Monthly Archives: February 2013

How does digital impact strategy, marketing, and the customer experience?

I say digital fundamentally disrupts everything: value propositions, communications, the customer experience

“What do you think of digital?” That was the question that the interviewer at the Technology for Marketing & Advertising conference asked me. The bulk of my customer experience work for the last two years has centred on/around digital. So here is the answer I gave:

Digital is disruptive. It disrupts the value proposition, communications with and between customers, the customer experience, and the business model  I say every business has to get to grips with digital and the transformation it engenders in these four areas. Failing to do so is a one way ride to oblivion especially for retail businesses.

I went on to say:

The days of putting a warehouse with a glass front and minimum wage employees, who are generally clueless, on a high street, are fast running out.  Why?  Because if it can be bought digitally then it will be bought digitally. You cannot beat digital for research, for price comparisons, for ease, for convenience and even for instant access to the product/service – for some categories of goods and services. And if you get your logistics right then many customers can wait a day or two to get what they ordered online.

Which means that If your value proposition and the associated customer experience is not good enough to charge an entrance fee then you should close up shop. Why? Because you will simply end up being a showroom for a digital master like Amazon.

Michael Schrage says “Invest in your customers more than you brand”

It isn’t often that I come across a piece that speaks to me the way that Michael Schrage’s piece speaks to me.  I say that if you are in the game of business, the game of customer-centricity, or the game of customer experience then read and memorise that which he says.  For my part, I want to pull out his wisdom as it relates to the impact of digital on business strategy, marketing, sales, service and the customer experience.

Digital technologies push firms to recognize, rethink and reorganise how they should make their customers smarter and more confident…How are you using digital media to help your best customers and prospects to better educate themselves?  How are you making them smarter and more capable? Companies like Amazon, Google, Apple, IKEA and IBM have answers to that question. What’s yours?

The distinctions that make a difference will be value-added aducation and advice.  After decades of complaints about the poor quality of its instructions and documentation, for example, Ikea set up a YouTube channel…showing people how to easily put together its most complex furniture.

The advice/aducation marketing challenge comes from redefining advertising as an investment that makes your customers more valuable to you, not just an investment that makes your brand more valuable to your customers…

The digital and digitizing future belongs to the best aducators and advisors who make clients, customers, prospects measurably smarter and authentically more confident.  That a challenge a David Ogilvy, Jay Chiat and Rosser Reeves would appreciate.

Credibility comes from commitment to facilitate decision, not calculate persuasion. “We [Amazon] make money when we help customers make purchase decisions.”

Bezos’ bet is that relevant recommendations and reviews – good advice – are better brand investments than digital sales pitchesClose the deal by being openly helpful and helpfully open, not by “selling better.” Amazon transformed customer behaviours and expectations by consistently favouring innovative “advice” over sales-oriented “advertising” and promotion.

Sales don’t drive the UX; they’re it’s happy byproducts. That digital design sensibility has yet to seep into marketing’s mainstream…..

And finally

If you are busy firmly planted in the call-centre working on improving the ‘customer experience’ then I say get that you are at best improving customer service. Not the customer experience. You are mired in operations and as such you may just be missing out on the bigger picture – the opportunity and the challenge.

If like me, you are fundamentally a strategist and you passion lies in value propositions and customer experience innovation,  I say get passionate about digital. Learn digital. Use digital. Why?  Because digital enables transformations in the value proposition, communications with and between customers, the customer experience, and the business model.

What powers excellence in Customer Experience Management?

I was one of the four speakers on the speaker panel yesterday at the Technology For Marketing & Advertising conference/Exhibition in London.  Our conversation centred on the shift that IT vendors are making from calling their software CRM to labelling it CEM.  The first question that by Neil Davey (editor of MyCustomer.com) asked centred on what the discipline of CEM involves. That is what I want to grapple with today.

What does the discipline of CEM involve?

It occurs to me that there is a discipline called marketing, one called finance, another called logistics. Is there a discipline called CEM? I say there is not. There is a movement that is sometimes called CEM. And today it is just that – a movement.  It occurs to me that a movement is distinct from a discipline.

So let’s assume that there is a disciple of CEM. Put differently, lets assume that the Tops decide to play the Customer Experience game. So the question arises, what does it take for their organisation to excel at this game and generate happy customers, and profitable revenues?

Looking at the situation simplistically, it occurs to me that it takes the following:

1. Generating rich insight into the needs of buyers/customers;

2. Choosing a value proposition that speaks to (attracts) these buyers/customers; &

3. Designing and delivering a customer experience that fulfils on the promise made in the value proposition.

If we want to get into the detail of what it takes to generate rich insight, shape the value proposition, and deliver the customer experience that fulfils on the promise of the value proposition then I say that the levers are:

Priorities: what matters, what is talked about, what it given attention, what is fed with resources, what gets done, what gets rewarded, what gets celebrated….

Policies: statements of intent, of direction, of position, of fundamental principles that shape behaviour/action

Practices: policies get enacted (lived, carried out) or not through the practices of the organisation; there are practices around decision-making, resource allocation, customer, employees etc

People: it is not sufficiently appreciated that ALL that occurs in an organisation occurs through people and as such the stance, the disposition, the attitudes, the feelings, the behaviours of people matter!

Platforms: platforms are a combination of resources/tools that are brought together to enable the people in the organisation to do what they need to do – budgets, processes, tools, and IT systems are key ingredients of that which collectively make up platforms.

I am clear that whilst all of this is necessary it is not enough. The elixir that gives life and enables all of this to work, to flourish, and thus generate the desired performance is missing. Can you guess what it is?

Does excellence in the game of Customer Experience require a change in consciousness?

I say that excellence in the game of Customer Experience requires a change of consciousness.  Specifically, it requires a step change in consciousness. It occurs to me that the kind of change of consciousness that I am pointing out can be likened to phase transitions: like ice becoming water or water becoming steam.  Notice, that ice, water, and steam are distinct.

So what kind of consciousness is required for excellence in the game of Customer Experience?  The following occur to me when I pose this question to myself:

Consciousness of customers as fellow human beings who are always experiencing, including experiencing whether they are safe, whether they matter, whether they are cared for..

Consciousness of employees as fellow human beings, our team mates and source of all the value that is created by the organisation. And not as resources/objects/commodities that come in the awkward human form and as such have to be manipulated, controlled, coerced, used, discarded…

Consciousness of the fact that the only relationship that really works, in the longer term and leads to high performance, between human beings is that which is an I-Thou relationship as opposed to the default of I-It.

Consciousness of the profound difference between competing at the level of ‘product’ plus service and competing on the basis of the customer experience. A paperback book and friendly service at the counter is radically different from finding a book and seconds later reading it on the Kindle, or iPhone, or iPad, or all of them!

What do you say?

What is the purpose of customer experience design and innovation?

Simplicity speaks to me.  Complexity, including fancy ambiguous wording, makes me suspicious.  And it makes navigation in the real world that much more difficult.  With that in mind I share with you my take on customer experience design and innovation.

I say that the purpose of customer experience design and innovation is to enrich lives such that customers are left feeling great about choosing to do business with us.

How can we know that we have enriched lives and left customers feeling great about choosing to do business with us?  I say we can look at the following indicators:

1. What customers are saying about us;

2. How many people are turning up to buy from us without us having to hook them through advertising, promotions and other gimmicks like many ‘loyalty’ programmes;

3. The stickiness of customers in the midst of genuine competition and the unleashing of contractual shackles;

4. The budget that we can cut from marketing, advertising, and sales without negatively impacting the customer experience nor our ability to attract/keep customers.

5. Ease of attracting and keeping talent, the talent that actually comes up with products and powers the customer experience.

Is there a serious issue with the whole customer-brand relationship thing?

I came across this great quote from Anthony Robbins on relationship and I want to share it with you:

The only way a relationship will last is if you see your relationship as a place THAT YOU GO TO GIVE and not a place that you go to take.

Coming across this quote has rekindled the struggle that I have had with the relationship thing between the organisation/brand and customers.  Why?

We live in a self-seeking, self-interested, self-centred ideology and context. Customers are expecting companies to reward them for their loyalty. These rewards can be in terms of price discounts, higher levels of service, special privileges etc.  Brands/organisations have engaged in the relationship thing because of promises made by gurus/consultants/marketing professors. What promises?  Promises of  higher revenues, margins and profits.  How? According to these ‘gurus’ customers in a relationship will paying higher prices and buy more from the brand.

Do you see the issue?  From the brand viewpoint it is worth entering into the relationship so that the brand can take more – revenues and profits – from the relationship.  From the customer viewpoint it is worth entering into a relationship if they can get more value (price discounts, higher levels of service, privileges..) out of the brands.

This reminds me of the prisoners dilemma where the ideal course of action is for you to encourage the other party to cooperate whilst you defect.  And as such this occurs to be the use of the word/concept of ‘relationship’ masking a ‘selfishness/greed’ orientation/behaviour.  Which may explain why it is that with all the talk of ‘relationship’ there are so few brands that actually build relationships and cultivate loyalty.

Oh, if you are up for a refreshing take on the customer/brand relationship thing then I recommend the following slide deck from Martin Weigel, head of planning at Wieden+Kennedy, Amsterdam:

This is the deck that brought to the surface my unease with the relationship thing.  And it shows up for me as a great deck – one that speaks uncomfortable/unsettling truths. I’d love to hear your take on this.

What does it take to generate breakthroughs in performance and the customer experience?

Why do almost all change initiatives fail to deliver?

I have been involved in all kinds of organisational change initiatives whose ultimate purpose was to power performance. These change initiatives have come in many flavours: strategy, people, process, and technology.  They have encompassed the front office, or the back office, or both.  These change initiatives included: BPR, Kaizen, shared services, quality, ERP-CRM-Ecommerce technology, customer service excellence, strategy…

What is it that is I found common pretty much across all of these change initiatives:

  • They were mostly initiated by people gripped by a fad of that time;
  • Each of these initiatives was going to deliver substantial, even breakthrough, improvements in performance; and
  • Almost all of them failed to deliver on the promise.

I see the pattern being repeated with Customer initiatives that are focussed on improving the customer experience and thus engendering loyalty and advocacy.  Why?  Because what is being changed is the content and not the context.  Working on the content whilst leaving the context intact is liking rearranging the music, the dining hall, the food & wine, say on the Titanic.  Great stuff and ultimately it is merely a distraction from the inevitable.  The inevitable (destiny) is always shaped/determined by the context.

Differentiating between the context and the content

Let’s start with the dictionary definitions of context:

con·text

  1. Background, environment, framework, setting, or situation surrounding an event or occurrence.
  2. Words and sentences that occur before or after a word or sentence and imbue it with a particular meaning.
  3. Circumstances under which a document was created, including its function, purpose, use, time, the creator, and the recipient.

con·tent

  1. The things that are held or included in something.
  2. A state of satisfaction: “the greater part of the century was a time of content”.

Are you struggling with distinguishing between context and content and why this distinction is of profound significance? Let me help out.  Let’s use the analogy of computer software. The context can be likened to the operating system.  The content to the software programmes that you are using say Word, Excel, Outlook.

Or think of work and home.  The context of work is radically different to the context of home. Or the context of a wedding is radically different to the context of a funeral. Do you see how the content – people, talk, behaviour – whilst the same is/can be radically different in the differing contexts.  You talk at work, you talk at home, yet the way you talk and what you talk about is likely to be very different between work and home.

Shifts in context are the access to transformation and breakthrough results – for customers, for the organisation

Let me say this bluntly, most of the work that is taking place in the customer space in the name of customer focus, customer experience, customer-centricity, customer obsession is wasted money and effort. It is merely the equivalent of arranging deck chairs on the Titanic. Or if you prefer behaving like Blockbuster or HMV – both of which have gone into administration and are busy closing or selling their stores.

I say that excellence in the customer domain, and the business benefit this excellence generates, is only available to a particular set of organisations.  Which organisations?  The organisations whose leaders exercise courage. What kind of courage?  The courage to shift the context.  Allow me to give you some dimensions along which you can shift the context that powers your business:

Slide3

If you want to get a better grip of context and how it applies to the customer experience then read this post.

Great examples of shifts of context: from Amazon to Zane’s Cycles

Examples of Contextual Shifts

 

Kuhn called this contextual shifts “paradigm shifts”.  Every paradigm shapes/limits that which shows up including human relations and performance.  Some paradigms create more space and generate more energy to empower high performance. If you want to transform your customer experience then pay attention to the context.  Context comes first, content second. Only the fool, or one who has time-money to burn, focuses only on the content.

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