Does ‘Customer Experience’ exist in the Defence Industry? We think it should

Kelly Owens, Head of Customer and Growth Management Consulting Advisory
Mike Kalms, KPMG Australia’s Defence Industry Lead Partner, and member of the Government’s Expert Panel
Mike Kalms, KPMG Australia’s Defence Industry Lead Partner

An increasing number of my corporate clients are reviewing how they interact with their customers, they are seeking to improve the ‘experience’ their customers have when interacting with their product or services. In particular, companies within telecommunications, utilities and financial services are well down this path.

Does this type of thinking apply when your customer is the Australian Department of Defence?

Well, we think it does. It’s perhaps even more important when your customer is a monopoly provider of goods and services, like Defence. Building brand loyalty and followership to be the preferred choice of your defence customers offers even greater return on investment for your business in our view – let me explain why.

What is ‘Customer Experience’, and how is it new?

First, let me explain what this idea is and what’s new about it.

Customer Experience is the sum of all experiences a customer has with an organisation, over the duration of their relationship with that organisation. This starts with learn, or gaining understanding of what the organisation provides and how to get it, buy, use, re-engage, enable, satisfy, and connect.

Understanding and managing Customer Experience is a powerful lever which combines the voice of the customer, financial and operational analysis to drive a deeper appreciation of your customers’ motivations, and to accelerate the development of better customer experiences, as depicted below.

customer-experience

How do we see this playing out across the globe? Many organisations, including those in Defence Industry, are faced with rising service expectations from their customers whilst at the same time lowering operating costs, building trust, increasing retention and driving profitable growth. Customer engagement processes typically rely on legacy systems and practices, leading to regular delivery breakdowns, complaints and poor service.

So with a sense of what’s different about this Customer Experience approach, let me explore how it applies to the Defence sector.

Defining your Defence Customer(s)

Some may question who is a “customer” in my role. I’m in the business of serving or enabling others. Well, those are your customers, and depending on how many layers of customer are defined, the expectations of the experience and how those experiences are delivered may need to vary.

Is my customer Capability Acquisition and Sustainment Group (CASG), as the contractual buyer? Is it the Service Chief, who defined the requirement? Is it the enabling function, who will deliver the overall outcome? Or in the case of major capabilities, is it the politicians who have an increasing ability to influence investment decisions?

I’d suggest that Defence Industry’s customer is none of the above. Our customer is the ultimate end user of our products and services, the men and women of the Australian Defence Force (ADF). But what is most interesting here is that the warfighter often has less influence on the purchase decision, and less participation in the ‘customer journey’, than CASG, the Service Headquarters or the politicians. The advantage of focusing on the warfighter is that it unites and drives customer behaviour, more than any other stakeholder, across Defence.

Focusing on the warfighting customer gives your business clarity, purpose and momentum as you enter the ambiguous complexities of the Defence buying process.

Customer Experience challenges

Defence often experiences disconnects between the supplier of the product and the consumer of the product, presenting serious challenges to ‘customer thinking’. Within the Department, we see multiple layers of internal customers who have the ability to dilute the message and hold differing views of the requirement, schedule and/or budget. This makes it challenging for defence suppliers to determine the appropriate solution, and perhaps also to tailor their ‘customers’ journey’. Defence Industry is not always in possession of the necessary sales information.

Another challenge in applying customer experience thinking to the Defence sector is the protracted nature of each phase in the journey. Long decision timelines, manufacture time, and the extended life of acquired products and services, are all comparatively longer in the Defence sector compared with most non-government customers.

A Customer Experience does have value in Defence

What Defence Industry does have in common with other industries, and where the  Customer Experience approach certainly does apply, is the need to understand and respond to those attributes of the journey that are important to the customer, giving due consideration to each layer of customer along the journey.

The more important an attribute is to the customer, the greater the priority for industry to improve that aspect of the journey. In other words, identify what is absolutely critical to your customer by determining the “moments of truth”, those moments in the journey when the customers’ expectations of our brand, product or service are put to the test.

Your “moment of truth” might be different to a competitor’s, but in my experience, it’s always around a breakdown in technical delivery, or for a service organisation, a stakeholder engagement event. In both cases, a miss at that point where expectation meets experience. This adds drag and cost to your business operations as customers contact you more, engage less, or switch off and seek alternatives. Your business either walks away from a moment of truth as a credible partner or it doesn’t. If it’s the latter, you have a lengthy, costly, rectification investment to make.

Despite best efforts to avoid it, industry are often forgiven for late delivery (and other performance issues), despite public thrashing by the media and others. But customers at all levels within Defence are far less lenient if technical performance is sub-standard or missing, putting warfighter lives at risk.

Does your business identify each project’s “moment of truth” and work back through the Customer Experience journey to understand exactly what actions need be taken to ensure you deliver? If you do you’re ahead of your Defence Industry peers. Most still think of their Defence customer as a grey wall of conflicting guidance and advice. My advice is don’t accept that view if indeed you are hearing it from your teams. Employ tools like Customer Experience to grow a deeper view of who you’re selling to, what they expect, what the current experience is costing, and how you can improve delivery that will better meet needs. Research tells us it takes 12 positive experiences to recover from one bad one.

Combining Customer Experience methods with a clear focus on the warfighter is, in our view, the secret to success in our sector. Why? Because it aligns your internal business purpose with the purpose of the ADF. And when your client’s ambition is your business ambition, good things happen.

Mike Kalms

Kelly Owens

ABBM Kylie Wilson and LSBM Matt Kingston of HMAS Success on the wharf in Port Wilson in VIC checking the invoices for the stores of ammunition that is to be loaded onto HMAS Success. PIC: ABPH Damian Pawlenko
ABBM Kylie Wilson and LSBM Matt Kingston of HMAS Success on the wharf in Port Wilson in VIC checking the invoices for the stores of ammunition that is to be loaded onto HMAS Success.
PIC: ABPH Damian Pawlenko

© Commonwealth of Australia 2015

 

2 thoughts on “Does ‘Customer Experience’ exist in the Defence Industry? We think it should

  1. Good point Kathryn, and particularly relevant to the Defence Sector where so much of the client interaction is pre-contract award. Positioning your business’ brand in the minds of defence decision makers so they are inclined to include you on the tender list is perhaps your first ‘moment of truth’.

  2. I really enjoyed this article; thanks! I have also noticed that ‘customer experience’ often includes steps taken in the customer journey even before the customer has encountered your particular organisation. This makes it even more important to take a step back when considering what may inform a customer’s experience, and to look at a bigger picture.

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