CEB Service Intention 2009

Service Invention
To Increase Retention
2009 Copyright CMO Council. All Rights Reserved.
Service Invention To Increase Retention
Contents
03
Introduction
06
Key Findings
11
Detailed Findings
47
Qualitative Insights
75
Amdocs Commentary
77
Sponsors
78
Fielding and Media Partners
2
Introduction
With more than $1.5 trillion spent on marketing and communications worldwide, there
are significant incentives for global marketers to take a hard look at all facets of customer
experience in order to optimize acquisition, retention, satisfaction, and revenue generation.
Some notable studies from reputable sources certainly accent this:
Satisfying and retaining current customers is three to 10 times cheaper than acquiring new
customers, and a typical company receives around 65 percent of its business from existing
customers. (McKinsey)
47 percent of business executives say that customer experience will play a very important
role over the next three years. According to the same study, 73 percent of respondents
cite a lack of clear experience strategy as a key challenge. (Forrester Research)
A five percent reduction in the customer defection rate can increase profits by 25 to 80
percent, and seven out of 10 customers who switch to a competitor do so because of poor
service. (McKinsey)
A typical business only hears from four percent of its dissatisfied customers; the other 96
percent leave quietly. Of that 96 percent, 68 percent never reveal their dissatisfaction
because they perceive an attitude of indierence in the owner, manager or employee.
(University of Pennsylvania)
Companies that restructure call centers around a customer service strategy often cut their
costs by up to 25 percent and boost the revenue they generate by as much as 35 percent.
(McKinsey)
92 percent of all customer interactions happen via the phone, and 85 percent of
consumers are dissatisfied with their phone experience. (Gartner)
Indeed, nowhere are these data points more relevant and profound than the $4 trillion (Plunkett
Research) technology-driven, interconnected communications services market, where every part
of the industry ecosystem (carriers, wireless operators, Internet service providers, broadcast/
cable/satellite TV networks, device manufacturers, network equipment vendors, application
and firmware developers, component suppliers, distribution channels, transaction systems,
content creators, and property rights holders) have to be unified and aligned to deliver on brand
promises and user experiences.
Disruptive forces in the global service provider market are creating a greater sense of urgency
for assuring a more predictive and positive customer experience, as well as building stronger
and more profitable customer relationships. Key shifts that are impacting churn and loyalty
rates include:
Convergence of technology (voice, data, video and wireless) and competing, bundled
oerings from multiple providers.
Advent of new Voice-over-Internet Protocol (VoIP) service providers and web-based social
networks and interactive communities.
Merging of wireless communications with high-speed Internet connections in homes and
public access environments.
The rapid shift to wireless-only households from lucrative wireline accounts (32 percent of
U.S. households will have wireless-only services by 2012, from 15 percent today).
Flat-rate unlimited calling plans from new upstart regional service providers.
3
Market embrace of the digital lifestyle and more personalized, on-demand services
and experiences.
Increasingly diversified and fragmented entertainment, information and interactive
oerings from niche providers.
Loss of confidence and attrition of accounts in the financial services industry as consumers
and businesses struggle with the economic downturn, credit crunch, huge portfolio losses
and net worth declines.
Digital device dependency and the advent of mobile entertainment, connectivity, banking,
payments, remittances and other essential needs.
As market pressures increase and margins erode, the commitment to operational excellence
and back-end eciency frequently lags, often undermining the quality and consistency of the
customer experience and the level of brand advocacy and anity. At a time when customer
retention and relationship management should be a top priority, many companies are being
forced to cut corners, extract more revenue from existing customers, and reduce customer
handling and support personnel.
Few companies today have deployed real-time customer listening and feedback systems that
quickly identify and alert management to problems, issues or risks in the everyday customer
experience. They are not culturally, organizationally or operationally structured to quickly
remedy and address deficiencies in the customer experience, and marketing is certainly not
leading the way in this regard.
Siloed, distributed data still remains unconsolidated and untapped from a customer insight and
intelligence gathering perspective and marketing groups rarely have a hook into the customer
service and support center to monitor, recover or prevent churn, defection, account loss or
turnover issues.
Consumers have stated that a single negative experience with a brand can alter the decision
to do business with a company. According to a 2007 Harris Interactive poll of over 2,000 adult
consumers, 80 percent of consumers will never go back to an organization after a negative
experience. Marketings mandate is to revitalize sagging loyalty and retention numbers and
drive top line growth through deeper, more meaningful engagements with customers. Service
providers must, more than ever before, upgrade customer interactions in order to foster lasting
and profitable relationships.
Service Invention to Increase Retention is the first study from the CMO Councils new
Customer Experience Board, a global anity group of nearly 200 senior marketers across all
sectors of the communications services industry. The continuity authority leadership program
and knowledge transfer initiative is sponsored by Amdocs, the leader in customer experience
systems innovation, enabling world-leading service providers to deliver an intentional customer
experience. The Customer Experience Board also embraces a coalition of credible and notable
consultants, industry research analysts, subject matter experts, academics, media partners, as
well as a formidable brand leadership committee including marketers from AT&T, AOL, Boost
Mobile, Boingo, BT, Verizon, Vodafone and more.
Through a series of qualitative interviews and global online audits, our Customer Experience
Board is taking a deep dive into the problems, pain points, challenges, obstacles, issues and
disconnects on the front-end and back-end of integrated customer experience management
across the global service provider ecosystem. It intends to benchmark, analyze and provide a
report card on the state of customer experience management practices, as well as highlight the
4
business benefits, financial gains and competitive advantages to be achieved by embracing new
innovation models, systems and practice.
Among ongoing areas of investigation and evaluation are:
The critical linkage between marketing and IT in assuring back oce investments are
aligned with customer experience requirements.
How back oce systems can enable and further marketing strategies and deliver on
customer promises, relations and needs.
The CMOs level of responsibility and clout in assuring the customer experience and finetuning operational structures to impact this.
Level of involvement CMOs have in specifying and upgrading back-end information and
master data management systems to extract meaningful customer experience insight
and analytics.
The degree of alignment and collaboration between CMOs and CIOs in the area of
customer feedback, intelligence, experience, service adoption, billing, communication,
relationship management, personalization, content management, and web interaction.
Go-to-market capabilities and eectiveness in unifying ecosystem resources in delivering
new products, services and upgrades to the customer.
Challenges and obstacles to monitoring, addressing and perfecting customer experience
touch points, issues and experiences.
Top sources of customer aggravation and pain in service provider operational structures
and processes.
Impact of customer experience on business performance, profitability, competitive
dierentiation, loyalty, advocacy and anity.
Key performance indicators currently in place; additional customer listening and feedback
systems likely to be deployed.
Forces and factors driving, influencing or shaping customer experience investments
and programs.
Measures and metrics being used to track and calibrate customer experience strategies,
investments and commitments.
Level of adoption of new web, mobile and social media channels and platforms to
improve customer interactivity and response.
A best practices model and framework for integrated customer experience management in
the service provider sector will be constructed using inputs from the qualitative interviews
and the quantitative audit. A series of invention sessions will be held with experts, consultants,
integrators, partners, solution providers and analysts to further the intellectual capital base and
support and substantiate the customer experience imperative. This content will be published
online, syndicated and discussed in a series of ongoing interactions with global marketers
through CMO Council channels, aliates and regional dialogues and gatherings.
5
Key Findings
Marketers in the $4 trillion global communications industry (Plucket Research) are facing
unprecedented challenges and market gyrations. They are embattled to retain customers
and staunch defections in a transformative market brimming with disruptive, free or lowcost interactive digital media channels, social networks, mobile messaging devices, online
communities and other forms of content-rich engagement.
Service Invention to Increase Retention gathers insights from more than 150 international
marketers, via online audit and one-on-one qualitative interviews, across all segments of the
global communications industry. It provides a comprehensive benchmark of where technology
convergence and customer empowerment is bringing rapid and profound change to a once
glacial and monopolistic landscape.
Customer Experience Board (CEB) members represent telecommunications; networking;
wireless; broadcast, cable and satellite; Internet content and community; Voice-over-IP, and
interactive digital media stakeholders worldwide. Sponsored by Amdocs, the global authority
leadership group advances new thinking and best practices in customer retention, handling and
loyalty building.
Market Trends and Shifts

According to the CEB, market encroachment by new Internet diversions, entertainment oerings
and mobile device applications is putting more pressure on traditional providers of bundled
voice, data, video, and mobile services. This is increasing the importance of customer value,
retention and satisfaction, while adding demands on technical, back-end operational, business
and customer support systems.
Were in a battle for users
time and attention in these
industries that are converging:
the telecommunications
business, the information and
entertainment business and the
internet business.
Former President,
Access & Audience for a major global ISP
Service providers who had specialized

in a single area of the communications
spectrum are now being forced to
reanalyze service and innovate on their
total oerings. Traditional carriers, those
that have relied on a separation of
communication providers specialized in
specific data, voice or wireless categories,
are now forced to innovate to match the
new demands of customers, and match
the competitions. These incumbent
carriers are also fighting o competition
charging into the market with more nimble and agile pricing modules and new technologies that
speak to the burgeoning fully connected customer.
Adding to the crunch of convergence, customers have realized there are great savings to be had
thanks to this competition. According to a 2007 report focused on the competition between
local phone and cable conducted by the Federal Communications Commission (FCC), even as
traditional phone companies controlled more than 83 percent of the North American market for
voice services, competition with cable providers had saved consumers more than $23 billion and
could save households and small businesses a total of $111 billion over the next five years.
The huge popularity of social networking and user-generated content sites is viewed as
the most significant digital lifestyle shift impacting the market by 48 percent of survey
respondents. In addition, expectations for always-on access to content on every device and
6
more personalized on-demand services and experiences are forcing service providers to rethink their operational structures, product portfolios, customer handling systems, and strategic
partnerships and investments.
ing d
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So d u nt
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Lifestyle Shifts and Trends

TOP5 Digital
impacting the service provider business:
SERVICE
PROVIDER
-IP
-over
Voice
ss-only
Wirele holds
house
Per
on-dsonalize
ema d,
nd s
erv
ice
According to one executive with a major European

communication service provider, consolidation and
competition are rapidly transforming the market,
demanding a level of sophistication and ingenuity in thinking
through strategic partnerships and alliances. Weve got
a trend to competition. New business and competitors
are coming into the telecommunication market; Google,
Microsoft, IBM, and we have to bundle those oers.
One major trend identified by Customer Experience Board
members is a shift to increased wireless dependence, as 36
percent of marketers see a growing shift to wireless-only
households and 32 percent see a trend towards wireless
dependence for life, work and community tasks. According
to Wireless Week, mobile data revenue is expected to reach
$50 billion worldwide over five years and profits from voice
mobile will stand at about $124 billion, with an indication that
mobile users are willing to pay upwards of 28 percent more
on their bills for more services. Customers are demanding
additional data driven interactions, and that the service be
quick to implement and load, easy to use and simple to pay.
At the same time, communications service providers say

they are dealing with a cutthroat, competitive environment
in which new contenders are focused primarily on undercutting or discounting prices and
poaching high-value customers. According to 54 percent of respondents, emerging competitors
and market disrupters are undercutting or discounting prices, with an additional 37 percent
indicating these contenders often target the most lucrative customers.
Price is driving many established market leaders to transform experience through increased
service oerings and options, value-added service and bundled packages. It is these smaller,
often more flexible and nimble companies that pose a real threat to market leaders. Its really
In 2009, mobile phone users are expected to download over
10 billion applications to their mobile phones the majority from
sites managed by mobile device manufacturers, consumer
electronics firms, and software houses.
Although operators are unlikely to earn any direct
revenue from third-party application downloads,
there are several options for them to generate
income from downloads, including:
1. Device back up
2. Management of application transfers
3. Specialized services provided to thirdparty stores
Source: Deloitte
7
a price war, stated a Vice President of marketing from one of Asias largest service providers.
Its undercutting your prices as weve got low-cost competition thats disrupting the market or
really aggressive competition thats changing the state of play in the market because theyre
aggressive to try and gain market share.
Encroachments are also occurring as consumers are capitalizing on free services and programming,
capitalizing on emerging internet channels and programs; this as 33 percent of respondents see
growing consumer interest in rich media, IPTV, music and video services. Mediums like IPTV have
emerged as a major competition to television, cable and satellite services, and shows no sign
of global growth slowing as the market grew by 63 percent over the course of 2009. Specific to
North America, the number of IPTV users has more than doubled to more than 3,835,000 by the
end of 2008 (Global IPTV Market Analysis 2006 - 2010; RNCOS).
Challenges Change the Course of Communications

The rapidly changing and converging market and heightened demands for features and
functions at a fractional cost is further accenting the need for more adept and analytical
customer data integration, listening, feedback and engagement systems... a critical area of
collaboration for IT and marketing groups. Creating brand preference and dierentiation in a
crowded market tops the list of challenges facing communications providers as they struggle to
adapt to increased innovation, growing price pressures, and heightened competition from new
and adjacent market entrants.
Over 84 percent of respondents report increases in the cost of acquiring and sustaining
customer relationships and, not surprisingly, 63 percent are seeing higher rates of customer
churn and attrition. But what eect can churn have on the bottom line? Accenture estimates
that telecom operators worldwide lose at least 1-2 percent of revenue due to operational
shortcomings, translating into millions of dollars lost. Many also speculate that due to the
slumping economy, global telecom revenue will slump by as much as 3.1 percent this year.
TOP
Churn Contributors
1. Competitor offerings
2. Pricing or fee structures
3. Inadequate customer
service
4. Global market forces
5. Product or service
dissatisfaction
The biggest contributors to customer defection are competitive

oerings, pricing or fee structures, and product or service
dissatisfaction. 34 percent of respondents highlight poor and
inadequate customer service as a key contributor to churn.
Studies have also shown that seven out of 10 customers defect
because of poor service. Gartner illustrates this defection
dilemma by highlighting the irony that while 92 percent of all
customer interactions happen via the phone, 85 percent of
consumers are dissatisfied with their phone experience. The
reality is that, according to McKinsey, a 5 percent reduction in
customer defection can increase profits by 25 to 80 percent.
However, the communications industry tends to be falling down
in some critical areas of customer experience specifically, in not
listening and responding to core concerns. The biggest sources of
customer pain are said to be unmet needs and expectations (63
percent), followed by product/service usability and complexity
(42 percent), billing errors (44 percent), as well as quality or
relevancy of service or product oerings (31 percent).
Not surprisingly, more than half of survey participants said

their companys eectiveness in responding to pain needed
improvement or was not very good. And all but 11 percent believe they need to get better at
customer handling and response.
8
Time not on Marketings Side

Consumers are spending more time engaging online, more time watching video or television
programming, and spending more time tied to their various communication devices. The global
average for time spent online is 30 percent, with China leading the way with a staggering 44
percent of leisure time spent online. According to reports by Wireless Week, the average cellular
user spends more than 450 minutes on their phone each month, or an estimated 5,496 minutes
yearly. More users are also spending time accessing online news and information as, according
to comScore, the number of people using mobile devices to access online content doubled
from January 2008 to January 2009. comScore goes on to state that among the total audience
of 63.2 million people who accessed news and information on their mobile devices in January
2009, more than a third (35%) did so daily. And with television and video consumption at an alltime high, there is little time left. In North America alone, the average television viewing time is
153 hours per month, with an additional three hours per quarter watching internet-based video
content. So, when do consumers have time to engage and interact directly with a company?
Unfortunately a lot of customer experiences are after the
fact and often its often that the customer has had a bad
experience and then s/he either doesnt decide to complain
or just moves onto another service.
CTO of a major APAC-based
telecom provider
DO NOT
COMPLAIN
BAD
EXPERIENCE
One of the biggest obstacles that we and every

other company in this space faces is the limited
amount of time our customers have to interact
with us, said an executive leader of a major global
ISP. People either have time or money, and the
people who have money do not have time, added
a communication industry veteran, now serving
as the CMO of a leading solution provider. So
often what generates loyalty for a service business
is eort, and the less eort I have to extend as a
customer, the more I will appreciate and repurchase
from a company.
CHANGE
SERVICE
PROVIDER
So how are customers engaging with todays

communication service providers? And, how are
companies listening to customer complaints,
grudges and commentary? The usual channels
of inbound communication are leveraged by
the majority of companies as 84 percent receive email feedback, call centers (72 percent),
satisfaction surveys (56 percent) and corporate web sites (56 percent). However, while
customers are spending more time in social networks and creating terabytes of user generated
content, only 27 percent of marketers are monitoring online customer communities.
Customer-Centricity Eludes Corporate Cultures

Unfortunately, over 50 percent of marketers feel that organizations are is not culturally or
organizationally aligned around the customer. And business practices, billing policies, and
personnel are not customer friendly. Yet, industry leaders all agree that senior mandate and
a culture dedicated to customer experience and customer centricity are essential to lifting the
bottom line. I think customer experience strategy really starts with culture and leadership in a
company, said the Vice President of Sales and Operations from a major North American cellular
service provider. Those companies that really have industry leading customer experiences
have strong cultures built around delivering that ideal customer experience. You cant have a
sometimes great experience, and you cant have a consistently good experience it has to be
consistently great. Thats the challenge.
9
In the CMO Council report, Calibrate How You Operate, 83 percent of global marketers say
they face change-resistant corporate cultures, conflicts and competition between internal
constituencies, and a resistance to operational accountability, visibility and measurement.
This change-resistance crisis is also aecting the communications industry when you consider
that 44 percent of respondents point to the CEO or the CMO as the owners of customer
experience charged with the monitoring, improvement and owning of experience. However,
only 18 percent of respondents feel they have a very high level of commitment to listening and
experience across the organization. 46 percent to have hope, stating that their commitment is
getting better. But when asked to rate their degree of customer centricity, 42 percent feel they
need some work or is in po0r condition.
Bridging the CMO CIO Divide

Compounding this disconnect to the customer, over 35 percent of marketers see deficiencies in
IT, back oce, or operational systems that subvert marketing claims and fail to meet customer
demands and expectations. This, despite the fact that over 60 percent of industry marketers
say they provide strategic direction for systems investments and 73 percent expect back oce
systems to enable faster, more eective control and implementation of marketing of strategies.
We are investing in IT systems and CRM systems as were looking for a close collaboration with
marketing and the IT department for product development, states the SVP of Marketing from a
European telecom company. You have to do a consolidation of your IT landscape, and dierent
CRM systems to have all customer data in one system. If you do this, you have really invested in
customer care services for your customers.
Misalignments between marketing and IT stand in the
way of gathering and analyzing customer information,
optimizing go-to-market strategies and new product
launches, as well as improving customer acquisition and
relationship management programs.
Which processes are least aligned

between marketing and IT?
1. Gathering and analyzing
customer information
The most common complaints and roadblocks in

integrating disparate customer repositories are inadequate
or incompatible IT systems or databases, as well as
information siloed in dierent functional areas.
2. Go-to-market strategy
3. CRM application
selection and
implementation
IT
MARKETING
4. Lead generation,
aggregation and scoring
5. Capturing and communicating
product capability shortfalls
However, marketers agree, through enhanced back end

systems and customer-centric corporate practice, the
outlook is positive for the industry. People change,
points out the Vice President of Customer Management
of a US based cellular provider. Your customer base
changes, their expectations change, and you have to
be in tune with that so that youre constantly, one,
improving, and secondly, ensuring that youre attracting
the right customer.
Marrying technology with good business practice, with an intelligent approach to meeting our
customers needs at an ecient price point where one can make money for shareholders but
also provide a good experience I dont think weve ever been teed up to do that in as powerful
as way. And, that curve keeps getting better and better, and thats what makes it so exciting to
be in this industry.
10
Detailed Findings
Crowded market place and rapid innovation speed customer churn
Global communication service providers face an uphill climb when creating brand
dierentiation in a crowded and competitive marketplace. Also top of mind for marketers are
the pressures from increased innovation, price pressures and competition from new markets
(54.9 percent) and the need for rapid delivery of new and relevant applications and service
(47.2 percent). Increased levels of customer churn and attrition (39.6 percent) and reducing
customer confusion (33 percent) rounds out the list of top five challenges.
Q.01
What are your biggest challenges in todays market? (Select up to five)

56%
55%
47%
Creating brand preference and dierentiation in a more

crowded market
Increased innovation, price pressures and competition from
new and adjacent market entrants
The need for rapid delivery of new and relevant applications
and services
40%
Increased churn and attrition rates
33%
Reducing customer confusion over range of service and

bundled oerings
33%
Higher cost of acquisition and retention
33%
Reduced profit margins and rising costs
29%
Determining the right mix of services and pricing policies
28%
Building operational support and service models that can scale

and remain resilient
23%
Growing expectations for more choices and services
20%
Increased number of customer service and support requests
17%
Predicting service demand and direction in rapidly evolving market
10%
Reduced demand for, or discontinuation of, core services
8%
4%
Service delivery in new locations, venues and channels

(e.g. in-flight)
Other
11
Social connectivity and advanced apps shaping the needs of the market
The convergence of communications, entertainment, information, media and social networking
has raised the importance of customer value, retention and advocacy. This is amplifying the
demand to have back-end oce systems that can support the creation, delivery and support of
new service oerings.
Q.02
How is the delivery of communications, entertainment, information, media

and social networking transforming your business? (Select up to five)
55%
49%
40%
Increasing the importance of customer value, retention

and satisfaction
Adding greater demands on technical, operational and
business support systems to support more complex scenarios
Raising customer expectations for on-demand,
inexpensive content
38%
Bringing greater business complexity, risk and challenge
35%
Creating the need for new diversified and bundled

service oerings
Expanding target markets and opportunities in new segments
and demographics
Oering opportunities for more intimate and frequent customer
interactions
Amplifying the need to introduce new devices, new services, new
product bundles, and new business models and pricing bundles
Increasing the diculty in defining the expected
customer experience
33%
31%
31%
29%
26%
Accelerating demand for high-quality, high-bandwidth service
25%
Increasing the need to develop new or upgraded service oerings
24%
Diversifying revenue opportunities through service packages
3%
Other
12
Consumers demand personalization as mobile life merges with social life

The growing popularity of social networks, coupled with a consumer expectation for always on,
reliable, global service have been the major shifts and trends within the communication services
space. Consumers are also demanding a more personalized, relevant experience including access
to on-demand services. Three emerging trends also highlighted by marketers include a growing
shift to wireless-only residences and businesses, the utilization of Voice over IP technologies, and
a surging interest in rich media and video, music and IPTV services.
Q.03
What digital lifestyle shifts and trends are impacting your business?
(Select top five)
48%
42%
40%
Growing global popularity of social networking and user

generated content
Expectations for always-on, constant and immediate access
to content on any device
Consumer demands for more personalized, on-demand
services and experiences
36%
Growing shift to wireless-only residences and businesses
35%
Voice-over-IP and other real-time communications options
33%
Surging interest in rich media, IPTV, music and video services
32%
Increasing wireless device dependence for essential life, work,

and community tasks and information
Convergence of voice, data, video, and wireless services in the
home and business
Mobile device and service dependency and diversity in third
world and emerging countries
30%
24%
23%
Voice-over-IP and flat-rate calling plans
20%
Increasing penetration of high-speed broadband connections
20%
Widespread and growing use of text, instant and multimedia

messaging
18%
Proliferation of smart phones and multi-functional devices
18%
Growth of networked home entertainment and web-based

appliances
Uptake of mobile banking, commodity trading, bill payments
and remittances
Other
18%
1%
13
Disruptive competition undercutting pricing, expanding service

Rather than oer incentives, or extending choice and adding greater value to engagements,
global competition is forcing communication service providers to fight for the loyalty of every
customer. Marketers indicated that the top competitive challenge comes from a practice of
undercutting or discounting prices.
Q.04
How are emerging competitors and contenders disrupting or encroaching

in your market? (Select top three)
55%
37%
24%
24%
23%
21%
19%
19%
17%
16%
14%
13%
13%
12%
10%
3%
Undercutting or discounting prices

Targeting the most lucrative customers
Introducing more appealing products or services
Oering inducements to switch
Providing free programming or services
Capitalizing on Internet channels and infrastructures
Bypassing or establishing new channels
Delivering a more compelling experience
Leveraging technology advantages
Delivering new interactive services and platforms
Challenging the status quo
Creating added-value bundles
Providing greater incentives or rewards
Extending greater value and choice
Leveraging regulatory loopholes
Other
14
Marketers battle defection with retention programs and enhanced customer service
As marketers look to stem defection and boost bottom line growth, the monetization of
retention programs will be the leading program executed. And, while new product development
is also quite high on the list of programs and needs, it is worth noting that speedy conflict
resolution, demand generation and subscriber acquisition, along with immediate response to
problem resolution is at the top of the findings. Yet, only nine percent of respondents feel that
there is a need to operationalize customer intelligence in contact centers, one of the critical
fronts of customer engagement within the enterprise.
Q.05
What programs or initiatives have become more important in the current

recessionary environment? (Select top five)
56%
Better customer retention and monetization
43%
Customer support and handling eciencies
36%
New product development and innovation
33%
Quicker problem resolution and responsiveness
31%
Reassessing pricing and service strategies
30%
Demand generation and subscriber acquisition
25%
Brand building, anity marketing campaigns
25%
Loyalty and rewards programs for better retention
23%
Customer data collection, integration and analytics
22%
Service roll-out or market expansion
20%
Empowering the customer while lowering his/her costs

(e.g. improving self service venues)
Development of personalized communications and customer
touch points
20%
18%
Customer community building and market listening
18%
More creative service and product promotions
13%
Reactivation and recovery of lost or dormant accounts
13%
Infrastructure build-outs and back-end process improvements
13%
Advocacy, referral and word-of-mouth marketing
9%
Operationalizing customer intelligence in contact centers
2%
Other
15
The true cost of a customer

An overwhelming majority of marketers indicate that the cost of sustaining customer
relationships is increasing.
Q.06
Is the cost of acquiring and sustaining customer relationships increasing?
16%
Yes
No
84%
16
Costs forcing investment in customer insights and knowledge

Marketing is looking for new ways to upsell and cross-sell to existing customers through more
targeted, personalized engagements. When asked to outline how the rising cost of customer
relationships was impacting their marketing operational model, 43 percent of respondents
indicate that improving behavioral targeting and personalization were key strategies.
Q.07
How is this impacting your operational marketing strategies and

programs? (Select top five)
43%
Improving behavioral targeting and personalization
43%
Looking for ways to up-sell and cross-sell existing customers
41%
Investing in customer analytics and predictive modeling to

improve yield
37%
Introducing more creative acquisition and retention programs
36%
28%
Becoming more selective in identifying and targeting

high-value customers
Exploring new techniques for driving response and
conversation rates
Looking for co-promotions and partnerships to extend reach
and response
Embracing new online solutions and services to speed or
optimize engagement
Improving the performance of web sites and demand
generation programs
25%
Shifting media dollars to more targeted, alternative channels
24%
Increasing spend in search engine optimization and marketing
20%
Reducing traditional brand advertising and media spend
15%
Developing a product commercialization strategy
11%
Gaining IT commitment to marketing strategies
11%
Deploying marketing automation platforms for greater yield

and accountability
6%
Managing product exit/retirement
4%
Other
33%
32%
28%
17
Platforms that enable engagement are top investments for ROI minded marketers
In order to deliver the personalized experience that consumers are demanding, marketers are
looking to invest in engagement tools that will help facilitate personalized communication and
enable connectivity via social communities and online networks. The top three investments
over the next 12 months include marketing campaign management tools (52.1 percent), online
customer communication, feedback and interaction systems (46.4 percent) and social network
platforms (40 percent). Only 15.7 percent of survey respondents indicate that workflow
management is a key operational investment.
Q.08
What marketing tools are you planning to invest in over the next
12 months? (Select top three)
52%
46%
40%
39%
24%
24%
21%
16%
5%
Marketing campaign management (e.g. email campaign, live events)

Online customer communication, feedback and interaction systems
Social network platforms
Marketing performance measurement dashboard and analytics
eMetrics & web analytics tools
Campaign testing and performance tools (e.g. multivariable testing)
Personalization platforms
Workflow Management
Other
18
Marketing Owns the Customer Experience

Senior ownership of the customer experience is not lacking in the communication service
provider market. 24.6 percent of marketers surveyed indicate that the CMO is the primary owner
of the customer experience, while 19 percent point to the CEO as the leader of experience.
Q.09
Who is the primary decision maker for monitoring, improving and

owning the customer experience in your company?
19%
25%
4%
2%
8%
6%
11%
2%
6%
1%
2%
4%
0%
0%
1%
1%
2%
6%
Chief executive ocer or President

Chief marketing ocer
Chief service ocer/VP of service
Chief customer ocer/Chief relationship ocer
Chief sales ocer/VP of sales
Chief operating ocer
VP/Director of marketing
VP/Director of operations
VP/Director of customer experience
VP/Director of market research
VP/Director of customer loyalty
VP/Director of customer support
VP/Director of quality
Line of business executive
Strategic account manager
Sales or customer service representative
Dont know
Other
19
Customer listening and commitment to customer centricity on the rise

Even with clear senior ownership of experience, marketers still feel that there is tremendous
room for improvement specific to their level of commitment to customer experience. 45.6
percent feel they are getting better, while 12 percent admit they need improvement in this area.
Nearly 40 percent rate their commitment as high or very high, while only 1.6 percent admits to a
poor customer commitment level.
Q.10
How do you rate the level of commitment to customer listening and

experience across your organization?
2%
12%
18%
Very high
High
22%
Getting better
Needs improvement
Not very good
46%
20
Lack of a culture for customer-centricity undermines experience

Companies lack a culture of customer centricity, subverting their road to an optimized customer
experience. Infrastructure, business practice and a lack of cross functional visibility into
customer touch points are also key concerns. What is most alarming is that while it seems the
CEO and CMO own the customer experience, there is no firm mandate for the implementation,
monitoring and optimization of the experience.
Q.11
What are the internal forces and factors that subvert customer
experience? (Select top five)
54%
41%
35%
32%
32%
28%
26%
26%
23%
22%
19%
18%
14%
13%
Organization is not culturally and operationally aligned

around the customer
Business practices, billing policies and personnel are not
customer-friendly
Deficiencies in IT, back oce or operational systems subvert
marketing claims and fail to meet customer demands & expectations
Service oerings and pricing modules are inconsistent,
complex and confusing
Lack of real-time visibility into customer touch points and
contact centers
Customer listening, feedback and response systems are not
automated or do not exist
Sta are not empowered to eectively address and act on
customer problems
Lack of budget, sta, and resources reducing time and
attention paid to customer experience issues
Brand promise and value proposition is not consistently or
uniformly translated
Marketing does not own or control customer experience or
interface data
Poor inter-departmental communications or functional
in-fighting
Marketing and IT sta not well aligned to implement strategies
and address customer needs
Dealers or channel partners are frequently the first
point-of-pain for the customer
Customer support personnel ill-equipped with adequate
customer information and insight
13%
Technology innovation not keeping up with customer demand
12%
Customer communications, care and handling are not top

management or CEO priorities
Field installation personnel often lack training and customer
handling finesse
Other
11%
2%
21
IT back oce expectations bring on marketing frustrations

It isnt a real surprise that marketers fully expect IT to speed go-to-market strategies and more
eectively implement programs. What is surprising is that just under 30 percent of respondents
indicate they do not in fact expect back oce systems to enable the implementation of strategy.
Coupled with the fact that 35 percent of marketers felt that deficiencies in IT systems are
subverting service claims and are failing to meet customer expectations, the alignment between
marketing and IT has never been more critical to customer experience and bottom line growth.
Q.12
Do you expect your back oce systems to enable you to control and
implement marketing strategies quickly and eectively?
26%
Yes
No
74%
Marketers take a seat at the IT strategy table

62.7 percent of marketers are providing strategic direction for investments of IT systems, yet
there is still a divide between strategic direction and tactical implementation as IT deficiencies
appears as a challenge to customer experience.
Q.13
Do you provide strategic direction for systems investment?
Yes
37%
No
63%
22
Customer data remains at the center of cross-functional strain

A key to customer centricity, robust cross-functional customer data, is also an area of great
concern as marketing and IT look for common ground. An overwhelming majority, 60.7
percent of marketers, point to the gathering and analysis of customer information as the
least aligned function. Other disconnects include go-to-market strategy and new product
launches (41.8 percent), CRM (33.6 percent) and lead generation aggregation and scoring
(32.8 percent) platforms.
Q.14
Which processes are least aligned between marketing and IT?

(Select top five)
61%
Gathering and analyzing customer information
42%
Go-to-market strategy and new product launches
34%
CRM application selection and implementation
33%
Lead generation, aggregation and scoring
29%
Automation of the marketing operational process
25%
Capturing and communicating product capability shortfalls
24%
Producing product portfolio business plans
23%
Gathering and analyzing product information including existing

product performance and market assessments
22%
Campaign management and monitoring
21%
Product lifecycle management
19%
Defining product capabilities and requirements
18%
Delivering product capabilities
17%
Product development
16%
Product monetization and commercialization strategy
12%
Global procurement and supply chain management
4%
Assessment and implementation of on-demand and

cloud-based solutions
3%
Other
23
Data is finding a central home, but complete integration is still a ways o

After numerous studies that demonstrate customer data integration frustration, marketers
within the communication service provider space are showing signs of improvement and
optimism, even in limited spurts. 63 percent of respondents feel integration is good, in certain
areas, or getting better. However, there is still far to go until integration is a reality as only five
percent are enjoying completely integrated customer data.
Q.15
How well is your customer data integrated across the enterprise?

5%
38%
28%
21%
10%
Completely integrated (360 degree view)

Good in certain areas
Getting better
Needs improvement
Not well at all
Silos and systems are the primary constraints to integration

Marketers point to inadequate or incompatible IT systems and siloed information across multiple
functional areas are their top integration constraints. Senior mandate and a cohesive data
integration policy are also lacking as customer data integration is simply not a focus. Regulatory
issues and information privacy are the least troublesome issues. It seems that a level of
complacency and an unrealistic view of the state of customer data could be causing marketers to
assume that they are better integrated across functions.
Q.16
What are the biggest roadblocks to integrating disparate data

repositories? (Select top three)
56%
55%
37%
27%
20%
18%
17%
15%
14%
8%
7%
7%
Inadequate or incompatible IT systems or databases

Siloed information in dierent functional areas
Lack of formalized data-sharing policies and practices
No strategic focus or management mandate on
Customer Data Integration (CDI)
Proprietary ownership by business groups or departments
Data is not relevant, reliable or current
Internal (e.g., political or bureaucratic) barriers
Not sure where data resides and whats available
IT obstacles or objections to data integration
Risk, security or privacy concerns
Regulatory restrictions and limitations
Other
24
Master data management programs have been implemented, but results are
spotty at best
Marginally more marketers have implemented master data management programs. For those
who have implemented programs, the success rate has largely been sporadic and found in
pockets. Implementations seem to be relatively new as 28 percent of respondents say their
programs are still underway or newly implemented where it is too soon to determine results. For
those who can measure results, most feel the program has been mostly successful, but are still
looking for additional improvements.
Q.17
Have you implemented any customer data integration or master data

management programs in the past 12 months?
42%
Yes
No
58%
Q.18
If yes, how would you rate the success of the program?
6%
6%
7%
34%
Pockets of success, but many points of

siloed data remain
Mildly successful, but still room for
improvement
Programs still underway
22%
Too soon to tell
25%
Extremely successful in aggregating a

complete view of the customer
No improvement at all
25
Partnerships go online as performance and accountability ramp up

Marketers are looking to add performance metrics and accountability as web performance
and online resources rank as the top partnership in the coming year. Channel will also be a key
component to success as service providers are looking to reach into new markets and regions by
leveraging relationships and partnerships with distribution channels. Marketers are also looking
into new software systems as a key strategic partnership in the coming year. Events take a back
seat as only eight percent of marketers will look to increase spend or partnerships with major
global experiential events or sports sponsorships. Also low on the priority list, property rights
holders and brand licensees, indicating that distribution and new market penetration is clearly
top of mind for business growth, while branded properties and events will not be relied on to
move the bottom line.
Q.19
What strategic partnerships have the highest priorities in the coming

year? (Select top five)
46%
Web site performance and online marketing resources
42%
Distributors or channel partners in dierent markets or regions
37%
Customer listening, loyalty or advocacy experts
34%
New software systems
32%
Online communities or social networks with global audiences
24%
20%
Third party branded platforms, plug-ins and components

(e.g. Powered By platforms)
Content sources including news, information, sports or
entertainment partners
Application Developers
20%
Marketing or advertising agencies
19%
Handset device manufacturers
18%
Third-party installation, maintenance and support providers
15%
Network equipment manufacturers
11%
Consultants with access or influence in strategic markets
9%
Major global experiential events or sports sponsorships
7%
None
2%
Property rights holders and brand licensees
1%
Other
20%
26
Partnerships are important, but to what degree is the real question

These partnerships with online and channel resources are gaining in strategic importance as 50.4
percent of marketers rank strategic alliances as important while another 31.2 percent view these
relationships as being extremely important. Only 3.2 percent view these ties as irrelevant.
Q.20
How important are partnerships to your marketing strategy?

3%
15%
31%
Extremely
Important
Somewhat Important
Not at all
50%
Mixed signals as customer centricity is high, but focus on customer still needs work
For the most part, marketers give themselves high marks for customer centricity, even in
the face of customer data misalignment and a serious absence of customer experience
management. 35.2 percent of respondents hit top marks with high or very high degrees of
customer centricity. However, levels are not unanimously high as 47.5 percent feel their focus on
the customer needs some work.
Q.21
How do you rate the degree of customer centricity within your organization?
4%
13%
Very High
48%
High
35%
Needs some work

Poor
27
Reaction to problems versus anticipating customer needs

Marketing views responsiveness to issues and understanding and knowledge of the customer
as being the top two essential elements to experience. However, a byproduct of both the IT
disconnect and fragmented data as indicated earlier in the audit could be severe challenges to
executing and implementing programs that optimize experience. Form does not win over function
as style and cache of devices fall to the bottom of the list while issues like community and customer
engagement, billing accuracy and reliability of service are essential to an optimized experience.
Q.22
What do you see as the essential elements that contribute to the quality
of customer experience? (Select top five)
74%
72%
56%
42%
28%
28%
25%
22%
19%
18%
16%
16%
13%
9%
8%
4%
3%
Responsiveness to and resolution of issues

Understanding and knowledge of the customer
Simplicity and ease of use
Quality and reliability of service delivery and transmission
Customer community and engagement
Clarity and accuracy of billing processes
Frequency and quality of touch points
Speed of new service delivery
Flexibility and personalization of service bundles
Installation and support eectiveness
Device reliability and usability
Brand advocacy and loyalty
Point-of-sale knowledge and merchandising eectiveness
Monthly pricing
Terms of service contract
Style and cache of applications and devices
Other
28
Experience matters
Experience takes center stage as marketers consider it to be an essential element to driving
advocacy and business performance. Interestingly (and incredibly positively), not a single
marketer surveyed indicated that experience was not significant to advocacy and loyalty.
Q.23
How important is customer experience in driving brand advocacy and

business performance?
1%
8%
Essential
35%
56%
Increasingly important
One of many contributing factors
Not that significant 0%
Dont track or measure this
29
Usual channels deliver customer insight, but overlook new media outlets
Marketers, despite knowing that customers are increasingly demanding engagement and
connectivity in social and online networks, are still relying on traditional feedback loops
including email, call center engagements and satisfaction surveys. Most challenging to this
issue is the previously voiced concern over a lack of visibility into contact center customer data,
indicating that while 71.7 percent of marketers rely on call centers as a key customer feedback
loop, marketers might not have visibility into the data that is collected.
Q.24
How do customers communicate issues or provide feedback to your

company? (Select all that apply)
84%
72%
56%
56%
47%
43%
34%
29%
27%
25%
23%
18%
16%
13%
10%
9%
8%
Email
Call centers
Satisfaction surveys
Web site
Account rep interface
Employee interactions
Help desks
In-person service counters
Online customer community
Mail
Retail or reseller channels
Voice messaging
Conferences or gatherings
Fax
Mobile text messaging (SMS)
Evaluation cards
Exit or point-of-service poll
30
Marketing needs a firm measure of experience, but still rely on satisfaction

Despite numerous reports on the ineective nature of customer satisfaction as a barometer
for customer anity and attachment, 75.6 percent of respondents continue to rely on these
studies as a metric of experience eectiveness. Marketers are leveraging business growth
measures and metrics like the rate of churn, retention and acquisition as a barometer of
experience eectiveness.
Q.25
How are you measuring the customer experience? (Select all that apply)
76%
Customer satisfaction studies
61%
Customer turnover, attrition and/or acquisition
40%
Tracking revenues generated by each service/product
38%
Call center operational metrics including first call resolution,

average speed of response
31%
Usage and adoption of service
30%
Data mining and analytics
30%
Focus groups and online research
29%
Brand perception audits
24%
Website trac and postings
22%
Volume and nature of customer calls and email trac
19%
Recording and playback of call center interactions
19%
Related media coverage or blogging activity
17%
Third-party measurement and evaluation services

Monitoring service metrics including network disconnects,
service malfunctions or failures
17%
16%
Word-of-mouth monitoring online
14%
Established voice of customer programs
14%
Consumer reports or product reviews/ratings
13%
Tonality and sentiment of customer communication
13%
Automated customer feedback and response systems
11%
Discussion group and message board tracking
9%
Content and commentary on social networks
5%
Grudge sites on the Internet
3%
Dont know
3%
Other
31
Data ROI is high with highly actionable insights

The outlook is fairly positive for the actionability and quality of data as 23 percent of marketers
indicate they have eective data and an additional eight percent feel their data is extremely
good. The majority of respondents are seeing improvements, rating their data as getting
better all the time.
Q.26
How would you rate the quality, reliability, timeliness, and actionability
of your customer information?
2%
8%
16%
23%
Extremely good
Eective
Getting better all the time
Needs work
Deficient
51%
Continuous collection
While only a small portion of marketers are collecting data annually or quarterly, 28 percent
are only collecting customer experience data at points of transaction, leading us to believe
that they are not taking advantage of the broad range of interaction, engagement, advocacy
and experience data that could be collected. On a positive note, 47 percent of marketers are
collecting this data on a continuous basis. But, as indicated before, as marketers feel stymied by
limited visbility and access to cross functional data, we question how much of this continuously
collected data is actually being completely aggregated.
Q.27
How frequently do you collect customer experience data?

6%
12%
Continuously
7%
47%
After transactional touch point

(support, service, purchase)
Annually
Quarterly
28%
Other
32
Retention and customer acquisition leveraging customer insights

Customer intelligence and analytics are being leveraged to retain customers, minimize churn and
open routes to revenue as marketers are applying customer data to up-sell and cross-sell. Market
intelligence is also being used to understand the needs of the marketplace and arming teams
with better insights when acquiring new customers. Unfortunately, only 8 percent are using
customer data to oer personalized products and services into the marketplace.
Q.28
Where and how are customer analytics and intelligence applied in your
organization? (Select top three)
56%
54%
52%
35%
28%
22%
21%
21%
17%
13%
8%
2%
Cross-selling and up-selling

Retaining existing customers
Acquiring new customers
Better understanding the needs of the market
Marketing communications
Product development
Determining pricing
Identifying and aecting win-backs
Optimizing spend on marketing allocation by better
understanding the needs of the market
Predictive modeling
Creating personalized products and services
Other
33
Customer communities used for problem solving, not loyalty building

Most marketers are leveraging communities to address and aggregate real-time customer
feedback on service, quality and satisfaction. 31 percent are taking advantage of these forums
as a form of competitive market insight, keeping tabs on the competition and getting a
better understanding on market demands on product and services. Only 10 percent are using
communities to gather deep analytics on discussion threads and customer defined trends.
Q.29
How are you using online customer communities to gain competitive or

business advantage? (Select top three)
52%
35%
35%
31%
26%
22%
16%
16%
13%
10%
7%
Real-time customer feedback on service quality and satisfaction

Word-of-mouth marketing programs to spread viral buzz
Listening and response systems to quickly address customer concerns
Monitoring buzz on competitors
Better understanding future product and service requirements
Assess eectiveness of marketing campaigns or promotions
Running ads and promotions through community
Upselling existing customers
Identifying customer champions and evangelists
Gathering detailed analytics on discussion threads and trends
Other
34
Frustration and slacking service turn into customer pain

Customer pain comes, primarily, in the form of unmet needs and expectations. Companies are
also battling billing errors, usability and service complexity, and seem to be lacking in reliable,
quality service and product oerings. Customers are less concerned with privacy or the security
of customer information and more frustrated with a lack of global consistency or coverage.
Q.30
What are your customers primary sources of pain? (Select top five)
63%
44%
42%
31%
25%
23%
21%
20%
18%
16%
14%
14%
9%
9%
7%
6%
5%
4%
3%
7%
Unmet needs and expectations

Billing errors
Product/service usability and complexity
Quality or relevancy of service and product oerings
Lack of global reliability or consistency of coverage
Product failure and/or returns
Unexpected charges (e.g. bill shocks, high fees or taxes)
Complex and misunderstood price plans
Business policies or practices
Channel (e.g. device, retail or content provider) interface issues
Contractual terms and conditions
Lack of company access or response
Inflated pricing or hidden costs
Selection or availability of product/parts/accessories
Wrong product or order fulfillment
Attitude and courtesy of company reps
Loyalty or reward program fulfillment
Oshore support operations
Privacy or security of customer information
Other
35
On the road to recovery for lackluster response and reaction to customer needs
46.7 percent of marketers feel their customer frustration response needs improvement. While
only 9.2 percent give themselves top marks, with an excellent track record in responding to
customer pain, 35 percent are confident in their response rates, rating their process as good.
Less than eight percent are struggling with response eectiveness with systems described as not
very good.
Q.31
Rate your companys eectiveness in responding to this.
9%
35%
35%
Excellent
Good
Needs improvement
8%
Not very good

Dont know
47%
36
Churn happens
The overwhelming majority of marketers are seeing an increase in customer churn, making the
conversation around optimizing customer experience and the activation of loyal advocates
absolutely critical.
Q.32
Are you seeing increasing rates of customer churn and attrition?
34%
Yes
No
66%
Competition speeds customer defection and strains loyalty

Churn is largely being attributed to heightened competition in the market place as competitor
oerings are luring customers away. Pricing is also a key contributor aecting customer
retention, as is inadequate customer service. Mapping top customer pains, a key aspect of
churn revolves around customer dissatisfaction over products or services and relationship
management problems.
Q.33
If yes, why? (Select top five)

69%
47%
38%
28%
26%
25%
22%
17%
17%
16%
15%
11%
1%
6%
Competitor oerings
Pricing or fee structures
Inadequate customer service
Product or service dissatisfaction
Global market forces and factors
Relationship management issues
Weak channel/distribution network
Poor performance
Financial problems
Product quality
Lack of desired product features
Business terms and conditions
Not sure
Other
37
Routes to retention and recovery

Improved customer communications, addressing problems and pain and enhancing the overall
customer experience are the top steps to reactivation and recovery. While marketers are not
looking to oer low price guarantees or incentives, many are looking to improve and empower
front line resources to quickly improve experience and address problems. A smaller number
of marketers are looking to develop a deeper understanding of the customer, giving them an
enhanced view of customer expectations and desires.
Q.34
What steps are you taking to retain, recover and reactivate lost or at-risk
accounts? (Select top three)
58%
49%
47%
32%
26%
22%
19%
19%
14%
12%
10%
6%
5%
3%
Improving customer communications

Making enhancements to the customer experience
Addressing complaints, problems and pain points
Working to provide more personalized communications
Improving front-line customer service
Developing better customer profiles, knowledge & understanding
Modifying business practices and policies
Empowering customer-facing sta to resolve issues
Establishing loyalty and reward programs
Providing inducements or incentives
Oering low-price guarantees and other promotions
Introducing longer contract periods and/or lock-in terms
No customer retention activities in place
Other
38
Customer handling gets top nod from marketers

While marketers have clearly identified the pain points that contribute to churn, they are also
positive that their eectiveness in customer handling and response is improving. 58.8 percent of
respondents feel they are getting better while 10.1 percent feel their responsiveness is very high.
26.9 percent know their handling skills need improvement.
Q.35
How do you measure your eectiveness in customer handling and response?

3%
1%
10%
27%
Very high
Getting better
Needs improvement
Not very good
59%
Dont know
39
Expect online engagement based on deep customer insight

Communications service providers will integrate customer data and back end systems to gain
a better view of the customer as a strategy to grow customer bases. Engagement will also go
online as 48.7 percent of marketers indicate investments and programs to build and grow online
customer communities. While social media will play a critical role in engagement, companies
seem to be favoring their own branded solutions rather than partnering with social networks or
online destinations as a channel of engagement. And, while expanding the range of content and
applications is low on the list, personalizing and customized promotions and new services ranks
highly on the list of anticipated changes.
Q.36
What changes do you plan to make over the next 12 months to grow and
retain customers? (Select top five)
49%
Build or enhance online customer communities
49%
Better integrate customer data systems and back-end systems
37%
Develop more personalized and customized promotions and

new services
31%
Introduce or expand customer loyalty programs
30%
Partner with other complementary service providers
26%
Oer discounts or incentives for renewed service contracts
25%
Build out channel and distribution networks
24%
Create more flexible pricing or contractual terms
21%
Empower more self-service capabilities
20%
Oer expanded global service packages and applications
16%
Increase service level agreement guarantees
16%
Engage in more word-of-mouth marketing
14%
Expand range of content and applications oerings
12%
Team with social networks and popular online destinations
11%
Further automate back oce billing systems
7%
Other
40
Amplifying the voice of the customer through online channels

Online communities and social networks will be the newest form of customer engagement
according to 57.8 percent of marketers audited. While 40.4 percent will look to dedicated
customer advocacy programs, 35.8 will invest in word-of-mouth marketing automated platforms,
and 33.9 will look to invest in loyalty club or referral programs to drive advocacy and growth.
What is clear is that no one single tactic will be implemented. Instead, marketers appear to be
open to several new forms of communication and engagement, including customer anity and
engagement studies and investing in mining online communities for rich customer data.
Q.37
What new forms of customer communication and market engagement

are you embracing to improve listening, feedback, experience and loyalty?
(Select top three)
58%
Customer community and active online agenting
40%
Customer advocacy programs
36%
Word-of-mouth marketing platform from hosted

service provider
34%
Loyalty club and/or referral rewards/incentive programs
29%
Analytics of online conversations and community

discussions
28%
Customer anity and attachment studies
6%
Other
41
Loyalty leaders improving business outcomes

Over 61 percent of marketers have not invested in loyalty programs. Of the 39 percent who have,
34 percent have seen a moderate degree of improvement to business outcomes. 24 percent are
seeing a large to extreme degree of impact, while 20 percent are not seeing any impact at all.
An almost equal number of respondents simply do not know what the degree of contributions
these programs have had on the bottom line.
Q.38
Have you invested in loyalty and rewards programs?
Yes
No
39%
61%
Q.39
To what degree have these contributed to business performance and

value building?
2%
6%
20%
18%
Extremely so
To a large degree
Somewhat
Not at all
20%
Dont know
34%
Other
42
Will flat-rate bring a new up for service providers? Marketers are hopeful
Marketers anticipate pricing structures to trend to flat-rate plans versus service or quality based
pricing. While some anticipate service level agreements directing fees and pricing, many are also
seeing a shift to usage based programs.
Q.40
Where do you see service pricing trending over the next year?
7%
5%
Flat-rate
21%
46%
Usage-based
Based on service level agreements
Based on quality of service
Other
21%
43
Demographics
Q.43
What is your title?

2%
15%
22%
27%
9%
11%
3%
2%
0%
2%
9%
Q.44
Q.45
CEO
Chief Marketing Ocer
Director of Marketing
VP Marketing
VP Marketing and Sales
SVP/EVP Marketing
VP Customer Experience
Director of Corporate Communications
VP Corporate Communications
VP Marketing Operations
Other
What is your company size?

22%
9%
10%
10%
13%
7%
15%
14%
Less than $50 million
39%
23%
19%
6%
9%
5%
North America
51 million to $ 100 million

$101 million to $250 million
$751 million to $1 billion
$1.1 billion to $5 billion
Greater than $5 billion
Where are you located?
Europe
Asia Pacific
Africa
South America
Middle East
44
Q.46
What sector best describes your business?

7%
1%
3%
17%
9%
17%
30%
6%
12%
Q.47
Over-the-Air Broadcaster
Satellite TV/Internet Services
Satellite TV/Internet Services
Local Exchange Carrier
Long-Distance Carrier
Cellular Wireless Operator
Online Social Media, Community or Entertainment
Other
Number of employees in your company?

13%
11%
22%
10%
22%
5%
3%
5%
8%
Q.48
Cable TV Systems Operator
Under 50
51 -100
101-500
501-1,000
1,001-5,000
5,001-10,000
10,001-20,000
20,001-50,000
More than 50,000
Number of customers or subscribers served by your company?

39%
14%
18%
9%
6%
2%
1%
11%
Less than one million

One million to five million
Five million to 10 million
10 million to 20 million
Over 50 million
45
Q.49
What services does your organization oer? (Check all that apply)
62%
68%
48%
51%
37%
36%
45%
14%
5%
6%
Voice
Data
Video
Wireless
VoIP
Information
Entertainment
Education
Financial services
Other
46
Qualitative Insights
Brian P. Price
Executive Director-Internet Sales & Marketing
Verizon
Brian P. Price is Executive Director of Internet Sales & Marketing for Verizon, a position he has
held since 2005. He manages a team responsible for turning browsers into buyers for Verizon.
com and manages Customer Website Experience, Interactive Design & Usability Web Analytics &
E-Care Support for Verizon Telecom Consumer products.
We asked Brian Price if there are certain metrics that they look at more than others.
I look at abandonment surveys and funnel analysis to determine where we are losing our customers.
Also, looking at conversions from our Learn Product pages to the buy cycle. We look at our user
experience and try to understand where customers fall o due to the complexity of our products
and configurations.
For order abandonment, we look at abandonment statistics on the page and we also look at
abandonment surveys to tell us why customers leave a page or experience. We also review order
completion surveys to determine what drove the customer to the site and why they completed
their order (was it the oer, etc). Also, anytime we are doing major site changes we actually do
usability groups. So we will either conduct one-on-one, in-depth interviews, or focus groups where
we will bring the changes into a group and get user reaction prior to launch.
Brian Price believes social media is definitely a good method by which to engage customers, but
does not think anyone has cracked the nut in terms of best practices.
We launched Twitter for our Verizon News portal. So, we actually have generic news that goes out
and we send tweets out, probably about five or six times a day to our followers. We also have a
presence on Facebook and are in the process of trying to use social media to drive more self-service
transactions on the web.
What suggestions does Brian Price have for marketing executives looking to improve customer
experience?
The number one thing is get out with the customer. I go to the call centers all the time, and sit with
the reps because thats really where you hear the feedback. I also sit with the click-to-chat reps and
we look at transcripts all the time to see, you know, the questions the customer has and what arent
we answering. You know, where are those common themes? And we can do that, a lot online and
call centersits kind of hard to tabulate all this stu. So, we will get the reps in a focus group. If
youve got click-to-chat transcripts you can actually quantify the issues. Our vendor culls through
them every week for feedback every week Ill give them a business issue and say Im trying to
solve this problem and dont quite understand why this is happening online, can you get with the
transcripts and go find out what the customers are saying about this specific issue. And they will
do that. They will parse the data and be able to tell you exactly what people are thinking about that
specific issue and hone in on it so we can improve the site and close rates. So, its really about being
with the customer. Customer experience is what its all about.
47
Craig Forman
Former President, Access & Audience
Earthlink
Craig Forman recently completed a 3 year term as head of this ISPs 2.5 million customer
Consumer Division. In this role, Forman oversaw more than $1 billion in annual revenue and is
responsible for the EarthLink Access, PeoplePC, Voice, and Value-added Services businesses.
My own view is that were in the battle for users time and attention in these industries that are
converging: the telecommunications business, the information and entertainment business and
the internet business. We provide services but we have many competitors who also are providing
services. So we have to be uniquely respectful of the amount of time that our users have available
to spend with us. One of the biggest obstacles that we and every other company in this space faces
is the limited amount of time that our customer have to interact with us.
Asked what EarthLink does to ensure a cohesive, positive customer experience, Forman says:
We take our customers happiness and satisfaction with us very, very seriously. And when I say
we take it seriously, I mean weve tried to organize the entire company around the customer.
The extent to which our customer is feeling positive about their experience is a key driver of our
business model, and satisfied customers tend to recommend you to other customers and they tend
not to leave you as rapidly. In the telecom business, so much of your churn happens in the early life
of a customer. So we try to organize around the customer.
Earthlink has extensively used an online community of customers called Communispace, which
includes several hundred customers who Earthlink are in contact with on a frequent basis
regarding changing services and customer reactions. This virtual feedback loop allows them
to have a proxy for the entire base. This representative group allows Earthlink to know whats
working and whats not.
Asked about how his company [Earthlink] has changed the way it engages customers, Forman
had this to say:
I think weve gotten more sophisticated in the last three years about understanding that our
relationship with customers goes beyond just providing a very bulletproof experience of getting
access to the internet. Personally, having previously led business units at such companies as Yahoo!,
Time Warner and The Wall Street Journal which were very much about that kind of consumer
interaction I have been struck at how much were beginning to understand that our relationship
with our customers is very much about their engagement with our services, and I think that really
has evolved and gotten much more sophisticated in the last three years.
And I think it will continue to do so. And by the way, I dont think its just with Earthlink. I mean
I think if you look at how Apple and AT&T have worked together with the iPhone, its another
example of how the borders between value-added services and service providers are becoming more
fluid, and I think thats going to continue to evolve. And thats been one of the really exciting things
about having been kind of a change agent here at EarthLink, which is its happened right at that time
as network operators have begun to really appreciate the powerful ways in which they interact with
their consumers. And its more than just providing a physical line or a modem, or an ATA hardware
box that allows your internet to function as your telephone. Its really about the portal services, the
48
ability to manage data, the personalization, the customer experience, the customer service, all of
that, that leads to a satisfied customer. And thats been really, frankly, very exciting and I think
its going to continue to be one of the more exciting things thats part of this economy.
What sort of advice would Forman bestow on marketing executives in the telecom space?
I think it starts with a really good understanding of whats driving your customers desires and
needs. Theres a lot of dierent tools to use ethnographic research and experience, spending time
with those customers, really getting to know what kinds of things they expect and that they need
from a service provider. Once armed with that kind of real profound authentic understanding
then I think thats when what really drives us all as marketers when you can really get into the
sweet spot of what we all kind of come to this business to do, which is coming up with products
and services that really rise to meet that level of need. Marrying technology with good business
practice and with an intelligent approach to meeting our customer needs at an ecient price point
and manufacturing point where one can make money for shareholders but also provide a good
experience, I dont think weve ever been teed up to do that in as powerful a way, and that curve
keeps getting better and better, and thats what makes it so exciting to be in this industry. Theres
never been a more exciting time to be doing this.
49
A high-level executive
A major European telecommunications provider
This Senior Vice President of Marketing Operations is responsible for the cost management of
the division, all operational topics within marketing and steering the organization in order to
meet agreed targets (Key Performance Indicators) as well as automating marketing workflows.
Asked about challenges in the marketplace, he names five that he feels are key:
So the first trend, I think, is technology convergence. The second is broadband. Broadband is
everywhere and I think we have pressure to build new capacities and that sort of stu because
weve got increasing data transfers and the customers are getting more and more sophisticated.
Third, weve got I think, a trend to competition. New business and competitors are coming into
the telecommunication market, Google, Microsoft, IBM, that sort of stu and I think we have to
bundle those oers. For instance, we are the first supplier who had the deal with Google, the iPhone,
which is running really, really good in Germany and really good for T-Mobile, Germany. So, I think we
have to make some competition with really big brands and well known brands for us to meet our
customers needs. And last, but not least, I think in Germany and in Europe, theres a consolidation
going on of ISPs and telecommunication competitors. Theres some companies for sale in Germany
and I think weve got a really mature market and there is going to be a consolidation in the market
in the next two or three years.
In terms of gathering customer feedback and measuring customer satisfaction, he cites the
CM index tracking of customer satisfaction and customer loyalty as well as the user experience
index, which he believes needs to be consolidated into one system.
You have to do a consolidation of your IT landscape, and dierent CRM systems to have all
customer data in one system. If you do this, you have really invested in customer care services for
your customers.
Asked about future programs that are being implemented to improve the customer experience,
he cites better IT and CRM systems.
We are investing in IT systems and CRM systems and were looking for a close collaboration with
marketing and the IT department for product development. And we are optimizing our processes
on a regular basis.
The European SVP points to a customer feedback management system, which has been a
success, as well as blogs, which are also playing a role in their customer engagement.
We started some new marketing campaigns, CO blogs, which is really new for us. We shifted some
budgets in the online marketing sector, so we believe that emails, viral campaigns and all that sort
of stu is really vital for the future. So we changed our marketing mix.
What suggestions does our senior level marketing executive have for other marketing
executives trying to improve customer experience and customer loyalty?
I think you have to put customer loyalty and customer engagement at the top of the list. I think
you have to try some new ways of marketing more campaigns, blogs and that sort of stu,
rather than putting the whole marketing budget to TV or old fashioned marketing campaigns. New
communication platforms.
50
Alan D. Ferber
Vice President, Sales Operations and Chief Marketing Ocer
U.S. Cellular
As Vice President of Sales Operations and Chief Marketing Ocer, Alan D. Ferber has positioned
U.S. Cellular as one of the countrys top wireless carriers by leading all advertising, retail
merchandising, new products, pricing, segment marketing and customer lifecycle activities.
Since Ferber joined U.S. Cellular in 2001 as Vice President of Marketing, his eorts helped add
over four million new customers, garner one of the highest customer loyalty rates in the industry
and increase average revenue per user (ARPU).
For Ferber, who is tasked with defining the companys customer experience strategy, an
organization must strongly embrace the idea that the customer is paramount, and maintain a
mindset of putting the customer first.
I think customer experience strategy really starts with culture and leadership in a company. Those
companies that really have industry-leading customer experiences have strong cultures built
around delivering that ideal customer experience, and that is from a people strategy point of view,
incentives, reinforcements, service delivery and support and other things along those lines.
I think systems and technology help enable that. However, you could have award-winning customer
experiences with strong cultures and poor systems, but you cant have award-winning customer
experiences with strong systems and poor culture. The technology puts more power behind them,
but at the end of the day, its about that personal connection with the customer, and it comes down
to the interaction between that frontline associate and that customer.
Ferber feels that perhaps one of the biggest challenges most service providers face is ensuring a
great customer experience across multiple touch points.
You cant have a sometimes great experience, and you cant have a consistently good experience
it has to be consistently great. Thats the challenge. The larger a company is, the more distribution
points and the more associates, the more important it is to make sure that the institutionalized
culture is replicable across touchpoints and geographies. That comes down to leadership and
training. At my company, we have almost 2,000 retail locations and six call centers. Being able
to replicate a great customer experience across all those is a major challenge, but one that we
have achieved through a strong culture. It is built upon a strong set of core values where every
associates action is a natural outgrowth of the beliefs weve instilled and supported. If a frontline
associate waits for a manager to tell them what to do, youre dead in the water.
In ensuring a cohesive experience across multiple touchpoints, says Ferber, the aggregation of
customer data through technology and back oce systems is very important.
I always say that if were going to be a leader in customer satisfaction, a leader around the
customer experience, then we have to know more about our customers than anybody else.
Certainly, from our point of view, thats where we need a significant amount of investment
still. As a general rule, I think theres some opportunity there to leverage more insightful and
actionable information.
One of the areas that we are investing in is applications that help us really understand the data a lot
more, to help inform product marketing opportunities, the ideal customer experience and targeted
51
communications mainly in the areas of campaign management, EDW/CRM, marketing automation

and things along those lines.
Ferber says that while they have had to invest more cautiously during the economic downturn, it
hasnt impacted U.S. Cellulars customer experience strategy.
We had to be a little more cautious about the pacing of our investment, but we keep our company
oriented around delivering that customer experience. If you look at any of the great customer
experience brands, everything boils down to a culture thats focused on that customer experience.
Its not just a marketing job, its not just a sales job, its not just a customer service job. Even
if youre an analyst in the accounting department, you better understand what your role is in
delivering that ideal customer experience. Its a companys job, and everybody must understand
their role.
52
Terry Gardiner
Vice President, Business Enablement
TELUS
Terry Gardiner is the head of the business enablement team at Telus.

Our teams mandate is to help drive programs for clients. So this is sort of our customer service
department for commercial customers and our job is to drive cost and customer experience
improvements throughout the business.
We asked Terry Gardiner to discuss strategies they have in place to ensure a cohesive and
positive customer experience?
Well, I would say that were sort of midway through our journey of building an overall customer
experience strategy. We have a fairly cohesive customer experience improvement program, but I
think its probably fair to say that we havent got a really well designed customer experience map,
a target optimal customer experience that were building towards. So I think we know were going
in a direction to make it better based on improving what we hear from our customers, our gaps
in our current experience, but the work in progress right now is designing that optimal customer
experience and then building towards that in a sort of structured, well-thought-out way.
To help drive customer experience, Telus gathers customer feedback in a number of dierent ways.
So we have a loyalty survey, a sort of traditional customer value measurement study that we do
on a biannual basis. We also have a series of transactional surveys that we run that we believe
give us a little bit more actionable information. We also will follow up with customers directly and
have sort of more meaningful one-on-one dialog with them, especially where theyre where the
customers identified theres opportunity, and then for our largest customers we survey them sort
of on a regular basis.
In terms of actual systems in place to gather customer data, Gardiner believes they could use
improvement.
Theyre not integrated well enough now, no. Were in the process of pulling the data and starting
to do some, what I would call linkage analysis, trying to answer questions like does the customer
who weve missed the due date on a service that we were providing, are they more or less likely to
be loyal? Are they more or less likely to grow revenue with us over the long run? Does that have an
eect at all? Does service outages have an eect on their loyalty and whats the magnitude of that
eect? So were in the process of doing that study, and I believe thats going to help inform that
ideal customer experience.
Telus does, however, fully utilize their survey data to determine where they need improvements
in customer experience.
Theres probably three things that we do with that data. Number one is, we use it as a coaching
tool for our people. Number two, we leverage that information to help inform our improvement
programs on an annual basis, so the highest priority, the most significant impacting elements we
would look to improve on first. And then the third thing that we do with that it is we use that
information to help inform new product design and solution design going forward. Were trying to
do a more robust linkage between what our customers are telling us is important to them. Weve
connected that to revenue already.
53
What sort of recommendations or suggestions does Gardiner have for marketing executives
looking to improve customer experience and engagement at their companies?
To me theres really two things that I try to drive. Number one is you cant engender any loyalty
or superior engagement if half your stu is broken or if it doesnt work. Get the basics right before
you expect loyalty. I think everybody would accept that. The second thing though is then people,
organizations try to figure out, okay, how do I make everything excellent? How do I be the best at
everything? And I dont think thats the right approach. I think what companies need to do is find
those moments of truth in the relationship with their customers and make those things superior.
For us at the previous company we supported people who were traveling all over the world, and
a moment of truth would have been when they had an issue traveling, and of course the brand
dictated that thats a moment of truth and there were two or three others that we just decided
we were going to be excellent at delivering, and in Telus installing a new service may be a moment
of truth for a customer. Service outage certainly would be a moment of truth for a customer with
us, and were going to make sure that we excel at those. I dont think you get much loyalty at being
excellent at a billing inquiry.
54
Debbie Jo Severin
Chief Marketing Ocer and Vice President of Marketing, 8x8
Formerly Vice President of Marketing, Covad Communications
Debbie Jo Severin, now CMO for 8x8, recently spent several years as Vice President of Marketing
at Covad Communications, the first company to commercially deploy DSL technology in the
United States. Severin managed Covads national go-to-market plan for direct sales of the
companys VoIP and data services, helping to grow that business to more than $178 million of
revenue at the end of 2007.
Severin says that surprisingly, given all of the changes and convergence in her industry, Covad
Communications has not seen a higher customer churn rate.
I cant say that our churn is higher than it was in the last two years, even with consolidation and
some of the competitive pressures. But what we do tend to see is more of what we call irrational
behavior from competitors and in some cases irrational behavior from ourselves in terms of price
wars reducing the buying decision to a pricing decision, which is extremely salient and easy for
a customer to wrap their head around. But at the same time, we know customers stay with you
not because of price but because of service and the quality. So we do see more and more irrational
competitive behaviors, but weve not seen any major increase in our churn it hasnt gone up in
terms of number of the lines that disconnect.
Despite not seeing an increase in line disconnects, however, Severin notes the company has seen
changing reasons for customer churn.
Whats interesting is that maybe two years ago lets say, but reasons for churn two years ago would
be things like, Im going to go to AT&T because they can bundle my mobile service with my wire line
services and my internet access. Today the reasons tend to be, I got a better price. Now, that could
be that I got bundled services, but its my impression that the switch is more about price.
For everybody in the service industry, says Severin, finding the predictors for customer churn or
lost customers can be hard to do.
There are events that can predict churn, like having a trouble ticket within 30 days of the onboarding process. But after that it gets really dicult to say why someone leaves you. How do you
measure it when they havent talked to you in forever? And so one of the things that we started
doing was a tenure analysis. Knowing how many customers disconnect in their first 30 days can tell
you if theres a problem with the on-boarding process, whereas customers disconnecting at 90 days
could mean they didnt get what they thought they were gonna get.
Analyzing tenure against events can help determine reasons for churn. If customers are leaving
in the 22nd month, for instance, we can see that theres something that goes on at that time and
we can survey the customers to figure it out. But it also tells us that is a period of time we want
to reinforce our value to customers. That became something that has been very useful for us, and
weve now reduced churn in the tenure model four years in a row.
Covad Communications has a marketing team which takes an active role in customer service,
including making customer calls following installation and to encourage contract renewal.
If a customer has a trouble ticket and calls into customer support to have it resolved I dont
manage that, but if they have two trouble tickets in 30 days I take control of making contact with
55
that customer. We may outbound to the customer saying, Sorry for the inconvenience, heres a
Starbucks card.
The marketing team manages customer satisfaction measurements, doing satisfaction surveys on
a monthly basis, though Severin admits that this type of tracking has limitations when a company is
seeking feedback on the customer experience they are currently providing customers.
We know overall customer satisfaction is sometimes hard to impact because someone who gives
you a rating of seven on a scale of one to ten may still be rating you on an interaction they had with
you three years ago. Theyve not had any other physical interaction with you for the last three years,
but theyre still rating you a seven.
Severin says that to get a comprehensive picture of customer satisfaction and the quality of
customer experience , Covad does a correlation between the overall customer satisfaction
ratings managed by her team and the contact survey satisfaction ratings managed by
customer operations.
Its an interesting model that weve put in place here, and I think it really works. We start to see how
contact experiences influences overall customer satisfaction, and whether that can have impact on
just a general satisfaction or in other types of measurements such as our Net Promoter scores.
However, loyalty is dicult in the service industry, admits Severin, because the reasons
customers stay with a company often dier from the reasons they buy. And the current
economic climate, she says, has made price competition a much bigger factor.
Once somebodys been a customer of yours for three or four years, and even if nothing goes wrong,
all of the sudden the bar may be moved on you. A customer may be with Covad for three years
without having to call Covad for the last two. They may never have had any problems with their
service, but all of the sudden another company puts out some new lower price, and they think, well,
everybodys alike, right? Its not that they know theyre going to get better service elsewhere;
they just get desensitized to the service that you provide them. Thats why price competition then
becomes so salient.
So I think thats a challenge in the service industry, and the economy just kind of magnifies how
people start to think about it. Were all just generic providers after a while. It is very dicult for
someone to value the customer experience in a service because a lot of times they might not
interact with you except for their bill and the outbound marketing that you might do. So taking
credit for the fact that youve been there for them is hard to do you cant reinforce your value
every day.
56
Kelly Owens St. Julian

Vice President of Customer Management
Boost Mobile
As Vice President of Customer Management, Kelly Owens St. Julian leads Boost Mobiles eorts
to improve the customer experience across all touch points. In her role, Owens St. Julian
manages churn reduction, customer lifetime value, account replenishment operations and
delivery of care to Boost Mobiles customers.
My role is actually beyond customer experience. I own replenishments and care and loyalty, churn,
as well as customer experience, strategy and execution. So its interesting for me, because I dont
just get to think about the strategy and how were going to implement it cross-functionally. I
actually have areas, operational areas that I own that I have to kind of walk my own talk.
And I think that organizationally sometimes that can be challenging for companies, when youve
got a CE group thats kind of o to the side and not well integrated into the rest of the organization.
Thats one of the things that, even before I came to Boost, that I learned early on, that your CE
group has to be integrated with the organization and be grounded in reality.
Regarding current strategies to improve customer experience, Kelly believes in consistently
having a sensitivity to the customer and promoting customer-centricity across all touch points.
It sounds fairly basic, but a lot of times customer experience either gets caught up in strategy or
its done really well at some points of the customer lifecycle or at some customer touch points, but
its either inconsistent or its not fully executed across the entire span of both of those things. So
thats really our focus. First o, what do we want the customer experience to be? How do we want
it tied to our other brand values? What does that look like across a customer lifecycle and across the
physical touch points that a customer may encounter?
Asked about current challenges in the market and where her company is investing to address
these challenges, Owens St. Julian believes there is a shift in focus.
Were in the process of kind of evolving our brand and really shifting the focus of the overall
company. And with that comes a dierent customer experience, because theoretically youre
attracting a dierent customer segment and with that you kind of need to evolve your experience
as well. So for example, we have become, rather than just a pure lifecycle brand play, more of a
value play now and have expanded some of our distribution points, and the people that shop in
those distribution points tend to skew a little bit older, use the Web more, are a little bit more tech
savvy than some of the ones that weve historically trended to.
So as a result you have to change your overall customer experience strategy, and kind of the
physical and the emotional components that go along with that across all the touch points.
My philosophy is that there is only a few things that a company can focus on, and whether its the
quality of your service, your price, the product itself, access or the quality of service you provide
around it, we just felt that it was time for someone in our space to really put a good balanced focus
on value and product quality. So thats what weve done.
57
So what systems or processes does Boost Mobile have in place to listen to and gather
customer feedback?
We have listening posts across most of the touch points, whether thats feedback that we
get, e-mail, blogs, customer care, analysts, customer surveys, ex-customer surveys, potential
customer surveys.
Owens St. Julian says that customer feedback definitely influences the products and services
that they oer, but they are careful to pick and chose which feedback makes sense to act on.
Were always listening, but like with anything, you listen and then you take what you can learn
from it, and what makes sense for you and what doesnt. I mean not every bit of customer
feedback is going to make sense for us. There are certain things that we as a company decided
not to be, and if we see noise or feedback on, Well, Boost doesnt do X, Y or Z, well maybe that
was never our intention.
How has Boost Mobile changed the way they engage customers over the last few years?
I came onboard a little over three years ago and we didnt really have much that was what Id call
sanctioned and/or organized in a way to collect feedback. We did customer surveys here and there.
We did brand surveys. But we never did anything that was consistent and was across all the touch
points. As a result weve had to develop all that and add sta to do it, and make it a part of how we
do business cross-functionally.
As far as trends and technologies that will significantly impact brands across the
telecommunications industry, Owens St. Julian points to the need to align marketing,
customer experience and IT.
Well, Im not going to speak specifically to what we do because thats not public yet, but what
I see that a lot of companies dont do well is tie information together from across the dierent
departments or silos. So I think technologies which will enable the disparate information thats
collected to be one gathered, synthesized, and then repackaged so that you get a common view,
are key.
What advice does Owens St. Julian have for marketing executives in the telecom space?
First of all, the first thing that you have to do is to know your customer. Well actually, the first
think you have to do is know yourself. You have to know what youre going to market for and
what youre trying to deliver. And then knowing your customer and what their wants and needs
are, and constantly comparing the two. Its a constant process. Its not just, Oh, well we do it
once a year, right.
People change. Your customer base changes, their expectations change, and you have to be in tune
with that so that youre constantly, one, improving, and secondly, ensuring that youre attracting
the right customer, because I think thats one of the mistakes a lot of companies make is that
theyve designed themselves to be one thing. They attract a dierent customer and then they sit in
the middle and are perplexed about why theyre not meeting customer expectations.
And its not just about your brand. Its how you execute that through the rest of the organization.
I mean your brand can stand for one thing, but if the rest of your organization doesnt deliver that
then theres a gap between what the customer thought they were going to get and what they
actually get. And again, youve somehow then disappointed the customer or you havent lived up to
their expectations.
58
Alexandra Ho
Vice President, Corporate Marketing
DOCOMO interTouch
Alexandra Ho is a global executive and has worked in multinational corporations in a number of

portfolios ranging from business development, carrier relations and wholesale strategy, mobile
services and strategic alliances/partnerships. Currently, she heads up the Corporate Marketing
department for DOCOMO interTouch, which is a wholly-owned subsidiary of NTT DOCOMO Inc.
I head up the whole corporate marketing department, and the team works very closely and
supports our sales organization here at DOCOMO interTouch. It is very important to understand
what the customer requirements are and trying to meet their ever-changing requirements. Our
direct clients are the hotels and to reach out to the hotel guest that is the end user, we have to
understand what the end user requirements are and then craft the marketing and sales activities
together with in partnership with the hotel.
We asked Alexandra Ho about strategies DOCOMO is currently implementing to improve the
customer experience.
There are certain things you put in place. Company mantras, for example, in terms of customer
experience that you really focus on. Weve got a company program this year that weve just started,
and its what we call internally the Six Alpha programs, and one of the Six Alpha programs is really
customer satisfaction and customer retention. So in a sense, something like a mantra: how we
go after ensuring customer satisfaction and retaining our existing bases. So then its things like,
for example, how do we improve on our internal systems? How do we ensure that our customer
relationship management systems are up to speed or up to par in terms of making sure that we
derive those sort of operational eciencies to meet that demanding customer at the end of the
service-value chain?
And then from a customer service standpoint, its how do we segment our service levels and
product oering to then cater to the dierent tiers of customers? By properly segmenting your
customer base, we can then map that onto the dierent service levels and product features. We
need to go down to this little bit of detail and granularity on that, for example: it would be more
like if youre a premium customer, then you get the full works! You get the best-of-breed solution
or the best-of-breed product suite. And in terms of service levels, you get the commitment from
the company to provide that top tier premium service level agreement. Its all about enhancing the
whole customer experience or guest experience in our context.
Asked about disruptive forces that pose challenges in the market right now, Ms. Ho points to prices.
I think we are all facing some pricing challenges and deep discounting in the industry. For example,
low-cost competition coming in thats disrupting the market or really aggressive competitors who
are undercutting your prices because they would like to try and gain market share. Our industry is
very interesting as we see a whole range of providers from smaller outfits/startups vs the big boys
in the market compete for a share of the customers wallet, where financial stability of the company
becomes a key to sustaining profitability.
In terms of what areas DOCOMO is investing, Ms. Ho says R&D is near the top.
Thats a key focus actually this year. I think at the same time as well, the other touch-point that
were investing in as well is our contact center. So were ensuring that were upgrading our contact
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center architecture, training and getting more and better skilled contact center representatives so
that when the customer calls come in, we actually have a good base of customer contact agents to
be able to support these calls.
What advice does Ms. Ho have for other marketing executives in the telecom industry?
I know it sounds really clich, but just constant interactions with the customer is key. Its just
being their friend, really. Whether they are griping about you or youre having a coee or tea chat
with them, its just making sure that your customers are your closest friends and just keeping that
communication and interaction ongoing.
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David J. Moore
VP of Business Development & Marketing
D&E Communications
David J. Moore has served as Vice President of Business Development and Marketing for D&E
Communications since July 2007. He brings over 20 years of proven accomplishments leading
and supporting all aspects of new product introduction within the global telecommunications
markets of Voice Over IP (VoIP) and 2.5/3G/4G wireless & multimedia applications.
We asked David Moore to discuss challenges in the marketplace.
Well we look at customer experience in a couple dierent ways. One is our broadband Internet
subscribers, what theyre experience is, basically how they address their Internet requirements,
what it looks like, what the feel looks like. And the challenge there is to make sure that we are able
to enforce our brand and motivate our subscribers to do business with us on our Internet sites. So
from that perspective I think the challenges there really are trying to stand out in the crowd, make
sure that were top of mind for them, that they see us as advanced in the Industry as possible.
From our service and support folks, I think its just customer contact in general. We have call centers
that are really specific in their performance requirements. We believe were in the top of our industry
in being able to respond quickly and keep the queue and the waiting times for customers seeking
support very low, so were putting a lot of eort into that for our subscribers. I think the biggest thing
that people are trying to leverage are the social networking sights like Twitter.
Like many marketing executives, David Moore feels the recession has had an impact on customer
experience primarily due to budget constraints.
One of the things you have to do in the interest of all of your shareholders is watch the budgets, so
we have had to slow down some of our programs as a result. One of the things in particular that
weve had to postpone was our brand survey that we were intending to do. Were doing a full
SWOT analysis in our brand by a third party and a brand new marketing study. So we really want to
understand when you say D&E Communications to somebody, what do they think that means and
then adapt it from there, so from my perspective the recession has slowed that part of it down.
David Moore also points to the acceleration of land-line loss as a consequence of the recession.
Discussing customer feedback, David Moore is a firm advocate of keeping in touch.
On our residential side, we do have an active call center, and what they do not only do they take
inbound calls, but they do outbound calling as well. So we do have a pretty good pulse on what our
customers are thinking about D&E, but I think it could always be better.
Asked about the way in which D&E engages with customers and whether it has changed in the
past few years, David Moore says absolutely.
Were finding that things like direct mail, direct response, are becoming less eective, and weve
focused a lot more on Internet types of advertising, web 2.0 types of techniques as opposed to the
traditional newspaper ads because we know those circulations are going down.
David Moore thinks that moving forward we will have to keep a very strong eye on how social
networking sites are influencing people.
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His advice for marketing executives looking to improve customer experience?

Make sure that you build and develop a brand strategy, and implement it and monitor it very
carefully. Dont underestimate the impact of poor messaging. Secondly, tie your brand strategy with
your business initiatives and your corporate goals; make sure that they are compatible and that
the brand and marketing strategy support that. And then the third thing is marry new products,
services and product introduction schemes into that strategy. I think one of the dangers that Ive
seen is that those three items are not necessarily very well coordinated.
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Andrew Osterday
Director of Product Marketing
Premiere Global Services
Andrew Osterday is the Director of Product Marketing at Premiere Global Services. There he
heads strategic planning and develops customer acquisition and retention programs through
web, social, and direct sales eorts.
We began by discussing some challenges in the marketplace.
I think theres a lot of pressure right now on marketing executives to achieve better and better results
even though budgets are tight. Just the fact that they have to do so much more requires scale, and
to scale requires an understanding of technology, an understanding of databases, as well as all sorts
of other traditional marketing 101 knowledge. Its very hard to get that amount of sophisticated
work done in the same amount of time. I see a lot of our customers really struggle with the fact
that theyre very motivated to get to that one-to-one marketing nirvana, where youre able to treat
every customer, no matter how many you have, like someone that comes into a brick-and-mortar
store every day and you know them by name. I see a lot of folks wanting to get to that point in time
and wanting to get there now, especially with the recession really putting some urgency on these
initiatives, but they require an investment; an investment of skill and time and dollars.
Andrew Osterday points out, however, that there is a positive side to this scenario that
companies are more focused on doing more with less, and addressing these issues of ineciency
head on.
You know, when times are good, I think businesses naturally dont pay attention to some
ineciencies or things they could be doing to really make a huge dierence with the customer, with
retention of the customer. I guess any marketer worth their weight in gold, any marketer that
really knows what theyre doing in a recession, is really looking to retain. In our case, weve had
more attention on it. Theres been more eyeballs on it, more executives buy into initiatives around
lifecycle programs, around e-marketing programs, and importance on your customer data.
You can also place a lot of importance on acquisition at a time like this, but retention, I think, is
especially important, and people really start looking at that user experience and putting themselves
in the users shoe and saying, Why would I leave, and at what point in the lifecycle would I leave? Is
it during the trial period? Is it a month after they get the product? Is it a year after? You really start
looking at that customer experience and where there may be places that you can optimize.
In terms of quantifying the customer experience good and bad Andrew Osterday is a firm
advocate of utilizing both quantitative and qualitative data.
What suggestions does Andrew Osterday have for aspiring CMOs looking to improve
customer experience?
Id say just put a massive emphasis on user experience, and really create a culture where every team
member, not only in marketing but in product and in development, customer care, billing, finance;
everybody is focused on the user experience. You know, really try and get out in front of a lot of
things, like product development and that kind of stu, rather than sit behind all of these groups
and kind of catch the product and figure out what you need to do with it then. Really get in front
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and feed these groups the information that they need to develop better products and better user
experiences, because it takes the entire organization to really provide that user experience at every
touch point. Its not just the marketing touch point. It really takes a whole culture to get there. So,
whatever you can do to feed that, whether its investing in third-party agencies to help you with
things like personas and processes, and stu like that, or working with your peers to sell them on
that idea, or even get some quick wins. Try some small projects that focus on that, that you can use
to justify your argument. Theres really a huge emphasis on the user experience throughout the
entire organization.
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Keao Caindec
Entrepreneur in Residence
Panorama Capital
Keao Caindec is an Entrepreneur in Residence at Panorama where he advises portfolio

companies and develops technology investment strategies. Prior to Panorama, Mr. Caindec was
Chief Marketing Ocer of Reliance Globalcom, a global communications provider with more
than $1.6 billion in annual revenues.
My role as CMO at Reliance Globalcom was to manage the brand and product marketing and
product management and marketing communications. Much of it was focused around architecting
our products, our features, our tools, our service, to provide the customer experience that was
consistent with our brand.
Regarding challenges in the marketplace, Caindec highlights the lack of systems.
I think one of the disruptive forces [in the telecom industry] is just the expectation that whether
its through chat or building communities that a company has the tools required to allow customers
to really be part of the community, so developing systems that take advantage of a Wiki or
build a community is pretty disruptive to creating the experience. Id say the other one in the
telecommunications space is the performance measurement and the system, so being able to report
on a more granular level across network performance.
Whether its jitter or packet delivery or availability, customers require it and want to see it across
the dierent services they purchase. So building not just the measurement systems but also the
portals is critical in linking a lot of the back-end systems together.
In terms of other forces at play in the market, things like application-aware networking or cloud
computing are going to change the way services are delivered, meaning that a carrier that may have
been delivering simply a carrier service, a network service, relatively undierentiated is going to
have to think about how they deliver applications and guarantee availability of those applications
versus simply providing a pipe.
So what actions need to be taken to face these challenges? According to Caindec, measurement
systems are key.
Well, one of the things that we did at Reliance Globalcom was we developed a performance
measurement system from the ground up called Hawkeye, and that was developed specifically for
Ethernet network services, and then we also built a new portal around it so that customers could
get in with a five-minute delay access to performance data across the network, and we provided
that information not just on their own network, a customers own network, but across our global
network and specifically for our financial customers, visibility to major financial exchanges and trading
platforms so they could gauge who was providing the fastest platform for electronic trading.
Caindec believes customer feedback had a major impact on the products and services that
they oered.
Absolutely, absolutely. So both through surveys that we do that ask customers what applications
are important to them or what types of abilities of their telecommunications provider they value
most or where they get their information, where they hear about new technologies, or new
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products, or how they perceive our brand and the brands of our competitors. We survey pretty
regularly on that as well as separate surveys of customers in particular with regard to customer
service and customer service satisfaction.
Caindec points to several trends/technologies that he thinks will impact brand perceptions in the
telco industry?
I think video and video advertising is a big area, so whether youre talking about consuming content
that you have purchased or that youre viewing as part of syndicated content through media
companies, or whether its just basic product marketing content thats out there on the web, I think
that will transform advertising, the way that we advertise, the way that we perceive brands, and
thats just emerging.
What recommendations does Caindec have for marketing executives in the telecom industry?
It would be to look holistically at delivering the brand, the brand benefits and the brand values. So
I think communicating and delivering on that brand takes extreme discipline across all segments
of the business, whether through operations or product design or messaging and marketing
communications or sales and sales methodology. All of it needs to be looked at in total so that
the overall experience of the customer at every touch-point is consistent, and its through that
consistency that the brand can have its biggest impact.
Caindec also says he would love to have this type of exchange in a small forum of peers
across industries.
I think that would be really interesting. I think that what some of us take for granted in our industry
or in our segments could be meaningful to others. So, if youre a managed service provider or a
large global carrier or a small local provider that feels somewhat commoditized, I think theres a lot
of value in sharing the challenges and successes across the industry.
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Vance Williams LaVelle

Global Chief Marketing Ocer
Avaya
Vance Williams LaVelle recently moved to Avaya from SIRIUS Satellite Radio, where she led
customer marketing, sales, and service driving subscriber and revenue growth. Concurrent with
Vances leadership of SIRIUS subscriber based businesses, SIRIUS achieved record-breaking
subscriber growth, best performance in industry customer retention and positive free cash flow.
Her prior roles include CEO of Time Circle, a strategic marketing consultancy, Chief Marketing
Ocer of PNC Financial Services Group, SVP of Marketing at Chase and various executive roles at
AT&T.
LaVelle says that throughout her career, she has observed that one of the main challenges to
providing a great customer experience lies within inadequate business systems and procedures.
Often the back oce support for the customer-facing organizations is not flexible enough to
facilitate whats being requested on the customers part. There is a lack of freedom and autonomy
on the front-end and a lack of malleability on whatever the customer interface is, whether it is the
web, a person or third-party partner. Theres a lack of flexibility in the framework or the business
system to allow them to adapt their delivery to satisfy the need of the customer. So the issue is, in
essence, the business systems, processes and procedures havent been set up to adequately address
the customers need. And it turns the customer o to the brand.
One of the main customer experience considerations inside a service business, LaVelle notes, is
the eort a company puts forth on behalf of the customer in any given customer interaction.
People either have time or money, and the people that have money do not have time. So often
what generates loyalty for a service business is eort, and the less eort I have to extend as a
customer, the more I will appreciate and repurchase from a company.
For service providers looking to improve customer service, says LaVelle, the key is learning to
identify what she calls the moments of truth in customer interaction.
Identifying what moments in a customer interaction matter the most, and at what point in an
interaction a customer would become an advocate for the brand, allows a company to drive loyalty
and repeat business. A company must identify what the consumer considers an ante, then make
sure they perform well on those, because those are the dierentiators that drive advocacy.
I think the way in which a marketer should go after understanding what the antes in the game are
is from looking at a data pattern, and then determining what the best methods of dierentiation
are in those moments of truth. You have to go in there and find something to dierentiate you, and
you have to do that through research.
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Joseph Michelli, Ph.D

Chief Experience Ocer
The Michelli Experience
Joseph Michelli, Ph.D is an internationally sought-after speaker, author, and organizational

consultant who has been described as catching what is right in the world and playfully sparking
people and businesses to grow toward the extraordinary. His insights encourage leaders and
frontline workers to grow and invest passionately in all aspects of their life.
Asked if customer experience has improved, Michelli feels in general that it has, but points to
one of the great ironies in customer experience that is still besetting the practice.
Those little details that we tend to ignore, but from a consumer perspective thats where an
individual forms an impression of a service or of a store, of any kind of company. So the paradox
is, and this is especially true in retailing, that a company can spend an enormous amount of money
engineering the image that it communicates, and it all rests on the shoulders of the lowest paid
person in the organization, who is that front line salesperson.
So you might have someone who is kind of working for minimum wage, working the counter at
McDonalds. A company like McDonalds invests millions of dollars in a coordinated advertising
campaign and promotions, yet the individuals primary impression of that company will be based on
the interaction they have with the person that takes their order, who is making minimum wage. So
it all rests on that person who is the least valuable, at least monetarily, in the organization.
Michelli believes that a number of social media sites will play a major role in how companies
interact with their customers.
All the so-called new media, social networking and so on is where everything is happening right now.
All the online technologies, particularly those that allow you to personalize your messages to people
are very exciting. Im not prepared to say traditional advertising is dead, but its definitely on its
deathbed in terms of how people are getting their information.
Some of this is just going to be a fad and people are going to get tired of it. I think, for example,
Twitter might be a fad. But the general idea has been building for a while that weve always known
that word-of-mouth is what gets people to choose a service, not advertising. Advertising has other
functions that are important, but what the technologies do is they allow that word-of-mouth to
be spread much more eciently. So thats really where the action is. You look at something like
Facebook, which of course started out as something for college kids, and now most of its growth is
with older people.
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Shaun Smith
Senior Partner
smith+co
Over the last decade, Shaun Smith has been a key catalyst in expanding management focus
from the tactical issues of customer service to the much wider and strategic issue of customer
experience. He has developed some of the latest thinking and practice around this subject,
helping organizations world-wide create a compelling customer experience that achieves brand
dierentiation and long-term customer loyalty. He is co-author of three critically-acclaimed
business books including Managing the Customer Experience.
We asked Shaun Smith to discuss the key factors companies must face to provide a great
customer experience.
The things that came through for us in the research we did with leading brands was we found that
these organizations truly do put into practice the customer centricity, customer focus, and that
their actions match their words. Even in a downturn, for example, as we are in right now, those
organizations that are truly customer-focused are those that are looking to dial-up their dierence
and increase the focus on their strategy, rather than stripping out costs willy-nilly like most
organizations. They understand how they create value for the customer, and they focus on those
things that really dramatize that value for those customers.
A second thing we discovered was what we call triad power by which we mean those
organizations that have very strong brands tend to have a very strong alignment between
marketing, HR and operations around the customer experience, whereas in most organizations
those functions tend to operate in silos in isolation. As a result they often have competing agendas,
competing initiatives and competing priorities, whereas in those organizations that we looked at
that are very strong, people tend to work together around that common understanding of the
brand and the experience and how to deliver that.
A third thing we discovered from our research and our experience in working with leading brands
is that the HR practices of these organizations are often aligned around the nature of the customer
experience and the brand rather than following more traditional avenues. So to give an example, if
you look at Southwest Airlines, part of its brand proposition is to have, as you probably know, very
friendly, outward going flight attendants. Well the way that they align their HR processes with that
is to have auditions, where they bring in people and people are invited to sing a song, tell a story,
tell a joke, whatever, but to demonstrate their personality. And thats obviously very dierent from
the traditional HR recruitment model of interviewing people or using psychographic tests.
So what metrics does Shaun Smith recommend using to gauge the customer experience that
theyre providing?
Obviously a lot of organizations are using Fred Reichheld and Bains Net Promoter Score, and I
think that has a lot of power. It has the advantage of being very focused, and therefore creating
clarity in an organization. As you probably know, there are a number of organizations that argue
that no one measure is accurate enough for every organization, and there is some truth in that. But
as I say, I think it does oer the advantage of really focusing organizations, and certainly a number
of my clients use Net Promoter Score. Weve got our own survey called the Customer Experience
Management Survey and we measure advocacy. We define advocacy as those customers that give
you, on a ten point scale, nines and tens, for their willingness to recommend you. We also measure
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the drivers of loyalty and advocacy, so which of the elements of the experience which have the
greatest impact on the willingness of customers to repurchase or refer you.
Shaun Smith believes the current economic woes are definitely having a negative impact on
customer experience due to broad cost cutting as opposed to more targeted cost cuts where
they do not aect the customer experience.
I think many organizations are looking at the economic situation and saying, Well, revenues are
down. We need to cut costs. Therefore, what were going to do is take ten percent, for example,
out of everybodys budget, and to be frank, when organizations do that it really is pretty stupid.
It simply demonstrates they have no real idea of how they create value for their customers. The
organizations that are much clearer in their thinking and who understand how they create value for
their customers would in fact say, Now is the time we can really dierentiate. Now is the time we
can really dial up our dierence. And what we therefore need to do is to protect or even increase
our investment in those areas where we truly create value for the customers, and to reduce costs
or indeed eliminate costs in the areas where it really doesnt matter to customers. So Im not
saying that organizations shouldnt cut costs. They should. In fact I think they should even be more
aggressive in cutting costs, but only cut costs in those areas where it really doesnt make a dierent
for the customer, where its behind the scenes, your internal processes, perhaps those businesses or
product extensions that you shouldnt continue to oer because youve strayed too far away from
the core of what you do.
When it comes to collecting customer feedback, Shaun believes companies should converge
not diverge.
Use as few sectors as you possibly can or as few segments as you possibly can, and to try and
aggregate the data and analyze it by touch point, by customer experience and the customer journey
as opposed to by life style segment, by channel, by product line and so on. Because the one thing
that is true for all of your customers, irrespective of which segment they belong to or which product
they are buying is generally they experience a fairly similar journey, and if you understand which
parts of that journey are the most important ones, and if you understand how youre performing
against each, that allows you then to improve the experience in order to drive up satisfaction.
One of our predications is that were going to see a lot more real time feedback. So for example,
Smith+co has a partnership with Cincom, the manufacturer of unified desktop software for call
centers. They have a product called CEM+Synchrony, which uses customer methodology in a really
nice user interface for call center agents. So what it does is create a better experience for the agents,
a better experience for the customer, and make the transaction more ecient. The result is an
enhanced experience with lower costs. But one of the things that does is to allow the agent to ask
a question, for example, of every single customer, and those questions are rotated. So the analytics
part of that software enables the organization to have a read out on every single customer, every
single day on one question. Now if you rotate those questions over the period of a week, those are
seven key questions you can ask of all of your customers and have trend data day by day or even
hour by hour allowing you to monitor the customer experience real time. That starts becoming very,
very powerful, because its immediate, its very fresh data, its from every customer. And to be frank,
if an organization needs to ask more than seven questions, then it really isnt very focused anyway.
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Peter C. Honebein, Ph.D.

PhD, Author
Creating Do-It-Yourself Customers and Strategies for Eective Customer Education
Peter C. Honebein, Ph.D. is author of Creating Do-It-Yourself Customers and Strategies

for Customer Education, founder of Customer Performance Group, LLC, a management and
marketing strategy consulting firm, and a research scientist with The Academic Edge, Inc., an
educational media design studio.
In a recent project, Peter Honebeins group analyzed the touch points that a utility has with their
customer and came up with 86 dierent touch points.
Which are everything from web to face to face, to communications, to outreach, to a variety
of other things, and if you then look at how all those touch points are structured within the
organization, theyre all over the place. There isnt a central deal. And I know there are some
companies that have tried to have a customer experience ocer or something like that to do that,
to try to bring all those things together, but then again, that becomes yet another part of the
bureaucracy to try to impact and control.
Doing the design work, it may not be clear to everyone, but the customer centric design methods
are fairly well known and the skill of your team in terms of how they apply dierent models in
their creativity. I think the industry, in terms of customer experience design has moved from the
functional parts of it, that is, we know what were supposed to do and really, its how do you take it
to the next creative level to have that spark of genius to create a product, to design a service that
really works.
The same thing is if you can consider those products as being customer experiences, as well, the
number of experience failures cant be substantial, as well. And I guess its wrong to call them
failures. Its just that it reduces your ability to retain your customers and to convert your customers
into new services and things, or to dierentiate from your competitor.
In terms of creating a cohesive customer experience across all of these touch points, Peter
Honebein believes you must first recognize that all of these touch points exist.
So you have to do a little bit of diagnosis. So what does my partner say? Prescription without
diagnosis is malpractice. So, you need to do a bit of diagnosis and what one in an organization
needs to know is that theyre not operating as an island and that they have to be aware of what the
impact would be of something that they might have authority over, a touch point that they might
have authority over and how that would integrate with what else is going on.
Lets say you implement a web service to do something it touches your accounting and billing
department it touches your IT department it touches your PR department. I mean, just the
number of tentacles that it touches is pretty substantial in terms of being able to deliver that
type of experience. And so you know, then again the other best practice is that because it is in
a complex environment, especially in larger companies, to plan and view against existing well
known methodologies, project management methodologies, whatever, that takes into account the
complexity of the organization and make sure its pushed through.
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Peter Honebein believes that measuring both qualitative and quantitative data is a key
component in improving customer experience.
One of the things that weve innovated over the past two years, here, is this qualitative research
process we call co-design panels and what that is, is that we screen customers for innovator
characteristics and we then engage them in a four week online discussion. And in this discussion,
we give them tasks. We educate them about the issues or problems associated with whatever
were working on. And because its a co-designed process, the task involves creating tangible facts
of certain design elements. So, we might be, lets say, designing a website process for registering
customers for an account service or something like that. We would actually prototype and design
that in this interactive form.
From a research standpoint, again, the qualitative work is primarily on the sign in to kind of see
what theyre doing, the quantitative work is okay, so now you implemented it, how did it actually
work? And its not to mean that once youve done all the qualitative work up front, youre not doing
any of the quant stu, its that youre still going to be taking measurements with qualitative data
throughout the whole process. In terms of best practices for how you go about measuring this thing
one of the principles that we have is to focus on observable behaviors.
And we know from consumer behavior research that customers arent going to take a big, giant
step immediately. So we have to have these small, observable steps that we can collect and track to
determine whether or not customers are moving in the direction that we desire them to move. And
so, the measurements that youre collecting are these small, observable measurements.
And then you begin to segment, based on those measures, overlaying, lets say, set the graphic
data on top of that to determine and to look for whether or not certain groups of customers
are more likely to behave the way that you want them to behave. And then, the last part of the
measurements of this aspect of whats called action research or action science that in designing
customer experiences, youre never going to get it right the first time because it involves people.
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Bernhard Schindlholzer
Founder & Editor
Customer Experience Labs
Bernhard Schindlholzer is research associate at the University of St. Gallen in Switzerland and
founder of the Customer Experience Labs, an interdisciplinary research group focusing on all
aspects of designing remarkable customer experiences. His research focuses on the relationship
between customer value and customer experience as well as the organizational impact when
managers work together with designers to solve strategic business problems
We began by asking Schindlholzer what he thinks the biggest challenges are that companies face
in terms of improving customer experience.
I think the biggest challenge is to really understand where does the customers experience start
and where does it end. Now, coming back to the communications or service industry, thinking
about a traditional Internet service provider, they would say okay, my job is basically selling Internet
connection, Internet connectivity, and my job is selling bandwidth, but basically, they should be
helping and supporting customers activities and figuring out what are these customer activities?
What is this customers process? Where does it start and where does it end? I think when you
really understand that, the customers process and the customers activities and what he is trying
to achieve, then you can really start creating dierentiated experiences and service oerings that
surprise the customer and create value for him, more value than just saying, Okay, here is your
Internet connection, do whatever you want.
Schindlholzer believes the first step toward improving customer experience is reacting to
existing complaints to existing, dissatisfied customers. He points to Swisscom as an example.
Swisscom is the Swiss mobile phone and communications telecom company, and basically, they
have been a state monopoly, but since the market got opened, there are now more competitors,
but the Swiss are still loyal to their Swiss telecom provider. Swisscom charges premium prices, and
they see themselves as having premium customers. Just recently, I had a problem with them, and
they couldnt map a new contract on my current contract. They couldnt change it. And without
asking or anything, the call center agent said, Okay, I can give you 150 Swiss francs for that, and
Im really sorry that we cannot solve the problem right now, but I give you that 150 Swiss francs.
Protectively when they see there is a problem in an interaction, they have to act on it. I was really
surprised that this happened and I sent them an email telling them I really like being a customer
of Swisscom because what just happened at the call center is really good. But so far, there was
no reaction all from Swisscom. I reached out to them and told them Im really happy to be your
customer, and this is, in my opinion, a really huge opportunity for them to start an interaction with
me, but they didnt use it yet.
Regarding the current economic woes and its impact on customer experience, Schindlholzer
believes a lot of companies dont fully accept that there is recession.
They wait until they realize okay, sales are dropping, now we have to do something. Sales still stay
flat because they cannot change that fast, and after a few months, they have it finally implemented,
but 12 to 18 months later, consumer demands change again.
Asked about social media and how companies can utilize it to engage with customers,
Schindlholzer believes it has certain merits but is not an ideal channel to engage with customers.
73
What I think is essential to understand is that this communication on Facebook and Twitter and
all these things, its humans, you know? They dont want to interact with the company. I want
to interact with people in that company, and Im willing to have a conversation with them. One
example I had with this was on Twitter. I was speculating that you could combine two services
from two companies. And then the CEO of one of the companies saw what I was Twittering and
contacted me and told me o the record that they are already working together.
So what I think is, you know, when you have somebody in a company whos observing these
interactions and communications and whats happening on Twitter, whats happening on Facebook,
but then actually reaches out to people and communicates them, this is the way forward. The
challenge is it has to be a human with a name, and it cannot just be call center agent No. 25 whos
calling you or contacting you today and two days later its somebody else.
What recommendations does Schindlholzer have for marketing executives looking to improve
customer experience?
What I think is really important is the corporate vocabulary when you talk every day about the
customer, the customer experience, when you introduce this vocabulary in your organization, when
you create positions and say, Okay, we have customer experience managers, we have customer
experience designers, I think then you really start to think more about it, you focus on this area,
and you really ask yourself, okay, now what can we do to improve the customer experience? What
do we have to do to beat our competitor? I think if organizations really objectively analyze their
corporate vocabulary, they can get a pretty good snapshot of what their current focus is, and
then they have to figure out how they can create initiatives or change strategies to become more
focused on the customer and the customer experience, and I think then you will also see a change in
the corporate vocabulary. This is something that you could measure.
74
Contributed Commentary
THE ORDINATION OF MARKETING: The Customer
Experience and Marketers New Mandate
By Dana Porter, Vice President Amdocs Marketing
If youre a marketing executive in the communications, media and entertainment space, the
Customer Experience Boards first report, Service Invention for Customer Retention, validates
what you (and we, Amdocs, a company that serves this industry) have come to know is true:
the customer experience has become vitally important. Now, more than any other factor, the
customer experience determines a communications companys ability to attract and, more
importantly, retain customers in a highly competitive market. And its given the Marketing
Department a new level of credibility and authority as service providers seek to create and
deliver an experience thats compelling, personal and valuable enough to dierentiate them
from competitors and keep high-value customers happy. As with most evolutions in this industry,
the customer experience one is accelerating at light speed. Marketers must act now.
Already complex, shaped in myriad interactions both direct and indirect the customer
experience challenge is growing. Several factors are combining to make delivering a compelling
customer experience even more dicult:
Ubiquitous connectivity: By 2012, according to Yankee Group, 16 or more countries will

have more than one broadband connection per person, with another 10 or more countries fast
approaching that standard. The explosive growth of wireless broadband, in particular, is driving
the creation of this Anywhere Network, where people are always connected no matter where
they are.
Increasingly smart devices: Blackberries and iPhones were just the beginning. Consumers
are buying innovations in technology as soon as service providers can bring them to market.
Meanwhile, more devices are incorporating connectivity. Game players, book readers, GPS
devices, netbooks, remote cameras, health and environmental monitors, picture frames, and
even appliances are becoming new nodes on the network.
Pervasive content, applications and services. It took Apple about two years to sell a billion
songs on iTunes and less than a year to cross the 1 billion-mark for iPhone applications. Most
recently, the company logged a million downloads of the Skype app enabling free mobile calls
in just two days. Consumers appetite for new applications, relevant content and on-demand
services is seemingly insatiable. Its driving a tidal wave of online community, entertainment,
commerce, research and business collaboration crashing through global networks. Many new
applications will sit in the cloud enabling even greater functionality and mobility than ever
before, and changing the business model yet again.
Customer Demand. Through it all, customer expectations continue to rise for more, better,
faster everything should be available on demand, now! Customers have become addicted to the
web and mobile services for staying informed, connected, instant shopping, banking, and being
entertained at any given time. They want more content on YouTube, Facebook and Twitter; better
access to home and business services; and faster access to everything, anytime, anyplace.
At the same time that these factors create greater challenges around the customer experience,
they create greater opportunity. In this new world, marketers will receive actionable information
75
from myriad channels: directly from customers calling in or tweeting or blogging; from
observing their usage patterns and preferences; from traditional internal measurable data
key performance indicators or KPIs such as average revenue per user (ARPU), devices sold,
churn, customer satisfaction survey scores; and more. Gathering all that information to design
the customer experience from an outside-in approach rather than inside-out is key to capturing
the opportunity, and requires adapting business & operaional KPIs accordingly. In an alwaysconnected world, information about customer experience, behavior and satisfaction manifest
itself everywhere. Just imagine the level of personalization and customer intimacy a marketer
can achieve if they could use technology to gather and act upon this information in an immediate
way. Thats the nirvana of customer experience a level of experience so fulfilling that the
customer would never consider leaving.
Clearly, within this vision, the Marketing Department has a giant role to play. But only if
marketers can drive change at their companies right now. The key will be for IT to be strategically
and operationally aligned with Marketing. Despite the fact that the Service providers decision
makers agree that it is the Marketing departments role to steer the companys business
strategy, the survey points out there is too often a gap between IT & Marketing that inhibits this
in real life. This gap derived from dierent goals, languages and methodologies must be bridged.
Marketers have clearly pointed out in the survey that ensuring the front- and back-end systems
revolve around the customer, capture and surface information eectively, and enable the
company to act, in real time, is critical to deliver a customer experience that makes a dierence.
This is a critical point and one that is no small task. However, the reward is tremendous. As one
of the marketers interviewed says, customer experience groups must be integrated with the
organization and grounded in reality, otherwise they are disconnected with the heart of the
business. Its only by working together that they can design what they want the customer to feel
when coming across their companys brand.
76
Sponsors
The Chief Marketing Ocer (CMO) Council is dedicated to high-level knowledge exchange,
thought leadership and personal relationship building among senior corporate marketing leaders
and brand decision-makers across a wide-range of global industries. The CMO Councils 4,000
members control more than $120 billion in aggregated annual marketing expenditures and run
complex, distributed marketing and sales operations worldwide. In total, the CMO Council and
its strategic interest communities include over 12,000 global executives across 90 countries in
multiple industries, segments and markets. Regional chapters and advisory boards are active in
the Americas, Europe, Asia Pacific, Middle East and Africa. The Councils strategic interest groups
include the Coalition to Leverage and Optimize Sales Eectiveness (CLOSE), Brand Management
Institute, and the Forum to Advance the Mobile Experience (FAME). More information on the
CMO Council is available at www.cmocouncil.org.
The Business Performance Management (BPM) Forum is dedicated to advancing performance

accountability, process improvement, operational visibility and compliance in global
organizations. It provides support to thousands of senior executives and practitioners
representing enterprises with more than $500 billion in combined annual revenues. The BPM
Forums C-level members engage in research, thought leadership, and knowledge exchange
programs around a variety of strategic issues and challenges. More information is available at:
www.bpmforum.org
The Forum to Advance the Mobile Experience (FAME) is a member advocacy group and strategic
authority leadership initiative to accelerate marketing programs and research around enhancing
the wireless user experience. FAME promotes the adoption of wireless applications in the best
interests of industry players, bringing together influential senior marketing leaders from top
mobile technology companies in the pursuit of innovations and best practices tailored towards the
advancement of end user wireless applications. Current advisory board members include: ARM,
Autodesk, Alcatel, Gemplus, Google, Intel, Lucent, Nokia, Nortel, Palm, QUALCOMM, Sybase,
Symbian, Virgin Mobile, Vonage, Yahoo!, and others. More information is available at:
www.fameforusers.org.
Amdocs is the market leader in customer experience systems innovation, enabling world-leading
service providers to deliver an integrated, innovative and intentional customer experience at
every point of service. Amdocs provides solutions that deliver customer experience excellence,
combining the software, services and expertise to help its customers execute their strategies
and achieve service, operational and financial excellence. A global company with revenue of $3.16
billion in fiscal 2008, Amdocs has more than 17,000 employees and serves customers in more than
50 countries around the world. For more information, visit Amdocs at www.amdocs.com.
77
Fielding and Media Partners

CTIA, The Wireless Association, is an international nonprofit membership organization founded
in 1984, representing all sectors of wireless communications cellular, personal communication
services and enhanced specialized mobile radio. As an organization, CTIA represents service
providers, manufacturers, wireless data and internet companies, as well as other contributors to
the wireless universe. CTIA advocates on their behalf before the Executive Branch, the Federal
Communications Commission, Congress, and state regulatory and legislative bodies. www.ctia.org.
IIR is the worlds leading knowledge and skills transfer company with a global network of 47
companies and 112 operating units. Every year, IIR works with 650,000+ business executives
providing them with knowledge and skills through training, conferences, seminars, e-Learning,
blended solutions, exhibitions, consulting and mentoring. www.iir-events.com.
The Satellite Broadcasting and Communications Association of America is the national trade
organization representing all segments of the satellite industry. It is committed to expanding the
utilization of satellite technology for the broadcast delivery of video, audio, data, music, voice,
interactive and broadband services. SBCA is composed of DBS, C-band, broadband, satellite radio,
and other satellite service providers, content providers, equipment manufacturers, distributors,
retailers, encryption vendors, and national and regional distribution companies that make up the
satellite services industry. For more information, visit www.sbca.com.
Telecom IQ is dedicated to providing practical, detailed information through conferences held

at both the national and international level. By providing accurate, objective and up-to-date
developments and trends in various industry segments, Telecom IQ enables organizations to
remain competitive and profitable. Telecom IQ recognizes the value of face-to-face forums, and
strives to make each conference a valuable learning experience, allowing our attendees to receive
a maximum return on investment. Current areas of practice include: Convergence, IMS, Mobile &
Wireless, Triple Play/IPTV, Networks & Infrastructure, VoIP Peering, OSS/BSS, WIMAX, and many
others. For more information, visit www.iqpc.com.
The Telecommunications Industry Association (TIA) is the leading trade association representing
the global information and communications technology (ICT) industries through standards
development, government aairs, business opportunities, market intelligence, certification
and world-wide environmental regulatory compliance. With support from its 600 members, TIA
enhances the business environment for companies involved in telecommunications, broadband,
mobile wireless, information technology, networks, cable, satellite, unified communications,
emergency communications and the greening of technology. TIA is accredited by ANSI.
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Service Invention

2009 Copyright CMO Council. All Rights Reserved.

Service Invention To Increase Retention

Service Invention To Increase Retention

Service Invention To Increase Retention

Service Invention To Increase Retention

Service Invention To Increase Retention

Market Trends and Shifts

Service providers who had specialized

Service Invention To Increase Retention

Lifestyle Shifts and Trends

According to one executive with a major European

At the same time, communications service providers say

Service Invention To Increase Retention

Challenges Change the Course of Communications

The biggest contributors to customer defection are competitive

Not surprisingly, more than half of survey participants said

Service Invention To Increase Retention

Time not on Marketings Side

One of the biggest obstacles that we and every

So how are customers engaging with todays

Customer-Centricity Eludes Corporate Cultures

Service Invention To Increase Retention

Bridging the CMO CIO Divide

Which processes are least aligned

The most common complaints and roadblocks in

However, marketers agree, through enhanced back end

Service Invention To Increase Retention

What are your biggest challenges in todays market? (Select up to five)

Creating brand preference and dierentiation in a more

Increased churn and attrition rates

Reducing customer confusion over range of service and

Higher cost of acquisition and retention

Reduced profit margins and rising costs

Determining the right mix of services and pricing policies

Building operational support and service models that can scale

Growing expectations for more choices and services

Increased number of customer service and support requests

Predicting service demand and direction in rapidly evolving market

Reduced demand for, or discontinuation of, core services

Service delivery in new locations, venues and channels

Service Invention To Increase Retention

How is the delivery of communications, entertainment, information, media

Increasing the importance of customer value, retention

Bringing greater business complexity, risk and challenge

Creating the need for new diversified and bundled

Accelerating demand for high-quality, high-bandwidth service

Increasing the need to develop new or upgraded service oerings

Diversifying revenue opportunities through service packages

Service Invention To Increase Retention

Consumers demand personalization as mobile life merges with social life

Growing global popularity of social networking and user

Growing shift to wireless-only residences and businesses

Voice-over-IP and other real-time communications options

Surging interest in rich media, IPTV, music and video services

Increasing wireless device dependence for essential life, work,

Voice-over-IP and flat-rate calling plans

Increasing penetration of high-speed broadband connections

Widespread and growing use of text, instant and multimedia

Proliferation of smart phones and multi-functional devices

Growth of networked home entertainment and web-based

Service Invention To Increase Retention

Disruptive competition undercutting pricing, expanding service

How are emerging competitors and contenders disrupting or encroaching