Creating the 360° Customer Experience The more you get to know your customers, the better your sustained profitability

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1 Introduction: It’s About RelationshipsConsumers no longer limit their purchases to products and services. With the rise of mobile communications, social media, and online communities, transactions between businesses and consumers have grown far more complex. The relationship itself is up for sale, and companies’ fortunes are tied directly to their ability to manage those relationships to customers’ satisfaction.

Points programs, frequent-flyer miles, private sales, personalized promotions, and logistics support that allows customers to choose when they shop and how soon their purchase will be delivered all have transformed the shopping experience into the customer-centric experience. Retail and other businesses have discovered the revenue-generating power behind shopper and client behavior. Customers are being trained, in turn, to behave in ways that maximize the value they get from their interactions with stores and service providers.

UPS created this guide to help your company make the most of its relationships with its best sources of repeat business and recommendations. A strong strategy for cultivating those relationships is essential to your plans for sustainable long-term growth.

Leveraging Data EffectivelyGetting it right involves more than collecting data and allowing that data to drive communications content. Many companies leave too much to the algorithms, experts say, and fail to spend enough time having a human being review and interpret the information.

“We collect so much data, but we don’t know how to get our arms around it,” says consultant Joseph Michelli of The Michelli Experience and author of The Zappos Experience: 5 Principles to Inspire, Engage, and WOW. “How do we do anything to actually improve the experience of the customer? What is signal, and what is noise?” The answer, he says, is to actively engage with customers, listen to their input, and find meaningful ways to be responsive to their positive and negative feedback.

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Tell Customers They Matter [or Show Customers You Know Them]

It’s not enough to track customer purchases and use those to anticipate future buying patterns. It’s also a big mistake to be over-zealous in offering suggestions based on items the customer viewed but didn’t buy. The petite customer who liked the sweater that’s sold out in her size will just be frustrated by pop-up ads that prompt her to buy it.

The opera lover who no longer recalls buying a few CDs for his teenage nephew’s birthday will be mystified by recommendations of rap or metal recordings. Rely too heavily on automated analysis of buying patterns, and you leave the customer wondering, “Do these guys know me?”

Businesses also have to be aware of inducing “message fatigue” in customers, particularly with what the customer regards as an excess of email messages. “Because email is so cheap, marketers see the upside potential but don’t recognize the downside,” says value exchange expert Liz Crawford, author of The Shopper Economy (McGraw-Hill, 2012). “They’re not looking at the opportunity costs of over-communication. The thing that’s not being measured is the extent to which people are getting turned off.”

On the other hand, if the music retailer notices that the opera lover buys every recording that includes a certain soloist, it makes sense to send a heads up about that artist’s upcoming CD releases. That technique involves what Michelli calls “listening behind the scenes,” and it demonstrates that you care about the customer’s interests, not just his purchases.

And show that you’re listening

Businesses can also gain points with customers just by moderating and posting to their own message boards. As consumer reviews have become a popular feature of retail websites, a few companies have recognized that even negative reviews present an opportunity to bolster

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On the other hand, if the music retailer notices that the opera lover buys every recording that includes a certain soloist, it makes sense to send a heads up about that artist’s upcoming CD releases. That technique involves what Michelli calls “listening behind the scenes,” and it demonstrates that you care about the customer’s interests, not just his purchases.

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the brand. The t-shirt faded badly when laundered according to instructions? The battery life was less than half what was advertised? The toy was broken by December 28? Smart companies post responses to those comments to remind the reviewers and their readers about the corporate return policy and commitment to customer satisfaction. The revenue cost of issuing occasional replacements or refunds is more than offset by gains in reputation and customer loyalty.

In any case, it’s essential that the company offer acknowledgment of and thanks for comments, particularly when it solicits feedback. “There’s nothing more offensive to a consumer than to waste their time helping you make your business better without any appreciation for that,” Michelli says. “A lot of people just want to feel as though they are heard and seen, particularly if they have an emotional engagement with the brand.”

Cultivating Loyalty, Building Community

Another challenge is finding the right incentives to encourage customers to volunteer feedback. Discount coupons are nice perks, but experts caution that they don’t build loyalty to the brand. And over the long term, shoppers who are loyal to the brand are more valuable than those who make purchases only when there’s a discount in the offing.

How do you cultivate loyalty to the brand, as opposed to price reductions? Michelli points to the My Starbucks program, which mixes rewards with invitations to play a direct role in improving products and services. The program succeeds, he says, because participants see their suggestions being implemented and come to feel that they have a role in shaping their own customer experiences.

This strategy works because it focuses on community building rather than just sales. “One of the benefits people seek is affiliation with like-minded people,” Crawford says. For an outdoor equipment or sporting goods retailer, that can mean creating a discussion board where customers can share tips and personal experiences. In fashion or personal technology, it can mean offering private sales of the new season’s styles or an advance look at products that are

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In any case, it’s essential that the company offer acknowledgment of and thanks for comments, particularly when it solicits feedback. “There’s nothing more offensive to a consumer than to waste their time helping you make your business better without any appreciation for that,” Michelli says.

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still months away from commercial release. Companies can also consider a program like Amazon Prime in which frequent customers who pay a premium are accorded elite status and rewarded with special deals, expediting shipping, and more.

Each of these approaches works by giving customers a sense of be-ing “insiders”—of gaining some advantage from their connection to the seller. Crawford explains that once customers see the company’s brand as intertwined with their personal brand, they’re more likely to become advocates or evangelists of that brand—to, in effect, be-come an extension of the company’s marketing team.

ROI on ReturnsFrom Amazon to Zappos, companies have found free shipping to be a great customer lure. Even companies that normally charge for shipping will test the waters with occasional promotions or offer free shipping on orders that meet a purchase minimum.

Businesses have been more wary of free returns. Michelli makes the case for “best practice in the customer-centric space”—not just offering free returns, but giving customers 365 days to send items back and reimbursing their credit cards before the company receives the returns.

How can companies operate profitably under that model? A few consumers will violate that trust, he acknowledges, but “you can manage them in the back side. It’s not a real problem. If you’re not in a discounter mindset, you’re paying full price for the product anyway. It’s built into the way you execute against your business model.”

Meanwhile, the majority of customers, “having been given more trust than they deserve,” will reciprocate that trust, “and you will end up with an incredible amount of people who are doing your marketing for you. So a lot of that perceived cost is a cost you don’t have to spend on marketing.”

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Once customers see the company’s brand as intertwined with their personal brand, they’re more likely to become advocates or evangelists of that brand—to, in effect, become an extension of the company’s marketing team.

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The Privacy PrerogativeTo ensure that you respect your customers’ preferences and privacy—and to protect your company against penalties of up to $16,000 per email—it pays to know something about CAN-SPAM.

This law established rules and requirements for all electronic advertisements and promotions of commercial products and services. “The law makes no exception for business-to-business email,” the Federal Trade Commission’s Bureau of Consumer Protection says. “That means all email—for example, a message to former customers announcing a new product line—must comply with the law.”

The Bureau’s Business Center created a compliance guide to help ensure that your business doesn’t violate either CAN-SPAM or your customers’ trust. The basic rules are easy to remember and fall into two main categories.

First, ensure that your communications are open, transparent, and not deceptive. This means you must include clear, accurate information in the “from,” “to,” and “reply to” fields and routing information. In addition, your subject line must reflect your message content, and the message must include a line that identifies it as an advertisement.

Second, include in the email all the information your customers need to contact you. You’re required to provide each contact with your valid, current physical street address or registered post office box details. In addition, your message must contain “clear and conspicuous” instructions for opting out of future emails or unsubscribing from your mailing list, and those instructions must be “easy for an ordinary person to understand.” Include a return email address or Internet-based way for people to update their email preferences, make sure these opt-out requests won’t be caught in your spam filter, and honor those requests within ten business days.

Finally, remember that your business is still legally liable for CAN-SPAM violations even if you hire a third party to handle your email marketing.

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First, ensure that your communications are open, transparent, and not deceptive. This means you must include clear, accurate information in the “from,” “to,” and “reply to” fields and routing information. In addition, your subject line must reflect your message content, and the message must include a line that identifies it as an advertisement.

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4Moms: The customer experience is their baby Rob Daley and Henry Thorne have always been conscious of the impact of the social community—so much so that they named their company, which manufactures strollers, play yards, portable infant cribs, and car seats, 4Moms in honor of their first focus group. “A key strategy for building our business was taking advantage of that potential power among consumers,” says Daley, the company’s CEO. “The primary way we were going to build awareness of our products and brand was parent-to-parent marketing.”

Strong word of mouth depends on the quality of customer relationships. “I’m a really big believer that everything you do says who you are. You don’t get to choose what your consumers pay attention to,” Daley says.

The industrial design has to be great. The way you put it together has to be great. It has to be really easy to use. All of those touch points, right down to the layout of the instruction manual and the quality of the design around the packaging, add up to this overall customer experience. If we do a great job at every one of those interactions; when it goes flawlessly, it’s unbelievably powerful.”

CASE STUDY:

Strong word of mouth depends on the quality of customer relationships. “I’m a really big believer that everything you do says who you are. You don’t get to choose what your consumers pay attention to,” Daley says.

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Of course, no company can achieve 100 percent flawless performance, but 4Moms has found that, if properly handled, malfunctions can actually support relationship building. “A lot of our most evangelistic customers are actually people that have had failures with our products, because once they have the failure, we do a great job of servicing that customer,” adds Daley.

Services support a higher standard

The scope of logistics support available from UPS is integral to 4Moms’ ability to deliver on that standard of service for consumers and retail partners. It has customers in 26 countries worldwide, and as its rapid growth continues, the logistics challenges mount. UPS has been a partner in meeting those challenges, Daley says.

For example, 4Moms has seen an increase in the volume of containers it receives from suppliers in Asia. Those shipments enter the U.S. on the West Coast, but the company is headquartered in Pittsburgh. That’s where UPS has been invaluable in increasing the company’s logistics efficiency and reducing both its costs and the time it takes to complete deliveries. Instead of transporting the goods two-thirds of the way across the continent before sending products to consumers and retailers, the company has UPS oversee those shipments from a warehouse on the West Coast. That gets product to retail partners more quickly and reduces inventory in the Pittsburgh warehouse, which keeps costs down.

Another key area of partnership emerged through UPS Capital® financing, which supports 4Moms by financing its working capital needs while those shipments from Asia were in transit.

“Financing inventory when it’s not in a warehouse in the U.S. is not something that banks are typically willing to do,” Daley says. “But because UPS can actually touch and feel that inventory when it’s on the water, they’re willing to provide financing for that.”

From commitment to execution

But the greatest value of the UPS partnership, he says, is that the quality of its logistics infrastructure supports that customer service standard and commitment to taking care of

Rob Daley, 4Moms

Henry Thorne, 4Moms

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4Moms customers. “If we have the intention of taking care of them, but we didn’t have the brown trucks moving around to get the product there on a timely basis, it would only be intentions. It wouldn’t be actual execution,” Daley says. “The fact that we’re able to get things out so quickly is a policy that means everything, and UPS is the partner that enables us to actually hit on that.”

Leverage Logistics for Your BusinessWhen companies like 4Moms need to wow customers and work with a range of retail partners in 26 countries, having a logistics partner like UPS helps them keep the supply chain moving. Unique services, like UPS Capital Cargo Finance®, help companies truly leverage a logistics relationship for better overall operations. UPS Capital Cargo Finance lets you use your in-transit inventory as collateral to obtain working capital for your business. So you don’t need to wait weeks or months to convert your inventory into the cash you need to run and grow your business. Instead of having the cash you need to serve customers locked into your supply chain, your supply chain becomes a valuable source of free cash flow.

That’s just one of the ways UPS logistics can help you free up resources and focus on building the best possible customer experience. For example, for any company like 4Moms that sells online, delivering a better shopping experience builds loyalty. And UPS can help you make the most of online purchases for your customers, with incentive programs, speedier product delivery, increased overall convenience, and streamlined returns processes.

Learn more about the ways in which UPS logistics can level the playing field for your company, helping you compete and win against other businesses. Our logistics solutions and services can aid your business in working smarter and more efficiently, whether locally or globally. For more information about the ways you can put logistics to work for your business, download the free guide, 16 Ways to Benefit from Logistics.