IT Innovations That Generate Revenue and Get You More Customers
Best Buy, Hilton Hotels and Washington Mutual dug into their data and revamped their business processes to empower customers and increase sales. Here's how they did it.
By Katherine Walsh
The accepted wisdom of the Internet is that customers
want what they want, the way they want it, when they want it.
And, judging by our CIO 100 honorees, helping your customers do
just that produces business benefits that go directly to the
bottom line. So how do you make that happen? How do you empower
your customer? And how do you prevent your own business
processes from getting in the way?
There are, according to our honoree CIOs, three key steps.
First, find out everything you can about the customer. Then,
build a system that anticipates his every wish. Finally, step
back, get your own business processes out of the way and let
him do his thing.
A bank, a retail giant and a hotel chain tried to perfect
the customer experience and received 2007 CIO 100 Awards in the
process. For Washington Mutual bank (WaMu), listening to
customer demand for faster, easier access to their accounts
resulted in a new process that eliminated the need for anyone
to ever set foot inside the bank. At Best Buy, focusing on
customers meant developing a way to increase sales of in-demand
products by making them more visible to the consumer. Hilton
Hotels developed a system to give customers more options for
reserving rooms by improving its online booking channel. By
listening to its customers, by figuring out how innovations to
existing technologies could meet their needs and by constantly
asking how IT can improve existing business processes, the CIOs
of all three companies created systems that generated organic
and significant competitive advantage.
Washington Mutual: No More Banker’s
Online banking isn’t unique to Washington Mutual. What
is new is the fact that WaMu customers who want to open new
checking accounts with the Seattle-based consumer and small
business bank (which has $312 billion in assets) don’t
have to get up from their computer to do so. What’s more,
if a new customer wants to open an account, he doesn’t
have to visit a WaMu branch and, in many cases, will never have
Customers want convenience, ease of use and speed from a
banking application. “That’s the key,” says
Deb Horvath, CIO of Washington Mutual. For WaMu, delivering a
better product more simply has meant putting the process
largely into the hands of the customer. But doing so presented
a challenge. In order for its CIO 100 Award-winning Instant
Checking system to work, WaMu had to figure out a way to remove
signature cards (used to validate transactions) from the
process. The bank’s solution was to capture a digital
image of the customer’s signature through the first check
posted to his account, and copy that image into a
signature-archiving system. The project’s success hinged
on WaMu’s ability to convince regulators that such a
method could adequately replace traditional signature cards.
WaMu IT worked with legal, compliance and other parts of the
business before getting the OK and rolling it out to customers
WaMu customers are now able to open their accounts in seven
minutes, quite a change from the 45 days it previously took. As
a direct result, according to Richard Blunck, senior VP and
director of e-commerce, WaMu now receives 2,700 online account
applications per day. Prior to Instant Checking, that number
hovered around 100. WaMu has also saved millions on costs
associated with opening new accounts—mainly back-office
support and paperwork.
According to Horvath, the key to creating a successful
online solution lies in streamlining an existing process.
“You have to remove any bit of bureaucracy that
doesn’t have high value,” she says. For example,
WaMu added a feature to Instant Checking that allows customers
to open a savings account at the same time as a checking
account simply by checking an extra box. Previously, customers
had to open the two accounts separately, filling out their
personal data twice.
Horvath and her team are now starting to examine how they
can further leverage online convenience for business advantage
in their brick-and-mortar branches. After all, if you can open
a second account by clicking a box online, why shouldn’t
you be able to do that in the physical bank? Why should
competitive advantage be restricted to cyberspace? If Horvath
has her way, it won’t be.
Best Buy: The Visible Customer
Best Buy, according to CIO Bob Willett, has always looked
through a customer-centric lens.
Improving the customer experience by examining shopping
behaviors and developing the capability to give customers what
they want has, he says, forever been central to the $31 billion
consumer electronic retailer’s mission. This year,
Willett’s IT department received a CIO 100 Award for
Purchase Path, a proprietary BI system that analyzes customer
purchases at a macro level, as opposed to gathering data only
from individual transactions.
This, says Willett, has proven to be a better way to measure
and anticipate customer desires, because looking at aggregate
purchases, as opposed to single transactions, gives Best Buy
planning teams an opportunity to unearth connections between
the products its customers buy.
“Primarily, we were looking to increase
attachments,” says Willett. That means selling, for
example, not just the TV but the remote control and the DVD
player that go with it. Not just the iPod but the iTrip and the
car charger. By discovering purchasing patterns, Purchase Path
helps Best Buy to either bundle products (for example,
packaging a popular set of headphones with a specific laptop)
or make sure the two associated products live close to each
other on the shelves. Purchase Path also helps Best Buy target
specific customer segments and thereby increase sales by giving
its planning teams a way to model future customer behavior. By
collecting data from call centers and in-house point-of-sale
devices, and slicing and dicing it in multiple ways (through
single or multiple transactions, within specific customer
segments, like age and gender, or by geographic region), Best
Buy gets a detailed picture of what products its customers want
where, and how best to make them available and accessible.
Willett says that so far the best measure of how well
Purchase Path is working can be found in customer satisfaction
surveys, which he says were at an “all-time high”
last quarter. “You don’t get good sales or
performance if customer satisfaction is going backward,”
he says. “One breeds the other.”
Hilton Hotels: 24-Hour Party People
Letting customers do something themselves is often the best
way to their heart. Tim Harvey, CIO and executive VP of global
distribution services at Hilton Hotels, kept that vision of
customer satisfaction through self-service in mind as he set
out to improve the $8.1 billion hotel chain’s online
booking channel. Harvey’s vision, e-Events, is now a
reality, and a CIO 100 Award winner. The proprietary website,
which lets customers book up to 25 rooms for events,
conferences and parties, reserve meeting spaces, order food and
drink, and reserve audio/visual equipment—all
online—is the most comprehensive one-stop shopping
application in the hospitality industry.
Harvey says all of this was made possible by integrating
multiple business capabilities into one enterprisewide
technology platform, OnQ. The key to the project’s
success, according to Harvey, lies in combining the power of
systems such as reservations, CRM, BI and a revenue management
system that optimizes pricing while displaying inventory
As is the case with almost any project of this scope and
scale, Harvey ran into resistance. For example, sales, Harvey
says, which is focused on selling as many rooms at the best
price as possible, was loath to put this process in the hands
of customers. But Harvey set out to prove that e-Events
wouldn’t result in a loss of control for the sales arm.
He argued that e-Events simply opened a new sales channel,
allowing customers to book directly and take advantage of all
of Hilton’s products; sales would still control inventory
availability and pricing.
Harvey says customer satisfaction is booming. Previously,
planners booking group meetings could call only during business
hours and often had to wait for salespeople to return their
calls. For Hilton, that meant the possibility that customers
would turn elsewhere. But Harvey says that last year e-Events,
which was fully deployed in April 2006 at a cost of $1.5
million, generated $2.6 million in new revenue. It’s
expected to bring in $19 million this year, and $65 million in
2008—an ROI worthy of the Presidential Suite.
Associate Staff Writer Katherine Walsh can be reached at