Detecon Management Report

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1 1 / 2016 Detecon Management Report dmr Special CRM The Customer in the Center of Digital Transformation Customer Loyalty in the Age of Social Media and Their Kin Digital 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

2 The Customer in the Center of Digital Transformation 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. Joachim Hauk Managing Consultant Lead Global Knowledge Community CRM, Sales & Service Dr. Jürgen Padberg Partner Lead Global Knowledge Community CRM, Sales & Service We hope you enjoy reading these fascinating and inspiring articles! 1 Detecon Management Report dmr Special CRM 1 / 2016

3 Content Digital Transformation A Future in Paradise or Absolutism? 4 Customer Loyalty in the Age of Social Media and Their Kin Digital Megatrends Along the Customer Journey 8 CRM Tools in the Age of Digitalization Mom-and-Pop Interview with Dr. Markus Messerer, Head of Corporate Strategy, Swisscom The Customer at the Center, the Organization Fit for the Future 18 CRM in the Digital Age Opportunity 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 Masthead: Editor: Detecon International GmbH Sternengasse Köln Germany DMR@detecon.com Supervisory Board: Thilo Kusch (Chairman) Executive Board: Francis Deprez (CEO) Dr. Jens Nebendahl Local Court Cologne HRB Registered Office: Cologne Amtsgericht Köln HRB Sitz der Gesellschaft: Köln Printing: Druckerei Chmielorz GmbH Ostring Wiesbaden/Nordenstadt Photos: Fotolia istockphoto 2 Detecon Management Report dmr Special CRM 1 / 2016

4 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 Dashboards How Managers Listen to Customers in Real Time 62 Megatrend Internet of Things No Longer in Its Infancy 68 Big Data in Customer Relationship Management Instilling Trust by Generating Added Value for Customers 74 Analogos-Digitalis Transformation in the Communications Industry Education Is Still the Key 80 3 Detecon Management Report dmr Special CRM 1 / 2016

5 Digital Transformation A Future in Paradise or Absolutism? 4 Detecon Management Report dmr Special CRM 1 / 2016

6 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 together. 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 communicates 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 opportunities 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 recipients 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 example 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, succeeded 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: Millions of users of Sony s PlayStation were affected by the theft of data caused by hackers (Source: Samsung itself warned its own customers that the brand s smart TVs have functions that can invade their private sphere (Source: 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 personalized 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 hypochondriac 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 valuable 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 5 Detecon Management Report dmr Special CRM 1 / 2016

7 also paved the road for the invasion by third-party systems. Numerous examples reveal the many and diversified risks from outside 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. Online 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 transformation 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 dominance of digital absolutism, but enables everyone involved to benefit 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 broadband 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 companies as well as to aberrant users. Trust is becoming a decisive loyalty factor in the relationship between companies and their customers. Companies that give the impression they are not trustworthy in their treatment 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 construct 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 6 Detecon Management Report dmr Special CRM 1 / 2016

8 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 algorithms 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 ambivalent, 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 transformation during the customer journey, social media performance, and organizational and process management. He is the author of a number of publications and studies. Sascha Krpanic is Consultant focusing on the areas of digital services, omni-channel management, competition and market analyses, and corporate strategies. 7 Detecon Management Report dmr Special CRM 1 / 2016

9 Customer Loyalty in the Age of Social Media and Their Kin Digital Megatrends Along the Customer Journey Trends such as big data, mobile solutions, or social media are revolutionizing traditional customer relationship management. Detecon employs Customer Journey Trend Mapping methodologies to support companies in the development and realization of innovative digital concepts along the customer 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 neglects 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-scouting 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. 8 Detecon Management Report dmr Special CRM 1 / 2016

10 INTERNET OF THINGS Wearable Technology Sensors Smart Home/ Smart Building Connected Mobility BIG DATA Mobile First Design Location-based Services Smart Home Assistant Mobile Wallet/Payments MOBILE Enterprise Listening Social Amplification Crowd Intelligence Sharing Economy Data Analytics Predictive Analytics Machine Learning Data Visualization OPEN APIs Meshed Services Shared Login Smart Triggers SOCIAL 9 Detecon Management Report dmr Special CRM 1 / 2016

11 MEGATREND 1MOBILE 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 contact inherent in this combination. Mobile First, i.e. the tailoring of web content to fit smartphone 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 experience 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 identification or authentication of customers, both transmitted by the smartphone in your pocket. Virtual mobile assistants combine knowledge about users location, mood, or activities with additional information from private services such as calendars, 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 payment 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 buying 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 personal information voluntarily. The payment transaction itself is handled in the background, almost as an after-thought. MOBILE 10 Detecon Management Report dmr Special CRM 1 / 2016

12 2 MEGATREND SOCIAL 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-)structured data of the social web a process that is called enterprise listening. SOCIAL 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 customers is becoming increasingly vital from a corporate perspective. 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 product 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. 11 Detecon Management Report dmr Special CRM 1 / 2016

13 3 MEGATREND OPEN APIs 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 information 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. OPEN APIs 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 extensive storage of data including financial transactions with time stamps, scanned receipts, flight and hotel reservations, and previously 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 appropriate 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 immediately, and offers target-oriented added value to customers. 12 Detecon Management Report dmr Special CRM 1 / 2016

14 4 MEGATREND BIG DATA 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 continuously analyzes voice data from call center calls for creating personality profiles of customers and agents. Calls from customers 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. BIG DATA 5 MEGATREND INTERNET OF THINGS INTERNET OF THINGS 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 connectivity with products and services in daily life. ibeacons, a technology 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 information of insured objects to improve their risk management and offer flexible insurance premiums to their policyholders. 13 Detecon Management Report dmr Special CRM 1 / 2016

15 Thomas customer journey 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 appropriateness 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 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 automatically 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 recommends 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 network; 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. 14 Detecon Management Report dmr Special CRM 1 / 2016

16 Reservation Vehicle Access Driving Experience Vehicle Return After Drive Movement and location 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 Social rewards program: post your trip and collect loyalty points Apple Watch app for car reservation Linked travel accounts: car automatically adjusts seat and air conditioner settings (based on most recent use) Mobile wallet payment at the filling station Link to fitness tracker On-board cameras took pictures during the trip; automatic compilation of online photo album Picture analytics on social media profile automatically generates preferred route along lake and river Automatic reservation of intermodal transportation opportunities for the last mile (inter modal travel cooperation) Figure: Customer Journey Map 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! 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. 15 Detecon Management Report dmr Special CRM 1 / 2016

17 CRM Tools in the Age of Digitalization Mom-and-Pop 2.0 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? 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, complex, available in innumerable variations, and thanks to globalization 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. 16 Detecon Management Report dmr Special CRM 1 / 2016

18 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 purposes. 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 management? Specific product placements based on previously analyzed 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 communicate 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 companies 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 communities moderated by service agents. They have substantial influence 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 internal 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 Hardt advises clients in the areas of marketing, sales and service, and the implementation of CRM tools, especially Salesforce.com. Maria Manthey is Consultant in the consulting unit Deutsche Telekom. Her work focuses on the areas of marketing, sales and service, and transformation and change management. 17 Detecon Management Report dmr Special CRM 1 / 2016

19 Interview with Dr. Markus Messerer, Head of Corporate Strategy, Swisscom 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. 18 Detecon Management Report dmr Special CRM 1 / 2016

20 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 strategies. 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, technology, 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 customers 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 infrastructure 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 opportunities 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-development 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 19 Detecon Management Report dmr Special CRM 1 / 2016

21 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-oriented. 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 attitudes and expectations. Telcos definitely face a challenge in providing 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 operators 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 infrastructure, 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 establish a community service with precisely this orientation. These examples demonstrate that better services in the digital world are not inevitably attended by large investments. 20 Detecon Management Report dmr Special CRM 1 / 2016