The Wall Street Journal - 22.02.2020 - 23.02.2020

B2| Saturday/Sunday, February 22 - 23, 2020 **** THE WALL STREET JOURNAL.

THE SCORE

THE BUSINESS WEEK IN 7 STOCKS

E*TRADE FINANCIAL CORP.

The long-predicted M&A frenzy in the wealth man-

agement industry is here. Wall Street stalwart Mor-

gan Stanley agreed to buy discount broker E*Trade in

a $13 billion deal announced Thursday. The all-stock

deal is the biggest takeover by a giant U.S. bank since the

2008 crisis. Earlier in the week, money manager Franklin Re-

sources Inc. agreed to buy rival Legg Mason Inc. for $4.5 bil-

lion in cash. E*Trade sharessoared 22% Thursday.



ETFC

22%

PERFORMANCEOFWEALTH-MANAGEMENTFIRMS

Source: FactSet

30

• 10
  
  
  • 5
  
  
  
  

0

5

10

15

20

25

%

E*Trade

Financial

Morgan

Stanley

Legg

Mason

Franklin

Resources

Tues. Wed. Thurs. Fri.

Binge Watching Netflix?

That’s an ‘Experience’

Businesses from Mastercard to TGI Fridays appoint chief experience officers

to examine how customers interact with their products

BYNATIVES

MICHAEL BUCHER/THE WALL STREET JOURNAL

systems and 26 supply-chain cen-

ters as well as text messages, Twit-

ter and Amazon Echo. The world’s

largest pizza chain works with data

management and analytics compa-

nies like Splunk Inc. and Talend Inc.

One goal is to determine what

kinds of promotions to offer and

when. Another is to spot bad cus-

tomer experiences like a sluggish

website before they become too

widespread—or big on Twitter.

One specific output of Domino’s

data is its Live Pizza Tracker, which

gives customers real-time updates

about their pizza as it is being

made. It alleviates some of the im-

patience customers feel as they

wait for their order to arrive, ac-

cording to Mr. Maloney.

“That single device from a con-

sumer experience standpoint has

been incredibly important for us,”

Mr. Maloney said.

Some companies say the key to

creating a great experience for cus-

tomers starts with something sim-

ple: listening.

At Harry’s, its razors didn’t al-

ways make a clicking sound when

blades snapped into place. Co-

founder Jeff Raider said the com-

pany changed the design after a

user said he wanted to hear some-

thing when he locked in a new

blade. “One of our customers went

into his garage, hollowed out a

piece of his handle and said ‘If you

make that change, you can get that

click,’ ” Mr. Raider said. “We said,

‘Can you send that handle to us?’ ”

But listening is often not

enough. Sometimes what a com-

pany hears can create new, unin-

tended problems.

When Netflix heard from sub-

scribers that they wanted the ser-

vice to highlight coming attractions,

the company tested a large preview

unit at the top of the screen. “We

think it’s going to work,” said Todd

Yellin, vice president of product at

Netflix, who shares responsibility

for the customer experience with

Steve Johnson, vice president for

product and studio design, and

other executives. But even though

customers asked for it, they didn’t

use it, Mr. Yellin said.

The company realized that the

unit was making it harder for users

to reach programs they could watch

right away. “When I want instant

gratification, I don’t want a big part

of the interface taken up with ‘com-

ing soon,’ ” Mr. Yellin said. “I want

what I can play now.”

The solution: It moved the com-

ing attractions to a section that peo-

ple could navigate to if interested.

Another change designed to im-

prove the Netflix customer experi-

ence was a decision to let members

skip the opening credits of serial-

ized TV shows.

Long opening-credits sequences

make sense for traditional TV view-

ing, when episodes arrive a week

apart and people watch other

shows in between, Mr. Yellin said.

But as binge viewing became more

popular, Netflix discovered the old

format degraded the experience for

people watching several episodes of

the same show in a row, he said.

The company tested the skip but-

ton on a subset of members. “They

loved it, and even more importantly

as a subscription service, it encour-

aged people to keep subscribing,”

Mr. Yellin said.

At Mastercard, one recent change

made to enhance the customer ex-

perience is a “True Name” program

that allows transgender customers

to use the name of their choice on

credit cards even if it isn’t their le-

gal name. This change was made

“by understanding the journey that

people go through every time they

pull the card out of their wallet,”

said Mr. Chesnut, the company’s

new chief experience officer.

Mastercard is also grappling with

unintended consequences of any

changes that make the payment

process easier.

Customers want their purchases

to go smoothly and quickly, Mr.

Chesnut said. But if a cashierless

grocery makes checking out so ef-

fortless that nobody takes out their

credit cards, do they forget about

Mastercard? “There’s some debate

we have internally—is too little fric-

tion a bad thing?” he said.

One fix to that potential problem

is a signature sound that now plays

when customers use a contactless

card to pay for a New York City taxi

ride, according to the company. It

eliminates friction but still lets peo-

ple know that payment went

through—and that Mastercard did it.

The Experience Report, The Wall

Street Journal’s new newsletter

about ways businesses are trying

to serve their customers and

employees better, launches Feb. 26.

Sign up at wsj.com/newsletters.

More companies are hiring chief experience officers like Donald Chesnut, center, who is with Mastercard Inc.

A customer wanted to

hear a click when he

attached his razor blade.

Harry’s made it happen.

VIACOMCBS INC.

ViacomCBS has a tough year

ahead. The company reported

a loss in the quarter as Via-

com completed its merger

with CBS and said it is tar-

geting $750 million in cost

cuts for the year. The company also un-

veiled its three main streaming plans: a

free ad-supported service called Pluto

TV, an expanded version of CBS All Ac-

cess, and a third service anchored by

Showtime that will be the most expen-

sive option. “We believe this strategy of

free, broad pay and premium pay is

where the market will go,” Chief Execu-

tive Bob Bakish said. Sharesplum-

meted 18% Thursday.



VIAC

18%

can lead to cardiovascular events

like heart attack and stroke, or

those who are genetically predis-

posed to very high cholesterol lev-

els.

Nearly 100 million Americans

have high cholesterol, according to

the U.S. government, and cardio-

vascular diseases are the No. 1

cause of death in the country.

Esperion’s drug, which will

have the brand name Nexletol, has

shown in clinical trials to reduce

low-density lipoprotein choles-

terol, or LDL-C levels, when taken

alone as well as when added to

other lipid-lowering therapies. Be-

mpedoic acid works by inhibiting

a specific enzyme in the liver that

allows for LDL to exit the blood-

stream, a new mechanism.

Esperion said bempedoic acid

reduced LDL-C levels an average

18% when compared to placebo in

patients taking moderate- and

high-dose statins, and up to 28%

in patients taking low-dose or no

statin, in late-stage trials. A com-

bination pill that combines bem-

pedoic acid and a cholesterol-low-

ering drug called ezetimibe was

found to lower LDL-C levels by

38% in patients taking a recom-

mended standard dose or low

dose of statins, and 44% in pa-

tients taking no statin.

A decision on the combination

therapy is expected within a week.

European regulators recom-

mended approval of both formula-

tions Jan. 31.

Analysts forecast bempedoic

acid’s peak sales to exceed $1 bil-

lion, but they and doctors expect

uptake will be driven in part by

the price of the drug and insurers’

reception.

Mr. Mayleben said in an inter-

view before approval that pricing

would be lower than PCSK9s and

low enough to earn coverage by

insurers.

The PCSK9 drugs—Repatha

from Amgen Inc., and Praluent

from Sanofi SA and Regeneron

Pharmaceuticals Inc.—have strug-

gled commercially despite having

shown to dramatically reduce cho-

lesterol levels and the risk of car-

diovascular events.

These therapies, which are ad-

ministered by injection, have been

challenged by lower-than-expected

prescriptions and high-prices that

scared away insurance companies.

They initially carried list prices of

more than $14,000 but have since

come down in cost significantly,

and now both cost $5,850 annu-

ally.

“Everybody would argue that

they had been commercial failures

because not many patients can get

access to them,” Mr. Mayleben

said of the PCSK9s. “It’s a shot

and it’s a chronic disease. You

don’t want to take a shot for the

rest of your life.”

The industry’s last major effort

to introduce a non-statin choles-

terol therapy was considered a

failure. A class of drugs called

CETP inhibitors that raised levels

of HDL, or good cholesterol, were

touted as certain blockbusters in

the battle against cardiovascular

disease, but ultimately failed in

the clinic.

Continued from page B

APPLE INC.

The coronavirus is rippling

through the world’s most

valuable company. Apple said

Monday it won’t meet its

revenue projections for the

current quarter as the epi-

demic limits iPhone production and cur-

tails demand in China. Apple’s an-

nouncement is the most prominent

example yet of the effects of the virus

on global business and markets; Apple’s

dependency on China’s manufacturing

and consumer sectors makes the com-

pany vulnerable. The company said it

will provide more information when it

holds its earnings call in April. Apple

sharesfell 1.8% Tuesday.



AAPL

1.8%

WALMART INC.

Even the world’s biggest re-

tailer struggled to get shop-

pers to spend during the holi-

day season. Walmart

executives said the critical

period started strong around

Thanksgiving but sales of toys, video-

games and apparel softened in the

weeks before Christmas. Chief Executive

Doug McMillon said store sales also

suffered from some merchandising mis-

steps, such as a lack of high-price, in-de-

mand holiday toys and a glut of inex-

pensive clothes and seasonal attire. Still,

Walmart’s U.S. e-commerce sales rose

35% in the fourth quarter. Sharesrose

1.5% Tuesday.



WMT

1.5%

BED BATH & BEYOND INC.

The new CEO of Bed Bath &

Belong wants to eliminate

“purchase paralysis.” To do

that, Mark Tritton wants to

declutter stores, make aisles

wider and stop piling mer-

chandise up to the ceiling. The former

Target Corp. executive laid out his vision

for remaking the troubled retailer Tues-

day. Mr. Tritton plans to trim inventory

by more than 10% this year, part of a

broader plan that calls for spending as

much as $400 million on store remod-

els, technology upgrades and supply-

chain improvements. He joined the

struggling company in November. Shares

gained 5.4% Tuesday.



BBBY

5.4%

L BRANDS INC.

Les Wexner is giving up con-

trol of Victoria’s Secret. The

82-year-old billionaire behind

the lingerie brand agreed

Thursday to sell a controlling

stake in the Victoria’s Secret

chain to private-equity firm Sycamore

Partners for $525 million. He also

agreed to step down as chief executive

of L Brands after 57 years, ending his

reign as the longest-tenured CEO of an

S&P 500 company. His decision to part

ways with Victoria’s Secret is an admis-

sion that Mr. Wexner couldn’t revive the

fortunes of the troubled brand he built

around shopping malls and sex appeal. L

Brands sharesfell 3.6% Thursday.



LB

3.6%

WELLS FARGO & CO.

Wells Fargo has reached a

settlement with the govern-

ment over its long-running

fake-account scandal. The

bank agreed Friday to pay $

billion to settle investigations

by the Justice Department and the Se-

curities and Exchange Commission. It’s a

victory for Charles Scharf, the bank’s

new boss who was tasked with resolv-

ing the crisis. Regulators and prosecu-

tors could still take action against indi-

viduals involved in the 2016 debacle,

where employees opened millions of

possibly fake accounts. Wells Fargo

sharesgained 0.8% Friday.

—Francesca Fontana



WFC

0.8%

Cholesterol

Drug Wins

Approval

N

etflix Inc. lets binge

watchers skip the open-

ing credits of TV shows.

Domino’s Pizza Inc. alerts

customers with updates

about their pie as it’s be-

ing prepared. Harry’s Inc.’s razors

now produce a “click” when users

change blades.

The theory behind these actions

is that customers don’t just want

to be the emotionless end point on

a transaction. They want a good

experience.

More companies are viewing that

experience as an increasingly pow-

erful driver of business success as

traditional advertising gets harder,

as data and technology offer new

ways to cater to customers and as

social media amplifies bad experi-

ences in unprecedented ways.

Increasingly firms are creating

new positions for people who are in

charge of maximizing these efforts.

“The experience of the product is

bigger than the product itself,” said

Donald Chesnut, who became Mas-

tercard Inc.’s first chief experience

officer in 2019. “It’s everything

around it. How well does it work?

How does the product feel?”

In the U.S., 330 people listed

chief experience officer as their

new job title on LinkedIn in 2019,

up from 125 who did the same in

2015, LinkedIn said. The position

is prevalent enough in the corpo-

rate world that it has its own cus-

tom abbreviation: CXO.

The companies that have a CXO

include restaurant chain TGI Fri-

days Inc., bank Citizens Financial

Group Inc. and travel site TripAdvi-

sor Inc. Sportswear company Under

Armour Inc. named its first chief

experience officer this month.

But just adding a hot title to the

c-suite won’t always get the job

done, experts said.

“That’s not enough to make the

whole thing really work,” said

Caren Fleit, managing director at

executive search firm Korn Ferry.

Organizations need to go through a

deliberate process to identify the

capabilities they’re missing, the in-

ternal silos that could get in the

way, the right size and structure of

the team most responsible for expe-

rience, and any changes to compen-

sation needed to give people incen-

tives to deliver, Ms. Fleit said.

It is not always clear what skills

or background to seek in CXOs—

who are typically drawn from disci-

plines such as marketing, informa-

tion technology and product devel-

opment—nor is it clear how many

companies will measure the success

of these executives. CXOs can also

find themselves too removed from

the ground-level decisions, some-

times seemingly small ones, that

cumulatively shape customer expe-

riences, said Cliff Kuang, a user ex-

perience designer and co-author of

the book “User Friendly.”

“You need someone who can get

into the weeds but also see the

broader picture,” Mr. Kuang said.

“It’s just rare.” A big question, he

added, is “what does a leader look

like and what does it take to em-

power that position? People don’t

have answers.”

For companies that don’t have a

CXO, the work is still important

enough to be assigned to multiple

top executives. At Domino’s, which

is facing mounting competition for

delivery customers, responsibility

for experience is shared among ex-

ecutives like Chief Digital Officer

Dennis Maloney.

The Domino’s approach to craft-

ing an experience for its customers

is to rely on oceans of data pulled

from sources including point-of-sale