Moving at the speed of delight: it's not enough to merely "satisfy" customers if you truly expect to get value from your technology investments - Roundtable - chief executive officers

Chief Executive, The, Dec, 2002 by Jennifer Pellet

What do Apple's iPod, Southwest Air flight reservation system and 3M's Post-It notes have in common? All three are shining examples of that most elusive of customer-oriented goals: delivering not just a satisfactory experience, but actual delight.

That's no easy feat, particularly in an economy that couples ruthlessly exacting customers with intensifying pressure to reduce costs, according to CEOs at a roundtable cosponsored by Cap Gemini Ernst & Young and Chief Executive. "The bar continues to increase," says Hank Bonde, chief operating officer of J.D. Edwards. "I recently read a book about customers that said they want it free, they want it perfect and they want it now. If that's the definition of delighting a customer, that's a really difficult hurdle."

Increasingly, companies are looking to technology to delight customers with better service, lower costs or even a better product, as well as to help gauge the success of their efforts. "The first thing we have to do is get the measurements in place to find out who's satisfied and, if they're not, why," says Michael Tryon, COO of Metal Management. "Then we can try to go to the next step and put in some kind of metric to help us with that."

But while runaway successes--such as Post-Its or the iPod--are easy to spot, incremental improvements, particularly intangibles such as customer experience, can be much harder to gauge. In the absence of clear metrics, several CEOs still struggling to assess the value of investments in business automation and technology suggested an inward focus.

"In the long run, the best thing you can do to delight customers is to delight your own employees," argues James Goodnight, CEO of SAS Institute. "And that's much more measurable, because if you have really happy, dedicated employees who love their jobs and love to come to work every day, they will take care of your customers."

Setting the scene

John Jordan (Cap Gemini Ernst & Young): What is customer delight in a given market? Disney delights their customers and Southwest delights their customers, but Disney's model is very different from Southwest's. Do they have much to learn from each other? On the surface, maybe not; underneath, maybe so.

But it's not a simple notion. Whatever market you're in, can customers tell you what delights them before they experience it? Did people know how a Post-It note would delight them before the Post-It showed up? What is the feedback loop of customer experience back into the business? Do we hear only if something is horrible or only if something is wonderful?

The fact is, delighting customers can be really expensive, and it can be really bad business. If you don't have the internal controls, if you don't know how much it's costing you to delight a customer, then do you really want to delight them? What are the costs of failing to delight customers? Maybe they defect--and maybe that's good news and maybe it's bad news. How do we know the difference?

Where has technology impeded a business s ability to delight customers? Hershey's couldn't ship chocolates for Halloween a couple of years ago. And five years ago, American Airlines was a success story because they used a lot of complex technologies and heavyweight algorithms to do scheduling, profitability and pricing. Now Southwest is making American's life really miserable with a very simplified model and pricing schedule. All of that application of IT to American Airlines' business model may not be delighting many people now.

And how do we set expectations? There's an external phase to customer delight. To be delighted, you have to know what to expect in the first place. If I expect a Ritz-Canton and there are no flowers in the room, I'm disappointed, whereas at Holiday Inn if I don't get flowers, I'm fine.

Then there's the internal operations piece. Once we've promised flowers in the room, what does it take to get flowers in the room? How do you use technology to change how people do their job, whether that job is making decisions, servicing customers or moving metal around?

Peter Nauert (Ceres Group): About a year ago two sales guys told me how easy it is to order a ticket on Southwest. They said that it takes them a nanosecond compared to what it takes to go to American's, Delta's or anyone else's Web site. I think the most important thing for a technology is: How did it make it easier for your customer to do business with you? It's the CEO's responsibility to make sure technology is being deployed in a way that allows his or her customers to better access the company's service. You can call that marketing or technology--or you can just call it good business.

Michael Tryon (Metal Management): I don't think you have to be the CTO and on the forefront technologically and have all of the answers, but you've got to bring the organization together to find out evolution-wise where you are and what you need to do to drive costs down, bring customers in closer and provide the data we need consistently across the organization.