April 11, 2016

Improving customer experience is a critical competitive advantage – even in the manufacturing industry

Jaakko Vilén

Sales Director, Fintech Customer Experience, Tieto

Jaakko Hallavo

Lead Business Consultant, Tieto Corporation

"One of the few ways for a company to grow profitably is through superior customer experience," says Jaakko Vilén, Sales Director at Tieto. In today's complex environment, this is easier said than done. Help can be found in Customer Experience Management (CEM) that is fast increasing in popularity.

Research shows that companies that are able to offer a good customer experience are clearly more likely to succeed than their competitors. This applies to companies operating both in corporate and consumer markets. However, building a high-quality customer experience is getting increasingly challenging.

"Customers approach companies through a multitude of different channels and are constantly jumping from one device to another. Customers themselves do not, however, think about channels. They only feel they are approaching their supplier," says Jaakko Hallavo, managing consultant at Tieto CEM, Tieto corporate’s unit specializing in building competitive customer experience solutions.

Hallavo says that traditionally, the various channels, such as the company's own salespeople, online sales, customer support or marketing, have been optimised separately on their own terms. The problem is that the overall package does not necessarily work and create seamless experience.

Customer Experience Management (CEM) is designed to address this challenge. In CEM, all customer interactions with the company are gathered together and the experience as a whole is improved. In other words, customer experience acts as the driver for developing technical solutions, whether they are online stores, ordering systems, self-service channels, marketing automation, or tools for the company's own salespeople and stores.

In comparison, it is no longer enough for a bank or a telecom operator to reduce the queuing time in their telephone service. Key is to measure whether the customer's problem was solved during the first phone call. In addition, superior service enables that during the phone call, the customer can be offered new products that are relevant to that particular customer, and the system makes it possible to collect the products quickly from a store. That requires seamless supply chain to deliver on promises.

Integrated operations focus on customer

"It is a classic problem that sales, marketing and customer services each work in their own silos. In the successful companies, these functions will be increasingly merged," says Jaakko Vilén, Sales Director from Tieto's digital customer experience start-up.

Vilén and Hallavo have been working together since Tieto acquired Smilehouse as part of its CEM unit at the beginning of December. Tieto already has extensive experience in improving customer experience, and Smilehouse's in-depth knowledge of e-commerce and industry branches strengthens the unit significantly. Tieto believes that customer experience management is one of the company's strongest growth areas.

“Since December we have had a number of discussion also together with various customer in the manufacturing and forest industries. Our joint capabilities to advice business processes and e-commerce modernization, and translate that into IT requirements and deliveries has almost surprised even ourselves,” laughs Vilén.

"Traditionally, companies have focused on, say, increasing the efficiency of factories and delivery chains. Lately, focus has often shifted to improving customer experience and customer service," adds Vilén.

Three dangers to beware of

It is good to be aware of the pitfalls associated with improving customer experience. For example, a competitor’s clever idea may raise great enthusiasm within a company. It is not, however, always understood what the change will require. It is not just about money; any change also requires that enough of the company's own personnel's time is invested in the change.

"Another common problem is the lack of a clear target architecture, instead, companies build and shop for isolated solutions. And then, when systems should be integrated, this isn’t accomplished easily," says Hallavo. At worst, this may paralyze all development work.

The third thing to remember is that improvement of customer experience may require changes in the way things are done within the company. "Most added value is created when things are done in new ways," Hallavo advises.

For example, manufacturers of industrial machinery and equipment have traditionally had a unit called Spare Parts. The most successful companies have developed these into service units with a billion euro turnover, selling service and maintenance agreements for the products of dozens of manufacturers. Digital solutions that combine sales, customer support and automated marketing play an important role when developing this type of business.

Customer experience in heavy industries – critical for the B2B business

"CEM is not just about one piece of software working nicely. It is essential to understand how customers move between the various channels and to offer them relevant services within a seamless service path. This result is achieved with a sensible overall architecture," says Hallavo. "Long-term planning does not, however, exclude building the solution in an agile way implementing continuous improvements through quick iterations."

Hallavo's advice is to involve customers in the service development. For example, building and testing prototypes is an inexpensive way of improving user experience.

Vilén and Hallavo conclude that improving customer experience requires skills and resources, for example system architects and service designers focusing on usability. Investments do, however, pay off also in the corporate market.

"It is critical for the entire national economy that our export companies in particular are world leaders in terms of competitiveness, and customer experience is a key component in this. We are now even better equipped to help, because with the recent acquisition, Tieto CEM is the leading expert in this area in the Nordic countries," says Hallavo.

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