Monthly Archives: May 2012

Infographic : all you need to know about cultivating happy customers?

As I am weaning myself of the sedative after my stay at the hospital, this a great time to share the infograhic that the folks from Bolt Insurance have put together.  I hope you find it useful.  And yes, I will be back with the longer, more challenging, contrarian posts – soon.  Until then enjoy the infographic!

Book review: Extreme Trust by Don Peppers and Martha Rogers

Let’s get up to date

If you have been reading the recent posts you will know that I have been diving into, exploring and sharing what I have learned as I have been reading Extreme Trust the latest book by Don Peppers & Martha Rogers.  This weekend I finished reading the entire book and so this post is my, personal and biassed, review of the book.  If you have not read these first 2 – 3 posts then here are the links:

Extreme Trust: can honesty be a means of competitive advantage (part 1)

Extreme Trust: can honesty be a means of competitive advantage (part 2)

What kind of a book is Extreme Trust?  Think back to The One to One Future

How best to describe Extreme Trust the latest book by Don Peppers & Martha Rogers?  Perhaps the best place to start is to compare it with the other books Don and Martha have written.  Which is the book that is the closest to Extreme Trust in its flavour?  The One to One Future.   That book, The One to One Future,  was a delight to read and it said what needed to be said about the state of marketing and spelled out the future.  Extreme Trust has a similar flavour and had provided me with a similar experience.   What did I like about it?  What spoke to me?  In Extreme Trust, Don and Martha do the following effectively:

  • Inject human beings and in particular the social/co-operative/empathic being of human beings back into the whole Customer conversation – yes, look closely and you are likely to find that for all the talks about relationships the focus of the Customer movement has been on processes, data and technology (that is as true for Don and Martha as any other authors);
  • Address the ‘elephant in the room’, the greed based, short term focussed, deceitful/manipulative context of ‘business as usual’ which is oriented towards/focussed on extracting revenues and profits from customers usually by taking advantage of the ignorance/vulnerability/helplessness of customers;
  • Explore the theme of trust – why it matters, how it operates, what difference it makes, what benefits it delivers to social life and business/organisational life; and
  • Spell out the why/how organisations will have to become ‘trustable’ whether they want to or not – social technologies, smartphones and the fundamentally social/moral wiring of human beings make it inevitable

Extreme Trust is not a book about marketing, it is not a book about customer service, it is not a book about social media.  Extreme Trust, if read/viewed through a wide angle lens, is essentially about a new paradigm in business which involves and impacts everyone – the Tops, the Middles, the Bottoms, the Customer, the Community.  Essentially, Extreme Trust sets out a new philosophy of doing business based on an understanding of the social being of  human beings and how social media has given real weight to the hollow sounding expression “The Customer is King”.   If that is the background of the book than the customer and the relationship with the customer sits in the foreground and can best be encapsulated in the following diagram:

Let’s take a brief look at the chapters

The chapter headings are meaningful and so I want to share them with you and provide my brief take on each one.

“Trust: not just a good idea. Inevitable.”  Don and Martha make a persuasive argument for the importance of doing the right thing by customers proactively and they spell out the benefits of being trustable (USAA) and the downside of taking advantage of your customers (AOL).

“Serving the interests of customers, profitably”.  Here Don and Martha describe and point out the ‘flaws’ of ‘business as usual’ and argue that the central challenge for Tops is to come up with an appropriate business model for the time – a business model that allows the company to generate “good profits” and rule out “bad profits” by aligning the interests of the customer and the company.

“Trustability: capitalist tool”.  In this chapter Don and Martha ‘get real’ – they get that the lever for effecting change in business is through the profit motive as opposed to being good or doing good.  So Don and Martha strive to show you doing right by the customer, being a trustable company, leads to superior long term performance.  In short, trustability is an asset like ‘brand’ is or at least used to be.

“Sharing: not just for Sunday school”.  The social nature of human beings as evidenced by co-operation, sharing, reciprocity, sense of injustice and punishment of cheaters is explored here.  The key point is that we do not have to be encouraged to share, to cooperate, to reciprocate, to punish those that do not share/cooperate/reciprocate – to be human is to be/do this stuff effortless, it is the default.  Social production and the radical implications it has for business is touched upon here.

“Trust and the e-social ethos”.  In this chapter Don and Martha take the social being of human beings and look at/describe how this shows up in the e-social world of social networks.  The implications are explored through real life examples of companies that got it right and those that did not. This chapter is heavily linked with the previous one.

“Control is not an option”.  Business as usual can be characterised by “command-control-secrecy-spin”.  Well this used to work great and is now well past it’s sell by date.  The world is much more interdependent, fluid, unpredictable – just look at what has been happening since the financial crisis of 2008.  And anyone who has studied ‘systems and systems thinking’ will get that control is an illusion.  Yet as Kahneman has shown in his latest book (Thinking Fast and Slow) we human beings are wired to strive for control, think we can control more than we can control, and look for/find order when none exists.  Don and Martha share these features of our existence and spell out some approaches that Tops can take to deal with the new reality.

“Build your trustability in advance”.  In this chapter Don and Martha spell out the advantage of being a trustable company through examples of real companies that encountered hard times and where reputation for trustability (with core customer base) made all the difference.  In short, if you look after your customers in the good times they look after you during your bad times.

“Honest competence”.  It is not enough to be honest, it is not enough to be competent, your organisation has to show up as being honest and competent.   Don and Martha divide competence into product competence and customer competence  and explore each one.  Turns out that organisations really struggle with customer competence.  The key issue – inability/failure to empathise with customers, to see the world through their eyes.  Don and Martha share the instructive story around Domino’s pizza.

“Trustable information”.  Information is data that makes a difference – it sheds light on a situation, it enables action, it helps attain desired outcomes. One way companies can contribute to customers and the wider community and thus build trustability is through sharing data and/or information that is held by the company.   What is often just data within a company, if released to a wide community in a usable format can be turned into information.  That is the key point of this chapter, Don and Martha gives some examples.

“Designing trustability into a business”.  This chapter completes the conversation, the story and Don/Martha do so by exploring what trustability would involve in various industries – mobile operators, financial services, automotive, airlines, enterprise computing…..

Why I have gone to all this effort to write this review?

Extreme Trust deserves to be read.  It opens up a new domain, a new conversation, a conversation that needs to happen.  Why?  Until this conversation happens, this domain is addressed, pretty much all the money spent on Customer initiatives is wasted.  Why?  Because the ‘elephant in the room’ is not being addressed and addressing that ‘elephant in the room’ is the key to cultivating genuine affection and customer loyalty.   I want to leave you with the parting words of Don and Martha in Extreme Trust:

“In the final analysis, it is almost certain to be the new companies and the start-ups that employ these tactics to overturn the old way.  They have less invested in the current paradigm, and less to lose by destroying it.  Gradually, they will use trustability to transform our entire economic system, in the same way that interactivity itself has so dramatically transformed our lives already.  They will deploy honesty as brutally efficient competitive weapon against the old guard. 

As standards for trustability continue to rise, the companies, the brands, and organisations shown to lack trustability will be punished more and more severely…..

For my part, I am keen for this future to turn up sooner rather than later – the thought occurs to me that this is a future worth operating from and living into.  How about you?

Treating customers right: does selection, training and development make a difference?

Ultimately it comes down to people

In their latest book (Extreme Trust) Don and Martha make the point that ultimately it all comes down to people:

“… no business rule or line of software code will ever be sufficient to ensure that employees treat customers right .  Your employees have to want to do that……

Is wanting to do the right thing enough?

I accept that employees have to want to treat the customer right.  The question that I want to grapple with is this: is wanting to do the right thing enough?  I consider myself to be a great learner and so I would have said that yes:  wanting to do the right thing is enough because if you want to do the right thing then you will do what it takes including learning that which you need to learn in order to do the right thing.  My experiences with the healthcare system in the UK have led me revise my point of view.

Both of my parents are elderly and now incapable of looking after themselves especially as my father has had two strokes and thus needs help with everything.  So they have carers coming in to help with various tasks every day.  What they have noticed and I have noticed is that there is one carer, Charity, who is actually good at what shoe does.  My parents love Charity whereas they are indifferent to most carers and consider some others to be totally useless – completely unfit for their roles.

Why is it that Charity shows up as both being professional and as caring?  Why is it that my parents and I love Charity and not any one of the other carers?   To answer this question we have to look at the bigger picture.

The problem with the care provided to the old folks in the UK is to do with the lack of value we place on our old folks and the commitment to cutting costs. To cut down costs and to deflect criticism the local authorities have outsourced the provision of care for the elderly to private companies. The focus of the people who run these private companies is minimising costs.   One way of keeping down costs is to pay the absolute minimum – the minimum wage. With that goes the practice of taking on anyone who applies for the job of carer.  There is no selection to make sure only the people who are suitable for this kind of work actually get to do the work.  Finally, there is no training and development.  Is that why the annual rate of turnover in carers is similar to that in call centres?  Do you see a parallel here between these carers and front line staff whether they sit in call centres or stand behind counters in retail stores?

Let’s get back to the question of Charity: why is she so much better than all the other carers that my parents and I have come in contact with?  It turns out that Charity grew up in Germany. And trained – professionally – to be carer in Germany.  That’s right – she spent two years training to be a carer.  Why did she undergo that training?  Because, in Germany you cannot work as a carer unless you have the necessary skills and experience as evidenced by a certification.  And to get that certification you have to undergo two years of training.  In the UK there are no such requirements: so anyone can be a carer and most of the carers neither care about their job nor do they have the skills/expertise to do the job – the job of connecting with vulnerable/demanding people and the jobs of cooking, cleaning, bathing, listening and chatting to old folks.

Lesson: focus on selection, training and development of your people if you want them to treat customers right

It is not enough that your people want to treat customers right, they also have to have the necessary skills and experience.   Learn from Zappos and other customer service champions:

Select the right people.  Put in place hurdles that screen out the people who are only doing it for the money.  And follow this up with giving people an incentive to quit during the training like Zappos does ($2,000?).

Train your people.  Rigorously train your people so that they have both the skills and the lived expertise that they need to do their jobs and leave customers feeling that they have been treated right.

Develop your people.  People care to the extent that they are cared for.  Development, taken seriously, is evidence that you care for your people and their futures.  Human beings have both a capacity and a yearning to grow, to develop, to be all that they can be.  Development done right meets this needs and enables you to keep the people you have so carefully selected and trained.

And finally

What is the biggest attribute that UK carers lack?  In my experience is the ability, the willingness to empathise, to care, to be patient, to be kind towards the elderly folks who rely on them.  It is interesting that this reflects the biggest issue companies face: inability/unwillingness to empathise with customers as human beings.  This is an issue that Don and Martha have also identified in their book Extreme Trust.  I will writing a review of that book soon as I have now finished reading it.

Customer loyalty and advocacy: what can we learn from Jonathan Ive and Zappos?

Customer focus: no progress in ten years?

In a recent post on CustomerThink, Bob Thompson shared his experience with AT&T and Colin Shaw made the following comment:

“No progress in ten years…

I am sorry to say Bob but this doesn’t surprise me. I used to work for BT before setting up Beyond Philosophy ten years ago. In that ten years I don’t see a lot of progress on being more Customer focussed.

We have recently undertaken new research in Telecoms. The biggest surprise to me was when we asked Telecoms companies “Which Telecoms company do you most for CE ?” There was a deafening silence.

I can totally appreciate your feeling of ‘doubt’. This, unfortunately is a common emotion that organizations generate. Do you think this is what they want to generate? Obviously not, but their actions have led you to feel this way. In my view there is a massive opportunity for someone to get the CE right in the CE space. But they will need to look outside of their industry for examples.”

Why has there been no progress?

I say that the reason so little progress is due to the lack of genuine care for people (customers, employees, suppliers, community…) as fellow human beings.  When we label a customer as an asset we have turned our fellow human being into an object, equipment, a resource for our purposes.  HR tells us all that you need to know about the relationship between the Tops and everyone else in the company: human resources – equipment, tools, resources that come in a human form.

Human existence, being-in-the-world, is characterised by CARE. We care about how our lives turn out – we are designed to survive and we strive to flourish.  Care gives rise to and is tied up with CONCERN – we have concerns that we have to address if we are to survive and flourish.  John Bowlby pointed out that we  need ‘SECURE BASES’ – people, places, organisations, communities where we matter, where we feel cared for, where we can count on others to care for us and what matters to us.

What can we learn from Jonathan Ive of Apple?

I was reading this article on Jonathan Ive (Apple’s design guru) and the following jumped out at me:

“I think subconsciously people are remarkably discerning. I think that they can sense care.”

One of the concerns was that there would somehow be, inherent with mass production and industrialisation, a godlessness and a lack of care.”

“I think it’s a wonderful view that care was important – but I think you can make a one-off and not care and you can make a million of something and care. Whether you really care or not is not driven by how many of the products you’re going to make.”

“We’re keenly aware that when we develop and make something and bring it to market that it really does speak to a set of values. And what preoccupies us is that sense of care, and what our products will not speak to is a schedule, what our products will not speak to is trying to respond to some corporate or competitive agenda. We’re very genuinely designing the best products that we can for people.”

Is there any doubt that the people who run Apple care, deeply, about making great products that generate a great user experience?  And if care is the access to breakthroughs then why is it that more companies do not care the way that Apple cares?  Is it because it really takes something to genuinely care when we swim in a culture that does not embrace and encourage caring?

Lets just get present to what ‘care’ involves and why it is so important

We use words automatically and without really getting present to what they signify, what they point at/towards, what they make present/available to us.  So here is definition that I find particularly useful as it is a rounded definition:

care/ke(ə)r/

Noun:
The provision of what is necessary for the health, welfare, maintenance, and protection of someone or something.
Verb:
Feel concern or interest; attach importance to something: “they don’t care about human life”.
Synonyms:
noun.  worry – concern – attention – solicitude – trouble
verb.  mind

Zappos: a great example of a company based on and operating from a context of authentic CARE for people as fellow human beings

The results that show up in the world are always in line with and bounded by the context which gives rise to these results. If your organisation operates from a context of ‘not caring’ or plain ‘indifference’ then this will shape what occurs and how it occurs.  With this kind of context it is possible that people who do care may from time to time do stuff that is characterised by care and shows up as care in the world of the customer.  Yet, this will not cultivate loyalty between the customer and the organisation.  Why?  Because this act of caring will been seen as an exception when compared with the lack of caring in all the other interactions with the company and its people.

Zappos is the poster child for the customer-centric orientation and great customer service.  Why?  Because the Tops have intentionally created and operate from a context of caring: caring about their people; caring about their customers; caring about suppliers; caring about what they do; caring about what they stand for.  What is this context?  “Delivering Happiness”.  Two words, they say it all, and for many companies these would simply be empty words.  Not for Zappos because they were not crafted for brand messaging nor for brand positioning.  No, these words, are an expression of the philosophy of Tony Hsieh and the founders/senior leadership team of Zappos.  The other point worth noting is this: how many of us would stand up and argue against a philosophy and a stand centred on “Delivering Happiness”?   Do this not meet/ address a fundamental need of human beings?

Zappos and Tommy Walker: an awesome experience of caring for the customer

Tommy Walker, host of “Inside The Mind” a show about online marketing strategy.  Here is his story, in his words:

Just over a year ago I bought a pair of sneakers from zappos and was very excited to get them in the mail.  However, after about a month and a half they fell apart.  After wearing other inferior footwear, I settled upon wearing my indestructible work boots for the rest of the year, and while they did make me a little taller, they weren’t terribly comfortable and started to cause me pain.   And just when I thought I had enough, I got an email from Zappos that essentially said:

“Hi Tommy, you bought these shoes a year ago and we wanted to say thanks, and remind you that we have more of the same. If there’s anything we can do to improve our service, please don’t hesitate to let us know!”

To which I responded:

“Hey there, thanks for reminding me :-).  Though I have to admit, these shoes only lasted me a month and a half.   I’m not overly hard on my shoes but for some reason, these just fell apart.””

What happened next?  How did things turn out?  What was Tommy’s experience?  If you want to find out then click here.

In a world of indifference, authentic caring is the difference that makes the difference

You want your customers to care about you.  Do you really care about your customers?  If you don’t genuinely care about your customers, as human beings, then how/why do you expect them to care about you?  What is so remarkable about Zappos other than the genuine context/culture of caring about people  and “Delivering Happiness”?  What is so special about Apple other than the care that goes into envisaging and making products that customers will love and find useful.

And finally you may wish to consider and act on the following:

CARE:  Customers Always Remember Empathy

CARE:  Customers Are up for Reciprocating Empathy

CARE:  Customers Always want to Reward Empathy

Extreme Trust: can honesty be a means of competitive advantage? (part 2)

I value what Don Peppers and Martha Rogers write and as such I am making my way through their latest book (Extreme Trust) and using it to write a series of posts on matters that are touched upon by Don and Martha.  In the first post I set out the bigger picture – why trust matters, what the  challenge is and how transparency will force companies to become “trustable”.

What is the core challenge of authentic customer-centricity?

In Extreme Trust Don and Martha name the key challenge of customer centricity.  Can you guess what it is?  I can tell you that it is not what most folks are working on: People, Process, Data, Technology.  According to Don and  Martha the key challenge is that of business model design – coming up with a business model that allows you to serve the needs and interests of your customers profitably.  Here are some quotes from Extreme Trust that shed light on the matter:

Untrustable business models thrive in our economic system today largely because being untrustable can be highly profitable – in the short term anyway – and many businesses are managed almost entirely for the short-term results………

a trustable company must find a business model that allows it to create shareholder value by acting in its customers’ interests.  It won’t  – and shouldn’t – sell its products or services at a loss, but to be trustable it must be sensitive to the customers’ point of view and try to deliver a fair deal

In the past, companies assumed a gap between what’s good for customers’ and what’s good for profits.  The trustable company sees no such gap, but – starting from scratch if necessary – figures  out how to use what works for customers as the basis for developing its business model and strategy.”

Whilst I find myself in agreement with what Don and Martha say I cannot help noticing something that strikes me as being falseThey say “In the past, companies assumed a gap between what’s good for customers and what’s good for profits.”  I disagree.  Right now, today, the  assumptions is there and the gap is there. This is an issue that needs to be addressed if companies are to become authentically customer-centric and it is not being addressed as the assumption is that authentic customer-centricity will drive down profits and profitability.

How do you tell if your organisation is “trustable”?

Don and Martha point out the Michael Schrage has put forward a litmus test: 

Are your best and most valuable customers dumb, uneducated or not paying attention?  (If the answer is “yes”, then you should engage in a little self-analysis of your business model.)  AOL may like ‘em stupid, but no trustable company should.”

How exactly is a “trustable” company different from a merely “trustworthy” company?

According to Don and Martha:

” .. a trustable firm is always trying to understand what it’s like to be the customer, and then to make that experience as hassle-free and satisfying as possible……”

“A trustworthy firm will do what it promises to do, but a trustable company, like a friend, will do what’s best for a customer even if the customer isn’t really paying attention or isn’t well informed or knowledgeable as the company is…”

How does “trustability” show up in the lives of customers?

Lets take a look at some concrete examples that indicate and/or show up as being trustable:

Amazon:  just the other day I was about to buy an ebook for my Kindle and Amazon told me that I had already bought it.  I checked and sure enough I already had it.  Furthermore, Amazon makes reviews available on all the products it sells – one of the few sites to do so.

Apple: if you are about to buy what you have already bought through iTunes then Apple will alert you that you have already purchased it. Also any tracks that you purchased from Apple are protected so that you cannot lose them. And for a small annual fee you can apply the same kind of protection to any and all other tracks that you have stored in iTunes.

JacquieLawson.com: an e-card site alerts customers before their credit cards get hit with renewals so that customers who do not wish for the automatic renewal to occur can opt out and thus not get charged!  Now compare that with my recent experience in unsubscribing from various lists – the bloggers made it easy, the commercial marketers made it hard.

RBC:  the Royal Bank of Canada uses its superior insight into its customers to extend automatic overdraft to low risk customers – most of the customer base.  And RBC does not charge a fee for this and in the process forgoes revenue from penalties that most other banks rely on.

Why should you make the effort to be a “trustable” company?

The short answer is that the ‘workability and performance’ of our lives, our organisations, our communities, our societies improves dramatically when trust is present between us. We are social and as such we have a strong sense of empathy, fairness and justice.  Or as Don and Martha write:

The world we live in and raise our children just works better – for us too – when we play fair.…. Our own well-being is wrapped up in the well being of our society and empathy for others is a social stimulant, a catalyst for collective welfare.”

Now, I get that this simply will not speak to some of us.  So let me share another reason for you to transition your organisations towards “trustability”, again in the words of Don and Martha:

In the e-social world, companies will be expected to act toward their customers the way people act towards people.  With empathy.  Violators will be prosecuted.”

For my part I do not think that these companies will be ‘prosecuted’ as the law and the lawmakers have shown themselves to be pretty lax and advocates for ‘business as usual’.  I am of the view that the ‘public’ will name and shame companies and even persecute some of them – showing up the gap between fine words and the not so fine deeds.  Like was done with facebook (privacy), Netflix (price hike, division into two businesses, Shell (Nigeria/North Sea), Apple (Foxconn)……  And the tools they will use?  Smart phones, tablets, PCs and social media/networks.  I believe this is Don and Martha’s point – radical transparency will force companies to change.

What do I say about what Don and Martha say?

Broadly speaking I get Don and Martha in Extreme Trust and I am in alignment with them when they point towards the need for business model design and rethinking strategy to genuinely, authentically, act in the interests of customers whilst making the requisite profit.   About a year ago, I captured my point of view and put it forward in the following diagram:

This diagram is my way of saying that the world has changed and four environment pressures (digitisation, mobile/smartphones, the social customer, the economic environment of austerity) will force companies to revisit/rethink/revise/transform four critical domains of organisational life: Leadership, Business Model, Mission & Strategy, and Culture.  I see these as interconnected.  Only when these dimensions are adequately addressed does it make sense to start making adjustments in the People, Process, Data and Technology domains.  However, this is pretty much the opposite of what organisations have done in the realms of CRM, Customer Experience, Customer Focus and Customer-Centricity which is why so few companies are loved.  Really how many brands/companies would leave a hole in the lives/hearts of their customers if they ceased to exist?  Which is pretty much why there is little or no real (emotional as opposed to behavioural) loyalty.

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