The Economist:
Integrated Transformation

The first step in becoming more customer-centric is to understand what customers want

In late 2018, when former Intel chief executive Brian Krzanich took the helm at CDK Global, a provider of enterprise software for car dealerships, one of his top priorities was to uncover the reasons behind a falling customer retention rate and a poor Net Promoter Score (NPS). The NPS is a customer experience measure based on the percentage of customers who say they would recommend the company’s product or service to others.

It soon became clear to him that, for some time, dating back to its 2014 spin-off as an independent company from payroll specialist ADP, CDK Global’s leadership had been highly focused on internal measures around cost and profitability, and not enough on its customers. “Customers had suffered, and there was a lot of frustration,” he says.

“I spent a lot of time in my first few months visiting dealerships, spending time with their owners. And what I consistently heard was, ‘We don’t see CDK as a partner. Your business sells me a product, you implement it and then you go away—and the next time we see you is when it’s time to renew our contract and you want to talk about pricing. But you’re just not helping me to run my business.’”

That was the catalyst for Mr Krzanich and his team to make a start on building a more customer-centric model, in direct response to the frustration they were hearing. At the heart of this model is a new “customer success” team of between 80 and 90 people, currently being recruited for deployment this year, who will make regular visits to customers. This team will talk customers through recent key metrics for their business (sales and service revenue growth, advertising spend, how their performance compares against the industry average for their region, and so on), as well as make suggestions as to where and how improvements might be made.

Mr Krzanich has also extended CDK Global’s customer support hours by 30%, in order to better cover the weekends and holidays when car dealerships are at their busiest and can least afford to experience software problems. In addition, sales executives at the company are now compensated not just on new sales, but also on retaining existing customers.

It’s still too early to say what the impact of these changes will be, Mr Krzanich acknowledges. But, he adds, “A year from now, I want to see that customers are using our software more, that they’re more productive as a result and that they’re making more money. If we’re able to see these things, then that will be the best validation of our success in putting them first—because if our customers win, then we win too. It’s as simple as that.”

Customer experience begins with an understanding of customer wants and needs. The survey shows that practically all companies (98%) already use various methods to capture information that helps them evaluate customer experience (see chart on next page). Some of this information is quantitative in nature, some qualitative—and both are important to well-rounded market research.

Regardless of where it originates, all this information and data need to be aggregated in order for a company to achieve a holistic view of the customer. This can be understood as an all-encompassing profile of each individual that includes their contact details, order history, and billing and payment details, as well as responses to customer satisfaction surveys, relevant social media posts and so on. In other words, companies are looking to establish a “big picture” view of all a customer’s interactions with it, across different brands, products and channels.

Respondents indicate that they believe they have achieved this holistic view in their organisation. More than a third (35%) describe their view of the customer as “very holistic”, while 42% describe it as “somewhat holistic”.

This may be over-optimistic. A holistic view of a customer implies the ability to tie together every interaction a customer has with its brand, across any and every channel. In theory, the effect for customers is that, in every interaction a customer has with different employees and departments within that business, they will be recognised, the context of their query or issue will be understood, and they will experience seamless hand-offs between employees on complex journeys, such as submitting an auto insurance claim or reporting a problem with their internet service.

Connected journeys like this, however, are still not as common as customers would like. Although firms may report solid and comprehensive customer understanding, the organisational overhaul required of companies is profound, as fragmented organisations strive to bridge siloes and disparate infrastructure to meet demand.