Category Archives: Case Studies
I say that the way to make a significant impact on the quality of the customer experience (as experienced by the customer) is for the organisation not to focus on improving the Customer Experience. That is a bold assertion and shows up as nonsense to many. So what is it that I am getting at?
It is my experience that after accessing the voice of the customer and doing the journey mapping a range of initiatives are on the table. So the folks around the table getting busy figuring out which initiatives to take forward. Which ones do they take forward? The ones that don’t rock the boat. The ones that are the least risky. The ones that are usually called low hanging fruit: the easy ones that involves a tinkering at the edges, and in the bigger scheme of things make little difference.
To Improve The Customer Experience Ramp Up The Quality Of Competition
Take a look at this photo. Notice, the people standing up – how many there are, and how closely packed they are against one another. I invite you to step into this picture. Imagine yourself standing up in this train. And finding yourself packed in like sardines in a tin.
I found myself on this train – standing up. This train was so packed that it took considerable skill to just get my smartphone out of my trouser pocket – to take this photo. How long was I standing up in this train? For one hour and ten minutes.
So I ask you how is it that this kind of occurrence is actually a regular occurrence on the trains going into and coming out of London at peak travel times? It is so because there is no competition. On each line there is one company that has won the right to run the train services. A monopoly is in place and the folks who need to use the train have no choice but to put up with whatever they have to put up with.
Now consider that the Tops of just about every business strive to minimise the competition. Why? Because where there is no genuine competition, Tops can ignore customers, and run the organisation in a manner that extracts surplus profits from customers.
Looking at the situation from the Customer’s point of view I am clear that the most effective way of causing improvements in Customer Experience is to effect genuine competition into every industry, every market place. Genuine competition for customers will force companies to do that which they are not willing to do today: focus on creating superior value for customers – that includes the Customer Experience.
I don’t know about your country, I do know about the UK. I assert with confidence that there is no genuine-significant competition in many industries: retail banking, grocery retailing (Aldi, Lidl are starting to make a dent), energy (gas, electricity) suppliers, telecom’s providers….
Consider that if business genuinely had the interests of customers at heart then the Tops of every business would welcome increased competition in their market place. Why? It would provide the impetus to do better: to focus on creating superior value for customers – including providing a better Customer Experience.
Is injecting genuine competition into a market place enough? Is it enough to ‘force’ the incumbents to pay attention to customers and do right by customers: focus on providing superior value for customers?
Effective Regulation Is Necessary To Make Competition Work
For two years I was leading a data mining and predictive analytics practice which operated across Europe. So I got to know something about how different countries went about implementing-enforcing the European Data Protection directive. Some countries were effective (Germany, France, Italy, Spain) and others (UK) ineffective. Why? The Germans, French, Italians, and Spaniard adequately funded their national data protection agencies and allowed them to levy unlimited fines (usually running into millions of Euros). I believe one of these countries set up the funding arrangements so that the data protection agency had to fund itself through the fines it levied on those companies found bending or simply not following the legislation. Whereas the UK government provided the minimum funding possible, and limited the fine that the national data protection agency could apply to £50,000.
Let’s get back to the issue of competition. Is it necessary for national governments to put in place effective regulations and enforcers of these regulations? No? Are you of the view that multinationals so love their customers, and are so committed to the Customer Experience, that regulation is not necessary? If so I invite you consider this: business, especially, big business is not customer friendly. Allow me give life to this assertion.
Yesterday I read this Guardian article: France fines 13 consumer goods firms €951m for price fixing. Which companies are involved? Companies include:
- Proctor & Gamble
- Reckitt Benckiser – €121m
- Unilever – 2nd largest fine, €172.5m
- L’Oreal – largest fine, €189.5m
- Johnson & Johnson
- Henkel (maker of Persil) – €109m
- Biersdorf (Nivea) – €72m
- SC Johnson
Which products were involved? As far as I can figure out, just about everything. Here’s what the Guardian says (bolding mine):
The price-fixing affected a large number of popular brands, such as Vanish stain remover, Palmolive washing-up liquid, Sun and Calgonit dishwasher tablets, Sanex and Petit Marseillais shower gel, shampoos including Head & Shoulders, Fructis and Elsève, and Colgate and Signal toothpaste. Mouthwashes, deodorants, shaving creams and razors, female hygiene products, body lotion, facial and sun creams and insect sprays were also affected.
So what went on? What did the folks at these companies do to merit such a large fine? This is what the Guardian says (bolding mine):
The regulator said the 13 companies ….. had colluded on price increases between 2003 and 2006. “These two sanctions are among the most significant imposed to date by the competition authority,” it said. The regulator added that the price-fixing had kept prices “artificially high” affecting consumersand “caused harm to the economy”.
…. commercial directors and other sales officials from the companies involved met “regularly and in secret” to co-ordinate price hikes at restaurants or via correspondence to private homes, as well as through telephone calls. The groups in which they met were called “Team” or “Friends”.
Consider that if business genuinely had the interest of customers at heart – were committed to creating superior value for customers – then business Tops would not only welcome regulation, they’d want it enforced rigorously and big fines handed out to those who cheat customers. Name me a Top that advocates this position – can you think of one? I cannot.
I say greed, selfishness and even corruption permeate our way of life. It permeates politics, national government, and local government. It permeates the police. It permeates business. It permeates the broader society – us. Given this context, I say, all talk of customer - customer focus, customer service, customer relationships, customer engagement, customer experience, customer obsession – is totally and utter bullshit.
Do you study history? I have. This is what I have learnt: every right that you/I enjoy today was earned and paid for through blood of brave souls many years ago. So if you and I are going to be treated right by folks in big business then it behoves us to fight for genuine competition in the market place, stronger customer protection legislation, and effective enforcement bodies. What you and I cannot count on is business itself: yes, the words have changed, and business as usual (screwing customers) continues unabated. I say that the true customer strategy of most business is something like this: blind customers with bullshit, and empty their pockets whilst they are not looking.
Tesco: The Darling of Customer Marketing Guru’s Issues Its Fifth Profit Warning
Tesco continues to struggle. According to this piece from the Guardian newspaper, Tesco has issued its fifth profit warning, share price has plunged (down 16%): Tesco is on the floor. Why does this matter? Why is it worth me writing about. Let’s go back a little.
In the early 2000s Tesco was much lauded my many: the customer-centricity gurus, the 1:1 marketing gurus, the data mining and predictive analytics players, and customer loyalty program vendors. Tesco was the exemplar of harnessing customer data through a loyalty programme (Tesco clubcard), using data mining and predictive analytics to generate insights and then doing database driven marketing based on these insights. In the process Tesco went from being just one player amongst the UK grocery retailers to the the dominant retailer. At one point it looked like there would be no stopping Tesco.
Today Tesco is on the floor. Why? Because Tesco’s management ended up doing what management teams do: exploiting customers to extract surplus profits for the Tops and Shareholders. I think some wise person said something like “power corrupts: absolute power corrupts absolutely.”
What Can We Learn About The Challenge Of Building A Customer-Centric Organisation?
So what is it that you and I can learn from Tesco if we are grappling with the challenge of shifting a business towards a customer-centric orientation: one not based on using data/insight to exploit customers; one based on using data/insights to generate superior value (product, proposition, customer experience) for the customer? Here are the paragraphs from this Guardian piece that catch my attention (bolding is my work):
Lewis [CEO], who marks his 100th day in the job on Tuesday, said he was building “a new Tesco” that would eventually reward shareholders. “We need to get back to core principles. We need to improve the service and availability and that is what we are doing.”
Here is what strikes me, how I make sense of this statement based on my prior lived experience:
1. Moving an organisation from a business as usual (product-centred, extractive, short-term focussed) to a customer-centric organisation is akin to building a new organisation;
2. Building a new organisation is not simple, not easy, not quick. It requires the persistent application of substantial energy across a large number of people for a long period of time – years. Only a CEO who has the power and genuinely cares about the wellbeing of the organisation will do what it takes, and keep doing it over the long term of many years.
3. Part of the challenge in building a new organisation is sacrifice. This sacrifice especially involves shareholders. Why? Because usually the shareholders have gotten fat through ‘bad profits’ delivered by their agents (Tops) putting in place strategies-structures-people-practices that collectively take advantage of customers, suppliers, and the employees – extracting surplus rents (to use the term used by economists);
4. Building a customer-centric organisation is matter of getting back to core principles. Notice, it is not discovering some secret recipe nor the latest shiny miracle technology. It is about honouring already discovered, well known, rarely enacted, core principles. How does one honour a principal? By living it – being an exemplar of that principle in action.
What Specific Actions Does It Take To Be A Customer-Centric Retailer?
Let’s continue this conversation by looking at another paragraph that speaks to me. Here it is:
In a bid to improve customer service, the retailer has taken on 6,000 more staff since mid-October, and despatched 6,000 existing head office staff to spend one day a fortnight on the shop floor to get a taste for the sharp end of the grocery business. Lewis has decided not to lay off people after Christmas, a traditionally slack time for retailers, as part of this customer service drive. “Certain activities help you manage profits, but can have a detrimental impact on how you serve customers,” he said. “What we are trying to do is deliver better for customers … I believe that is the foundation from which we can build a new Tesco, which is financially attractive to shareholders.”
Here is how I choose to make sense of this paragraph:
- A customer-centric organisation is one which “delivers better for customers”. Delivers what better? Delivers better products. Delivers better service. Delivers better value propositions. I sum this up by saying it delivers a better Customer Experience.
Customer service is a key thread of Customer Experience. Organisation which seek to show up as customer-centric have to get customer service right. This is especially so for service heavy businesses where the employee to customer encounter is important, even critical.
Getting customer service right means investing in the people who actually are the customer service of the organisation. Please notice the word “are“. Your front line people are your customer service; they do not merely deliver the customer service that someone else (perhaps in head office) has already produced. This critical aspect of reality is much ignored: your front line people simultaneously invent-create-deliver customer service every time they encounter the customer – they are your customer service!
Investing in people is long term play. Think Warren Buffet: you select the right people and then you hold on to them over and for the long term. That means not laying people off during traditionally slack periods. Why? Because two way loyalty (sticking by one another) is essential to creating the context for greatness to show up from your people. When you, the CEO, take the pain for your people you are putting a deposit in the bank account of goodwill. And this allows you to draw on the goodwill of your employees when you need it. Think Market Basket.
The core challenge of building and then keeping in existence (over the longer term) a customer-centric organisation is this one: “Certain activities help you manage profits, but can have a detrimental impact on how you serve customers”. It occurs to me that this is THE most critical insight. There is a broad range of ingrained, celebrated, management practices that deliver the numbers over the short-term whilst at the same time chipping away at the quality of the Customer Experience. Over the shorter-term there is no visible impact. Then the hit occurs and when it does it is big. I refer to this as the ‘straw that broke the camel’s back’.
The people who collectively constitute the biggest obstacle to making the shift to a customer-centric organisation and keeping this customer-centric orientation intact (and effective) are the people who work in head office: those who make policies, set targets, dictate management practices…. I am talking about the Tops and Middles: those who work with concepts and not reality. John Timpson of Timpson recognised this and turned the role of the head office from a dictatorship to a helpline, and in the process reduced the number of people in head office, and moved them to the branches where the real work of interacting with and serving customers occurs.
Final Thoughts: Leadership and Governance
If find it interesting that the management practices that have brought Tesco to its knees ended up being unconcealed when an outsider (no relationship to the Tops running the organisation) took over the role of CEO; and
It is the competitive world in which Tesco competes which has forced Tesco’s leadership to deal with these management practices. It is only when that which had been hidden (bullying of suppliers by head office folks, bullying of store managers by head office folks, manipulating profits through shady accounting practices) could no longer be hidden that both people and management practices are being addressed.
It occurs to me that Tesco is in crisis as there has been a fundamental breakdown in leadership and governance. The Board of Directors failed to do that with which it is concerned. Ensuring that the right person/s are running the organisation. And overseeing the actions (and management practices) of these people. Interesting then that the Chairman of Tesco has had to walk the plank.
I thank you for listening to my speaking. And I invite you to share your thoughts and experience with me. Looking forward to reading your comments.
What Is Transformation?
For the purposes of this conversation, when I speak ‘transformation’ I am pointing at a radical shift in one’s way of being – as in one’s way of showing up and travelling in this world. If you are Christian, and know your Bible then think of the transformation (often called conversion) of Saul to Paul. What was intrinsic to this transformation? Was it not a letting go, a complete letting go, and embracing the unknown?
What Has Transformation To Do With Customer-Centric Business?
What has this conversation to do with all things Customer and especially customer-centric business? Everything. As I have said many times before a shift to showing up and doing business in an authentically customer-centric way requires a transformation: personal (Tops, Middles, Bottoms) and business (policies, practices, processes, tools).
a. What is the access to transformation?
What is the access to transformation at the individual (personal), and business (organisational) level? Allow me to share the following with you:
In some Asian countries there is a very effective trap for catching monkeys. A slot is made in the bottom of a coconut, just big enough for the monkey to slide its hand in., but not big enough for the hand to be withdrawn when it is clenched. Then you put something sweet in the coconut, attach it to a tree, and wait for the monkey to come along. When the monkey slides its hand in and grabs the food, it gets caught. What keeps the monkey trapped? It is only the force of desire and attachment. All the monkey has to do is to let go of the sweet, open its hand, slip out, and go free - but only a rare monkey will do that.
- Joseph Goldstein, A Heart Full Of Peace, Best Buddhist Writing 2008
OK, this Buddhism stuff shows up for you as ‘other worldly’ – unrealistic. So allow me to make it real for you.
b. The Transformation of Zappos Occurred in March 2003
Listen to Tony Hsieh talk about the early days of Zappos when the leadership team was struggling to find funding to keep Zappos going – the cash had run out (bolding is my work):
A month later, we still weren’t profitable. We still couldn’t raise funding.
But we had a decision to make.
How serious were we about this idea of making the Zappos brand be about the very best customer service? We had discussed the idea internally with our employees, and everyone was excited about the potential new direction.
But was it all talk? Or were we committed?
We hadn’t actually changed the way we did anything at Zappos yet. We did a lot of talking, but we weren’t putting our money where our mouths were And our employees knew it…..
For 2003, we were projecting sales to double, with about 25 percent of our overall sales coming from our drop ship business. The drop ship business was easy money. We didn’t have to carry inventory so we didn’t have any inventory risk or cash-flow problems with that part of the business. But we had plenty of customer service challenges.
The inventory feeds ….. from our vendors for our drop ship business were 95 percent accurate at best …. On top of that, the brands did not ship as quickly or accurately as our own WHISKY warehouse, which meant we had plenty of unhappy and disappointed customers. But it was easy money.
We all knew deep down inside that we would have to give up the drop ship business sooner or later if we were serious about building the Zappos brand to be about the very best customer service. We also knew that the bigger we grew, the more reliant we would be on the cash from drop shipping. There would never be a good time to walk away……
So we made what was both the easiest and hardest decision we ever had to make up until that point. In March 2003, with the flip of a switch, we turned off that part of the business and removed all of the drop ship products from our web site.
We took a deep breath and hoped for the best…..
We had to deal with our first test of our new direction right away. With a drop in revenue, cash was even tighter than before.
Now we had to figure out how to make next week’s payroll.
- Tony Hsieh, Delivering Happiness
Not easy is it? Which kind of explains why many organisations which talk about customer focus, customer obsession, customer-centricity are playing at the periphery: making process changes, buying-implementing technology etc. Which CEO or leadership team looks forward to taking a deep breath and hoping for the best?
If you are serious about cultivating genuine-meaningful loyalty between yourself and your customers then you have to open up your clenched fist. And let go of all the policies-practices-products-people that generate bad profits – profits made at the expense of your customers.
As Tony Hsieh says there is NEVER a good time to do this. So the best time to do that which goes with showing up and travelling the authentic customer-centric path is NOW! Why now? Get this, everything that ever happens, happens NOW. I know that this is not how it shows up for you, or me. And look into this, deeply, and you will see the truth of it. All action occurs in the present, NOW.
Here is where it gets interesting. There cannot be an organisational transformation unless it is preceded by individual/personal transformation; this individual/personal transformation has to start with the Tops – it is called leadership.
What is the subtitle of Tony Hsieh’s Delivering Happiness book? “A path to profits, passion, and purpose”. It occurs to me that the many with whom I speak show an avid interest in profits – increasing profits. Few show any interest in any purpose other than ego: self enrichment in its many disguised. Passion? Passion for great customer service, passion for great Customer Experience, passion for the genuine well-being of customers as fellow human beings? If you come across it then please share it with me.
giffgaff: Wow! What A Delightful Experience.
Youngest, daughter, has ‘lost’ her mobile phone. So she logged me into her giffgaff account on the website. I clicked the “Help” tab. Then I clicked “Lost & Stolen”. Then I chose “Lost Both My Phone and SIM”. At this point I was expecting to be told that the phone and SIM had been blocked. And a new SIM would be with me in a couple of days. That would have been a good enough experience: got the job done in a couple of minutes.
That is not what happened. Once I selected the “Lost Both My Phone and SIM” option I was informed that the phone and sim were now blocked. AND I was informed that I could get a replacement SIM activated immediately instead of waiting for one to arrive in a couple of days. How so? By getting hold of and activating an existing giffgaff SIM – one that had not been activated to date. How is that possible? giffgaff, as a matter of course, sends extra SIMs to members. Why? So that they can give them to those who they think would benefit from being members of giffgaff.
As a result of this capability, I was able to hand over a fully working mobile phone on the giffgaff network to my daughter in less than five minutes – start to finish! That was my desired, real, outcome. And arriving at this desired outcome in five minutes as opposed to several days left me delighted; I am a protective parent!
What is unconcealed here? The starting point for customer-centricity is authentic care for one’s customers. When this is in place then the folks in the organisation will exercise thoughtfulness. In so doing, these folks will make it easy and enriching for customers to do business with that organisation. And in the process the organisation will both generate customer loyalty and reduce waste – doing stuff that costs money but does not create value for customers from the customer point of view.
What can I say? I love the folks at giffgaff. I love how thoughtful and smart they are. I love how easy they make life for me. I’d happily recommend giffgaff and have done so many times!
RAC: Regulation of Call-Centre Agent Behaviour Is What Matters, Not The Customer Experience
Youngest son bought a car and in the process he was about to buy breakdown insurance. I told him that he didn’t need to do that as I’d put him on my existing breakdown policy with the RAC. I rang the RAC expecting a brief conversation of the following kind:
Me: I’d like to put my son Marco on my existing breakdown policy. Here is the policy number. What is the cost?
Call-centre agent: The cost is £x. Does that work for you?
Me: Yes, here is my credit card number.
Call-centre agent: That’s done for you. We’ll send out a membership card to your son in the next couple of days.
Me: Thank you.
How did the conversation actually go? It took some time. I found myself frustrated. I found myself raising my voice. I found myself angry. Why? Once the helpful young man had verified who I was he proceeded to ask me stupid questions. What made these questions stupid? He already had the answers to these questions. He was asking about the services that my son would need. And I told him those on the existing policy: roadside recovery, home recovery, onward travel, and European travel.
So why did this friendly professional (sounding) call-centre agent ask me questions to which he already had the answers? Because he had to: the ‘designers’ of the call-centre operation had come up with a script and he had to follow it to the letter so that he would be in compliance with the script. After all the phone call was being recorded and the quality folks would be listening in to ensure compliance with the script.
What a waste! What a waste of my, the customer’s, time. What a waste of the intelligence of the call-centre agent. What a waste of valuable call-centre resource: the time of the call-centre agent. What a waste of an opportunity to deliver a great customer experience and generate goodwill. What a waste!
What is unconcealed here? There is a conflict between the way organisations are designed to operate (regulate the behaviour of the folks in the organisation so as to facilitate command and control) and the flexibility (of response) that has to be in place in order for the customer facing folks to respond intelligently to this particular customer, at this particular time, as regards this particular context.
Sainsburys Bank: A Good Experience Turns Ugly
Eldest, son, asked for help in signing up for a suitable credit cards. I did the research and identified several providers. In the process I found three providers which appealed to me. I signed up for each of these providers – one of these being Sainsburys Bank. All three providers made it easy to sign-up. All three did the background checks on me, verified me as sound credit risk, approved me as customers and gave me a credit limit. Two of them, at the end of the process, invited-encouraged me to setup an online account with them so that I could manage my account online.
Several days later I got the paperwork through from all three providers. Two providers sent me confirmation paperwork, terms and conditions, and the passwords/codes I’d need to use the credit cards. One provider – Sainsburys Bank – didn’t. What did Sainsburys Bank send me? It send me a bunch of unappealing (black and white) paperwork to read and sign! This struck me as such a disconnect! How antiquated in comparison to the other two providers! What a great way to foul up a great digital experience! The whole point of digital is that stuff can be done there and then, in real-time.
What is unconcealed here? Some folks just don’t get digital. Some folks just don’t get mobile. Some folks don’t get social. Some folks just don’t get how to use the various customer interaction channels intelligently. More importantly, some folks don’t get customers. A customer who chooses to interact with you through digital channels is looking for a digital experience. A customer who chooses to ring in to the call-centre is looking to talk with an intelligent-friendly human being – not navigate a frustrating-inhuman IVR. You get the idea.
It occurs to me that established organisations have a long and difficult path ahead of them if they are to compete on the quality of the Customer Experience. On the Customer Experience path the advantage lies with the younger, greenfield, organisations which do not have to deal with the legacy of relational and technical debt. And that is food for a future conversation. Thanks for listening.
What Customer Experience Paths Are Organisations Taking?
It occurs to me that under the Customer Experience umbrella one can pursue several distinctive paths. What might these paths be?
One there is the lets suck less path. This almost always involves looking at way of reducing customer effort at specific touchpoints e.g. call-centre, or specific customer interactions e.g. when buying something. Arguably some, perhaps even most, of the effort that the UK government has put into its digital services programme is about sucking less, reducing customer effort, and in the process decreasing costs.
Two, there is the data-technology path. Let’s make use of the latest technologies (internet, social, mobile, mobile apps, kiosks, marketing platforms..) to do interesting/sexy stuff. And in the process collect-harness data on the end consumers – who have to date been unidentifiable. Take a look at just about any high profile B2C brand. For me, several automotive brands come to mind immediately. This is the path pushed by the technology vendors and the more IT oriented consultancies.
Three, there is the customer journey / business integration path. By this I mean lets glue up the organisation – business units (online, offline), interaction channels and business processes – so as to provide a harmonious (as a result of the integration) customer experience. What is in it for us? Higher revenues (customer stick around more, attract new customers through word of mouth, and existing customers buy more) and reduced operating costs. A great example of this is the John Lewis Partnership in the UK.
Is this all there is? Making that which is, work better? And using the latest shiny technology to collect data on customers, potential customers, and push out marketing messages? Is this the extent of the possibility of Customer Experience?
What Is The Truest / Fullest Expression of Customer Experience?
Bring new light to what life might be.
- Hugh MacLeod
I say that the true-fullest possibility that is inherent in Customer Experience is that of bringing new light to what life might be. Think Amazon. Have the folks at Amazon not brought new light what the experience of searching for, finding, reviewing and purchasing products might be? Have they not set the benchmark for what constitutes an online store and the associated experience?
Think Apple. Some say Apple is phone company now given that this is where the bulk of revenues, profits and growth is at for Apple. How did it get that way? Did not the folks at Apple ‘bring new light to what life might be’ with a touchscreen intuitive (to use) phone? And is it not that possibility that has been pursued consistently such that few of us would now consider being apart from our smartphones?
Think First Direct. Did the folks there not bring new light to what telephone and online banking might be?
Think The John Lewis Partnership. Did the folks there not bring new light to what life might be for the folks that work in the business and those who are served by those who work in the business? The genuine partnership model were they are no employees. Only partners, who partner with one another to deliver great service to customers.
Think giffgaff. Have the folks at giffgaff not brought life to what life might be like for customers of mobile phone networks: life as a community? The experience of membership, of community, of being in it together, of participation, of loyalty, of honest dealing between network and its customers?
It occurs to me that the folks that were at the helm of these companies were pursuing a vision of what life might be. Not just in the pursuit of making the numbers. They chose to tread the bold path rather the safer one of incrementalism or following the latest fashion. They led in the truest sense of leading: the invented a possibility, they enrolled people into that possibility and got busy giving birth to the unborn: what life might be.
I am finding myself becoming more and more dissatisfied with Customer Experience as practiced. Why? Because what calls me is the possibility of ‘bringing new light to what life might be': honouring, enriching, elevating, the life of my fellow human beings. Perhaps my interest is in innovation rather than Customer Experience. Or perhaps my interest is in innovation in the form of the total customer experience : Customer Experience Innovation. What about you?