EXECUTIVE SUMMARY

Cisco has made great strides in supporting its customer community in the eight years since we first published the company’s story in “Customers.com.” Cisco’s online community of networking professionals, originally started a decade ago, has been revitalized with a new name, Networking Professionals Connection (NetPro), and new features, including “Ask the Expert” and the “Tech Talk” “radio” show.

The company has put in place strong online programs to support its partner community--thus extending its customer community to include the partner VARs, systems integrators, and network consultants who are the face of Cisco to many customers.

Cisco has also become a leader in advocating and implementing interaction-based customer support. The new Customer Interaction Network (CIN) is designed to provide customers a seamless point of entry into the company, where there is no such thing as a wrong number, and there are no transfers to another frontline team.

Rallying around CEO John Chambers’ vision of moving from transactions to interactions, and putting the emphasis on customer relationships, Cisco is providing customers with streamlined support and engaging community experiences.

UPDATING THE “CUSTOMERS.COM” CASE STUDIES

A New Version of Customers.com

In the eight years since our best-selling book, “Customers.com” was first published in 1998, we have received almost constant requests for updates to both the concepts and the case studies presented in the book. In 3Q 2006, we’ll be publishing an updated version. But as subscribers to our advisory service, you don’t have to wait! You’ll receive each updated section and case study as they’re completed. Stay tuned. (A summary of the originally-published case study appears in the section “Case Study Backgrounder” below.)

CISCO’S HERITAGE OF MAKING IT EASY FOR CUSTOMERS

Since 1984, when the company was founded, Cisco has been an innovator. First, the company was a leader in the development of IP-based networking technology. Then, by the early 1990s, Cisco also became a leader in customer focus and supporting a customer community. Cisco was the first to make it easy for (and to encourage) customers to answer each others’ technical questions and to solicit new ways of using Cisco’s technology solutions. We’ve discovered that one of the best ways to foster customer-led innovation is by creating and nurturing vibrant customer communities. Cisco has been doing that for more than a decade.

MOVING FROM TRANSACTIONS TO INTERACTIONS

John Chambers, president and CEO of Cisco Systems, understands the importance of building relationships with your customers. He has been espousing an evolution away from simply making technology-supported transactions faster and easier--which he believes was where businesses focused their energies and resources in the 1990s. As he states, “I believe that the era of diminishing returns for transaction productivity has begun and that the next productivity horizon is emerging... Adding value and context in the exchange of information is a significant capability of people that computers and networks have not yet fully achieved. As markets move toward greater transparency, these INTERACTIONS will be an important source of competitive advantage. One indication of this is the movement toward really knowing our customers, regardless of industry.” ¹

“Transactions to interactions” has become the rallying cry for all of Cisco. Indeed, as we conducted our research for this case study, everyone we talked to emphasized the goal of having more conversations with customers and leaving the ordering and fulfillment process to the underlying technology systems.

The Transaction/Interaction Round Trip

LaVeta Gibbs, director of Customer Interaction Network for Cisco, talks about the transaction/interaction round trip. “It’s all a cycle that starts and ends with the customer,” she points out. For example, the role of the customer service agent has changed from fixing transactions or performing low-level tasks, to helping customers make better choices about how they operate their businesses. “Our people are working to help customers make good decisions, and are less involved in the execution of that decision.” Technology can handle executing the resulting transaction. And that, ideally, leads to more interactions, which leads to more transactions and revenue.

Mike Metz, senior director for Cisco Web marketing, points out that a lot of traffic on corporate Web sites consists of quick, task-oriented transactions. You might go in to check on a bug fix, get your answer in a minute, and leave. “If you watch users or your own behavior, you see we’ve become almost hyperactive in our use of the Web,” says Mike. These pinpoint transactions on the Web don’t build richer customer relationships (although, if they aren’t available, they can hurt the relationship). Cisco is now creating an environment where customers can come and hang out. The company is building on its heritage for creating customer community to offer the opportunity for networking professionals to engage with each other and with Cisco in deeper, more meaningful, relationships based on interactions.

Case Study Backgrounder

Much of Cisco’s success in doing business over the Internet stems from a set of decisions made back in 1993 and 1994, when Doug Allred was the company’s vice president for customer advocacy, and Joe Pinto, now Cisco’s senior vice president of technical support, led the tech support organization. Allred and Pinto had seen how fast sales of internetworking routers were increasing. They were concerned about the company’s ability to provide adequate technical support for all these new customers.

They noticed that the Internet itself was becoming a useful tool for customer support. Since 1989, Cisco customers had been downloading software from the company’s Internet site. By 1990, customers could also access Cisco’s bug report database via the Internet. And Cisco made other technical support tools available to customers via the Internet--such as a software upgrade planner that would let them prepare their systems to receive upgrades.

In 1993, Pinto put in a call-tracking system to monitor each technical support call, find an answer to the customer’s problem in a database of known problems and solutions, and track that call to completion. Although the Web was in its infancy then, as one of the pioneering suppliers of Internet technologies, Cisco designed the system to run both as a telephone-based call center and as a virtual call center via the Web.

Originally, this virtual call center application was a typical help desk service for Cisco’s enterprise customers, allowing the customer to visit the Web site with a question or a problem, search the database to see what similar situations had been encountered in the past, and see how they had been resolved. If he couldn’t find an answer, he would post the question.

Here’s where things got really interesting: Cisco’s technical support staff would begin to work on finding the answer to the customer’s question, but miraculously, so would other Cisco customers! Whoever came up with the answer first posted it. As soon as any answers began flowing into the database, an email was triggered and sent out to the customer, alerting him that answers awaited him at the Web site.

Allred and Pinto had found a solution to the technical support engineer gap--let customers, all of whom had been trained and certified by Cisco, help one another out. Cisco called this customer support Web site Cisco Connections Online (CCO), and it became a vital resource for the company, its customers, and its channel partners. By 1997, an average of 4,500 technical questions were being answered each week in CCO’s Open Forum.

As Cisco’s business grew, the call center didn’t have to expand proportionately. Customers were happy to go help themselves on the Web site first. Cisco had succeeded in creating an environment of trust--the most important ingredient for fostering community.

As Cisco continued to build its Web site, it surveyed customers constantly and asked them what they needed. They responded with comments such as, “I can’t find out the status of the order I placed.” “Your price lists are out-of-date and useless.” “No one can figure out how to configure your products.” Cisco addressed each of these issues one by one.

First, the CCO team gave customers access to the status of their pending orders via the Web. Almost immediately, 70 percent of the 7,000 inquiries per week Cisco had been receiving moved from the call center to the Web. Next, Cisco posted its standard price lists on the Web and kept them up-to-date, denominated in the currencies of all countries in which the company did business.

Configuration was more of a challenge. The in-house configuration system was cumbersome and inefficient. To make it easy for customers to configure their own products, Cisco purchased a new constraint-based configuration engine from Calico and populated it with all of the company’s products, as well as the rules involved in putting together a manufacturable bill of materials.

More than 70 percent of Cisco’s business was handled by third parties, resellers, and systems integrators. Cisco Connections Online was where most of these partners placed and tracked their orders. Cisco’s channel partners also had access to the company’s entire knowledgebase of technical and troubleshooting information, but they also had their own private community sections of the Web site where they could find information targeted directly at them and enter into dialogue with Cisco management and with one another. In 1995 and 1996, Cisco noticed that it had a number of different groups of partners and customers, each with very different needs. For example, there’s a big difference between the needs of a small business and that of an Internet utility. Cisco reorganized its Web site to serve these different groups...

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1) http://newsroom.cisco.com/dlls/tln/exec_team/chamb
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