NETTING IT OUT

Twice a year, we take the pulse of “Patty’s Visionaries”--a hand-picked group of customer-centric business and IT execs who have proven track records in transforming their companies to be more customer centric. We gather their input and issues not through surveys, but through deep dialog and discussion.

For those of you who consider yourselves to be customer visionaries in your organizations, this snapshot of your peers’ concerns provides a mirror. For those of you who are in business to cater to these folks, we hope you’ll take away a better understanding of some of the challenges they face.

The autumn Visionaries meeting focused primarily on the challenges of building customer-focused next-generation e-business initiatives and Web sites.

We summarize the key lessons learned from both successes and failures. We highlight the challenges these visionary executives are facing as they enter 2006. We describe the key initiatives that many of them are undertaking this year. And, we close with a description of the organizational models that are working best and the organizational hurdles that are presenting challenges to customer experience success.

Who Are Customer-Centric Visionaries and What Do They Do?

Since 1994, we’ve been discovering and supporting visionary customer-centric business leaders who work in organizations in a wide variety of industries around the world. These are the people whose breakthrough work we chronicle in our books and in our case studies. We call them customer-centric visionaries because, unlike other business and technology executives, they invariably put customers’ concerns and issues first in their thinking, in their strategies, and in their operations.

These visionaries are leaders. They attract and retain loyal, customer-passionate teams who execute well. Our visionaries are far from dreamers--they are kings and queens of operational excellence. They deliver profitable results to the bottom line of their companies, day in and day out. That wins them respect, gives them clout, and lets them keep redesigning their organizations from the outside in.

Yet what sets these people apart from other results-oriented executives is their common dream. They dream of delivering the best possible customer experience--an experience that is so much better than what their competition offers that it enables their company to sustain higher profit margins and to continue to attract and retain both more––and more profitable––customers.

Where Do Visionaries Sit in Their Organizations?

We typically find customer-centric visionaries at the senior director, VP, SVP, CIO/COO, or equivalent level in multibillion dollar businesses, and at the executive director/CEO level in businesses that are below $1 billion in revenues. In other words, these are people with clout, with respect, with teams of people reporting to them, and with proven track records in their businesses. They are sometimes, but rarely, transplants. Most commonly, they are people who have been with their current companies for more than six years--many of them for more than a decade, some for their entire careers.

Most of our customer-centric visionaries have been promoted within the last few years as their customer-centric visions and execution have paid off, and been recognized and valued. One typical career path has been for the visionary to lead the charge in her company’s e-business initiatives. Then she moves beyond e-business to a role that oversees or interacts with e-business, but one that isn’t limited to a single customer interaction channel. Another common profile for customer visionaries is that of an “enlightened” CIO, CTO, or IT director--a technology executive who plans and prioritizes IT initiatives first and foremost around impact on customers.

Wherever they begin their customer-centric journey, visionaries are usually promoted to lead entire functional areas of their organizations, such as global marketing, business strategy, customer experience, business process redesign, operations, or IT strategy.

Through our visionaries’ support group, we provide ongoing coaching, face-to-face meetings and moral support. We chronicle their successes and lessons learned in our books and reports, and we synthesize and summarize their best practices as well as their issues and concerns.

This report is a snapshot of some of our visionaries’ issues and concerns as of November 2005. Participants at the November meeting included the e-business, marketing, and IT and business process leaders from companies selling both to business and consumer customers in industries ranging from high-tech systems and software to financial services, publishing, travel services, consumer electronics, and retail. The companies represented ranged in size from $2 billion to $80 billion in revenues. All are global companies.

What Lessons have Our Customer Visionaries Learned in 2005?

Some of the biggest take-aways from this fall’s meeting included accomplishments and successes as well as failures.

Learning from Successes

Among the accomplishments were:

Payoffs from Highly-Targeted Email Marketing. All of our visionaries continue to refine their email marketing programs. Email marketing now falls under the purview of the same group that “owns” e-business for the organization. By tightly linking outbound email marketing, search optimization, and Web activities, these e-business leaders are able to both deliver and to measure results.

For example, one visionary reported that the “open-to-click” rates on his highly-targeted opt-in email marketing initiatives were averaging 34 percent. He had segmented customers based on the products they already had bought and the jobs they did. The offers being made were relevant for that particular group of customers.

Benefits from Managing Key Product-Related Metadata and Content. Several of these organizations had invested wisely in rationalizing the metadata that is associated with each product they offer. Starting from the Web back, they determined what product characteristics customers needed to see and search on in order to make decisions about which products to buy or to get help using. Well-managed product metadata also enabled these companies to link all related products together easily. This linkage, in turn, makes it easy to merchandise groups of products, to cross-sell and up-sell, and to replace products with appropriate substitutions. (The number of “products” managed by these businesses ranged from 10,000 to 75 million).

The benefits these companies have seen as a result of standardizing product-related metadata and processes are huge. Customers, employees, and partners are all able to access consistent and up-to-date product information via the Web. The Web-based product information is the most current and the most accurate in the organization. It has become the product data of record for the company.

Benefits from Corralling All Customer-Facing Web Properties under One Oversight and Governance Team. All of our visionaries now “own” the e-business/Web sites for their entire company. Four or five years ago, there were still battles over who owned the Web sites: the business units or the e-business organization. Now, the dust has settled. A centralized e-business organization, usually residing in the marketing organization, typically has purview over the customer experience, the look and feel, the standards, and the technologies used to develop and deploy Web sites. Business units may still manage their own Web sites on a day-to-day basis, but they do so according to a set of well-policed standards.

The number of discrete customer-facing Web sites in our visionaries’ organizations ranged from one (with customized major account sub-sites) to 1,200. But all Web sites adhere to standards, processes, and policies that are set centrally.

Developing a Corporate-Wide E-Enabled Product Launch Process. Perhaps it follows that if your e-business drives the standardization and interlinking of product information, then your e-business should also be tightly involved in your product launch process. Only one of our visionaries has moved into the position (as head of corporate marketing) in which he can now control the product launch process for all of the company’s products. However, what we learned from listening to him is that it’s easier to have an integrated marketing plan from the outset if emarketing is considered up front, rather than at the tail end of the launch process.

We also learned how costly and badly-controlled product launch decisions are in most organizations. This visionary has standardized his company’s product launch process and the go/no go decisions, and funding allocations being made. He makes the entire process visible to everyone in the organization through e-enablement. Everyone can see where each product stands both in the launch process and in meeting the decision criteria at each stage. As a result, the organization has shortened time-to-market and gained much faster adoption rates for new products, while reducing the number of new product launches.

Shifting Business Models and Business Processes to Be More Customer-Friendly. At every Visionaries’ meeting, at least one of our members tells a story about how they e-enabled some business process to make it easier for customers to do business, and in the process of doing so, fundamentally changed a business model. This year was no exception. This year, the breakthrough came in giving customers pre-configured licensing options that gave customers much more flexibility in how they might eventually choose to use the digital goods they had purchased without having to make decisions up front that they weren’t yet ready to make.