Rewired: Crafting a Compelling Customer

Experience
Rewiring the Customer Experience Digitally
In 2008, Dominos Pizza was staring at trust.” Dominos streamlined the ordering of social customer community software,
a difficult future. The company faced process by introducing “Pizza Tracker” says, “We are living in an age of extreme
plummetting sales, falling stock prices — an online tracking mechanism to let customer expectations5.” Second, the
and a lacklustre brand image. Customer customers view the progress of their complexities of integrating new digital
dissatisfaction was running high with pizza from order to delivery. They also let channels with existing operations can be
customers complaining about the poor customers build online profiles, with their daunting. A recent survey indicates that
quality of Domino’s Pizzas1. By November location and other preferences, thereby over 38% of marketers feel the technology
2008, the company’s stock price was reducing order placement time to as low to build an integrated digital marketing
at a record low of $2.832. That is when as 30 seconds. The results have been strategy is too complicated. Over 58% of
Dominos decided to chart a new path for remarkable, to say the least. From $2.83 marketers still use basic methodologies
itself. From that position, the company a share in November 2008, Dominos such as last-click attribution model
has scripted a historic turnaround making has seen its stock price rise to over $70 rather than more sophisticated cross-
its entire customer experience digital. The a share in June 20143. Domino’s mobile channel attribution models that are more
company focused on making easy-to- sales accounted for 22% of online sales relevant in the digital age6. Third, digitally
order and easy-to-track the foundations in 2012, which was larger than the entire transforming the customer experience
of its overall customer experience. And company’s sales in 19994. requires an overhaul of organizational
they did this across the key channels of culture and traditional ways of managing
PC/mobile/social. Dominos launched Such transformative impacts do not customer relationships. 56% of marketers
a social media campaign — “What is come by accident. They happen as in a survey described their organizations
wrong with the Dominos Pizza?” — a result of carefully coordinated and as customer-centric, but only 12% of their
where it sought feedback from customers orchestrated use of digital technologies customers agreed with their assessment7.
to help improve its pizzas. Customers and platforms such as social media and This shows that the promise of customer
appreciated the company’s sincerity in mobile. However, while the opportunities centricity still has a long way to go.
reaching out to them and as a result, the for driving a great customer experience Finally, the pace of decision-making has
strategy proved to be highly successful. using digital technologies are significant, hastened and there is a new sense of
Professor Renee Gosline of the MTI so are the challenges. First, organizations agility that companies from the Internet
Sloan School of Management says, need to manage an ever-increasing tide of sector are bringing. In short, what has
“People felt that Dominos was honest customer expectations. As Rob Tarkoff, worked in the past is not guaranteed to
and really trying to hear them, which built CEO of Lithium Technologies, a provider work in the future.

The Age of Extreme Customer Expectations

Consumers are going online to request help on a product
or service and want responses fast

66% 43%
expect a same-day expect a response
response to their within an hour or
online request less

Consumers are using online channels to complain

Complaining

39% 35-44 years 45+ years

of Americans 46% 35%

are more likely to go online to
complain than to praise
But younger Americans seem to complain at higher rates than older Americans

Source: Lithium Technologies, “Lithium Reveals Extreme Customer Expectations Survey”, May 2014

2
 Look Outside to Transform order to gauge customer reactions prior
to rollout8. Organizations are beginning
Inside
Less than half of to realize the importance of customer
Digital leaders look at technology as a experience. Research indicates that over
organizations have a means to an end, and not an end in itself. 86% of executives consider customer
company-wide program The end-state is defined by the kind of experience to be a top strategic priority.
experience that the customer desires However, less than half have a company-
for customer experience, at each touch point. Digital leaders wide program for customer experience,
and only 30% have a design experiences based on a forensic and only 30% have a dedicated budget
understanding of customer expectations,
dedicated budget to fund and actively seek to understand and
to fund the transformation9.

the transformation. alleviate customer pain points. They

ensure that their knowledge of customer
interactions extends across all touch
So, how can organizations master the points. Barclay’s Bank for instance, Digital leaders look at
has set up a website dedicated to
new rules that will help them drive lasting
gathering the voice of the customer. The
technology as a means to
customer engagement in a digital world?
Our research revealed that four key website called “Your Bank” encourages an end, and not an end in
customers to publicly share their views,
actions play a defining role in delivering itself.
compelling customer experiences — concerns and complaints regarding
and differentiate digital leaders from their the bank’s products and services. In
peers (see Figure 1). We examine each of addition, the bank puts future changes
these actions in the sections that follow. to its offerings to vote on the website, in

Figure 1: Creating a Digital Customer Experience

Forensic understanding of Focus on impact rather

customer interactions and than size of digital
pain points across investment
all touch points

Smart
An Outside-In Investments
Approach in Digital
Channels

Seamless
Meshing Data Driven
of Physical Insights
and Digital
Experiences
Using Big Data analytics to
Amplifying the physical enhance understanding of
experience with digital customer behavior,
technologies preferences and motivations

Source: Capgemini Consulting Analysis

3
Focus on Smart
Investments in Digital
Mercedes-Benz
Channels to Enhance Reach
and Drive Engagement The automotive industry offers an interesting example of an area where multiple
technology trends are coming to fruition at around the same time. Intelligent
Digita l lead er s a p p ro a c h d i g i t a l
highways embedded with sensors, autonomous vehicles, and digital showrooms
investments differently. Rather than the
are all converging to create new challenges for large automotive players in managing
size of the investment, they focus on its
customer experience. Mercedes-Benz responded to these challenges by launching
impact. Sephora, the global cosmetics
‘Mercedes-Benz 2020 – Best Customer Experience’ aiming to provide customers
major, has shown how smart investments
with a consistent premium brand experience across all touchpoints – physical as
in digital channels can deliver extraordinary
well as digital. As Ola Kallenius, Member of the Divisional Board Responsible for
results. Sephora has closely tied its social
Marketing & Sales explains, “Our goal is twofold — to create special moments
media strategy to the way that customers
for the customer at every step in the customer journey, and to connect the dots
use various social media platforms.
across all customer touch points.” One of the key initiatives that Mercedes-Benz
Research suggests that Pinterest is better
took to drive such a seamless experience is the service brand called ‘Mercedes
than Facebook in inspiring purchases10,
Me’. Ola explains, “Through “Mercedes me”, we intend to comprehensively
and that its users tend to spend more
address our customers’ product purchasing, financing, and servicing needs both
on every purchase than users of other
in the digital and physical worlds. All of the “Mercedes me” services are available
social media platforms11. Sephora has
via a unified digital platform.” One of the underlying themes to Mercedes-Benz’s
focused its customer engagement efforts
customer experience initiatives is on the role of digital. Ola says, “In our business,
primarily on Pinterest and it was among
digital can complement and enhance the physical experience, but not replace
the first retailers to integrate the “Pin It”
it.” For delivering such a digital-physical experience, Mercedes-Benz adapted its
button on its website12. Sephora curates
internal organization. Ola expands, “We created a customer experience function
lists of popular products on Pinterest
with a project and organizational leadership model that is based entirely around
and launched a Pinterest-centric email
the customer journey. So, we took departments dealing with different aspects
marketing campaign, where users can pin
of the customer journey, which were spread across the company, and brought
products directly from emails. Sephora’s
them under a single leadership. The customer experience function is tasked with
social media strategy has proved to be
creating the blueprint for a consistent global Mercedes-Benz brand experience.”
highly successful. The company saw
a 60% increase in traffic from Pinterest
Source: Capgemini Consulting, “Digital Transformation Review N’ 6 - Crafting a Compelling
following its email campaign. Its average
Digital Customer Experience”, August 2014
Pinterest follower spends 15 times more
money on Sephora.com than its average
Facebook fan13.

Sephora has seen similar success with their online and in-store purchase
its investments on mobile channels. history15. The company also offers free
The company was among the earliest digital content, such as music, magazines
Customers increasingly to extend mobile payment services to and apps, through the “Sephora Shares”
see their interactions its customers by integrating loyalty data program16. The company’s continued
with Apple’s Passbook application. As a focus on its mobile strategy has
with organizations as a result, customers that used the Passbook contributed significantly to spurring sales.
continuum of physical application were found to purchase twice As the director for mobile and digital store
as frequently and spend twice as much marketing at Sephora puts it, “We’ve seen
and digital experiences. annually as the average customer14. 150% growth in the mobile space this
Sephora introduced new features for its past year, and we’re seeing that continue,
mobile app that allowed customers to which is really outpacing the industry.17”
create online shopping lists and access

4
Use Data to Create recommendations engine accounts for Integrate Physical with
29% of its overall sales20.
Engaging Customer Digital to Create Unending
Experiences Several banks have also reaped the
Experiences
A compelling customer experience is rewards of leveraging customer insights Customers increasingly see their
often underpinned by a good grasp of to enhance customer experience. For interactions with organizations as a
data and customer insights. Digital leaders instance, U.S. Bank, the fifth largest continuum — a continuum of physical
such as Amazon and Macy’s are applying commercial bank in the US, integrates and digital experiences. They don’t
analytics to substantially enhance their data from online and offline channels necessarily understand and appreciate
understanding of customer behavior, in order to create a unified view of the internal organizational barriers between
preferences and motivations. Macy’s customer. This data is then used to target physical and digital. Organizations will
analyzes several million Terabytes of data prospects with personalized offers. As a need to understand that this is not about
every day including store transaction data result, the bank has been able to improve old vs. new, or physical on one side and
and social media feeds. This is used to its lead conversion rates by 100%. The digital on the other. It is about creatively
personalize the customer experience bank even tailors the content on its integrating their digital and physical
in various ways, including for instance, website, based on data analytics. For experiences so they blend in a seamless
by offering customized promotions to instance, products and services featured customer experience. Digital technologies
customers at checkout. The retailer’s on the website vary based on the profile offer powerful ways of amplifying the
analytics capabilities now enable it to of the customer visiting the website21. impact of a physical experience.
create 500,000 unique versions of a single Organizations across industries are
direct mail catalog18. As a result of its faced with a deluge of structured and
focus on advanced analytics, Macy’s has unstructured data. However, the ability
been able to boost store sales by 10%19. to translate this data to meaningful U.S. Bank improved its
Similarly, Amazon’s ability to harness insights and deliver superior customer
data allows it to help customers find experiences sets digital leaders apart.
lead conversion rates
products that are most relevant to them. by 100% using Big Data
The online retailing giant’s analytics-driven analytics.

Zappos
Amazon-owned online retailer Zappos has a unique take on how customer experience needs to be addressed in the digital
age. The company encourages customers to dial into its call center and engages them in extensive conversations. As Darrin
Shamo, the Director of Direct and Online Marketing at Zappos explains, “We do not follow any productivity metrics that are
designed to reduce the volume of calls coming into our call center or the time spent on the call.” The company also invests
extensively in people to develop an organizational culture around customer service. As Darrin explains, “All employees go
through a four-week call center training course before they start in their official position, and each holiday season the entire
work force, even the CEO, goes back to the phones to handle the volume.” Zappos combines this mindset with a new
approach to management called Holacracy. Darrin explains this model, “We are rolling out a new management style at Zappos
termed “Holacracy”. It is a unique management style that distributes the authority of leadership to influence various decisions.”
Such an approach to customer experience has helped Zappos immensely. The company has consistently been at the top
of customer service rankings. Over 75% of its business now comes from repeat customers. Going forward, Darrin believes
marketing needs to evolve. He says, “The future of marketing lies in the development of systems to better understand the
causal effects of customer happiness and the predictive value of customers.”
Source: Capgemini Consulting, “Digital Transformation Review N’ 6 - Crafting a Compelling Digital Customer Experience”, August 2014

5
US financial services major Capital One Automobile giant Audi’s showroom in
is experimenting with a café format for its London is another example of digital
bank branches, designed primarily to drive blending with physical to create a great Audi’s Digital Car
services offered by their online bank — customer experience (see Figure 2). The
Capital One 360. Across the US, the bank new showroom — called “Audi City” Showroom reported a 70%
has opened nine café styled branches that — houses just one car, the company’s increase in new car sales
provide high levels of customer intimacy most exclusive model. In addition, it has
along with complimentary services22. The an array of large screens where Audi’s
and higher average sales
branches also provide access to financial complete range of models can be viewed, price than traditional
and digital tools. Bankers within the café customized, repainted and accessorized.
dealers.
give personalized advice on saving and In its first ten months of operation, Audi’s
investing strategies while also providing digital showroom saw a 70% increase in
detailed information on Capital One 360 car sales compared to prior retail format23,
products. As such, the café format allows and a higher average sales price than its
Capital One to combine the personal average UK dealership24.
touch of the physical branch with the
convenience of online banking – ultimately
providing customers with the best of both
worlds.

Figure 2: Audi’s Digital Showroom

Source: Company website

6
How to Create a Compelling Customer Experience?
The View from Industry Leaders

“It is important to benchmark

yourself against a broader
range of consumer services and “The key is to strip out
not just against other complexity from our
companies like yourself.” customers’ lives.”
- Tim O’Reilly
- Andy Palmer, Nissan

“We created a customer experience

function with a project and
organizational leadership model
that is based entirely around the
customer journey.”
“Customers are increasingly expecting
- Ola Källenius, Mercedes-Benz
a simpler, leaner experience that is
adapted to mobile.”
- Nathalie Gaveau, Shopcade
“Customers expect the experience to be
easy, personalized, shareable and
seamless.”
- Rob Tarkoff, Lithium Technologies
“The integration between the digital
and the physical world has to be and
will be a seamless one.”
- Ola Källenius, Mercedes-Benz

“We drew inspiration for our customer

experience initiatives from one of the
head concierges at the Mandarin
Oriental Hotel who told us, “Our
motto is simple. The answer is yes, but
what's the question?”
- Ola Källenius, Mercedes-Benz

Source: Capgemini Consulting’s Digital Transformation Review N’ 6, “Crafting a Compelling Digital Customer Experience”, August 2014

7
Build-A-Bear Workshop Inc, the US- represented by a set of emoticons on the
based do-it-yourself retailer of stuffed touch screens. They can also choose
animals, is another great example of the from an assortment of digital music and Organizations can lose
power of such an integrated physical- sounds to add a “voice” to their toys.
digital approach. The company undertook Such tactile experiences were introduced as much as 20% of their
a two-year modernization program aimed to help children form deeper connections annual revenues due to
at providing a more immersive in-store with their chosen toys25 (see Figure 3).
experience to its target customers — The remodeled stores met with strong
poor customer experience.
young children accustomed to using positive reception from customers, with
smartphones and tablets. As part of sales increasing by an average of 25%,
the program, Build-A-Bear remodeled compared with an 8% average increase
some of its stores using touch, object in company-wide store sales. Driven by
and gesture recognition technology. the success of the program, the company
Digital storefront installations enabled plans to extend the same experience to
with Microsoft’s Kinect technology allow many more stores26.
customers to use gestures to play games
and interact with Build-A-Bear’s latest Digital leaders such as Capital One,
product offerings as they enter the store. Audi and Build-A-Bear have successfully
Within the store, a series of kiosks with understood the amplifying effect that
interactive touch screens digitally enhance they can achieve by meshing physical
each step in the process of making the with digital experiences in order to help
toys. For instance, children can choose differentiate themselves.
personality traits for their toys, which are

Figure 3: Build-A-Bear Workshop Store

Source: Company press release

8
Can traditional Research indicates that organizations can customer behavior, smart investments
lose as much as 20% of their revenue due in digital channels, the ability to harness
organizations create a
to poor customer experience29. So, why customer data, and finally, the ability
rewired digital customer don’t many companies try creating great to creatively mesh physical and digital
experience? customer experiences? One obvious experiences.
Many Born-Digital companies have set reason - it is very challenging to do so.
a high entry bar for compelling customer Organizational constraints are usually
experiences. Companies such as Zappos the biggest reason. There is very little
go to great lengths to create a compelling coordination between the front-end of the
customer experience. Darrin Shamo, organization and the back-end. Customer Many Born-Digital
Director of direct and online marketing at experience, while being everybody’s companies have set a high
priority is no one’s job. Delivering a
Zappos explains, “We do not follow any
compelling customer experience requires entry bar for compelling
productivity metrics that are designed
to reduce the volume of callscoming the careful orchestration of people, data, customer experiences.
into our call center or the time spent on IT, processes and customer behavior. It
the call27.” Zappos has also shown that requires an exhaustive understanding of
they are willing to work around traditional
organizational governance models.
For instance, the company replaced
its traditional management style with
‘Holacracy’ - a model that distributes Nissan
authority amongst various circles of
employees. Such a model empowers Our latest Cars Online study indicates that as many as 44% of people surveyed
employees enabling them to assign top were likely to purchase a vehicle online. It is behaviors like these that are shaping
priority to customer experience. Some the industry’s response to the digital customer experience. As Andy Palmer, Chief
traditional organizations have been quick Planning Officer of Nissan says, “we are on the cusp of one of the most radical
to adapt. Mercedes-Benz for instance, changes in the way that you buy cars in 125 years.” Customer trips to dealers for
launched an organizational restructuring a car purchase are down from 7 in the past to as little as 1.5. As Andy explains,
initiative — aptly titled “Customer “In previous times, the customer journey began the first time a customer walked
Dedication” — to focus its activities into a dealer. Now, it is 6 to 12 months before purchase intention.” Andy also sees
more sharply around customer needs. Big Data playing a big role going forward. As he states, “The biggest commercial
Ola Kallenius, Member of the Divisional opportunity we have around Big Data right now is in marketing.” However,
B o a rd a t M e rc e d e s - B e n z C a r s , Andy points out to the potential privacy risk that surrounds the use of Big Data
responsible for Marketing & Sales in marketing when he says, “Privacy needs to be as defined by the customer,
explains, “The objective of the initiative not the company.” In order to offer superior customer experience, Andy believes
was to build a leaner and more flexible CMOs have to adapt. He explains, “CMOs need to have a grasp of mathematics,
organization, so that each division within statistics, data technology as well as digital technology.”
the Group could focus its activities more Sources: Capgemini Consulting, “Digital Transformation Review N’ 6 - Crafting a
sharply around customer needs”.28 For Compelling Digital Customer Experience”, August 2014
most other organizations however, it is
Capgemini Consulting, “Cars Online”, 2014
time to play catch-up rapidly. Not doing
so will expose organizations to the perils
of a poor customer experience, which
can indeed be significant.

9
References

1 TIME.com, “Domino’s Mea Culpa and America’s Pizza Passions”, January 2010
2 Fastcocreate, “How Domino’s Became a Tech Company”, May 2014
3 Stock price as of 17th June 2014
4 MobileMarketing, “Domino’s Mobile Sales Larger Than its Entire Business in 1999”, June 2013
5 Capgemini Consulting, “Digital Transformation Review N’ 6 - Crafting a Compelling Digital Customer Experience”, August
2014.
6 IgnitionOne, “Integrated Marketing Survey 2013”, November 2013
7 Informa.com.au, “Customer Centricity: The Key to a Sustainable Future”, 2012
8 CustomerCentric.info, “Barclays Bank Working Smart and Gathering VoC Data”, September 2013
9 Forrester Research inc, “The State Of Customer Experience 2011”, February 17, 2011
10 Bizrate Insights, “Pinterest vs. Facebook: Which Social Sharing Site Wins at Shopping Engagement?”, October 2012
11 Internet Retailer, “How Pinterest tops Facebook in e-commerce”, January 2014
12 Venturebeat, “Sephora: Our Pinterest followers spend 15X more than our Facebook fans”, February 2013
13 Social Media Delivered, “Pinterest Case Study: Sephora”, September 2013
14 Internetretailer, “Apple Passbook users are among Sephora’s best customers”, April 2013
15 Sephora.com, “My Beauty Bag”
16 Mobilemarketer, “Sephora borrows from Starbucks with app recommendation program”, January 2014
17 eMarketer, “At Sephora, Mobile-First Means ‘Connecting’ the Customer’s Experiences”, November 2013
18 Direct Marketing News, “Macy’s CMO shares loyalty insights at NRF Big Show”, January 2013
19 CNBC, “Retail Goes Shopping Through Big Data”, April 2013
20 Yahoo, “Retailers Using Big Data: The Secret Behind Amazon and Nordstrom’s Success”, March 2014
21 Adobe Digital Marketing Suite Success Story, “U.S. Bank”, 2012
22 Company website, accessed in May 2014
23 Audi MediaInfo Release on “Audi City”
24 Financial Times, “Online showrooms and digital dealerships revolutionise car buying”, December 2013
25 Samsung.com, “Case Study: Build-A-Bear Workshop®”, June 2013
26 Marketwatch.com, “Build-A-Bear gets a big bear hug; shares surge 30%”, May 2013
27 Capgemini Consulting, “Digital Transformation Review N’ 6 - Crafting a Compelling Digital Customer Experience”, August
2014.
28 Capgemini Consulting, “Digital Transformation Review N’ 6 - Crafting a Compelling Digital Customer Experience”, August
2014.
29 Oracle, “Global Insights on Succeeding in the Customer Experience Era”, February 2013
Authors
Didier Bonnet Jerome Buvat Subrahmanyam KVJ
Global Head of Practices Head of Digital Transformation Manager, Digital Transformation
didier.bonnet@capgemini.com Research Institute Research Institute
jerome.buvat@capgemini.com subrahmanyam.kvj@capgemini.com

Digital Transformation
Research Institute
dtri.in@capgemini.com

For more information contact

China France India

Julien Bourdinière Patrick Ferraris Neha Joshi
julien.bourdinière@capgemini.com patrick.ferraris@capgemini.com neha.joshi@capgemini.com

Norway Netherlands Sweden

Martin Landberg Jan Brouwer Hakan Erander
martin.landberg@capgemini.com jan.brouwer@capgemini.com hakan.erander@capgemini.com

Germany, Austria and Switzerland UK United States

Steffen Elsaesser Sherif Choudhry Scott D Clarke
steffen.elsaesser@capgemini.com sherif.choudhry@capgemini.com scott.clarke@capgemini.com

About Capgemini and the

Collaborative Business Experience

Capgemini Consulting is the global strategy and transformation With more than 130,000 people in over 40 countries, Capgemini
consulting organization of the Capgemini Group, specializing is one of the world’s foremost providers of consulting,
in advising and supporting enterprises in significant technology and outsourcing services. The Group reported 2013
transformation, from innovative strategy to execution and with global revenues of EUR 10.1 billion. Together with its clients,
an unstinting focus on results. With the new digital economy Capgemini creates and delivers business and technology
creating significant disruptions and opportunities, our global solutions that fit their needs and drive the results they want. A
team of over 3,600 talented individuals work with leading deeply multicultural organization, Capgemini has developed its
companies and governments to master Digital Transformation, own way of working, the Collaborative Business ExperienceTM,
drawing on our understanding of the digital economy and and draws on Rightshore®, its worldwide delivery model.
our leadership in business transformation and organizational
change.

Find out more at: Learn more about us at www.capgemini.com

http://www.capgemini-consulting.com/

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Capgemini Consulting is the strategy and transformation consulting brand of Capgemini Group. The information contained in this document is proprietary.
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