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Detecon Management Report

1 /

2016

dmr

The Customer in the Center of Digital Transformation

Special CRM

Customer Loyalty in the Age of Social Media and Their KinDigital Megatrends Along the Customer Journey

Interview with Roman Becker, CEO at forum! „The Lifeblood factor is Decisive“

Interview with Dr. Markus Messerer, Head of Corporate Strategy, Swisscom The Customer at the Center, the Organization Fit for the Future

Measuring Customer Experience Success Factor for Assuring Emotional Loyalty

CRM in the Digital Age Opportunity and Challenge for the Automotive Industry

DMR_Special_Titelseite_CRM_NEU_11_2015.indd 1 25.02.2016 09:55:37

1 Detecon Management Report dmr • Special CRM 1 / 2016

Dear Readers,

it’s not a secret– digital transformation is proving to have fundamental, in part disruptive, potential in virtually all industries. While there are enormous opportunities for new ways to do business inherent in this potential, it also entails risks that can threaten the very existence of companies if they fail to master digital transformation.

Successful companies – and this applies to the digital world in the same manner – focus on their customers and the active management of customer relationships. Two aspects are relevant here. For one, digitalization opens the door to new ways of interacting with customers, acquiring them for the company’s products and services and securing their loyalty for the future. Second, the digitalized environment is changing behavior and expectations of customers themselves. “Digital natives” demand new approaches to relationship management and expect radically different products and services, some of them requiring completely new digital business models.

Following the Detecon mission of “Leading Digital”, we advise our clients as they design their digital transformation journey and answer the question: How must customer relationship management and customer interaction be developed further so that the opportunities offered by digitalization can be fully exploited and with an orientation to need; and how can the potentials for the realization of a new quality in customer loyalty be leveraged?

In this issue of the Detecon Management Report, we will be taking an especially close look at these topics:• What “field of tension” between customers, companies, and society will be generated by digital transformation?• What digital megatrends will have an especially powerful impact on the management of customer relationships?• How can digital customer excellence continue to foster loyalty to the same degree as traditional customer interaction and even enhance it specifically?• What added value do “Big Data” and “Customer Analytics” create in the management of customer relationships?• How will the “Internet of Things” broaden the scope of customer interaction?• What new opportunities for customer feedback management do digital channels have to offer?• How will digital transformation change the requirements for the basic functions in customer relationship management? • Why do a culture of service and the “lifeblood factor” of dedicated employees remain decisive in digital interaction channels?

Detecon experts from “CRM, Sales & Service” are joined by external interview partners and guest authors in describing many diversified cases from telecommunications, the automotive industry, and the health care sector; their remarks will illustrate how different companies, ranging from startups to multinational corporations, are tackling the challenges of digitalization in customer relationship management.

We hope you enjoy reading these fascinating and inspiring articles!

Joachim HaukManaging ConsultantLead Global Knowledge Community CRM, Sales & Service

Dr. Jürgen PadbergPartnerLead Global Knowledge Community CRM, Sales & Service

The Customer in the Center of Digital Transformation


Content

Editor:Detecon International GmbHSternengasse 14-1650676 KölnGermany

[email protected]

Supervisory Board:Thilo Kusch (Chairman)

Executive Board:Francis Deprez (CEO)Dr. Jens NebendahlLocal Court Cologne HRB 76144Registered Office: CologneAmtsgericht Köln HRB 76144 Sitz der Gesellschaft: Köln

Printing:Druckerei Chmielorz GmbHOstring 13 65205 Wiesbaden/Nordenstadt

Photos:FotoliaiStockphoto

Masthead:

Digital TransformationA Future in Paradise or Absolutism? 4

Customer Loyalty in the Age of Social Media and Their KinDigital Megatrends Along the Customer Journey 8

CRM Tools in the Age of DigitalizationMom-and-Pop 2.0 16

Interview with Dr. Markus Messerer, Head of Corporate Strategy, SwisscomThe Customer at the Center, the Organization Fit for the Future 18

CRM in the Digital AgeOpportunity and Challenge for the Automotive Industry 26

New Mobility Services Turning from Car-maker into Mobility Service Provider Energizes CRM 32

Interview with Juliane Zielonka, CEO Die Artverwandten GmbH“Digital Health Care: Detecting Illnesses at an Earlier Stage with Smart Technology – for the Right Treatment at the Right Time” 36

Digital Customer Excellence Imperative for Customer Satisfaction and Customer Loyalty 42


Interview with Alexandra Tymann, CFO Sixtyone Business Digital Customer Service as a Mission 46

Measuring Customer Experience Success Factor for Assuring Emotional Loyalty 48 Interview with Roman Becker, CEO at forum!„The Lifeblood factor is Decisive“ 52

Workforce Management (WFM) in Field Service Make Your Customers Happy! 58

Social Walls and DashboardsHow Managers Listen to Customers in Real Time 62

Megatrend Internet of Things No Longer in Its Infancy 68 Big Data in Customer Relationship ManagementInstilling Trust by Generating Added Value for Customers 74

Analogos-Digitalis – Transformation in the Communications IndustryEducation Is Still the Key 80

Digital Transformation

A Future in Paradise or Absolutism?



Digitalization is the phenomenon of our times. “Always connected” – the possibility of being connected at any time, anywhere – is permeating and changing virtually every area of our personal and working lives. The Internet makes it possible. Every minute, about four million search queries are submitted to Google, about 300,000 tweets appear on Twitter, 14 million WhatsApp messages are sent, and 72 hours of video material are uploaded onto YouTube (Source: Statista). These figures speak for themselves.

Digitalization brings people and technology closer to-gether. The “Connected Car” is far more than just a means of transportation; it is a transmitter, receiver, and conveyor of data. The vision of the self-driving vehicle has become a very real and concrete scenario – and not only since yesterday. Technology com-municates with technology, from “machine to machine”, without any human input. This development is progressing at a breathtaking pace. In 2011, about five billion people were digitally connected around the world; in 2020, another approximately 50 billion material objects will be interconnected (Source: BDU 2015). The importance of the computer as a device is on the decline because it is being replaced by other “intelligent” devices. We have arrived at the Internet of Things.

Is digital transformation a synonym for a better quality of life? Or are we moving in the direction of digital absolutism based on the scenario of the transparent society? Opinions diverge widely between digital enthusiasts and pessimists. We have not yet found a definitive, final answer to the question of whether the opportunities or the risks are greater for society and business. Erik Brynjolfsson, co-author of the book “The Second Machine Age”, which has been very well received and was the winner of the award for the German Business Book of the Year in 2015, pulls observers dreaming of a future paradise back down to earth: “Robots can’t even pick up a pencil or clean a kitchen” (Source: Handelsblatt).

One thing is undisputed, however: the diversity of new oppor-tunities of transparency, connectivity, and collaborative co-determination. Consumers can benefit immensely from trends such as patient monitoring in the health care sector, life style computing with the aid of augmented reality, sleep monitoring, or athletic self-optimization using digital fitness coaching, yet at the same time improve their position as customers by increasing their influential input. In only a few fractions of a second, information can be shared with an unlimited reach through social networks, communities, or blogs on the Internet, and the impact on recipi-ents’ opinions can be positive as well as negative.

Companies in all industries are forced to respond. They must deal with the changes in communication mechanisms, whether they want to or not. The IT corporation Dell in the US is one ex-ample of what can happen if a firm remains ignorant of what is

transpiring around it. At the beginning of the 2000s, huge numbers of dissatisfied Dell customers made use of social channels and other platforms to give vent to their anger. “Dell Hell” entered history books as the first genuine “shitstorm” and ultimately led to a dramatic plunge in the company’s earnings. Dell, however, succee-ded in turning things around and is today a textbook example of the right way to handle imminent or acute ”shitstorms”. Other examples illustrate the reverse side of this coin. About 700,000 users misused the social network Facebook for tests and manipulations for scientific purposes without being noticed (Source: http://www.forbes.com). Millions of users of Sony’s PlayStation were affected by the theft of data caused by hackers (Source: http://www.dailymail.co.uk). Samsung itself warned its own customers that the brand’s smart TVs have functions that can invade their private sphere (Source: http://www.dailymail.co.uk).

Digitalization makes many imagined things feasible. The right question is not so much whether, but when. Naturally, there is only a thin line between opportunities and risks in this development. The rapid growth in the monitoring of health clearly illustrates this ambivalence. The numbers of digital health care products such as digital insulin pumps, smart glasses, pill cameras, or digital blood pressure monitors have already become overwhelming today. What all of these applications have in common is the promise of improved health and fewer illnesses in the future. Medicine and preventive health care become persona-lized through their use, and treatment with medicines can be even more closely adjusted according to each individual’s requirements. Sometimes illnesses can be diagnosed at an earlier stage, reducing the risk of their further advance. The transparency resulting from such extensive monitoring along with the more intensive and regular preoccupation of individuals with their own health, however, can also foment fears of nascent illnesses – the hypochon-driac effect. The innumerable opportunities of digital health care could stimulate an excessive form of self-optimization. The misuse of dietary supplements, for instance, could itself lead to illness. This enhanced transparency could also benefit third parties such as insurance companies and banks when they are determining the terms and conditions of life insurance policies or making decisions about the granting of loans – to the detriment of the affected people in borderline cases.

It is absolutely correct to speak of digital ambivalence, and not only from the perspective of consumers. Thanks to big data,generating a complex base of data, companies in all sectors understand their customers better and better and can address them more individually. CRM systems are the treasure chest of this valu-able and exploitable information and open the door to personalized campaigns to heighten loyalty and customer value. At the same time, this treasure chest inevitably turns companies into highly coveted targets for hackers and industrial spies. Digitalization has


also paved the road for the invasion by third-party systems. Numerous examples reveal the many and diversified risks from out-side attacks on their data security to which companies are vulnerable. Espionage is reaching an unprecedented level of activity. Hackers were able to access the confidential data of journalists working at the New York Times and the Washington Post for several months before being noticed. At Sony, 100 million customer data records were stolen. Some 250,000 user accounts and passwords were hacked at the social network Twitter; LinkedIn suffered a breach of a staggering 6.5 million accounts.

The political establishment as the third active party and its role in this story must not be forgotten. It also finds itself on the horns of the digital dilemma. The expectations of full-area coverage with broadband capacity sufficient to handle the immense increases in data volume both now and in the future are high. “On-line” is more or less perceived as an unwritten basic right. Yet the general public also demands regulatory intervention and controls, especially when the issue at hand is protection from data misuse and invasion of the private sphere. Politicians are supposed to enable, but at the same time regulate and curb risks.

One study shows that the ambivalence of digital transfor-mation is reflected very clearly in people’s perception (Source: survey by Bitkom Research):

People acknowledge the fundamental transformation!• In the opinion of 82% of the people surveyed, the changes in

business and society taking place because of digitalization are at least as far-reaching as the upheavals of the Industrial Revolution.

Opportunities and risks are recognized!• Seventy-five percent say that digitalization is threatening jobs in

traditional sectors. • Seventy-one percent believe that digitalization is creating new jobs. • A slight majority of 65% believe that digitalization offers more

opportunities than risks.

People expect more engagement from the political establishment!• Sixty-four percent say that politicians should do more to foster

digitalization. • Twenty-seven percent are of the opinion that politicians need to

throttle digitalization.

So how should digitalization be guided in the future so that this digital dilemma can be overcome as successfully as possible? How can we realize a positive scenario that does not result in the domi-nance of digital absolutism, but enables everyone involved to bene-fit from the opportunities?

Laws and regulations do not protect from misuse and unfair actions. Nevertheless, they are an indispensable legal framework within which digitalization must continue its development. If digitalization is to benefit everyone, however, it will require further regulatory control and principles on this basis.

It is of the greatest importance that expansion of powerful broad-band capacities into full-area coverage be realized in the middle term. In this context, equal opportunity means that every person must have the chance to access high-performance Internet. This access must not be restricted to people living in the densely populated urban areas. Achieving this goal will require politicians, regulatory authorities, and telecommunications providers to act together as one.

Besides the general legal conditions, there is the need to establish a sense of ethics in working with the Internet, social media, and personal data. The transparency on the Internet must be used to implement a code that censures any activities taking place outside of this ethic corridor and causing harm to others. Anyone engaging in such activities must be made clearly aware that such behavior is unacceptable to the Internet community and will, if serious enough, be sanctioned. This applies to compa-nies as well as to aberrant users.

Trust is becoming a decisive loyalty factor in the relati-onship between companies and their customers. Compa-nies that give the impression they are not trustworthy in their treat-ment of their customers and their customers’ data may feel the impact of this failure when customers terminate their relationships. In contrast, companies that take legal requirements seriously and, moreover, work on generating “digital trust” with their customers will enjoy long-term benefits. When they anchor this trust as an elementary component of the customer experience, they lay an important foundation for the long-lasting success of their digital business models and set themselves apart from the competition with respect to a sensitive and decisive point. As tempting as it might be for companies to use the digital tracks left behind to con-struct a digital twin of the customer – the customer and the digital twin are never identical. Genuine customers can always surprise you and are (hopefully!) less predictable than generally implied.

The important principle of personal responsibility applies to users today and will continue to apply in the future. Anyone wishing to take advantage of the innumerable digital opportunities and benefits must also be willing to divulge information. The two elements have a proportional relationship to each other. Nevertheless, anyone who discloses information must be given the absolute assurance that the data will always and strictly be used in accordance with given consent. In certain cases, this can also result in disadvantages – but they must be visible and predictable. When

people sign up for a bonus system offered by their health insurer and based on digitally collected health data of the policyholders, they may profit from the advantage of a bonus payment by leading an exemplary, healthy life style. On the other hand, a life style that is more likely to result in poorer health values may trigger a penalty, e.g., a higher premium.

The demand for transparency often appears in the discussions about the realization of digitalization as a magic formula, almost a panacea. Transparency has become a paradigm of digitalization with almost exclusively positive connotations – even if the algo-rithms that are at the heart of many business models are often anything but transparent. Yet there are many customers who would consciously like to retain the magic of secrets, the value of the am-bivalent, and the doubt as well as charm of hidden inefficiency. A completely transparent world would be a “poorer world” for them, one without digital surprises. In other words, a residual lack of transparency is quite often desirable because it maintains suspense. The trust described above is the more important advisor at this point.

Conclusion: Digitalization will not produce a paradise without end. Nevertheless, it has many new opportunities and innovations in store. It will not, however, be able to replace human thought and conduct in awareness of personal responsibility – this human element, including all of its unpredictability, will always remain autonomous. We will not see digital absolutism because the digital world is regulating itself more and more strictly in addition to the legal conditions. While misuse cannot be prevented in isolated cases, it will certainly never have a great future. Erik Brynjolfsson and Andrew McAfee, MIT professors and the award-winning authors of “The Second Machine Age”, also believe there are more opportunities than risks: “A machine doesn’t have the slightest idea of what common sense is.” This is only one of the reasons why digital optimism can assuredly carry the day.

AUTHORS

Andreas Penkert is Managing Consultant and advises clients from various industries on the subjects of digital trans-formation during the customer journey, social media performance, and organizational and process management. He is the author of a number of pub-lications and studies.

Sascha Krpanic is Consultant focusing on the areas of digital services, omni-channel management, competition and market analyses, and corporate strategies.



Customer Loyalty in the Age of Social Media and Their Kin

Digital Megatrends Along the Customer JourneyTrends such as big data, mobile solutions, or social media are revolutionizing traditional customer relationship manage-ment. Detecon employs “Customer Journey Trend Mapping” methodologies to support companies in the development and realization of innovative digital concepts along the cus-tomer journey as a means of intensifying customer loyalty.

In the last several years, digital technologies have led to more than just the development of new, innovative business models; they have also brought about major changes to the customer interfaces in existing business models across all industries. It is becoming increasingly important to expand existing customer touch points by adding digital channels and to foster an even more individual relationship to customers. Anyone who neg-lects to do so runs the risk of new players moving in and taking the position of digital intermediary right at the customer interface.

This setting prompted Detecon to prepare a comprehensive portfolio of digital trends that are of significance for customer loyalty management. In close cooperation with the trend-scou-ting experts at the Detecon Innovation Institute in San Francisco we have developed innovative concepts that can help companies strike out on new paths and work up concepts for the integration of digital media and channels.

OPEN

API

s

SOCIAL

MOBILE

BIG DATA

Wearable TechnologySensorsSmart Home/ Smart BuildingConnected Mobility

Data AnalyticsPredictive AnalyticsMachine LearningData Visualization

Meshed ServicesShared LoginSmart Triggers

Enterprise ListeningSocial AmplificationCrowd IntelligenceSharing Economy

Mobile First DesignLocation-based ServicesSmart Home AssistantMobile Wallet/Payments

INTERNET OF THINGS


The smartphone has morphed into a pocket-size, all-purpose weapon and turned itself the most intimate of all devices; at the same time, it is touch point and gateway to the digital world. There is significant potential for need-oriented customer con-tact inherent in this combination.

“Mobile First”, i.e. the tailoring of web content to fit smart-phone displays and interaction patterns, aims at maximizing customer engagement via mobile devices. The leading principle here: less is more. For instance, the radical simplicity of the user interface of messaging service Snapchat is a key reason for the great success of this mobile application. The mobile app of the ride-sharing service UBER also aligns the entire travel experi-ence of its users strictly with the needs of mobile users; UBER functions as an invisible companion who always has the right message at the right time.

Other enablers for innovations and new business models are real-time data about geo-positions and the automatic identifi-cation or authentication of customers, both transmitted by the smartphone in your pocket. Virtual mobile assistants combine knowledge about users’ location, mood, or activities with addi-tional information from private services such as calendars, email inboxes, or wake-up alarms. The objective of this approach is to generate a holistic and frictionless user experience.

Mobile payment app Square uses location and authentication of users on their smartphones for completing in-store pay-ment transactions without proactive engagement; customers are logged in automatically (by geo-fencing) upon entering the coffee shop. The service agents now see the customer’s name, photo, and buying history. The impersonal standard greeting becomes an individualized address: “Hi Alex! Glad to see you for the third time this week! Would you like another latte with soy milk?” This personalization creates emotions in the buy-ing experience previously possible only for regular and known customers. It does not only strengthen the relationship to the brand but also the willingness to disclose additional perso-nal information voluntarily. The payment transaction itself is handled in the background, almost as an after-thought.

MEGATREND

MOBILE1

MOBILE10 Detecon Management Report dmr • Special CRM 1 / 2016

The presence of brands on social networks like Facebook, Twitter, Instagram, and Pinterest is a double-edged sword: they reach a large audience which can be measured accurately, but they are also exposed to the users at the same time.

According to a study by Allianz, one-third of social media users in Germany expects a company to respond to complaints placed on social networks within 60 minutes. Customer emotions must be quickly extracted and processed from the (un-)struc-tured data of the social web – a process that is called “enterprise listening”.

Following GlobalWebIndex, 54% of Internet users consider the product experience and opinions of other customers during their buying process on the Internet; yet, this is predominantly a small group of highly active customers who have substantial impact on their environment because of their reviews and social media activities. The cultivation and relationship management of people with such an amplification effect on other custo-mers is becoming increasingly vital from a corporate perspec-tive. These “ambassador” customers and their respective reach and influence can be identified by “social influencer scoring” technologies.

Product Hunt acts as a “crowd intelligence platform” for pro-duct development to raise the voice of customers to a higher level, reinforcing market orientation and generating the feeling of belonging to the product right from the beginning.

2 MEGATREND

SOCIALSO

CIAL



Open IT interfaces (application programming interfaces – APIs) enable the sharing of data and the combination of services which link various applications and the services behind them. An open API ecosystem enriches individual user data with in-formation from other platforms – making all players profit from higher information content. For instance, Facebook, LinkedIn, and Google have created interfaces which allow users to register with third-party services using their login data (e.g. “Facebook Connect”) – from the customer’s perspective, a simplification of password management in everyday life; from the service provider’s perspective, an opportunity to become even more familiar with the customer.

However, besides the enrichment of data records there is another important goal of open interfaces: the link-up with providers of relevant value-added services. The business aim here is to utilize the knowledge about customers in such a way that they become aware of third-party services at the right moment and can be transferred to the relevant services accordingly. One example is the travel expenses management tool Expensify. It has an exten-sive storage of data including financial transactions with time stamps, scanned receipts, flight and hotel reservations, and pre-viously entered master data by business travelers. The profile of needs, movements, and routines created based on this data triggers offers from external partner applications at the appro-priate moments. For instance, Expensify knows that Mr. Smith always eats dinner in a certain restaurant at 7pm whenever he is been in Miami on business. He now automatically receives an offer for an Uber taxi to the restaurant at 6.45pm and a seat reservation via OpenTable during his next business trip to Miami – both from an API with the partner services. The service thinks ahead, makes suggestions that can be booked im-mediately, and offers target-oriented added value to customers.

3 MEGATREND

OPEN APIs

OPEN APIs


The Big Data world does not stop at the threshold to CRM thanks to increasingly powerful distributed calculation methods – Hadoop and others – and the growing availability of data. The analysis of customer data is often used for added-value services in the form of reminders, alerts, or recommendations which customers receive virtually in real time. Simultaneously, features supported by Big Data contribute to the individualization of customer relationships and make them more transparent. Machine-learning algorithms and predictive analytics make it possible to predict customer behavior as well.

RetailNext and Mattersight are examples of applications of Big Data in the context of CRM. RetailNext assesses structured and unstructured data around and within retail stores in order to generate a basis for optimal design of store areas and gives tips on suitable digital interaction with customers. Mattersight con-tinuously analyzes voice data from call center calls for creating personality profiles of customers and agents. Calls from custo-mers will no longer be routed arbitrarily to the next free agent in the future; the caller’s profile will be intelligently matched to a suitable call center agent.

4

The Internet of Things describes an interconnected world consisting of “things” that have their own virtual identity and intelligently connect to one another. Wearable technology, connected mobility, smart home devices, and many more segments are frequently lumped together under this term. For customers, the Internet of Things means even greater connec-tivity with products and services in daily life. iBeacons, a tech-nology which can be used for communication via smart devices and wearables with customers in the close vicinity, are one of the great hopes of brick-and-mortar retail businesses. Amazon finds its way into the smart home via “Amazon Dash” buttons by enabling its users to re-order pre-defined household products by pressing a button on the spot – delivery within two business days guaranteed. Insurers can use regular status and location in-formation of insured objects to improve their risk management and offer flexible insurance premiums to their policyholders.

5 MEGATREND

INTERNET OF THINGS

MEGATREND

BIG DATA

OPEN APIs BIG DATA

INTERNET OF

THINGS


Method: Customer Journey Trend Mapping

The digital world is creating a broad range of new opportunities for endowing customer interfaces with digital experiences and generating valuable data while doing so. However, the appropri-ateness of digitalization depends on the customer segment and the customer journey step. Detecon Consulting uses the format “Next Generation CRM Workshops” to support companies in structured generation of relevant use cases. The “Customer Journey Trend Mapping” described below has proven its value as a suitable method.

The touch points of a generic customer journey are re-enacted in break-out groups from the perspective of various Personas – hypothetical customers such as the “Business Traveler” or the “Silver Ager”. The point of the exercise is to give your own imagination free rein and to assign innovative use cases based on relevant ICT trends to the touch points. Innovations can lead to the generation of new touch points as well!

The following story exemplifies the mapping of the trends described above as a “carsharing customer journey” of Thomas (personal profile: high income, no kids, early adopter). The colors of the pictured sticky note correspond to the megatrends of the trend wheel.

Thomas’ customer journey

Thomas uses his Apple Watch to book a car sharing vehicle after being automatically warned that there are very few cars available in his immediate vicinity. He opens the car with a finger scan. When the vehicle door is unlocked, the passenger seat is auto-matically adjusted to the settings of Thomas’ most recent trip. During the trip, the seat belt notes that Thomas is sweating and recommends that he stop at the next gas station where he can buy a bottle of water and pay with his mobile wallet. Using a big data analysis of his social media profiles and the photos he has uploaded onto the sites, the system determines that Thomas has a preference for beaches and the sea, but is not fond of trees and forests. The car’s navigation system suggests that he takes a small detour on his way to his destination so that he can drive along a route with lakes and rivers and avoid the forest as much as possible. The preview of the alternative route is enhanced with pictures that were taken less than five minutes before by an on-board camera of another car sharing vehicle driving the same route. Shortly before his arrival at his destination, the system acquires relevant crowd intelligence and sensor data. There is a shortage of parking spaces at the destination and Thomas has not yet achieved his fitness targets for the day, so the system re-commends that he heads for a parking lot that is a little farther away. The vehicle makes sure that a bike sharing bicycle near the parking lot is reserved so that Thomas can ride it the last two miles. Before leaving the car, Thomas uses the car infotainment system for sharing the most beautiful photos taken by the vehicle along the route with selected people in his social net-work; his account is credited with additional loyalty points. Thomas rides the bicycle to his destination where his friends are waiting for him; they were notified well in advance of his estimated time of arrival.


AUTHORS

Ingmar Haffke is Senior Consultant with a focus on strategy and innovation and is part of Detecon’s San Francisco based Detecon Innovation Institute (DII). He provides strategic guidance to clients in North America, Europe, and the Middle East, particularly with regards to topics related to digital business transformation such as digital business models, digital CRM strategy, digital customer experience management, or mobile/social strategy.

Alessandro Cante is Consultant at the Detecon Innovation Institute (DII) located in San Francisco. A digital native and active Silicon Valley explorer, he investigates the “Customer of the Future” and advises his clients on the subjects of Next Generation CRM, digital business models, digital experience management, and innovation scouting.

This example of customer journey mapping illustrates the many and diverse ideas for digital touch points that come up during this exercise. Next step is prioritizing of use cases: as a rule, they are appraised according to strategic relevance, core competencies, technical feasibility, and business impact. A comprehensive assessment from various perspectives ensures that the strategic CRM road map of the next planning periods includes the most promising use cases.

One thing must be clearly noted: The battle for the customer interface is becoming fiercer and more digital. Technology pioneers from Silicon Valley are setting a fast pace and have tremendous international punch. Established (analog) customer relationships are threatened. Absolute focus on customers and their digital needs as well as making new digital opportunities specifically useful is indispensable – after all, the customer is still king!

Figure: Customer Journey Map

Reservation Vehicle Access Driving Experience Vehicle Return After Drive

Movement and loca-tion analytics engine: time to reserve!

Fingerprint scanner instead of a car key

Health sensors in the seat belt register biometric data

Data pool of basic crowd intelligence and sensors with real-time data about the parking situation

Link to fitness tracker

Automatic reservation of intermodal trans-portation opportuni-ties for the last mile (inter modal travel cooperation)

Picture analytics on social media profile automatically gene-rates preferred route along lake and river

Mobile wallet payment at the filling station

Linked travel accounts: car automatically adjusts seat and air conditioner settings (based on most recent use)

Apple Watch app for car reservation

Social rewards program: post your trip and collect loyalty points

On-board cameras took pictures during the trip; automatic compilation of online photo album


Mom-and-Pop 2.0 CRM Tools in the Age of Digitalization

They knew the preferences of a new customer by the third visit at the latest. Reserve something? No problem. An extra piece of chocolate for the young boy? Gladly. A mom-and-pop store offered familiar surroundings to its customers; they felt at ease and appreciated. This is a concept that is found only in isolated spots today. The everything-in-one shop has long since become decentralized and moved online, the customers are largely anonymous. The sheer mass of products is overwhelming, com-plex, available in innumerable variations, and – thanks to glo-balization – of uncertain quality and at widely varying prices.

Is it at all possible in today’s world to offer individual service at the level of the mom-and-pop store to customers? Yes, it is. You just need the right tools and methods!

Why do I need a CRM tool?

As fast as markets are changing and products are increasing in complexity, the changes in customers are moving just as rapidly. Expectations are on the rise, and the barriers preventing churn are breaking down. From the consumer’s perspective, it has

rarely been so easy to substitute products and services for one another while maintaining virtually the same level of quality. If providers are to meet the demands of customers and secure their long-term loyalty, it is important to respond fast, agilely, and from a 360° perspective to what they want – in marketing as well as in sales and service.

CRM tools offer a vast range of ways to master these challenges. Besides simplifying business processes and increasing efficiency, they allow a holistic view of customers, their behavior, and their preferences. Moreover, many of these tools can now be obtained from the cloud, making it possible to call up data in real time. Customer-centric service is no longer subject to any restrictions of time or geography.

Functional requirements for CRM tools

Digitalization is at this time one of the most powerful drivers of our markets and customer expectations. This trend naturally has an impact on the demands made on a holistic CRM tool. There are four major functions in this sense.

No one lived the concept of customer loyalty and customer focus better than the mom-and-pop stores. But the days of the small grocery store around the corner belong to the past. Large discounters and online shops have long since become the dominant force in the sector. Is it nonetheless still possible today to offer customer service comparable to that of 50 years ago?


1. Mobile devices

Digitalization essentially embodies three paradigms that can also be projected onto CRM tools: simple, anytime, anywhere. Customers want to satisfy their needs anytime, anywhere, and as simply as possible, whether during the purchase of products or contact with customer service. This calls for a CRM solution that enables customers to call up data quickly, simply, and from any location, regardless of the device they are using.

2. Big data/Data analytics

While companies used to obtain their customer information primarily from internal systems such as the CRM and product management systems, they can today make use of external sources as well. In this digital age, customers are making more and more use of electronic devices, and they leave their digital footprints behind everywhere they go on the Internet – on Facebook, when shopping online, or when making cashless payments, for example. The consequence is that companies have enormous quantities of data about their customers at their fingertips, and they can analyze this material for marketing pur-poses. The administration and analysis of the data volume and differing types of data are not the only challenges that must be met. There is also the issue of data security, a subject of growing significance, especially against the backdrop of the latest data security breaches and hacker attacks. When the right CRM tool is used, even large quantities of data can be managed securely and be analyzed qualitatively and in compliance with legal provisions.

3. Social Media

The continuously growing use of social media has been obvious for some time. The question in this regard for many is this: How can these media be utilized in customer relationship manage-ment? Specific product placements based on previously analy-zed customer behavior – think of big data/data analytics – are already in common use. In the meantime, however, more and more companies are using these media as a service channel and (one example) answering customer queries directly. Many CRM tools already include integrated features so that social media channels can be accessed right from the platform. Social media have also brought about a change in the relationship between customers and companies. While the two sides used to com-municate only directly with each other, today’s customers make use of social media to share experience and information with other customers. They go to forums to discuss the company’s products, for instance, or visit a chat line to find help. This is both an opportunity and a threat for companies. It is absolutely essential for a company today to develop a clear social media

strategy and to monitor and steer activities on the Internet with the help of effective software programs.

4. Customer self-services

Many customers are reluctant to contact a company directly when they have questions or need clarification. A lot of com-panies are turning to customer self-service measures as a way of countering the insecurity of these customers even before initial contact. FAQs, help videos, or instructions on the website can reduce the number of service questions significantly. By using the right CRM tools, however, far more potential can be mined. One popular instrument is independently managed communi-ties moderated by service agents. They have substantial influ-ence on customer satisfaction and the reduction of customer contacts.

An embarrassment of riches

Once the decision to implement or expand a CRM tool has been made, there is usually the problem of choosing the right one from an enormous range of providers and system functions. Cloud-based systems are playing an increasingly important role alongside the on-premise solutions. The disadvantage of this diversity: companies often face enormous difficulties during their search for the right application. A precise analysis of in-ternal processes and requirements is absolutely essential during the process of selecting a CRM system. Sometimes it is enough to expand an existing application by adding some additional functions. Basically, virtually every company today will find it rewarding to review whether the existing CRM system still meets the requirements arising from digitalization or whether the system should be replaced or expanded. Long-term survival on the market will be secured only for those players who can effectively manage the customer relationships of the future.

AUTHORS

Alexander Hardtadvises clients in the areas of marketing, sales and service, and the implementation of CRM tools, especially Salesforce.com.

Maria Mantheyis Consultant in the consulting unit Deutsche Telekom. Her work focuses on the areas of marketing, sales and service, and transformation and change management.

The Customer at the Center, the Organization Fit for the Future

Swisscom must prove its strength in competition with global Internet players while at the same time facing the challenge of digital transformation itself. Dr. Markus Messerer, Head of Corporate Strategy at Swisscom, takes a positive stance: he wants to play an active role in the transformation. One of the key anchor points for success is to place customers firmly at the focal point of every action and be the best possible guide for them in the digital world.

Interview with Dr. Markus Messerer, Head of Corporate Strategy, Swisscom



DMR: Digital technologies such as social media, the full scope of mobile communications, data volumes that are fully integrated in personal as well as business life – these factors are all exerting a major impact on companies and bringing about a change in strate-gies. How must companies adjust to the new situation? What does digital transformation mean for you in your position as head of strategy at Swisscom?

Dr. Messerer: We are definitely on a journey of transformation. We are keenly aware that in five years’ time Swisscom will be a completely different company than the Swisscom of five years ago. This awareness is behind our drive to guide and steer this transformation and not just to sit back and let it happen to us. Our efforts are multidimensional and encompass systems, tech-nology, and processes, including the organization, skill set and mindset of the workforce, our leadership culture, and our understanding of leadership. We are now guiding all of these factors in a kind of integrated change management process. Naturally, all of these elements have been designed around the customer because they have significant impact on the customer and on the customer journey. Swisscom stands for a highly customer-centric approach to this journey.

DMR: We see this standpoint in the corporate strategy entitled “Swisscom 2020” – the customer figures prominently at the heart of the concept. You have set as your standard the support and guidance of your customers in the world of digital communications, providing them with the best service and offering them worlds filled with exciting experiences. What is an extraordinary experience for custo-mers today? What do they expect in terms of service?

Dr. Messerer: To start with, you will undoubtedly find the key words “customer orientation” and “best network” in the strategy of any telco. Our interpretation is that we are more than just an infra-structure provider. While our objective is certainly to have the best infrastructure, it serves only as the foundation on which we build so that we can offer the best customer experience and realize opportu-nities for growth. Creating a customer experience is truly at the heart of our corporate strategy. We want to inspire and thrill our customers with our products and services and the entire ecosystem and provide a simple experience with the effect of being close to customers. This is why our products are designed to be much more intuitive right from the beginning. We see no need for a complicated, inward-looking perspective. Customer needs are addressed directly and in terms of the entire life cycle even in the early stages of conceptualization as we collaborate with customers in co-develop-ment and co-creation. We genuinely have customers at the focal point of our deliberations; services are consistently built around them. In other words, customer centricity is not just a buzzword for us; it is a part of our processes, systems, and the entire organization. For example, we have established a separate unit called Human


Centric Design; its sole purpose is to design new services in such a way that they are as appealing as possible, as simple as possible, as intuitive as possible, and are therefore perceived as customer-orien-ted. This is the objective in our own organization.

DMR: What characterizes customer expectations today? What has changed over the course of time?

Dr. Messerer: Today’s customers are familiar with simplicity because of the many new products and services from the digital world, the many web services, and mobile applications. They are accustomed to using every product, every service integrated across all of their devices, in real time. This shapes the customer’s atti-tudes and expectations. Telcos definitely face a challenge in provi-ding an integrated 360° view of customer-oriented services, in designing services to be effortless, and, above all, eliminating any interfaces. Customers want little interaction; the principle is that the best service is no service.

DMR: The competitive landscape has changed drastically. Who are your primary competitors today? Are they still telcos?

Dr. Messerer: No, they are no longer only telcos. If we look at the Swiss market, a Salt, Sunrise, UPC, or one or more cable opera-tors naturally appear before the mind’s eye. But if we talk about the digital world, it is crystal-clear that digitalization is web- and service-based rather than infrastructure-based and consequently disregards national borders. Competition today takes place on the global stage. As a consequence, the competitors include Amazon, Facebook, and Google, not just the traditional companies. We notice especially keenly at the service level that competition is unequivocally a global matter.

DMR: That sounds relatively complex. We know that margins are shrinking, the market is screaming for state-of-the-art infrastruc-ture, competition is becoming even more intense because of the entry of digital global players. Customers have rising expectations when it comes to service, but you are under cost pressures. How can all of these circumstances be handled competently?

Dr. Messerer: This is a tremendous challenge. Fortunately, not everything that contributes to better service automatically means higher costs! This is the good side of digitalization. If we at Swisscom succeed in becoming a model company in the digital world, it will also mean that we have integrated process chains and better interaction with customers, and this will make us more efficient. We kill two birds with one stone. Let’s take the example of self-service apps to show how we make our systems accessible to the outside. They take us a step in the direction of digitalization while meeting customer wishes because customers would like to use self-service 24/7. One of the side effects, however, is that we are also able to cut costs. Another example is related to the subject of “community”. Today’s customers are no longer satisfied to hear advice solely from Swisscom. They want to be able to seek advice from other customers, from the community. This has prompted us to esta-blish a community service with precisely this orientation. These examples demonstrate that better services in the digital world are not inevitably attended by large investments.


DMR: You mention self-services. We could be heretical and claim that it is inappropriate for a premium provider like Swisscom to transfer the burden of service to its customers – this is just a way to cut costs. Can these two aspects – self-service and premium provider – be reconciled?

Dr. Messerer: We are talking here about making self-services available to customers in exactly the scope they want because it is more practical for them. But at Swisscom you will always have top service you can physically turn to in the shop, you will always find contacts who speak various languages and highly competent service lines to provide help. These services will always be available at Swisscom so that we maintain our premi-um position.

DMR: We are talking about various possibilities for service. A traditional telco operates on a number of channels – omnichannel management is the key word here. Internal coordination is a gigantic challenge. What does that mean for you?

Dr. Messerer: The underlying issue goes back to processes, systems, and people. People especially, the direct interface to customers, are extremely important. Swisscom has always attached the highest value to this interface and made great investments in this position. We long ago recognized that direct interaction with the customer is an important strategic asset. The challenge is in the linkage of processes and systems. Swiss-com must also take a huge step here so that it can implement the oft-quoted multi-channel presence. We must design integrated process chains so that we quickly and effectively become a digital model company ourselves. Naturally, this is an enormous challenge for all large telcos.

DMR: So different building blocks are needed for this. Systems and processes mean very protracted and arduous changes. What is the greatest hurdle here? Which of the building blocks is the most difficult to put into place on the path to digital trans for mation?

Dr. Messerer: None of the building blocks mentioned here are simple. In my opinion, however, the most fascinating aspect relates to the linking of systems and processes. Turning former mobile systems and former fixed network systems into a fully integrated BSS network that also provides fully integrated support for processes during the customer journey and provides customer employees with an integrated 360° customer view is extremely challenging, and it is something that cannot be achie-ved overnight.

DMR: The market assuredly views Swisscom as a customer-oriented company. There are a lot of customer channels at the moment. How does Swisscom view this?

Dr. Messerer: There is no doubt that we have already accom-plished much. Highly focused, lean Internet players are constantly optimizing customer interaction and the experience chain, however, and we have to keep up. That is clear. It goes without saying that we must take certain steps in development in this area. As I said at the beginning, we want to be active in setting the course for this. That is why we are focusing top management’s intensive attention on these transformation issues.


DMR: The attention of top management is one part, but the grass-roots involvement is another. What mechanisms do you have or, to put it another way, how do you ensure that everyone is pulling together in the same direction?

Dr. Messerer: There is no single recipe for this. We make use of various levers in change management. Besides the top manage-ment programs, we have initiatives that involve all of the execu-tives and that attempt to secure the commitment of all of the colleagues to the transformation. We believe we will be able to steer the ship in a certain direction by generating common opinions and with the aid of broad-scale communication and dedication. The ingredients are probably time, constant dialog, and management commitment.

DMR: Let’s return for the moment to the topics of service and custo-mer experience. Swisscom has set itself the goal of shaping customer care to be as personalized, but also as flexible, as possible. Could you tell us what you mean by this?

Dr. Messerer: The topic of customer centricity does not end for us at customer service, of course; it is an integral component of every newly developed product. Our speaking of mass customization is one aspect of the digital world. “One size fits all” is no longer viable; in the ideal case, every customer has service tailored to specific circumstances, but the service is based on modularization and standardization. A digital company will have to master the art of offering as much complexity and variety as possible to the outside without overwhelming itself internally with this complexity. We hope that we will be able to utilize standardization and modularization in combination with customer data so that we can offer these kinds of services. Let’s take Amazon as a simple example. Customers who have purchased xy are also interested in A, B, and C. In our industry, this might mean that when customers have watched a certain film on Swisscom TV 2.0, we recommend other films featuring the same actor. This customer experience must be a part of every product, from telephone rates to apps.

DMR: This takes us to the subject of big data, another buzzword that is heard everywhere today. You speak of variability toward the customer, of the reduction of complexity, of personalization; this is not limited to recommendations tailored to specific customers, but can also mean knowing and understanding where customers are right now and what devices they have. Data are extremely impor-tant in this area; access to data is considered an asset today. Is it really an advantage?

Dr. Messerer: Data are an asset in every case in the digital world; entire business models are based on having this access. Possession of data also means that we incur responsibility, of course. This is a point that certainly sets Swisscom well apart from many startups and global players – we are aware of this responsibility. Concretely speaking: we devote the greatest secu-rity and care to the handling of all customer data.

DMR: Sound judgment is certainly required in the interest of customers. You mentioned your ecosystem earlier. What image do you have before your mind’s eye?

Dr. Messerer: In the digital world, offers are not limited to specific products and isolated services; topics with synergy effects can be bundled. This is what we call an ecosystem. If, for example, you put hardware at the heart of Apple’s ecosystem, you see that all of the services implemented around this heart are possibly not so relevant commercially, but they form a highly effective bundle that expands and protects the heart of the ecosystem.

DMR: Customers can generate a consistency benefit from this. But it involves a change in mindset. Calculating isolated services or services maximized for revenue in a single case is sometimes simpler than taking an ecosystem perspective. How does Swisscom deal with this? What approaches do you use to ensure that you are developing in the direction of an ecosystem?

Dr. Messerer: That is a difficult subject, of course. Theoretically, telcos could have established IP messages within an ecosystem ap-proach long ago. It would not have been necessary to wait for WhatsApp to do that. If, however, we now change our way of thinking to move in the direction of an ecosystem, this must not be understood as a free pass to establish all kinds of possible services without regard for their potential monetarization and commercial benefits simply by arguing that it defends the ecosystem. The major players do not do this, either. Contrary to certain biases, they are not nearly so free-flying and highly creative that everyone can tinker with whatever might come to mind. There are extremely strict and rigid requirements, and companies are highly disciplined in their reviews of what works and what is commercially viable. Everything else is tossed aside without hesitation. Normal consumers never hear about the large number of projects that are cancelled. We must not limit our observations of the digital world to its delight in inno-vation, but must also have the discipline to orient our efforts to commercial benefits.


DMR: That sounds like fast development, but also like fast fail – in any case, however, being agile in the customer perception. Are the internal structures and large number of coordination loops in larger companies a hindrance?

Dr. Messerer: Definitely. Once again, however, we have here a group of subjects that we must work through at the same time. We are fully aware that we do not have this quickness, this agility, this maneuverability and flexibility in our present struc-tures and our waterfall project management that would come if we were organized in teams with open creation and co-creation. These are exactly the components, along with skills, along with organization, along with incentivization, that are part of our transformation program. We are already seeking to develop services in other structures.

DMR: There are undoubtedly core findings or recommendations for action based on this experience that you would like to pass on to our readers to help them on their journey toward digital transformation.

Dr. Messerer: Knowing the future exactly and finding the optimal position are probably not at all the primary tasks of strategists and managers in the digital world. That is not even possible. Instead, we must improve our companies’ abilities to learn and to change. This includes the need to open up, to sharpen their senses, to continue the dialog with customers, and in general to stay in contact with the outside world so that they can respond very quickly. These are the skills that will be decisive in the digital world.

DMR: Thank you for these insights, Dr. Messerer.

The interview was conducted by Peter Tüscher, Managing Consultant, Detecon (Schweiz) AG.

Dr. Markus Messerer is Head of Corporate Strategy at Swiss-com, one of the leading ICT providers and most innovative players in the tele-communications industry. His role stresses support for growth strategy and topics revolving around digitalization and transformation. Before coming to Swisscom, he was a strategy consultant and head of the business unit “Strategy and Projects” at A1 Telekom Austria. After finishing his studies in economics, Markus Messerer’s passion for strategy led him to earn an MBA in strategic management and a doctorate in interna-tional corporate management.


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Opportunity and Challenge for the Automotive Industry

Car-manufacturers will have to intensively engage with the heart of CRM in the future: Data Management & Analytics will become key elements of Digital CRM and will serve as benchmarks that determine a company’s ability to play a role in the digital age.

CRM in the Digital Age


Mobile devices, social media, and the Internet of Things offer companies and customers completely new opportunities to contact one another – anywhere, anytime, and using a broad variety of display types. The possibilities for analysis of collected data that is generated more or less “along the way” as a conse-quence of digitization, deliver new insights about customers, their interests, and their needs in previously unknown breadth and depth. This situation touches on the most fundamental pillars of Customer Relationship Management:• Know your customers and their needs!• Make them offers that “fit” with their needs!• Communicate with them in a personalized, “appropriate” form!• Generate a positive and emotional customer experience to

produce customer enthusiasm and gain their loyalty!• And: Do all of this as economically as possible, i.e. by applying

efficient processes and employing the support of adequate systems!

Digital Customer Journey

The automotive industry can be used as an example to illustrate the opportunities and challenges for the management of customer relationships inherent in digitization. There are three essential changes in the “classic” customer journey during the purchase of a (new) vehicle as well as in the after-sales customer journey for workshop services & parts:

1. New, digital touch points

New, digital touch points arise. Examples are the customers’ smartphones and tablets; they are always on and represent a permanent connection between customers and car-makers as well as between dealers and workshops. This includes the atten-dant requirement of providing customers with an app that is re-ally beneficial so that the contact is not lost. The key here is the adjective “beneficial” – an app for app’s sake is quickly revealed to be a “dud” and has the inherent potential of becoming dead lumber. However, the benefits need not necessarily be related directly to the car. Playful “entertainment” elements or helpful functions for other areas of daily life such as smart home, smart logistics, intermodal mobility, or smart health encourage custo-mers to use an app regularly and create a strong relationship to the brand. When used in combination with iBeacons or GPS-based services, smartphones offer the possibility to provide a “virtual point of sale” to customers at previously “white spots” so that location-based services can be used. Connected Car plays a very special role for CRM in the automotive industry. For one, the vehicle itself becomes a permanent digital touch point that

OEMs can exploit especially effectively for communication at the moment of the product experience. For another, it entails opportunities for the collection of data relevant to the vehicle and driving patterns that have never before been possible.

2. Digitization of existing touch points

Using mobile communications has become completely normal, and not only for “digital natives”. Companies who do not have a mastery of communications over digital channels can no longer reach their customers. This both applies to “electronic” media like email and the “traditional” websites as well as for customer interaction centers and brick-and-mortar retail formats. Video chats and the use of social media platforms as a form of customer self-service are moving into customer care, both in dealerships and in service centers. Consequently, digitization is making completely new demands on the orchestration of communica-tions via the various digital and non-digital channels. The com-plexity of multi-channel or even omnichannel management is growing enormously in the wake of digitization. Moreover, the lines between communications with known customers on the basis of existing contact data – CRM “in a narrower sense” – and the addressing of anonymous, unidentified customers – traditional “advertising” – are becoming blurred. The analysis of device-specific information and the behavior of the users of the digital devices (using cookies, for instance) often makes it possible to address someone personally and in line with his or her needs without knowing the identity of the customer or potential customer. This situation fulfills the major features of CRM even without identification of the customer.

3. Break-up of the predefined sequence of the customer journey

Digitization fundamentally changes the way in which customers prepare a buying decision. They take advantage of the many and varied opportunities to obtain information about products and services without regard for place and time. Research for additional details can be done at any time. Information is acquired “bit by bit” and no longer “in bulk” as was the case during the conventional visit to a dealer. A far greater number of different sources are examined because the costs for the procurement of information are virtually zero. What is more, it is common practice to report to the “peer group” about current activities on social media and to involve its members in the making of decisions. Communication between the car-maker or dealer and the customers is constantly supplemented by communication among customers themselves, with respective impact on the decision-making process.


Hopping between touch points increases the coordination effort

Customer journeys are no longer “linear”; they are characterized by rapid and almost unforeseeable “touch point hopping”.

In terms of the three-layer sales constellation that is usual in the automotive industry, a consistent and uniform customer experience can be generated only if all of the parties involved in the customer interaction – manufacturer (OEM), importer (wholesale level), and dealer/workshop (retail level) – cooperate without any friction. In the past, direct customer contact took place almost exclusively with the importer and the dealer: the importer primarily in the early phases of lead generation, the dealer in the subsequent handling of the sale. In after-sales, the service partner was almost exclusively the face to the customer, supported as necessary by the importer’s customer care center Digitization is drastically changing this constellation. Most of the information can be provided centrally by the manufacturer because the digital channels are available on the Internet all around the world. Significant scaling effects can be realized here by the centralization. With Connected Car, whose contract partner for mobile services related to the car is the manufacturer itself – and no longer the importer or the individual dealer – manufacturers become original parties in direct customer relati-onships for the first time.

The effort required for coordination among the various touch points rises in two ways. First of all, the number of touch points

and the involved parties increases at all three sales levels. Secondly, “touch point hopping” leads to the necessity for mutual sharing at all times of information about the interactions that have taken place at all of the previous touch points so that customers can be served “on eye’s level” at the next step.

“Next Generation Digital” customers

Customers themselves, along with all of their expectations and needs, are changing as well. It is no longer a secret that sales of cars to buyers between the ages of 18 and 34 have declined substantially. Mobility is a high priority, but ownership of a car is no longer such important. Has the automotive industry as a whole adjusted adequately to this transformation? And does it know this new generation and its needs? The so-called “Millen-nials” are the first generation to grow up with digital technology. Communication and sharing with the outside world via digital media and devices are second nature to them in their daily lives. They therefore have different expectations when it comes to communication. The selection of a channel is based on individual preferences or the specific situation. Regardless of the channels, these customers assume today that the content as well as the presentation of a product or brand will speak with the same voice and without any breaks. Furthermore, they also expect an app or a web portal to function and be usable intuitively; high performance in the sense of fast response times is taken for granted. Customers do not want to spend their time trying to understand the technology. When we consider that 65% of the customers in this target group begin their customer journey on a

Dealership

E-Mail / Letter

Call Center

Digital Advertising

etc.

Web / App

Configurator

Social Media

Customer Portal

Connected Car

Figure 1: “Touch Point Hopping” in the Digital Customer Journey


mobile device, we can understand how very important the con-tent and storytelling the users see when scrolling down on a mobile device have become. The first two or three seconds of content are decisive – they either stop thumbs or keep them moving.

Expansion of customer intelligence

There is a third dimension – car-makers must turn their eyes to market events taking place around them. Digitization has caused disruptive changes in hand-ling data. Innumerable business models of the digital “big players” are based completely on the collection, analysis, and exploitation of data. The “customer intelligence” that provides the knowledge about customers and their needs so fundamental to CRM is now in the hands of others. Facebook, Google, Apple, and others are sitting on a genu-ine “treasure trove” of detailed know-ledge about customers who have made this knowledge available – in part consciously, at other times unconsciously. Especially the combination of otherwise com-pletely discreet puzzle pieces from customers’ lives leads to valuable conclusions about their behavior and their needs. Google and its ilk do not limit themselves to a certain area such as car mobility; they collect and com-bine all of the traces left behind by customers – whatever paths they may take with their mobile devices. When powerful analysis tools are used, segmentations that permit extremely precise addressing become possible. Since the digital “data collectors” do not release these data and findings on their own, but profitably open the communication channels to the target groups to the highest bidder, car-makers must make use of these channels so that they do not fall hopelessly behind. They should also look for ways to collect data themselves, or they will otherwise become completely dependent on others for their “customer intelligence”.

If we now continue this chain of thought at a highly abstract level and keep in mind the rapid pace of digitization, it will not surprise us to hear that there are already some in these companies who view the car as nothing more than another “mobile device”. The lead in expertise when it comes to handling digitization and the competence in data management and analytics have an inherent risk that the automotive sector will be hijacked by non-OEMs like Google and Apple. Own digital mobility products of these companies, even going so far as the autonomous car, are already more reality than any science fiction vision. This reveals that the knowledge about customers and the related recognition and fulfillment of their needs for mobility services in the future have a value that is at least as high as the traditional assets “engine, power-train & body”.

People always on

Communications

Smart Home– 2 –

Connected Society

New Mobility World

Seamless Experience of Digital Touchpoints

„Internet of (Every)Things“

Smart Parking Smart Logistics

Smart Health

Smart City

Smart Energy

Seamless Connectivity

Touchpoint Hopping Data Analytics

Figure 2: “Next Generation Digital” customers are Always On


Data Management and Customer Analytics – the core of Digital CRM

How can car-makers cope with all these challenges? By embracing digital transformation and viewing it as an opportunity! The meaning of this for the digitization of the customer journey is first of all the consistent use of digital communication channels and their orchestration by multi/omni-channel management. Furthermore, it involves the implementation of completely new digital touch points and their integration into the overall interac-tion with customers. Most important, however, is the key role played by customer data management. Since the number of touch points and the frequency of contacts with the touch points are rising, but there is no longer an inherent sequence for touch point visits; and since the customer interaction shares at the three sales levels OEM, importer and retail are changing significantly; the collection of all of the information about customer interac-tions and, in turn, the provision of the information at all touch points are the keys to success for digital CRM. Digital customers expect ubiquitous availability of interaction opportunities at the touch point of their choice at all times. In addition, they expect their “counterparts” to be fully informed about their situation, their needs, and – especially – the steps along their “journey” that have already been completed so that the trip can be continued without any “backtracking”. Customers usually do not distinguish between the three sales levels – for them all touch points represent the company that builds and cares for their car. That is why there must not be a single break perceivable to customers in the interaction even if there is a de facto change from the retail to the OEM level (for instance) because

customers, after visiting a dealer, go to a web portal to obtain additional information or to continue the configuration they had previously initiated.

The prerequisite for this is the availability of a 360° view of the customers, at all times and at all touch points. The key role here is played by the standard “Customer ID” that merges the actions of previously known customers at all touch points into the aforementioned 360° view. This comprehensive picture is not possible without the merger of all of the customers’ actions. Actions performed anonymously on digital devices can (initially) be collected via temporary IDs (e.g. cookies) and merged with the other information at a later time. At the appropriate time, suitable incentives can push for the identification or de-anony-mization of customers so that these digital traces can also be added to the overall profile.

Organizational and legal aspects in addition to technical aspects for merging the customer merger (“data integration layer”) must be taken into consideration for the implementation because the involved parties at the three sales levels are, legally speaking, autonomous units and are not allowed to share all of the details about “their” customers without any restrictions. This is where extended concepts for marketing permission declarations come into play. In addition to the “permitted”, however, the “desirable” nature of sharing customer data must be adequately addressed among all of the parties: Everyone involved must become aware of the benefit gained by sharing the data of the customers. True CRM is not possible without transparency about customers and their needs!

Dealership

E-Mail / Letter

Call Center

Digital Advertising

etc.

Web / App

Configurator

Social Media

Customer Portal

Connected Car

AnalyticsBig Data & Prediction

Data ManagementIdentification & Combination

+ External Data

Data Integration Layer

Figure 3: Data Management and Analytics


Connected Car – Connected Customer

Data about customers collected in large quantities by third-party market players must, in specific cases, be added as “external data” to own customer data records in order to enable more precise segmentation and more targeted customer addressing. However, this is very expensive; no doubt, the business model of Google and its compatriots is aiming at generating revenues. This is why the expansion of their own data collections is especially interesting for car-manufacturers: Connected Car provides a general opportunity to record vehicle-specific needs as well as driver behavior relevant for mobility.

Firstly, companies can use messages from control devices – warnings, error messages, or simply notifications about upcoming service – to send concrete offers for precisely these maintenance or repair requirements of their vehicles to customers – preferably within the time frame and spatial context of the occurrence of the need and – best of all – straight to the vehicle’s onboard unit or the corresponding app. The high quality of the after-sales leads generated directly from the vehicle will also overcome the usual skepticism at the retail level about the quality of the leads from the manufacturers. The “seriousness” (“correctness”) of the need and the “timeliness” of the need cannot be outmatched. So only working on the “willingness” of their customers ist left for the dealers and service partners...

Secondly, the constant connection with the car can provide valuable data about the vehicle’s situation – mileage, age, speed, RPMs, transmission setting, oil temperature, outside temperature – and its position that can be used to determine road conditions, altitude, grade of the road, or weather conditions. Such data can also be collected anonymously and analyzed without significant loss of content so that the relationships between this data and vehicle needs like spare parts, maintenance requirements, or possible need for repairs can be identified. By making use of predictive marketing, companies can use this data basis to generate perfectly “matching” offers specific to the vehicle. And predictive maintenance will enable them to contact customers in good time so that imminent failures can be prevented by a visit to the workshop before a car breaks down on the highway, avoiding negative customer experiences.

“Next Generation” CRM

Beyond any doubt, digitization is creating valuable opportunities for the automotive industry that will allow closer proximity to customers. New digital channels open up a broad potpourri of customer communications; customers can be reached anywhere and anytime. Conversely, however, it also entails the promise on the industry’s part to be reachable at any time for customers’ requests – and on the channel they select. Omni-channel management is gaining in importance for a cross-channel, uni-form customer experience.

Connected Car creates new opportunities for contact with customers – and in the direct context of product use. Opening contact to customers can deliberately take advantage of the emotional situation of the driving experience. At the same time, previously unimagined opportunities for the expansion of custo-mer intelligence arise because vehicle and mobility data can be collected and analyzed – provided that legal issues relevant to data protection and organizational questions related to data collection and utilization have been clarified.

The important point is that the perceived concrete added value and the excitement about the offered services will in total outweigh any resentments customers might have concerning providing their data.

* For more details see Padberg/Seel: „Customer Loyalty in After-sales“, Detecon Management Report „Special Automotive 2015“, September 2015, p. 68–71.

AUTHORS

Dr. Jürgen Padbergis Partner in the sector Automotive of Detecon and head of Global Practice CRM, Sales, and Service. He guides clients over the course of their digital transformation so that they can design new models of customer communications and customer experience with the aid of innovative technologies.

Yujin Schmidtis Management Consultant at Detecon and has had a number of years of experience working on projects in the automotive and telecommunications industries. Her consulting work focuses on the areas new mobility and connected car as well as the subjects of customer relation-ship management, customer experience management, and digital business models.

New Mobility Services

Turning from Car-maker into Mobility Service Provider Energizes CRM

Having your own car is no longer so important, especially for the younger generation. But it is, beyond any doubt, a comfortable form of mobility. If car-makers can now manage to change their way of thinking, they can take advantage of the opportunities arising from new mobility concepts to benefit their customer relationship management.



Expectations and demands related to personal mobility are in a state of flux. The underlying causes are related in part to the circumstances in the densely populated urban areas and mega-cities, where the infrastructure has reached its limits. One of the consequences is the high level of environmental pollution that is already seen in these areas today, but individuals feel the impact especially from the lack of parking spaces and from inner city traffic jams. World metropolises like Beijing, Paris, or London are reacting to the situation by enacting measures such as envi-ronment stickers, congestion fees, or ban days, actions that always place restrictions on drivers. The sense of convenience that comes from being able to drive your own car whenever you like is evaporating. A second factor is that the importance of owning a car, its significance as a status symbol, is declining sig-nificantly among the members of the young generations. Gene-ration Y and digital natives can be mobile without owning a car. They are on the lookout for mobility concepts and maximum flexibility without any obligations – prompting them to prefer to use new mobility services such as carsharing and transport apps for intermodal mobility. The desire for connectivity (orga-nizing activities in networks, being connected via the Internet of Things) and convenience (everything available anywhere, anytime, customizing products and services for one’s own needs) is only reinforcing this social trend.

Mobility concepts based on digital processes generate proxi-mity to customers

Bad news for car-makers? Far from it! While it is true that the respected magazine Fast Company featured an article entitled “Millennials Don’t Care About Owning Cars and Car-makers Can’t Figure Out Why” this year, carsharing and intermodal mobility concepts should be regarded as an enhancement of urban mobility and not as the cannibalization of traditional business segments of the OEMs, the sale of vehicles. As of this moment, only one-third of all car drivers see carsharing as a fully equivalent substitute for their own cars (Aral 2015: Trends bei Autokauf 2015), so there is still time for OEMs to move with the changing times and to develop new mobility concepts. For traditional car-makers, this means a mind shift away from being concerned almost exclusively with the development and manu-facture of cars as in the past and toward acceptance of the role of mobility and service providers and the exploitation of digitaliza-tion for intense interaction with customers and strengthened customer loyalty. OEMs today must include IT support for apps, connectivity and back end, support processes such as fleet management and scheduling, and, above all (and this is where they will have their great opportunity), the user interface for end customers with a focus on apps and portals as well as usability and user experience. The customer presented on a (digital) silver tray, so to speak.


Direct access to customers creates many touch points for customer interaction that offer added value to customers and companies. For instance, customers with an ID can use a mobility card or user ID to select among various types of mobi-lity. One can imagine using a card or an app to reserve, use, and pay for carsharing vehicles, taxis, or tickets for long-distance transportation. Fuel and parking charges when driving one’s own car could be paid for with the same card. The total cost of mobility is transparently listed in a cost overview for end custo-mers. It might also be possible to book various mobility rates or flat rates, similar to those that can be obtained for mobile net-work services, depending on the individual’s specific need for mobility.

OEMs who supply a card like this obtain transparent informa-tion about the mobility behavior patterns of their customers and can use this information to offer tailored mobility to specific customer groups. This creates long-term bonds to users that go beyond the simple sale of vehicles. Mobility data can also be used to develop and offer new services and mobility services with a specific goal. The build-up of mobility networks featuring benefits for a company’s own customers in terms of intermodal mobility would increase the lock-in effect for customers even more.

Mobile devices are the new “point of sale”

“Personalized – unique – just for you”. This is the path OEMs must take in customer relationship management. Products, customer service, and relevant marketing campaigns must be tailored individually to each and every user. At the same time, users are becoming co-creators, a part of the product, through crowd intelligence – they are being integrated into product development. Many successful digital business models are achie-ving their success by following this formula.

Traditional CRM focuses on internal customer interfaces and processes. Activities in automotive CRM today still concentrate primarily on measures for the generation of leads in the sales process and parallel dialog marketing campaigns when models are launched. They are supplemented by sales campaigns in after- sales (which tend to be rather half-hearted) as a means of proac-tively binding customers to service partners. The OEM does not have the actual contact to the customer; at best, this takes place with the importer, but is mostly the domain of the dealerships. The customer and the shaping of the customer experience must truly be the focus of attention now, however. The changes in mobility behavior are leading to these changes in requirements, but they are also opening up opportunities for customer relation-ship management and customer expectation management.

Other industries where the level of digitalization has reached a more advanced stage are already making use of differentiated approaches as ways to create sustained customer experience and to secure the loyalty of their customers. App-based business models exploit crowd intelligence intensively and integrate customers as co-creators through structured feedback channels. The approach enables the continuous further development of a product in fast and agile development cycles during live opera-tion. The customers’ active input for “their” products forges a close bond to the customers.

Social media are a supplement to the traditional service channel in customer service. The challenge for companies concerns the fast response to queries or complaints. About one-third of social media users expect an answer within one hour at most. Compa-nies benefit because they can respond quickly and specifically to dissatisfaction. Furthermore, intelligent network mapping methods allow social influencers to be identified and integrated into communication, increasing the chance that opinion makers on the Internet will be encouraged to become active in a positive sense for the company and contribute to the dissemination of positive company messages.

The most important element in the interaction with customers and for the creation of positive customer experiences is the direct interface to customers – the user interface. This interface must be designed with “mobile first” in mind so the wish for continuous connectivity in combination with high mobility is fulfilled. In other words, customer applications must be designed first for use on a smartphone or tablet and only later for laptops or PCs. Consequently, the use of apps or software must be intuitive; they must operate at a high level of performance and offer fast problem-solving for the worst-case scenario of customers not knowing how to solve the issues themselves. These pre-conditions are essential for the creation of a flawless customer experience and the related bonding with the brand. The brand image and positive customer experience for all aspects of the car are carried over into the digital world.

IT and organization must be suitable for CRM

Digital business models for mobility come with an inherent opportunity for OEMs to obtain direct access to their customers and the customer data. But once they have the data, the challenge is to be able to process and work with the information. Even today, the complete infrastructure in many companies is inadequate to handle these tasks satisfactorily. For instance, integrated high-performance databases are lacking; the existing CRM systems are no more than rudimentary and are not designed to deal with digital processes in service; the internal organizational structure is not service oriented; the necessary


processes do not exist. Yet high-performance customer data ma-nagement is the backbone that must be in place before the new digital mobility services can be offered at all; even more, it assu-res positive customer experience and customer satisfaction over the long term.

“As far as Facebook is concerned, a car is nothing more than another mobile device” (quote by Christoph Stadeler, Facebook, at the Automotive All-Stars Event 2015). Facebook has recog-nized that the core element in the digitalization of the automotive industry is not the connectivity of the car, but the interconnec-tion of the company with the drivers in the sense of relationship building. OEMs must draw up level here if they do not want to be forced into the position of being nothing more than the manufacturers of interchangeable “end devices” in the future. Avoiding this predicament will require the successive expansion of business capabilities in customer relationship management and, above all, the creation of the organizational and IT techno-logy prerequisites. Unless this happens, the transformation from a manufacturer to the provider of (new) mobility will not succeed and the added-value chain will not be commercialized along its full length.

The pioneers in this sector are models such as moovel (Daimler AG) and qixxit (Deutsche Bahn AG). They are targeting the estab-lishment of business areas dedicated to intermodal mobility concepts. At the moment, however, this business field is still in its infancy.

AUTHORS

Jörg Recktenwald is Managing Consultant and works in the Auto-motive cluster. He advises companies in Germany and abroad on subjects related to digitalization, in particular new mobility concepts and digital busi-ness models. Recktenwald lived in Beijing for three years; during his time there, he was involved in the successful establishment of a B2B carsharing con-cept for a large German OEM.

Yujin Schmidt is Management Consultant and has had a number of years of experience working on projects in the automotive and telecommunications industries. Her consulting work focuses on the areas new mobility and connected car as well as the subjects of custo-mer relationship management, customer experience management, and digital business models.

“Digital Health Care: Detecting Illnesses at an Earlier Stage with Smart Technology – for the Right Treatment at the Right Time”

Digital health care, provided that its integration is excellent, simplifies a health-conscious life style in a pleasant way, says Juliane Zielonka. In keeping with this vision, the startup LARAcompanion guides involuntarily childless women and couples through digital programs.

Interview with Juliane Zielonka, CEO Die Artverwandten GmbH



DMR: Juliane Zielonka, you are the founder and CEO of a digital health care startup in Berlin. What exactly is your business field?

J. Zielonka: Digital health care stands for the merger of medical knowledge and smart IT solutions with the objective of impro-ving or maintaining human health. Fitness trackers are one example from the life style sector; used in conjunction with the matching smartphone app, they supply information about a person’s exercise profile, sleeping patterns, and moods. In the medical products sector, the monitoring of vital signs such as blood pressure, pulse, or blood sugar is standard practice. Our smartphones are our companions in daily life, whether we are sick or healthy. We used to keep diet logs, journals, patient’s charts. Today, we can use intelligent algorithms to interpret the digitally recorded values and, on this basis, determine behavior activities ourselves or ask our physicians to set up a schedule of activities for us. Data end points turn into data processes. The resulting business field includes consulting and development of Software-as-a-Service products and services in the health care and medical sectors: interactive programs for the web and mobile devices that encourage users to achieve the health goals they have set for themselves by entering, analyzing, and evaluating data.

We established the startup LARAcompanion as a spin-off of our digital health care publishing and consulting company Die Artverwandten. We develop digital training programs for hand-ling stress that can be used by involuntarily childless women and couples. Stress is a significant factor when the desire for a child is not fulfilled. Our programs reduce stress levels, a factor that can increase the chances of a pregnancy. The scientific substruc-ture to the program comprises measures for cognitive behavior changes. Clinical studies document that women who participate in relaxation training courses parallel to infertility treatments are more than twice as likely to become pregnant as women who do not attend these kinds of courses. This is precisely our starting point for launching digital transformation. We professionally take charge of this highly emotional subject and develop relaxation training programs on a solid scientific basis that these couples can use outside of the doctor’s office. The idea at the heart of the program is for users to measure their bodies’ own fertility and stress levels while regularly following the LARA-companion health program series. Our app can be used to store meaningful results, map decisive progress, and recognize logical recommendation patterns by means of the intelligent algorithm. Couples can easily use smart technology to move closer to their goal, step by step.

DMR: Where did you get the idea for this startup?

J. Zielonka: LARAcompanion is the logical evolvement of a women’s health care portal on the subject of “illnesses that represent a risk to women’s fertility” that we established in collaboration with physicians in 2012. Our own lack of knowledge and bad experience in working with irrelevant and contradictory Internet sources prompted us at that time to create a single clearing point for all medically available options in the form of an “information therapy”. www.uterus-myomatosus.net has now become fully established and records about 50,000 visits a month. The women’s health care portal launched in cooperation with professional medical associations offers independent information about all of the forms of medical therapy for genetic and hormonal illnesses that can threaten fertility. There is no web portal with specific exchange of information about the success of treatment that goes beyond the medical therapy decision. LARAcompanion takes this additional step. All expectations and desires have been identified after more than 100 interviews with affected women. Our goal is to offer interactive training programs through smartphone apps that will provide reali-stic appraisals of the chances for pregnancy to involuntarily childless women and couples. They can quickly take the next relevant steps while the treating physician has more extensive data patterns for preparation of tailored treatments so that illnesses that represent a risk to fertility, for example, can be detected sooner. LARA stands for Learn, Appreciate, Reach decision, and Act. The ability of women and couples to apply knowledge through the use of smart app tech-nology is a source of enormous added value. In the age of digital interconnection, data patterns are generated from the successful treatment of many users, and, with their consent, these data can be used for scientific research. The networking of smart IT solutions and the resultant opportunities for the best possible results from treatments fascinate me.

DMR: According to the description, the development of LARA follows the customer and user perspective closely. How exactly do you proceed so that the needs of the later users can be considered and implemented the best way possible?

J. Zielonka: We work according to the lean startup principle. This principle guides the founding of a company or a product launch so that the establishment of a successful company requires as little capital as possible. The focus is on learning by doing as a conse-quence of the early “introduction to the market” of the product or service. This contrasts with a long period of advance planning. You have a proposal for a market, a group of buyers. General opinion holds the business plan to be the first thing that anyone wanting to


establish a new company must write: a static document that describes the scope of a market opportunity, then briefly outlines the problem and the monetizable solution available to the startup. It typically contains a three- to five-year forecast for all of the financial indicators. The business plan is a good tool for thinking through all of the fields of business action on the basis of a clear structure. However, ten pages are also enough for this purpose. Even after setting down a business plan, I still don’t know if my market will be willing to accept the sales price I have calculated. This summer, we became the first digital health care startup to launch an eight-week financing campaign on “aescuvest”, Germany’s first crowd-investing platform for medical startups. During the campaign, we found more involuntarily childless women and couples to support us in the product development. “Lean” means that you enter the market with the smallest possible product, the MVP (minimum viable product) and apply user feedback to work iteratively on your proposal. We are in this stage right now. We have just completed the first course schedule and are testing the interactive functions for user compatibility. Immediate feedback from users ensures a user-centric approach.

DMR: How can we picture this in actual practice, i.e., obtaining meaningful and effective support for handling stress from an app, a technological development?

J. Zielonka: Just as for any other training program supported on the web and mobile applications. There is a training schedule, target achievement, and exercises. Moreover, personal progress is

documented in the app. The collected data can be analyzed and in-terpreted and patterns can be recognized over the full course of the program.

DMR: Why can a machine do this better in this case than personal, human support?

J. Zielonka: This is not a question of better or worse; the app provides an additional service. Empathy remains one of the most important elements of human interaction in health care. It is not at all an easy matter for women and couples to find the psycho-social support they require in the cool world of traditional medicine. We do not take the place of a physician; on the contrary, the machine can establish a connection to an expert who would otherwise remain unknown or unreachable. We work with coaches trained in helping people to have children; they can be reached via the software and are available to answer personal questions.

Machines can be helpful for the treatment important for good health. Cognitive systems such as Apple’s SIRI or IBM Watson utilize unimaginably large data sources so that they can provide the appropriate information within seconds. Imagine how this works during a doctor-patient consultation. The cognitive system helping the physician frees up more time for insightful conversations with the patient because the information relevant for the diagnosis can be obtained much faster than from the tedious compilation of broadly strewn information from MRI images, patient’s files from other con-sulting physicians, and from other disparate sources. Watson is


already being used during clinical studies at American clinics, saving enormous amounts of time in clinical research. And who knows how susceptible we might be to artificial intelligence. In the science fiction film “Her” made by the US director Spike Jonze, a lonely man in his mid-30s falls in love with his operating system (featuring the wonderful voice of Scarlett Johannsson) that helps him get through life every day.

DMR: What trailblazing innovations and achievements do you foresee in the digital health care sector in the next five years?

J. Zielonka: Digital health care is a worldwide subject. I see five trends:

#1 AI: Cognitive systems such as IBM Watson that support health care professionals and, perhaps, patients as well in making decisions by analyzing large quantities of data and comparing the results with scientific studies.

#2 Home diagnostics. Diagnostic tools for use at home that read out biomarkers and provide bio-feedback from saliva, urine, or blood samples within a very short time. The American company Theranos, for example, is working on shortening the waiting time for lab results from blood tests by disruptively redesigning the laboratory logistics chain.

#3 3-D printing of medications, prostheses, organs. Patients can print out their pills with a specific dosage at home themselves.

Transplantation organs can be grown from cells in the laboratory with 3-D printing. This will drastically reduce the currently long delivery periods and treatment channels. Rapid proto-typing of medical devices with the aid of 3-D printing techno-logy will also reduce the development time until market intro-duction of these devices. Making commercially intelligent use of the new agility of these tools will secure a strategic competitive advantage.

#4 Precision medicine. Tailored therapies for specific patients prepared on the basis of genetic research. Away from the “one size fits all” prescribing of medicines and toward precise treat-ment based on genetic characteristics.

#5 Remote care. Telemonitoring of high-risk patients by health care professionals with the aid of connected IT solutions and sensors for monitoring vital signs. Can be used in conjunction with Apple Airstrip, for instance, during high-risk pregnancies or for people who have had a heart attack. The same is true for nanosystems such as pills containing cameras for the examination of internal organs.

DMR: What advantages, what concrete benefits will patients have from these developments?

J. Zielonka: Enhanced quality of life from understanding and accepting the illness. A Dr. Google can be bested with the help of knowledge reviewed according to guidelines. The ideal of


patient sovereignty will suddenly become achievable. The person with the illness is at peer level with the physician and becomes the pilot of his or her own health. Just as in aviation, where two sets of eyes still see more than one, the doctor serves as co-pilot. More extensive knowledge makes it easier to deal with the illness. Furthermore, long waiting times will become obsolete thanks to video office visits and chat-supported systems.

DMR: How would you assess the acceptance of digital health care applications right now? Have you determined that users are more sensitive to the subject of health because of the many different appli-cations that are already available today?

J. Zielonka: On the secondary health care market of people who pay the bills themselves, a distinction must be made between people who are interested in health and people who are living with an illness. The first group wants to stay fit and embellishes their active life style with wearables, sensors, and smart textiles that symbolize their physical way of life to their surroundings. Then there are the quantified self-bio-hackers who, in n=1 experiments, hunt down answers to their own questions by taking measurements themselves and share their findings with others in show-and-tell events, e.g., at the hub:raum Café in Berlin (hub:raum is the Deutsche Telekom incubator). People with illnesses as well as people who are at risk for an illness and suspect the initial symptoms are beginning to appear have a much more private approach to health care apps.

The health care programs and applications serve more as a kind of concierge, a therapy companion, to these people, helping them to apply the right treatment at the right time.

Data privacy is a subject that must be taken seriously. Providers of reputable health care apps and programs transparently reveal who the operator is, what happens with the data, and – most importantly – who owns the data. Digital transformation cannot be stopped, not even in a system as recalcitrant when it comes to change as the one in Germany. A representative survey by a large health insurance company has shown that one out of two people (52%) would like to contact a physician via the Internet. Desired services such as digital prescriptions (81%) and online scheduling of appointments (98%) are also right at the top of the list. Sixty-eight percent want exactly what I described above: to be able to take vital signs regularly at home themselves and send the results online to their physician. Sixty percent of the respondents would like to receive the findings of doctor’s examinations online.

DMR: Do you believe that digital health care as a whole will be able to make people healthier in the long run?

J. Zielonka: Digital health care should be viewed as a metaphor for people at the center of the digital health care system, supported in their decision-making processes and actions by technology. This approach of “focus on the person” is new for our health care systems as they currently exist all around the


world and will consequently require a rethinking of business models and relationships of “patient, provider, payer”. The great question is which of the three parties will take the decisive step toward digitalization. If people serve technology, we will have the worst case scenario of a dystopian society depicted in films like “Terminator” or “War of the Worlds”. Human beings are ruled by machines. However, I am not so sure that this has not long since become the case for some smartphone users ... Intel-ligently dealing with the opportunities and possibilities arising from rapid technological developments can lead to a congenial way of life. The Internet of Things (IoT) and digital health care blend into one here. If illnesses never occur because they are treated preventively or diagnosed beforehand, that is in my mind an achievement that will benefit all of us in our society. Digital health care is already possible in Hamburg within the framework of a pilot project for tinnitus patients. A German health insurance company allows ENT specialists to prescribe acoustic therapies via an app. The regular application of digital health care products and services can improve the quality of life. As in all areas of our lives, the dose makes the poison. The motivation must come from within; taking away responsibility for oneself is not the intention of the inventor. Behavior patterns must be tracked down in the subconscious and brought to light in the conscious mind. Pleasantly simplifying life in awareness of good health instead of responding to the peeping of the technical assistants represents excellent integration of digital health care in my view.

DMR: Thank you for the interview!

The interview was conducted by Andreas Penkert, Managing Consultant, Detecon International GmbH.

Juliane Zielonka is CEO of Artverwandten GmbH Verlags- und Consultinggesellschaft für Digital Health. The spin-off LARAcompanion is a startup speciali-zing in digital relaxation training programs for involuntarily childless women and couples so that they can become pregnant without stress.

www.die-artverwandten.comwww.laracompanion.com


Imperative for Customer Satisfaction and Customer Loyalty

Thrilling customer experiences in the digital world are today the key factor for differentiation in competition. A clear digital mission as well as an understanding of customer needs, tailored products and services, and personal support pave the way to digital customer excellence.

Digital Customer Excellence


Digitalization creates new competitive advantages for companies. Within the company, processes can be made more efficient, while new business models can be developed for contact with the outside world (digital transformation). Companies must estab-lish digitalized contact points to their customers. Time is pres-sing because customers are already digitally active. They are themselves undergoing a transformation – from the traditional consumer who simply consumes to the consumer who is simul-taneously a producer, the so-called prosumer.1 This process is an ongoing one; “meta prosumers” are permanently connected with one another and generate digital information of a quality that can significantly exceed the commercial content on the Internet. The decisive drivers of this development are the omnipresence of connectivity, the diversity of functions now available on mobile devices, and the networking of “smart” objects.

Digitalization of contact points means stepping into the customers’ shoes!

A lot of companies have the digitalization of the points of custo-mer contact on their agendas, and some of them have already achieved success in the implementation of digital contact points in some areas. However, the realization of the digital agenda frequently involves a large number of transformation projects on a smaller scale, and the holistic view of the big picture is somehow lacking. Attention often focuses on the back office organization; large sums of money are spent on software programs; and massive demands are made on the IT department.2 If the coordination of the activities in various corporate units within the framework of a clear digital strategy is neglected, a landscape of disparate processes, platforms, self-services, and apps will arise. The overall vision communicated to customers lacks definition, is not in alignment with their expectations, and frequently leaves them in the dark. Moreover, companies working on the establishment of digital contact points today focus above all on cutting costs. The integration of self-services in customer service, for instance, aims primarily at relocating the contacts and reducing expenses.3 A customer-centric perspective is left behind. This is not a good starting point when you consider that today’s customers expect support and consistent handling of their concerns across all points of contact and channels.

Assuming that comprehensive knowledge about customer needs and wishes is available, the systematic design of digital customer relationships (including digital customer experiences and the seamless integration of digital corporate capabilities into the off-line world of stores, showrooms, or service points) is the key

factor for differentiation over the competition and the assurance of high customer satisfaction and loyalty. When companies can consistently fulfill (or even exceed) digital customer expectations over the long term, they achieve digital customer excellence.Stepping into the customers’ shoes lays the foundation for a profound understanding of customers. The concept of the digital customer journey is a useful strategic frame of reference for the analysis, structuring, and optimization of customer experiences. It can be broken down into three main phases:

Customers find companies – on the Internet

Digitalization turns consumers who are looking for and receiving information into creators of information as well. Companies are no longer the only ones providing information to consumers looking for products. Instead, consumers are themselves intensely sharing information as well, and this sharing is being driven by digital networking. In addition to the strictly positive messages about the company, its products, and its services found in tradi-tional advertising, negative information is now increasingly available as well. So the process of searching for information has experienced a power shift favoring consumers because today’s consumers find significantly better opportunities to obtain infor-mation and assessments.

“Consumers gather 75% of their infor-mation on digital channels before making a decision to buy.” 4

That is why companies must become active at the place where information is created and opinions are formed: on the Internet. Moreover, they must ensure that their own products have been placed in an optimal position on digital channels and that potential customers find what they are looking for. A strong recommendation is for the use of a broad range of digital marketing activities such as search engine optimization (SEO), content marketing, social media sites, or the use of video plat-forms. The use of innovative digital methods such as the integra-tion of links into TV commercials (using the music identifica-tion app Shazam, for instance) can highlight the communication of information. Companies can use these and other methods to take customers from their smartphones straight to the corpo - rate home page where (ideally) additional information and inspiring content will be found. The diversity of channels,

1Cf. Toffler: The Third Wave, 1980.2 Cf. Roos, S./Friedrich, O: Customers Like It Simple! A Well-Thought-Out Omnichannel Architecture Lays the Foundation for Successful Customer Journeys, DMR Impulse, 2015.3 Cf. Penkert, A./Eberwein, P./Salma, V./Krpanic, S.: Customer Self-Services – Efficiency and Customer Loyalty in the Age of Digital Transformation, Detecon Study 2014, p. 20.4Cf. Ovum: Social Media Trends in Telecoms, 2014, p. 17.

Gathering information


communication media, and information platforms such as price comparisons and ranking portals mean that it is absolutely essen-tial for the information which can be influenced by the compa-nies to focus on a clear message, e.g., “best in class service”, price leadership, best quality. Unless they have consistent information communication on all channels – including the offline channels – companies will not be able to generate a clear image in consu-mers’ minds.

Individuality and transparency in the digital world reinforce the company offer

During the decision-making phase, customers expect clear offers, simplicity, transparency, and efficiency in the handling of decision-making, purchasing, and delivery processes. Fulfilling the hygienic factors regarding simple sales processes (e.g., doing no more than warding off frustration during the purchasing process in online shops) is not an adequate response for companies. On the contrary, it is necessary to coordinate all of the digital processes related to this important phase and to analyze, assess, and optimize them with respect to their user friendliness. Personalized, individually tailored additional products and services create added value for consumers during the decision-making process and give them an additional incentive to buy. Suggested products and services should be a good fit with customers’ specific circumstances (such as their use history) and the current context (such as location) or their current activities. One way to ensure that these suggestions are sent at the right moment is to use real-time decision-making systems that take individual criteria into account. Nor should it be forgotten that customer feedback is valuable for obtaining new insights regarding customers. The new knowledge must be incorporated into the analysis and given consideration in the optimization of future suggestions. By using the right cross-channel suggestions, companies can generate seamless customer experiences.

“The 1,000 online shops with the highest revenues in Germany realized sales of €32.7 billion in fiscal year 2014 – a doubling of sales since 2008.” 5

Personal support, simplicity, and accessibility in digital channels strengthen customer loyalty

As a rule, customers contact companies during the purchase and consumption phase when they need service, have encountered problems, or have further questions. They change over to the digital media to make this contact. And they expect their service requests to be taken care of there. Digital channels include public forums, blogs, and social networks such as Facebook and Twitter where consumers and companies provide information and answer queries. The spectrum ranges from self-services such as help videos to emails sent by customers directly to companies, who use the same medium to reply.

“On average, customers make use of as many as six different channels to contact companies about various customer service issues, problems, or complaints. They ran-ge from social media to the company website to email.” 6

Customers use digital channels because these media have been integrated into people’s daily lives, are available at all times, and can be accessed quickly. Moreover, customers place a high value on being able to manage their own data and having direct access across all devices and applications to their contract and billing data, customer program, or status information. The simplicity of managing these data, obtaining a precise, up-to-date information report about their own status or the elimination of malfunctions, and proactively receiving information about malfunctions is decisive for positive customer ratings.

The challenge for telecommunications companies today is to complete a transformation away from digital services oriented solely to cutting costs and toward digital customer experiences. Customers whose experience with the channels is positive can be turned into proponents of the services by the use of specific loyalty actions. The situation is similar for loyalty programs. Customers expect to find solutions usable on all devices for the

5Cf. EHI Retail Institute e.V. and Statista GmbH, 2015, page 12.6Cf. https://callcenter-verband.de/home/news/neue-nice-studie-mediennutzungsverhalten-im-kundenservice-2015

Decision

Purchase and consumption


collection of bonus points or obtaining context-related rewards such as special product offers or added value services. Digital applications for the analysis of customer behavior lay the foundation for the identification of special customer needs or loyalty levers as well as for customer segmentation and report evaluations. Active customer management of the program parti-cipants enables the addressing of specific rewards, tailored services, and actions which promote customer engagement and reduce churn. At the same time, the use of location-based servi-ces is a good method for the seamless integration of digital loyal-ty measures into the offline world. These services identify the current location of customers and can suggest shops in their proximity in real time. Bonus points can serve as an incentive for “check-ins” in the shop and to deanonymize users.

Digital mission secures a successful customer journey

Changes in customer expectations generate opportunities which companies can use to their benefit. Digital customer excellence will consequently become established as an imperative for customer satisfaction and loyalty. If companies want to make use of a thrilling customer experience to set themselves apart substantially from the competition in the digital world, it will be necessary for them to use digital channels for more than just cutting costs. Instead, they must include the customer perspective in all of their decisions and activities and never lose sight of the added value for customers. The result must be a clear, digital mission addressing digital customer needs across all phases and integrating digital capabilities into the offline channels.

The efficient implementation of the measures to be taken on the road to digital customer excellence requires taking the time to coordinate decisions and secure agreement with them across all departments despite the need for speed in setting up the channels and media. This will ensure the cross-channel consistency of the measures, simplify the networking of relevant data (e.g., provision of customer information), and prevent the “wild growth” of apps or digital platforms. Companies must not view the path to digital customer excellence as nothing more than one of many projects on their digital agenda. New corporate capabilities must be developed on the digital channels, and the digital operation of the company must have a customer-centric orientation.

AUTHORS

Jens Zimmermann is Senior Consultant with a number of years of project experience in CRM, sales, and communi-cations. The focal points of his consulting activi-ties are found in the thematic areas customer ser-vice, sales management, loyalty management, and digital customer experience.

Jan Grineisen is Senior Consultant in the consulting unit Deutsche Telekom. His consulting work focuses on the development of commercial strategies in the end customer segment, especially on customer experience. Moreover, he has profound consulting experience in the development of omnichannel busi-ness models and sales strategies.


DMR: The Sixtyone Business motto is this: “Your customers live. We take care of the rest.” Could you briefly explain how you make this motto come alive with Sixtyone Business?

A. Tymann: We give companies the opportunity to secure an innovative expansion of their service without any additional expenditures for personnel or processes and to make a gift to their customers of the most valuable asset: time. Using a (white label) app, their customers can obtain access to mobile personal assistants who take care of annoying everyday errands for them. The assistants bundle the many services found on the market and look for the solution that best fits the user’s needs; their search is supported by a clever software solution. The charm here is that users speak only to one person and no longer have to search, research, coordinate, or organize the affairs themselves. Instead of going through a lot of single apps or spending a long time searching for what they need, users can simply give us their tasks. We find the solution while our users are relaxing or taking care of other tasks.

DMR: Many companies have proclaimed their intention to realize perfect customer experiences as a means of creating an intrinsically

motivated customer relationship. What does the digital assistant have to do with retention management? How can you help compa-nies to intensify their relationship to their customers?

A. Tymann: Customers are four times more likely to move to the competition if they are dissatisfied with the service. So it is not the price or the product. Moreover, customers remember their experience with the service longer than the price of a product or service rendered. For instance, do you remember the prices for the last hotel you stayed in? Probably not. But perhaps you can recall the pleasant clerk at the reception desk who had some good tips for things to do in the vicinity. This is exactly what turns your stay into an experience.

With the help of our solution, companies can offer the decisive extra service in other areas as well without having to expend major amounts of time, effort, and money. Customers receive personal service along with their product – whether a car, a suitcase, or an insurance policy – that takes irksome tasks off their hands. This is an innovative way to generate genuine enthusiasm with your customers and secure their loyalty.

Digital Customer Service as a Mission

A lack of time to take care of everyday personal matters and frustration handling annoying errands were the triggers behind the idea to create a mobile assistance service. The startup Sixtyone Business is today operating throughout the entire GAS region. Managing director Alexandra Tymann explains the customer experience.

Interview with Alexandra Tymann, CFO Sixtyone Business


A. Tymannhas been an additional strength in the management of Sixtyone Minutes GmbH since the summer of 2015. The company was founded by Monique Hoell and Michael Gnamm in Berlin in July 2014. She had previously had five years of experience in project management, finances, and controlling at a well-known consultancy. Owing to the long hours of her work week and her many business trips, she had herself yearned to have a service like Sixty-one. Since there was no reliable alternative to expensive concierge services, she decided to submit her resignation and develop the solution herself. Not long after, she met the members of the ambitious Sixtyone Minutes team and accepted their suggestion to move from Frankfurt a.M. to Berlin and to establish the business solution as a part of Sixtyone.

Sixtyone BusinessSixtyone Minutes was the first mobile assistance service to be foun-ded in Germany (www.sixtyoneminutes.de) and offers users access to the services of personal assistants through an app. The assistants diligently take care of matters that consume valuable time at work, in the family, or during leisure time such as submitting notices of termination for contracts, travel plans, restaurant reservations, doctor’s appointments, or household tasks – and much more. The company’s innovative business solution (www.sixtyonebusiness.de) now gives companies as well the opportunity to offer the service under their own brand name to their customers and/or employees, thanks to the software developed by Sixtyone.

Detecon coached the startup Sixtyone Business in preparation for the live pitches for the Detecon pro bono project at the “Long Night of the Startups” in Berlin and supported the founders in their sales work.

DMR: “I would rather put my trust in the assistant who has been helping me for many years and who knows my preferences – for instance, that I like an aisle rather than a window seat on a plane.” How do you counter criticism like this? How can a digital solution create trust?

A. Tymann: We have “real people” as well who handle the tasks – they are simply mobile. Users also have the chance to tell us about their preferences, and of course we will take these wishes into account when we take care of future tasks. The mobile solution enables us to make the service available to everyone. Companies can now make a gift of added values that they would not have been able to offer in this form in the past.

DMR: Without digital transformation, your idea of a digital assis-tant would not exist at all. How do you handle customer manage-ment yourself?

A. Tymann: Thanks to a software program developed specifi-cally for our requirements and with every task given to us, we are in a position to act on customer wishes and demands even faster and to recognize needs and trends at an early stage. Be-sides the technical development that continues to move for-ward every day, we hold regular workshops with our assistants so that what we have learned can be applied directly, developed further, and incorporated into the software development.

Moreover, we emphasize a clearly structured app in which tasks can be clustered instead of requiring single feeds such as text messages or WhatsApp. Naturally, data security is also highly important to us, which is why we have decided to use a German data center that is bound by the data security require-ments in effect here. We have been hosted at T-Systems in Munich since August, and we are currently cooperating very closely with Telekom in other areas as well.

The interview was conducted by Jens Zimmermann, Senior Consultant, Detecon International GmbH.


Success Factor for Assuring Emotional Loyalty

Customer experience is a source of differentiation in competition. Cross-process measuring reveals opportunities for improving customer experience and assuring emotional loyalty.

Measuring Customer Experience


Traditional means of measuring satisfaction are inadequate instruments for managing customer experience. Companies need new methods and skills if they are to shape and guide the improvement of the customer experience in the desired direc-tion. The important point is to secure the strict assessment of the customer perspective in terms of internal categorizations while simultaneously establishing an adequate relationship to business. Only then can the starting points for changes be clearly addressed.

Customer satisfaction measurement is used to determine the degree to which customers are pleased with a company, a pro-duct, the quality of an interaction, or the result of a transaction. The additional question about their willingness to recommend products and services to others and the responses indicate not only their satisfaction, but unveil the presumed extent of their loyalty as well.

Companies nowadays have at their disposal customer survey systems that vary in their complexity and measure the quality of the customer relationship along the road to customer loyalty in terms of presumed or clearly identified quality drivers. Systems of this type lay an important foundation for evolving the matu-rity level of customer focus in a company. It will not come as any surprise that a large number of companies rate their CRM efforts as successful and report a positive trend in the satisfac-tion indicators.

This should not, however, be allowed to blind anyone to the fact that the customers, encouraged by the fierce competition for their favor, are by no means reluctant to look into their neighbor’s garden. Thanks to the transparency in today’s world, the grass on the other side of the fence appears greener than ever before. Because of the flood of alluring offers, customer loyalty

has become such a fragile value that any measurement cannot be regarded as more than a snapshot of a momentary situation. This is confirmed by the steady levels of churn tendencies and the significantly greater reluctance of customers to remain com-mitted to any specific products or companies.

Customer experience management creates differentiation

Customer experience management (CEM) provides a change of perspective. The goal of CEM is to create positive customer ex-periences, thereby establishing an emotional bond that leads to loyal customers who are above all enthusiastic ambassadors. Moreover, CEM is the driver of intensive customer manage-ment. Customers today control the when, where, and how of their interaction with companies. Businesses must therefore strive to offer to their customers added value that will set the firms apart from the competition along with an experience that continues to develop. Consequently, CEM must be designed in the form of a closed loop mechanism that uses the acquired fin-dings to adapt the end-to-end processes in such a way that this differentiating added value for the customers can be created.

A convincing customer experience (CEX) is a key differentiation factor in competition. Companies that set themselves apart from the competitors through their consistently convincing CEX are as a rule able to secure their positioning over the long term. They generate emotional loyalty and optimize their out-look in terms of both costs and revenues. Accomplishing this efficiently requires a specific measurement of CEX that secures the status and development of the customer experience. With respect to measurement of the success of the efforts to achieve a customer-centric orientation, this means that companies must continue to develop their customer survey systems and tailor them to fit the major areas where they will later be used.

Customer Viewpoint

Classification of Business Relevance

Time Relevance/Response Capability

Representativity

Complexity

Use in Reporting/Management

Integration into Target Systems

relating to

Challenge for Measurement of CEX

Figure 1


Cross-process CEX measurement discloses potential

The requirements must also be defined and weighted according to the area where the CEX measurement will be used. Experience has shown that, besides the standard requirements, it is also important to be able to appraise pilot projects using the standard measurement in combination with the capability to validate the measurement results in a feedback loop or to obtain even greater depth of detail. Above all, it is important to have cross-process CEX measurement. Traditional contact-oriented satisfaction measurement falls short and in some cases produces mismanagement effects through optimization in the (channel) silo instead of an improvement in the general customer experience. The customer experience project “K1–Customer first!” initiated by the management board of Deutsche Telekom Group and conducted with our support is one example that demonstrates the benefits and relevance of a cross-process measurement of this type. One of the key objectives – in addition to the identification, implementation, and monitoring of prioritized measures for improvement of the customer experience – was to establish new and stable measurement logics for the CEX measurement.

The experience in the project clearly demonstrated that satisfac-tion indicators can provide valuable findings about the aspects viewed in each specific case. It also revealed, however, that they

Figure 2

draw an incomplete picture, especially of complex customer processes. The previous narrow focus of the measurement of contact quality using ACCIs (after-call customer interviews) in particular painted a highly positive picture of customer satisfac-tion in the contact situation, a picture that was not supported by the crossover process analysis within the framework of process tracking. A detailed analysis revealed that there were repeatedly cases in which customers were given solutions to their problems quickly and unbureaucratically, which they honored with extremely positive ratings in the satisfaction surveys. The surveys conducted immediately after the calls were unable, however, to show that the problems that had presumably been remedied recurred with a certain regularity, putting a sub-stantial damper on the customer experience as a whole. The cause was found in the decision of the service representatives to forgo an in-depth root cause analysis in favor of a fast solution that did not permanently rectify the issue; this decision was a consequence of the ambitious time targets for finding solutions that had been set for the representatives.

Deutsche Telekom now has a key indicator – the process tracking index, calculated by weighting the survey results about the rate of recommendations across all of the key customer pro-cesses – that appears at the point where the customer experience is nurtured day in and day out: during the customer processes that communicate value.

Measuring Success Management Value Analysis Instrument

Classi-fication of

Processes/Products

Measu-rementInterval

Consistency with Target

Systems

Differentiation acc. to Interaction

Channel

Focus of Overall Process

Measu-rement of

Pilot Projects in Standard

Format

As-signment

to Department/Team (anony-

mized)Possibility of

Feedback Loop

Identification of Multiple Contacts


Process tracking index lays the foundation for operational management

Over the course of the project, the focus shifted more strongly in the direction of this index, and it was further developed above all to uncover weaknesses in the services as perceived by customers. Starting points for the optimization of the CEX are found with the aid of a so-called heat map. The status of each major process step is depicted in a traffic light logic. Triggers for the assessment of recognized weaknesses are identified and addressed in a customer experience blueprinting. A yardstick of sufficient sensitivity for the CEX measurement was realized in the program by means of a quantity compass of negative customer experiences derived from the heat map and enhanced by business case quantities. Straightforward index solutions have the drawback that their measurement swings are generally too small to display the effects of measures in tangible form.

Our project experience has shown this procedure to be highly expedient and a valuable tool in operational management of the channels. Once a measurement logic of this type is fundamen-tally in place, the expansion of the measurement by adding soft-ware support of the survey would be a sensible extension phase. These solutions, generally categorized as customer feedback management or operational CEM, enable the opening of a feed-back loop to customers for a detailed analysis of especially striking customer feedback. Such an extension would supply additional valuable starting points for the optimization of the CEX.

AUTHORS

Joachim Haukis Managing Consultant and Knowledge Leader for CRM, sales, and service. He advises in particular companies in the service in-dustry with regard to these subjects. His special focus is on issues of channel management, customer experience management, and customer loyalty.

Peter Tüscherhas been in charge of the consulting division CRM, Sales and Service at Detecon Switzerland since 2007. His thematic focus is on customer-centric strategies and processes, data-centric business models, customer service omnichannel management, and customer experience management.

Figure 3

Customer Experience Blueprinting

Compass of Negative Customer

Experiences

Heat Map and E2E Customer Satisfaction

• Reduction of the most pressing customer disappointments

• Anchoring customer centricity in the c ompany effectively

• Permanent increase in customer satisfaction and loyalty


“The Lifeblood Factor is Decisive”

Interview with Roman Becker, CEO at forum!

What impact does the growing number of online channels have on custo-mer loyalty? And what should companies consider especially closely when they use digital media to address their customers? Roman Becker, founder and CEO of the market research and consulting company forum! and an expert in the field of emotional customer loyalty, has answers.


DMR: Mr. Becker, why are contacts – whether on analog, personal, or digital channels – of such fundamental importance for emotional customer loyalty?

Becker: The model of emotional customer loyalty is based on the recognition that satisfaction alone is not an adequate yard-stick for measuring customer behavior. Even highly satisfied customers are displaying increasingly disloyal behavior today because they perceive products and services to be more and more interchangeable. In this kind of setting, contacts become momentous. They give companies an opportunity to charge relationships emotionally and to make them unique for customers. Within this context, we talk about the “lifeblood factor”. What is especially amazing: we know today from our studies that the actual existence of direct contact to customers (personal or telephone contacts) is not decisive for this “lifeblood factor”. Perceptible emotionalization can also be achieved by digital means. The decisive elements are that customers have the opportunity to choose (i.e., they are not forced into the restric-tions of a specific channel) and that they experience the contact as excellent. Speaking in terms of school grades, we say that nothing below an “A” counts. Furthermore, our studies reveal that there is a relationship between contact frequency and customer satisfaction or loyalty. Frequent contacts enhance customer satisfaction and loyalty – provided, of course, that nothing goes wrong and the contact is experienced as excellent.

DMR: Digital channels such as Internet sites, mobile applications, or social media are rapidly rising in significance for certain customer groups. What are the most important success factors in this respect?

Becker: Any area where digital channels are becoming more popular also experiences a decline in the number of users on the conventional channels. The chance to build up emotions in personal contacts and to charge customer relationships positively begins to evaporate. The deciding point now becomes to drive emotionalization on the digital channels as well. Our first step should be to look at the ways emotional customer loyalty is created. It is always generated when a company can make use of focused and orchestrated performance and communication to serve the key needs of its customers at all of the contact points better than any of its competitors. Customers begin to have the image of a monopoly position in their heads, and this turns them into fans. This is why we also speak of the “fan principle”.

Essentially, the success factors for digital channels are the same as for analog ones: customers must feel welcome and they must sense that the particular channel has been aligned with their key needs. If, for example, I am a bank or IT service provider whose special claim is the alleviation of my customers’ burdens, they

will measure my performance against this claim exactly when they use my digital media. BMW is an example of a company that achieves this very successfully. The car-maker has elevated the concept of “The ultimate driving machine” to the brand essence and does everything to ensure that its customers repeatedly sense and experience this promise, and that they do so at each and every contact point: with the product itself, at the dealerships, in service, and on digital channels. This is how BMW achieves differentiation and a unique position that is virtually impossible to accomplish with good performance alone.

Moreover, companies must understand that online communica-tion is not a one-way street like a television commercial, for instance. The web is interactive, and users who like the online experience have learned to expect feedback opportunities on Internet sites or on social media channels – a chat with a repre-sentative, a forum, a closed user section, or even the traditional contact form.

forum!forum! is a market research and consulting company in Mainz that specializes in the analysis and optimization of corporate relationship management. forum! supports national and inter-national companies from the B2B and B2C sectors in the analysis and optimization of their relationships to external and internal target groups so that they become more successful com-mercially. Moreover, forum! offers analysis and consulting instruments to associations and non-profit organizations to aid them in enhancing the emotional loyalty of their members. Al-ways at the focal point: the comparison with the best. forum! has a large repertoire of cross-industry benchmark studies (including Fanfocus Deutschland, Mitarbeiterfocus Deutschland) and is the initiator of the national competitions “Deutschlands Kundenchampions” and “Deutschlands Mitgliederchampions”.


DMR: Many companies are trying to serve their customers across a broad range of channels and to improve the integration of online and offline channels. What special demands do customers make on this kind of omnichannel communication?

Becker: The approach of serving customers consistently across all channels is exactly right and is in line with the fan principle. Customer groups with a strong affinity to digital channels have especially high expectations with respect to user friendliness, speed, and intuitive competence in solving problems. Above all, customers expect omnichannel concepts to be transparent and to feature an interlinking of the various channels that functions smoothly. For example, personal customer advisors should have the customer’s data at hand right away and be able to commit to the same services that are shown on the Internet; in addition, they should be completely familiar with the company’s own website. Some of the mobile services providers can serve as negative examples. Their rate plans and conditions vary from one channel to the next – customers notice this, and it annoys them.

DMR: Your basic research emphasizes the importance of employee motivation and customer orientation for emotional customer loyalty. What role do they play in the digital world?

Becker: Both of them play a role that is equally meaningful on digital channels and in personal contacts. Website visitors are extraordinarily sensitive to whether a company’s employees are oriented to customers during the design and maintenance of digital channels. They can assess precisely and differentiate such aspects as “I feel taken care of on a website” or “The people taking care of this site find it easy to put themselves into visitors’/users’ shoes”. These aspects have an overriding impact on whether ultimately the school grade “A” mentioned previously is given or not. All too often, however, customers in digital customer service run into employees who have been recruited for their technical skills and expertise and not for pronounced customer orientation. These employees are often not aware of the impression their actions make on customers. This is a situation in which employees from “traditional” service units are frequently better trained and also more suitable. In my opinion, there needs to be a change in the way of thinking, both in the conceptualization of the job profile and in the development of employees who are in charge of the digital channels.


DMR: How do digital channels change the working environment of service representatives?

Becker: Customer service employees initially feel it is more complex because they must utilize specific digital channels to serve customer needs more effectively. But as soon as the emplo-yees have internalized the omnichannel concepts and learned how to use them appropriately, they experience a substantial lightening of their workload. The time and effort required for support are reduced whenever customers can read in-depth information on the website or on specific apps. The buying opportunity increases if the customer service employees can concentrate on advising and selling and potential customers can obtain specific information by interacting with fan customers on social media channels.

Roman Becker Roman Becker is the founder and CEO of the market research and consulting company forum! in Mainz and a pioneer in the analysis of emotional customer loyalty. In addition, he is the initiator of the national benchmark study “Fanfocus Deutsch-land” and the corporate competition “Deutschlands Kunden-champions”. Roman Becker studied journalism at the Johannes Gutenberg University of Mainz, where he also worked for many years as a statistics teacher.


DMR: What impact does this development have on companies’ management and KPI systems?

Becker: We do not see any great need for changes in manage-ment and KPI systems. The sustained application of the fan principle means in any case that companies must know and manage relevant contact points. Companies should take advan-tage of the continuous customer feedback on digital channels to measure quality. Determining the drivers as well is key for making efficient use of resources while working on the major corrective values of digital channels.

On the whole, fan customers in the role of disseminators gain tremendously in importance within the scope of digital channels. Companies should also be interested in determining how well they succeed in animating fans in social media and in turning these fans into their ambassadors. Our studies show that fan customers, besides being the most valuable customers because they buy more and buy more frequently, are also best at recommending the products or services to others. The real profit from social media comes from the ambassador role of the fan customers. The number of likes and followers is not so impor-tant; it is the proportion of brand ambassadors that generate an overall positive impression on potential customers and trigger a buying decision. So there is a clear distinction between Face-book fans and fan customers as we define them.

DMR: The integration of customers in company processes, along with the importance of employees, is a significant element, whether as peer-2-peer support, through customer feedback management, or from new opportunities in design of innovation and products. What is of especially high value for customers?

Becker: Becker: Not every customer wants to become involved in the design of innovations or products, so no general state-ments can be made. Many customers, even those who are highly satisfied, have neither the required knowledge nor the interest to become integrated into company processes in this way. Compa-nies should concentrate their address on their fan customers; this will help them to implement integration concepts specifi-cally and successfully while avoiding scatter loss. As our studies demonstrate, such customers have high intrinsic motivation and involvement. They are more than happy to help “their” company. However, companies make a fatal error when they equate “fan customers” with potential customers. Not every customer who appears to be attractive for business at first glance is also a fan customer, and vice-versa. The value of fan customers is indirectly generated especially by the extremely high and credible disseminator impact. So if companies are oriented exclusively to a traditional ABC segmentation, the genuine fan

customers are not captured by the grid filter. The result: unre-quited love, and in the worst case, fan customers turn into “terrorist customers” and work against the company.

DMR: Do customers expect monetary benefits as well, and, if so, in what form?

Becker: Monetary incentives are not only unnecessary for fan customers – they are counterproductive. Who wants to be paid for loving something? As a rule, monetary benefits do not attract the fan customers who are really valuable, but instead the mercenary customers. Customers who belong to the group of mercenaries have an above-average level of satisfaction, but they are not loyal to the company. This group has a high willingness to jump to the competition. They have neither the required identification nor a sufficiently high level of information to be of effective help to their providers. When they give recommen-dations, they regularly attract new mercenary customers who are sensitive to prices and yield low returns.

DMR: Is it possible to use customer participation in digital channels to measure the degree of emotional customer loyalty?

Becker: Generally speaking, a (positive) statement is a conse-quence of emotional customer loyalty. The strength of emotional customer loyalty on digital channels as well can best be determined by market research, i.e., with customer surveys. There are tried and proven instruments for this purpose. While an indirect measurement using the participation in digital channels is possible, it is less reliable because there is no exact one-to-one relationship. A combination of both methods would be ideal as a means of classifying and assessing the statements in social media in terms of fan portfolio groups.

DMR: What changes are called for in customer feedback manage-ment and traditional loyalty measurement?

Becker: Digital channels, just like other channels, will make a sustained contribution to success only if companies have done their homework. No one who does not have a profound under-standing of customer needs, customer perceptions, and the opportunities for differentiation from the competition and who does not implement this knowledge systematically at all of the customer contact points will be successful online or elsewhere. This is where many managers simply confuse cause and effect. Digital channels do not generate loyalty and raise the proportion of fans, the relationship is the reverse: a high proportion of fans guarantees that digital channels will function as additional contact, orientation, and distribution channels to heighten corporate success.


Book TipIn April 2015, Roman Becker and Gregor Daschmann jointly published the specialist book “Das Fan-Prinzip: Mit emotionaler Kundenbin-dung Unternehmen erfolgreich steuern” (Verlag SpringerGabler). On its pages, he advocates a fundamental paradigm shift in relationship management of companies and presents the fan principle as a new management steering instru-ment for companies (only available in German).

Make Your Customers Happy!

Workforce Management (WFM) in Field Service

When they hear the words “workforce management” (WFM), many people think of technicians in blue coveralls or of subjects such as the optimization of call scheduling or cost reductions. Yet workforce management is above all a driver for customer satisfaction.



The year is 2015.

I need a taxi because I want to pay a visit to a friend. Using my app, I can see what taxis are nearby and order one. The display on my smartphone shows me how far away the approaching taxi is. So I know that it has actually set off and I can see just where it is at the moment and how long I will have to wait for it. I feel involved in the process and am well informed because I am continuously supplied with information while I’m waiting. When I get out of the car at my destination, I tell myself I should use the same service the next time I need a taxi. I am satisfied.

It is the year 2015 again.

I need a technician to solve a problem with my Internet connec-tion. After I make an appointment on the phone, my provider tells me that the service technician will presumably be at my door between 8 and 12 in the morning. Since I don’t know exactly when the technician will be there, I have to take off work for half a day. I get up on time and wait. I start to get restless at 10, by 11 I am really getting nervous, and at 11:45 I call my provider and ask what has happened to the technician. When he finally arrives, he is unable to solve the problem. I feel poorly treated because my provider could not give me a more precise time for the appointment and I had to waste a lot of time waiting. I am annoyed at the loss of a morning, the poor service, and – above all – by the fact that my problem has still not been solved. I decide to terminate my contract as soon as possible and to change to a different provider. I am extremely dissatisfied.

These two examples – exaggerated only slightly – illustrate what is truly at the heart of modern workforce management (WFM): customer satisfaction. The approaches described in the following show how this satisfaction can be increased and sustained.


As our example indicates, customers become annoyed when they do not know the status of their order because this takes a toll on their nerves and is time-consuming. They feel poorly informed and left out of the loop – and rightly so. In an ideal WFM process, the key data of the appointment, the status of the order, and, as appropriate, the position of the service techni-cian are available to customers in real time. They can check at any time to determine exactly when the service technician will be knocking on their door. Moreover, the system can give them an estimate of how long the technician’s visit will last. The issue of security is recognized by provision of the technician’s name and picture. If customers are unexpectedly unable to keep the appointment themselves, they can cancel quickly and without any fuss and immediately set up an alternative date.

Even the best service technician cannot know everything. Nevertheless, customers expect their problems to be solved during the first visit. Frequently the technician is unable to find a final solution to a problem and bring a smile to the customer’s face while at the location because only a small bit of knowledge is lacking. Modern WFM systems offer tools that make it possible for service technicians to share their knowledge via cell-phones or tablets. The colleagues complement one another and can use the knowledge of the entire group with just a few gestures of their fingers. This sharing of know-how becomes increasingly effective as the number of service technicians able to access the system at the same time grows. Chat lines are often used for this purpose. A colleague can, without hesitation, describe how to set up the initial installation of a Fritz!Box. Moreover, companies can analyze the chats later and use the results to determine what further training their service technicians require.

Involve customers in their appointment and keep them up to speed on what is happening!

Solve the custo-mers’ problems on the first visit!


Anyone who can shake free of the idea that he MUST sell something to the customers will quickly recognize what potential for customer loyalty lies dormant in the subject of “Sales” as well. Ideally, customers should be treated like good friends: when dealing with good friends, people do not as a rule recommend products and services that do not offer added value to their friends. The same is true for customers. No one should encourage them to obtain services and products that do not satisfy their needs. Modern WFM tools support service techni-cians in making tailored suggestions based on customer data such as booked bandwidth, booked products, booked services, or service history. A good salesperson will not attempt to sell a subscription for top sports events to a 70-year-old female pensioner, but will instead offer her an all-round carefree package of television series in combination with easy-to-use hardware. Note: only clever, honest, and direct recommenda-tions will make customers happy in the long run.

There are very few situations in which companies have such immediate contact with their customers and are so consciously experienced as in field service. Regrettably, many companies are far too lax in exploiting this potential. Rigorously realizing just the ideas described here alone will enable companies to increase the satisfaction of their customers to a major degree.

Seize the opportunity and make your customers happy by pro-viding them with comprehensive information, fast solutions to problems, and interesting offers!

Treat customers like good friends – advise and recommend!

AUTHORS

Florian Bogenschütz started out two years ago as a financial expert with experience in the automotive and insurance indus-tries. He has acquired additional experience from projects in the field of “process design”, including order-to-cash processes. His special area of interest is digital transformation in the financial sector.

Hans GaiserManaging Consultant, has been a project manager in the company for many years. His major areas of interest include the broad field of processes and the subject of workforce management in field service.

Social Walls and Dashboards

How Managers Listen to Customers in Real Time


Technological innovations and new commu-nications channels – especially social media – have led to radical changes in customer behavior. Today’s customers actively share their experiences with brand, products, and companies more than ever before. Social walls help companies to utilize this unfiltered and honest information for their organization.


Now the elk can shoot back!

Customers have made substantial gains in terms of information sources, power (of opinion), and freedom of decision because of the digital revolution and the opportunities for networking and communications it provides. The consequence: they behave more selectively, more flexibly, and significantly more critically. Their loyalty to certain brands has become diluted. At the same time, the tendency to express dissatisfaction or criticism openly has risen immensely thanks to the simple access to the social web. The criticism of a single customer (incident stages 1–2) posted on social media reaches significantly more people than the traditional discussion at the neighborhood bar. The dynamics of the group, once set in motion, can quickly trigger a viral cascade leading to a storm of protest (incident stages 3–4), and if these voices are not heard appropriately, it can all end in the omnipresent shit storm (incident stage 5). The right constellation of circumstances can result in serious harm to a company’s image and, in extreme cases, end up in a company crisis (incident stage 6).

In view of these potential threats, companies and their managers today must keep their ears even more open to what customers are saying than ever before. It is essential to pay attention to them, to meet them at the peer level, and to take their feedback seriously at all times.

Management information systems – from 1.0 to 4.0

Popular wisdom once said that nothing was older than yesterday’s newspaper. In the digital age, nothing is older than today’s (print) newspaper or even some of the status reports. The infor-mation channels traditionally used by management are less and less adequate to meet the rising demands of an accelerated and dynamized “Business 4.0”.

Information, especially in the corporate context, is often aggre-gated and standardized to such a great extent that the essential message is received too late – sometimes not at all. Such analyses might be called “watermelon reports”: a beautiful “green traffic light” on the outside, but turning into increasingly darker red when you “bite” into a deeper level. Moreover, the originally clear statements and recommendations of professionally quali-fied employees frequently become blurry from correction loops as they move through a number of hierarchical levels.

The solution: social walls and dashboards

One escape route from this dilemma is offered by social walls and dashboards. They put management in a position to obtain up-to-date, unfiltered information while using simple means. Direct information channels are blunt in their presentation of moods and feature direct insights in comparison with status reports that lose information content through aggregation (for example) or end up as the classic decision memo for manage-ment bodies. The first draft frequently begins with the ambi-tious goal of improving the (customers’) world, but, after innumerable collaboration compromises and to preserve corpo-rate peace, end up once again as toothless, cuddly tigers in a cozy corner. Social walls and dashboards can convey customer feedback promptly, directly, and unadulterated to the executive suites.

Social walls search the social web for content according to pre-defined search criteria like key words, hashtags, or accounts and visually present their results. They represent the qualitative information level in comparison with dashboards. Figures such as the number of postings, sentiment, or share of voice are not their primary concerns. So social walls offer an ideal entry into the world of social media; users obtain access to company-rela-ted content from a large number of social networks without log-ging in or registering. As a rule, the contents and messages are short and enhanced with pictures or emoticons. Moreover, any particular expertise is usually unnecessary to understand the clear messages of the postings. One example: “You were not ex-cused; why didn’t you come to the lesson?” “I’m practicing for my later career as a technician for @deutschetelekom! “

The objective of the first step is to make existing content visible. This refers primarily to user-generated content, but includes as well corporate content that in this way becomes visible for non-users of social media as well. Social content can in this way be more easily assessed outside of social media, e.g., on websites, shop displays, or event screens. Building on this foundation, social walls encourage users – whether customers, employees, or partners – to generate content themselves.

The Telekom Social Wall is freely accessible at www.telekomwall.de.Its placement in the lobby of Telekom group headquarters serves to make the voice of the customer omnipresent and to stimulate discussions and thought processes.

The Telekom Social Wall pumps digital buzz into the company in the cafeteria of the Telekom corporate headquarters in Bonn as well.



A gimmick or game-deciding – the example of John Legere

The use of social media as a reputable source of information and feedback is still difficult to grasp for some managers. After all, companies invest a fortune in traditional market research to obtain feedback about their products and marketing campaigns. John Legere, celebrated star manager and CEO of T-Mobile USA, expressed it succinctly at the GeekWire Summit 2014, however: “I learn almost everything I need to know to run T-Mobile IN TWITTER.” His success proves him right. When, during an unparalleled chase to catch up, he rose to third place among the US mobile network companies and took more and more market share away from his American rivals, the questions about his recipe for success became prominent. He himself points to Twitter as the primary information and feedback sour-ce for his strategic “#Uncarrier” steps that systematically remedy customer problems. The example of John Legere demonstrates that managers have begun to recognize the opportunities provi-ded by social media and, by systematically making use of them, have taught their competitors the meaning of fear.

Social walls in Europe’s executive suites

Initial examples for the use of social media as information and feedback instruments in the executive suites can be seen in Europe and not only on the progressive US market. Christian P. Illek, the chief HR officer at Deutsche Telekom – a digital enthusiast – recently had the Telekom Social Wall installed in his executive office in Bonn. It is also in use in other Telekom offices and shows (in real time) all of the postings about Tele-kom found on the largest social networks. “This gives me the chance to put together my own picture of what the outside world is saying about our company right at this second and what is worrying our customers, partners, and even our employees,” notes Illek. “Social media make knowledge more transparent. Thanks to the Social Wall, I’m right in the middle of it.”


Telekom’s Social Media Center: analyses in the executive suites

As part of its Social Media Business Program, Telekom has been working on the build-up of a comprehensive Social Media Analysis Center since 2013. The Center and its social media analyses aid in the automatic identification and categorization of topics on the social web relevant for Telekom. The mood (sentiment) of public communication can also be determined in this way. Telekom is in a position to gather direct and unador-ned customer feedback and to derive potential for improvement in products, services, technology, and processes from it. Moreover, large-scale campaigns as well as the introduction of products and rate plans can be supported analytically. If, for instance, the number and frequency of negative comments about certain topics on the social web begin to rise, the people in charge can respond quickly. In addition, a reliable mood barometer for the overall market can be drawn from social media analyses. New, innovative subjects, trends, and hot topics of the OTT players like Apple, Google, Facebook, Samsung, and Microsoft can be picked up at an early stage and made available from a central location.

Social media dashboards as information disseminators in real time

Real-time distribution of analysis information is realized parti-cularly via social media dashboards. These are 70-inch touch screens that are set up in the offices of top managers as well as in the service and quality centers at Telekom, where they are actively used. Performance indicators such as the number of postings during the day, the mood barometer, the source distri-bution, or trends are displayed. Many different units within Te-lekom as well as management can find information about the most important happenings on the social web related to topics relevant for Telekom quickly, transparently, and from a central point.

When customers are sitting at the table with you

Furthermore, the Social Media Center, along with the “Telekom hilft” customer service colleagues, is represented weekly with a selected subject in the private customer top management committee. The meetings revolve around customers’ concrete and hotly discussed pain points related to Telekom services, pro-cesses, or products. This is how the Social Media Center gives customers a voice on the top management board. A document supplements the Dashboard running in the background and contains charts showing mood trends, recommendations for action, and selected customer comments – even if they are sometimes painful. Lively discussions are guaranteed!

Moreover, there is a weekly briefing (at the request of top management) in which all of the topics generating “social buzz” about general topics relevant for the company are presented in short form.


The mix is the thing

The experience with the elements of direct customer feedback as described shows that there is not “one and only one” form of presentation that has an effect. A mix of• a social wall as simply entry with pronounced visual

elements,• a dashboard serving as an analytical overview of social media

events, and• analyses as processed aggregation and detailed information

on a topicprovides outstanding coverage of management’s need for information.

Unadulterated customer feedback flows promptly into the executive suites, helping management to maintain close proxi-mity to customers and to make better decisions for the company.

The Telekom Social Wall in the office of Dr. Christian P. Illek, Telekom chief HR officer: he keeps a constant eye on what the digital world is saying about his company.

Customers sit at the same table with management – via Social Wall and Dashboard in the conference room of the private customer top management committee.

AUTHORS

Alexander Luyken is Social Media Program Manager at Telekom Deutschland GmbH and has had long years of consulting experience in the telecommunications sector.

Dr. Marco Hetterscheidt is project manager of the Social Media Center at Telekom Deutschland GmbH.

Dr. Winfried Ebner heads the program Social Media Business at Telekom Deutsch-land GmbH. He previously held various positions as assistant to the Executive Board at Deutsche Telekom and at the chair for business informatics of the TU Munich.

No Longer in Its Infancy

Megatrend Internet of Things

The Internet of Things is one of the most frequently discussed IT trends of the day. Assessments from Gartner indicate that the number of connected devices worldwide will grow to 4.9 billion by the end of 2015. Presumably, 20 million to 40 million devices will be connected with one another (and with servers) by 2025. If the trend is to keep the promises it is making; however, companies will still have to do quite a bit of homework.



The Internet of Things (IoT)1 has the potential to change the added value creation of established industries from the ground up. In the future, traditional manufacturers of offline goods will develop interconnected, “digitally” enriched products and digital services. They will then be in a position to collect data about their customers and to analyze the information, allowing them to draw completely new conclusions about the behavior and needs of customers. While this will open up entirely new business opportunities to companies, they will also have to deal with new players who are completely foreign to their industries.

Consumers are (still) hesitant

At this time, IoT is still at the beginning of its development. To be sure, the aviation industry has been using sensors to record and monitor aircraft data for more than a decade, and this is just one example. Nevertheless, the rapid spread of the Internet and mobile devices as well as new developments in network techno-logy are the factors that have finally made it possible for compa-nies today to exploit in full the potential of IoT.

The Gartner experts also regard the IoT as one of the major drivers (along with social media, mobile, big data, and cloud computing) of customer relationship management (CRM). Consumers, however, are still hesitant. Although developments such as wearables – mobile, wearable computers like smart watches or pulse monitors – are awakening growing interest among potential buyers, the reality is that there is still a lack of convincing fields of application at this time. Moreover, products such as connected razors or a connected egg carton are more likely to generate skepticism or an indulgent smile rather than genuine excitement with potential customers. Yet, no matter what use cases ultimately gain acceptance – experts are in agree-ment that the IoT will hold an important position on the market.

The telecommunications and automotive industries are good examples of the opportunities and challenges that are a part of the Internet of Things. While the latter is already deeply invol-ved in the development of customer applications (“Connected Car”), carriers are focusing on the interconnection of the various systems.

Carriers must occupy a clear position

Network operators play a key role in the context of the IoT. After all, the connectivity made available by the telecommuni-cations companies is absolutely essential for the realization of mobile use cases. In short: it is the key factor that makes the Internet of Things what it is. Looking at the total share of value, however, connectivity is responsible for no more than 15% to 20%. Carriers are at risk of being reduced to providers of managed connectivity – while also facing a continuing decline in future average revenues (average revenue per user, ARPU) and rising investment requirements in network infrastructure because of the increased data traffic. They should quickly clarify for themselves what position they might be able to occupy in the IoT added-value chain (in addition to connectivity) so that they do not one day end up as simple “dumb pipes” or find themselves made redundant by other players.

Nevertheless, carriers – in contrast to many other industries – have highly visible customer service carried over from their broad presence in brick-and-mortar retail as well as extensive experience with the management of a large number of custo-mers and devices (e.g., service-based billing). Furthermore, carriers boast outstanding pre-conditions for operating as platform providers for IoT applications, and they are also intimately familiar with the regulatory challenges related to international mobility.

Carriers today, however, frequently struggle to offer suitable IoT services at the end customer interface. They are even hesitant about taking on obvious use cases such as real-time promotions, on-demand pricing, predictive customer services, and individu-alized in-store experience for traditional telecommunications products. As a rule, carriers join product manufacturers for the introduction of the first end customer products (such as connected bikes) on the market. So far, however, the response has been less than thrilling.

Car-makers are setting trends

On the other hand, one of the first industries to jump on the IoT bandwagon was the automotive industry. It has been at work for quite a while now to develop use cases that not only improve the functionality of the vehicles and enhance safety, but expand the service available to end customers as well. The term “Connected Car” is frequently used to stand for features such as Internet-supported infotainment, vehicle tracking, remote

1 To put it in simple terms, IoT refers to the integration of sensors into various consumer and industrial devices with the intention of establishing an Internet-enabled connection and achieving a far-ranging interconnection of objects that share data with one another and initiate appropriate actions on the basis of the analyzed data.


maintenance, or use-based insurance premiums. In addition, companies such as Apple and Google are using their vehicle platforms to open the world of apps to cars.

Three future trends can be determined in the automotive sector that will play a major role from the CRM perspective: the merging of smart home and the smart car world, the integration of biometric passenger data, and the interaction of smart objects with vehicles. From the CRM viewpoint, this will create an even richer data pool that can be used more effectively for focusing and customizing customer relationship management in the future.

1. Smart home integration:

One of the first digital interfaces between buildings and vehicles was the so-called remote garage door opener. These devices are already in frequent use today. As the technology for the connection of houses and apartments continues to evolve, additional applications of greater scope will become established. Sensors that are installed in vehicles anyway (such as rain sensors, rear-view cameras, or outside thermometers) could supply valuable data to a smart home about its surroundings, and these data could be used in turn for security systems (for example). Conversely, buildings could share their status data with connected vehicles and prepare them for their upcoming use (heating/cooling, for instance). Even the car alarm could be used to protect the house.

2. Use of passengers’ biometric data:

The continuous monitoring of biometric data such as blood pressure or pulse rate is a part of daily life for many people today because of the increasing use of wearables. In future, sensors in vehicle seats, seat belts, and steering wheels could also collect the most important biometric data of drivers and passengers, analyze and interpret them in real time, and finally make them available to the vehicle system. A vehicle could automatically switch the driving assistance to a higher level, for instance, if the driver appears to be nervous. Another imaginable application would be to alert drivers who are at risk of momen-tarily nodding off. Ambient conditions within the vehicle could also be changed according to the sense of well-being and mood of the passengers and communication with the driver could be controlled automatically.

3. Interaction with smart objects:

A whole series of use cases for other vehicles can be imagined in a world in which physical objects have their own digital identity and communicate with one another. Sharing information is especially valuable in the case of objects in immediate proximity to the vehicle such as bicycles, bags, suitcases, equipment for leisure-time activities, and similar items. A bicycle mounted on the rooftop carrier, for instance, could warn the driver via a vehicle interface if the car is approaching an area of limited vertical clearance. In the future, the vehicle interior or trunk could also function as a delivery and storage space with third-party access. It recognizes its content at all times and reminds its users of any objects that have not been properly secured or that have unintentionally been left behind.

Without digital trust – forget it!

One massive issue related to the Internet of Things concerns the legitimate concerns about data security and privacy of potential consumers. After all, the IoT does a lot more than just connect an enormous number of devices with one another. The data generated, stored, and transmitted by these devices are in part very private and personal.

Hence, it is no wonder that digital products and services are viewed with an extremely critical eye by some groups of custo-mers and consumers – the related discussions are heated! Many companies attempt to calm their customers by emphasizing legislative actions as well as the processes and regulations estab-lished within their organizations (compliance). In our view, however, this approach falls short. It does not take the worries and fears of customers seriously enough. Companies should work on gaining the “digital trust” of their customers by means of a credible and holistic approach going beyond simple legal requirements. If firms anchor this aspect as an elementary com-ponent of their customer experience, they will lay an important foundation for the sustained success of their digital business models. Beyond this, they will create differentiation from their competitors, who appear to be rather technical and impersonal in IoT use cases in particular, at a decisive point.

Such “trust-building” measures include (among others) the greatest possible transparency (What actually happens with the customer data, and where are they sent?), guarantees, and the provision of insurance to cover any incidents of loss or damage.

2Cf. on this point the talk given by PwC during the Bitkom professional conference “Digitalization of the Finance Market/Cashless Society”, Berlin 2015, and others.


Don’t get too hasty

Although less concrete, we believe that a reflective entrepreneu-rial attitude concerning the opportunities offered by digitaliza-tion and the IoT is even more important. Three aspects deserve special attention:

1. Digitalization will not create a new paradise

IoT appears to be an outstanding and simple means of solving everyday problems, both large and small, and making the world a better place. The idea behind this thought – perfecting the world – is certainly appealing. Yet it frequently blocks out key aspects, namely, the problems themselves and the implications of the technical solutions that often come with their own prob-lems. There is a drive to blind “solutionism”.3 The problems are accepted per se as a given, they are not analyzed; there is a search for simple technical answers before the questions have been asked in full.

2. People, not their digital twins, are the customers

As tempting as it might be to use the digital tracks to construct a digital twin of the customer – the customer and the digital twin are not identical. “Genuine” customers can always surprise you and are (hopefully!) less predictable than assumed.

3. The demand for “more transparency” is ambivalent

Transparency has become a paradigm of digitalization with almost exclusively positive connotations – even if the algorithms that are at the heart of many business models are often anything but transparent. Yet there are large numbers of customers who would like to retain the magic of secrets, the value of the ambi-valent, and the doubt as well as charm of hidden inefficiency. A completely transparent world would be a “poorer world” for them.

IoT is about to grow out of its infancy. Exemplary use cases demonstrate the enormous potential of the small digital helpers. But before these connected products and services can conquer the market, companies must still master a number of challenges – particularly with respect to the subjects of interoperability, connectivity, security, and digital self-understanding.

3Michael Dobbins, Urban Design and People, New York, 2009.

AUTHORS

Steffen Roos is Managing Consultant and supports companies from various industries as they seek to master the challenges of digital transformation.

Ingmar Haffke is Senior Consultant with a focus on strategy and innovation and is part of Detecon’s San Francisco based Detecon Innovation Institute (DII). He provides stretegic guidance to clients in North America, Europe, and the Middle East, particularly with regards to topics related to digital business transformation such as digital business models, digital CRM strategy, digital customer experience management, or mobile/social strategy.

Sascha Krpanic has been working as a consultant since the beginning of 2013. His focus is on the areas of digital services, omni-channel management, competition and market analysis, and corporate strategy.


Various artists have taken a fresh approach to the interpretation of our fi elds and made major contributions to the design of our new Web site.

Pay us a visit at www.detecon.com

We have provided a public stage for art.

Art meets Consulting

Detecon’s business fi elds put us right in

the middle of one of the most exciting sea changes of

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DMR_Anzeigen.indd 4 01.12.2015 14:19:22

Big Data in Customer Relationship Management

Instilling Trust by Generating Added Value for Customers

Improving customer relationships and generating added value means above all increasing customers’ trust in the company. Companies must use clear and understandable terms in communicating with their customers about new technologies such as big data, making sure that the customers understand the applications and willingly support their implementation.


Big data has not lived up to expectations; it is possible, however, that hopes were simply too high. According to experts such as Gartner, big data will undoubtedly continue to traverse a “trough of disillusionment” for the foreseeable future, as is illustrated in Figure 1; even in such manner that the Big Data has been taken off its hype cycle.

Aside from the disappointment in the efficacy of many big data applications, this low point is also inducing the one or the other technology developer to look elsewhere for a field of endeavor. What does this mean for big data in customer relationship management, and how should this subject be handled in the future?

PEAK OF INFLATED EXPECTATIONS

TROUGH OF DISILLUSIONMENT

GRADUAL ADOPTION

TIME, UNTIL PLATEAU OF PRODUCTIVITY WILL BE REACHED

> 5 Years

2 – 5 Years

Virtual Personal

Assistants

MOVES FROM THE LAB

Argumented Reality

Speech to Speech

Translation

Virtual Reality

Machine Learning

Big Data

Natural Language Question

Answering

Advanced Analytics with Self-Service

Delivery

Citizens Data

Science

Figure 1: Big Data in the “Trough of Disillusion-ment” [Detecon, based on Gartner’s hype cycle]



Added value for customers from the use of big data in customer relationship management

One question is at the focal point of the discussion: What genuine value will big data be able to generate for customers in the future? We provide guidelines to companies that serve to instill trust by generating added value for customers and creating a win-win situ-ation for both companies and customers.

Before we move ahead, we must first define what we actually mean when referring to big data. Since big data is characterized by many competing technologies as well as up and coming technologies and consolidation in the landscape of suppliers, we will be served best by a definition that is neutral with respect to technology. We see big data as “the value generated by the analysis of the data in terms of volume, variety, and velocity: the 4 Vs.” [Footnote: Wisselink, Intelligent Business by Big Data, Detecon Opinion Paper, July 2013].

Volume: Big data technology should be able to handle large volumes of data. Big data promises that it can process various terabytes in the two-digit range – the volume of a storage solution at this time – in only a few minutes and can manage a total volume in the petabyte range (= 1015 bytes, corresponding to the size of one thousand of today’s hard drives).

Variety: Big data should be able to process a tremendous diversity of data types. It should not be limited to finding answers in data that are highly structured (such as billing data), but should also be capable of extracting information from sources with little or even no structure at all (e.g., emails, customer calls, or images).

Velocity: Big data technology should be able to analyze large volumes of data quickly. The performance promised by big data systems is found in the support of right-time data processing. We understand “right time” to mean that the results of the data processing must be available when they are needed for operations, which is not necessarily equivalent to real time. For instance, big data solutions must be able to interpret the threads in social media quickly enough to pick up swings in “moods” so that customers’ perception can be steered proactively.

We are concentrating our focus on the added value (value) created for customers from the use of big data in customer relationship management. In customer relationship management, added value for the company does not exist until the customers have received clear added value. Consequently, the added value for the company comes from derivative effects such as enhanced customer loyalty.

Figure 2 shows how big data generates added value. There are two factors that create the added value. First, big data enables a customer or a company to understand a set of circumstances better (variety, volume). Second, the speed of the analysis makes it possible to provide this information at the right point in time (velocity) so that faster and more expedient responses to a set of circumstances are possible. This second factor is called “decision agility”. A big data application cannot generate added value unless customers or companies obtain better information from the use of big data and can consequently act faster.


Better information

Decision agility

Large volume of structured and unstructured data

Value of big data

Figure 2: The Added Value of the Information Resulting from the Use of Big Data [Detecon 2015]

Big

data

func

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The Value of Big Data

Proc

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Hand

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VOLUME VARIETY

VELOCITY


Sustainably creating added value in tandem with customers

Using three examples of customer relationship management (big data use cases, Barc Research Study 2015; guidelines for the use of big data, Bitkom 2015), we want to show how big data generates added value (although without any consideration of improved traditional loyalty management):

I. Integration of customer touch pointsIntegration of information that customers leave behind at the various touch points with the company, with which a 360° customer image is created by the use of big data.

II. Personalization of the sales channelsAdjustment of the sales channels (ongoing and prompt as needed) to potential customer wishes.

III. Digital shopping worldsImprovement of the shopping experience in sales rooms and shopping centers through information about traffic flows and the use of digital technologies.

Added value for customers and companies is created because the latter, thanks to the use of big data, are able to respond faster and more expediently to a set of circumstances.

Examples of big data applications in customer relationship management that have potential for added value!

Potential for better information

Complete and up-to-date customer view

Prepare offers that are tailored to current customer needs

To understand better the shopping behavior of customers in trade

Potential for decision agility

Ability to respond to current customer interests

Faster and better buying decisions

Agile optimization of sales rooms and product lines

Added value for custo-mers and companies

Customers:• Less effort required to

provide information

Company:• Increased customer

orientation• More satisfied customers

Customers:• Better shopping experience

Company:• More satisfied customers• Higher revenue• Fewer returns

Customers:• Better shopping experience

Company:• Efficient utilization of shelf

space• Higher revenue

Figure 3: Examples of Applications Creating Added Value in Customer Relationship Management

I. Touch Point Integration

II. Personalization of Sales Channels

III. Digital Shopping Worlds

Figure 3 shows cases in which applications of big data create a win-win situation for customers and companies. Added value is gene-rated only if the better information produced by the application is also used agilely.

Improving customer relationships and generating added value means above all increasing customers’ trust in the company. Companies must become more consciously aware of the corres-ponding expectations of their customers and respond to them. Consequently, companies must communicate openly with their customers with regard to new technologies such as big data so that the customers have a better understanding of the use of data analytics and are able to support this use. This is possible only if companies create transparency about the application of big data and introduce the parallel procedures consensually with their customers.

Clear guiding principles are a help here. Deutsche Telekom has established its own guiding principles for big data (Deutsche Telekom Guiding Principles on Big Data, DTAG 2014). One core point of these principles is transparency for citizens and politicians. Moreover, the fundamental use of anonymized data that cannot be traced back to individuals and the exclusion of any possibility of discrimination of groups are the major priorities for Deutsche Telekom. Deutsche Telekom also seeks dialog with supervisory authorities and with non-government organizations. Furthermore, an enlightened handling of data in full awareness of responsibility by everyone concerned is required. This presumes a culture of agreement and strict adherence to these guiding principles so that customers’ trust is built up and strengthened.

Win-win for customers and companies

In customer relationship management, added value for the company does not exist until the customers have received clear added value. Big data creates added value for customers and companies because the availability of correct information at the right point in time assures better and faster decisions.

Big data opens up new horizons in customer relationship manage-ment through proactivity and interaction.

Since good relationships are based on a high level of trust, companies must use understandable terms when communicating with their customers about new technologies such as big data so that the customers understand the application of big data, support it, and, ideally, even demand it themselves. If they are to accomp-lish this, companies need clear guiding principles that they adhere to transparently and strictly.

AUTHORS

Dr. Frank Wisselink is interim manager and Managing Consultant at Detecon. He advises to and heads large innovation and transformation projects within and outside of the Deutsche Telekom Group.

Dr. Ralf Meinberg is Senior Expert for regulatory strategy at Deutsche Telecom AG. Among his other activities for the corporation, he is concerned with the strategic development of innovation and Internet topics.

Julian Obeloer is a consultant at Detecon and in the telecommunica-tions sector with a focus on marketing, strategy, and business analytics. The current focus of his work is on larger national and international transformation projects. He previously worked for Vodafone and Miele, where he gained extensive experience.


The transformation from an analog to a digital world has progressed virtually unnoticed by many people. Even the circumstances atten-dant on the new technologies have frequently been noted only in isolated cases without any recognizable relationship to the technological revolution. Dr. Reinhard Schwarz, economics journalist and communi-cations expert at Inforce GmbH in Bielefeld, uses the communications industry as an example to demonstrate clearly that this transformation would not have been possible without the determined and ongoing interplay of technology, science, business, and society.

– Franklin D. Roosevelt

„Be sincere; be brief;

be seated”Analogos-Digitalis – Transformation in the Communications Industry

Education Is Still the Key



Welcome to the digital age! A long road. Quite a lot had to be clarified in preparation for this journey before we could reach the point where we stand today. When the starting shot was fired in the 1980s, people were still heatedly discussing the transparent man, the elimination of jobs, the paperless office. Unfazed, developments continued along their course, even though no one could say with absolute certainty where the journey was headed. The large technology corporations sensed their chance, did research, developed, offered, and sold. Little by little, a completely new infrastructure serving only the digital world came into being. Open computer systems grew out of proprietary programs. Mainframe computers shrank to the size of a PC, analog networks from the “telephone case” turned first into the huge Motorola handset, but soon became the mobile cellphone. Although long unnoticed by the general public, the working world was changing – new structures arose here as well. Entire industries disappeared without so much as a whimper, much less a bang. Think here of film manufacturers like Agfa or Kodak, who never managed to do more than wave as the digital train passed them by, or the “lithographic printing offices”, as many of them still called themselves even after 2000.

In the beginning the great dying

The professions in the communications industry underwent an especially dramatic development. Many agencies failed to notice the small revolution that was going on right under their noses and continued to muddle along as they always had. The conse-quence: monstrous agencies with as many as 120 employees shrank to a normal size, i.e., between 5 and 30 employees, or they disappeared completely. What had happened? Workers in agencies were not alone in their delight over affordable word processing and graphics software programs that could be used to produce splendid business cards, brochures, and even complete books; individuals and companies were just as thrilled. All of us were suddenly our own graphics designers, copywriters, and typographical artists. The fact that it all cost only a fraction of the sums that had previously been required for stationery or business cards from graphics designers was another benefit. The results were usually a horrible mess, but why spend years lear-ning how to do it properly?

In the meantime, analog cameras had disappeared, digitalization continued its triumphant progress and created the all-round photographers who kept their fingers on the shutter free of charge and provided masses of picture material. Marketing employees in large companies were now motivated to make their contributions to cost reductions. Out of focus? Who cares! It was determined that the high-quality customer magazine no longer required the expensive lithographs, the services of a pro-fessional photographer were not absolutely necessary,

professional copywriters were also an expendable luxury because, “We all learned our mothertongue at school,” as the owner of a midsize business once stated while addressing his marketing department. Thanks to the development of powerful software programs, the knowledge and know-how of the communica-tions specialists migrated straight to the marketing departments, who took a new motto to heart: “Maybe not perfect, but produced at low cost by our own people.” Perfection purchased from the outside is expensive. Agencies began closing their doors.

European academic tradition: always at the center of attention – and in the way!

At the same time, a lot was happening in the field of education that encouraged the course change. Digitalization required simplification. In 1996, Germans were forced to accept a reform of orthographic rules aimed at precisely this target. Evidently, however, linguistic mediocrity was also the goal because many of the spellings and annoying rules such as comma placement were replaced by different ones, some of them making even less sense than the old ones. For instance, Grenze continued to be spelled Grenze, but the Stengel mutated amazingly to the Stängel, causing all kinds of Gequengel, which could not be spelled Gequängel under any circumstances.

Finally, the entire European educational system came under attack.

At the end of the 1990s, European education experts initiated the “Bologna process”, which had long been on the drawing board; the objective was to create a homogeneous European education framework with standardized academic degrees and a shortening of the time required to earn them. The point was to encourage the mobility of students, teachers, and academics; to enhance international competitiveness; and to assure graduates they had the necessary qualifications for employment. What was (and still is) wanted is the “practical” student who earns a “bachelor’s” within 6 semesters and has all the qualifications needed for employment. The fixation of the courses of study on the common occupational profiles was intended to assure the desired “employability” with the result that traditional education was sacrificed on the altar of professional training in the service of a highly technologized knowledge society. The managers in the communications agencies, however, suddenly determined that the training of their interns now had to be supplemented with the teaching of basics that were lacking everywhere they turned.

„Be sincere; be brief;

be seated”


Digitalization revolutionizes communications

So one thing led to another. The way was cleared for digitalization in all phases of our lives! Technology demanded and received what the universities and private universities of applied sciences produced: intellectual minimalists, focused on a single goal, mostly tuned in to what was happening that day, people who intuitively understand digital technology and are able to project without hesitation abridged versions of the topics of social life on the display screens of the digital world. What had now become standard engulfed the wide world of communications. Once entire archives had been maintained in ring binders; today a smartphone is all that is needed to gain virtually unlimited access to research, databases, knowledge portals, and media. Journalism as practiced by professional journals once involved days of research featuring detailed analyses and interviews with experts; today, there is a quick look at Internet sources, a fast interview via Skype, or the massive flood of PR announcements delivered to the editorial offices free of charge.

What has not suffered is the circulation. Never before have there been so many professional journals; in this sector at least print is completely “in”. The traditional daily newspapers are no longer quite so sexy, and they are suffering from the superficiality desired by their readers. For the most part, they have allowed the opportunities offered by digitalization to pass them by, and to make matters even worse, many of them still, even today, do not understand the necessity of revising their marketing budgets in favor of digital communications. They still think in analog terms and simply mirror their newspapers on the Internet. Not the right way to think, unfortunately – and their subscribers are deserting them in droves.

Triumph of digital technology

Nor will anything be able to stop this steady decline in the numbers of subscribers as long as publishers and the entrenched editors-in-chief refuse to understand that digitally pampered customers want to have a medium that is in line with the digital times: strategically planned, skillfully facilitated, in real time as far as possible, featuring short, concise content, eye-catching, illustrated, supported by podcasts and opportunities to respond quickly in blogs and specialist forums. And closely linked to the world of social media, of course. This is where digitalization really shines. There is no denying that it entails short lifetimes and superficiality. This is not a natural law, however; it simply meets the demands of those who want to use it. People who want to delve more deeply into the material can do this better and with a far greater range of sources than was ever possible in the analog world. They simply must be able to use their own knowledge and combination skills to link innumerable islands of knowledge with one another quick as a flash and to draw logical conclusions from what they have found. Our current education system, however, does not promote or support these capabilities any longer.

So it is left up to a relatively small educated elite to make profitable use of the opportunities and blessings of the digital world and to exploit them, even with pleasure, for themselves and their clientele. This is a challenge for companies and consulting PR specialists, but one that also includes great opportunities: this could secure the future of the communications industry that is threatened from so many different sides! Social communication is developing in the direction of direct commu-nication, including that between companies and their customers. Those who can use their special knowledge to work with social media so skillfully that they can place the products, solutions, and services of a company authentically, cleverly, and likeably without taking the long way around through media have under-stood the digital challenge and will confidently master it. Education as a service – whether traditional, wide-ranging, spe-cialized, or even virtual – is the key. The age of simple commu-nication, of the shortening and trivialization of content makes it easy for us to avoid the rapids of the mainstream. That is the wonderful heritage of the analog world.


AUTHOR

Dr. Reinhard Schwarzborn in 1952, worked for several years as a freelance journalist and author after completing his studies in German literature and history and postgraduate work in communi-cations sciences and journalism at the Universities of Tübingen and Stuttgart-Hohenheim. He has been owner and managing director of Inforce GmbH, Agentur für Public Relations und Fachpressearbeit, in Bielefeld since 1987. A communications expert, he advises midsize businesses and large companies in all industries as well as educational institutions. His special focus is on academic journalism, especially in the fields of economic science, IT/TC, and basic medical research/pharmaceutical research.


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