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The Secrets to AGCO’s CX Success

Jared Tincher Jared Tincher 06/21/2024

The Secrets to AGCO’s Positive Customer Experience Success

AGCO, an agriculture OEM giant, has found the secret to business growth through improving customer retention rates. Central to this success is Courtney Warford, who with the support of HoC invested heavily in customer experience talent, research, and strategy. By focusing on what mattered to the customer, AGCO implemented quality improvements and support experiences that created the delight and word of mouth needed to drive sales. From this project was born the Fundamental Four, which is now an AGCO operational playbook.

The great news is that the Fundamental Four framework can be applied to nearly any experience across all industries. Here, we will break down the principals of the Fundamental Four.

Follow along for our four principles:

Preparing the Machine: Creating a Positive Customer Experience

Onboarding is crucial in setting the tone of a customer journey.

As your mother told you, you never get a second chance to make a first impression, so don’t leave this up to chance. Onboarding (defined as the first experience after the sale) sets the tone of customer journeys and sets the stage for meeting customer expectations. Failed first experiences are difficult to recover from, and customer satisfaction can suffer if time isn’t taken to ensure a positive customer experience from day one, so it is vital that you get your customer experience strategy right the first time.

The need for early establishment of customer loyalty is especially prevalent with equipment purchases, which are one of the biggest investments a farmer makes. Issues with this equipment cause major anxieties, not just because of their large cost, but also because tractors and implements are essential to the work of farming. While equipment problems are never welcome, it’s especially critical not to start with an issue. This is why AGCO makes machine readiness the first element of their Fundamental Four.

One effective tool for ensuring a successful first impression is product checklists. In his book Enchantment, The Art of Changing Hearts, Minds, and Actions, Guy Kawasaki wrote about the importance of checklists: “A checklist…helps people take action. With a list, there’s a plan, and a plan focuses people on doing, not deciding what to do.” We recommend implementing a product checklist to ensure that things are ready to go, every time, so the customer journey starts out without a hitch.

Customer Experience Management: Get the customer ready for the product

Preparing the customer for the product creates a smooth customer experience.

This is the other side of onboarding and a major part of customer experience management. AGCO’s CX philosophy is rooted in the principle: farmer success is the top priority. After all, the perfect tractor isn’t perfect (and the customer cannot be successful) if the farmer doesn’t know how to use it.

How well do you know what is required to set up the customer for success? And how well are you operationalizing against that?

When your customer first receives their product, what information do they need? And are you providing it? If customers’ success is the priority – are you setting them up to succeed?

This lesson applies to many areas outside of heavy equipment. How much unnecessary effort flows from a software customer who isn’t trained on the product, a patient who doesn’t know how to take her medication or a builder who doesn’t know how to properly install a new type of window? Uninformed customers create avoidable service calls and warranty claims, driving up costs and annoying both the customer and your employee.

Taking the time to ensure customers are ready for your product streamlines the entire new-customer experience, saving costs and setting the stage for a long, mutually beneficial relationship. This creates a superior customer experience when the product is actually delivered. To implement this principle, we recommend measuring the Customer Effort Score (CES) to determine how easy it is for customers to use the product and identify areas for improvement.

Follow up frequently and collect customer feedback

When a customer has an issue, you must respond as quickly as possible and keep following up until the issue is resolved, ensuring positive customer interactions. Following up ensures that customers know you still care and aren’t just there for the sale.

Net promoter score shows a marked increase when AGCO makes a follow-up call after a tractor is delivered.

In a salient example of the importance of follow-up, Courtney reported that when AGCO makes a follow-up call after a tractor is delivered or after a service issue, it has shown to improve the net promoter score significantly. When you follow up frequently, it enables you to discover items where customers may not be calling you today. For example, after repair, the equipment may work, but did the mechanic make a mess? Are there small irritations or questions that a customer may not share in a survey? Following up allows your customers to have a voice proactively. It helps you learn and strengthen the relationship by creating a communication channel.

AGCO dealers follow up a few days after the sale, a few weeks after the sale, and a few months after the sale. Creating these deliberate touchpoints helps orient the customer as they gain more experience, increasing their odds of success – while also helping their dealers support them better and building a stronger connection than can be gained through a survey.

In their report, “State of the B2B Account Experience,” (https://customergauge.com/ebook/b2b-nps-and-cx-benchmarks-report) CustomerGauge found that companies who close the loop (follow up with customers after an issue to confirm that the solution is in place and satisfactory) for all customers have a Net Promoter Score that is eleven points higher than those companies that don’t close the loop at all. Even more importantly, businesses who close the loop with all customers reported 8.5% higher retention rates, significantly reducing customer churn!

Your customers want to know they’re valuable, and the best way to show that is to follow up with them throughout the customer journey. Consistent follow-up is not only part of responsible customer experience management, but also significantly boosts customer engagement.

Fix issues fast to ensure customer satisfaction.

While most customers do not expect perfection, they do expect quick support when an issue occurs. For AGCO, this means a strong partnership with their dealers to tackle customers issues as quickly as possible.

Companies that follow up with customers within 24 hours of an issue being raised see a sharp NPS increase over companies that don’t.

Few things create a worse ongoing relationship than unresolved problems. Unresolved problems can lead to a poor customer experience, which can have significant financial impacts on the business. At a 2021 customer experience conference, I had the chance to interview DOW’s former Global Director of Customer Experience, Jen Zamora, about the work we did together to improve their complaints experience. In that interview, she spoke about the importance of responding to complaints quickly, saying it was one of the biggest predictors of decreased loyalty.

In the aforementioned report, CustomerGauge also spoke to the importance of following up quickly when a customer has an issue. Companies that close the loop within two weeks saw an NPS improvement of three points, but when the loop is closed within 24-48 hours, that improvement doubles to six points, significantly enhancing customer loyalty. A positive experience during a problem not only meets customer needs, but makes for stronger customer interactions in the future across the entire customer journey.

We recommend not only following up with customers, but doing so within 48 hours. This can drive up both customer satisfaction and retention.

Applying the Fundamental Four to Other Industries as a Customer Experience Strategy

The Fundamental Four isn’t just for AGCO, or even tractors; it can apply to almost any customer experience. Understanding the customer journey is crucial for applying these principles effectively. Let’s imagine how Cara, the Director of customer experience at an owner of commercial properties, can apply the Fundamental Four:

Get the property ready for the customer.

Cara starts by ensuring the property team has a checklist of items to review before the customer comes to the site for the first time, aligning with customer expectations. To create this checklist, Cara interviewed the Property Managers of her most successful regions to find out what they did. She then cross-checked by interviewing her call center contacts and reviewing the most common call types for new clients to ensure they had a comprehensive list, incorporating customer feedback.

She separated her markets into three tiers based on their New Client surveys—strong, medium, and poor-performing sites. Within each tier, she selected two markets to test this new checklist. She was pleased to see stronger scores in five of the markets. When she investigated the sixth market, she discovered that most Property Managers didn’t use the checklist, so she worked with regional leadership to rectify this.

Get the customer ready for the site in their customer journey.

When she looked at the existing survey, she found that many clients didn’t know who to contact for different issues, as well as challenges understanding invoices that created a significant number of calls from 15 to 60 days into a lease. Onboarding emails discussed both topics but weren’t solving the issue, highlighting the need for a well-prepared customer support team. Having learned about the power of checklists, Cara created a second checklist that was customer-facing, and that Property Managers and clients could both review during the key turnover to make sure the issues were resolved. Since there was a place for notes, this also became a handy leave-behind for customers to review during their first few months.

Cara tested this checklist in six different markets and was pleased to see a 10% reduction in calls for new clients in these markets. Additionally, the “I know who to contact for my issues” scores on their New Client survey significantly increased. This approach not only reduced calls but also significantly improved customer satisfaction.

Follow up frequently and Fix issues fast.

Cara had tried to get the Property Managers to close the loop with customers as part of a broader customer experience strategy but faced a brick wall. Follow-up was inconsistent; even when it happened, it was slow and rarely documented. This issue appeared in comments, with phrases like, “Why has nobody responded about…” She also found that clients who did not receive a follow-up had even lower response rates than her other customers.

To build a test case, she worked with her contact center to close the loop on one region with customer support reps instead of Property Managers. By using a central team, she lost the intimacy and case history (since few Property Managers document their customer involvement well) but was able to enforce a quick response time. Small issues would be solved by the contact center, with more complex issues being routed to the Property Managers.

Doing this test taught the company several things. First, by responding to all negative feedback within 24 hours, clients appreciated the fast response, and they were able to resolve many issues quickly. They captured many comments from clients and also identified some big issues that would likely have resulted in customer churn.

They also discovered that the Property Management leadership was annoyed that the contact center was proactively reaching out to clients rather than relaying the conversation through the Property Managers. As a result, they returned the closed loop work to Property Managers and established KPIs to ensure clients were followed up with quickly.

Cara also worked with Property Management to create a follow-up call on the first and fifteenth days of tenancy to ensure everything worked out for the new client. New Client survey scores were 10% higher in those markets. Even better, calls dropped an additional 5%, rent disputes dropped an amazing 50%, and on-time rent payments increased by 3%. This program was quickly scaled to the entire company, significantly enhancing customer lifetime value.

Implementing the Fundamental Four at Your Company

First, to be clear, Courtney gave me permission to share AGCO’s Fundamental Four journey with the customer experience community.

The key to Courtney’s and Cara’s success (granted, Cara’s was mythical 😊) was not just the concept of the Fundamental Four but also a strong measurement system, including collecting customer feedback. Implementing the model will require more work from your operations teams, and your leadership will want to know that this work has benefits, which can be tracked through effective customer relationship management.

So, before rushing out and sharing the concept with your teams, determine how you will measure the results. Surveys are one component, but notice how Cara paired surveys with other pieces of data, such as complaint calls. Work with your operations teams to identify the critical measurements that will be improved through this implementation.

The other key to success was piloting the results to see which improvements truly move the needle and which add work without long-term return.

In Conclusion

The success of AGCO’s customer experience program, led by Courtney Warford, exemplifies the transformative power of a well-structured approach to CX management. By seamlessly integrating customer experience into operational practices, Courtney’s team has significantly enhanced AGCO’s customer focus which will set them up for organizational growth.

The cornerstone of this success is the “Fundamental Four,” a pragmatic framework designed to ensure a smooth and positive customer journey. These principles—preparing the product, readying the customer, frequent follow-ups, and rapid issue resolution—have been crucial in elevating AGCO’s customer experience. AGCO’s methods, rooted in these core principles, demonstrate that even simple, well-executed strategies can have a profound impact on customer satisfaction and loyalty.

AGCO’s journey underscores the importance of thorough preparation and proactive customer engagement. The use of checklists to prepare tractors and educate customers highlights the significance of first impressions and ongoing support. Moreover, frequent follow-ups and swift problem resolution reinforce AGCO’s commitment to customer care, driving higher Net Promoter Scores and retention rates.

The adaptability of the Fundamental Four is further illustrated by its successful application in a hypothetical commercial real estate scenario. This case study emphasizes that the principles Courtney championed at AGCO can be effectively tailored to various industries, ensuring a consistent and superior customer experience across different business models.

In conclusion, AGCO’s customer experience program is making great strides by showing the value of a structured, customer-centric approach. Courtney is careful to say that the mission isn’t accomplished – but a strong CX practice and a culture of putting the customer first will enable AGCO to achieve their aspiration of being the “most farmer focused company in the industry”.

By implementing and customizing the Fundamental Four, businesses can enhance customer satisfaction, reduce churn, and build long-term, beneficial relationships with their clients. The lessons from AGCO’s experience offer a roadmap for other organizations aiming to achieve similar success in their customer experience initiatives.

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