Think Digital Disruption Doesn’t Matter?

Good example from Tim Clark at SAP on how Purchasing Power have leveraged the customer experience to their advantage. Originally published on the SAP Business Trends Community. 

By 2018, IDC predicts one third of the top 20 in every industry will be disrupted by digitally transformed competitors.

This begs the question: How can businesses stay one step ahead of the competition in this type of cut-throat business environment?

It’s all about engaging customers through more consistent experiences, according to Jamie Anderson, SVP and CMO of SAP Hybris. But what does creating a great customer experience actually mean?

“For many companies, customer engagement is still a nice to have capability,” said Anderson who cites Forrester’s Customer Experience Index as proof positive to indicate otherwise. “Over an eight year period… the customer experience leaders phenomenally outperformed the index, so there’s actually significant value in getting it right. It affects the share price and value of your company.”

Power to the people

Purchasing Power, one of the fastest growing specialty e-tailers in the United States understands the importance of getting the customer experience right. The company offers consumer products, vacations and online education services through an easy and convenient payment plan. Purchasing Power’s clients – around 260 strong – are large companies who offer their program as a benefit to employees. Based on how long the employee has been working for the particular company and their base salary, a “spending limit” is established.

“They can use that spending limit to transact with us, buying over 45,000 different products with us,” said Prakash Muthukrishnan, CIO, Purchasing Power. “That’s why everything we do at Purchasing Power, whether launch a project, set a policy or introduce new technology, it is centered around our customers.”

The typical Purchasing Power customer is a mom, with two kids who earns $35,000 annually. If a washer/dryer breaks down, she doesn’t have a credit card to buy a new one from, say, Nor does she have money saved up to buy a replacement at a store. Clearly, this mom’s options are sub-optimal. Rent-a-Center? Try to secure a loan at the bank?

“Our program is financially better because it is opportunity given to her by her employer,” said Prakash. “So we are extremely conscious of our customer – who she is and what she wants from us.”

Delivering relevant content

The average Purchasing Power order is a big ticket item, generally $1,000. This means providing the right amount of product data to customers is critical. To that end, many different product guides are available on the Purchasing Power web site that steer customers toward a more informed purchase.

“The last thing we want is to have our customer jump to a third party web site, take a look at what is going on, then come back to us and transact,” said Prakash. “We want the customer to stay in our web site, have all the right information at her fingertips so she can complete the transaction.”

Oftentimes, Purchasing Power customers enter the company’s web site through their desktops at work. At home, she might be using her mobile phone or other device.

“We want to make sure she’s having a consistent experience with us whether it’s through her desktop, tablet or mobile phone,” said Prakash, who led an effort to optimize the Purchasing Power web site two years ago. “Our web site is now responsive. If a customer comes to us through a mobile device or desktop they will have the same content and the same experience.”

At your (self) service

A mobile app was also created whereby customers can easily take a picture of their pay stubs and submit with their orders.

“The mobile app is a compliment to the web site,” said Prakash who said over 50% of traffic now comes from mobile devices, with approximately 40% of revenue generated via mobile.

“This is a great achievement, not just for the company, but for our customers as well because it is easy,” said Prakash. “There is no friction when you are transacting with us.”

Making it easy to discover new products and provide more self-serve capabilities like returning items helped Purchasing Power’s Net Promoter score rise 20% over the past two years. This attention to customer detail has paid dividends and transformed Purchasing Power’s business:

Nearly 20% of revenue came through the call center just 3 years ago, today, it’s less than 10%.
Call center is only open 5 days per week as more activity moves to self-serve
Customer satisfaction continues to rise per the Net Promoter score
Purchasing Power will continue to rely on cutting edge e-commerce and marketing solutions from SAP Hybris to help grow its business.

“This is the next phase of our journey; to make our customers transact with us seamlessly and have a very uniform experience,” said Prakash. “Customers don’t look at you as mobile, call center and web. They look at you as one company and you have to provide one customer experience.”

Neil How
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Neil How

Neil ran his first SAP transformation programme in his early twenties. He spent the next 21 years working both client side and for various consultancies running numerous SAP programmes. After successfully completing over 15 full lifecycles he took a senior leadership/board position and his work moved onto creating the same success for others.

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