Supply Chains are Critical for a Great Customer Experience

Stephen DeAngelis

May 26, 2020

Customers don’t want to think about supply chains; they just want great purchasing experiences. Although the connection between great customer experience and a world-class supply chain should be obvious, customer experience is not the first thing that pops into most peoples’ minds when they hear the term “supply chain.” Supply chain professionals are among the few people who regularly make the connection between customer service and the supply chain. Bob Trebilcock, editorial director of Modern Materials Handling, reports Todd Walker, a spokesperson for Amazon, claims, “Everything at Amazon starts with the customer, and we work backwards from there.”[1] Trebilcock goes on to note that a 2018 article co-authored by Michigan State’s Steve Melnyk argued, “The next generation of supply chains will be tasked with delivering an experience as well as a product.” Melnyk and his colleagues defined the experiential supply chain as one in which “the customer is involved in the design, development, delivery and implementation of a good or service, and not just the consumption of a product.”

Components of a great customer experience

A great customer experience (CX) begins with creating products customers want. It continues with great marketing followed by a great purchasing experience and it ends with great last mile delivery. Data and cognitive technologies can help at each stage of the customer journey.

Creating great products.

The late Harvard Business School professor Clayton Christensen argued great products are products that solve people’s problems or match their desires. One of his last books was entitled Competing Against Luck: The Story of Innovation and Customer Choice, coauthored by Karen Dillon (@KarDillon), Taddy Hall (@taddyhall), and David S. Duncan. In the book, they discuss the “Theory of Jobs to Be Done.” According the book’s introduction, that theory helps companies understand their “customers’ struggle for progress and then [creates] the right solution and attendant set of experiences to ensure [they] solve [their] customers’ jobs well, every time.” Christensen and his colleagues wrote:

If a company doesn’t understand why I might choose to ‘hire’ its product in certain circumstances — and why I might choose something else in others — its data about me or people like me is unlikely to it create any new innovations for me. It’s seductive to believe that we can see important patterns and cross-references in our data sets, but that doesn’t mean one thing actually caused the other. … The one thing that matters most in innovation [is] the causality behind why I might purchase a particular solution. Yet few innovators frame their primary challenge around the discovery of a cause. Instead, they focus on how they can make their products better, more profitable, or differentiated from the competition.

Although it may sound like Christensen and his colleagues were skeptical about the value of big data analytics, I don’t believe that’s their message. What I think they are saying is that companies have been asking their analytics to answer the wrong questions. Richard Howells (@howellsrichard), an SAP supply chain expert, adds, “[A great customer experience] starts by designing and manufacturing what a customer wants. And that requires the ability to listen to your customers and learn and predict what they will want next based on their experiences and desires.”[2]

Creating great marketing.

Mark Smith, President of Kitewheel, insists, “There is a yawning gulf between organizational measures of customer experience and actual customer satisfaction.”[3] He notes, “Customer data is now available at an unprecedented scale, and the technology to enable meaningful and positive customer experience has never been more advanced. What’s more, there is broad consensus that CX is critical as a competitive differentiator. … There are real consequences to getting CX wrong.” He also believes the CX gap also represents real opportunity. “For forward-leaning companies it actually represents a huge opportunity,” he writes. “If nearly two-thirds of consumers can’t remember ever being truly wowed by a brand experience, imagine how differentiating it would be to actually wow consumers.” He suggests the first step to great marketing is understanding customers’ digital path to purchase. Then, he suggests, customers should adopt the LUDA framework: listen, understand, decide, act. He explains how it works:

  • Listen: “Once you’ve mapped your current customer journeys, ‘listen’ to customer behavior by collecting data on it across every one of your marketing channels. Doing so will almost always involve breaking down data silos, since your customers’ behavioral data likely lives in disparate parts of the organization. This listening needs to be ongoing so that you can create a complete, up-to-the-minute picture of customer behavior, informed both by historical data and by current info — what’s going on right now.”
  • Understand: “Using your journey maps and the data you’ve gathered, track users along different journey paths and analyze behavior. Real-time data allows you to update your assumptions and respond quickly when customer behavior begins to change.”
  • Decide: “Determining the next best action for every touchpoint in the customer journey is the crux of personalization. Building off the insights you’ve gleaned, determine what the ideal journey flow is. Find a solution that will enable you to implement your next best actions in real-time. … Embrace cross-channel messaging and think of ways to create an integrated experience.”
  • Act: “Execute personalization efforts. By determining next best actions for each and every interaction, organizations can extract true value from their data and carry customers from one touchpoint to the next logically and seamlessly.”

“After that,” Smith writes, “rinse and repeat. Personalization is an iterative process, and there is always room for improvement. The more you personalize, the richer the data you’ll be able to collect, and the better insights you’ll be able to extract.” Cognitive technologies, like the Enterra Shopper Marketing and Consumer Insights Intelligence System™, can leverage all types of consumer data to provide high-dimensional consumer, retailer, and marketing insights.

Creating a great purchasing experience.

Howells observes, “Today’s customer is always connected and can research and order products and services at any time, on any device at the click of a button. This requires an omnichannel sales strategy to enable your customers to buy or subscribe to your products on their terms.” Having a strategy is only the beginning. A great purchasing experience means implementing the strategy in such a way that customers can move seamlessly from one touchpoint to the next during their purchasing journey. Krystal Taing (@krystal_taing), Local Product Strategy lead at Rio SEO, asserts, “Current consumer behavior is forcing retailers to think holistically. From apps to e-commerce sites to messaging plugins and email marketing, each local marketing element must meet the consumer’s need for information, validation (i.e., consumer reviews) and the ability to take action.”[4] She adds, “The right tools and technologies can help companies deliver experiences that delight tech-savvy customers, converting them to become loyal advocates of the brand.”

Creating a great delivery experience.

Howells notes, “There is no point in having a great order experience if your supply chain processes are not designed to deliver on the promise. … When you have omnichannel sales models, you also need omnichannel logistics models to deliver what the customer wants, when, how, and where they want it.” He continues, “You need to have the business processes in place to manufacture what the customer desires and deliver it how, when, and where they want it. This means a different (and often more complex) logistics network, especially in the last mile of delivery. You can’t have a truck with full pallets of products making door-to-door house calls. You must have an inventory of key products stored in a more regional approach to reduce delivery times. And you need the visibility of what is where and how much is available to satisfy higher volumes of much smaller orders.”

Concluding thoughts

Howells concludes, “The ultimate test of customer experience is how the product performs once it is in use at the customer’s location. Are they delighted by how it runs, looks, feels, and performs? Is it fast enough? Does it make their life, business processes, or daily tasks better? Does it deliver all the features they expected? Does it deliver on the promise they were sold? … When you think of great customer experience, you need to consider the complete life-cycle of the customer engagement — from designing what they want, to delivering the product or service, all the way through to how it performs when they use it. Only then can you gain a customer for life.” Trebilcock adds, “There’s also no question but that supply chains have to make the leap from being focused on cost to, like Amazon, being focused on the customer. As Melnyk wrote, ‘we will see if companies and their supply chains are ready to survive and thrive in this new, more demanding environment.'”

Footnotes
[1] Bob Trebilcock, “Is your supply chain focused on the customer experience?,” Modern Materials Handling, 4 March 2020.
[2] Richard Howells, “Why A Great Customer Experience Requires A Great Supply Chain,” Forbes, 23 January 2020.
[3] Mark Smith, “The CX Gap: How We Got Here (And How You Can Close It),” MarketingProfs, 29 January 2020.
[4] Krystal Taing, “How to provide an exceptional customer experience in the digital environment,” Retail Customer Experience, 30 January 2020.