Monthly Archives: March 2011
I believe that the marketing function has a valuable role to play in customer experience and customer-centricity
In the Customer Experience and Customer Centricity communities I have noticed a certain dismissive attitude towards the role and contribution that the marketing (and advertising) folks can and do make. To some extent this is not a surprise as some of the most visible proponents of Customer Experience come from a customer services background. Others who share this dismissive attitude tend to come from an operational improvement background and are deeply embedded in process thinking – the engineering mindset.
Whilst I can see the shortcomings, I can also see the value of the marketing function and the contribution it can, does and needs to make: to the customer centric orientation and to the customer experience in particular. Recently I made my point of view clear on a Linkedin conversation:
“The companies that have marginalized the marketing function are making a big mistake. In my experience, the folks working in the marketing and advertising arena are one of the few tribes that truly get the emotional nature of human beings. The best marketers get the impact of standing for something that resonates with human beings. They get the importance of symbols and how these move human beings. And they get the importance of beauty. They know how to touch upon the emotional, engage and move human beings. Customer Experience requires the harmonious integration between the rational and the emotional.”
There are plenty of people who disagree with my point of view
I was not at all surprised that my comment on Linkedin resulted in the following response – a response that I believe is representative of many working in the CE and customer-centric communities:
“Regarding marketing losing its place at the table in customer-centric companies, had marketing exhibited the skills and behaviors you describe often enough, marketing still would be at the table. However, as an overall profession, marketing is far better at promoting to people than communicating with them. “Understanding” customers isn’t sufficient. In customer-centricity, companies have to see through customer eyes, rather than understand how to look at customers.”
Does this response raise a valid issue? Absolutely. Is it an accurate description of marketing? Let me share an example with you and then you can decide for yourself.
Lets examine the issue through a concrete example: my wife and Tesco
My wife used to shop regularly and almost exclusively at Tesco (the biggest supermarket chain in the UK) and made frequent use of their online shopping and home delivery service.
Over the last three months she has shopped less frequently, bought less and spent less with Tesco. In part this is simply because she is travelling more and finds other supermarket chains (Sainsburys, Morrisons, Asda) more convenient. It is partly because she is being more frugal. And it is partly because she had a disappointing experience at a Tesco store: Why my wife will not be relying on Tesco….
On the 24th March 2011 my wife received the following email (I have extracted some information from this email to shorten its length) from the Tesco.com marketing team:
What impact does this email have on you? Does this piece of marketing produced by the marketing function improve or degrade your experience, your perception, your attitude towards Tesco?
How has my wife experienced this communication from the Tesco marketing team?
My wife is pleasantly surprised that Tesco noticed that she has shopped and spent less with Tesco. How is she left feeling towards Tesco as a result of this marketing communication?
She says “It makes me feel valued as a customer. I matter to them and they want me back. And Tesco is providing value to me as their customer by giving me £7.50 off my next order. I know it is not a huge amount, yet it does matter that they are giving me this discount.”
What other impact has this email from the marketing function made on my wife? She is left thinking that Tesco:
- Is a professional company that is on top of things because they noticed a change in her shopping behaviour;
- Is proactive because Tesco has taken the first step to recover / ignite the previous shopping behaviour; and
- Tesco is simple (as in easy to do business with) and straight with its customers because the email is written in that way – no fluff, no gimmicks, no tricks.
You might say great, but has she actually made any behaviour changes? The answer is yes – she is once again shopping and spending more with Tesco. And all because of a single email from Tesco’s marketing team.
So what is the lesson?
Marketing matters, the marketing function matters because it touches the customer in so many ways. And if your marketing function is not making the kind of impact that the Tesco marketing function is making then it is time to learn from Tesco (and others who practice good marketing).
Disclosure: I am a member of the Institute of Direct Marketing and thus possibly biassed!
There is value in personalisation
By personalising content on websites you provide me with content that is likely to be relevent to me. And that saves me time. It tends to make me think that you have your act together. That you are competent and possibly sophisticated in your use of data and technology. Because of your personalisation, you make it that much more likely that I will purchase from you.
When you send me direct mail then it may or may not be personalised. Simply putting my name on it does not constitute personalisation. Doing that and taking my situation and/or my past behaviour into account when you talk to me in your direct mail does constitute personalisation. And by personalising your direct mail to me it is that much more likely that I am going to read it. Whether I act on it or not depends largely on your timing – did your personalised direct mail catch me when I have the need for what you are offering?
Why personalisation is not enough
The big issues with personalisation as it is practiced is that it addresses the rational / functional needs. I’d argue that the kind of personalisation that I have described is a hygiene factor. The thing about hygiene factors is that if they are present they do not build positive emotion, engagement or loyalty. When hygiene factors are not present then they do build dissatisfaction.
Why the personal touch matters
Customers are people – human beings. For most human beings there is nothing more nourishing than the personal touch. The personal touch is always a human to human encounter. It is one human being taking the time to acknowledge, validate and uplift another human being emotionally. I can talk about this in many ways and sometimes an example is much more direct and useful. Please take a look at the image below.
I have an inquisitive mind and I read widely. As a result I tend to buy quite a few books from Amazon and it’s partners. Most of the time the books arrive and there is absolutely no emotional impact. This time I am really touched. Why? Simply because of one personal sentence written by a fellow human being who works at RocketSurgery:
“Thanks for your order, hope you enjoy this excellent book and find it useful. Best wishes. RocketSurgery Crew”
Now the interesting thing is that this sentence would not have had the same impact if it had been typed up. It occurs as personal because it is handwritten and it lands as authentic – as heartfelt.
The net impact of this personal touch is that RocketSurgery is imprinted on my mind (and heart) and next time I am choosing between ANother or RocketSurgery, I know who will get my business.
Research validates the impact of the personal touch
I am not alone in being moved (influenced) by the personal touch. The impact of the personal is described in the following book: “Yes! 50 secrets from the science of persuasion”
You can download an extract of the book and relevant secret (secret 10) by clicking on the following: Yes_Book_Extract
So what is the lesson we can take away from this?
Personalisation is necessary because it delivers on the functional (hygiene) need. Yet it is not enough to build an emotional connection with your customers and grow loyalty. To do that you have to be personal: leaving your customer feeling acknowledged and valued at an emotional level.
Santander has been getting a lot of flack in the press recently. In fact the Guardian newspaper wrote the following article: “Is Santander Britain’s worst bank?” The article points out that Santander has the highest rate of complaints (per thousand customers) and that this situation has been going on since about 2007. Yet, the same article points out that Santander has gained over 1 million customers last year and it has a number of products that are considered to be best-buy products.
At about the same time, I received the following document from Santander.
I started banking with Abbey (one of the banks purchased by Santander) over 20 years ago and on the whole things have worked out pretty well. Yet, at best, I have had what I would describe as a distant, transactional, relationship with Abbey and then Santander. After all, despite the advertising, one bank is simply like any other. They are all concerned with making the most money they can from me and it is up to me to look after myself.
Then this document arrived in the post and frankly I could not believe my eyes. Santander is being helpful. It is telling me that I can cut down the amount of interest I pay on my mortgage if I take a number of reasonable actions. Actions they know that I can take – clearly Santander has done its homework.
With this document I find myself facing cognitive dissonance: trying to reconcile the view that Santander is supposedly the UK’s worst bank and at the same time it is writing to me to provide advice that will help me and ‘cost’ Santander.
Whilst I have yet to make sense of it, I do know that my attitude towards Santander has changed. I actually feel gratitude. Is this the start of an emotional bond?
What is the lesson?
I believe that the fundamental lesson for banks (and all other organisations) that want to create loyalty is to be helpful proactively. Use the information and expertise that you have to create value for your customers. Most will remember and reciprocate by staying with you longer, recommending you and buying more from you in the longer term.
One of the biggest issues that I have with the customer experience movement is that the process, technology, efficiency and standardisation mindset that is appropriate in the manufacturing environment is being applied to the services industries and the service environment. And in the process the very best of what people have to offer (the human touch, flexibility, improvisation, creativity…..) is being taken out of the picture: the opportunity to create that emotional bond is sacrified for efficiency.
At the same time, today, I have not been able to do much today (back is playing up) and so I spent some time re-reading an old book (published in 1999) and called “Market Leadership Strategies for Service Companies”. As I have spent the bulk of my life working in, delivering and advising companies with a heavy service orientation the following passages speak to me and I want to share them with you:
Employees are not the problem, management is the problem
” Over-engineered employees desperately need to once again pursue the most personally satisfying work goal: doing things that make a difference in the eyes of customers. Employees intuitively know that their core mission should be to provide the kind of help to customers that is truly needed …..Their company’s seeming indifference to being perceived by customers as unique frustrates them……..The net effect is that millions of employees feel robotic in their daily execution of quality, cycle time reduction, re-engineering and a host of other operational activities that perpetuate rather than improve the company….”
Employees are incredibly important and yet misunderstood, under-utilized and over-structured
“Employees are often the most misunderstood, underutilized, and over-structured assets of a service companies. But next to customers they are the second most valuable asset that companies have. The problem lies in the perception of the role that employees play in the customer experience. Many service companies view their employees simply as part of a process that produces an end output – a physical product to be delivered to a customer. If a customer’s primary focus is on functional performance of the physical product, the employees generally do not need to be involved with the customer experience. But with services the situation is different. In fact, in service companies the employees are very involved in the customer’s experience.”
Big mistake: dehumanizing people all in the mistaken (manufacturing) view of quality
” The mistake made by well meaning and well schooled managers is to dehumanize their people – all in the name of quality control. Service managers attempt to make employees interchangeable. Although industrialising the service may be important and even necessary, taking the “performers” out of the equation leads to a neutered, indistinguishable experience for customers. “
Product and quality through people – not by replacing them with self-service technology, standard processes and scripts
“Productivity and quality improvement come from having people involved with customers – people who want the responsibility, can manage themselves, respond well to pressure from customers, and who are highly motivated through skills, job opportunities and pay advancements.”
My conclusion, my interpretation
People – customers, employees, contractors, suppliers, partners matter. In fact they are critical to business success in service intensive operations and industries. If you are worthy and you have the know how you can tap into the very best of what they can offer: energy, enthusiasm, passion, creativity, flexibility, discipline, intelligence, wisdom. And that in itself is ultimately the source of competitive advantage, ongoing renewal, new product development, great customer experience, growth and profitability.
Yet as a very wise French teacher told me when I was about 10 years old: “you can lead a horse to water but you cannot make him drink”. I believe that is the case with many companies, many CEOs and many management teams. If they do not value their employees, you cannot make them value them. Which means the door is wide open to those that get the message and are willing to blaze the trail. For example, John Lewis – who recently delivered a great set or financial results when many other retailers are struggling and blaming the weather.
The entire ethos of this blog is to take a questioning look at the Customer field. On that basis, I confidently predict that the majority of customer experience efforts will follow the CRM cycle and fail to deliver on the promise of higher customer satisfaction, loyalty, revenues and profits. Why?
The theory is fine
Is there something wrong with the theory? Not that I can see. The theory is robust in that the companies that consistently create superior value for customers tend to do well in the long run. These companies tend to companies that have put good profits – those made by creating value for the customer – at the heart of their business models. And behind this business model lies a distinct ethos: that of not taking advantage of, exploiting and letting down their customers. It is an ethos that gets that trust and loyalty is earned by being trustworthy and being loyal.
The critical importance of ethos and culture
Before we go further it is worth defining ethos: the guiding beliefs or ideals that characterize a community, a nation or an ideology. Ethos gives rise to culture. Specifically, the taken for granted attitudes, values, priorities, thinking and behaviours. I like to think of cultures in terms of natural landscapes: mountains, deserts, jungles, rainforests, savannah…Each culture supports certain types of people, certain types of behaviour and rules out many others.
All customer experience initiatives are embedded within a specific cultural landscape. And most of them are busy working on eliciting customer feedback, redesigning customer interactions, redesigning business processes, changing systems and working on the front line staff who interact/serve customers. Very few are paying any attention to the cultural aspects – of the organisation or the wider society.
How does culture play out?
When Katrina struck the USA the enterprising American business folks got busy on making money out of the misery of their fellow americans. So motel and hotel room prices doubled, tripled, quadrupled. So did the prices of food and drink and so forth. This behaviour is a direct result of the American culture and particularly the business culture.
When financial services industry was deregulated in the UK, the financial services folks got busy on working out clever ways of exploiting the ignorance of non-financial people be they business folks or consumers. And frankly, it was culturally OK – after all the motto is “Buyer beware” – the responsiblity is for the buyer to make sure that the seller is not taking him for a ride.
Now compare that with what is happening in Japan right now. The north of the country is devastated and thus the Japanese have an opportunity to enrich themselves at the expense of the fellow countrymen who are suffering and in no position to take care of themselves. Yet, there is no looting. Nor are the Japanese businessmen taking advantage of their countrymen. On the contrary, supermarkets are cutting prices and vending machine owners giving out free drinks. You can read more here.
Why the majority of Customer Experience efforts will fail
The majority of Customer Experience efforts will fail especially in the USA and the UK. Why? Because Customer Experience efforts can only take hold and flourish in cultures where loyalty and the long term is valued both by society at large, by businesses and by customers. This may be the case in Japan (and hence no looting and price hikes), it is definitely not the case in the USA and the UK. Here only growth and profits matter. Why bother to go the extra mile to make ‘good profits’ when you can take the short cut and make ‘bad profits’? Put differently, we have Katrina, we have folks who are desperate for our products, so it would be stupid of us not to double, triple, quadruple our prices!
What I find really puzzling is that companies are busy taking actions that will, in the longer term, result in poorer customer service. Yet, somehow, the companies persuade themselves that they are improving the customer experience. When I look at it, I see cost reduction disguised as customer experience improvement. Which reminds me of the way that the UK government is spinning the massive cost cutting: ‘savings’ and ‘efficiencies’.
If you disagree then please comment and share your perspective. I am open to being challenged, to being shown the error of my ways.
PS: Here is the Forrester Perspective
Paul Hagen wrote an interesting post on the gulf between the hype and the reality. Click here to read it.