Ariba’s satisfaction research program has made listening to the customer a company-wide habit

By Roger Blumberg | October 1, 2006

Reading time: 9 minutes

Abstract

Customer satisfaction research is now ingrained in the corporate culture of spend management firm Ariba. How it got there and how it is implemented is the subject of this article.

Research Topics:: Customer Loyalty | Customer Satisfaction Studies | Quantitative Research
Industry/Market Focus:: Business-To-Business | Financial/Investment/Banks
Content Type: Case Study

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Time well spent

Editor’s note: Roger Blumberg is senior director of customer advocacy at Ariba, a Sunnyvale, Calif., spend management firm.

How are we doing? How can we do better? How satisfied are you? Those questions form the core of any customer feedback program. Last year, those were the questions my company, Sunnyvale, Calif.-based services provider Ariba Inc., needed to answer.

With over $300 million in annual revenues, Ariba includes multiple business units operating globally providing spend management services and technology for a diverse customer base. While the company is successful, factors such as fast growth, multiple acquisitions and a changing business model were causing customer care concerns for us. We were selling software and services-based solutions to companies who knew us well, but there was no comprehensive, companywide program that told us how satisfied our customers were. If a customer was dissatisfied, we weren’t certain we would know about it before renewal time. We needed a better way to hear the voice of the customer (VOC) and satisfy customer needs.

After five mergers in three years, our various departments were using over five different customer survey vendors. Each program employed different tools, styles, questions and scales (1-5, 1-7, 1-10, etc.). Some used online surveys, others paper surveys.

With no central gatekeeper to manage the process, there was a constant risk that some customers would be oversurveyed while others would rarely or perhaps never contacted. There was little organized sharing of data or follow-up. With data in so many different customer feedback programs, there was no easy way to generate reports that provided a 360-degree view of each customer. We also wanted the ability to consolidate data into roll-up reports that would guide upper management in its process improvement and investment decisions.

At the same time, Ariba’s business model was changing. We were moving from being a technology provider to offer an on-demand “software as a service” solution, with much shorter, lower price-point renewal options. With 50 percent of Ariba’s workforce providing services and additional delivery options, we needed to know a lot more about how well our various business units were performing.

Customer advocacy program

In 2005, CEO Bob Calderoni and Ariba’s management committee (MC) established a customer advocacy program. I was tapped to become senior director of customer advocacy and the primary change agent in our fast-moving environment.

With the backing of the MC, my goal was to make customer satisfaction a primary focus of our entire organization. My charter was to:

develop a closed-loop feedback process, in which we regularly measure customer satisfaction, take corrective actions and provide management with necessary reporting;
create an interactive feedback forum where Ariba senior management and customers could meet, share constructive feedback and enjoy peer-to-peer networking opportunities;
cultivate a corporate culture in which customer satisfaction and loyalty are key goals and all employees are measured on them.

My four-person customer advocacy group assumed the management of all feedback programs. As a centralized gatekeeper, we coordinate contact with the customer, ensure consistency of questions, consolidate and disseminate responses and provide tools and templates to all departments. With the support of the management committee, customer satisfaction was made top priority companywide. My team’s objectives included:

develop and implement a robust, global VOC process, including the tools and metrics to better understand and track customer satisfaction, loyalty and employee engagement;
deliver actionable information that enables the organization to improve customer satisfaction and loyalty;
drive profitable growth into new markets.

After approximately one year in operation, the results have been impressive:

Customer survey response rates rose to 74 percent across all regions (from 28 percent).
All departments and regions saw significant improvements in overall satisfaction scores. Ten percent of our customers surveyed reported an impressive two-point (out of 10) improvement in overall satisfaction.
Millions of dollars of contract revenue have been retained, significantly boosting our growth and profitability and validating the benefits of our acquisitions - and our investment in customer feedback.
We’ve developed a framework to sustain our programs in self-running mode, so we can concentrate on follow-up actions that utilize the intelligence we receive.

But perhaps the most important result is the profound change in Ariba’s culture. Customer focus and satisfaction are now one of the key metrics at every level of the organization. Every department knows not only its own customer satisfaction scores but the scores of every other department. Every employee’s compensation and incentives are tied to customer satisfaction. Ariba even created a Spotlight Award to honor employees who were nominated by a customer - an important measure of customer engagement. The mean overall satisfaction scores of customers who recognized an employee is one point (10 percent) higher than those who didn’t. We wanted to reward those employees who were taking extra care of our customers.

Integrated program

We began our transformation by finding the right partner. After a thorough review by management, we selected CustomerSat, Mountain View, Calif., and it its CustomerSat Enterprise as the sole customer feedback solution for our firm.

After selecting CustomerSat, Ariba continued to develop its integrated customer feedback program:

Departments not previously conducting surveys were assimilated into the new companywide program.
A central repository of customer data was established.
Touch rules were instituted to ensure proper frequency of surveys and to make sure the entire customer base was surveyed but not oversurveyed.
Account managers were given access to their customers’ results across all surveys.
Leadership was provided with a dashboard of data encompassing all surveys and all customers.

Our management committee was confident that we could better serve our clients by motivating them to become more engaged. We knew they could provide real-time insights and valuable market intelligence while helping Ariba define new strategic offerings.

Measure early and often

It’s crucial to measure customer happiness early and often, especially for a company like ours. We face strong competition, sudden advances in technology and a blistering pace of market change. With the on-demand solutions we now offer, our customers don’t have the massive initial investment that traditional perpetual-license customers might have had to make. Lowering the barriers to entry is great from a business development perspective but we didn’t have full understanding of the competitive landscape - especially without a voice-of-the-customer program to measure how satisfied customers were. But now our VOC keeps customers close. We know what they’re thinking, feeling and doing. If there’s an issue, we know it. We acknowledge their concerns immediately and address them promptly.

Data collection, analytics, action

Ariba’s integrated VOC system has three parts: data collection, analytics and action. Data collection involves deploying two kinds of surveys:

A semi-annual relationship survey delivers overall satisfaction and loyalty readings. If customers indicate a problem, a member of our management committee meets with them to follow up. Overall satisfaction scores are used by the MC for semiannual investment decisions, including hiring, new programs and services, and to initiate process improvements. Results and remedies are presented to all 1,500 employees in rolling departmental road shows.
Transaction surveys are performed at four critical customer touchpoints, e.g., the end of a consulting engagement or training session.

The chart shows the details, participants and timing of Ariba’s current survey program.

Here’s a look at the steps our VOC program follows as it drives and coordinates action:

1. Survey sample is selected and exported from the central repository. Touch rules protect customers from being oversurveyed.

2. E-mail survey invitations are sent out. Respondents click on unique URLs to complete surveys.

3. Ariba-wide interactive dashboards are updated with customer feedback in real-time. Push reports periodically e-mail current status.

4. Real-time action alerts are e-mailed from CustomerSat to Ariba. Cases are opened based on satisfaction scores and customer value, and assigned to management committee members based on region and tier. Cases must be closed in seven days.

5. Decision support and service management systems are updated with latest customer data.

Results are consolidated into reports which are distributed across the company and guide follow-up action and process improvement. Customer intelligence is shared across all departments using a common dashboard and dissemination system.

Close the loop

We close the loop individually with every customer, regardless of how they rated Ariba. CustomerSat’s Action Management provides us with an automated system of alerts, assignments and communications that enable our team to respond to customer concerns immediately.

Action Management automatically generates and sends action alerts to designated Ariba account teams. Dashboards are visual displays of performance data by product, region and department and communicate customer feedback data across all departments, offering a consolidated view of the results of each relationship survey. Push reports, showing trends and verbatim customer comments, are sent to individual departments, managers and MC members. Our people can quickly review all of a customer’s responses and progress reports over any period of time, making it easy to prepare for an upcoming customer meeting.

At Ariba, the management committee handles the alerts of every customer who returns an overall satisfaction score of six or below. During the first two months of our program, there was a heavy emphasis on insuring these calls were made, which helped them better understand each customer’s issues and concerns and made a positive impression on our customers. This improved level of communication has led to a significant increase in satisfaction scores and repeat business.

Personalized thank-you notes signed by the CEO are sent after each customer call, reiterating the discussion, commitments and progress to date and acknowledging any major changes - up or down - in the customer’s satisfaction level.

A two-way street

At Ariba, customer intelligence is a two-way street. Individual account summaries, updated after each interaction, fuel interactive discussions with customers at regular checkpoints during each half-year period.

Quarterly management review is a one-on-one quarterly presentation delivered in person by Ariba executives to each major customer. It delivers a 360-degree view of Ariba and customer engagement.
Customer advisory councils are group discussions with 30-40 strategic accounts. These encourage customer involvement in the improvement process and drive the future direction of Ariba products and services. Council participants take part in needs assessments, product testing and feedback sessions.
Customer product focus groups, organized by geography and industry, drive feedback on specific products and services. Five formal focus groups on product and services are conducted in all geographies (North America, Europe, Asia) during each half-year cycle.

Gratifying results

Barely a year after we began, results have been gratifying. We now measure satisfaction at every touchpoint and, for the first time, measure satisfaction in our services group. Company bonuses are tied to the results of the relationship survey, as are most of Ariba’s investment decisions.

We measure trends in overall satisfaction scores for the company, region, products and business units. In just one year, customer satisfaction scores have improved overall by 10 percent, with every region showing a significant increase. Five percent of our customers showed an improvement of 20 percent. Scores of 8, 9 and 10 jumped from 38 percent (Q4 2005) to 60 percent (Q2 2006).

Qualitative feedback is reviewed using CustomerSat’s Comment Analyzer, which we use to develop themes and chart trends. For example, we measure the willingness of customers to act as a reference. The number of customers willing to spend detailed time with us in focus groups and at our customer councils has tripled in one year - a measure of their willingness to invest in us. Significantly, the mean overall satisfaction score of those attending these meetings has risen 15 percent.

Looking ahead, Ariba’s future looks bright. We no longer have to wonder how we’re doing - now we know. Thanks to our feedback process, Ariba will stay on track toward increased growth, profitability and customer satisfaction.

ARTICLE SIDEBAR

Lessons learneed

Don’t hide from the results. Face and fix them.
Close the loop with your customers, especially the angry ones.
Give customers the option not to receive follow-up calls.
Customers genuinely appreciate follow up, especially from senior management.
Consider compensating your sales team to nominate customers for surveys, as well as to follow up to make sure they respond. That strategy has helped double our response rate.
Paying a corporate bonus tied to customer satisfaction has greatly raised the awareness of the programs and employee buy-in throughout Ariba.