Waking up to The Semiconductor Customer

Intro

The past three years have been tumultuous for semiconductor companies. The immediate hiring and supply chain challenges of 2020 were followed by enormous growth, with the semiconductor market growing by 26% in just 2021[1]. Growth moderated to 3% in 2022[2], and is expected to shrink about 11% in 2023[3], but these rapid changes in the market underscore a perennial challenge in the semiconductor market- highly variable sales, often making long-term planning challenging.

To help attempt to moderate the variability, companies are considering how to smooth the sales cycle, to offer more predictability and stability in revenue. They are looking to differentiators to help create greater stickiness with customers. One method of differentiation can be winning on customer experience.

Semiconductor leaders have already begun to cultivate more customer-centric organizations. A recent Deloitte survey[4] found that,

• 50% of transformation leaders surveyed are currently improving customer-centricity in their operating models to achieve strategic priorities
• 43% of leaders are driving improvements by involving customers early in the product development cycle
• 33% of leaders are gathering customer inputs to refine product roadmap
• 23% of leaders are driving collaboration between sales and development teams

This could be a moment to embrace investing in customer experience, as semiconductor companies face increased diversity of customers, many requiring new ways of operating and engaging with customers. These new customers may also bring new expectations, often largely influenced by consumer brands that have upped the ante on customer experience (CX) in recent years, informing their buying experiences, both personal and professional. Consider the recent transformations, work completed by Deloitte Consulting, at a $10B+ B2B technology company with a hardware legacy. As the company pivoted to a software and recurring revenue-led business model, they instituted an enterprise-wide focus on customer experience, with an emphasis on driving customer success and outcomes. This permeates across all aspects of business, including:

• New CX-focused offerings - e.g., adoption services for major product lines,
• Business processes - e.g., new compensation models for sales teams with an emphasis on driving customer success,
• New systems and tools - e.g., a single interface for customers’ post-purchase needs.

Investments in customer experience can translate to direct financial outcomes, and become a competitive advantage, driving consistent sales to help smooth re sales year-to-year. The data supports the ROI of this investment, with leading customer experience (CX) companies experiencing an average increase of 18% in customer acquisition rates, 8% higher revenue, and 26% increase in customer lifetime value, over baseline companies[5].

If semiconductor companies answer the call to deliver on customer experience, they should consider re-designing the end-to-end customer journey, with particular attention paid to the hand-off between functions such as marketing, sales and service through the journey. To deliver consistently, the organization should be customer focused, with processes aligned to serve the customer and customer experience technology in place, but this journey often begins with making a commitment to becoming a CX leader.

Seamless & Consistent Experience

Today’s semiconductor buying experience can often be disjointed. Consider the sampling process. When a prospective customer requests a sample of a product, they may:

• Be able to buy that sample online via an ecommerce portal,
• Be required to go through their account’s sales rep,
• Be required to go through a distributor.

?The customer may not want to “raise any flags” to the sales team, as they do not yet know if the sample product will be effective for their needs. To avoid interacting with a sales representative, they may resort to creating fake profiles to obtain product. This demonstrates the customer’s frustration with the buying process, which often does not suit the customer’s preferences, and can compound the issue internally with the semiconductor company by creating bad data, and undermining efforts to create a single view of the customer.

So how can organizations redesign themselves to better serve customers, and deliver an improved experience? As with many transformations, customer experience should begin with the end in mind. What could a seamless and consistent end-to-end experience look like?

What Could A Better State Look Like?

A better experience would be seamless, with smooth transitions between steps in the customer lifecycle, starting with the pre-sales process through post-sale and support. A customer’s needs would be anticipated through a continual assessment of the Voice of Customer (via a method that integrates sales teams’ inputs, customer feedback via surveys, support requests, etc.) and solutions proactively identified for specific customer use cases. The representative would offer appropriate options, based on the individual customer’s past purchases and likely needs, based on their segment of the industry, use cases and customer segment needs. There would be a continual assessment of how the product is performing in the field, and how it is impacting the financial success of a customer’s product. An account and buying center-specific customer health score would be calculated by analyzing the customers’ revenue, margins and operational metrics, as well as their experience using the product, such as customer experience scores.?

In practice, an improved buying experience might look like the below:

A semiconductor buyer is looking to purchase a new type of chip for an Internet of Things (IoT) device.

1. Having worked with a company before for similar needs, the buyer logs into their account on that website to find more information.
2. While on the website, they chat with a virtual concierge to determine which chip would fit their needs. Once a chip is found, the virtual concierge asks the potential buyer if they would like to be contacted by a sales rep. The lead is automatically routed to the right sales rep, along with the initial conversation, so when the sales rep picks up the lead and contact the customer, they can pick up the conversation where it ended with the virtual concierge.
3. The sales representative assists in creating a cursory proposal to support the buyer in their internal procurement processes. The sales representative also reminds the buyer that any of their virtual concierges can assist if questions arise when the sales representative is not available, and the virtual concierges have access to the customer’s file, to provide detailed responses.
4. The buyer wins approval internally, and the sales process is completed quickly, with all documentation completed through a central digital platform, leveraging past billing and contracting information, stored from the last transaction. Upon completion of the sales process, the sales representative introduces the buyer to their account manager, who will be their primary contact for all service considerations, however, as ever, anyone will be able to assist them at any time, given their centralized record keeping.

While the individual buying journey could vary by type of semiconductor company, the important qualities of a seamless experience are often common across types of companies, and across industries. Semiconductor companies should strive to deliver the same level and approach to service at each touchpoint. The individual steps of the process should become almost indistinguishable as they are passed from marketing to sales to service in any order, with their next interaction influenced by any interaction to this point. The process should feel simple and intuitive throughout.

To achieve this goal, semiconductor companies should install the proper people, processes, and technology infrastructure. Teams may need to be re-organized to prevent siloes. Both customer-facing and back-end processes should be standardized and designed to deliver on the vision for customer experience. Technology should allow for greater insights into the customer and their needs. While transforming the customer experience could be largely focused on the marketing, sales, and service departments, it is worth noting that the initial transformation will likely require engagement from additional teams, including IT, product, and distribution.

Once the foundation is laid for the experience, companies should challenge themselves to continue to elevate the experience. Excellent service has often become an expectation. How can we use the experience to differentiate ourselves, and achieve the financial benefit of that investment? How can we stand out in the semiconductor industry?

Customer-Centric Organizations

The unsung hero of a seamless customer experience may be alignment between marketing, sales, and service. This type of seamless integration is often a challenge, with many companies experiencing siloes, which can be felt by the customer, in the form of broken hand-offs between teams. When information has not been shared between teams, it can create frustration for the customer, undermining their confidence in the semiconductor company, and creating needless rework by each of the downstream teams. As an example, consider something simple, such as deal sizing. Do marketing materials size in number of units, while sales offer pricing in volume of petabytes?

This challenge can be remedied through thoughtful operating model design and the proper alignment of incentive with key customer KPIs across the journey. As part of the design process, companies should consider the following:

• How should the marketing, sales, and service departments interact?
• How can customer success principles be embedded into the roles, goals, and incentives of these teams?
• What are the procedures to govern the hand-off between teams?
• Which tasks are owned by each party? Should these teams operate with separate C-suite leaders or a central revenue office?
• How can teams collect better data, to ensure all necessary information is captured to meet each department’s needs? How can teams contribute to a single view of the customer?

A Customer-Oriented Process

Having aligned on the organization of the teams, departments should create shared processes to govern how they will work and how customers will move through the sales funnel. All employees should know how their role fits into the larger customer journey to create trust in the process, and to promote working across siloes, as necessary and appropriate. The goal of this integrated process is likely to offer a seamless customer experience, with the customer feeling as though their transaction is a single unified journey, rather than distinct steps between marketing, sales, and service. For example, if a client reaches out to their sales representative for a service issue, is the sales representative prepared to direct them to the best channel for resolution? Would they be able to properly introduce a Field Application Engineer versus a Customer Service Representative, as appropriate to the client’s described challenge? This may seem like a simple application but can deliver an outsize impact in delivering a smooth experience and building trust with the client.

Particular care should be paid to the transition between teams during the customer journey. These are often moments that matter for customers, and reveal, in a flattering view or otherwise, the service level of the semiconductor supplier.

These processes should be designed intentionally with feedback loops, to allow companies to regularly iterate. The departments representing each step of the journey should meet regularly to review opportunities for improvement for the process at-large. Feedback should be solicited from customers, as well as staff at every level of the organization to identify opportunities, such as gaps in data or broken hand-offs.

Technology to Help Enable Better Customer Experience

Similarly to people and process, delivering on a stellar customer experience from a technology perspective will likely require consistent investment and attention. The goal of investing in technology is to provide greater integration across marketing, sales, and service platforms. Integration could begin with a strong technology foundation, to enable up and coming technologies and position companies to better embrace cutting edge solutions.

• Foundational Technology:

The initial integration of marketing, sales, and service systems often begins with marketing technology (MarTech) and CRM systems. MarTech can be used to personalize marketing outreach, track interactions, and retarget leads automatically. This information can be used to iterate on marketing efforts, as well as inform future sales and service actions. A CRM system can be used to capture and share information between sales and service teams to offer a personalized experience, in an analog fashion, and encourages greater collaboration between departments. In addition, semiconductor companies should also pay attention to the Configure Price Quote (CPQ) and Order Management systems and how they integrate with their partners’ (design, supply chain and distribution) systems. A well-integrated system can be important to deliver on customer experience needs, especially in a world where the boundaries between partners and customers is often blurring. Deloitte recently assisted a leading technology research organization to implement a CRM to streamline the sales process as part of a client experience improvement effort.

• Up & Coming Technology:

Having established a solid foundation, some semiconductor companies may be beginning to invest in greater automation and greater data capabilities. The process often begins with a centralized data platform, or CDP, to manage data through a single system, and share out to the related systems, fostering a single view of the customer and enabling customer success processes. Improved data and automation systems can be leveraged to enable capabilities such as next best action, where customers and representatives can be gently nudged towards a next step in the process, based on their previous interactions. It can also automate lead management, by scoring leads, proposing their prioritization, and routing leads to the most appropriate sales representative. These data systems also help automatically calculate customer health scores to gain a more complete and real-time understanding of the value and outcomes the company can deliver for the customer.

• Cutting Edge Technology:

?As companies look to the future, they might consider investing in newer tools and technologies to deliver an improved customer experience. Tools such as Generative Artificial Intelligence (Generative AI) can be used to improve the customer and engineering support experience.

For example, Generative AI is built on pre-trained, large language models that help users build unique text, images, and other content via text-based prompts. It can be used for customer-facing interactions, such as developing more personalized responses to customer requests, and resolving service requests faster through analyzing historical cases. It can also be used internally facing to analyze conversation sentiment and patterns and anticipate service needs for specific technologies.

Conclusion

As semiconductor leaders continue to design new ways of engaging customers, they should consider not only the tangible end-to-end customer experience, but also how they can refine the people, processes, and technology in place to support the customer experience. By considering the infrastructure that will foster a seamless process, they may be better able to provide a stellar experience consistently, particularly as customers are moved between teams throughout the process.

To be felt across the organization, it should be an enterprise-wide strategic priority, and that may be no easy feat. When done well, however, it can be a differentiator in the market, and result in increased sales, longer relationships, and increased customer lifetime value.

Authors

Kenneth Marzin , Brett Buresh , Keith Washington

Contributors:

Brandon Kulik , Philip Eranat , Duncan Stewart

[1] The Global Semiconductor Chip Shortage: Causes, Implications, and Potential Remedies (link - published in October 2022)

[2] Global Semiconductor Sales Increase 3.3% in 2022 Despite Second-Half Slowdown (link - published in February 2023)

[3] Gartner Forecasts Worldwide Semiconductor Revenue to Decline 11% in 2023 (link - published in April 2023)

[4] Global Semiconductor Alliance (GSA) and Deloitte Consulting survey, 2023

[5] Forrester B2B Decision Makers Study, 2022