## " Propelling a Company Revolution via Fast, Fresh Feedback from Customers, Partners and Employees"

Part I. The Stages of the Revolution

The Internet and company Intranets have begun to change radically the interactions between businesses and their customers, their partners and their employees. Now companies can gain real feedback from their most important "customers" in hours or days, with large and representative samples, so that fresh and meaningful data can propel a company to act quickly on opportunities as well as trouble spots. We can pinpoint employee issues before they become problems, and we can integrate up-to-date information from our suppliers and other partners into our strategic goals on an ongoing basis.

The information revolution is not just information as reference; it is information as fuel for action. Critical information imparted by the customer helps the supplier meet their needs and desires. "To succeed today, companies must learn how to use information and telecommunications technology to respond immediately, not only to changing circumstances but also to customer demands." James Barksdale, President & CEO, Netscape

This customer information should not be static, but active, continuous and comparative. Customers want to be asked about their choices, and then answered (via action) in real time. "The new marketing model reflects a shift from monologue to dialogue in dealings with customers. The result is a reversal of traditional consumer and producer roles, with the consumer dictating exactly how he or she would like to be served." Regis McKenna, Real Time

The guidance we receive from customers or employees, if well interpreted and understood, allows us a power we have never had. Their thoughts and opinions and preferences come quickly to us and are more accurate than ever before. Customers can return their feedback in web time rather than post time: the opinions do no "age" before they can reach their destination. The goal is no time elapse between the time the opinion is given and the time when the opinion is received and action can be taken. Furthermore, opinions are written directly by the customers and do not have interpolators writing down their words and missing parts of their ideas. And finally, because people answer web or email in their offices or homes and on their own time, they are willing to be more direct, honest and thoughtful than they are when they are interrupted by phone calls and other intrusive feedback systems.

Revolutions sometimes start on familiar ground and go in stages, as this one is doing. Most companies move through these stages on their way to true, fast two-way interaction-- between a company and its customers, employees and partners. These stages move from static one-way information delivery to an Internet and Intranet-based system which allows for continuous, ongoing information exchange.

Stage 1: Email and Static Web Sites

Simple information exchange

Stage 1 is the stage for one-way information: sending information which your customers, employees or partners can read and be informed about what is happening in a business.

Begin with Email

This stage often begins with companies communicating with their customers via email—sending them notices of new product introductions, or information about new pricing or new programs. This "first stage" communication is meant to broadcast information to a group who are potentially interested in such information, but without tailoring the information or the message to the specific audience. Still, it is faster and cheaper than postal mail, and gets the ball rolling toward communication over the net.

Web sites as posted, static reference

Usually the next stage is enriching the information given to customers, partners and suppliers by posting information for their customers to review on various web sites-- product line information, prices, success stories, support tips, and so on. From the inside, companies begin to use their Intranets to post information to inform their employees of the latest product announcements, press releases, pricing actions, and so on. The Intranets also serve as ways for different groups in the company to make other areas aware of their purpose and services.

Reference and navigation experience

This is an important stage because it makes companies and the people in them familiar with posting and looking for information, and able to navigate in the new web space. Most high technology companies are beyond this stage, but many mainstream businesses are still experimenting with this stage.

Stage 2: Interactive data collection & posting

Stage 2 is the beginning of interactivity in the use of the Internet and Intranets.

Internet surveys

Companies begin to solicit and gain feedback from their customers over the web. They begin to ask their own employees for feedback-- about specific questions (should we have a 401K plan?) and about the general state of things (company culture surveys or employee 360 review systems.) They ask their partners to participate in feedback systems on the web.

Intranet as work center

At this stage, the company Intranet becomes an engine for increasing productivity and the center for active work at a company. It is the place where team schedules are updated, where projects are tracked and monitored, and where people go to find out the status of anything on which they are working. It speeds up access to operational details so that knowledge workers can quickly and effectively do their jobs.

Web advantages discovered for customer feedback

Companies discover that they can use the web for gathering customer information. The Internet helps companies achieve the following:

- Larger samples
- Higher response rates
- Faster response times
- Better and more comments
- Lower cost for similar results
- More convenient for respondent

They can send questions to their customers and receive feedback faster and better than ever before. Customers respond in droves (response rates run as high as 30-50% in large samples), they respond quickly (2 hours or 2 days rather than 2 weeks or 2 months), and they respond thoughtfully (with more, longer and more helpful comments than any other vehicle we've seen.)

Furthermore, researchers find that they can enlarge sample sizes from typical phone samples (often less than 100) to thousands or even tens of thousands—without the prohibitive time and cost they would have incurred for non-web surveys. For example, according to Bill Petit of BMW North America: "We had to complete some product research in a very short time from a hard-to-reach group of people. So we decided to put our survey up on the net. The chief reasons for choosing this method were timeliness, ability to get a good sample, and cost."

Most high technology companies are currently in this stage of development-- experimenting with interaction and with bringing outside parties into their previously guarded enclaves. Sometimes parts of a company’s Intranet are actually accessible to channels and other partners, and customers become part of the company team.

Stage 3: New Drivers for Enterprise Information & Decisions: Customers, Employees and Partners

Customer information propels quick action across the enterprise

In this final stage, the Internet and Intranet are the dominant enterprise tools for the company, its customers, its partners, and its employees. Information from these various parties no longer has a middleman; information becomes directly accessible to all who are working on a project or with a particular customer--from sales to marketing to system engineering to purchasing to legal. This "disintermediation" of customer and partner feedback causes something else to happen: it enables, perhaps even forces, a company and its employees to act more quickly to solve problems. This means that expectations are raised for everyone, and the speed and accuracy of interpretation of data become essential for success.

Continuous customer information

Customer feedback, rather than being incremental or occasional, becomes the constant against which everything is measured. The customer information is gathered frequently -at regular intervals (quarterly) or perhaps even continuously (after each transaction.) It is then shared over the Intranet around the world, and all parts of the company serving that customer can share the data and insights coming back from the customer.

Common web interface

Ideally, at this stage, companies have found one common reporting interface for dealing with customer information. One interface allows everyone to learn the graphical language of customer feedback, to share and discuss results, and to act quickly upon the results. It also allows feedback from multiple sources-- partners, customers, employees, channels-- to be fed into one system and compared for similarities and differences.

Web reporting

Reporting on the web is an essential part of the system-- perhaps the most essential part. Without web reports, the system of gathering and reporting information is not state-of-the-art because the data is not broadly accessible. This information may be password and user-protected, or it may be totally open-- depending on the sensitivity and confidentiality of the information.

Interactive data discovery

Furthermore, the web reports should allow interactivity: they should allow people to check and arrange information according to the segments of most interest. They should allow ad hoc selection of segments, and the ability to compare and contrast across different segments or samples.

Integrate information from multiple sources about each customer

Also essential at this stage is the ability to unite information from customers' surveys with information about customers from internal databases. What this means is that companies can get a better overall view of the customer.

Part II: Some Practical Case Stories

To illustrate some of the many experiments in Internet and Intranet innovation, I have selected five case stories about gathering and acting upon fresh information from customers, employees and partners. These are true stories which show how broadly and quickly the revolution in information is taking place—and the value which these companies perceive in their experimentation.

Case Story #1: Major Account Management Systems: Two Companies Use Web System To Build Partnerships

"To provide you, our customers, with world-class products and services, we need to understand your expectations and measure how well we are doing in meeting those expectations." Jack Harding, CEO, Cadence

"What is great about our Global Account System is that is brings consistency to how we view accounts. Now we can compare apples to apples, and have an overview of all of our major accounts using the same metrics." Global DLT Account Manager, Quantum

In most companies, major account management is the fastest growing part of sales. Global account management grew 400% over the last year, according to the National Account Management Association, NAMA. The reason is simple: effective management of key accounts can make the difference between growth and no-growth and between customer frustration and customer loyalty. Long term, this loyalty or lack of it will drive a company's profitability.

This is the story of how two high technology companies, Cadence and Quantum, have used the Internet and their Intranets to build closed-loop account management with their major customers.

Cadence saw the increase in expectations from the customers as a pivotal change. According to Paul Gallagher in Global Account Management: "Customers are now expecting that their suppliers have an integrated strategy for them as a requirement for doing business. They expect us to understand their business, their challenges and their competition." To meet these rising expectations, Cadence invested in systems to give them frequent and usable information about their major accounts.

Cadence has four methods of gathering data from the web on major accounts. First, when an account is signed up, Cadence performs strategic account research by combining data from the Internet with their own internal research and analysis. The result is a comprehensive dossier of the customer: its strengths and weakness as well as its opportunities in the marketplace and its strategy.

Second, Cadence broadcasts opportunistic data about each account to the internal account team. Using a filter program on the Internet to pull out relevant data, they then email the latest news and information on each account to team members. That "push technology" allows each person on each major account to receive a daily update of the crucial happenings on that account so that they can act quickly on major changes in the customer company.

Third, they use a sales automation tool to track what specifically is happening at many levels in the account, and to share an overview of the major account profile.

Fourth, Cadence installed via a third party a Customer Satisfaction Measurement (CSM) system to conduct a survey each quarter on each account, to aggregate the results and to graphically display the results in specially designed web sites. These Internet web sites are password protected for security, but are available to all of the Cadence Account Technical Managers, or ATMs, who serve these accounts. Via this web-based system, they can monitor absolute results as well as changes in the account. Are these customers becoming more or less satisfied? Where are the problem spots? How does Customer A compare with the average? What should they do better to serve these customers?

Drive customer satisfaction and loyalty

Quantum had a similar need to Cadence in the area of measuring customer satisfaction and loyalty. They had a long-established Quarterly Business Reviews with each of their major accounts, but did not have one overall, consistent way of measuring accounts and their progress. Earlier this year, they installed a system similar to the one described above.

Measure trends

When asked about the value of their Global Account Measurement system, a Global Account Manager for Quantum stated: "It is an effective tool to measure all aspects of our business-- and to give customer feedback to specific functions so that they can improve their operations. It also allows us to monitor progress against our goals and also against past quarters."

Focus constantly on the customer

Cadence and Quantum now have systems which "provide a constant process and a constant focus on customer satisfaction measurement." This common set of metrics enables their account managers to improve relationships with their customers by pinpointing the trouble spots, by identifying who in their company can fix the problems, and by communicating to the customers how they will solve it. In Cadence, this process even impacts the compensation of account managers: positive account improvement yields positive compensation changes.

Close the loop with customers and with the account team

This "closed loop" account management is only possible because these companies employ both the Internet and their Intranets as seemless vehicles to communicate with their customers and with their own internal teams. In both cases, the customer satisfaction systems are used as discussion guides with their account teams as well as with the customers directly.

Case Story #2: Bay Networks' Transaction-Based Customer Loyalty System

A company's sustained success rests heavily on its customers' satisfaction and loyalty. Bay Networks wanted to increase customer loyalty by getting fresh customer feedback after every support transaction and by integrating that with customer support performance metrics. Bay thus began to track each customer support transaction to determine how they were doing and what needed to change -- according to the customers. Was Bay being successful in resolving the problem? Was the support engineer knowledgeable and professional? Was Bay perceived as responsive and timely in its actions?

Automate Feedback

Bay did not want to add time and effort to the already pressure-filled day of its support engineers, so it made sure to design an automated system. This system would send a message to each customer (without intervention) after each support case was closed. The scorecard survey was short and sweet (8 questions) since the goal was to have a high response rate and a large sample size.

Integrate with Support Performance Metrics

Bay already tracked many things about its customers through its support system: customer demographics, time to solve a problem, problem resolution codes, problem severity, etc. Rather than start from scratch with an entire new system, they integrated their customer survey system with their customer support application so that data did not have to be re-entered. The results clearly show view how customer satisfaction varies by support center, support engineer, industry, product, problem severity, and so on.

Manage Critical Issues Immediately

Research has shown that quick resolution of problems can lead to even greater satisfaction than no problems at all-- but also that slow resolution leads to extremely low satisfaction and customer retention. To make sure they resolved problems immediately, Bay uses a system which triggers an email each time a score comes in below a certain level -- and sends that information to the person who can act to resolve the issue.

Case Story # 3: Oracle Employee Surveys Change the Way Oracle Evaluates Programs and People

Measuring the effectiveness of programs and people are at the heart of business success. After all, how can a company continuously improve without a clear view of what its programs and people are contributing and what they need to improve? Oracle has instituted a number of web employee surveys to help it measure effectiveness: one, to measure the effectiveness of its training programs; and two, to measure the effectiveness of its top managers by conducting 360 degree performance evaluations (personnel evaluation by superiors, peers and subordinates.)

Measure Training Program Effectiveness

For the first program, training evaluation, Oracle wanted to measure the effectiveness of training its technical support people. Oracle sent out 4 separate questionnaires to different groups: the trainers, the trainers’ managers, the trainees and the executives. The purpose was to get a broad view of how people were trained, how effective the training was in helping them to perform their jobs, and how the training program should be changed to meet the needs of both trainees and managers.

The training evaluation results indicated a significant difference of opinion amongst the four groups of employees about the best type of training needed. The web format allowed the data to be entered anonymously and quickly so that the training team could use the results in their next year’s strategic plan. Web reporting sites made the data available to all of the Oracle training managers in all geographies and departments. It became a focus for the discussion of how to change and improve the program, as well as for recognizing success and effectiveness.

Set Up Web-based 360 Degree Performance Evaluation System

The second web program Oracle instituted, the 360 degree performance evaluation, is an innovative way to provide employee performance evaluation over the net—with the appropriate security checks and balances to protect answers and identity while still retaining the speed of the web. The goal of this program is to provide Oracle with an easy way to evaluate performance and provide feedback and results graphically via a Web viewer/report system. This process is based on a survey questionnaire that is completed by the participants. Approximately 20-25 very senior worldwide Oracle executives are the target participants, along with their manager, 5 peers, and 5 direct reports. The results will be posted over the net so that each manager can see his/her own results, along with the results of his/her subordinates. Although the program is just beginning, it heralds a movement toward applications which gather and use feedback from employees and the Internet.

Case Story #4: Adobe's E-Mail/Web Product Survey Nets Over 1,000 High-Quality Customer Responses

Knowing what your customers like about your products, and what they don't, is critical to market success. Adobe Systems Inc. puts an especially high priority on customer satisfaction and feedback. When the company needs a fast, economical way to survey a large user group, Adobe turns to email and web surveys.

Adobe utilizes innovative Internet technology to gather customer opinions, analyze the data, and provide the results in a format that can be easily interpreted and disseminated throughout an organization. The turn-around time is three times faster than traditional methods, with most surveys averaging less than one month.

Recently, Adobe undertook an extensive survey to gather customer reaction to Adobe FrameMaker™, a versatile software product that allows businesses to simultaneously create content for both print and the World Wide Web. The survey was e-mailed to a select group of FrameMaker users, with an embedded link which takes customers directly to the site hosting the survey.

"We wanted to explore alternatives that would deliver a large sample size effectively," said Marion Melani, Product Marketing Manager for Adobe FrameMaker.

Responses Exceed Quantity and Quality Expectations

The number of responses and the quality of the answers exceeded Adobe’s expectations. While the company's goal was a sample size of 300 to 400, over 1,000 customers responded with in-depth opinions on the current version of FrameMaker and offered suggestions for future products. According to Adobe, the ease of completing an Internet survey facilitated a large number of respondents.

"Our intent was to create a robust data set that gave us as much insight into Adobe FrameMaker customers as possible. We wanted to reach a large umber of customers in a short time span," said Joel Mier, Senior Research Analyst for Adobe Systems.

24-Hour Interviewer Encourages Thorough Responses

A survey is posted to the Internet and targeted customers are directed to the site via a link in the e-mail message. The Internet acts as a 24-hour, ever-ready interviewer. Whenever the customer has the time and inclination to express their opinions, the survey is ready and waiting for them.

Because the surveys are conducted over the Internet rather than over the telephone, customer responses are typed, rather than verbal. Consequently, customers take more time to compose their thoughts and provide a more thorough, accurate, detailed response to each question than they would during a phone conversation.

E-Mail Makes It Easy for Customers to Volunteer More Data

Even more gratifying than the high response rate were the additional steps customers took after the survey was completed. Adobe received a flood of follow-up e-mails which supplied even more detailed responses to the survey questions, and described at great length the customer’s favorite likes/dislikes about all aspects of Adobe FrameMaker.

The survey data is now being utilized by Adobe's Marketing, Product Development, Engineering and Sales departments. As a result of the survey, Product Development can customize the software's features to meet precisely customers' wants and needs. Adobe Marketing can now utilize this new information with programs that appeal directly to this group's needs.

Graphical Web Reporting Make Results Easy To Understand and Share

"The best part about the survey results were presented." Melani said. "The information was posted to a Web site, where everyone in Adobe could benefit from this new, updated and actionable data. At the push of a button, we could break out the survey results by customer size, platform, version of the software, or geographic region. The Internet methodology proved to be fast, cost-effective and versatile," said Melani.

Case Story #5:

Netcom Measures Customer Lifecycle Loyalty

Netcom, an Independent service provider, has customers who sign up for an ongoing service to access the Internet. As part of their marketing plan, Netcom was focused on increasing customer loyalty and keeping customer turnover rates low. To do that, they needed a tracking system to gather and access specific, detailed data about satisfaction levels during all points of the customer lifecycle.

Netcom solved its problem by employing a web-based survey and reporting software system to update and analyze customer information and satisfaction levels at different points during the customer lifecycle.

Obtain and access lots of quality data

Netcom had a lot of technical and market information on their hundreds of thousands of customers. The challenge was to add a continuous flow of customer preference and satisfaction-level data to determine the factors driving customer satisfaction and how they changed over time according to customer segments. They needed to get specific enough to evaluate satisfaction by length of relationship, as well as modem speed, level of membership, frequency and type of use, and other factors, while keeping a high level of statistical accuracy. A key requirement was to develop a database and access method that maintained the flexibility to query on an ad-hoc basis, as customer-specific issues arose.

Wanted customer satisfaction research expertise "What we really needed was a combination of technology and customer satisfaction expertise," reports Dave Rochlin. "We wanted a flexible reporting tool, as well as the expertise in categorizing and organizing the information, so we can get the answers we need, when we need them." |

Dynamic tracking over time To enhance Netcom’s traditional research, Rochlin was looking for something more dynamic that they could use to collect and access data on an ongoing basis. "We didn’t just want a snapshot of what was happening today. We wanted to put in place a system of tracking customers’ opinions over time. If they are happy with us today, how will they feel in 6 months, 9 months, a year? Which customers are satisfied, and which are not? Most importantly, what factors are influencing our customers’ opinions, and how will they change over time? " Netcom used a third party to design and implement a survey that would get the very detailed analysis that Netcom needed to evaluate their product and service. They were able to categorize the responses by the length of the customer relationship and provide Netcom with an in-depth analysis and presentation two weeks after the survey was sent. This data was also made available on a server that could be accessed and analyzed directly by Netcom. |

Quality data fast

Web-based surveys are the fastest medium available in research. If well designed, they also have the advantage of providing large sample sizes in the tens of thousands like Netcom.

Results: Ongoing customer feedback allows Netcom
to stay close to their customers

Ongoing information and analysis

"Now I have information at my fingertips that I can manipulate every time a new question comes up. As one example, I can see what sort of impact an external event - such as the introduction of higher speed modems - has on the Netcom customer base... This was definitely worth the time and the investment," Rochlin concludes.

Case Story #6: U.S. Web Uses Web Survey Results To Streamline Business Processes and Communicate With Customers

A one- to two-percent return is considered good for unsolicited surveys sent through the U.S. Mail. Imagine USWeb Corp.’s delight when they received a 21% return on a survey e-mailed to their clients. This remarkable response—ten to 20 times the standard survey return rate—produced such high-quality information that USWeb has been able to use the results to improve its own business processes and make strategic decisions.

"As with any professional service firm, it is imperative to understand client satisfaction on an on-going basis," says Geoff Kerr, partner, corporate communications for USWeb Corporation in Santa Clara, Calif.

USWeb’s growth is a Cinderella story that keeps both its competitors and Internet analysts in awe. Barely two years old, the company has acquired 20 of its competitors and affiliates in the last year, and now has more than 25 offices worldwide with over 600 employees.

Founded in 1995, USWeb Corporation has become the largest provider of professional services for the Internet by solving its clients’ problems. The company knew that to maintain its explosive growth without sacrificing quality, it must continuously measure the performance of its offices and quality of its services.

Advanced Systems Provides Real Time Answers to Complex Questions

The survey developed for USWeb focused on the impression USWeb’s clients had of its services. The survey was e-mailed to the most senior-ranking official at each client company. Clients were asked to rate, on a scale of one to seven, USWeb’s image, performance, responsiveness, professionalism and the quality of its services.

In addition, clients ranked each of these attributes as applied to their expectations for an ideal company offering Internet consulting services. By analyzing both sets of data side-by-side, USWeb now has information that is not only valuable and useful, but also extremely accurate and reliable.

"The technology behind this system is incredible," Kerr says. "With real-time data processing, detailed survey information goes directly from the respondent to the server, which analyzes and calculates the data. The back end is so easy and fast that it simplifies a very complex process."

Kerr notes that all of USWeb’s offices can access the evaluation of their particular operation and also the aggregate results for the entire company. This information enables USWeb to include the measurement process as a key factor for evaluating performance, and reward those offices that use the survey results to improve the quality of their services.

When asked whether he considered other forms of customer surveys, Kerr explains that no other medium has the benefits of the Internet, including a non-intrusive query format, the ability to process and analyze highly detailed information, and the ability to deliver this data in a real-time process.

US Web Practices What They Promote

Kerr also says that as an Internet-focused company and the recognized expert in strategic Internet consulting and professional services, it is extremely important that USWeb use the Internet as its query medium.

"We show companies how to leverage their legacy systems and how to use the latest Internet technology to solve their business problems. Everything we do is keyed to automating the business process for maximum efficiency. Using (this web methodology) not only provides results that will help fuel growth, but also will enhance our reputation as a leader on the forefront of the technologies we deploy."

USWeb will continue to survey customer opinions because Kerr is convinced that the consistent use of this methodology and analysis will enable the company to maintain its quality and competitive advantage. The company plans to e-mail a second survey to a much greater universe—approximately 500 of its clients—in the near future. According to Kerr, this is just the beginning.

"The first survey was a benchmark. In evaluating the results, we asked ourselves, ‘Does the medium work? Is it giving us information that’s valuable?' The answer to every one of these questions is a resounding yes. We plan to continue to use this compelling and efficient service to streamline the business process of measuring client satisfaction and communication."

Conclusion

These six case stories tell us that industry leaders are quickly moving to use Internet and their Intranets as vital tools to re-orient their businesses to real-time action which reflects the frequent and continuous input from customers, partners and employees.

Many of the top companies are moving beyond the first stages of this evolution, in which the data was primarily static and one-way. Some companies have moved to Stage 2, with closed-loop customer feedback systems and quarterly, systematic interactions with major partners. The most enlightened are planning for and entering the third stage, when a unified graphical web interface will combine and integrate data from multiple sources so that anyone with a need to know will be able to see via their Intranets what is happening with their customers, partners and employees.