Thursday, March 27, 2014

Product Management: Leading with Customer Experience


Recently, I was browsing www.flipkart.com and www.indianroots.in and had picked up few items in the online shopping cart, only to abandon it, i.e., I did not complete the buying process - because of slow site response and incomplete product information.

In e-commerce world, its a common problem. An abandoned cart is an online "shopping cart" where a shopper has begun the process to purchase items by adding one or more item to their cart but then leaves the site without completing the purchase.

According to an IBM survey, every year roughly US $83 Billion of sales is lost due to poor customer experience. That's more than the total revenue of all retail e-commerce.

Solving this problem is of paramount importance to any e-retailer. So to begin with, product management must have a seat at the business strategy table and "own" the total customer experience and must work towards improving total customer experience.

In this context, product managers have to work on building better customer experience and improve the customer experience, increase customer engagement to stem such losses from abandoned cart.

Note: In this article, I have taken e-commerce as an example. However the concepts explained here is equally applicable to enterprise software products.

A fresh look at the customer experience– and why it matters

To start with, product management should "own" the customer experience and understand customers. Understanding customer in e-retail implies investing in technology and data analytics and build consumer behavior models and then use this insight to deliver differentiating customer experiences - i.e., tailor the product to match customer needs.

Technology is just an enabler and must not be mistaken for the solution or for strategy. Technology is used to understand the customer and tailor the entire marketing channel and web interactions.

Let me explain this in detail in the next section. Essentially, Technology is used everywhere, but the overall solution depends on strategy - which can be grouped into three distinct steps:

Step-1: Understand Customer Context
Step-2: Act Pro-Actively on the insights
Step-3: Take a broader view of Customer Experiences

Understand Customer Context

Understanding Customers in e-commerce world is a lot more than understanding customer demographics: Age, Sex, Income Group, Geographic Location, User history, user platform (PC, tablet, mobile), Time of browsing/purchase. It also involves knowing which marketing channels the customer has been exposed to or used in the past - i.e, knowing did the customer use the information in a email or social network or on-line advertisement, or search engine.

Knowing all this information that makes up the customer context in real time leads to the next step. Note that the key word here is "real time".

However understanding customer context in real-time is a major challenge. Capturing and understanding the full context of each and every customer interaction across all channels is a gargantuan task - and this calls for high investments in technology.

In the world of e-retail, every single interaction as an opportunity to understand customer context. To do this successfully, e-retailer must be hypersensitive to not only behavior, history and preferences, but also the real-time circumstances customers are facing.

To explain this in simpler terms, think of a old physical retail shop. The customer is greeted by a sales associate who scans the customer demeanor and quickly gauges customer's interests. He can gain additional insight by asking probing questions such as "Why do you need it? Or Where do you plan to use it? And other questions. In e-commerce world, we need to use technology to gain such insight and then tailor the buying experience.

Product management can tackle this issue by automating all processes across channels to calibrate the web responses based on the behavior and context of each individual engagement, which is described in the next section.

Act Proactively on the Insights

Once the customer context is understood, the next step is to act proactively on it. In e-commerce world, this could mean:

1. Adjusting the web site in real-time to match the context and creating right-time, right-place offers.
2. Tracking customer interest and communicating that through different channels in real time and also off-line.
3. Providing a high quality of online customer engagement during the moment customer is on your website.
4. Identifying & rectifying customer struggles (such as slow responses etc.) in real time.
5. Automatically creating customer communication portfolios for the future

All these actions are based on insights gained. This could be due to real time analytics that can serve as  valuable guideposts for creating high quality customer engagement.

Monitoring, tracking and understanding the quantitative value of customer experiences also provides critical insight that can directly influence marketing actions.

Leading e-retailers devote invest heavily to understanding what's going on and then use the resulting knowledge to drive action. They measure results, identify what's working and what isn't, and follow up to verify that their efforts are making a difference.

Real-time action is very important and must be coordinated across all channels of customer interactions: Online, Mobile devices, social media etc., to create an integrated and consistent customer experience.

When real-time understanding of customer context is achieved and used to coordinate activities, it becomes possible to create highly sought-after right-time, right-place offers.

Monitoring, tracking and understanding the quantitative value of customer experiences also provides critical insight that can directly influence the company's actions – and help to ensure that the correct choices are consistently made.

To win customers' mindshare, trust and loyalty, it's essential to coordinate activities and messages across all channels at all times and keep them aligned to the customer context. This  is a highly dynamic and challenging undertaking. But for the customer, it is a seamless experience that sends the message that the company truly knows and understands them.

Take a broader view of Customer Experiences

Each customer experience is an event in itself. Each event taken individually does not constitute an overall customer experience or customer relationship.

Taking a broader view implies in-depth understanding  of the full scope and nature of the engagement with customers and using analytics to guide the future actions and build customer relationships that grow and strengthen over time.

Customer experience is influenced by every customer touch point, even the call center, website, email, mobile app and shipping.  Customer experience can be improved by addressing any difficulty tied to that experience. Note that every single customer touch point creates a customer experience, from the website, Mobile app, Facebook business page, Email marketing campaign etc. All the details from each of the customer touch points create an overall customer experience.

All leading e-commerce companies maintain all transactional history which is then used in future. Taking a broader view of customer experience helps in enhancing the lifetime value of the customer. Leading e-commerce companies integrate all inbound actions with outbound communications across multiple channels. For example, if customer had abandoned a cart, a follow up email is sent requesting customer to complete the transaction, while the online advertisement points to the product that was in that abandoned cart.

Product Management, having taken up ownership of customer experience and sets up broad strategic goals such as:

1. Complete channel integration.
All channel activities should be mapped and prioritized to foster integration for creating a unified customer communications and touch points.

2. Building an insight-driven organization.
Technology must be used to create a holistic view of the customer relationship and this insight be understood by the entire organization and act on relevant insights.

3. Build an enterprise wide focus on customer experience.
It is essential to understand in depth how customers engage with your website to identify opportunities to serve them better. This implies placing the customer at the center of the business.

While these are long term goals and has a direct impact on the financial front. But these goals also have important challenges. Integration issues will continue to exist as the number of channels and the channels characteristics change with new technology. Even today, leading e-retaileres struggle integrating mobile and social channels with other campaigns and tactics.

Product Management should also have a clear vision of the end goals for each quarter/year. As these goals are tough to achieve, it needs to be broken down into smaller end goals for each quarter. From a product planning perspective, building superior customer experience is a journey with several milestones. Product management lays out the plan for the enterprise and the shows the way forward.

Putting Customer Experiences First

Enhancing customer experience should be part of the overall strategy. Product management defines this strategy and gets a buy-in from all stake holders. Once the strategy is agreed upon, product management has to break down customer experience into measurable metrics, identifies steps to achieve those goals and then give directions to each departments/groups to reach those goals.

In the initial stage, the goal could be to create technologies to measure those metrics.
The broad strategy can be like:
1. How can the company orchestrate the engagement of its customers across all its channels?
2. How to understand the context and motivations of each customer engagement?
3. How to differentiate and create highly personalized customer engagement?
4. How to create new and unique communications?

Leading e-retailers across the world are investing to find the answers to these questions and then set about creating superior multi-channel experiences by making full use of every tool available to them.

E-retailers should go beyond each transaction and follow up with a definite action plan to create a very positive user experience. For example:
1. Contacting customers to get their feedback on their experience.
2. Monitoring/Tracking delivery commitments to ensure customer fulfillment
3. Identifying cross-sell and up-sell opportunities.
4. Designing other customized offers for future use

Consider how Amazon has taken ownership of the entire customer experience by using technology, business analytics,  insights and engagement in a carefully orchestrated way. When customers log into Amazon website, they encounter a seamless blend of live web information and interaction, relevant web-store displays that is both customized to them and made more convenient by presenting it in multiple platforms.

The entire process flows smoothly across channels. For example if a customer has clicked on a web advertisement and he is instantly taken to the relevant product page. The page also shows all other products that are relevant to the customer.

This sends a powerful message that Amazon has invested in building a better customer relationship by making it easier to interact and conduct transactions. This cross-channel integration displays broad understanding of the customer, knowledge of customer context and ability to take systematic action, all brought to life through a single customer interaction.

4 comments:

Nilay Shrivastava said...

Very nice and insightful post.

And I must let you know that IBM's main strategy in the coming years revolves around "customer experience". So customer experiencw is undoubtedly one of the most important focus for most of the companies.

IBM also has many products which help improves the customer experience. For ex
1.Digital media optimization suite
2. Social Media Analytics
3. Coremetrics
4. Tealeaf
5. SPSS Statistics

Through post of yours I can relate wha
fits where. :-)

The three points you mentioned are truly insightful and must be used as a reference

anand s said...

Arun Kottolli is an awesome guy.

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Locality Findlocales said...
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Prosys Sols said...


Thanks for giving such awesome Articles.

Monitoring and Troubleshooting product