Award-Winning CX

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Steve:
We've tackled B2B customer experience on this program more than a few times, but it's not often we get to interview a leader of an award winning program.

Riccardo:
When we started more or less five years ago, our CX journey at how we built it around, I would say three pillars and a foundation underneath those three. At the highest, simplest level, what we're trying to do is to make every customer experience easy, enjoyable and effective for our customers.

Steve:
We'll take a peek into the CX program of the overall winner at the 2023 US Customer Experience Awards on this episode of The CX Leader Podcast.

Announcer:
The CX Leader Podcast with Steve Walker is produced by Walker, an experience management firm that helps our clients accelerate their XM success. You can find out more at walkerinfo.com.

Steve:
Hello, everyone. I'm Steve Walker, host of The CX Leader Podcast. And thank you for listening. We like to say it's never been a better time to be a CX leader. And on this podcast, we explore the topics and themes to help leaders like you deliver amazing experiences for your customers. You've heard us promote the US Customer Experience awards several times on this program. If you're not familiar with them, I recommend you check them out at usacxa.com. But for today's episode, we have the privilege of welcoming a CX leader that helped earn their company the overall winner of the 2023 Customer Experience Awards, in addition to winning gold and silver in several other categories. Riccardo Porta is the global director for CX at Dow, the Materials and Science company known to many households around the globe. Riccardo, thank you for being a guest on The CX Leader Podcast.

Riccardo:
Hey Steve, it's a pleasure to be here with you. Thank you for inviting me.

Steve:
Well, we're so glad to have you and congratulations on the big win for for you and your program and for Dow.

Riccardo:
Yeah, we're very happy. It was the first time we took part in the contest and we were really positively surprised with the outcome and really proud of what we came back with.

Steve:
Yeah, well, we've been really proud to have an association with the awards and and I'm so grateful that award winners are willing to come on to the podcast and share their story, because that's exactly what our listeners want to hear is good stories about actual practitioners that are out there making a difference for their companies. One of the things I always do on the program, Riccardo, is try to get a little background on how somebody got to be at your level in the CX profession. Just give us your CX journey. It's always interesting to hear how people got into CX.

Riccardo:
Sure, Steve. Yeah, If I look at my 20 plus year of career and I look backwards, there is one common thing that I've been doing all this time when I even when I changed different jobs at Dow and Rohm and Haas before Dow. And really, it boils down to who I am as a person. I like using data to make things better. That's really what I do. I'm a chemist as a background so I started in manufacturing plant at Dow and I was looking at data and improving the quality of the product. And then I spent the majority of my 20 years actually in operations in manufacturing and supply chain, and that was all about driving better service while maintaining or reducing costs. And ultimately in the last couple of years is when I became the CX global director. It's again all about using data, making hypotheses and then identifying ways to do and create better experiences. That's really what I'm doing today. But it's interesting how I got into CX. I believe if I went to vice president of Supply Chain two years ago and said, We think… I think we need a full time person doing CX for a supply chain perspective, I'm not sure I would have gotten away with that.

Riccardo:
So I actually created the role myself. I was doing my own other job in supply chain, and I loved CX. I knew there was opportunity there. So I started to volunteer to take projects. We run a customer journey mapping. I didn't know what it was at that time, but I thought it was interesting. I got to participate into it. It was very vocal, of course, and at the end, guess what people say, Hey, it looks like you have ideas and passion for this topic. Do you want to lead the improvement project as a result of the journey mapping? And that was my first involvement in CX. After that, I took another one and that how I became the CX person within supply chain at Dow. Right? And after when the global supply chain CX director role opened up at Dow because of my exposure experience through the supply chain ranks, I got a shot by getting the job and now that's how I'm leading CX for the overall company, right? So it's a little story, but I think it speaks to the fact that you need to be creative to make the space for CX at your own company doesn't come easy as other jobs.

Steve:
Yeah, I think that's a great background. So you actually a chemist. You're a scientist by training, right?

Riccardo:
I am, yes.

Steve:
So, you know, I've always said what we do is not you know, it's not rocket science, but it is science. You know, we're using data to try to inform and improve the business. And then all your time in ops has to give you a lot of credibility inside the organization. So, you know, I think a lot of us end up kind of getting here by accident or, you know, somewhere along the line our passion came through and somebody recognized that, so…

Riccardo:
I agree. In fact, one of the words we want, maybe we have time during the podcast to talk about it, it was the word was about they best use of insights and feedback. It's all about that. It's take the scientist approach, look at experienced data, match it with operational data, combine with financials and build the story and the the case out of that analysis. So…

Steve:
Well, I'm really excited to get into this because I think you're just what the doctor ordered here for for this podcast. And it's no wonder that you have won this award. I know people are familiar with Dow, but why don't you just give us an overview and just kind of the scope and scale of your organization beyond what people may know about it?

Riccardo:
Yeah, sure. Dow is a very large materials science company. We are $55 Billion Company, part of the S&P 500 list, 36,000 employees around the world. And the interesting thing about Dow is we do not sell B2C, so you never find products on any shelves that have dialog or Dow brand. But I can bet very safely that around everybody of the listeners here in your workplace, in your car, in your house or in your hand with the mobile phones, there is some doubt products around you in your fridge everywhere. So we are entirely B2B and we serve a variety of markets, right from packaging, specialty plastics, consumer home and personal care, infrastructure mobility. And again, we are entirely B2B. Also, we are one of the few companies left in the S&P 500 list with over 120 years of history. But we also like to think of ourselves as a five year old company because more or less five years ago we entered into a very large and complex merge and spin transaction with DuPont that many people have heard about. And we emerged out of that transaction as a new company with a streamlined business portfolio and with what was a key game changer for our CX journey, which was a new ambition to be the most innovative customer centric, sustainable and inclusive materials science company in the world. That customer centric ambition was really got us started on that journey for for real.

Steve:
Well, thank you for that. And 120 years in the Dow is definitely impressive. I'm a kind of a student of the history of free enterprise and business. And, you know, there aren't too many companies, I bet that could say that. And what you all do is is such a part of everything that we as consumers and and business people benefit from. So let's start big picture, because you came out of this role through supply chain and now you have the whole operation. But what are kind of the overall guiding principles or the sort of the strategic imperative for CX inside of the Dow management structure?

Riccardo:
Yeah, When we started more or less five years ago, our CX journey at Dow, we built it around, I would say three pillars and a foundation underneath those three. At the highest, simplest level, what we're trying to do is to make every customer experience easy, enjoyable and effective for our customers. And to do that, we started, as I said, built our approach on three around three pillars. The first one is listening to customers, right? You got to have a way to collect customer voice and customer input. And for a company of the size and complexity of Dow, we came from a situation where we had multiple businesses, multiple regions, functions, doing their own CX programs. So we stopped all that and said, we're going to run one single enterprise wide VOC program and CX program. So that was one of the big changes for us. The second pillar was around prioritizing. Many people on the line that deal with B2B are familiar with the 80 over 20 rule whereby 80% of the value comes from 20% of the customers, where Dow is no exception to that rule. And therefore, we had to also force a bit of a conversation to say we are not the same thing to every customers and not every customer means the same thing to Dow.

Riccardo:
So we had to do a lot of work there to structure our prioritization segmentation approach so we can out of that once we know what the customer tell us from the listening approach and we know what we want to be for each of those customers, then we can work on the third pillar, which is drive those design and implement those announced improvements that are easy, enjoyable and effective for customers. And we used customer journey mapping to do that, which was in our way how we got the foundation of it all, which is engaging employees in all this CX journey. At the end, you know, the most difficult things to do in CX is not understanding the surveys or designing surveys or doing journey mapping. The most difficult thing is to convince people to change the way they work. And it's only when they change the way they work that actually drive a change in the experience?

Steve:
Yeah, I just want to reinforce a couple of those principles just generally. But you did get to a single source of truth. One primary listening post that replaced a lot of disparate systems. You employed the classic process improvement strategy of a Pareto chart, you know, trying to focus where you can get the most bang for your buck, so to speak. And then you're right, the real value of this is to drive positive change. I think you said that earlier, you know, using the insights. And when we do that through people, not always easy. People sort of resist change by nature, but they're also usually receptive to feedback coming from customers, and particularly if it if it makes sense to them. So very nicely done. So I can't wait to get into more details about this award winning effort.

Riccardo:
Yeah. In fact, Steve, one of the things we observed as we were talking to peers and particularly again in the B2B space, we realized that a lot of companies, particularly in the manufacturing space, are dealing with the same type of challenges, both internally on how they organize the program, how to staff it, how to prove the value, where are the needle movers and the bigger driver of experience within a manufacturing and heavy order fulfillment machine type of companies. But also on the, you know, the customer side of things, right? What are really, you know, the critical drivers of satisfaction and how, how do how do you get the best bang for your buck, as you say. So that's actually with the spirit that we went on and say, hey, why don't we create a consortium and bring together those peers in industry and drive some of this discipline together, learning from each other and applying best practices all across?

Steve:
Yeah, I was going to go there because we talked a little bit about that in prep, but is that something you started or…

Riccardo:
Yeah, that started this what we call Advanced Manufacturing Consortium or AMCX for simplicity. We're very proud of this initiative we started… Actually, the timing wasn't great at all. We started just before COVID was announced to the to the world. So we took a bit of a back seat for for a couple of years. But now we're back in full swing. And really what this consortium is trying to do is again, bringing together B2B companies in manufacturing space that are passionate about CX and wants to drive that forward and and work together to find a common way to measure CX so we can also benchmark amongst each other, identify what are the needle movers and the biggest drivers of that satisfaction through science, through data at scale. And ultimately, our ultimate measure of success is being able to demonstrate again with data and at scale that companies that excel in CX also provide the best total shareholder return. So we started this initiative we have now over 25 B2B companies covering over $1 trillion of revenue, and we continue to grow pretty much every month. As I speak, actually, we are running our first ever benchmark survey and we're looking forward to collect some results. But already from, you know, the early interactions we have with the team, we we have already started to uncover very interesting insights that I think are very exciting.

Steve:
I don't want any top secret stuff, but can you share a couple of examples of some of the insights that have come out through the consortium?

Riccardo:
Absolutely, yes. And of course, we will be publishing the report once once we have completed the benchmark study and done some more study. But a few things that we learned, for example, that are the basics of how we agreed as a consortium to measure and benchmark experience. One interesting one is about the importance of expectation, right? A lot of times we think about CX is all about the quality of the experience that we deliver and how much efforts we invest into designing that experience. In reality, it's never only the absolute experience delivery that drives the satisfaction. It's the combination of that experience versus expectation. And interesting learning was most of the companies that are part of the consortium reported that at the very beginning of COVID, they saw an increase in their CX scores, that those CX scores then dropped very quickly in the second part of the COVID period to then only recover very slowly back to where they were before or slightly above or below, depending on where different companies are. And really, we believe that the reason why we had that uptick in satisfaction at the beginning of COVID is because expectation well went low. So you deliver the same amount of experience and performance, but because you're doing that against lower expectation, the experience will go up. And of course, as COVID progressed. Expectations went back up and performance went down with all the logistics disruptions and everything else. And that's why CX tanked. Right? So this is an example to explain, you always have to balance your experience, design and offering with what you think customers are expecting from you back to the 8020 rule and segmenting customers, right? Another interesting one was around the importance of emotions, right?

Riccardo:
Conceptually, I think we know that. When you have emotionally charged steps in the customer journey, those tend to build memories and have a disproportionate impact over the rest of the other touchpoints in the journey. And with the consortium we debated at length, what are the emotions at play even in B2B? And we decided as a consortium to measure trust as a key emotional play. And our theory, which we haven't demonstrated yet, but we'll see with the benchmark results where we land, is that if companies have a low score on the trust element, it's very unlikely that they will be providing or obtaining a very high CX without that trust factor being in place first. And then the last thing I'll mention maybe here is and again, it's a bit early, but we believe NPS may or may not be may not be the best measurement of experience or best predictors of business outcomes in B2B, or at least not as good as it apparently is for B2C. And the reason why is again, because we think there is others at play in the B2B decision making that the key buyers and key decision making are taking into consideration. And those include, as I say, the emotional component of it, the trust, the confidence. It includes the performance versus expectation and also satisfaction at certain key touch points in the journey. And for manufacturing company, for example, we know from the data we already collected that reliability of supply is probably one of the biggest driver of that satisfaction.

Steve:
My guest on the podcast this week is Riccardo Porta. He's the global director for CX at Dow and also the founder of the B2B Advanced Manufacturing CX Consortium, which we've been talking about is just a fascinating way to go about kind of having a broader base to build your CX program on. And we've just had a great discussion and I can't wait to have you back on again, Riccardo. I hope you will come back on again because you're a tremendous guest. But I'm fascinated by this consortium and and particularly the the insight on the NPS in B2B, I'd say that we have a pretty large B2B practice at Walker, and I concur. B2B solutions are more complex. There's more people involved in the decision, there's more people delivering value, there's more people receiving value. And I think NPS at essence is really easy to communicate and easy to understand. But the nature of B2B value creation is, is not simple. So…

Riccardo:
It's not always actionable, right?

Steve:
Yeah, It's I think it's great for consumers and it's it's very good for a transactional type of situation. But when you're you're working with lead times and supply chains and design build and it's it's pretty difficult to find the right moment in time where you'd recommend you know so.

Riccardo:
At Dow right… and this is true again for a lot of B2B manufacturing companies. There is a constant tension between optimizing EBIT and optimizing cash flow, right? So, for example, if you are a CFO and you want to maximize your cash flow, you would want your company to run as low on inventory as possible, right? That's that's your goal. On the other side, right, if you push it too low, you may end up disappointing customers or offering poor lead times or ultimately even losing orders, which is going to compromise your EBIT. Right? And where is the right balance there? It's always a complicated trade off to strike right. And always at this natural tension, healthy tension most of the time between whoever is in charge of cash flow, which is typically the finance and CFO team and whoever is in charge of the EBIT side of the equation, which is typically income statement, right, which is typically the business presidents and business directors, Right? And and one day one of our business presidents came to me when I was in the role and told me, Hey, Riccardo, how can I use CX to help me understand this trade off? How can I explain to my finance people what happens if we go too low on inventory and how should I look at this? Right. So we went on and collected information, made some hypothesis first, right? We say the first time that a customer is exposed to inventory or lack of thereof is at the time of order entry. Right?

Riccardo:
And we were able to show with data that when you have low inventory, your experience of order entry deteriorates. But that doesn't mean. Right, it's going to impact your business. In fact, one objection that I got immediately almost from the business president was, well, the person that is entering the order is not the person that I negotiate contracts with. So that's even matter. If the person entering the order may not be happy because they can't find the product for the date they want it. We were able to show again with data that repeated that experiences are order entry cause a deterioration of confidence in Dow as a reliable supplier. Back to the importance of emotions, right? Confidence we measured. And we were able to show that that erosion of confidence propagates across multiple personas on the customer side all the way to the key decision makers in the buying process. And to maybe to close the loop entirely, right, the next step we did was, okay, if if I have eroded confidence, is that meaningful? Does it have a major impact on customer buying decision with Dow. And the way we demonstrated that was to show that the CX score we measure easy, enjoyable, effective through a CX index. That index score for customers that are not confident was ten times lower than the CX score of customers that show confidence in product availability from Dow.

Riccardo:
In other words, it doesn't matter how good is your product quality, your technical service, your account team. If you lose the confidence in Dow, in their ability to supply reliably all the rest of the journey doesn't matter anymore. The entire journey is not easy, not enjoyable, not effective. And the last piece that was missing was to show that when you land in the very low range of that CX score versus being the high range of that score, your volume revenue and margin over time tend to shrink instead of growing. In other words, we were able to prove with dollar value, right, that if you reduce inventory to the point that you have repeated bad experiences at order entry that you wrote the confidence of your buyers, then you're going to more likely shrink volume revenue margin with those customers of your time. So you have traded EBITDA for the long term EBITDA versus your short term cash flow. And we didn't stop there, of course, because the answer cannot be let's pile up inventory, right. And make everybody happy. That's not a viable business model. But we use this study to turn the question around and say instead of either or trade off, do you want inventory or service? We turn that around and say, what do we need to do to work at lower level of inventory while maintaining or improving CX? And we got the funding to support some of our improvement initiatives in that space.

Steve:
Yeah, I think you make a great point there and we ought to have another we'll have another podcast and we can go even deeper in this because I love this kind of stuff. But customer experience, customer feedback is only one input we use to make business decisions and it does have to be traded off against the other aspects. But you've given such a perfect example of how, you know, you turn the kind of "yeah, but" into "yes and," and that's I think what a really good CX function can do for an organization is they can bring clarity to some of these decisions and help people find the common ground. So congrats. I'm fascinated by the consortium. If there's manufacturing companies out there listening, can they find out more about that somehow?

Riccardo:
Oh, thanks for asking, Steve. Yeah, absolutely. The easiest way to reach reach us is just go on Google and type in B2B CX Consortium or AMCX, Advanced Manufacturing CX Consortium. They will land you on a page with a contact us, which will drive you straight to my inbox. And really we created this consortium with the goal of elevating CX for everybody in B2B. There is no intent to monetize, so for companies to join is very easy. There is no cost to join or stay there. There is no obligation to purchase products or services. It's just again, a group of people that wants to drive the discipline forward and apply and share some best practices there. So we welcome new members at every time. And as I say, Google us AMCX Consortium and I'll be happy to talk to any anybody interested.

Steve:
Riccardo, we've reached that part of the podcast where I ask every guest for their take home value. This is kind of part of our hook of the show. We we try to leave the listener with something practical and something that they could learn from your podcast that they could actually apply to their program in in relatively short order. So Riccardo, if you're ready, let's let's have your take home value for this week.

Riccardo:
Sure. Let's go. Well, I would say is I know a lot of people struggle to prove the value of ROI for CX – is one of the top rated challenges for B2B practitioners, CX practitioners. So my advice, based on the experience I just shared in this podcast with the with the case study I described briefly, is, I think one of the easiest way to do it is start from a real pressing, pressing business challenge, right? Something that the business presents or somebody in charge of running a business see as priority, as a struggle, and then use CX to help answer or address that that challenge or that question. And when I say use CX, start with the data combine experienced data that you may have from surveys or other VOC programs, but don't stop there. Combine it with your operational data and your financial data and start showing how that more comprehensive view of data can help you expand the way you look at challenges and identify new solutions or new values that you otherwise could have missed. I think that's much easier, simpler way to do that way than trying to use CX, you know, convince business to have an issue that they don't even know they have or they don't see as CX a priority as a pressing burning issue.

Steve:
That's a great one. We've said for a long time on this program, it's you know, as opposed to showing up with all your voice of the customer data in a big deck. Better to go out and talk to the business leaders, find out what issues they are, and then go back and mine your data for, you know, insights that they may or may not have or might reinforce something that they were already kind of had a hunch about. So, Riccardo Porta, thank you for being such a great guest on the podcast. I hope you'll come back sometime.

Riccardo:
Anytime. It's been fun. Thank you, Steve, for having me.

Steve:
And we teed it up a little bit for the consortium, but I assume we could find you on LinkedIn, right?

Riccardo:
Also on LinkedIn, that's another easy way to get in touch with me.

Steve:
Yeah. So we have a great community out there and I know that people are always willing to connect. And if you have further questions or you'd like to make a connection with Riccardo, I'm sure just based on my interactions with him here, I'm sure he'd be happy to do that. So Riccardo Porta is the global director for CX at Dow. And thanks again for being such a great guest.

Riccardo:
Thank you.

Steve:
And if you want to talk about anything you heard on this podcast or about how Walker can help your business's customer experience, feel free to email us at podcast@walkerinfo.com. Remember to give The CX Leader Podcast a rating through your podcast service and give us a review. Your feedback will help us improve the show and deliver the best possible value to you our listener. Check out our website cxleaderpodcast.com to subscribe to the show and find all our previous episodes, podcast series and a link to our blog which we update regularly. We also have our contact information on there. You can drop us a note, let us know how we're doing. The CX Leader Podcast is a production of Walker. We're an experience management firm that helps companies accelerate their XM success. You can read more about us at walkerinfo.com. Thank you for listening and remember, it's a great time to be a CX leader, so go out there and find the pressing business challenges you have and that will help you explain the ROI of CX. Thanks for listening and we'll see you again next time.

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