Tuesday, December 29, 2015

Developing a Customer Experience Strategy - The HealthScan Company Case Study

We’ll use this fictitious case study to create our CX strategy.  The development of our plan will build on the various CX tools and concepts presented throughout the preceding posts on this blog.  Our strategy will be designed in the context of the following brief case study about a mid-size manufacturing company.  While the setting of the case is business-to-business, the approach used in designing the strategy can also be applied in a business-to-consumer context.  

HealthScan is a mid-size manufacturer of various medical devices used in surgical procedures by doctors around the world.  The company’s direct (revenue generating) customers include hospitals and large medical practices who purchase the various diagnostic and surgical instruments used to treat patients.  Particularly in the case of hospitals, there are numerous “indirect” customers who have varying degrees of influence over the purchase decision.  These include financial managers and accountants, as well as paramedical staff including nurses and therapists.  From a customer experience standpoint, the needs and viewpoints of all of these stakeholders need to be taken into account during by HealthScan’s sales and service staff.

 With headquarters in Geneva, Switzerland, HealthScan has over 300 employees, mostly engineers and technicians, in Switzerland, and maintains regional sales offices in Chicago to serve its North American customers, while its Asia-Pacific base is in Melbourne, Australia.  
Established in 1935, the company is privately owned, with a controlling interest held by the founding family.  Forty percent of the private shares are owned by the employees, who also each receive a vote on selected organizational matters.  While HealthScan has been consistently profitable since inception, the company’s operating margin has declined by two-percent in each of the last three years, and market share for three key product lines has eroded by over five-percent during the same time period.  

While a couple of competitors have introduced new products at lower price points to compete directly with HealthScan’s offerings, senior management does not think this is the primary reason for the fall off in performance.  Anecdotal input from global account managers indicate that customers are increasingly unhappy with both the process involved in purchasing the company’s products as well as with the quality and availability of service for devices needing repair.  HealthScan has always been an extremely product focused on company, and consequently, the formal collection and analysis of customer feedback has never been established.  Indeed, over the last two-years, four major clients have elected not to re-purchase replacement devices from the company, electing to go with competitor products instead…in the absence of a formal customer feedback system, this came as a complete surprise to HealthScan management.

In addition to these customer issues, HealthScan management was also dealing with some staffing concerns.  Over the preceding 18-months, a couple of senior engineering managers had left the firm and convinced a few of their staff to follow them to competitors.  Employee loyalty is a cornerstone of Swiss businesses, so such turnover is unheard of in most established companies.  Given its good reputation, management was surprised when it subsequently experienced a fair amount  of difficulty in attracting new staff for these roles.

Concluding that changes needed to be made in key facets of HealthScan’s operations, the executive team implemented a series of strategic choices.  One of these involved a renewed focus on customers, and to enable this, the company established a new customer experience management role and began recruiting suitable candidates.  With this brief case as background, the next series of posts will focus on the development and execution of a customer experience strategy for HealthScan.

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