Customer Experience Transformation – the New Imperative

Posted by Sandeep Dhar
March 14th, 2018

Customer Experience Transformation Imperative

There are dozens of IT services companies around the world that we compete with today. Many of them, like us, have a full range of IT and IT-enabled services to offer. Application development and maintenance, infra and cloud, testing services, BPO, digital and analytics, are services that appear on every website. Similarly, verticals we support; banking, insurance, manufacturing, telecom, transportation, are not unique either. In such a scenario, a key question that we need to answer is, how are we different? Why should a client select us over the others?

The answer lies in articulating why we are in business. Making money alone cannot be an objective. As Simon Sinek, a British-American marketing consultant famously quoted that customers usually buy from an organization not because of what they do or how they do it, but because of ‘why’ they do it. Average to good brands spend most of their time articulating ‘the what’ and ‘the how’. However, the truly great ones have a well-articulated, inspiring mission, a reason for their existence, which defines why they are in business.

Disney is in business to make customers happy. The theme parks, and the films are ‘the what’ and ‘the how’. Google is in business to organize the world’s information and to make it universally accessible. YouTube, maps, search comprise of the what and the how. Similarly, Nike wants to bring inspiration and innovation to every athlete in the world. Walmart wants to save people money. Facebook aspires to bring the world closer together. And Intel’s mission is to bring smart, connected devices to every person on earth.

This core purpose, in turn defines the culture of the organization. One recruits and retains talent that identifies and aligns with this core purpose. Everyone rallies around it. Investments are prioritized against this goal. The structure of the organization, the compensation and reward philosophy too are guided by this. Even clients that we target and partner with are the ones who identify with and are excited by this mission.

So, what’s our raison d’être? What binds us and what drives us? Let’s spend some time discussing this.

Customer Value Creation: The Three Cornerstones

Our clients are competing for customers in their respective industries. The general belief is that delivering value to its customers is what will help them attract and retain customers. An HBR article published nearly twenty-five years back, defined three value disciplines that enables customer value creation. These disciplines are operational excellence, product leadership and customer intimacy. Most companies that have taken leadership positions in the last three decades, did so by excelling in one of these values, while meeting a base standard in the other two values. The number of companies that managed to excel in two of these values are just a handful, while almost no company managed to excel in all three.

The reason is very straightforward. A company’s core purpose determines which of these value disciplines will be the differentiator. So, the culture of the organization has to be built around this mission and discipline. It is tough to build a culture that is driving focus on more than one of these disciplines. Also, all investments have to be channeled towards excelling in the chosen discipline. It is tough to find a company that has adequate margins and bandwidth to be able to invest in excelling in more than one. Most successful companies succeed by narrowing their focus rather than broadening it.

The ‘Big’ Shift in Focus:

Now as we look around, there are numerous examples of companies that have succeeded through focus on operational excellence. Operational excellence manifests itself in the form of low costs, and through ‘zero-defect”. Reliance Jio is an example of success through primarily cost leadership. Numerous budget airlines are the result of successful adoption of operational excellence. Chinese mobile phones too are great examples in this category. With greater automation and enhanced scale, we will see more and more companies follow this path to leadership.

The second discipline is product leadership. This involves building products that sell for their innovative features and ease of use. Not just that, such a company has to keep producing a steady stream of innovative products. Some of them could be continuous improvement over what they have already created, while others could be products that solve new problems. Processes are geared towards minimizing the time-to-market an idea. Apple is a classic example. The company continues to create generation after generation of iPhones, each better than the previous. They also keep producing new product lines; iPad, Apple TV, Homepod.

The third discipline is exceling in customer intimacy. This requires micro-segmentation and customizing the offering. A bespoke quality of service has to be provided. IBM and Nordstorm used to be great examples once upon a time, but somewhere down the road, they lost focus. Home Depot is one of the few companies that comes to mind, that continues to excel in this discipline. This is the toughest discipline to excel in and that is why we do not see too many examples of leadership in this space. Meanwhile, it’s not hard to understand why. Delivering on customer intimacy, as a differentiating factor, had a huge dependency on people in the past. Delivering consistency in people dependent interactions (bank branches/ retail stores / field sales force / contact centers) was a challenge. Data analytics and data sciences were not strong enough to analyze and predict buyer behavior. Applications developed using “water-fall” methodology, took too long for enhancements. Even as commerce started going online, scalability of processing power and storage would often become bottlenecks to provide consistency of experience. Testing of systems was largely manual and limited in its ability to provide quality assurance speedily. All this combined together was too much of a challenge to deal with. Companies found it easier to focus on operational excellence and product leadership.

The Coming Era of Customer Intimacy

All these brings to us a unique opportunity that companies across industries can exploit today. Customer intimacy and customer experience are the key differentiating factors that companies today can adopt. Many limitations of the past do not exist anymore. Data science provides us unprecedented insights into consumer preferences at a more granular level. These insights can be used for micro-segmenting customers to a segment size of one. And that is the design challenge. With the advent and evolution of digital channels, there is an opportunity to customize touch points as per the consumer needs. Applications and ERP systems can be rapidly improved using agile frameworks, to feed and support these channels. Adoption of the cloud, provides the required processing power and the required storage, on demand. Automation in testing allows speed, scale and rigors of testing hitherto deemed impossible. And once again, data sciences allow us to keep improving with successive iterations of this cycle.

We, at Hexaware, are uniquely positioned to partner with our clients on this journey. We have extensive experience and expertise having delivered individually, these components for multiple clients across numerous industries. A design-led approach, allows us now to stitch these capabilities together, to help our clients build customer experience as a differentiator and a competitive advantage.

We have decided to take a leadership position in helping our clients go through this customer experience transformation journey. Our mission is to help our clients create customer intimacy as their competitive advantage. It’s a unique opportunity for our clients and for us.

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