Keeping Pace With Customers Multichannel Preferences by SCRM SCRM

Executive Dialogue Featuring Don Peppers and Martha Rogers, Ph.D. focus:

Communications

Keeping Pace with Customers’

Multichannel Preferences

Don Peppers Recognized for over a decade as one of the leading authorities on customer- focused business strategy, Don Peppers is an acclaimed author and a founding partner of Peppers & Rogers Group, the world’s premier customer-centric management consulting firm that provides clients with world-class customer strategy, flawlessly executed, for bottom-line impact.

Consumers use multiple channels interchangeably; companies must create a multithreaded dialog that maps to customers’ movement across channels.

any marketers don’t fully appreciate what “multichannel” means to customers. Organizations may have multiple channels to serve their customers—and those

companies may send messages via direct mail, email, mobile, and social—but that doesn’t make them multichannel. Interacting through multiple channels is not enough. True multichannel means using all channels seamlessly in one platform to create a multithreaded dialogue that matches customers’ behaviors across channels. In this 1to1 Executive Dialogue, industry thought leaders Don Peppers, Founding Partner of Peppers & Rogers Group, and Richard Burdge, CMO of Thunderhead, will define the optimal multichannel approach, discuss why it’s essential today, and explain how to create a multithreaded dialogue. Why is it so important to interact with customers seamlessly across multiple channels?

Richard Burdge: Businesses must embrace the fact that consumers are now empowered. In

Richard Burdge Richard Burdge is Chief Marketing Officer. With 20+ years’ marketing strategy, communications and CRM experience in B2B and B2C, Richard has a successful track record of driving profitable marketing programs that deliver growth and enhance shareholder value. Before joining Thunderhead in January 2010, Richard worked with organizations including Sky, HP and Vodafone, on client and agency sides of the fence. Richard’s specialities include digital marketing, e-commerce and social networking.

the past, brands used to be able to control and manage the message. But now that consumers are engaging with one another to give their opinions on brands, brands have really lost that control. So companies have to deliver what the customer wants. It’s time to examine, build, and execute strategies that create a strong and customer-centric presence in the marketplace. This might mean that brands need to look at their engagement with customers and reprioritize. I’ll give you a good example. I have a son who’s 12 years old. When I come home from work he’s on the Web. But he’s not looking at websites. He’s engaged in social games across the Web with his friends from school, or he’s discussing his math homework, for example. He never picks up the phone and makes a paid call, and he rarely looks at websites. I recently shared this with a group of insurance executives. Then I asked, “How are you going to serve my son in 12 years time when he becomes an early-stage customer that you’ll want to acquire?” He may be looking for auto insurance at that stage, and they may have infrastructure that won’t serve him in the social environment. It doesn’t just apply to young people. One of Facebook’s fastest growing communities is women over 55. Brands are going to have to interact with them in those environments, as well. Lastly, when we examine emerging markets, we find that people are now using social banking across mobile phones. Micro financing and commerce are taking place in an entirely

Executive Dialogue Featuring Don Peppers and Martha Rogers, Ph.D. focus:

Communications

different manner where, in some countries, a text message becomes a contract. Don Peppers: The interaction that consumers have with other consumers has led to rising customer expectations. People have a richer and more efficient experience in their online dealings with other people, as well as with organizations and companies, and so their expectations are that companies will be able to keep track of the conversation. Imagine being on Facebook and communicating with someone, and then you call them on the phone and they have no idea what you said on Facebook. That would be a totally nonsensical experience when you’re dealing with a human being. Increasingly, to customers, it’s nonsensical if that’s the reaction they get from companies they deal with.

What are the possible repercussions for businesses that are not agile enough to have multithreaded discussions with their customers? Don Peppers: I think it goes to the question

of whether the customer actually trusts the company. Two requirements must be met before I will be willing to trust someone. First, I have to trust their intent to act in my interest and not abuse me or abuse my privacy. But second, I have to be confident that they’re competent to carry out that intent. If they’re not competent, it doesn’t matter how good their intention is -- I still can’t trust them. If a business is not competent enough to recognize me when I’m online as the same person who’s ID number was in use at the call center the other day; or if you can’t call up the receipt at the retail store for the products I bought online that I’m trying to exchange, that’s going to destroy my confidence in you. Richard Burdge: Don’s right, there has to be trust. If that trust breaks down simply because an organization can’t commu-

nicate in a multichannel way, then the relationship breaks down. We’re seeing businesses look more and more to acquire customers through recommendations or advocacy from their existing customers. An acquisition won’t work unless the promise is fulfilled, and that is reinforced by the advocacy that is coming from existing customers.

“I don’t see myself as an email customer or as a Web customer of a particular brand.” —Richard Burdge, Chief Marketing Officer, Thunderhead

You’ve got to look at your customers and believe that you can make them advocates of your service through differentiation of the dialogue that you have with them, make it much more personal, and make it related to how they behave. If you can drive that advocacy in your customers, that’s going to fuel your acquisitions.

What are the first steps companies need to take to create multithreaded dialogues with customers? Don Peppers: It really depends on what your

current situation is. For instance, if you don’t have any level of integration among your various communication channels, then your first step has to be to design the systems and processes that integrate your actions so that the people at the contact center actually have access to information about what happened at the point of sale or through another channel. If you have at least some level of system integration and information integration, then the next step is probably going to be to break down organizational silos. These silos grow up naturally in every organization be-

cause whenever you put a function in place, you have to put somebody in charge of that function, and that helps create a silo. Once the systems can communicate with each other, then you need people to communicate with each other inside your company.

What are the key challenges that decision makers must overcome to achieve success in providing seamless multichannel interactions with customers? Richard Burdge: As Don said, all businesses grow up with silos inside them, and those silos of information, people and data tend to serve consumers of one particular channel. So you’ll get the email group, the Web group and the mobile group. But the trouble is, that’s not how consumers and customers see themselves. I don’t see myself as an email customer or as a Web customer of a particular brand. I just see myself as a customer. As a customer, I just want that experience and that dialogue to be continuous across all of those channels seamlessly because I’m the customer and that’s how I behave. Given the range of devices out there, this will make it difficult to track audiences. Marketers need some kind of intelligence in a single platform that can understand where their customers are, what their customers want, and how they want to be served in a multichannel way, all while maintaining management of the brand and compliance of standards and quality in serving that customer. Don Peppers: Another critical area is the orientation of the business. Orientation goes to the heart of the attitudes of the people are who are responsible for carrying out the processes. Think about it: You can’t write a line of code or a business rule that ensures employees always try to delight the customer; your employees have to want to delight the customer.

Executive Dialogue Featuring Don Peppers and Martha Rogers, Ph.D. focus:

Communications

How can companies leverage technologies to help close communication gaps across siloed functions and channels, such as CRM and email systems? Richard Burdge: The customer really doesn’t

care if their data or their information is held in a number of silos or different systems. What they really care about is how they’re communicated with. So even if companies have silos, and CRM is operated separately from email, for example, they can layer technology over the top to close that communication gap and give a much richer experience to the customer. A combination of technology, behavioral, and people change can achieve this, and this will move responsibility closer to the front line and empower customer-facing staff to become customer heroes. That’s what the customers want them to be, somebody who goes that extra mile to deliver exactly what they want—and that means being supported by a single platform capability to deliver that dialogue and service.

How do you manage the compliance and security aspects? Richard Burdge: From compliance stand-

point, having the ability to record pertinent information on what companies have communicated, right down to the paragraph or sentence with their customers, is a powerful tool. Having a single platform to handle all of these different communication channels for compliance can save your organization dramatic amounts of time. Don Peppers: I saw a survey the other day from a research firm that looked at call centers in the United States, and it compiled the national, state, industry, and union regulations that they needed to comply with. Over 50 percent had to comply with the Do Not Call laws, 32 percent with Sarbanes-Oxley, 27 percent with HIPAA,

plus a slew of other regulations. This is a major task, just being competent enough to interact with your customers in a way that doesn’t violate regulatory restrictions.

Is there a formula for achieving the right balance in company customer communications between various channels? Don Peppers: When a customer is participating in an integrated conversation, what’s important to you is the customer’s impression of the conversation. The conversation is not integrated if the customer doesn’t think it’s integrated. It’s in the eyes of the beholder, and the beholder in this case is your customer.

“Customers create all the value associated with a business.” —Don Peppers, founding partner, Peppers & Rogers Group

The single most important issue is putting yourself in the place of the customer, trying to see your business and all the interactions that a customer will have through the eyes of the customers themselves. The more customer insight you have, the better prepared you’ll be to adopt this customer-oriented perspective. There is no magic formula.

What are some recommended best practices in multichannel communications with customers? Richard Burdge: The challenge for organizations will be to integrate social media with their existing traditional capabilities into all facets of their business. Businesses will need to harvest the knowledge gleaned from customers through these networks to deliver customer-focused communications, providing relevant information and support where customers want it; the right

message, at the right time and in the right format-over the right channel. I’ll give you a good example. I was talking to somebody the other day who’d purchased some software on-line. They received a thank you note that read, “We’re really interested to hear how you get on with it.” And they thought that the language and the tonality used to communicate back to the buyer were interesting. Also, the message had actually come in a text format rather than through email or direct mail. This provider had an understanding that the customer used multiple channels and behaved in a multithreaded way. The company also wanted to ensure it conveyed that they welcomed feedback on the users’ experience. I think this demonstrates that companies will have to become increasingly social and connected with their customers instead of pushing information towards them.

How can companies measure success? Don Peppers: Customers create all the value

associated with a business. Fundamentally, when you’re trying to measure your success, you’re trying to measure how much value your customers are creating. Customers create value in two different ways. Customers, unlike products, have memories. They remember you from event to event. So how you treat a customer in one interaction is going to have a direct influence on the amount of value the customer creates, not just in that interaction, but in all future interactions. So when you go to measure success, you have to tie your metrics into your analytics. And to the extent possible, you have to try to measure how much their lifetime values are going up or going down on the basis of the day’s activities.

Who is doing multichannel well? Richard Burdge: Best Buy has a really suc-

Executive Dialogue Featuring Don Peppers and Martha Rogers, Ph.D. focus:

Communications

cessful social media listening program that takes that critical next step and engages with the customer. But it also provides options for customers to email or call to interact with the company in whatever manner necessary to resolve a concern. It’s not enough just to have the interaction. You then have to follow through with the response. And that’s the real fulfillment of genuine customer engagements in a multichannel best practice. In Forrester’s 2010 Voice of the Customer Awards, American Express and Dell were both cited for their active use of customer data they collect and act on to drive that real-time customer experience. Amex increases customer loyalty and customer spend by highlighting valuable things like unused card benefits rather than hiding them away. They’re not trying to sell customers up to the next card. Dell uses its online community’s ratings. They have an open policy of reviewing all

that information and identifying unmet customer needs. This is feedback for the business. It generates innovation and ideas that Dell can respond to en masse, but it also makes the customers feel that they’re really being responded to regarding their individual issues. Don Peppers: JetBlue has a fairly substantial Twitter following, and when there’s a weather problem or a flight delay, it’s not just the deals and one-day fares that go on its Twitter announcements. The airline announces to the world its delays, and if you’re on a connection to Albuquerque or Long Beach or wherever, you’re going to find out quickly. That give and take with customers is particularly powerful for service companies, and even more critical for companies that may have problematic service reputations. Carphone Warehouse is an independent phone dealer based in Europe that had a terrible reputation for service. So the company launched a program called (CPW Cares),

Carphone Warehouse Cares—basically, to monitor the Twitter space. Let’s say a customer has a bad experience. She might blog about it, but then she’ll tweet out the blog, and it’s the tweet that gets picked up very quickly if you’re monitoring the space. And so CPW will reach out to them and try to solve the problem. The CPW Cares team has dramatically reversed what was a terrible reputation. It’s becoming much better, and CPW is becoming known as a social media–aware company, a cutting-edge type company when it comes to customer feedback. This is the new marketing, where you take the perspective of the customer and where the company is proactively trustworthy. It’s proactively protecting the customer from making mistakes, for example, and that is going to be a central element of customer service in the next decade— proactive trustworthiness, or what Martha Rogers and I call trustability. n

Thunderhead changes the way companies engage with their customers, enabling measurement and learning from every interaction to drive greater loyalty and profitability. Our innovative business user-driven software, Thunderhead NOW, delivers new levels of personalization, context and compliance with true multi-channel capability—the right information, to the right person, at the right time, in the right format. Founded in 2001, Thunderhead now has insurance, retail banking, government and capital market customers on three continents. They optimize their customer engagement—we help them make every communication count. For more information, please contact: http://www.thunderhead.com/home.php.

Peppers & Rogers Group is dedicated to helping its clients improve business performance by acquiring, retaining, and growing profitable customers. As products become commodities and globalization picks up speed, customers have become the scarcest resource in business. They hold the keys to higher profit today and stronger enterprise value tomorrow. We help clients achieve these goals by building the right relationships with the right customers over the right channels. We earn our keep by solving the business problems of our clients. By delivering a superior 1to1 Strategy, we remove the operational and organizational barriers that stand in the way of profitable customer relationships. We show clients where to focus customer-facing resources to improve the performance of their marketing, sales, and service initiatives. For more information, please visit: www.peppersandrogersgroup.com.