customer experience or provided exceptional customer support?”
Once onboard, people should then be supported with training and coaching schemes to help staff to boost their own skills around customer-centricity and maximize the data, insights, and tools at their disposal. Compensation and reward schemes should also be built around incentivizing managers and staff on customer satisfaction scores, to ensure the customer is front-of-mind at all times.
There is no quick fix when it comes to customer obsession and we’ve only scratched the surface of the change required to make it a reality. To be successful, it has to be authentic, consistent and most importantly threaded through everything you do. It has to become a way of life.
CX obsession at HP Inc.
What customer obsession looks like in practice
A brief history of HP
Founded in a Palo Alto garage in 1939, HP has been through countless incarnations in its journey to becoming the brand we know today. Famed for its engineering expertise and consistent ability to build innovative, market-leading products, HP has constantly reinvented itself in response to shifts in the business landscape. However, its biggest challenge arguably came in 2014, with its split into HP Inc. and HP Enterprises, breaking its hardware and software arms into two separate companies, and sparking HP Inc. to reevaluate the relationship it had developed with its customers.
With the printer market becoming increasingly commoditized and a decline in printing leading to stagnant growth, HP knew that it needed to make changes to remain relevant to customers in the digital age. Furthermore, the strong product innovation focus that had served it well in the past meant that it frequently prioritized new features over meeting customer needs. The business had also grown to comprise numerous distinct business units, creating siloes and preventing a single view of the customer journey. The upshot being that customers frequently felt confused and frustrated in their dealings with the company.
Recognizing the challenges it faced, HP set about shifting from a product innovation focus to one of CX obsession, with the aim of building a new HP, which used customer insights to drive its decisions, communications and product developments. Hence began a business transformation initiative, to understand and commit to a process of continuous improvement of the customer experience.
The transformation team began by clearly profiling HP’s key target customers, mapping the journeys they go through when engaging with the company and pinpointing areas of friction. Net Promoter Score (NPS) was implemented as the key metric to measure customer success, and four moments were identified as having the biggest impact on improving the score: research/purchase decision, in-store experience, out-of-box experience, and post-purchase support. Finally, the team spearheaded a ‘top-down, bottom-up’ approach to engaging the whole organization in the change, implementing core transformation principles and maximizing customer case studies, insights and training to bring all employees along on the journey.
New cross-functional processes were developed to meet the needs of the customer journey and, with constant repetition of the process, teams started to collaborate and come to decisions over experience gaps more quickly. The new CX focus was also fed back into new initiatives and product development, with ideas only pursued if they scored highly in the CX prioritization process. HP even began designing and developing products that specifically addressed gaps in the CX of its competitors, seeing significant sales uplift as a result.
HP’s CX transformation initiative was rolled out across 25 countries, with 202 separate CX initiatives. It has led to a turnaround in the fortunes of the tech giant, driving substantial cost savings, thanks to a reduced reliance on external vendors. Meanwhile, HP continues to grow after an incredible 80 years in business, with revenues up 12% in 2018.
Overcoming top challenges
The most common hurdles when going customer-centric and how to navigate them
The top three barriers to going customer-centric and how to overcome them
If it was easy to become a truly customer-centric organization, then everybody would have it down to a fine art. But the figures show this is far from the case, with a study by the CMO Council finding that 50% of CEOs believe that their organizations are extremely customer-centric, while less than one-tenth of customers agree. This is sometimes known as the ‘customer management illusion’, where there is a gap between how companies think their customers see them, and the reality.
The truth is that implementing a customer-centric culture is hard, and very few organizations manage it successfully, for a number of key reasons.
1. Organizational silos
Most organizations have historically been structured with distinct departments for different operational arms of the business, for example, sales, marketing, customer service, and distribution teams. Or in a very large organization, divisions based on the different products and services that the company sells. As each of these separate divisions and departments has its own operational structure, processes, and technology, this can work against delivering a seamless customer experience.
“A lot of customer friction exists in the seams between departments, where issues have many owners or have a very high-level owner,” explains Aquilante at Hubspot. “When your scope is small enough it’s very easy to impact the customer experience, but it gets harder as your scope gets bigger, where you have these very wide-ranging topics. For example, what does your hand-off look like between sales to services? It’s a challenge to find those issues and then once you find them, it’s a challenge to assign the right team or the right person to own and fix those things.”
How are your departments organized?
- Around region
- Around product stream
- Around customer segment
- Around expertise
Becoming customer-centric means shifting from this siloed model to organizing departments around customer segments, not products, while also investing in joined-up infrastructure, technology and data, and a clear vision and culture, which is firmly focused on putting the customer first. It can also be hugely beneficial to assign one individual with overall authority for the customer journey, whose job it is to identify areas of friction and put in place open communication channels, so everybody is clear about who owns each particular problem space.
A recent announcement from HP showed how it is working to break down the siloes that can hold customer focus back: “We are moving from our current structure – which is built around three large regions – to a single commercial organization. Reducing the number of management layers in our go-to-market process will make us more agile and efficient, drive faster decision making, and increase flexibility and authority at the local level where it counts the most. Simply put, this brings us closer to our customers than ever before.”
Truly customer-obsessed organizations have customers who are willing to spend more, who stick around for longer, and who introduce their friends to your products and services.
2. Resistance to change
Introducing customer obsession into a product-centric organization takes a wholesale change of culture, behavior, and attitude, and resistance to this change is inevitable. Employees will revert back to old habits and processes, which may feel more practical, easier and faster than the new way of doing things. Some will be unable to change their mindset from focusing on selling as many products as possible to listening to and addressing the needs of customers. There will be teething problems and staff will wonder if the company is on the right track.
This is why ongoing training and communication are so important to reinforce the new vision and direction of the organization. Open channels of communication must be forged, to identify areas where employees are struggling, while customer-centricity must be built into processes and procedures to ensure new habits are formed. Crucially, success must also be measured, reported and celebrated, so that employees are incentivized and rewarded for delivering a joined-up customer experience.
Nothing drives profitability like great customer experience
Dan Hesse, former CEO of Sprint
Pushing changes through also demands total, unwavering commitment from senior leadership, who themselves must change how they go about their own role, moving away from a traditional top-down approach in order to empower employees.
“Implementing customer obsession is hardest for bosses because they’ve got used to the idea that bosses tell people what to do,” says Edwards at Kimble. “But the world is now changing so fast that we’re no longer qualified to do that and our job has completely changed to one where our main role is to ensure the team has clarity of mission and then help to create the environment where they can be successful.”
3. Keeping costs under control
Concern about costs can also hold organizations back from fully committing to a customer obsession strategy and, at first glance, the changes required can certainly sound expensive. However, it’s important to remember that, following the upfront investment in infrastructure and technology, a customer-obsessed strategy done right should be a revenue-driver, not a cost-center. As the former CEO at Sprint, the wireless and internet provider, Dan Hesse says: “Nothing drives profitability like great customer experience.”
Truly customer-obsessed organizations have customers who are willing to spend more, who stick around for longer, and who introduce their friends to your products and services. A great customer experience also means that your customers will spend less time speaking to your customer service or making complaints, thereby cutting overheads. Plus, smart use of data means you can channel your efforts towards your most profitable customer segments, targeting them in a highly personalized way, driving real customer outcomes.
In short, customer obsession means that businesses stop wasting time and cash on marketing strategies that ‘might’ work and focus on those that will.