Why Operational Excellence Is Mission Critical: Lessons learned from Best Buy and Coop
Many blogs, articles and books have been written and published about Customer Experience that provide many good reasons why it is important to deliver a great customer experience – and most authors provide valuable advice for organizations on improving the customer experience: listen to your customers, deliver great customer service, and provide a consistent experience across multiple channels (and don’t ignore the social media channels)! Many companies have followed this advice - invested in information technology, process improvements, and employee training - to improve their capabilities end-to-end.
At times, however, we customers experience the opposite: we are put on hold for 20 plus minutes when we call a customer service center until we can finally talk to a service representative who is either incompetent or is not authorized to handle our complaints properly – or, we get lost in a maze of options of an interactive voice response system. We get frustrated when products are not delivered as promised, products with special promotions are out of stock, or we get billed for services we never requested (or never received). In other words, most companies still get it wrong – despite their good intentions.
A recent example of a company that did do many things right is Best Buy (News - Alert). They invested big in employee training, they empowered front line workers in their stores, and they’re a showcase for an integrated multichannel approach. Best Buy’s Brick and mortar stores, their online site, mobile apps, Facebook (News - Alert) etc. – even including kiosks at airports - offer Best Buy products without any premium over the price you’d get at a typical retail store. The experience is consistent; relevant to its customers, delivering on its brand promise – whether one is rushing through an airport, or choosing a Best Buy product from a relevant Facebook offer.
In spite of those strengths, Best Buy still fell short. A few days before Christmas, disaster struck. According to new reports - up to 30,000 orders made by online customers from BestBuy.com were not delivered on time for Christmas or got cancelled completely. And, Best Buy told some customers about the problem in only the last day or so. Imagine how you would feel if you ordered a PlayStation for your eight-year old son weeks before Christmas and then learn on Christmas Eve that your order has been cancelled? How do you explain this to your kid: Santa failed to deliver? Not only did Best Buy alienate many loyal customers, the incident turned into a PR nightmare.
Who is going to order from Best Buy again when it’s critical that the order is delivered by a certain date (be it a big-screen TV for the Superbowl or a new iPad for your teenage daughter’s thirteenth birthday)? I had a similar experience last month when an online order did not arrive on time (as promised) for Valentine’s Day. Believe me, I had a lot to explain and it was not a pleasant experience. And, I had to make up for it with an outrageously expensive flower bouquet and a very exquisite dinner – and ended up spending a lot more than I had planned (my wife still loves me, though, so I was lucky).
I don’t want to put Best Buy on the spot here, but it serves as a great example for how things can go wrong – even if you do many things right – if you neglect the most essential factor to deliver a great customer experience: operational excellence.
Operational excellence is ‘key’ to providing a great customer experience. Forget about your cool Facebook app announcing a new product or your hip mobile campaign offering a 40% discount on a particular product line - if your supply cannot meet demand (unless you are Apple (News - Alert)). Forget about your sophisticated marketing promotions if you can’t guarantee the shelves are stocked when the promotion hits the street. And, forget about your text messages or email alerts about the due date of a payment - if the bill you have sent out is incorrect - or an automatic payment kicks in only in the next billing cycle. Delivering on your promise - and the expectations you set - is the #1 thing you need to get right before you think about anything else.
A great example of doing it right is Coop, one of the two largest retail grocery chains in Switzerland. Like all retailers, $27 billion Coop fights for its share of the grocery market place with its razor-thin margins, and they strive to engage customers so intimately with their brand that they simply have no reason to turn to the competition. In Switzerland, stores close early in the evenings and are closed on Sundays; also, many Swiss use public transportation to commute to their workplace.
Coop’s @Home division had already launched a successful online store - based on cutting edge web technology - which was integrated to its enterprise resource planning system and its CRM application, but it did not stop there. The company quickly realized that it could leverage its e-Commerce platform to add an iPhone (News - Alert) app that the time-pressed, tech-savvy Swiss would love. The Swiss grocer’s iPhone-based shopping application enables customers to shop while commuting to or from work and – this is a key differentiator – allows them to specify the delivery time within a 30-minute time window while they shop. Shoppers can see a real-time view of product availability for more than 20,000 products ranging from food and wine to flowers and other household goods and get consistent pricing across the physical and virtual channels. These capabilities provide Coop with a competitive advantage by providing reliability, consistency and convenience to their customers and eliminating the source of much frustration for consumers. If you are sitting on a bus on your way home from work, you can order everything you need for dinner and be sure it will be at your doorstep by the time you get home.
Information technology is a key element for Coop’s success: the integration of enterprise resource planning, supply chain automation, and customer relationship management with its e-Commerce and mobile commerce platform is a shining example of operational excellence that delivers an exceptional customer experience. Coop has also added additional capabilities to use the iPhone for in-store shopping. Using the iPhone camera, customers can scan the bar code of a product on the shelf and add it to their shopping basket; when they checkout, all the products will be ready for them to pick up. The app also makes recommendations to complement a particular item; for example: it suggests several marinara sauces to go with the pasta that you have just put in your shopping basket.
The latest innovation at Coop is a virtual store in the shape of a 90 foot glass wall at the central public transportation hub in Zurich, which displays grocery products on a shelf behind a window and allows customers to snag product IDs with their iPhone camera and add them to their mobile shopping basket while they wait for their next tram connection. This takes window shopping to a whole new level.
With all the innovative applications and ways of interacting with consumers Coop never lost sight of the most important aspect: operational excellence in order to deliver on their promise. Check out this video for more information: http://www.youtube.com/watch?v=i_s0i4PrdCU
You can find more great examples like Coop in my new book “The Customer Experience Edge” which is based on multiple surveys and many case studies in achieving an exemplary customer experience for those who interact with your brand.
Edited by Juliana Kenny