Chapter
2
The Real-Time Monitoring and Response (RTMR) System
Companies that utilize Internet of Things (IoT) technologies to actively monitor equipment installed at their customer sites have the opportunity to respond to problems more quickly to reduce downtime. Repairing products that are out of service more quickly than competitors demonstrates greater respect for the value of customer time. Advances in technology have made it increasingly feasible to add features to almost any product to make it both smart and connected to the internet, thereby allowing usage and diagnostic data to be collected throughout the product’s life. In many cases these smart products can even be repaired by remote technicians.
For example, consider the blood- and urine-analysis equipment made by Sysmex ($2.5 billion in sales on the Forbes Global 2000 list for 201812). Sysmex originally added connectivity to its instruments to “perform quality control on customers’ instruments, monitor their operating status in real time and support their stable operation.” In doing so, Sysmex reduced the amount of time to service equipment because the equipment could self-report detailed diagnostic information, which allowed service calls to be scheduled before the customer knew there was an issue; furthermore, the monitoring data always provided the service technician enough information about the problem to enable appropriate preparation to solve the issue. Service technicians can now access as much information about a machine when they are off site as when they are on site. Often they can fix the problematic device by remotely rebooting it, delivering a software upgrade, or talking an on-site medical technician through the repair process. As a result, Sysmex’s service costs, equipment downtime, and customer satisfaction improved dramatically, making it more competitive.13 Companies such as Sysmex that are better at reducing disruptive equipment downtime are more real time than their competitors.
Becoming a real-time organization means that an organization has established and regularly employs a real-time monitoring and response (RTMR) system. Organizations employ these systems to do three things:
Collect time-centric and other data, such as sales, costs, performance of competitors, environmental issues, and government regulations. This data is collected by monitoring a variety of activities and conditions internal and external to the organization.
Analyze the data to identify strengths, weaknesses, threats, and opportunities and prioritize the areas to improve; for example, financial statements and strategic analyses are commonly generated and used for these purposes.
Respond to changing conditions reflected in the analyses by specifying the requirements for change that will lead to improvements, developing or acquiring innovations that will meet the specified requirements, and implementing those innovations.
A real-time organization’s RTMR system builds on the existing monitoring and response system. Importantly, it adds an overarching focus on valuing customer time. That focus assures that the system includes data that supports the evaluation of the organization’s competitive strengths and weaknesses in valuing customer time. It also assures that the organization responds to competitive challenges that threaten its successful delivery of better customer real-time experiences. The RTMR system is an essential element for determining the transformations required to compete effectively as the real-time bar is raised by the competition.
It also allows an organization to draw a picture of its real-time status compared to competitors (see Figure 2.1). The organization’s chances of retaining existing customers and attracting new ones (i.e., surviving and thriving) increase as it moves toward becoming a real-time contender or leader. The likelihood of customers migrating to its competitors increases as it moves in the other direction toward real-time denial.
For products and services that are based on remote intelligence, technologies such as IoT can be used to collect and monitor product status and usage statistics. IoT data, when collected and centrally analyzed, can be employed to identify faults and supply detailed diagnostic information to the manufacturer. Advanced RTMR systems can often detect systemic faults before the customer has realized there is a problem. The same data can also be utilized to monitor usage statistics that provide the basis for predictive fault management, allowing the manufacturer to respond before a fault has occurred. Finally, the same data, when combined with data from other customers, can provide more generalized quality statistics that often allow a manufacturer to segment between user-derived faults and more wide-scale product design issues. For companies that deploy products and services based on intelligent devices, those devices facilitate building an RTMR system that moves the company toward becoming a real-time contender or leader.
Figure 2.1 Continuum of Real-Time Organizations
An effective RTMR system supports three foundational activities for a real-time organization:
1. Monitoring Customer Real-Time Experiences. To remain competitive, a real-time organization should collect data to determine how well its products are saving customer time or providing greater value for the time spent. Such data ideally provides verifiable proof that a company’s efforts yield incremental customer value above and beyond competitive offerings. The same data can be employed to indicate additional areas where the company might provide new features or services that bring additional value to the customer, e.g., by saving incremental time.
2. Prioritizing Areas for Improvement through Understanding Competitive Positioning. A detailed understanding of where and how a customer interacts with a company’s products may provide a basis for comparison with a company’s competitors as well. Developing an understanding of where the organization stands relative to competitors can clarify current areas of strength and weakness in efforts to demonstrate value for customer time. The clarity of strengths and weaknesses provides the foundational data for prioritizing areas for further real-time transformation targets.
3. Specifying the Response to the Market. RTMR data can also be used to drive a variety of innovations, including offensive and defensive innovations. The successful real-time organization has an RTMR system that provides a detailed understanding of the customer’s product use that can be applied to specify the company’s innovative response to the competition (e.g., new product innovations, new marketing campaigns, new complementary services, etc.). Those individuals in a real-time organization’s RTMR system who are responsible for specifying the required outcomes of an innovative response will be driven by the goal of transforming the organization so that it values customer time better than competitors do.
Foundational Activity: Monitoring Customer Real-Time Experiences
Companies must collect data to monitor the amount and quality of time customers spend using their product or service. As just one example, consider fast-food restaurants. For each sales transaction restaurants can store a variety of data, including an identifier for the specific transaction, its location and date, the time the order was entered, the time the order was completed, and the items ordered. In addition, restaurants can use online surveys to ask a number of questions about the customer’s experience. To assess the customer’s quality of time spent, questions may ask for ratings of satisfaction with several items, including the speed of service, the accuracy of the order delivered, and the taste and quality of the food. The online survey data can be linked with the data previously stored for a specific sales transaction through a matching survey code that the customer enters from the transaction receipt. Upon completing the survey, the customer may be given a validation code to redeem an incentive for completing the survey, e.g., a free sandwich or dessert at their next visit.
Besides asking current customers who are driven by expectations of efficient interaction, as in the fast-food example, consider a range of other customer types, conditions, and monitoring approaches. Firsttime versus repeat, infrequent versus frequent, high versus low volume, current versus potential, and current versus those who are no longer patrons are examples of different types of customers. Examples of different conditions include interactions driven by customer expectations of efficiency versus expectations that the time spent will be enjoyable, productive, or otherwise satisfying; other examples include high versus low price and rarely versus frequently purchased products or services. Different approaches to monitoring could include using hypothetical (“what if”) versus actual scenarios; also, consider using observational studies of customers in addition to asking them or as an alternative approach to monitoring. Indeed, consider monitoring with various combinations of customer types, conditions, and approaches.
Leaders of real-time organizations will also want to know the answer to this important question: “Do we value customer time more than our competitors do?” Real-time organizations must collect data not only to monitor the amount and quality of time customers spend using their products or service, but they also must collect similar data on the competition. If a company’s customers are also customers of the competition, these customers can legitimately answer how the company rates against the competition. Data collection that asks a customer to compare one establishment with competitive establishments provides valuable data that can be used to assess how well the company and competitors stack up against each other.
Ideally, data collection should be automatic and unobtrusive, i.e., not requiring the customer to spend any time providing information (e.g., to enter data or answer questions). As an example, consider the use of smart wearables. An Apple Watch can automatically monitor and report on the owner’s activity.14 Though some customers may consider this an invasion of their personal privacy, others are willing to provide activity data to companies they support and trust in an effort to help make their favorite products and companies even better. As a further example, consider the futuristic scenario where a consumer has a wardrobe full of smart clothes, i.e., clothes with embedded sensors that report usage statistics to the clothing producers, clothing wear data to the dry cleaner or tailor, and gift ideas to family and friends. Based on a customer’s personal preferences and patterns of use obtained from monitoring, the technology could even help a consumer select a daily outfit and recommend matching items of clothing for future purchase.15 This kind of unobtrusive monitoring could simplify the customer’s life by allowing simpler maintenance of the wardrobe, speeding up the dressing process, extending the life of the clothes, and making it easier to expand the wardrobe.
If data collection requires customers to enter data or answer questions, a company could offer incentives or thank-you gifts in exchange for participation in a favored shopper program. The number of participating users could increase dramatically, particularly if such rewards were interpreted as further evidence that the company values the time required for customer participation. However, companies should be cautious. If they share the data with other companies, those receiving companies must overtly demonstrate their appreciation of the customer’s time or they could negate the goodwill initially created through the program. Further, each receiving company has indirectly agreed to honor the original company’s data policy. However, the original company will suffer the customer’s wrath if the receiving company violates the customer’s trust.
Besides collecting data by monitoring product or service use, a real-time company will also want to collect data on other customer experiences associated with the product or service. Examples of such data include the results of participating in product design or testing, behavioral data associated with the product or service ordering process, performance data associated with product delivery, and records of product maintenance activities. As the company evolves toward a real-time company, it will want to build and maintain a map that details various customer interactions. These customer interactivity maps should include time and experience quality metrics, which provide quantitative and qualitative indices to evaluate current and future performance.
The design of the data collection part of the RTMR system involves a number of choices. The data collected should support developing an understanding of customer expectations, experiences, and values. The ultimate goal of that understanding is to transform your organization to value customer time better than competitors do. Questions to consider include:
Which customer experiences do we want to monitor?
What methods do we want to use to collect data on the duration and quality of customer experiences?
Do we want to monitor all customers? If not, how do we want to select customers to monitor?
The importance of customer expectations regarding time and other factors affecting their behavior suggests additional questions, including:
How do we want to collect customer data on expected duration and expected quality of their experiences?
How do we want to collect data on the value of reducing time or increasing experience quality?
How do we want to measure the trade-offs customers are willing to make among time and other factors?
Similar questions about competitors should also be asked. Although comparing customer experiences across companies may not be straightforward, the design of the RTMR system should provide the foundation for evaluating real-time progress in customer experiences.
With the emergence of sensor-detected data and the Internet of Things, the alternatives for collecting data have begun to expand significantly; these evolving systems provide a wide range of new metric possibilities. As an example, consider the situation where a company wishes to improve its understanding of how customers operationally use its products. The company might initially design a product to automatically detect and provide detailed diagnostic information to the customer support desk. To further expand the value of this information, the same data could be copied and sent to the product development team so that it can use that incremental knowledge to improve product enhancements already in progress. Going further, the same data could also be provided to the product management team to aid its efforts to create a new usage-sensitive pricing model. And finally, the same data could be routed to the marketing team so it could design messaging and marketing campaigns that highlight the most useful features of the product. Such monitored data could provide regular, consistent, and detailed feedback that would be valued by everyone in the organization concerned with ensuring an optimal customer experience.
The goal is to be able to determine the amount and quality of time each customer spends in each stage of an ongoing engagement. Ultimately, the data on customers’ experience can be leveraged to drive a management- level dashboard. A company may find it helpful to think about customers as resources that dynamically flow through different processes related to a product or service. The overall goal, as a real-time company, is to accelerate the rate at which customers flow through these processes or improve the quality of customers’ experiences as they flow through one or more of these processes. Monitoring customer real-time experiences is an essential foundation for determining where and how to demonstrate that the company values customer time more than the competition.
Ideally, the monitoring system should go beyond collecting data on customer interactions during the marketing and sales process, use of the company’s products and services, and experiences with various support personnel. Similar data must be collected on potential customer interactions with the competition for benchmarking purposes. This data horizon should be extended to monitor indirect competitors that influence customer expectations. Competitive customer experience data will be more challenging to collect and will not provide as detailed an understanding as proprietary data; this is to be expected, but by monitoring competitors’ activities, their efforts to improve their processes will be detected and can, thus, be acted upon.
For example, in the education field, university faculty, staff, and administrators are responsible for designing educational programs for traditional four-year undergraduates. Staff should also monitor direct competitors (i.e., comparable universities with similar four-year undergraduate degrees) and indirectly competing institutions (i.e., competitors that offer educational alternatives). Examples of such alternative educational options include community colleges offering two-year degrees, universities offering three-year degrees, and providers of online courses, as well as corporate training programs designed to provide nondegree educational opportunities for their employees.16
Ultimately, an RTMR system should collect data on the amount and quality of time customers spend with the company—integrating data from marketing, sales, product and service usage, and customer support functions. Overall, it should track customers’ real-time experience at various touchpoints with the organization and its competitors. The goal is to allow a company to understand what the bar is for demonstrating that it values customer time more than direct and indirect competitors.
The real-time revolution makes it imperative that a company actively collect and analyze such monitoring data. That tracking information is essential for the organization to respond appropriately and move toward becoming or maintaining its status as a real-time contender or leader. Without such monitoring data, the organization may be in real-time denial, in danger of losing its customers to those using a data-based approach.
Foundational Activity: Prioritizing Areas for Improvement through Understanding Competitive Positioning
Monitoring customer real-time experiences (the first foundational activity of the RTMR system) is essential, but it is not sufficient for becoming an effective real-time organization. The company needs to use that data to help it prioritize opportunities for improvement. Assuming a company has established a real-time monitoring system, it will have the ability to evaluate its performance compared to the competition, just as the customer would measure the company’s competitive effectiveness. Given that companies are motivated to differentiate their products, services, and customer experiences from each other, it is likely that a competitive comparison will highlight strengths and weaknesses between competitors. With such data, a company could choose to improve performance in an area where the competition outperforms it, or it could target improvements to an alternate area, e.g., it could focus on further extending an area of strength.
Prioritizing areas for real-time improvements can be approached in several ways. For example, a company could start by examining strengths and weaknesses in customer real-time experiences. To obtain different perspectives on what those strengths and weaknesses are and how they should be prioritized, a company could analyze data from a sufficiently varied set of customers. To illustrate, customers could be segmented into those who expect a high-quality experience in researching a product and those who expect to conduct little or no research. Differences and similarities between these segments could then be examined.
As another example of an approach to prioritizing, consider that the customer experience may span multiple activities. A set of evaluators could assemble the data so the end-to-end experience can be understood in its entirety. As a leader, consider asking, “Do we want to develop this understanding with just our own people?” Alternatively, supplement internal resources with independent evaluators, or opt to outsource the process completely. For example, evaluators could include not only members of the organization but also supply chain partners, immediate customers, and, potentially, competitors’ customers.
To illustrate an end-to-end analysis, assume that a point of disparity emerges from the data that demonstrates customers take longer to make use of the company’s product than a competitor’s product. Perhaps the same data also indicate that the company has a more effective product support process compared to the same competitor. Based on its understanding of the data, the company could choose to highlight the importance of customer support in its marketing efforts and use the available data to demonstrate superior performance in this area. Presumably, this same data could be used to initiate a new transformation program intended to improve the time to operate the product with the caveat that operational improvement proposals should not undermine the product support process. The priority would be to drive real-time product improvement in a way that avoids driving real-time inefficiencies in other areas of the customer interaction process.
Developing a list of priorities from the analysis of the evaluators is essential for identifying the areas for improving customer real-time experiences. Understandably, all companies are resource constrained. Once a prioritized view of opportunities has been identified, companies must be selective in choosing which areas will be targeted for improvement programs. The opportunities that cannot be covered with available resources become candidates for successive rounds of transformational improvements, with the understanding that each successfully completed program should be considered a baseline for future improvements.
Prioritizing Areas for Improvement—The RSI Example17
Republic Services Inc. (RSI) is the second largest service provider for domestic nonhazardous solid waste disposal in the United States. The company’s customer service demands are incredibly intensive insofar as RSI provides continuous on-the- ground services for thousands of communities across the US. These customers produce over 12,000,000 calls per year. To complicate matters, customer needs are distributed across 50 call types and 150 different call reasons. To support these highly complex customer service requests, RSI employs approximately 1,200 service representatives in over 100 locations.
With such a large-scale and complex operation, providing seamless customer service posed a significant challenge. Agents sometimes lost or dropped customers’ phone calls, or customers hung up in frustration. What is more, when RSI call centers became busy, agents and supervisors lacked current data about the call center, such as which agents were available. Without this information, agents could not adapt effectively to changing call volumes, resulting in customers experiencing increased wait times.
Customers exiting a call queue were required to furnish information they had already entered. Furthermore, RSI agents often needed to confer with other agents to resolve issues. However, agents encountered difficulty conferring with one another in a timely fashion. Because agents did not know whether certain agents were available, it became necessary for them to try different numbers to locate an agent who could assist or take a transfer. The delays created by these bottlenecks often led to impatient customers hanging up or being dropped as they were transferred to agents who were busy or simply not available to assist.
In evaluating the most significant problems, RSI identified the following areas for improvement as the highest priorities:
Decrease number of dropped calls and customer hang-ups
Decrease agent response time
Improve inter-agent communication
Provide agents with operation-critical call center information
In addition to possessing monitoring data about real-time customer experiences to identify highest priority problems, RSI’s evaluators must understand the context of the customer experiences to interpret monitoring data on those experiences. For example, evaluators could look at the data from monitoring that shows customer wait times, dropped calls, and agent response time and identify those as problem areas without knowing anything about the call center context; however, if they were given a narrative description of the call center context in conjunction with the monitoring data, it is more likely that evaluators would identify inter-agent communication and lack of operation-critical call center information as high-priority problem areas that need to be addressed to help improve agent response time, dropped calls, and customer hang-ups. The inclusion of the last bulleted priority suggests that the evaluators were given such a narrative.
RSI’s efforts to reduce problems with dropped calls, customer hang-ups, and customer wait times clearly are related to how well an organization values customer time. However, as presented, the RSI case study is silent on how the company compares with direct or indirect competitors in these areas. For a company to become or maintain its status as a real-time contender or leader (see Figure 2.1), it is essential to compare how well the organization performs against its competitors. As more organizations join the real-time revolution, increased competitive emphasis will be placed on solving customer-focused time concerns. Those organizations that do not move toward competitively better real-time operations are in danger of falling behind.
Foundational Activity: Specifying the Response to the Market
The third part of an RTMR system is specifying the intended results of the prioritized responses (based on the second part of the RTMR) from evaluating the monitoring data (from the first part of the RTMR system). Armed with an improved understanding of how customers spend time with it, the company will take action to improve real-time experiences for its customers. The intent of changing the experiences is to demonstrate that the company values customer time better than competitors do. To guide implementation of changes, the intended results of the changes must be specified. Changed experiences occur when the company implements innovations based on these specifications.
To illustrate the specifications of an innovation, consider the RSI case presented above. In this situation, RSI customers recognize that service problems may occur. Such problems drive a need for customers to interact with RSI agents. The overall intended result for RSI and the customer is to reduce the total time a customer spends with agents to resolve the problem completely.
The following is an example of the specifications of an innovation to reduce aggregate customer resolution time (and the more detailed intended results that make the overall result possible):
Agents must be able to view information about customers quickly so they can converse about their issues from a source of customer-specific knowledge. The necessary information should be provided to agents within three seconds.
Agents (and customers) should not spend undue amounts of time with process inefficiency. The solution must eliminate the need for customers or agents to enter information more than once. Information must flow between agents seamlessly.
Agents should be able to know which other agents are available, their areas of specialization, and customer interaction histories so the problem can be quickly referred to another agent as needed. Some problems will require escalation to a problem specialist.
Specifying an innovation can be viewed as similar to specifying software requirements. Similar to software, the innovation could be developed internally or externally, or it could be acquired from a provider that already has a fully developed solution. The specifications (i.e., requirements) of the innovation provide a basis for guiding development or for evaluating solutions from external providers.
Going beyond the Foundational Activities: Responding by Innovating
The innovation process begins with the understanding that change needs to occur and then goes beyond to design the innovation so that it becomes realizable. Finally, the innovation must be made tangible. Innovative efforts must be incorporated into a company’s regular operations so they can bring to life the company’s desire to demonstrate that it tangibly values customer time. Implementing such real-time innovations into a company’s regular operations is no easy task. Given the importance and challenges associated with innovation, much has been written on it.19
It is likely that a corporation’s culture will be changed by repeated cycles of (a) monitoring how well customer time is valued, (b) determining the innovations needed to respond to shortfalls or opportunities for doing better than competitors at valuing customer time, and (c) incorporating those innovations into regular operations. To deal with cultural change issues, a cohesive focus on a common objective is essential. For companies joining the real-time revolution, that means focusing and orchestrating their efforts around serving the customer’s understanding of the value of time.
Transforming Your Organization and the RTMR System
Leaders, in conjunction with organizational members, must transform their organizations to value customer time more effectively than competitors do. This can only be accomplished by continually transforming the organization through innovations that recognize the changing nature of customer real-time expectations. An RTMR system is an essential enabler of such transformation; it is the ultimate determinant of progress. The RTMR system includes the foundational activities—monitoring customer real-time experiences, prioritizing areas for real-time improvements, and specifying innovations to better value customer time—that lead to transformational programs. Furthermore, the RTMR system generates and implements the innovations, i.e., the transformational programs that subsequently are measured by their ability to provide change that is valued by the customer.
Transforming an organization is not a one-time event—it is an ongoing revolution. Leaders of real-time organizations, in concert with their members and other stakeholders, regularly sense and respond to changing customer real-time experiences; in addition, they also strive to transform the RTMR system to sense and respond to changing customer expectations more rapidly than competitors do. The RTMR system provides the basis, the North Star, which empowers leaders to guide their organizations forward through competitive and uncertain terrain.
Key Takeaways
A real-time organization’s RTMR system adds an overarching focus on valuing customer time to the organization’s existing monitoring and response system. This overarching focus guides organizational leaders and members to evaluate their competitive strengths and weaknesses in valuing customer time. It also directs them to continually strive to improve customer real-time experiences.
An organization’s RTMR system tracks customer real-time experiences when they interact with the organization, its products, and its services. It also tracks the real-time experiences of competitors’ customers.
Organizations that are real-time leaders, real-time contenders, and real-time transitionals use data from their RTMR systems to help them identify real-time strengths, weaknesses, threats, and opportunities relative to their competitors. Data analysis helps them answer the question, “What customer interactions with us, our products, and our services are our highest priorities for improving customer real-time experiences?”
The highest priorities for improvement guide the specification of the results that innovations should achieve to respond to needed improvements. Innovations that meet these specifications must be implemented to improve customer real-time experiences.
The specifications for innovations provide the basis for guiding either the development of innovations or the evaluation of innovations already developed by external providers. Once developed or acquired, these innovations must be incorporated into the company’s regular operations. Leaders of real-time organizations, in concert with their members and other stakeholders, make these organizational changes possible. These transformations provide the improved customer experiences that demonstrate that the organization values customer time better than competitors do.
The big picture for organizational leaders is this: If you have not done so already, join the real-time revolution. Engage in an ongoing process of monitoring and responding to changing customer real-time experiences. Furthermore, recognize that the RTMR system is a work in progress. Improve it as well. The resulting transformations should reinforce your organization’s survival as well as its progress toward thriving as a real-time contender or a real-time leader.