Whitepaper: Business value for perfect customer experience & integrated value chain; by Sourajit Ghosh (SG)
Sourajit Ghosh (SG)
Chief Expert, MBA, AI strategist & data scientist, SAP AI Blackbelt, CX & CRM advisor & thought leader, Gold Medalist Engineering, Enterprise & Business architect, Management consultant, Advisor startups, IIT-IIM alumni
Contents
Why customer experience (CX)?
Defining customer experience (CX) & integrated value chain
CX: key components
Value chain: key components
CX & integrated value chain: key components in technology enterprise architecture
Strategic framework for perfect CX &integrated value chain
Customer net promoter score (NPS)
Perfect order Rate
Customer lifetime value??????????
Business value outcomes
Mathematical model for calculating synergy
Enterprise architecture design: Customer experience & integrated value chain
Why customer experience (CX)?
Imagine a coin. On one side are customers and the other the company providing an experience (product, service, solutions) to the customer. The customer can be an individual consumer (business to consumer); or a channel/distributor; or a key account; or marketplace eco-system. The perfect customer experience is when both sides co-exist as one office on that same coin. They are the same coin – just 2 different sides of it.
Once you understand this end objective as a company, you design your business strategy, end-to-end processes, your enterprise architecture, and your IT infrastructure such that you design the best coin possible! The best unified one office experience along-with the best customer experience.
This whitepaper will address – the “Why?” you need to do the same. The business value for perfect customer experience & integrated value chain.
Defining customer experience (CX) & integrated value chain
?CX: key components
By CX in this whitepaper, as a domain I would mean the following key business domains/organizations and associated business process:
1.?????Go-to-market customer strategy and leadership team
2.?????Sales
3.?????Service
4.?????Marketing
5.?????E-commerce
6.?????Customer data
7.?????Customer success
Value chain: key components
By integrated value chain, the above business domains will have to integrate to downstream fulfilment domains:
1.?????Order fulfilment – pricing, inventory, logistics
2.?????Supply chain – planning, execution, warehouse management & delivery
3.?????Asset management
4.?????Finance, billing & invoicing
5.?????Sustainability
CX & integrated value chain: key components in technology enterprise architecture
The relevant technology solutions which will enable the perfect customer experience & integrated value chain are:
1.?????CRM – sales & service
2.?????Marketing/ MarTech – marketing planning & execution, campaign management, marketing network
3.?????E-Commerce, omnichannel B2C & B2B commerce, Portals (B2B, dealer, partner channel, customer self-service)
4.?????Customer data (customer data platform, customer data management, customer identity access & preference management)
5.?????Customer big data & data science platform
6.?????Integration suite
7.?????Analytics suite
Strategic framework for perfect CX & integrated value chain
The business value for perfect customer experience & integrated value chain can be impacted by measuring and ensuring these 3 key KPIs are consistently improved:
1.?????Customer net promoter score (NPS)
2.?????Perfect order rate
3.?????Customer lifetime value
The 3 executive board level KPIs the above will thus impact are:
1.?????Revenue growth
2.?????Operating margin
3.?????Customer retention rate
Customer net promoter score (NPS)
Customer net promoter score (NPS) is a long-proven measure to calculate how great an experience your company is providing your customers. This single metric also predicts customer retention and revenue growth.
In general, there can be many ways of calculating NPS relevant to your company. At the heart of it is this question which you will ask your customers:
“How likely are you to recommend our company/ product/ brand/ solution/ service/ experience…. to others (example: your friends, family, marketplace, community, digital followers, business partners, etc)”
More your customers will promote, the more the NPS
How to increase Customer NPS
When you are calculating the NPS, try calculating individual components of the NPS for the entire customer experience and value chain. For example, ask your customers how likely they will recommend their experiences when it comes to:
1.?????When they were marketed to (example: via emails or social media)
2.?????When they first visited your website digitally or your store-in person
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3.?????Whey they spoke to your sales representatives or service agents
4.?????When they were in process of buying like e-commerce or in-store or B2B portal; (longer sales cycles in B2B business – hence ask individual phases like opportunity-> quote->contract)
5.?????When they completed the purchase and was waiting for the delivery (of products/services/digital experience)
6.?????When they received the delivery of what they bought
7.?????When they had a problem and needed support – and returns or renegotiate
8.??????When they were billed/invoiced/subscription charges
9.?????When there were escalations along the way (example: delayed shipment, non-availability of product during purchase, bad self-service experience, dealing with untrained ill-equipped sales or service agents, etc)
10.?When old customers tried to introduce new prospective customers and promote your product
Customer journey design @ NPS
Granular insights into NPS in various stages in your customer life cycle will help you shape your execution design towards a better CX and integrated value chain.
Perfect order Rate
There are various ways to calculate perfect order rate. Some try to keep the definition very narrow and only stick to final orders shipped without any error (accurate orders / total orders)
However, in this scenario consider the entire lifecycle of an order (just like you considered the customer lifecycle in NPS calculation above)
Hence while calculating perfect order rate consider the following
Excellence in each of these components will help your organization drive a holistic perfect order rate:
Availability of products/ services (digital/ shelf)
Accuracy of available to promise pre-purchase
On-time delivery
Order line fill rate
Efficient Returns for sustainability
?
Customer lifetime value
As an organization you are trying to do the following to increase the Customer Lifetime Value (CLV) of your customers:
Frequency of purchase
Increase the number of purchases your customers does with you. This could mean both number of line items of products/services bought per transaction and/or increase number of transactions over a period.
Value of sales per transaction
You are approaching this by:
1.?????Increase the sales price (per item in sales orders) – however with not compromising either your operating margin or neither your competitive differentiation. Pricing (calculating advanced dynamic pricing and margin) integrated to sales becomes an integral element to achieve this
2.?????Upselling and cross-selling at the time of selling. A blend of CRM and e-commerce with predictive algorithms and deep customer insight thus becomes critical for the same
Profitability/ margin (cost to serve)
Historically lowering production or service costs would contribute the most to lowering margins. From a customer experience standpoint, this still holds true. However, there are now other powerful ways too of improving your profitability.
A streamlined well-integrated customer experience with supply chain and ERP will help you drive a lower cost-to-serve. Also, omnichannel self-service commerce with innovative business models like subscription too will improve your margin.
Business value outcomes
Here are some examples of business value outcomes of an integrated customer experience and value chain:
§?Deliver a hyper-personalized customer experience – omnichannel, real-time, insightful – driven by connected value chain data (front office and back office)
§?Automated process flows make sales and service reps more efficient resulting in improved operational efficiency and productivity
§?Achieve high efficiency when it comes to line of business (sales, service, marketing, e-commerce, etc)
§?Integrated processes in sales drive higher lead quality, improved deal conversion, shorter sales cycles, and shorter lead-to-cash cycle time
§?Integrated processes in service result in improved customer experience, satisfaction, and loyalty
§?Ensure data harmonization and consistency across the customer experience value chain (master data like customer, product, pricing, etc). Improved data consistency, quality and accuracy improves confidence leading to better decision-making?
§?Increased employee satisfaction resulting in reduced turnover in sales and service
§?Up-sell & cross-sell real-time
§?Distributed and omnichannel efficient and effective order management
§?Quality of pricing information improves pipeline and forecasting accuracy?
§?Data is today’s currency, accurate data provides a competitive advantage?
§?Real-time, centralized, clean data allows for informed, high-quality interactions leading to greater customer value
§?Ability to make more informed decisions with promotional, project, delivery, and provisioning information
§?Centralized info increases user adoption (no need to learn how to use other systems)
§?Providing sales and service professionals with comprehensive real-time access to enterprise customer data, enables them to deliver informed interactions at every touch point making them trusted advisors.?This increases loyalty and retention and shortens sales cycles and lowers competitive threats.?All resulting in revenue growth.
§?Improved collaboration with other departments means sales/service reps have additional tools to nurture, sell, and support customer inquiries
§?Increased ability to meet quota and goals through better collaboration with the indirect channel
§?Simplified IT environment & reduced costs
§?Prepackaged integration flows & common data model between front-office applications (sales, service, e-commerce, marketing, customer data) & back-office applications (supply chain, ERP, finance, subscriptions) will result in lower TCO (total cost of ownership), efficient upgrades and lower maintenance with cloud solutions and prepackaged content
§?Increased use of analytics, data intelligence & predictive insights will help you differentiate against competition
§?One unified connected customer experience & integrated value chain platform will improve your cash-flows and accelerate your return of investment (ROI) in existing and new ventures thus enabling a high NPV (net present value).
Mathematical model for calculating synergy
You can consider the following model (for more details refer to this whitepaper: https://www.dhirubhai.net/pulse/strategy-customer-experience-integrated-operating-model-ghosh/)
Enterprise architecture design: Customer experience & integrated value chain
The above target enterprise architecture can be considered as a framework to help you design a perfect customer experience and the integrated value chain.
Personal Disclaimer
The content expressed in this publication is purely the personal opinion of the author and do not necessarily reflect the official policy or position of organization the author works for.?