Monthly Archives: July 2011
A high end retailer and a discount retailer offer the same value for money
I was reading Marketing Week and the following piece caught my attention:
“Consumers perceive that John Lewis and Primark offer the same value for money, despite their widely different brand positionings, according to a new retail study.
The “Re-imagining the retail store” report, by Arc Worldwide – part of the Leo Burnett Group, found that both John Lewis and Primark scored 112 on its quantitative scale for value for money, as rated by consumers.
The scores demonstrate that both deliver good value for money, but in different ways. Consumers’ perceptions of Primark’s value stems from its low price, while John Lewis’ value perception comes from its range of choice and quality.”
How do you make sense of Customer Experience?
How do you decide when you have got the customer experience right? How does the customer experience fit / contrast with customer service? How does customer experience fit into the bigger picture? Put differently if customer experience is the foreground then what it the background (the context) into which it fits? I have been grappling with these questions and want to share my thoughts with you and get your feedback.
Here is how I make sense of Customer Experience:
In my way of thinking the focus of enterprise effort should be to create (and communicate) superior value to the customer segments that the Tops have decided to focus upon – to serve. So that is why “Superior value” sits at the centre of my thinking and this diagram.
Which begs the question: how do you create superior value? My answer is made up of two parts. First, you have to come up with (and communicate) value propositions that meet customer needs/wants – whether these needs and wants are expressed or not by the customers themselves. Second, you need to deliver a customer experience that matches the promises implied within the proposition. And the brand plays a role because there are a set of promised associated with the brand by customers and these are inherent in any value proposition. For example, you will expect different stuff when you think of Mercedes and say GM.
The key point I want to stress is that in this framework we can think of the value proposition as the promise – the bargain that is being struck between the customer and the enterprise. And the customer experience is the delivery of that bargain as experienced (lived) by the customer.
If you think about value, value proposition and customer experience then the fact that a high end retailer and a discount retailer as perceived as being par on value makes perfect sense. They both excel because they have crafted value propositions that speak to their chosen customer segments and deliver the customer experience that goes with the value proposition.
How do you craft the right value proposition and associated customer experience? This is where insight comes into play. In my model I distinguish four different types of insight: customer insight – your customers needs, wants, behaviours; competitive intelligence – what your competitors are up to; technology insight – what technology enables and how it disrupts what is taken for granted today; and other insight for example regulation around how you treat customers, privacy etc.
The final point I want to make is that I strive to think like a ‘systems thinker’ and I see all of these pieces as being interdependent. Each affects everything else. So customer insight informs the value proposition and the customer experience. Yet the customer experience will inform/feed customer insight and the value proposition cannot be developed solely based on customer insight: competitive intelligence has to be factored in because we, humans, make sense of things through comparison and contrast. You may have a great value proposition and customer experience yet if your customer comes up with a better value proposition then you are likely to find yourself in trouble: think Nokia, think RIM.
Customer Experience Management – a tentative definition
I take the view that all knowledge is provisional and as such I offer you my ‘faulty’ yet ‘rigorous’ definition of Customer Experience Management:
Customer Experience Management is the practice of designing, orchestrating and overseeing the efficacy of customer interaction (direct and indirect) such that the phenomena (experience) and outcomes of these interactions as a whole deliver on the promises implied by the value proposition and meet-exceed the expectations (implicit and explicit) of the customer, the customer facing agent and the management of the enterprise.
If you want a much simpler definition then here it is:
all the stuff that you need to do to create happy customers, have them stick with you, incentivise them to ‘recruit’ new customers for you (free of charge) AND to do this in a way which delivers a fair reward for the investment/sacrifice that you make in time, money, effort and risk.
What do you think?
I’d love to get your feedback on what I have written here. So what do you think?
Anna: the difference between despair and delight
My heart sank when I saw the queue in the bank and I mentally calculated that I could expect to be waiting some 10 – 20 minutes before I got served. Is it worth waiting that long simply deposit £200 into my bank account because I do not like to carry cash around in my wallet? Just as the two parts of me (The Rider, The Elephant) were tussling over that question something caught my attention. One of the three cashiers (Anna) left her seat behind the glass cage, opened the secure door and became a part of us – the customers.
She went up the first person that was waiting and asked her if she was waiting to deposit cash into her bank account. The old lady mumbled and said she wanted to wait in line. Then Anna went to the next person – an old man – and asked the same question. He told her that he was waiting to withdraw cash from his account. Anna told him that if he had his cashcard then he could withdraw it from the ATM and she would show him how. The old man made some excuse. Then Anna went on the next person and the next and after some eight refusal she faced me. When Anna was facing me I took her up on her offer to show me how to quickly deposit the £200 into my account.
Anna told me that the they (I assume the cashiers) had noticed that customers do not like waiting. She also told me that most customers turn up and simply want to pay money into their accounts or withdraw money from their accounts. So they had decided that the best way of reducing the waiting time and educating customers was simply to ‘hold the customer’s hand’ and guide them through the task of depositing or withdrawing money. She showed me which ATM to use. Then she turned the work over to me yet standing beside me she guided me through the five simple steps. In less than two minutes I had completed my task and was simply delighted: delighted with Anna, delighted with Santander, delighted with the self-service technology; and delighted with myself for ‘being open to the new’ and ‘learning a useful shortcut’ that will make my life easier in the future. I thanked Anna and left the Santander branch. On the way back I pondered some questions and came up with some thoughts that I want to share with you.
Thoughts on customers, customer facing staff and the customer experience
Telling is not the difference that makes a difference. I can remember at least four instances when a Santander cashier has deposited my money into my bank account and then proceeded to tell me that I would do that myself by using the ATM. Nonetheless, I did not change my behaviour. In fact I have lost count on the number of time I have been given advice and not acted on it. Telling is our default mode when we want to remodel human behaviour and it is spectacularly ineffective. Telling speaks to the Rider (the neocortex) and yet you need to ‘speak’ to the Elephant (limbic brain) to shape behaviour.
Knowing is not the difference that makes a difference. This is a corollary of the previous point. The simple fact is that The Rider knew that I could use the ATM to deposit cash into my account. Yet, the Elephant discounted this knowing. Why? Because the Elephant is risk averse. I had not changed my behaviour because my Elephant had taken an emotional position: risky might lose my money; probably will not know what to do and will make a mess of it in public and so lose face; and it is not likely to work so I am going to have to take time to figure out how to make it work and/or go the cashiers to sort out the mess.
If you want to remodel customer behaviour then build a ‘scaffold’. Lev Vgotsky who studied cognitive development pointed out that effective learning and development depends on the right scaffold – one that the learner can use to climb higher safely one step at a time. Think about construction work: the scaffold is a structure that enables the workers to build the building more effectively whilst feeling safe. One form of ‘scaffold’ is a ‘more knowledgable other’ (MKO) – someone who has mastered the domain and can act as empathetic guide and coach. This is why Anna was so effective in changing my behaviour. She led the way by literally walking to the ATM and then she led the way by guiding me through the process – one step at a time. If you want customers to use self-service technology then you have to do what Anna did: train them to use it in a safe supportive environment. And here is a key point: behaviour (doing, the experience) shapes learning much more than learning shapes behaviour.
Design self-service to create value for your customers. Part of the delight of my customer experience was actually experiencing how easy it was to use the ATM to deposit cash into my account. That is to say that the designers had cracked the usability of it: it was intuitive and it addressed the kind of concerns that may come up like I deposit £200 and the ATM thinks it is £160. Furthermore, the process consisted of only five steps and could be completed in less than two minutes thus saving me time which many customer value as we never seem to have enough of it as so much occurs as being spent on drudgery. Simple tasks are great candidates for self-service provided you save the customer time and/or effort and the customers is embedded in the right context.
Treat different customers differently. Anna offered to help some eight people all of whom refused before she made the same offer to me which I took up enthusiastically. The interesting thing to note is that all of these customers were older than me. They struck me as being the kind of people that trust people more than technology and the kind of people who prefer the human touch to hi-tech. These people are never likely to be the early adopters so the right thing to do is to find the early adopters – the younger people, the busy professionals, the young mums with children – and remodel their behaviour. Put more simply, scatter the seeds where they are most likely to grow with the least effort. Then wait for the followers to adopt this practice by social osmosis.
Being precedes doing so focus on the being. There is something special in Anna’s being – it is the first thing that I noticed last time we interacted and this time. Of the three cashiers she was the youngest. Of the three cashiers she was the only one that smiled and looked happy. When she came into the customer den – to where we were standing – she was totally calm. Her whole being exuded the air of caring, helpfulness and competence. She was not pushy: she was not in a rush to get any of the customers to do anything in particular. Her totally being was an invitation: “I can make your life easier if you will allow me to do that, will you allow me to do that?” It was her being( the way she was being) that got my trust and why I took up her invitation to use the ATM. What am I saying? You can’t fake caring it is simply who you are or who you are not: if you genuinely care for your customers it comes through and the Elephant (subconscious) picks it up and if you do not care the Elephant picks that up as well. My advice: hire more people like Anna and create an environment that supports and nourishes their natural being.
Your customer facing staff have valuable insights into your customers. The Santander cashiers spend their professional lives observing, talking with and serving customers. So is it any surprise that the Santander cashiers know that that the most frequent service that they are asked to deliver is either to bank cash or withdraw cash for customers. Is it any surprise that they also know that customers hate waiting? What else do your customer facing staff know about your customers and your business that if you tapped into would make a difference to your customers and your business results? Have you created an environment that calls forth these insights from your staff?
If you want your customer staff to improve the customer experience then create clearings for insight to be acted upon. Have you ever played paintball? What is it like to move around in a densely wooded area? Difficult, tedious, painful and slow right? Well in many organisations it is the same experience for customer facing staff to do the right thing by your customers. So if you want them to do more of the right things then you have to create ‘clearings’. What is possible in a clearing? A lot because the space is not cluttered, it is empty. I am clear that the Santander management at my local branch had enabled the cashiers to act on their insights by creating a clearing: permission to step out of the glass cage and help customers by walking them to the ATM and showing them how easily they can help themselves.
Treat different employees differently. The employees that are most ingrained in the existing way of doing things are the ones that are most likely to stick with the existing way of doing things. It is the younger employees those that have not been assimilated into your existing culture that are the most promising candidates for trying out new ways of doing things. I could not help but notice three things: Anna was the youngest of the three cashiers; she had only been with Santander for a relatively short amount of time; and she is not English. So it makes perfect sense that the other two cashiers stayed within their glass cage where they are comfortable and Anna walked out of it. Yet, if all three had stepped out of the glass cage then there would have been no cashiers to serve the older customers who expect cashiers to sit behind glass cages and do stuff for them.
Improving the customer experience and delighting customers need not cost any more. What extra costs did Santander occur by allowing Anna to leave her glass cage and help me to serve myself? None at all. The customer experience was improved by simply redeploying the existing resources in a more imaginative / more valuable way. Incidentally, if you spend much time in a call centre you will find that the bulk of the incoming demand for attention from customers is ‘failure demand': the call centre is being asked to rectify ‘defects’ introduced into the customer experience by marketing, sales, logistics, finance…… So by improving the customer experience you can take out as much as 80% of the cost of your call centre operations. How many millions is that in savings? And in the process your create customer delight simply because your organisation gets it right first time. To paraphrase Philip Crosby ‘quality customer experience is free’.
Over at Focus Courtney Sato asked the following question: “What are easy ways for small businesses to (almost) instantly improve the customer experience?” To answer that question it is worth getting clear on what constitutes ‘customer experience’.
One way of looking at Customer Experience Management: effectiveness of interactions
Here is how Richard Snow (VP & Research Director at Ventana Research) defines ‘customer experience management‘: Customer experience management is the practice of managing the effectiveness of customer interactions so the outcome meets the customer’s and the company’s expectations.
How do you improve the effectiveness of these interactions?
If we accept this definition (and largely I do – there is a piece missing) then the question is what do we need to do to improve the effectiveness of the customer’s interactions with our business? In his article Richard sets out the four steps:
- Measure the outcome of all customer interactions (across all media, all touchpoints, all aspects of the customer journey);
- Identify the reason for the interaction (from the customer’s perspective);
- Figure out why the outcome was the way it was (root cause analysis); and
- Make necessary changes to generate more of what works and eliminate/minimise what does not work.
What we can learn from Guy Letts, the founder of CustomerSure and formerly Head of Services at Sage UK
Before he founded CustomerSure, Guy Letts was the Head of Services at Sage UK; Sage describes itself “Sage is a leading supplier of business management software and services to more than 6 million customers worldwide. From small start-ups to larger organisations, we make it easier for companies to manage their business processes.”
As the Head of Services Guy was responsible for improving the customer experience, driving up satisfaction and increasing revenues through repeat and additional business. This is a goal that Guy achieved and in the process he learned valuable lessons which were the seeds of the business he has founded: CustomerSure. What are these lessons?
The critical point to make is that the rational approach – the one that is commonly practiced – did not work well. The response to customer surveys was less than ideal. The quality of the information that was provided was variable. Providing statistics – customer satisfaction scores – to his services staff did not leave them inspired to do things differently. And pushing the employees to do more / better / different was exhausting and did not deliver the results. So how did Guy ultimately improve the customer experience and hit his customer satisfaction and revenue goals?
Guy had an Aha moment when he visited a Richer Sounds store (hi-fi / electronics retailer which won the Which? retail customer experience award in 2011). What was this Aha? He noticed that the Richer Sounds customer survey was simple (5 questions) and these questions were focussed on the customer and what mattered to a customer. Questions like: “Was the item in stock?”; “Did our staff know what they were talking about?”; “Where you served quickly?” etc.
So Guy had cracked the first part of the puzzle: how to assess the effectiveness of the interaction from the customer’s perspective. The answer was cut down the surveys sent to Sage customers down to the essential five or so questions and ask the questions that matter to Sage customer – the key stuff that determined the Sage customer’s experience of the Sage services team. And to survey these customers immediately after a services engagement or interaction rather than wait for the next annual survey to come around.
The next challenge was inspiring change within his team. Here Guy learned that sharing the verbatim (unstructured) customer feedback with his services team made an emotional impact that quoting customer satisfaction scores simply did not do. Yes, you have to share the customer’s word and emotions with the people who directly or indirectly impact the customer experience. Why? Because it is more effective at altering their perceptions, attitudes and ultimately behaviour; numbers simply do not have this effect – they do not touch the Elephant, they they might speak to the Rider.
Sound good so far yet Guy found out that asking the right questions and sharing the verbatim feedback with his services team was not enough. If any of you have been on any motivational training courses or seminars then you will know how long the emotional high hangs around. For most people when an emotional high meets resistance (from the powerful) and hard work (of changing ingrained behaviours) that high tends to dive pretty quickly and you arrive back at the status-quo. So Guy introduced the practice of assigning actions (with specific deadlines) and monitoring to ensure that members of his services organisation did what they had agreed to do / assigned to do.
Next Guy instigated the practice of sharing and closing the loop. The first part was sharing with customers: sharing what his team was doing with the feedback provided by customers with a particular focus on actions to address the key issues as highlighted by these customers. The second part was sharing with his services team: sharing the next round of feedback from customers – thus showing that the actions of the services team were paying off in happier customers and higher revenues through additional business and repeat business.
If you are a small business / medium size business (less than 1000 employees) then check-out CustomerSure
Guy’s customers at Sage UK were small and medium sized businesses and as Head of Services for 4 years he got to know a lot about these businesses – their situation and their needs. He learned that there was and is plenty of scope for these businesses to improve the customer experience and keep more of their customers. He learned that these businesses want to keep things simple and were looking for a guiding hand – a simple process and easy to use software tool. And they are only willing to spend so much money on surveying customers to get their feedback.
Guy put together this insight with what he learned leading/managing his service team (described above) and then put his 10+ years of software development experience to work and created CustomerSure – a platform designed to enable small / medium size business to replicate his success. The CustomerSure platform enables the small business owner or a departmental head to easily survey customers, share that feedback with staff, set up / assign and monitor actions and then share feedback on what is being done and the results of actions taken. Furthermore, CustomerSure has put in place a platform where customer feedback and the actions that the company is taking to address customer issues is displayed and available for the world to see.
If you are are a small / medium sized business and you are looking to improve the customer experience then I wholeheartedly recommend that you give CustomerSure a test. You cannot lose out as you get a 30 day trail period – at least that is what I got when I tried it out.
A final point: answering the question I started with
I am not sure that there is quick – instant – way of improving the customer experience. In my world excellence is more like marathon than a sprint. Excellence in customer experience involved playing the long term game. It involves the kind of approach the Guy Letts used at Sage UK: open to insight, trial and error, selecting what works and revisiting what did not work, it involves passion and commitment to the longer term – engendering customer loyalty by doing the right things by your customers. If you want to play the longer term then you can learn a lot from Guy Letts and if you are a small business then the CustomerSure platform will help you to play that game.
Disclosure: I have absolutely no financial or commercial interest in CustomerSure. I have no financial or commercial interest in Guy. Guy and I are not friends – we have never met. Guy is a reader of the CustomerBlog – actually he was one of the first readers. Yet we are connected because we are customer evangelists.
I think it is fair to say that there is tremendous pressure on the retail sector. This would suggest to me that the retail sector has to up its game: to provide interested value propositions and attractive customer experiences in order to counteract the ease and convenience of ‘mouse shopping’ – internet shopping. Looks like I am wrong. Recently I accompanied my wife whilst she was out shopping for a dress. Here is what I noticed and experienced:
1. No welcome
We went into countless clothes shops and not once did we get a welcome from anyone. There was no welcome as in the greeting “Welcome!”. There was no welcome as in eye contact and facial expression (smile) which suggests “Welcome!”. We were simply invisible – at least that was our experience. It strikes me that the entrance into the shop is no different to a guest entering your home – the welcome or lack of it sets the tone for the entire stay.
2. No signposting
In just about every shop we entered there was one rack after another of clothing. There was no signposting (like you might find on a well designed site e.g. Amazon) to help us go to the right section. No signposting in terms of types of clothes or size of clothes or colour of clothes…… Nothing to help the shopper to figure out where to head to find the clothes she is looking for. I noticed that my wife was flitting from one rack to another and getting quite frustrated at times simply trying to find the right clothes!
Good signposting is what every good hostess does. She sizes you up and points you towards the right people – those that you are likely to be interested in – and away from the people who you have no interest in. It is also the heart of ‘information architecture’ on websites. So why do the retail shops not do the same?
3. Information not made available
More than once a piece of clothing hit the mark and yet my wife was disappointed to find that it was in her size. So she ended up wondering if the shop had that item of clothing in her size. Yet she had no easy way to find that information. Sometimes she ended up asking the store assistants, many times she did not because the store assistants were busy or simply not at hand. When she did ask the store assistants some of them simply said “No”. Did that mean “No that is not in stock.” or “No, I can’t be bothered to look and see.” Those assistants that did go and look were sometimes absent for up to 10 minutes. Is that an efficient use of a customer’s time? Is it an efficient use of a store assistants time?
Now imagine having kiosks in store that provide the customer with that information. Not only can the customer see what is and is not in stock she can also what other items of clothing go with the article that she finds interesting.
4. Size and pricing information was not easy to find
I noticed that my wife had to move clothes around and really make the effort to find the size and price information. Why is this information not easily available? The other thing I noticed was that in some of the shops there was a mismatch between the size quoted on the garment itself and the size on the price & size label tied onto the clothing. Which made me wonder how many women end up buying the wrong size?
5. Lack of an inviting atmosphere
It was clear that the retailers had invested in the exterior and interior of the shops. Yet, I was struck by the lack of an inviting and engaging atmosphere in the shops themselves.
Some of the retailers (those on the cheaper end yet not cheap as these were outlets in a designer clothes mall) were packed full of ladies: there as little room to move and clothes were lying on the floor. It simply felt like being in a cattle pen – how anyone can shop in that environment and enjoy it I do not know.
Walking into the high-end retailers felt a little like walking into a well run hospital. The shops were spotless and the staff simply looked like and behaved robotic: cold, stand-offish, snooty – anything but human, helpful, hospitable. Interestingly, there were relatively few shoppers in many of these retailers. With simple dresses selling for £2,000 perhaps you do not need to sell much to make the numbers.
6. Fitting rooms: not fit for purpose?
Clothes are an item that you simply must try on especially if you are a women. Given that is the case I assumed that a lot of thought would have gone into the design of the ‘fitting room experience’. What I noticed: sometimes no assistant was available at the fitting rooms; almost all of the fitting rooms did not have enough hanging space to hang more than say 4 pieces of clothing; my wife remarked how hard it was for her to see how the dress looked on as she does not have eyes in the back of her head; and some of the stores only allowed women into the fitting rooms. The last policy meant that my wife had to do a parade in front of all the customers if she was going to get my opinion: a private act became a public one and my wife did not like this at all. Which made me wonder how many other women feel like that.
It also struck me that the ‘fitting experience’ is a ‘moment of truth’. It is here that the staff assistants can really contribute to the customer. It is here that they can answer the customer’s question, provide feedback and offer to get the same clothing in a more suitable size. Yet only one assistant did that. She let me into the fitting room area it was against official policy – she pointed out that there were no other female customers so it was ok. She actually asked if she could look and offer an opinion on how the clothes looked on my wife. She provided her view in a friendly helpful manner. She suggested alternatives and went out to find those alternatives and bring them back. And she went into the stockroom to find the right size. She made a difference and ultimately ‘landed the sale’ and the gratitude of the customer (my wife) and her husband (me).
7. Payment and departure
In more than one shop I saw customers standing at the payment counter waiting to be served. The issue was not that there were too many customers in front of them being served. No, the issue was that the shop assistants were busy putting clothes on the clothes racks or manning the fitting rooms or taking questions from customers. In one instance I saw two shop assistants walk by a customer (who was waiting to be served) four times – not once did they acknowledge the customer. After about five minutes I saw this customer leave the clothes on the payment counter and walk out.
During the payment process not once did any of the shop assistants make any comment on the clothes that customers had purchased. No acknowledgement of the customer’s savvy in choosing that item of clothing. No useful tip for caring for the item/s of clothing. No mention of any other item of clothing that might go with a particular item being purchased. No sincere “Thank you for shopping with us. And we are looking forward to seeing you again. ” Nothing – just robots taking out tags, processing credit cards, bagging the clothes and handing over items.
8. Options – where are they?
What about providing the customer with the option of having her items delivered to her home? Or the option of leaving her email address and getting an alert when the items she wants is back in stock? Or the option of a stylist to help her choose the right clothes/colours? And so forth….
9. Alienation is rife
Alienation is a fancy sounding name from being emotionally disengaged from the situation / task that you find yourself in. It can be contrasted to ‘flow’ – the experience of being one with the situation and the task such that time flies by. What I noticed was that most of the shop assistants were alienated from their work – that of serving their customers. So I took the opportunity of talking to many of them. Most of them are young, paid the minimum wage, given little or no real training and do not feel valued. They are simply doing the shop assistant job until something better comes along.
How are the people that are staffing the shops going to make customers feel welcome and deliver an attractive experience for shoppers when they are so disconnected from their work?
It strikes me that (offline) retailers still think that they are selling goods. They still think that the are running warehouses that happen to be located on the high street or the shopping mall. That their role is simply to put the items on the shelves, let the customers pick them, bag them and take payment. They do not seem to get that if they are to survive and prosper then they need to create and sell experiences: experiences that engage the physical senses and leave customers with a smile on their faces and something to talk about and share with friends and their broader social network. This may be why many UK retailers are struggling. The exceptions being the likes of John Lewis an ‘employee owned’ organisation that puts great customer service at the heart of everything it does and where the employees have voice, are treated well (generally) and share in the profits.
The opportunity to re-envision and re-invent retailing is here I wonder who is going to take it. What do you think? What is your experience?