XO Communications has been around for nearly 20 years and does about $1.5 billion annually in revenue. The company provides advanced communications, intelligent networking, cloud computing, and hosted IT services to companies of all sizes, from small business on up to the Fortune 1000.
XO Communications is also a major provider of voice and network services to most of the largest cable companies, mobile carriers, content providers, and telecommunications companies in the world. As CMO, Don MacNeil has responsibility for go-to-market strategies, product development, product management, product marketing, branding, and communications. In this exclusive interview with CMO.com contributing editor Anoop Sahgal, MacNeil discusses customer experience, the use of marketing metrics, important skills marketers need today, and what the future of marketing holds.
On. . .customer experience and a reinvention journey.
MacNeil: About two years ago, XO Communications asked both our employees and customers to provide input on what they felt the telecom company was doing right—and also not so right. XO garnered high praise for technological innovation with regard to its communications, managed network, and IT infrastructure services. But ultimately the feedback showed that the company was doing a less-than-stellar job in one key area: creating customer intimacy.
We went through a rebranding effort that placed a new focus on creating positive customer experience, from our initial interaction with customers through the entire life cycle. And in the 18 months or so since then, we’ve not only seen an improvement in customer engagement, we have also enjoyed a side benefit: a more unified sense of purpose among our employees nationwide.
On. . .the brand transition and the sense of urgency.
MacNeil: One of the big drivers was that we went through a pretty significant reorganization. However, this change was going to be different than others. We put an element of urgency behind it because in conjunction with the reorganization and the beginning of a new fiscal year, we wanted to use things to not only energize and get everybody off to a good start, but we also wanted to unify the company under a single mission of delivering the best customer experience possible.
Inside of 120 days, we assembled the executive team and got the right people involved, including some help from the outside to help guide us through the process and keep us on schedule. We engaged the marketplace and engaged all of our employees to take stock to find out what was working, what wasn’t working, and to find out what do we really wanted to do very well as a company.
On...differentiation of the brand.
MacNeil: We contrasted the internal view of the company with the view in the marketplace and customers, and assessed these things along a couple of dimensions. In the telecommunications space, technology has always been a big differentiator. Since the launch of the competitive carriers with the deregulation of the telecom industry in 1996, technology has always been a big point of differentiation. Also, our history was where we really promoted our point of differentiation both internally and externally from the incumbent carriers. It was one of the things we liked to take pride in.
One of the shifts that really started to take place in the telecommunications industry was from what I like to call the transition from widget sales to solution selling. When we contrasted our own view of ourselves with the view the marketplace had of us, one area that we were doing well in was the technology advantage, but then we were kind of middle of the pack with our competitors with regard to customer intimacy.
That’s where we put our heads together and decided our approach had to differentiate along the lines of customer interaction, specifically moving toward achieving operational excellence. If we could be operationally excellent, the customer experience would be excellent as well.
We’re about a year-and-a-half into it, and I’d like to think we’ve made significant progress because, for the first time, I think we’re getting the message out about the new brand, the manifesto, and the brand promise—what we really wanted to set out and achieve. Through road shows and through ongoing communications with our employees and customers, the message is starting to sink in. It’s a good way to get buy-in and keep one another accountable by using the customer experience as the litmus test, that filter, as we’re prioritizing and making investments.
MacNeil: It’s probably an odd way to measure it, but for the first time in a lot of years, we were able to gain agreement on priorities of our capital spend. Typically it’s pretty contentious, and you can only imagine as time goes on you are always overriding the budget. But it seemed pretty effortless last year to get consensus and then come within the budget. And a lot of that I attribute to the fact that once we all embraced the ideas of the customer experience and operational excellence as our priorities, it was much easier to filter and rank our investments.
On…the balance of marketing, product development, and customer experience with accountability.
MacNeil: Prior to taking this role, I was on the operational side of our wholesale business. My focus on operations also comes from my Navy operations background. In any wholesale environment, I think you can imagine that it’s highly transactional, and it’s highly repeatable for a small select set of customers. We used the old adage that next month’s orders depend on this month’s experience. In the years that I was fulfilling that role, I had the benefit of owning product development, product management, as well as service delivery and repair. This gave me the ability to see the cause and effect of how a poorly rolled-out product equates to a poor delivery experience, which can then equate to poor repair experience.
Accountability doesn’t stop with just launching the product, but taking the ownership of everything post-launch where you look at things like trouble tickets and delivery intervals. [It’s about] being able to drive accountability and becoming metrics-driven, not just for sales numbers but also churn, and even taking it a step further to see how the product is performing from delivery through repair provides some great perspective. I think there’s a lot of value in individuals who have had some operational perspective to the extent that you can mix product development, product management, and operations.
We have also started to introduce individuals to our product team who have experience with our hardware vendors. In telecommunications we create services, and in every case it’s a combination of using some of these hardware vendors, whether it’s a Cisco, Ciena, or Juniper. Our secret sauce becomes taking these platforms and integrating and creating a service, and the customer experience we create around these services.
If you’re looking to push the experience and the operational excellence, what we have started to find is that by adding some of these former hardware product managers who have a lot of insight in building these components, they can bring that experience and insight over to the service side. It has added a lot of value to our team.
On. . .The use of metrics.
MacNeil: I’m a big believer in metrics and we see the world through seven specific customer touch points: consideration, purchase, setup, use, bill, seek help (i.e., the service I use is experiencing some sort of trouble), and renew.
Each of these touch points has one or more operational metrics. For example, in the seek help phase, you have customer satisfaction and customer effort measurements as part of any kind of customer survey. Being able to assess the effort that customers see both in the seek help as well as in the setup phase validates how well we are doing against our goals, in these specific areas, but also how this touch point fits into the overall, end-to-end customer experience.
Our goal with the customer touch points is to drive accountability for the customer experience across the company—it’s a team sport. In our industry, the groups that deliver services and those tasked with fixing things when they break are typically the ones that have the laser light shining on them. They are only second to the sales force in terms of being metrics-driven. So the idea of defining and measuring across these seven touch points is to expand the metrics measurement and accountability.
Step one for us was to get the touch points and get the measurements. Step two is to start to drive the compliance and the accountability.
On. . .the future of marketing.
MacNeil: It’s not new, but I think really having a strong partnership with sales and a balance from a marketing and product development organization that can define, implement, and execute on a succinct go-to-market strategy is key. In my opinion, the success of any business is dependent on how effectively the company communicates to and listens to its sales force—an effective and efficient sales force is the Holy Grail.
I really believe, especially in telecom, we’re going through a pretty interesting time with regard to new capabilities, new technology, and the big buzzword, the “cloud.” IT and telecommunications are converging, and it takes a new, fresh approach in every touch customer touch point. This is a major shift, and going forward it’s about creating the balance of moving fast and moving decisively to be sure we get the service and customer experience right—from the perspective of the market.