“If we had a choice to buy from someone else, we would!” said the president of the world’s largest semiconductor company at a customer conference. “But we are still buying from you because nobody else is offering these leading technologies right now.” This was a startling wakeup call to equipment-maker Applied Materials, well-known for being first-to-market with new technology, and listed among the 10 leading companies in Silicon Valley, with twice the revenue of its nearest competitor.
Customer Satisfaction Manager
To implement a worldwide customer survey that would help the company overcome this deep-seated negative customer sentiment, the company created a new role: Vice President of Customer Satisfaction. I was hired at Applied Materials as Voice of the Customer Manager based on my prior experience of launching the customer satisfaction program at Sonoco Products Company, and my track record of speaking at national conferences on the unique methodologies my company used.
In Sonoco’s Strategic Planning department, I visited hundreds of customers’ sites nationwide (e.g. AT&T, Chevron, Del Monte, Franzia, Kroger, Owens-Corning, P&G, Weyerhauser, Wilson Sporting Goods) to conduct in-depth interviews with purchasing managers, plant managers, and other influencers of buying decisions. When the company launched its Total Quality Management program in 1991, I was asked to lead the Customer Satisfaction methodology taskforce. Sonoco was a Fortune 250 company at that time, and it was headquartered an hour away from large airports in South Carolina, so our executives were very supportive of me conducting extensive in-person research with topic specialists such as TARP, MARC, Burke, and many other customer satisfaction firms. Winners of the Malcolm Baldrige National Quality Award also visited our taskforce.
From that time forward I’ve read nearly every book on this subject; one of my favorites is The Customer-Driven Company, by Dennis Whitely. These experiences were invaluable in establishing my foundation in the discipline of customer satisfaction. Before moving on to Applied Materials I also worked at two market research firms.
Enterprise -wide Accountability
With a focus on improving customer satisfaction, Applied Materials’ Voice of the Customer program was driven by Corporate Quality. 40 separate survey reports were created for each geographic region and for each product line, to avoid finger-pointing (e.g. “Those dissatisfied customers must be buying from the other division; surely my division’s customers are satisfied.”), since a typical byproduct of long-standing industry leadership is arrogance, and the company has always been highly decentralized, with a matrix management structure. (This was in 1994, before automated dashboards were available on desktops; in fact, we used zip drives and FedEx overnight delivery to transfer the graphics-laden reports.) One of the main methodology changes I made in that first year was creation of a super loyalty index, combining recommendation, referral, and satisfaction answers. The VP Customer Satisfaction was skeptical at first, but I was able to convince him of the wisdom of customer issues prioritization based on correlation-derived key drivers of overall relationship strength.
To aid connections with customers during the survey process, I trained the local market research firms in each geography on semiconductor manufacturing terminology and an industry overview. I led workshops with every regional office, product group, and functional area (including HR, safety, software, etc.) to teach them how to properly interpret their survey results, and to create action plans. The customer satisfaction improvement workshops were cross-functional, and resulted in single-page strategies for the 3-4 issues of greatest importance and poorest performance as seen by their customers. At the end of the workshops, the General Manager signed each action plan to signify active support for it. In a strong engineering environment, there was always temptation to focus on serial numbers and there was plenty of doubt initially about esoteric opinions, but my team of five Customer Satisfaction Improvement program facilitators helped executives and employees focus on trends and breakthrough improvements.
Every quarter, status of each customer satisfaction improvement action plan was distributed to all vice presidents in a format paralleling their financial status reports; the financial reports were referred to as the Bluebook and Blackbook, so the customer satisfaction report was called the Greenbook, a color that also conveyed growth.
A sizable amount of the executive bonus fund was tied to action plan progress. At the end of each fiscal year, each general manager throughout the company met with the VP-Customer Satisfaction to discuss action plan achievements. Executive listening session ratings were also included in the first years’ bonus calculations. Criteria were standardized enterprise-wide, but local business conditions were considered to adjust the criteria for fairness. If action plan goals were exceeded, the executives could receive up to 1.5X of their specified customer satisfaction bonus pool.
Partial List of Accomplishments
(this is the tip of the iceberg: 100+ similar achievements yearly for many years)
- 16X reduction in customers’ time for service
- Exceeded customers’ expectations by 75%
- 10X increase in customer productivity
- 23X reduction in lead time from 5 days to 5 hours
- 6X improvement in trouble-shooting cycle time
- $1M savings monthly to the customer
- 80% reduction in customer engineers’ cycle time
- 75% reduction in customer-reported bugs/issues
Methodology improvements were implemented each year, and I established ownership within each organization through train-the-trainer sessions on how to guide the local research firms, interpret the survey results, conduct the action planning workshops, and follow-up for ongoing momentum. A suite of surveys was developed to capture customer sentiment about the overall relationship as well as service and spare parts transactions, and the sales and installation process.
My role expanded each year, and I became Head of Global Quality in 1998. Team recognition and balanced scorecard, along with quality education and change management, were instrumental to the ongoing momentum of customer satisfaction improvement. I led the internal branding initiative with a wide array of employee communications to align behaviors and processes with customers’ priorities. In the cyclical semiconductor industry, achieving strong business results is the only way to survive the downsizing that occurs every couple of years. Although my team had to rely solely on management by influence to establish the “what’s in it for me” among leaders in every corner of the company, I’m pleased to reflect that we achieved our stretch goals for bonus incentives between 1.0X to 1.5X every single year. (See the Customer Experience Strategy white paper for examples.)
Over the past decade the company has adopted its customers’ supplier report cards as its primary form of voice of the customer. With sophisticated customers such as Motorola, IBM, Texas Instruments, Hitachi, Samsung, and Philips, the company has learned a great deal by focusing attention on each customer’s preferred feedback mechanism. A quarterly Quality Ops Review (QOR) was established to review these report cards and associated action plans, with the corporate CFO attending each General Manager’s portion of the two-day agenda.
Customer Experience Expertise
My passion is customer experience management (CEM). From its roots in TQM and customer satisfaction, this field has evolved through the concepts and tools of customer loyalty, customer retention, customer relationship management, experiential marketing, word-of-mouth marketing, and customer engagement, to CEM. Early authors of books with Customer Experience in the title, such as Joseph Pine, James Gilmore, Bernd Schmitt, Shaun Smith, and Joe Wheeler were actually writing more about Experiential Marketing. Other more recent authors who use Customer Experience in the title are really focused on Service Excellence, rather than enterprise-wide dedication to serving customer needs from their perspective, recognizing that paychecks are enabled by customers. True CEM authors include Colin Shaw, Jeanne Bliss, and Lior Arussey. Leigh Duncan Durst wrote most clearly about the true nature of CEM in a 2006 article: Just What is Customer Experience Management Anyway?.
After studying their works I came to realize that the enterprise-wide alignment approach we established at Applied Materials was, in fact, a leading benchmark of CEM. I was first in the world to ever conduct a global B2B CX practices study. The 2010-2014 ClearAction B2B CEM Benchmarking Study confirms that most companies seem to be emphasizing the service and marketing aspects of CEM rather than sustainable hassle reduction through enterprise-wide alignment with customers’ priorities.
In addition to my roles described above, I was Director of Marketing & Business Development for an environmental product line and a technology center, and I am a pioneer in customer experience innovation thought leadership (Amazon author).
Through ClearAction Experience Leadership Mastery e-consulting, I help companies get more value from their voice of the customer data, by engaging employees company-wide in living their brand promise for sustainable and highly profitable customer experience differentiation.