The Customer-Centric Business: Great Expectations

A 2015 study from Forrester and Accenture found that improving the customer experience now matches revenue growth as a top business priority among executives. By 2020, customer experience will overtake price and product as a key brand differentiator, according to Walker Information. Those are powerful indicators of the importance of pleasing customers – at a time when customers increasingly hold all the cards.

The travel, retail, home entertainment, restaurant and services industries have already been transformed by the power of customer recommendations, anywhere/anytime information and the fluid availability of online comparisons. Those industries that have yet to be transformed – including B2B sectors – surely will be.

Gartner predicts that by 2020 customers will manage 85% of their relationship with a business without interacting with a human. What interactions do take place will have to be quick and intuitive. Forrester estimates that 45% of U.S. adults will abandon their online purchase if they can’t find a quick answer to a question.

The digital dynamic has made delighting the customer an essential goal for nearly every organization. With customer relationships increasingly defined by digital channels, optimizing that experience is leading many organizations to the cloud as a way to speed up deployment times, lower costs, and add not only better functionality but also entirely new ways to serve customers.

“Only customer-obsessed businesses can increase market share, revenue and profit in the age of the customer,” says Peter Burris, a veteran industry analyst.

Only customer-obsessed businesses can increase market share, revenue and profit in the age of the customer.
Peter Burris
Industry analyst

How the Cloud Helps to Redefine Customer Experience

CIOs play a key role in helping businesses embrace a customer-centric mandate. They are aggressively looking for ways to utilize cloud computing, along with service-oriented architectures and cloud-based analytics, to build and deliver applications with unprecedented power and functionality. The cloud is helping organizations to redefine the customer experience in several ways:

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Insights-as-a-service. Companies can tap into world-class services to analyze and better understand customer needs at an affordable cost. Data-intensive tasks like analyzing years of sales data to identify patterns, once the domain of only the largest companies, are now available at a price nearly any business can afford.

These insights can be used to better target promotional campaigns and delight the customer with personalized
recommendations. For example, Pier 1 Imports uses the Microsoft Azure cloud and services from Microsoft partner MAX451 to combine data from its e-commerce site and point-of-sale terminals. The company applies Azure Machine Learning to unearth patterns that are difficult for human analysts to spot, then uses these insights to refine marketing campaigns and provide personalized in-store upsell and cross-sell recommendations.

Businesses can also combine their internal data with publicly available data such as weather and census records to better understand customer behavior via profiles. Customer conversations are a valuable source of free research as well. By listening to interactions on social networks, businesses can identify prospects, spot developing trends, and head off problems like product defects or dissatisfied customers.

Customization. Combining data from many transactions and customer interactions provides a range of customer insights. Automobile dealers, for example, can use Vectorform’s VKarozzi, powered by Microsoft Azure, to show prospective buyers customized versions of any model not in the showroom. They can also use the system to collect data on what accessories, colors and other customizations customers prefer.

The application uses a cloud back end to pull down the latest data on models, colors, accessories and prices from multiple automobile manufacturers and present an integrated dashboard customers can use to customize vehicles and preview the results. The system also maintains a constantly updated inventory of used vehicles with rich data about each drawn from maintenance, insurance and public records. The system enhances the customer experience and lets dealers use data from across the entire network to make smarter inventory decisions.

Personalization. Customers increasingly demand that the companies they do business with not waste their time with irrelevant marketing or promotional offers. But businesses can use cloud services to gather rich data that lets them customize and even personalize the customer experience. Cloud-based customer relationship management (CRM) software can capture data from multiple touch points, as well as social network interactions, to present a unified and personalized experience across multiple channels.

Marston’s, a 200-year-old company that operates 1,700 pubs scattered across the U.K., is using Microsoft Dynamics CRM Online and the Thunderhead ONE engagement platform to create a single view of the customer’s activity across the digital channels and within its pubs. Servers now know regulars’ prior pub experiences as well as preferences for food, drinks and music, and can use that data to have a pint of the customer’s favorite brew and even his or her favorite song playing on the jukebox as that customer walks through the door.

Functionality. Cloud applications defined as services enable developers to plug new capabilities into existing applications with unprecedented speed to enhance the quality of the customer experience. Applications are essentially assembled instead of written from scratch.

This can sharply reduce deployment times. For example, Virgin Atlantic was able to create a memorable experience with its holiday Festive Flights promotion by producing holographic images that appeared to float above flyers’ Lumia devices. These formed the basis for collaborative “reindeer games” to help guide Santa’s sleigh.

The project went from sketch to reality in just 21 days. On the back end, Virgin Atlantic was able to understand and adapt the experience continually to maximize customer engagement.

New products. The cloud enables businesses to gather data together from operations around the globe and discern insights that can lead to new products. Tire-maker Michelin developed a reporting system for customers that own fleets of trucks, for example. The cloud-based system analyzes weather, usage patterns, inflation pressure and other factors gathered from its entire customer base to deliver recommendations for reducing fuel costs. Michelin then splits the savings with customers.

Healthcare giant McKesson is providing small- and midsize healthcare providers with sophisticated analytics that show compliance with the Health Information Technology for Economic and Clinical Health (HITECH) Act. Such capabilities, which were previously out of reach to all but the largest institutions, enable smaller organizations to provide better service to their customers, compete more effectively, and improve their own operations. For McKesson, the payoff is better customer loyalty and retention.

Building trust. With cyber attacks increasingly threatening the enterprise and its customers, and security breaches involving millions of records dominating recent headlines, trust has become a defining issue in customer loyalty. For IT organizations, that means essential components of customer experience must include securing customer data and transactions and ensuring privacy.

Security is often perceived as a weakness of cloud computing, but actually the opposite is true. “Cloud computing security has evolved to be equal to, and in many cases better than, private IT security,” says Brian Gracely, lead cloud analyst at research firm Wikibon.

Nevertheless, perceptions change slowly. Two-thirds of IT leaders surveyed by IDG Research cite security as a challenge to implementing a cloud strategy, up slightly from the previous year’s study. Among organizations in the financial sector, 78% cite security as a concern.

Cloud computing security has evolved to be equal to, and in many cases better than, private IT security.
Brian Gracely
Lead Cloud analyst, Wikibon

This perception persists despite the fact that none of the headline-making security breaches of the last few years have involved a cloud service provider. Because of the nature of their business, cloud computing vendors have a compelling interest to provide state-of-the-art protection to their customers. And most do.

Reputable cloud providers are more than willing to put their money where their mouth is on this issue. More than half of the respondents to the IDG Research survey say they require security guarantees from cloud providers. Security shouldn’t be a concern when moving to the cloud. In reality, it has become a strength.

Know Thy Customer, or Thy Customer’s Customer

The age of the empowered customer demands that everyone in the organization, not just sales and marketing, pay attention to customer needs. CIOs appear to be listening. CIO’s 2016 State of the CIO Survey finds that 63% of CIOs currently meet with external customers, and 54% of those are looking to increase that frequency in the coming year. Some, like Michael Guggemos, CIO of solutions provider Insight Enterprises, have bottom-line accountability.

“I’m responsible for any revenue that goes through our automated portals,” Guggemos says. “I actually own several large accounts.” That’s incentive to deliver a superior customer experience.

But CIOs can’t do it alone. They must continue to partner across the organization to understand where and how customers interact with the company. They should embed IT staff with marketing teams or in any meetings where customer needs are discussed.

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As the stewards of information, IT is in an excellent position to capture customer interactions at every touch point, including Web, point of sale, mobile and call center. By plumbing for data at every juncture, then mapping these interactions to customer journeys, IT can better understand how to streamline and integrate the customer experience to create a consistent approach across all channels.

Marketing organizations are increasingly data-driven, and they are natural partners with IT on the customer-experience journey. IT teams can deploy analytics to help marketers better interpret the data they already collect. Screen-monitoring software can provide eye-opening insights about the ways in which customers interact with the applications the IT organization builds. CIOs might even designate one day per month for some IT staffers to field support issues in the call center.

The arrival of the empowered customer has rewritten the laws of competition. Presenting an engaging experience is not simply table stakes for customer acquisition and retention, it’s an opportunity to realize operational efficiencies and develop new revenue streams through more precise targeting and better understanding of customer needs.

Cloud computing presents compelling new opportunities to deliver unique experiences using best-of-breed functionality with speed and efficiency that was unimaginable just a few years ago. With the right mindset, skills and vision, IT can lead the way.