In 2005, Ariba faced a challenge. The Voice of its Customers was being muffled by a storm of fast growth, multiple acquisitions, and a changing business model.

Ariba is a large and complex global business based in Silicon Valley with offices around the world. With over $300 million in annual revenues, its business units provide Spend Management and other services and technology to a diverse and prestigious customer base. Its 500 marquee customers include most major players in 14 key verticals, including banking, financial services, chemicals, computer hardware and software, electronics, energy, insurance and industrial manufacturing. At least one-third of the Fortune 500 — including the top seven — depends on Ariba for critical services.

While successfully selling important software and services-based solutions, Ariba’s leadership was eager to improve their customer knowledge and focus. At the time, they did not have a comprehensive, companywide program measuring customer satisfaction. Instead, during three years and five mergers, Ariba departments employed many different customer survey programs. Each program utilized different tools, styles and questions. Some scored answers on a scale of 1-5, others 1-7, and still others 1-10. The customer feedback data were de-centralized, delivering little value to the enterprise as a whole.

With no central gatekeeper to manage the process, there was a risk that some customers would be over-surveyed, while others would rarely or perhaps never be contacted. There was little organized follow-up or sharing of data between departments. With customer feedback data residing in so many different repositories, there was no way to generate reports that delivered a 360 degree view of the customer. They could not roll up and consolidate data in comprehensive reports to guide upper management in its process improvement and investment decisions.

Also complicating the issue was Ariba’s changing business model. After years as a technology provider, it was evolving into an On Demand, Software as a Service (SaaS) provider. With 50% of Ariba’s workforce delivering services, management needed to know how well they and the other business units were performing. To increase customer satisfaction and loyalty, the company was determined to get their finger back on the pulse of the customer.

Creating Customer Advocates

In 2005, Ariba CEO Bob Calderoni and the Management Committee (MC) established a new Customer Advocacy program, tapping Roger Blumberg as Senior Director of Customer Advocacy and the primary change agent in this fast-moving environment.

• Develop a closed-loop feedback process, in which they regularly measure customer satisfaction, take corrective actions, and provide management with necessary, accurate and timely 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 values, and all employees are measured on them.

As the primary gatekeeper, Blumberg’s Customer Advocacy group now manages all feedback programs. They coordinate customer contact, ensure consistency of questions, and consolidate and disseminate responses to all departments.

Success has come quickly. After barely a year in operation, every department and region has seen significant improvements in overall satisfaction scores. Millions of dollars of contract revenue have been retained. But perhaps the most important result, Blumberg said, is the profound change in Ariba’s culture.

Customer satisfaction is now the key metric at every level of the organization. Every department knows its customer satisfaction scores, as well as the scores of every other department. Employee compensation and MBO 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.

Integrating Customer Intelligence

Finding the right partner was the first step, Blumberg said. After distributing a request for proposals from the nation’s leading solutions providers and a thorough review of responses by management, Ariba selected CustomerSat Enterprise™ as the sole customer feedback solution for the entire enterprise.

"Integrating many different survey programs into a single solution required a tremendous amount of hard work, skill and flexibility," Blumberg said. "CustomerSat’s Professional Services team worked closely with us to determine our goals, approaches and best practices, then optimized their application to deliver what we needed."

After selecting CustomerSat, Ariba continued developing its customer intelligence program:

• Departments not previously conducting surveys were assimilated into the new companywide program.
• A central repository for all customer data was created.
• New touch rules ensured proper frequency of surveys, and that the entire customer base would be surveyed, but not over-surveyed.
• Account managers received access to their customers’ results across all surveys.
• Leadership received an easy-to-read dashboard of data encompassing all surveys and all customers.

An integrated VOC system has three parts: data collection, analytics and action. Data collection includes two different kinds of surveys:

• A semi-annual Relationship Survey delivers overall satisfaction and loyalty readings. Troublesome responses trigger follow-up meetings with the customer by a member of the Management Committee. 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 1500 employees in rolling departmental road shows.
• Transaction Surveys are performed at four critical customer touch points: after contacting tech support, after a training session, at the conclusion of a project, and every 90 days and at the conclusion of a consulting engagement.

Results are consolidated into reports which are disseminated across the company. These guide follow-up action and process improvements.

Taking Action

Ariba was determined to close the loop individually with every customer, regardless of how they rated Ariba. CustomerSat Action Management provides an automated system of alerts, assignments and communications which enable the team to respond to customer concerns immediately — a proven method of retaining at-risk customers.

Action Management automatically generates and sends action alerts to designated Ariba account teams. Dashboards — visual displays of performance data by product, region and department — communicate customer feedback data across all departments, offering a consolidated view of each Relationship Survey’s results. Push reports, showing trends and verbatim customer comments, are forwarded to individual departments, managers and MC members.

Ariba’s Management Committee follows up with every customer who returns an overall satisfaction score of six or below. These calls not only improve their understanding of each customer’s issues and concerns, but also make a strong impression on customers and have led to a significant increase in satisfaction scores and repeat business.

Interactive discussions with customers are held regularly:

• Quarterly Management Review is a one-on-one quarterly presentation delivered by Ariba executives to a major customer. It delivers a 360 degree view of Ariba and customer engagement.
• Customer Advisory Councils are larger group discussions with strategic accounts. These encourage customer involvement in the improvement process and drive the future direction of Ariba products and services.
• Customer Product Focus Groups, organized by geography and industry, drive feedback on specific products and services.

ACE Certification

A spring 2006 audit for the Achievement in Customer Excellence (ACE) Certification cited Ariba’s loyalty program as an award-winning example of best practices in three categories:

• Action on customer feedback
• Management and employee involvement
• Communication to actual and potential respondents

The ACE committee praised the infrastructure that Ariba’s Customer Advocacy team has developed, saying it "serves as a best-practices guide that other companies may want to follow."

Business Results

Barely a year after launch, Ariba has achieved significant results. They now measure satisfaction at every major touch point. Company bonuses, an element in every employee’s MBO, are tied to the results of the Relationship Survey, which also drives most of Ariba’s investment decisions.

In just one year, customer satisfaction scores for the company, region, products and business units, have improved overall by 10%. Other significant results:

• Five percent of customers showed an improvement of 20%.
• Scores of 8, 9 and 10 jumped from 38% (in late 2005) to 60% (in mid 2006).
• All departments and regions saw significant improvements in overall satisfaction scores. 10% of customers reported an impressive 2 point (out of 10) improvement in overall satisfaction.
• Customer survey response rates rose to 74% across all regions (from 28%).
• Millions of dollars of contract revenue have been retained.

Ariba measures customers’ willingness to act as references and to participate in focus groups and Customer Councils — a number which has tripled in just one year. Significantly, the mean OSAT score of those attending these meetings has risen 15%.

Looking ahead, Ariba’s future looks bright. "We no longer have to wonder how we’re doing," Blumberg said. "Now we know." Thanks to their state-of-the-art customer feedback process, Ariba will stay on track toward increased growth, profitability and customer satisfaction.

"Our customer feedback program is the barometer of our success,” said Blumberg. “It keeps our finger on the pulse of our customers."