"Without customers you don't have a business, you have a hobby."
This quote from Martha Rogers, Ph.D., and Don Peppers' book Return on Customer captures the essence of customer centricity, and validates every organization's need for an executive whose primary focus is to champion the customer cause. But because it is business we're talking about, this customer focus can't operate in a vacuum. It must link tightly with overall business goals-profitable growth being chief among them. And this leader must guide his or her organization's customer strategy to do so.
1to1 magazine recognizes the tremendous effort it takes to align customer and company goals, to serve the customer while serving the bottom line. We also know that behind virtually every successful enterprisewide customer strategy is that Customer Champion-an individual who tirelessly evangelizes the customer cause, who reminds associates that customers are the business. In this annual salute to those dedicated, stalwart executives, 1to1 magazine honors the achievements, strategies, and approaches of 13 leaders whose efforts have commanded attention-and garnered results-this past year.
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Fifth Third Bank
Vice President, Direct Marketing Analysis and Research
When Katherine Black joined Fifth Third Bank two years ago it didn't take her long to notice a crucial gap in the customer relationship. "Historically, we heavily relied on our sales force to give us customer feedback," she says. "That works fairly well when you ask how customers are responding, but what we didn't do is talk directly to the customer, directly analyze the customer's actual behaviors and how they drive decision making."
Black proceeded with a new program of customer interaction. "We're doing quite a bit of customer research. We're finding out how satisfied customers are with the bank and questioning them about various attributes of loyalty and satisfaction," she says. "More important, we are looking at how we can create a better overall customer experience."
The studies showed that although Fifth Third was efficient at executing any sales and marketing program it initiated, the effectiveness of and customer satisfaction with the programs sometimes lagged behind Black's expectations. Since execution was not a problem, she focused efforts instead on improving the company's marketing database and the speed and effectiveness with which that information is presented to front-line staff. "We have improved the way we get information to the sales force, and that has improved the frequency, accuracy, and appropriateness of how we communicate with our customer base," she says.
Getting the bank to overhaul its understanding of the customer relationship wasn't easy, but she was able to fund a pilot program out of her budget, identifying $15 million in potential revenue improvements as a result. Now Fifth Third focuses its sales endeavors not simply on meeting the specified targets of a program, but with a keen eye on the customer perspective as well. "Anytime you involve an organization in trying to become more customer focused," she says, "it's a matter of remembering day in and day out to include customer information in the processes."
I always tell my staff: "You have to leverage the strength of the organization...and the bank has always been really great for its ability to execute on sales campaigns."
Big River Telephone
In late 2001 Kevin Cantwell took part in the buyout of a small telecommunications company floundering in a sea of competition and unsure of its identity. Reorganized as Big River Telephone, the new company has refined every notion of who its customers are and how it will interact with them, and is staking out a unique position, targeting rural customers in an increasingly consolidated space. "We're focusing on customer needs in these areas that have been overlooked by the monopolies, either because the customers didn't think they had choices, or if they did have a choice, didn't feel the [alternative] was a real company they could entrust their business to," he says.
But winning customers away from incumbent companies -- and keeping their business -- was no slam dunk. "We had to change the mind-set of the employees first, and then of the marketplace." Cantwell led an effort to remove Big River's web of IVRs and replace them with live customer service reps. He gives customers a toll-free number to reach him. "More than 10,000 customers have my home telephone number," he says. "I wouldn't give out my home number if I wasn't committed, because they'd be calling me all the time cussing me out."
When it comes to making deals with customers, Cantwell shifted the organization to think about providing the best possible service and to ask for prices that reflect that quality. "We will go anywhere, anytime to talk to a customer about using technology to improve their business, but we are not in the price game," he says. "That means if you can't do something for a customer, you have to tell them, or if you're not the best solution you have to tell them. But that also means they may pay us a little more than they would pay [a competitor.] At the end of the day, you have to treat people how you want to be treated."
United Parcel Service
Senior CRM Director
Sheila Dunn was not mentioned in Fortune's coverage of UPS in its ranking of America's Most Admired Companies. She should have been. The company achieved top-10 rankings in four areas she covers: third in the "best use of assets" category, fifth for "people management," sixth for "management quality," and ninth for "long-term investment."
Four years into a five-year customer-centric initiative, she's kept UPS on course by coordinating monthly meetings among the CRM executive steering committee, which includes the company's CIO, CTO, CFO, and CEO, as well as by rolling customer-centric solutions out to various parts of the far-flung UPS organization. Dunn executes the road map by connecting technology to people-and doing so firsthand.
During the second half of 2005, when sales force automation was the priority destination on the road map, she met with several levels of salespeople all over the world to get firsthand experience and feedback about how the SFA tool was working in the field. From that personal involvement she learned that the SFA tool UPS had implemented needed additional customization. It was built with midmarket accounts in mind. However, salespeople who serve larger accounts needed more detailed customer data and additional communication tools, such as wireless capability. Dunn reported her findings to the executive committee, and implemented the necessary changes.
Dunn's current focus involves overhauling the company's contact centers. Again, Dunn and her team are taking a high-touch approach, spending time with agents as part of their analysis and evaluation of UPS's contact center operations. Technology will be a major part of the new contact center approach.
The best thing a customer ever said to me: "Last year we met with several of our strategic accounts not just to deal with problems, but to define how we could work better together for the next few years," she says. "We moved the relationships from addressing immediate needs to long-term needs. I received many compliments for doing that."
My mentor's insight: Dunn credits the recently retired Gary Mastro, former senior vice president of the UPS brand, for instilling the customer-centric approach. "He taught me to always think of the customer and always innovate," she says. "He's always exuberant, even in a crisis. He saw crisis as an opportunity."
Management Style: A high-touch approach that includes meeting with field personnel before implementing any strategic changes
Briggs & Stratton
Decision Support Manager
Sometimes a customer focus is crystallized by the pressure of a crisis. When Hurricane Katrina decimated Louisiana and Mississippi in August 2005, Grant Felsing went into action. Briggs & Stratton does most of its business manufacturing the engines that power electricity generators, power washers, and other industrial equipment. The generator product line was overproduced before the storm hit, so when it became a disaster beyond anyone's prediction, the company was ready. Generators were already en route from the company's Milwaukee headquarters when Katrina hit, and Felsing's department coordinated billing, shipping, and other logistics with Lowe's, WalMart, and other retailers to expedite getting the products into the hands of those construction crews and private citizens who urgently needed them.
Key Motivator: Decision Support's processes bolster customer processes
Chief Marketing Officer
Last April Jeff Glueck took a risk that "flew directly in the face of conventional wisdom," he says, referring to the idea that it's nearly impossible to build customer trust or loyalty in online travel. Glueck was instrumental in creating and launching Travelocity's Customer Championship program, designed to build loyalty and engage customers, as well as implementing a Customer Bill of Rights.
To help Travelocity implement the customer-centric strategy, he spent six months convincing the executives to put long-term value ahead of short-term profit, and carefully worked through the plan's objectives, from legal to financial. In addition, his team conducted extensive customer research to convince the executive team that customers would respond to messaging about trust.
The transformation took months of training and a $20 million investment in Siebel and Intervoice technologies to pull off, but it was well worth the effort. In the final two quarters of 2005 Travelocity grew its gross travel booked by 30 to 31 percent-more than double the growth of its major competitors.
Internally, Glueck is proud of his team and how it has evolved. "Marketing was seen as a silo that was supposed to bring eyeballs to the site and nothing more," he says. "Now we're an engine of defining what the company is all about and ensuring that we live up to the promises we make to customers... Listening closely to customers has become a deep part of the company culture."
That listening helped Glueck and his team to launch the next phase of the Customer Championship strategy. On March 1 Travelocity unveiled the Proactive Guarantee, which extends Travelocity's protection program to include pretravel situations. For instance, if a hotel pool closes or a departing flight switches airport terminals, Travelocity will notify all affected customers. "Consumers are blown away by a company looking out for them like that," he says.
Vice President, Relationship Database Marketing
Jonathan Huth views his role as serving customer interests, keeping Scotiabank's marketing efforts relevant and unobtrusive. "I lead a team of database marketers who act as ambassadors of customer contact," Huth says.
The mission of these ambassadors is to support and promote loyalty by presenting the right offers at the right time, based on customer needs-not on an artificial marketing schedule. "Banks have always talked about loyalty, but typically have only focused on their wealthiest clients," he says. "What we're doing is providing those timely solutions to the broader base of our customers. Our programs go out year-roundand we don't contact customers for things they already have." That attention to relevance has encouraged customers to sign up for email newsletters that deliver relevant, just-in-time offers.
Huth's approach is inspired by his father, a local drugstore owner. "He built a successful business based on knowing customers-not with technology, but he knew every customer's name, he knew their last prescription, he would change store layouts and add different products based on what his customers were telling him they wanted," he says. "I'm trying to create that experience using technology."
That experience begins when a customer first opens an account. The bank responds with a mailer that targets additional products and services based on the customer's known financial situation. "We start with an analysis of each customer's holdings and transaction patterns, we look at demographics, and we apply technology to help us continuously learn from responses," Huth says. The payoff has been consistently high customer service ratings for six years running.
To ensure that customer data is getting the right amount of attention and that offers are being made in a consistent and responsible manner, Huth works with a cross-functional customer contact committee through twice-monthly meetings to constantly refine and correct the types of offers and criteria used by the bank. "I certainly can't take all the credit myself, because without the focus the bank puts on customer service, none of the technology or the great people on my team or the work I've done would have succeeded," he says. "It takes a fertile base of commitment to customer service to make the pieces come together."
Deliver the ultimate customer experience. Not surprisingly, that customer strategy pervades BMW's global culture. But Kelly Lam takes it a step further. His personal strategy is to be "genuine with the brand and genuine with the customers." That integrity drives Lam's approach to supporting the BMW brand and his job. Two major recent initiatives illustrate how he executes his personal customer focus. The first is through changes made to BMW Canada's survey techniques. "A lot of companies collect all the information they can get," he says. "But the focus has to remain on collecting useful information. If you're not collecting information you can gain insight on, you're not giving the customer the ultimate experience when they take your survey." And BMW dealer input is collected before BMW Canada executes its substantially shorter customer surveys.
The second initiative involves internal and external messaging. Lam has taken BMW Canada from an organization that had as many voices and customer communication tactics as the company has dealers: 79, to be exact. Customer-facing emails, internal emails, and marketing materials now have "one voice for one brand." Lam believes the customer experience is improved by the consistency.
The best thing a customer ever said to me: "I have always dreamed of driving a BMW and now I do. It is more than I ever dreamed it would be."
Good advice: Lam takes his from a restaurant: French Laundry, in Napa Valley. It has been ranked as the best restaurant in the world by Restaurant magazine. It seats about 50 people and a visit can range up to $200 per customer. "It is actually a very comparable brand and very comparable experience to ours," he says. "It's exclusive, luxurious, and when you go there you feel like a guest at someone's house. It's a combination of a great product and a great experience."
Senior Vice President of Marketing Information and Research
With more than 13 million customers and $124 billion in assets, data has been critical to US Bank since its first business intelligence program started in 1995. It has always been ahead of the curve in a business that has adopted advanced customer strategies faster than any other. Richard Martino and his team are responsible for all customer data and customer research initiatives.
Martino believes his role and the role of his 30-member team is to use data and the insight gained from it to challenge the common wisdom that the customer is a stable, uniform entity. Complacency in any area of customer strategy is unacceptable.
Martino's role is complex. US Bank serves customers who have millions in assets as well as customers who barely keep their checking accounts in the black. It serves customers who bank only online and customers who frequent branch locations. So he works hard "amplifying the customer voice" to understand the various needs of those disparate customer types. The result can be "deafening at times," he says. To manage that feedback he has developed an outsourcer's mentality for his division: He serves 13 million end consumers, but his more direct customers are the various divisions within US Bank.
Martino's team does a great deal of work for US Bank's home equity group, for example. The group relied on the usual direct mail tactics, but its response rates were flat over the past year. In late 2005 Martino's team developed a two-stage analytics program that spawned a new direct mail approach based on customer insight. The most recent campaign resulted in a 60 percent lift in response rates.
Martino's team deals with more than 1,000 internal data or research requests a year. They can range from "How many checking accounts does the bank have?" to "Does our customer loyalty effort really work?" Tasked with the latter question, Martino recently completed the first phase of analyzing customer loyalty at US Bank, during which his team confirmed that customer loyalty can be directly correlated to the drivers of higher customer value. The next step is to determine how much incremental profit results from US Bank's loyalty initiatives.
I always tell my staff: "Essential to serving the customer is having a team mentality. This is not about Rich. I have an awesome team."
Director, Customer Experience
Brynn Palmer is responsible for monitoring and improving customer care strategies and policies at Charter Communications with the single-minded purpose of keeping client needs and wants foremost on the organization's mind. Although some of Palmer's daily activities sound typical to a customer care supervisor or coach-interacting with customers, reviewing CSR sessions, preparing analytical reports-her purview as director of the customer experience program means that she is not only responsible for the company's quality program, but also for acting as a customer advocate. "I represent [customers] when we're having business discussions about processes and procedures, and try to present what their view might be," she says.
Taking the customer's point of view into account led Palmer to make changes to the way Charter viewed the concept of experience quality. "Quality programs have typically been transactions and process oriented. I introduced things that seemed unusual to people who grew up in the care community," she says. Palmer engineered a change to a more conversational and solution-oriented approach to customer contacts, and one which focuses on relationship health. "If someone important to me in my life looks like they want to walk away, I'm going to fight like heck to get them to stay," she says. "Applying those types of simple relationship principles to how we relate to our customers is very valid."
She also shifted focus away from scripts. "I want [agents] to talk to the customer as a relationship, as someone they had just met at a party or church event. From there, we're able to solve their problem or offer information," Palmer says. "For a customer it's a more pleasurable experience to talk to someone more interested in having a conversation than just to get through a series of gated processes."
Changing the customer experience at Charter has meant looking beyond basic metrics like call handle time and assessing each customer interaction as a step in a relationship. "Every day when I come to work my job is to ask questions and affect some kind of positive change for our customers," Palmer says. "There's a business process we drive and results we see, but for me, my contribution in the role of the customer experience is spreading a great affinity for our customers."
I always tell my staff: "Look at a customer not as a call or a technical visit but as a relationship, and nurture those relationships with the same vigilance we would if it were any important relationship in our lives."
Michael Parks says his title may actually be "a misnomer." Most CIOs spend their time with the IT department, putting out data fires and arguing about things like code and firewalls. Not Parks. "Those things are all in the background," he says. "The network is just what we use to manage transactions. I...participate in what makes us a vital part of our customers' lives."
He loves meeting Virgin Mobile customers and immerses himself in data only as it enables the value-added services that have separated the company from its competitors. For example, Virgin Mobile has 8 percent of the total ring-tone market despite having a minuscule (around 1 percent) total market share in the United States. This edge is due to understanding its customers (more than 70 percent of its three million customers are under 30).
"The people who started this company...had a notion that there was an underserved customer segment," Parks says. "We developed a vision of what a wireless service would look like for that segment and it coalesced into a very strong mission." Parks' department has been essential to meeting that mission and driving the company's steady growth. This customer focus is baked into the DNA of the company. "Internally, I don't think there's one department here that believes the company revolves around what they do," he says. The staff of every department at Virgin Mobile believes they revolve around the customer, not vice-versa.
My mentor's insight: Parks' biggest product influencer is CEO Dan Shulman. As a "customer," Shulman road tests all of Virgin Mobile's new features. "He'll call me from somewhere on the road after testing something out and ask me why it didn't work better," Parks says. "He lives this stuff."
Vice President, Customer Development
Nita Pennardt spent one morning in early February handing out 12-packs of Coca-Cola's new energy drink, Vault, to her employees. Coca-Cola had launched the new product that week and Pennardt, who oversees the contact center, wanted to drive awareness. She knew that the best way to do so was to personally give Vault to employees so they and their families could try it.
Few top executives interact with front-line employees on such a nitty-gritty level. But for Pennardt, vice president of customer development at Coca-Cola Enterprises, employee engagement is the norm. That focus has helped turn Coca-Cola's three-year-old contact center into an $800 million revenue stream.
Pennardt's task started with building a single point of contact for the company's 20 sales divisions that run B2B accounts like restaurants and office buildings. She had no prior contact center experience, but senior executives were impressed with the 18-year veteran's results in accounting and sales. They asked her to bring her expertise to the start-up contact center, where she faced the challenge of establishing new processes, hiring talented employees, and deploying effective performance optimization technologies.
She attributes her rapid success to her passionate team and the technologies the contact center managers use to support them (a workforce management tool from Blue Pumpkin, a performance platform from Knowlagent, and an agent monitoring tool from NICE Systems).
As every engaged leader knows, however, technology works in tandem with a strategy. Pennardt perpetuates her vision of building an engaged employee and customer base by making investments in employees' career development. She builds their leadership skills and offers successful agents new development experiences within other areas of the company. "I truly believe that the more people know where they fit in the big picture, the more motivated they are to do their part to make the larger organization successful," she says.
Her commitment is delivering great results. The center serves more than 200,000 inside sales accounts, handles 63,000 inbound service calls each week, and generates $2.2 million in revenue per day. And Coca-Cola has shifted more prestigious accounts to her purview, such as a large national restaurant chain. Not surprisingly, Pennardt gives all the credit to her staff: "I want to be a champion, but I'm really the leader of the customer service champion team."
I always tell my staff: "Treat people right, and never think you can make yourself look good by making someone else look bad."
Seattle Supersonics/Seattle Storm
Vice President, Guest Relations
Pete Winemiller is charged with ensuring that every customer ("guest," he is quick to correct) has a fabulous experience at every basketball game put on by the NBA and WNBA teams he represents. And he has to do it with an event staff made up primarily of contractors and employees of other organizations, ranging from City of Seattle staff to part-time employees of concession and guest services corporations. To complicate matters further, he has no control over the event taking place on the floor. "We are different than a Wal-Mart, Starbuck's, or McDonald's, where if you have a problem with something you purchased you get an exchange or refund," he says. "We can't replay the basketball game for you."
In such an environment, creating a consistently positive experience is a challenge. His solution is to turn every one of the 500-plus employees in a gameday stadium into knowledgeable and customer-focused ambassadors of the team-even though only about 30 of them are directly on his payroll. Winemiller strives to communicate to the customer service partners that they are the most important people in the entire relationship. "It's not me," he says. "And the players do not have the single greatest impact."
Engendering trust among this staff has not only required ensuring that the teams' internal staff walk the customer-centric message as well as they talk it, but also that the teams support the event staff. "You can't feel good about taking care of guests unless you feel good about being taken care of yourself," he says. That means backing up security or concession personnel when they take initiative to clear up a mistake or settle a dispute, being well-versed with all of the common and not-so-common questions ticket-holders might have, and taking complaints in the spirit that it's "a gift of free consulting," as he puts it.
Much of the customer experience hinges on attitudes and vocabulary, according to Winemiller, hence his emphasis on guest over customer and conversations instead of training. By pushing these positive images, and slogans, such as "RAVE: Respect and Value Everyone," he believes he is bringing a consistently positive experience to the inherently unpredictable basketball event, as evidenced by the organization's high season-ticket renewal rate.
The best thing a customer ever said to me: "The treatment I and my three-year-old daughter received tonight was excellent. Keep up the good work."
My mentor's insight: "Howard Schultz, chairman of Starbuck's and chairman of our company, has shared with me more than once, 'You can't build loyalty on the outside with guests until you build it on the inside.'"
Todd Woloson's approach to business is grounded in the belief that taking care of employees brings a company closer to its customers. Internally, every Izze employee has stock options. He also encourages the kind of conservation and social responsiveness that the brand stands for. According to Drew Grumhaus, vice president of operations, Woloson identifies with people who "appreciate, enjoy, and preserve the environment." That sentiment is expressed consistently by Izze employees, as well.
Also, Izze has taken social responsibility to the employee and local level, redefining employee to include the people who grow its raw materials. Through its Project Reach program the company supports education efforts in geographic areas that produce the fruit used in its products. Izze also supports the Healthy Start Day Care Center, based in Parlier, CA, one of the largest white grapegrowing regions in the country. Healthy Start exists solely to provide services for teenage mothers who want to complete their high-school educations; the mothers who use it primarily are daughters of local farm workers.
These programs increase the company's appeal among customers with a strong sense of environmental and social responsibility-and help create the buzz that drives its business. In fact, Izze's marketing campaigns rely almost exclusively on grassroots, word-of-mouth efforts.
Woloson's efforts have brought him his share of kudos lately. Entrepreneur magazine's readers named him Entrepreneur of the Year in December 2005. And he was the subject of a recent Wall Street Journal article that called Izze's growth so spectacular-it topped $20 million in annual revenues within four years of its launch-that it would merit a close look from Pepsi or Coke as a takeover target.
The best thing a customer ever said to me: (From a Southern supermarket executive) "Izze puts me in a mood to support my community because I know [it] supports [its] community."
My mentor's insight: Woloson is a huge fan of mentors, and has sought them out at all points of his career. He points to Ben Cohen and Jerry Greenfield of Ben & Jerry's Ice Cream as examples of executives whose company maintained social awareness, even after selling out to a large corporation (Unilever). His current mentors are on his board of directors: John Bello, former CEO of SoBe, which sold to PepsiCo five years ago; and S.M. "Hass" Hassan, cofounder of Alfalfa's Market, now part of Wild Oats Markets. Bello advises him on how to manage his business in the face of the Coke-Pepsi monolith. Hassan counsels him on the importance of keeping the holistic approach to the product and marketing.