Learn how to create great customer experiences that build loyalty and create a significant competitive advantage in the experience economy.
Customer Experience and the Experience Economy
Executive Vice President and General Manager, Oracle CX Cloud
The last few years have seen a dramatic rise in the importance of customer experience and the experience economy. From viewing potential homes in augmented reality to buying subscription services, consumers today control their customer journey.
This shift in consumer sentiment means that every business must find better ways to interact with its customers. Business leaders who grasp this new experience economy will build customer loyalty through word of mouth and create a significant competitive advantage.
To create a great customer experience, a business must understand all points of contact between the customer and the brand. Every interaction -- including pre-sales, purchase, and customer support -- must provide the right experience to each buyer and meet customer expectations.
Connecting these dots requires data about how customers interact with your brand. Based on the data, you can design the right product or service, send offers and messages that customers will find useful, and build positive interactions at every step of the customer journey.
Learn about customer experience and the experience economy in this deep dive with Rob Tarkoff, Executive Vice President and General Manager of the CX Cloud Group at Oracle. He is responsible for all the front office applications at Oracle, including sales, service, commerce, marketing, and content.
Rob discusses the unique challenges facing companies and explains why companies must change existing business strategies to address the demands of customer experience. That includes understanding the types of data available and developing tools and processes to manage that data.
This transcript has been lightly edited for length and clarity.
How have customer expectations changed over time?
We have been talking a lot about how the experience economy is something fundamentally different for CX, and that's because of three main things. One is that the customer is firmly in charge now. Given new interface models like augmented reality, virtual reality, or voice activated chat experiences, it's the consumer who is really driving the interaction model in ways fundamentally different. The concept of user experience or user interface has fundamentally changed to much more natural conversational ways of interacting.
The second thing that we talk a lot about is that journeys are completely nonlinear today. We've been hearing about the concept that, today, journeys are unpredictable. But now, they're happening across so many different channels and in so many ways that nobody can really predict.
Finally, it's the concept that data is really at the core of everything. The new customer experience mandate or challenge is about orchestrating data flows across these different interaction points. Those things, together, really form what we call the experience economy paradigm.
What Is customer experience and is it more than customer touch points?
True customer experience now goes beyond just the front office combination of these touch points. It actually now connects into things like back office logistics or supply chain.
If you think, for example, of a service situation, think of a gym as a great example where it has a series of treadmills in the gym and the IoT sensors on the treadmill detect that there's a motor problem. That IoT sensor can inform the gym owner. It can inform the manufacturer of the treadmill. Now, great customer experience is about not only knowing that there's a problem but how to orchestrate the delivery of the right part to the gym, so they can replace the motors in the treadmill, how to manage the schedule of the technician, the field service personnel who is going out to actually fix it, and then how to make sure that, once it's complete, all the inventory that's being managed is now accounted for and that you could have the proper subscription system, billing system put in place.
All of that is customer experience. Everything from the actual service ticket, through to the fulfilling of a part, through to orchestrating and scheduling the technician, through to actually understanding and managing the billing cycle at the end of that. That's how customer experience has changed now. It's not only just a front office phenomenon. It's actually connecting the front office to the back office.
When we talk about customer experience now, it's about first recognizing how you connect these discrete processes, service to field service or a service to an ordering process. It's also about managing the flow of data because you're capturing a lot of signals and a lot of data in that process. You have IOT sensors. You have service requests. You have marketing campaigns that need to be coordinated with this. You have inventory fulfillment, parts fulfillment, service technician dispatching. All of this is what goes into customer experience.
What is the experience economy?
The experience economy is this phenomenon that the consumer is driving interactions in a way that's unique to them. They are pushing technologies in ways we never envisioned.
Great examples: This is one of our customers, Berkshire Hathaway Home Services, has developed a concept for people to view homes using augmented reality browsers and actually swiping their phone over a barcode at the house and being able to virtually tour a house, never having to walk in, not having to set up an appointment with an agent until they're really sure that they like the house and want to go in and see it more in depth. Companies like Kubota, a Japanese manufacturer of tractor trailers, are using virtual reality to provide maintenance from Japanese technicians with farmers in Iowa.
We never know how the consumer is going to want to consume a product or a service and the number of interfaces today are so different across the board that new models are being developed, new pricing models, new billing models, new models of service, new models of consumer marketing. That has created an imperative today for companies to be more responsive and to let the customer drive the innovation and be responsive to what it is that they want as opposed to trying to force fit consumers into different models of interacting. That's been a major, major change in every industry. It's a period of time where companies are trying to catch up to this.
Is the experience economy just customer touch points or is it more holistic and involve business model change?
It's more holistic. It's about changing the way you interact with customers. An example, we talk a lot in service about predictive service. Knowing that your customer is going to have a problem before they know it and getting in and resolving it; that's actually good service in an experience economy paradigm, but it's not a traditional break/fix model. That has fundamentally changed the way companies think about their service operation.
In the marketing world, being able to target and serve customers in these micro-moments where they're going across different journeys on social, on the Web, in-app has created a different paradigm for marketers about what information they need to provide to become a trusted advisor to a consumer. All of these changing interface models are changing business models, and that's changing the way companies think about customer experience as an entire category.
Michael Krigsman: Customer experience, then, as it moves into the concept of the experience economy, ends up being really fundamental to the way an organization relates to its sources of revenue.
That's right. If you think today about things like subscription billing, there are many companies that have traditionally been in the business of manufacturing jet engines or MRI machines. The way consumers want to consume or buy has fundamentally changed. Rather than buying a huge machine and depreciating it over its life, they want to be able to subscribe to services, to use, to hours used of a particular asset.
Mercedes Benz is a great example of this. For $1,100 a month, you can get prepackaged insurance and a car delivered to your door fully cleaned. You can get any kind of car you want. One weekend you want the convertible; one weekend you want the SUV. It's your choice. You have a subscription to use a product which you think of as the Mercedes promise, but it's not any particular car that you buy and then has to sit in your garage being idle 90% of the time.
How does customer experience inform your product design decisions at Oracle?
It used to be the case that we thought a lot about persona-based product development. We would think about what is it that the marketer wakes up every day and wants to get done, or the VP of professional services or the VP of sales operations? We would set a product agenda in a calendar and set the requirements based on that.
Today, it's a lot more about, how do we make sure we are empowering whoever gets to the customer first, whether that is a campaign that was launched by a marketer but quickly becomes a service interaction, whether it's a sales opportunity that we've got to make sure is tracked along with the service request? It's now, again, about how do you connect the dots between the different front office personnel and make sure that we're designing products and experiences that appeal to all of them.
Increasingly, Michael, we're seeing CX decisions that are cross-pillar or cross-silo. Because of that, there's a mandate more now to connect the various components of these journeys together.
What is the Oracle CX platform?
At Oracle, we have a pretty simple approach to it. At the core is a customer intelligence system. We have launched our product not too long ago at OpenWorld. It's called CX Unity. It's a behavioral, transactional combination system that allows you to, again, be able to use data to empower whatever process you're involved in, whether that's service, sales, marketing, commerce. It allows you to dive into the key intelligence about your customer and use that intelligence to optimize a process.
We also build applications on top of that core system that served the particular needs of the salesperson, the marketer, the service professional, or the commerce professional. We also provide an engine that helps you build relevant content to serve those needs.
Content is an interesting thing today because we often say we live in a pageless world. It's not content that's always delivered to a webpage or to an application, but it's often signals delivered to my smart device, my watch, or my wearable. We want to make sure that content and experience can be deeply connected to each other regardless of the consumption vehicle.
Those are the components we build. It's a core behavioral, transactional data system and a set of applications that can be delivered to any device in any format that the consumer needs to receive it.
Are the experience economy and customer experience a core business strategy for companies?
I think it's a CEO level mandate in almost every company that we speak to. It's hard to get CEOs super excited about back-office things a lot of times. Usually, that's the paradigm of the CFO or the VP of supply chain.
It's very easy to get a CEO excited about their customers. Every company knows that their success begins and ends with how they differentiate in front of the customer. It's a CEO level mandate today and it's moved from being about soft variables to now about really hardcore ROI metrics that come from the way you differentiate on the basis of service, on the basis of interaction, on the basis of surprising and delighting your prospects and your customers. Those are things CEOs care about.
Michael Krigsman: In effect, you're saying that if we do a better job for our customers, they will spend more with us and, therefore, we have to align our business operations to meet those customer needs and customer expectations.
I think that, and I think the amount of time that CEOs themselves are spending on customer experience has gone up dramatically. The idea that I can hire a CX professional or a head of customer experience and then I can think about other things as the CEO, that time has gone away. CEOs are now spending 50%, 60%, 70% of their time worrying about this phenomenon because they see traditional businesses being disrupted all the time by upstarts who understand this new experience economy paradigm and are getting ahead of their competitors by really using that as the source of competitive advantage.
How can companies embrace customer experience?
The first thing is to study the models today that best in class customer experience companies are using. I gave a couple of examples in industries that you might not traditionally think of. We've talked a lot about everyone knows that Starbucks has focused on customer experience and done a great job with that. They continue to innovate across the board with the way people order things from Starbucks to the relationship they have on a loyalty basis going forward. People know about that.
They know about stores like Nordstrom or Southwest Airlines, but they don't often think about Elgin, who is a street sweeper company. They build street sweepers and they have created a model for the contractors who use their street sweepers to make sure that they're able to fulfill the demands of different cities that they're working for, how they're actually doing maintenance and repair in a way that keeps their street sweepers going and being used and is able to have a great experience for the contractors and for the cities. The City of Albuquerque is using a 311 service through Alexa to be able to report and fix graffiti in their cities. These are great stories that are popping up from municipalities, from hard goods manufacturers, from capital equipment companies, and they're using customer experience as a source of competitive advantage in every bit as much a way is Starbucks and Southwest Airlines.
Michael Krigsman: The conversation begins with the business strategy. That's the foundation.
It starts with the business strategy and starts with recognizing what are your points of differentiation and how you can use customer experience to create real competitive separation.
What are the technology components of customer experience?
Technology, to me, is an enabler of customer experience change. It's actually not the most important part. When we spend time talking to customers, we spend a lot of effort really trying to understand how your business is changing and technology can help you facilitate your transition into that new business model but it's not the primary driver. You have to organizationally be ready for that.
The big thing that that requires, which is technology enabled, is really understanding data, understanding the information, the signals through the noise that your customers are giving you about what matters to them. That can be everything from understanding what types of interactions that they have that are most meaningful to converting them to buy your product. It can mean how they want to engage with you in a subscription context to be able to keep a recurring relationship with you. It may be in the service context that I'd talked about. Understanding data and understanding how to keep your data secure, keep it safe, and really maintain that as a protected asset of the company but, also, at the same time, be able to create instantaneous access to real-time signals that can help you figure out how to drive your business forward.
Michael Krigsman: You need to then also understand the types of data that you have available to you and then the next step is the set of tools and processes that you need in order to manage, leverage, and make use of that data.
The hardest thing to do is to figure out, inside your company, how to build policies, governance, and cooperation among departments so all the necessary data is available at all times, again to whoever is there at the customer first, whoever is at that moment of truth, as we call it, or that point of interaction where they need to be informed by all the things that your customer has done across the company.
Michael Krigsman: I'm wondering; to what extent do you work with your customers to help them, from a business standpoint, look over their organizational landscape, the types of data, how to collect that data, and how to manage it?
We actually do that all the time and it's becoming an important part of what we do. Clearly, we build great software products and we're proud of those, but we also are in conversations with a lot of strategic customers who are trying to figure out how to navigate this world of change. Every company today, to a certain extent, is a software company, whether they build their own software or they're sourcing it from companies like us.
The kind of advisory relationship they often want to have with us is, help us to understand what your best partners are doing. What are your best customers doing here? How are they changing their businesses? How can we both understand the right products to use but, also, the right business model change to put in place? I think Oracle has an important role in that, as do all the major software companies.
What final advice can you offer?
I think one of the biggest obstacles today is companies are still thinking of this in a silo and trying to source best of breed components from a variety of different players and act as a system integrator themselves in putting this all together. I think that's a mistake today. I think driving toward platform decisions is more important than ever because there are so many different touch points that need to be orchestrated.
Unless a company wants to make this their full-time job, they're better off finding a trusted partner or a few trusted partners that they really believe can help them end-to-end. That's connecting the front office to the back office. That's connecting their customer experience to the engine that drives their company forward, whether that's a physical product or a service. That's connecting across the different touch points. These are all very, very important decisions. Having a few trusted advisors at this phase of the customer experience curve is probably a better bet than trying to source it from tens or hundreds of different companies.
Published Date: Jul 09, 2019
Author: Michael Krigsman
Episode ID: 608