3 Reasons Customer Centricity Brands Aren’t Walking The Talk

The executive meeting of a client became quickly heated. Their frustration was rooted in the discovery that the company was not as customer centric as it had led itself to believe. With C-Suite support, new marketing campaigns, messaging and content, new technology and processes the company could not reach the next level of target results. NPS, cross-product sales, and CSAT scores had increased but customers still complained about repeated service mistakes, billing errors, slow response times, sales not understanding their business, and not enough perceived value-add for the price.  The root cause was hard for the executives to hear – they were so focused on tactical, spot ‘fixes’ that they missed the essence of what cross-organizational customer alignment meant.  In short they weren’t walking the talk of customer centricity. How does that happen? This is actually a very common situation except that most companies don’t realize it. Jason Wadler, Chief Strategy Officer of Leapfrog Online and Chair of the Leapfrog Marketing Institute, says there are three common root causes:

  1. Culture
  2. Data
  3. Operations
Shifting from a product focused company to a customer-aligned organization changes how a company must operate.  “It requires a bit of a leap of faith and having the right controls in place,” according to Wadler. “Companies are competing against their customers’ expectations, less against their competitors.” Customer-alignment transformation must be led by the C-Suite, not delegated down, and takes around 24-36 months to complete. The CEO owns defining the alignment approach, target business outcomes, timetables and KPIs. The data companies collect and manage today don’t support customer-centric operations. The right data is either not available and or categorized correctly. On top of that, the data needs to be tied together at the customer level, not at the product or function level. Lots of companies do data analysis and come up with insights. But they are not actionable – they can’t leverage the data to drive the right individual customer interaction at the right time. While data completeness, accuracy and consistency is a centuries old problem, the difference today is that customers control the interaction at speeds unimagined before. The third root cause is operational. Is the company structured around the customer? Have the various functions been redefined in the context of the customer lifecycle relationship and how are they working together?  It’s not business as usual.  Wadler stresses that establishing clarity on who owns which decisions and who is accountability for implementing those decisions is critical. Aside from the root causes, most implement customer-aligned transformation plans miss:  Alignment of the annual budget and planning process. According to Deb Hall-Lefevre, SVP/CIO of Couche-Tard, “The process only works when priorities and goals are aligned across the functions.” She goes on to say, “Beyond that, funding decisions and execution becomes much more effective when there is a culture of collaboration, healthy debate, customer-first orientation, joint expectation setting, and fast decision making across the functions.” According to Leapfrog Marketing Institute’s 2017 Planning Report, part of the issue is that “55% of the respondents built their budgets with a primary focus on prospects or customers – a drop from 60% reported last year.”  If study participants weren’t focusing their budget planning on customers, where was their attention? On products and services offered. Of those companies that did build their budget to be more customer and prospect focused only “9% focused on cross-functional alignment.” That’s pretty low and is a direct contributor to missing out on the rewards of customer alignment.  Without collaboration and aligning strategies and budgets cross-functionally, customer alignment cannot be achieved. In fact, only 38 percent of study respondents report they currently have a dedicated customer experience budget.  The low percentage could be attributed to the difficulty in controlling, measuring and getting cross-functional resources aligned on key strategies and metrics. Company functions need to team up and co-create strategies, execution plans and supporting budgets focused on the larger goal of company-wide customer alignment. The other key requirement is measurable ROI accountability.  Since in most organizations Marketing owns customer experience (53%), marketers need to have over half of their budgets ROI accountable. The good news is that the Leapfrog study found that ROI accountability is gaining in acceptance along with increases in dedicated customer experience budgets. In fact, almost 10 percent of respondents “now have their first customer experience budget.” For companies trying to understand what ROI metrics look like, Wadler recommends asking these questions:
  • Did the activity move the business on the growth or efficiency axis?
  • Did it make the company more relevant to customers?
  • Is the organization more aligned on behavior and actions while reducing spend?
  • Are customer interactions managed according to an assigned value for each touchpoint?
  • Can the company move faster on market, customer or competitive opportunities?
Of the study respondents that were customer/prospect focused, 55% anchored their marketing budgets in customer life stages and 30% on customer value /LTV models.  The expectation is that over the coming years more companies will build budgets anchored in customer lifecycle stages in order to effectively respond to the continued pressure to deliver value, as defined by customers and prospects.  Wadler says “it is increasingly important for marketers to align investments with opportunities to drive scale and ROI.” Marketers are the change agents in operationalizing customer centricity.  If CMOs wish to remain with a seat at the table they will accept responsibility for forging cross-organizational collaboration and leading teams to develop the necessary strategic plans, tactics and budgets to achieve full organizational alignment to customer expectations. If your organization isn’t where it would like to be in the customer-alignment transformation, Leapfrog Marketing Institute offers these suggestions for walking the talk:
  • True customer experience ownership – dedicated customer experience plans and budgets are a necessity. Devices, channels and customer expectations are changing too fast for customer centricity to be treated as a decentralized initiative.
  • Customer-based planning and budgeting – with just 50 percent of budgets built to be customer centric, companies run the risk of investments being misaligned and high value customers lost. “Companies should consider a value-based segmentation strategy and test/optimize/scale methodology to validate the approach.”
  • Heightened focus on ROI/accountability – marketers must create performance investment tiers based on opportunity and value to both capture and report on clear financial-based business results if they want to keep their seat at the executive table.
  First published in Forbes.

How To Effectively Implement Customer Journey Maps

Journey mapping is a core discipline and competency of leading organizations. No longer considered a marketing or customer success initiative, leaders are realizing that everyone benefits from understanding journey maps and how they can be acted upon.   And by ‘everyone’ I mean everyone – from Finance to R&D/Engineering to Facilities.  Directly or indirectly, every job contributes to measurably delivering a consistent, valued customer experience. While the concept of sharing journey maps and coaching employees on how to operationalize journeys in their jobs is widely agreed to, implementation typically meets with resistance. Common objections include:

  • The maps will get into the hands of competitors.
  • Employees aren’t interested and won’t understand.
  • Being challenged by peers on the process, results and recommendations.
  • It takes too long to explain how and why specific touchpoints should change.
  • Belief that any process changes just need to be implemented in IT systems and applications.
At the root of each of the above points is a fear of change.  For managers who have not been formally trained in change management, effectively positioning and connecting the dots for each employee on how this can benefit them is daunting. It’s easier to just keep the knowledge within a siloed team and focus on aligning the processes the team owns. The thought process is that as other teams see their success they will want to join in. The ROI of journey mapping is realized when all employees understand how to align their activities to customer expectations. Employees are quick to see how embracing small, incremental changes can lead to higher job satisfaction and performance for them as well as company.  They just want to have a vote and voice in the implementation process.  Ironically, this is what customers want when participating in journey mapping and co-creation workshops. From my experience there are three best practices to successfully operationalizing journey maps.
  1. Develop internal audience-specific versions of the journey map(s).
Different people consume information differently; one size doesn’t fit all.  By tailoring how the maps are presented for each audience type, it makes the information more accessible and consumable. Develop a hierarchy of journey map documents demonstrating varying levels of detail and add graphics appropriate for each audience group. Executives want a one page, high level graphical map that shows key moments of truth, decision tollgates, and high value generating touchpoints. Managers want more detail and employees need even greater detail. Both audiences will benefit from graphically depicted journeys that are contextually relevant to their roles. Have fun with the graphics and don’t forget to develop versions to share with distributors, partners and key suppliers.
  1. Socialize journey maps through multiple channels.
Journey maps, done correctly using ‘outside-in’ methods, are a gold-mine of information that touches every corner of a company in measurable ways.  There are over 30 uses for the data coming out of journey maps.  Figuring out the best way to socialize a customer journey map can be overwhelming – the trick is to do it informally in bite-size, interactive chunks. Last year, I attended a meeting where the client insisted that all employees attend a PowerPoint presentation of the post-purchase journey maps. The content was powerful but the presentation resulted in the sales team falling asleep (literally) and engineers heads down on their smartphones.  The result was no one was particularly gun-ho to step up and embrace new ways of engaging customers. In fact, few people actually remembered what the meeting was about.  The data was correct, the presentation was dead boring; people tuned out. My recommendation is to kick off the operationalization of journey maps with an all-company meeting led by the CEO, thirty minutes max.  Having the CEO introduce the initiative speaks volumes to its importance to the company. Even more powerful is to have a customer co-present; that will get everyone to sit up and pay attention. That introductory session should be followed by three actions:
  • Develop and share interactive versions of the journey where people can explore and learn about journeys at their own pace and through their own perspective. This enables people to drill into the details or not – consider using a 3D tool like Kaon and check out Genroe’s review of journey tools.
  • Host open lunches or breakfasts to help team members understand the journey, how they can impact customer delight and what alignment would look like. Use these sessions to address skepticism and gain buy-in.
  • Bring customers in (virtually or in-person) to talk through their experience and how they define value-add, preference and intent. Building a bond between internal employees and customers is crucial to not only successfully implementing change but to maintain alignment with customers’ evolving expectations.
  1. Define a phased roll-out plan.
Despite today’s common belief that everyone will jump at the chance to change, it makes everyone uneasy. Human nature fears uncertainty and we spend inordinate amounts of time imagining all sorts of dire consequences, most of which are unfounded. It’s our natural resistance to change that requires operationalizing a journey with a plan. Begin by developing a phased, cross-organization change plan by prioritizing key interaction points and moments of truth that are driving customer dissatisfaction.  Look for journey steps where company engagement is counter to what customers said they expected. Also look for points that trigger complaints, high customer stress or frustration, and/or negative word of mouth. Develop a high level plan and milestones that are signed off by executive leadership. Structure the plan in sprints with target metrics before socializing with functional leadership. Based on my experience, I strongly recommend a bi-weekly steering committee of functional leaders and the executive sponsor(s) to reviews progress, issues and new customer behavior and feedback.  Consistent visible and vocal executive sponsorship, preferably by the CEO, is a critical success factor. Keep the whole company engaged by sharing implementation progress and give teams time to share lessons learned – good and bad - as part of monthly/quarterly all-company meetings. Celebrate successes no matter how small.  Public recognition is one of the most powerful motivators. Recognize a team that has changed a process and the measurable improvement in customer engagement. That will motivate others to take the initiative and step up. Don’t be afraid to include a handful of strategic customers in this initiative.  Their involvement adds gravitas to the effort and keeps the effort on target.  This is a community effort; make it one with all the trappings.

Chatbots Will Be Your New Best Friend

Chatbots came on the scene in 2011 as business intelligence, artificial intelligence and messaging platforms combined into new forms of responsive technology.  New ways were needed to support companies interacting with buyers and provide customer support that aligned and could evolve with changing communication habits. What is a chatbot?  A messaging application, sometimes referred to as a conversational interface, designed to simplify complex predefined task(s). The ‘chatbot’ label covers a number of categories including stand-alone applications, AI tools, bot developer frameworks and messaging, bot discovery, connectors/shared services, and analytics.  VentureBeat recently released a bot landscape which undoubtedly will rapidly expand in the near future. Today, chatbots are seen as easy and fun ways to help customers achieve an outcome. You’ll encounter them on web sites, social media and even on your smartphone. Say hello to Siri, Allo and Alexa, to name a few. To further adoption developers are making chatbots more human-like with personalities, capable of recognizing speech patterns and interpreting non-verbal cues to make interactions even smoother. The excitement is not in what they are capable of doing today but in their future trajectory.  As cited in The Chatbot Magazine, “Messaging apps are the platforms of the future and bots will be how their users access all sorts of services” shares Peter Rojas, Entrepreneur in Residence at Betaworks.  Verizon Ventures is an active investor in the chatbot market.  According to Christie Pitts, Manager – Ventures Development, Verizon Ventures, “Chatbots represent a new trend in how people access information, make decisions, and communicate. We think that chatbots are the beginning of a new form of digital access, which centers on messaging. Messaging has become a huge component of how we interact with our devices, and how we stay connected with the people, businesses and the day-to-day activities of life. Chatbots bring commerce into this part of our lives, and will open up new opportunities.” When asked why chatbots are strategic to Verizon, Pitts replied, “At heart, Verizon is a technology company and as such is constantly at the forefront of understanding and delivering on new market opportunities, and one of our top priorities is simplifying communication with our customers.” They have invested in companies like Spark Cognition, Adtheorent, Q Sensei, and MapD. Verizon sees AI as an enabling technology layer that can lead to huge gains. Companies working with AI technologies will create valuable solutions that augment the way people communicate, with each other and machines. Chatbot technology is part of Relay Network’s customer experience communication solution. Their approach is to first determine the specific use cases that could benefit from this technology.  Matt Gillin, CEO of Relay Network, believes “that a customer relationship and communication pattern needs to exist first before you can employ technologies, like bots, to facilitate the relationship further.” When asked about guidelines when employing chatbots, Gillin’s recommendation is bots are best “for scripted transactions or tasks that don’t require a lot back and forth.” Chatbots are most effective in situations where a customer is trying to resolve routine issues, complete specific tasks like placing an order, or guiding a user through a multi-step process. The benefit is the ability to “close the loop with the customer along a process, efficiently and in a delightful way,” shares Gillin. The ROI is in cost reduction, efficiency and improved customer satisfaction. Chatbots also play a role in marketing. By tagging specific content to certain chatbot words or phrases, content could be delivered in any number of pre-defined conversations. With deep understanding of the customer journey and emotions, through the eyes of the buyer, content and bot conversations can be successfully mapped and programmed. Verizon is excited about chatbots and the advances that are happening in the field of artificial intelligence. Over time, great leaps in technology have provided huge benefits to our lives. It’s easy, however, to get carried away with the allure of artificial intelligence and human-machine relationships. “Sometimes advancement comes with trepidation,” says Pitts. “Outcomes can be predictable and beneficial, or at times unpredictable and present new challenges. In the long view it is clear that technology improvements are a net benefit to society.” Yet, lurking in the background is the concern about unintended consequences. We become enamored with technology and its potential to do good.  We don’t think about the possibility of a dark side; how the technology’s original intent can be perverted to do harm.  A few examples are social media cyberbullying and sexting.  It’s a lesson we seem unable to learn. Dr. Liraz Margalit, Director of Behavioral Analytics for Clicktale, an enterprise-class experience management platform, blames our tendency to see the world through rose-colored glasses as a “lack of psychology research in the early stages of technology development. As a result we don’t plan for all the issues that will arise.” For some the unintended consequences are already here. Our willful blindness about the dark side of technology has some expressing concern.  Futurists like James Canton to technology giants Alphabet, Amazon, IBM, Facebook and Microsoft are calling for an AI framework that takes into account social and economic policies. Dr. Margalit states that “interacting with chatbots creates in our brains a new model which results in a new state of mind.”  We may intellectually know we’re interacting with a computer but our brain perceives it as companionship. The more human-like chatbots become, the more our brains gravitate to a companionship model.  And that is where the slippery slope begins.  As users increasingly interact with chatbots, they subconsciously perceive that bot as a friend – one that makes them feel good because the user unconsciously has control over the relationship.  No need for you to be nice and pleasant, the chatbot is selfless, always ready and available to serve you and in a good mood.  Dr. Margalit calls it “designing technology for companionship without demand for friendship.”  She believes incorporating humanoid social robots into our lives “invariably alters the dynamics of human relationships and gives rise to a society that isn’t completely real.” So what’s the wrong with that? Unfortunately, some users cannot tell the difference between a chatbot and human chat. Take a look at what happening in China with Tay and Xiaolce. This is known as the ‘Eliza Effect’ where people think they are communicating with a real person when in actuality it is a piece of software. When these same users then interact with fellow human-beings, things go awry.  They bring into the real-world human-to-human interaction a mental model partially based on how they felt and behaved while interacting with a bot. Dr. Margalit cites several studies done with children that are heavy smartphone users. These studies found a correlation to rudeness, impatience, imitation of video hero behavior, and disconnected attitude toward the real world.  Asymmetrical digital interactions are easier and don’t require effort on our part to really understand the perspective of other people, especially if their views are different. Gillin isn’t too worried about the slippery slope, “the focus of an organization on improving a brand’s business will keep it from running into the AI moral dilemma”.  Pitts and her Verizon team believe that “elements of AI like machine learning, natural language processing, and neural networks are poised to power the next wave of a digital revolution. Smartphones and ubiquitous access to high quality wireless networks have improved our lives in countless ways. AI-powered solutions will very likely further this transformation.” Interestingly, both Gillin and Margalit believe that chatbots should be visually tagged with a universally accepted icon so the unaware among us are always reminded we’re interacting with software, not our best friend. “Bots are changing rapidly as technology improves,” shares Pitts. “A bot that provides information today could provide contextual recommendations tomorrow. We are looking forward to watching these new technologies and integrating them when it will benefit our customers.” Chatbots are not likely to take over and drive all forms of customer communication. The technology isn’t that advanced and remains dependent on human design and oversight. The importance of this technology is its role as a stepping stone to the new world of IoT (Internet of Things) wherein traditional roles of sales, marketing and customer service will be completed transformed. We can either focus on redefining, in advance, what tomorrow’s organization, culture, and customer relationships should look like and guide technology development to further that transformation. Or we can be smitten with creating humanoid social bots that mimic us because in today’s increasingly isolating society we all need a new best friend. Originally posted in Forbes

How IoT Redefines What Sales Success Looks Like

Back in the 1960s the successful salesperson was typically seen as a confident and trusted ally that helped you solve a variety of business issues.  It’s a given that the product or service had to work; the core of the relationship, however, was personal.  It was between two people who trusted each other and were committed to each other’s success. Without the benefit of smartphones, cloud applications, big data or analytics, salespeople possessed deep understanding of their industry, market trends, products and usage best practices, and customers’ preferences as well current and anticipated needs. It’s arguable that sales people back in those days knew their customers better than we do today. The measure of a successful sales person was consistently exceeding quota, respected by their peers and high customer loyalty. Those same measures are just as valid today. Technology advances redefined how we think of the salesperson.  We began to believe that successful sales people could be made.  In the 1980s a movement began to standardize sales processes, how they thought and the activities that filled up their days.  From SPIN selling, Miller Heiman Blue Sheets and “Dress for Success” to today’s predictive analytics and Account Based Selling, a tremendous amount of effort is spent on teaching sales people to  replicate specific actions, steps, processes and communication styles.  Technology is available to helping them know which leads to pursue, provide real-time coaching, recommend what up-sell product to offer, and real-time forecasting all in the unwritten belief that successful sales people can be built. “Today it’s about copying the practices and methodologies of ‘A’ players to help ‘B’ players become more than just gifted amateurs,” shared Leslie Stretch, CEO of Callidus Cloud, a cloud-based sales, marketing, learning, and customer experience solutions vendor. Today what stands between the customer and the purchase order is the sales person. That is about to change rapidly and dramatically by the Internet of Things or “IoT” for short. With IoT, devices and machines are starting to automatically send purchase orders for inventory, replacement parts and repair services directly to vendor computers.  The sales person is out of the picture.  IoT disintermediates B2B account management.  No one needs the sales person because there is no one for the sales person to talk to – or is there? Stretch sums up the question that is on everyone’s mind as “What is sales’ role when machines take care of themselves and order for themselves?” Counter to obsoleting sales, IoT shifts the definition of the sales person back sixty years to a time when relationships matter.  Success will be once again defined by the long term value generated by the sales person, as defined by the buyer. Value that is often beyond the product or service he or she is selling.  Relationship trumps everything. What IoT triggers is the reversion of the definition of a successful sales person back to the consummate professional relationship builder, behaviorist and strategic advisor that takes their business personally. There is evidence that the shift is already underway – not from how CEOs think of their sales stars but in the actual characteristics of sales “A” players. “The Persona of Top Sales Professionals”, is a recent study of over 1,000 sales professionals by Steve W. Martin that was sponsored by Velocify, a sales acceleration platform. The study defines the personal attributes, attitudes and actions of successful sales people who achieved more than 125 percent of their quota last year. The study focused on six areas: Focus and motivation, career orientation, personal attributes, customer interaction strategy, attitude, and self-perception. We all know that highly successful sales people are driven by much more than money or greed as Martin calls it.  What may be surprising is the study’s finding that being recognized by their peers and held in high esteem “based upon their knowledge and the recognition that comes along with being thought of as an expert” is as important as money.  Quota-busters “believe that their knowledge is their most powerful attribute” and “are masters of language…[and] accomplished communicators who know what to say and, equally important, how to say it.” The study found that sales super stars rely on their intuition a bit more than pure rational logic when making critical decisions.  Their understanding of human nature, and of themselves, and drawing on those insights at key times is a hallmark of consistently over-quota achievers defined as people who exceed quota over 90 percent of their careers.   While pure-logic decision makers also exceed quota, they just don’t do it as often as the sales person that listens to their intuition a bit more closely. When it comes to how the most successful sales people approach customer relationships, the overachievers focus on “getting customers to emotionally connect with them” followed by customizing their sales approach and asking the tough questions in ways that showcase their knowledge and expertise. Sounds a lot like some of the best sales people from the last century – David Ogilvy, Mary Kay Ash, Joe Girard, and Zig Ziglar, to name a few. The bottom-line is that successful salespeople in the era of IoT are focused, as they were in the 1960s, on the emotional, political and personal drivers of the buyer.  The study found that successful sales people are able to “build a trusted relationship and personal friendship in a short period of time.”  To the sales person it’s about more than just the sale, it’s about owning a personal responsibility for and a dedication to their client’s success. What does that mean for sales organizations going forward?  Stretch believes the focus should not be on a salesperson but on the entire team involved in the account. He adds a “key is to compensate everyone supporting the customer because that directly impacts renewal and account expansion.” Based on my client work, I’m a strong proponent of ending the practice of hosting annual sales training to drill standard processes, systems and procedures in a one-size-fits-all approach into the heads of inside sales and account managers. Instead use these events to deepen industry expertise, understand emerging trends, and teach people how to apply this knowledge to customer situations and drive value-add beyond the boundaries of the product. I also recommend these four new best practices:

  • Test sales candidates based on their behaviors and motivations using new tools such as GRI
  • Individualize sales coaching to build self-confidence, personal certainty, and self-pride
  • Hire behaviorists to sharpen communication, sales intuition and human behavior skills
  • Teach sales how to use data to alter their behaviors to align with customer characteristics
You might say all of this has always been the hallmark of sales superstars. That’s true.  However, in the era of IoT, it means that all of sales need to have these characteristics not just the “A” players.

Customer Co-Creation Is The Secret Sauce To Success

The operative phrase is to “be involved in”. Increasingly, that is taking the form of customer co-creation. Prahalad and Ramaswamy defined co-creation as “the joint creation of value by the company and the customer; allowing the customer to co-construct the service experience to suit their context.”  In my work, I define co-creation as the “purposeful action of partnering with strategic customers, partners or employees to ideate, problem solve, improve performance, or create a new product, service or business.” The concept has been around since 2000 yet has taken over a decade to catch on. Co-creation is not a customer advisory board on steroids or a clever sales and marketing tactic. It’s about jointly creating value , for the vendor as well as customers.  To most managers, the thought of openly and transparently engaging customers, sharing detailed data is downright scary. The rewards, however, should cause CEOs to pause and reconsider. Let’s look at how two very different companies are using co-creation to drive value. The first is DHL the global market leader in logistics, part of the world’s largest mail and logistics services company, Deutsche Post ("DP") DHL. You may know them by their yellow and red delivery trucks. Privatized 15 years ago, today the DP DHL Group employs some 490,000 employees around the world producing $57 Billion in annual revenue. You might think a company this size would struggle being agile, let alone set standards in innovation and customer service. What DHL discovered was its customers wanted help in rethinking their supply chains to improve business performance. “That is quite a challenge, as we are typically dealing with very complex global supply chains” shared Bill Meahl, Chief Commercial Officer at DHL, “one which fueled us to embark on a journey of customer co-creation.” Embarking on this path meant more than just process and service changes, it meant picking the right customers to work with and deepening employee capabilities to understand how they impact customer business, customer perception and sustainability. A critical success factor was teaching employees how to “walk a mile in customer shoes so they intimately understand the dynamics of working with customers ,” according to Meahl.  That competence is critical to developing a range of viable recommendations and new solutions that not only meet customer goals but demonstrate the value of DHL as a business partner. DHL understands that innovation must be customer focused. One way they ensure this happens is by bringing customers and their DHL service partners together in specially built Germany- and Singapore-based innovation centers for workshops to share best practices and create value. The purpose is to “conduct intensive hands-on workshops that explore and understand technology, economic, socio-political and culture trends to develop new ways to manage supply chains and logistics.” Sessions sometimes start with a look at what business could look like in 2050.  Employing a proven methodology of scenario planning, DHL’s approach takes customers on a time journey which showcases a four-quadrant view of what the world could look like in 2050. The quadrants are radically different from each other; one quadrant is always a doomsday scenario and its opposite is a perfect world.  The power of scenario planning is that it breaks mindset.  The joint team then ‘walks’ backwards from 2050 to 2020 which provides a platform for specific trend lines, core competencies, and problems that need to be solved.  From there, the joint team brainstorms solutions and approaches. Some of the innovations that have been launched as a result of the over 6,000 engagements conducted in DHL’s innovation centers and other customer co-creation formats include:

  • Parcelcopter, a drone delivery research project, which may in future enable companies to be more responsive, agile and cost-efficient.
  • “Smart glasses” and augmented reality, co-created with DHL customer Ricoh, to improve inventory and warehouse picking efficiency by 25 percent.
  • Maintenance on demand” (MoDe), co-created with DHL’s customer Volvo Trucks and other partners, uses sensors that automatically send back vehicle and component performance to identify when and where truck maintenance will be required.
  • IoT Report, an industry report, authored by DHL and Cisco, that identified and evaluated the implications and use cases of the Internet of Things in logistics.
  • Robotics applications that are currently being jointly tested with customers. These range from self-driving trolleys that support pickers to do their work in a less strainful way to collaborative robots that support workers for value-added services such as co-packing.
Meahl admits the co-creation concept was initially received with skepticism, internally and externally. Customers thought it was a clever sales tactic. Internally DHL has multiple business units who have differing business models serving the same customers. Identifying the right DHL leaders who “owned that customer” and aligning and coordinating multiple teams to productize the innovation workshop outcomes forced the company to take a hard look at its own structure and processes. The result has been well worth it.  CSAT scores are over 80 percent and on-time delivery performance is 97 percent or higher worldwide. Customer churn rates are down and revenue from new services/products is up. At the other end of the spectrum is Phononic, an early stage technology company that develops solid state heating and cooling. Phononic sells into traditional industries that manufacturer refrigeration and HVAC systems. The founder and CEO, Dr. Tony Atti, believes that “companies should understand their customers’ desired experience and use that knowledge to work backwards to define company processes and culture .”  In Atti’s opinion a core part of B2B customer engagement should be based on emotion versus engineering or technical terms. “Co-creation is about helping the customer imagine a different future .” Most of Phononic’s products are the result of customer co-creation - these are highly complex, precision engineered equipment that can cost millions of dollars.  Fully integrated team of engineers, supply chain experts, sales and marketers partner with customers to define new products, design requirements, prototypes, and finalize manufacturing specifications. The result is a small company that is disrupting an old, established industry. Atti swears by the co-creation model for the entire customer lifecycle journey, not just product innovation.  It is at the core of Phononic’s differentiation as well as its culture .