21 Apr A two-sided coin: Customer experience in manufacturing
by Alyssa Suchy
Digitization is a top manufacturing priority. This is neither a Pulitzer Prize-winning statement nor a greatly insightful piece of new information, but it is an important one with seemingly endless components and paths toward a 360-degree view of the customer or the ultimate goal of delivering what is typically known as the ‘Amazon buying experience.’ We hear stats all the time like 70 percent of manufacturers will be held back because of outdated business models and technology due to changing customer expectations (that Amazon experience).
Wading through the above can be cumbersome, confusing, and at times lead to conflicting conclusions. Is it possible to experience continuous improvement and maintain or grow revenues at the same time? Can my business afford the “downtime” it would take to train my people on new processes and platforms? Will that make them leave? How can I ensure it will attract the new workers that are so necessary to keep the revenue engines turning?
What if we’re thinking about digitization too broadly? If we can narrow the scope to what truly matters we’ll be able to organize and tackle digitization priorities in the manufacturing industry in sizable, realistic pieces. No one climbed Mount Everest in one fell swoop, you start with a first step and the first milestone isn’t even base camp—it’s getting on the path.
So what does it all boil down to? The answer is customer experience. Again, the answer isn’t a piece of Nobel Prize-winning insight, but there are major components here that when broken down into their parts become incredibly powerful. Manufacturers are already making changes to their businesses guided by this type of thinking, and those changes are already paying off.
1. Understand that customer experience has two parts.
Customer Experience is a two-sided coin, with payoffs for both businesses and customers. Eighty-six percent of consumers who have a great customer experience are likely to repurchase from the same company. This stat holds true for both B2B and B2C organizations.
2. Recognize when cost-effective isn’t cost-effective.
In the past for a manufacturer that required nails, nuts, and bolts in bulk to make a product, the buying motion would be to go out into the marketplace, do research, gather quotes and ultimately choose the most cost-effective supplier to purchase those materials. Sounds simple enough. Why would anyone pay more for a seemingly identical nail, nut or bolt? This basic question is where customer experience comes into play. What if cost-effective doesn’t always mean cost-effective? What if my supplier delivers parts late? What unforeseen side effects does that have on my overall supply chain, and what unaccounted residual loss and revenue leakage can come from something as common as a delayed shipment?
Today, when sourcing parts, components, or chemicals, it’s less about which suppliers are the most cost-effective, and much more about identifying who is the easiest to buy from. Organizations, just like people, are willing to pay a premium for a better buying experience with the insurance that they are safeguarded against potential pitfalls that come from an unforeseen consequence of selecting based on cost alone.
3. Create new revenue streams with better buying experiences.
The other side of the customer experience coin comes from the manufacturer providing that better buying experience. It’s proved true that buyers are willing to pay a premium, but they also want assurance and a clear understanding of what comes with that premium. This is where we see a genesis of customer service SKUs wrapped around the physical SKUs that organizations have been selling for decades. Nails, nuts, and bolts could be just nails, nuts, and bolts, but some organizations are taking advantage of the insight they have into their customers.
Service SKUs can range from a dedicated service package with accelerated response times and white-glove amenities to something a bit more powerful, like taking the shared knowledge based on decades of experience selling nails, nuts, and bolts and offering paid consulting services to their customers on the most efficient and best ways to leverage even the most simple of physical technology.
Ultimately, this means new revenue streams for manufacturing organizations that not only couldn’t have existed before the technology boom but are now becoming more and more expected as a means of doing business.
4. Move from product-focused to customer-focused.
So where to begin? How do manufacturers move from being product-focused to customer-focused? The answer is defined by what matters most to your organization and mapping those key performance indicators directly to improving your customer experience and transitively your customer’s customer experience.
The effect is compounding and the ripples are seen throughout the manufacturing industry today. Partner and Customer Portals for self-service and knowledge are becoming commonplace, and little things like having service center calls routed to an agent who knows who your customer is and their portfolio within your organization can turn into bigger things like making that agent the same exact agent who answered the phone every time your customer has called in. How much potential is there in creating the environment for this type of consultative interaction? What could your existing customer need beyond nails, nuts or bolts? Was he or she even aware your portfolio offered more than that?
Ultimately, focusing on customer service creates customers for life, which is critical for retention, upsell, and cross-sell opportunities. More importantly, however, customer service SKUs create new sources of revenue previously unheard of in this industry. Digitization is a top manufacturing priority, but if digitization is focused on anything other than the ultimate goal of improving customer experience it may be the long way up the mountain.
Alyssa Suchy is Simplus’ manufacturing sales director. She shares extensive knowledge in sales, Quote-to-Cash implementations, enterprise-wide digital transformation, change management, custom configuration, predictive analytic, and managed services. Alyssa has worked as a trusted advisor to C-Level executives at $2BN–$5BN Fortune 1,000 organizations in the industrial space and led multiple global (APAC, EMEA, North America) digital transformation projects. She has extensive knowledge of the unique change management and training efforts required for global transformative success and a deep understanding of minimizing revenue leakage through centralized data and automation. Alyssa graduated magna cum laude from the University of Wisconsin-Madison.