EY’s Steven Bailey On How to Build Lasting Customer Relationships

An Interview with Rachel Kline

Understand the full customer journey and embed loyalty throughout, not just as a program. If you don’t understand how customers interact with you, what they need, and what motivates them, you have no map to prioritize how to engage. A human-centered design discipline is easy to undervalue and difficult to make up for a lack of understanding of how customers experience your brand. I’ve seen the power of human-centered design clearly articulating the customer journey many times in my career.

Building lasting customer relationships has many benefits, including increased revenue, positive word-of-mouth recommendations, and saving on acquisition costs. But how does one do this? In this interview series, we are talking to Product Managers, founders, and authors who can share their “Five Tips For Building Lasting Customer Relationships”. As a part of this series, we had the pleasure of interviewing Steven Bailey

As the EY Americas Commercial Excellence Leader, Steven helps clients embrace the value of data discipline and integrate functions across marketing, sales, service, commerce and loyalty. In addition to his leadership position, Steven actively assists his consumer industry clients in aligning their business models, talent acquisition strategies and technological capabilities with the objective of propelling their growth agenda. Prior to joining the firm, Steven helped global and niche brands alike to transform the commercial functions — from strategy to implementation to operations — through leadership roles at other global consultancies.

Thank you for doing this with us! Before we begin, our readers would like to learn a bit more about you. Can you tell us the “backstory” about what brought you to this career path?

I am most energized by exploration, new environments, and figuring out ambiguous situations. These motivators are what led me to seek out living in several countries, learning languages, and appreciating how life can be lived in so many ways at a young age — being an exchange student in Germany, a Fulbright Fellow in Japan, or taking a sabbatical to learn Italian and Art History in Rome for a year. Similarly, this need for constant change makes consulting a perfect fit for me; it gives me the opportunity to experience dozens of work cultures and wrestle with so many top-of-mind issues while learning from some of the best and brightest in industry.

Can you share with our readers the most interesting or amusing story that has occurred to you in your career so far? Can you share the lesson or takeaway you took from that story?

During one of my early expat assignments in consulting, I had everything in my corporate apartment stolen while I was at work one day — everything! Every piece of clothing. Everything. After finishing with the police to file a report, I went with the clothes on my back and my work bag to a nearby hotel for the night. Fortunately, I was covered by insurance, but the episode reminded me that we are not the sum of our possessions, that they are easily lost, and that we can always rebuild and remake ourselves.

Are you working on any exciting new projects now? How do you think that will help people?

I’m excited to be in the thick of helping organizations figure out how to harness the potential of GenAI — especially as it relates to building better customer relationships. GenAI is clearly an inflection point for us all, and there are risks during these early days. I’m working carefully to help our clients create responsible guidelines and frameworks to apply GenAI in ways that are transparent, ethical, and free of bias. How we use GenAI has to further trust; otherwise, it is useless, or worse, harmful.

For the benefit of our readers, can you tell us a bit about your experience with building lasting customer relationships? Can you share an anecdote or two that illustrates your experience in this area?

Lasting relationships, customer or otherwise, are all built on trust — an emotional connection that surpasses individual transactions. For customer relationships, there must be a brand promise and voice that starts with trust, and that trust must be earned with every interaction. Appreciating the importance of trust first, I help clients focus on how that trust is earned across the customer journey before we begin talking about technology and campaigns. Once there is clarity on how a brand builds and earn trust, then we can turn to the strategy, operations, and technology to support.

I have spent a career working with global brands, retailers, CPGs and luxury goods to elevate an integrated customer experience architected for growth, based on trust, centered on humans and fueled by data across marketing, ecommerce, loyalty, retail, and service. I’m always rewarded by seeing a brand engage in new ways, realize growth backed by metrics and a new-found energy among employees by their ability to succeed in ways they were never able to do before. At the heart of all this are the stories of customers truly excited by the brand as a result.

In today’s fast-paced and constantly evolving landscape, what strategies do you employ to maintain a strong connection with your customers and anticipate their changing needs?

Data is the fuel and first step. To maintain a strong connection and anticipate needs, there is no getting around knowing your customer. Whether it’s called CRM, C360 or CDP, brands must be able to aggregate everything they know into a common ‘golden’ record that is constantly enriched with each interaction. If companies put as much effort into their data as they do into campaigns, they would be able to identify those opportunities to surprise and delight so much more easily — across segments and to individuals.

Combining that data with the analytics and tools to generate the ah-ha insights of when, where, and how to interact is powerful. But knowing is only as good as doing. Brands then need the tools to deliver anticipated needs across a customer journey — online, in an app, in the store, with customer service. It takes a lot of work to create an integrated set of delivery channels to deliver a trust-building experience.

Of course, data and delivery channels are useless without the right operating model that empowers employees in all channels to know the customer, access insights, and provide them the tools to offer the next best action — all underpinned by a culture that is obsessed with building customer trust.

Can you discuss the strategies that companies can employ to strike a balance between driving revenue and profitability, and focusing on building customer relationships and loyalty?

I am a firm believer that the two are not mutually exclusive. If a brand focuses on value to the customer over selling to the customer, revenue and profitability can follow. Knowing it is easier and less costly to get an existing customer to purchase than to acquire new customers, the case for building lifetime value through trust becomes clear.

Simple things can build trust as much as big things. For example, something as simple as slightly personalized email or an online experience that lets the customer know that you know them as a customer and appreciate their business and needs can be enough to produce more revenue.

I often share an example of a retailer where I have spent considerable money over the years, yet they continue to send me unhelpful messages focused on categories I don’t purchase from them. To make it worse, their local store associate began also sending me notices about the same categories after meeting during a transaction purchasing in another category. This approach feels tone deaf and leaves me feeling unvalued. It feels like the company is just selling instead of solving a need. And I’ve seen my spending with the brand be replaced by shopping at a competitor who has shown they know me and speak to me. Multiply that experience across even a somewhat small percentage of customers, and the impact on revenue and profitability becomes clear.

Could you describe the metrics and measures you use to evaluate the success of your customer relationship-building efforts, and how you identify areas for improvement?

Yes, so many brands are terrible at tracking, measuring, and reporting a consistent set of KPIs to drive their customer relationship efforts. Many fall into the trap of valuing quantity of interactions over quality. “If we just send more email, it will bring more revenue.” While the spray and pray approach can yield some results, it is neither reliable nor an enabler of growth.

So many brands don’t calculate or report their Cost to Acquire (CAC). A brand has to understand what it takes to acquire new customers and to replenish the funnel. For existing customers, Customer Lifetime Value (CLV) and Net Promoter Scores (NPS) are good starting points. It’s also important to understand Churn Rate — the rate at which customers stop doing business with your brand — and, conversely, Customer Retention Rate. Customer Satisfaction Scores (CSATs) from direct surveys are a useful staple. An often-underutilized metric is Customer Effort Score (CES). CES measures how easy or difficult it is for customers to interact with your brand. A well-executed effort to measure CES on a continuing basis can bring friction points to light and help teams prioritize, making it as easy as possible to do business with the brand.

Regarding customer-facing teams, what steps do you take to ensure they can deliver personalized, proactive, and efficient support, tailored to the needs of each individual customer?

It all begins and ends with data, activated through intelligent decisioning and the ability to deliver those data and decisions to the right channel — including tools used by customer-facing teams, such as clienteling or a customer service system. If associates don’t have the information and insight for a particular customer, it is extremely more difficult to tailor an experience. Fostering a customer-oriented culture is critical, but only gets you so far. Without the ability to understand past interactions or propensities based on smart segmentation, customer-facing teams have nothing to support them.

For example, I’ve helped several brands deliver in-store clienteling systems that enable associates to get a fuller picture of the customer in front of them. Not only can they understand past transaction history, but they can also see demographic and psychographic information as well as recommended next best actions based on intelligent propensity modelling done behind the scenes. With this power comes the responsibility to use this data in a way that supports the customer and delivers value to them in the moment without overwhelming them with the information you have.

What tips do you have for responding to negative feedback from customers, and what steps can be taken to turn those experiences into positive outcomes?

As in our personal relationships, it is first important to make sure the customer feels understood. Create a culture where teams treat negative feedback as an opportunity to learn, not to defend. Make sure the customer feels their issue (real or perceived) is appreciated. Turning such experiences into positive outcomes means finding the opportunity to first fully solve the issue at hand reasonably, and second, to look for an opportunity to overdeliver. A small token goes a long way to rebuilding trust and doesn’t have to erode revenue unnecessarily to be effective.

Lastly, how do you use technology or AI to enhance your customer relationships, and what tools have you found to be most effective in building and maintaining them?

Technology is key, but it’s not everything. I can’t tell you how many clients have a mess of technology solutions not tied together through strategy or integration. That said, I’ll reiterate the need for data as fuel and AI (the non-generative kind) to derive insights and to determine what to do next. Being able to move beyond simple recommendation engines promoting product categories or past purchases to being able to send the right text message, personalized content slot online or even customer service outreach, is what separates good from great.

Specifically, brands need to invest in, 1) identity resolution solutions to create a unified record that can be continuously enriched, 2) in customer data platforms (CDPs) to take unified records and to create smart segments powered by AI and machine learning to work with highly tuned propensity models, 3) AI/ML-powered decisioning engines to determine the next best action required for a segment or individual, and 4) the ability to deliver across all channels a brand operates in.

Further, GenAI now offers the opportunity to move capacity from content production to interaction optimization and personalization. Instead of large teams spending the majority of their time producing content for marketing and channels at the expense of measuring and optimizing, teams can move to higher-value activities that feed continuous improvement cycles. GenAI also allows teams to keep up with the demand for the volume of content variations required to deliver personalized experiences that most brands forego due to the time and expense to create so much content.

Here is the main question of our interview. In your experience, what are five key components of building lasting customer relationships?

1. Understand the full customer journey and embed loyalty throughout, not just as a program. If you don’t understand how customers interact with you, what they need, and what motivates them, you have no map to prioritize how to engage. A human-centered design discipline is easy to undervalue and difficult to make up for a lack of understanding of how customers experience your brand. I’ve seen the power of human-centered design clearly articulating the customer journey many times in my career. I’ve spent many days in customer interviews and even sitting in customer’s home and going through their closets with them to understand what they buy, when, how, and why. And, every time, I’ve watched the C-Suite and customer teams learn something completely new about how their brand is experienced and what customers want. Once the journey is understood, it becomes much easier to figure out the right loyalty strategies to surprise and delight throughout instead of focusing solely on tiers, points and rewards to drive growth.
2. Create a culture focused on building trust through the brand experience. Empower that culture with an operating model that pushes decision-making close to the customer to do what is right in each moment. The customer may not always be right, but they can often be satisfied. Some brands can be good at building a customer-centric culture but then don’t empower that culture with the right operating model, governance or tools to deliver. I worked once with a large retailer who had no connective tissue between the business, marketing, and IT and was further hampered by ill-defined governance that made decision-making difficult, leading to inaction at all levels. We helped them stand up a new operating model with clear multi-disciplinary teams, pushing decision-making to the lowest levels possible and helped them adopt new ways of working with an unrelenting focus on value to the customer and corresponding value to the brand.
3. Define a clear data strategy. Treat data as the fuel required for the entire enterprise to deliver a brand’s promise. Appreciate that without an aggregate customer profile, constantly enriched and continuously mined for insights, your brand is flying blind. Very few brands have strong data capabilities. They often dance around the edges and are unable to drive insights or integrate that data downstream. I remember the power unleashed for one national retailer a few years ago once we completed a comprehensive data audit and set up identity resolution and connected 100+ feeds to create a unified customer record. That alone brought a lot of insight to recognize that this profile online was the same as this one in-store and this one from customer service, immediately unlocking new insights, segments, and behavior trend analysis the brand couldn’t do before.
4. Create a clear technology vision and strategy across the customer value chain to enable the right data, decisioning, and delivery required to achieve excellent customer experiences. I have seen across brands, retailers, CPG companies and others the classic spaghetti mess of point solutions brought in piece by piece by well-intentioned teams without an overarching strategy or clear architecture vision. The biggest issue becomes the inability to get systems to talk to one another, losing the promised value of those systems. For one CPG company, we helped them rationalize their technology against a capability map based on business needs and use cases versus tech toys, laying out a clear, prioritized roadmap of investments and a value case to match.
5. Establish a consistent and exhaustive KPI strategy to measure not only revenue and margin but also sentiment and brand affinity. Make sure that strategy is embedded into the core ways of working across the organization — not just marketing — to constantly adapt to evolving customer needs. Global brands seem to have the hardest time aligning KPIs across global teams and local markets, resulting in the lack of a common language to measure success. It was very satisfying to see one global client evolve to a standard ‘channel health scorecard’ for marketing, finally illuminating real opportunities while aligning executives and teams to shared plans for continuous improvement.

How do you ensure that these ideas are implemented throughout the customer journey?

People like to reinvent things, but the core foundations of people, process, and technology still hold true. I often see clients overemphasize one or two of these facets at the expense of the others and wonder why they aren’t seeing results. Some organizations try to throw technology at the issue, but don’t have the right data strategy to fuel it, the right processes to use it or the right operating model to execute. All three vectors must be done with intention and in concert. No one said it was easy, but it is achievable with discipline.

We are nearly done. You are a person of enormous influence. If you could inspire a movement that would bring the most amount of good to the greatest amount of people, what would that be? You never know what your idea can trigger. :-)

I firmly believe what Senator J. William Fulbright did when he founded the Fulbright Foundation after World War II — that society benefits immensely when we stop thinking of people from other cultures and countries as ‘other’, that when we see them as humans, we are much less likely to go to war or to even fight among ourselves. Exchange programs like Rotary and AFS contribute to the same cause. To that end, I would want to inspire as many people as possible to seek out learning from others — to appreciate that life can be lived in many ways that can be equally ‘correct’ and fulfilling. Whether through the opportunity to live abroad or to internalize different experiences at home through contact and conversation, the ability to see ourselves as human is transformative and lasting.

How can our readers further follow your work online?

People can find me on ey.com at https://www.ey.com/en_us/people/steven-bailey

and LinkedIn https://www.linkedin.com/in/stevenmbailey/

Thank you for the interview. We wish you only continued success!