Category Archives: Customer Loyalty
Does Amazon deserve the label of ‘Earth’s most customer-centric company’? Before I answer that question, allow me to tell you a little story about a well-known telecommunications company, one whose official strategy was to become customer-centric.
What Customer-Centricity Meant At A Well Known Telecommunications Company
I once did some consulting work for one of the world’s largest telecommunications companies. In the process, a certain kind of fellowship grew between me and the billing manager. To some extent he was a frustrated man. Why? The billing challenge was growing more and more complex: requiring more people, more expensive IT equipment, stronger oversight etc. .
What was the cause of the increasing complexity and thus challenge in billing? The number of unique billing plans in place. There were thousands of them. And most of them were legacy billing plans – many years old. So I asked the billing manager, why he didn’t just move customers to the latest billing plans. And in so doing he would be free to delete the thousands of legacy billing plans that were the cause of the headache. Can you work out his answer?
He told me that he built a ‘business case’ and presented to his boss. Yet, the proposal had got nowhere because Marketing had vetoed is proposal. What was the basis of the veto? The legacy billing plans were much more profitable for the company. Why? Because compared to the latest, competitive, price plans, the legacy plans were overpriced. And if the company took the decision to move these customers, arguably the most loyal as they had been with the company for a long time (3+ years), then this would mean giving away revenues and profits.
What did customer-centricity actually mean in this company? It involved lots of activity: vision statements, presentations, meetings, talk, customer research, mystery shopping, process changes, balanced scorecard. What it did not involve was the conscious choice to do right by the customer: to put the wellbeing of the customer on par with the wellbeing of the company (revenues, profits, share price).
Does Amazon Deserve To Be Called The Earth’s Most Customer-Centric Company?
We all know that Amazon works. It is easy to find and buy from Amazon. It is easy to keep track of where one’s order is. Amazon delivers the goods within the promised window. It is easy to return goods and get a refund. And on the only occasion something did not turn up when expected, I found it easy to get hold of Customer Services, and the call was handled by a friendly agent, who got my situation, validated my feelings, made a promise to have the issue fixed by the next day, and it was fixed.
This level of performance has kept me doing business with Amazon despite my concerns over Amazon’s tax avoidance strategy, and the concerns about how Amazon treats the folks who work in the warehouses. And to some extent my disposition towards Amazon has been a pragmatic one rather than one of affinity with what Amazon stands for.
This week the situation changed. What happened? My wife signed up for the Amazon Prime offer and she then enrolled me into it as well. As a result, I found renting and watching a movie (on demand) with my eldest son. The experience of selecting, paying for, and watching the movie was effortless.
The next day, to my astonishment (I do not use the world lightly), I found myself reading the following email:
We’re contacting you about your recent attempt to purchase “The Wolverine”. We recently learned that a technical issue may have prevented you from being able to watch this video. We’re very sorry about this.
To help make it up to you, we’ve issued a £3.48 for this order. The refund will be applied to your original order payment method and should complete within the next 2-3 business days.
We look forward to seeing you again soon.
Please note: this e-mail was sent from a notification-only address that cannot accept incoming e-mail. Please do not reply to this message.
Why was I astonished? I was and continue to be surprised that there is a commercial organisation that gives! What does it give? Proactive service. An apology. A refund. And all on the basis that a technical issue may have prevented me from watching the movie!
Once I got over my astonishment who was I left thinking-feeling? Given that I had watched the movie without any problems, and Amazon had been generous, I found a strong urge to contact Amazon and ask them to take their money back. Why? Because, I was brought up to repay good with good, generosity with generosity, considerateness with considerateness. Then I read the bottom of the email and found I could not reply to the email.
What did I find myself doing within 24 hours of receiving this email? I found myself buying a book, that I had been meaning to buy and had not bought, for £9 and watching a movie that I had not been intending to watch (this week) for £3.49.
Why did I do this? It occurred to me that I could not treat badly one who has treated me well. And as such I felt a pull to repay Amazon’s ‘goodness’ by repaying the £3.49, which I did by buying and watching a movie on the day of the email.
If the acid test of customer-centricity is putting the needs-interests of customers on par with the needs of the company then I am in no doubt that Amazon is customer-centric. Is this enough to show up as Earth’s customer-centric company? No. To win that mantle it occurs to me that an organisation chooses to prosper only by doing right by customers. That is how Amazon shows up for me this week. I cannot imagine any other company (that I am doing business with) taking the stance that Amazon takes in relation to its customers.
For those who are cynics, I get that Amazon may have taken a pragmatic decision to provide the refund so as to reduce the number of calls (and/or emails) coming into the call-centres. Even if this is the case, then the action that Amazon has taken is smart. So at the very least the folks at Amazon are smart in a way that also benefits customers.
Why Not Replace People With Technology?
In the second half of the 90s I was involved in consulting in the area of shared services. Being a sidekick I got to witness the sales pitch. What was the sales pitch? No human beings. Everything in the back office was subject to business rules. The business rules could be codified, programmed and back office work could be automated. No human necessary. Nirvana: 24/7/365 nirvana of efficiency guaranteed to deliver the same outcome each and every time.
Today, I notice the same love of technology as regards the front office: where the customer meets the enterprise. In this age of technology do people still matter? Do we need sales people given that content marketing will generate the interest, product demos can be put on the web, and the ‘inside sales’ people can take the orders? Do we need to have any people in marketing given that big data will generate the insights, decision engines will contain the heuristics, market resource management systems will hold the marketing assets, and marketing automation will take care of the execution of marketing campaigns? Do we need people in the call-centres taking calls given the extensive self-help that can be enabled through digital channels and every customer would prefer to interact via Twitter? Do we need people in the stores? Why not rebuild the stores so that they resemble a combination of a website and a vending machine?
What Do These Two Women Say On The Matter?
Allow me to share a conversation that I overheard the other day between two women. Before I do that let me set some context. Waitrose is supermarket chain in the UK and it is owned by The John Lewis Partnership. The John Lewis Partnership has been and continues to do well despite tough times for retailers. Tesco used to be the darling of the CRM press and used to be the dominant supermarket chain. It has not been doing so well since austerity hit. Morrisons is the fourth largest chain of supermarkets in the UK.
As promised here is the gist of the conversation (between two women) that I overheard at the weekend:
Mrs A: “Waitrose is known for their great customer service and rightly so. It’s easy to find someone to help you. And when you ask for help in finding something, the Waitrose person walks you across the store and takes you right to the item you are looking for. They are so helpful.”
Mrs B. “I was in Waitrose this week and wasn’t sure what ingredients I needed for eggs Benedict; I haven’t cooked them before. So I asked for help. The Waitrose man didn’t know either but he told me that he would find out. I saw him walk to one of his colleagues. Then he came back and told me what I needed and how to cook eggs Benedict. He was so helpful: he made my problem his own. That’s such good service.”
Mrs B. “The staff in Morrisons don’t walk with you to the item you are looking for. Yet, I always find them warm, friendly and helpful.”
Mrs A. “I don’t like Tesco. It is hard to find people in the store to help you. And when you do find someone to help they tell you where you can find the item, point towards it, and then leave you to it. They don’t walk with you and show you where it is. They don’t care – not at all like the Waitrose people.”
Mrs B. “I used to do all my shopping at Tesco. Then Tesco got greedy – pushing up prices and cutting down on the customer service. Now, I shop for the basics at Morrisons and the rest from Waitrose.”
My Take On The Situation
I’ll leave you decide whether people matter or not in the age of technology. For myself, I am clear that humans are simply more at ease in dealing with other human beings. And there is no substitute for great customer service – the way that the folks in Waitrose (and John Lewis) stores interact with their customers, and amongst themselves.
Before you rush off to revamp your customer service remember that one ingredient does not a dish make. A great dish always consist of the insightful application of a recipe – and the recipe requires a mix of ingredients, in the right measure, and sequence, cooked for just the right amount of time. How does one generate such insight? Through experience: on the battlefield of life. What is the recipe? The business philosophy and organisational design: what matters, who matters, the operating principles, how conflict is handled, how rewards are shared, how people are structured into groups, and how interactions-relationships-differences-conflicts are handled…
Please note: I am not in the business of giving advice (in this blog). So you shouldn’t take anything in this blog as constituting advice. In this blog I find myself involved in sharing my thinking and experience. That is all. Then you make of it what you make of it.
In this post I complete my take on the key assertion and the 4 findings put forth in the book The Effortless Experience. Before I launch into this post let’s recap the following points from the first post.
Recap of the essential points from the earlier post
The four major findings put forth by the authors:
- A strategy of delight doesn’t pay
- Satisfaction is not a predictor of loyalty
- Customer service interaction tend to drive disloyalty, not loyalty
- The key to mitigating disloyalty is reducing customer effort
Let’s also get clear on the scope of the research that gave rise to these findings. The primary mechanism was post (contact centre) call surveys completed by customers. And the scope did not included the end 2 end customer experience:
An important disclosure before we reveal the results and their implications: we intentionally limited this study to service transactions and their impact on customer loyalty.
And my position? I shared in the first post that these findings show up for me as a statement of the bleeding obvious. And it occurs to me that the headline grabbing finding “Satisfaction is not a predictor of loyalty” is misleading if not flawed. Now I fulfil on my promise to share my rationale.
Dealing with findings 2, 3, and 4
How many studies do we need to get that satisfaction is not a predictor of loyalty? Just look into your experience! I can be satisfied, even delighted, with a physiotherapist and switch to a chiropractor. Why? Because by switching I reduce my travel time from 45-60 minutes (each way) to 15-20 minutes each way. I can be satisfied with a particular restaurant and try out new restaurants that show up on my radar – usually as result of some recommendation. I can be satisfied with a particular mobile telco and switch because of some promotion heavily promoted by a competitor …
Who does the customer turn to when s/he has a pressing issue which needs to be dealt with? Customer Services and the folks sitting in some distant contact centre. What does it take for a customer to make the call to these contact-centres? My experience that many of us only call the contact centre if and only if we cannot address the issue through other means: internet, self-service channels, friends….. Why? Because, on the whole the experience of dealing with contact centres is effortful and painful.
It occurs to me that customers increasingly turn to Customer Services as a last resort and usually with the more complex issues/problems. And on the whole the Customer Services function is not designed to help customers with these complex issues/problems; contact-centres are staffed and run to minimise the cost of operations not to deliver a good customer experience. As a result of the mismatch between the needs of the Customer and the design-operation of the contact-centre customers often have to force a solution out from the contact-centre. That is to say that at best the interaction shows up as effortful. And there are many instances where the contact centre is unhelpful: quoting policy or making promises and not delivering on them as Customer Services has little power in the rest of the organisation. Given this is it any surprising that “Customer service interaction tend to drive disloyalty, not loyalty” and “The key to mitigating disloyalty is reducing customer effort”. Don’t take my word for it, read this post for my British Gas experience.
Dealing with the profound finding: “A strategy of delight doesn’t pay”
Take a look at delight. What shows up? For me, taken a phenomenological approach, the following shows up:
- I rarely find myself delighted in the course of interacting with companies of which I am a customer.
When I do find myself delighted it is because someone who is a representative of the company , or the company itself, has ‘given’ me something that shows up for me as valuable and which I did not expect.
Delight is contextual – the content which shows up as delightful in one context does not necessarily show up as delightful in another context. For example, being upgraded from an economy seat to a business seat, in Virgin Atlantic, for a transatlantic flight showed up a delightful. If I had been upgraded in the case of an hour flight the hassle would have probably outweighed the ‘delight’. Friendly-chatty service show up as delightful when I am relaxed and have plenty of time to spare; the same friendly-chatty service shows up as annoying-intruding-unprofessional when I am in a hurry and simply want the job done, the outcome delivered. If getting the job done turned out to be easier than I imagined, involved less effort on my part, then I tend to be delighted at how easy-effortless the experience was – whether conducting research, making a purchase, or contacting the customer services team and getting help with an issue.
In service transactions there is something like a recipe for generating delight in customers. The recipe involves: solving the customer’s problem; doing so quickly not leaving the customer hanging and most likely worried; minimising the effort that the customer has to make; and last but not least the human element – how you treat the customer as a flesh and blood human being with or without respect, with warmth or with coldness/indifference, as a unique fellow human being or just another call to be handled asap to meet the call time metrics….
How do the authors of the Effortless Experience see, define and measure delight? They see it very differently to me. They do not see delight in phenomenological terms: that which shows up in the customer’s lived experience – body and mind. No, they have defined a strategy of delight as consisting of a number of tactics falling under the category Moments of “Wow”:
“Moments of “Wow”
- Willingness of service to go above and beyond
- Applying knowledge about customers
- Exceeding customer expectations
- Teaching the customer
- Offering alternatives
- Perceived value of alternatives”
So what the author’s research is testing, if it is testing anything, is the effectiveness of these tactics in generating delight and thus loyalty. What if these tactics annoy customers rather than delight customers? Just this week, I rang my broadband supplier as my patience had run out. The contact-centre agent was helpful. In between conducting the tests, and understanding the size of my home, she was telling me about a special offer (wireless range extender) that the company had on, encouraging me to take advantage of this offer, and telling me she would be happy to guide me through the online process. Did this land as delightful for me? No! Why not? Because I just wanted her to fix my broadband so I could get my work done! I didn’t ring to get advice. I didn’t ring to get a free wireless range extender. I range because the broadband was slow, had been slow intermittently over weeks, and that day I desperately needed the broadband to work because I had pressing work to get done and for that I needed a fast (enough) internet connection!
Now take a look at what the authors have placed under the category of Customer Effort:
- Number of transfers
- Repeating information
- First contact resolution
- Number of contacts to resolve
- Perceived additional effort to resolve
- Ease of contacting service
- Channel switching
- Time to resolve”
It occurs to me that many of the factors that are likely to lead to delight showing up in customers, as a lived bodily experience, in-around-after a customer service interaction have been placed in the Customer Effort category.
If I am correct, this exhaustive research, the millions of data points, and the subsequent profound finding “Strategy of delight doesn’t pay” is:
- misleading at best;
- has been misinterpreted and misreported by many in the media (including bloggers) who failed to dive into the fundamental grounds of this research;
- does not prove that leaving customers feeling delighted does not generate an economic return.
I get that I make mistakes. If you see mistakes in the analysis that I have shared with you then please point them out to me by commenting.
The Effortless Experience Promises the Roadmap to El Dorado
Over the course of 2013 I noticed a certain buzz about ‘customer effort’ and its associated metric, the ‘Customer Effort Score’. So when I was invited to review The Effortless Experience (the book behind the buzz around customer effort) I took up the offer.
The central assertion of the book can be summed up by the following paragraph (page 3):
“Whilst most companies have been pouring time, energy, and resources into the singular pursuit of creating and replicating the delightful experience for their customers, they’ve ironically missed the very thing that customers are actually looking for – a closer in, more attainable, replicable, and affordable goal that’s been sitting right in front of them all this time: the effortless experience….”
That paragraph got my attention. Why?
First, because my experience contradicts the first half of the paragraph. It occurs to me that most companies have NOT been pouring time, energy, and resources into the singular pursuit of creating and replicating delightful experiences for their customers!
Second, the authors make a bold claim. Is there anything of substance to support this claim or is it as ungrounded as the first half of the paragraph?
The Effortless Experience: Four Core Findings
The authors claim that they surveyed over 97,000 customers and conducted a whole bunch of research through which they “ended up with a few million data points..” which they boiled down to four simple yet profound findings. What are these findings?
1. A strategy of delight doesn’t pay
“…. there is virtually no difference between the loyalty of those customers whose expectations are exceeded and those whose expectations are simply met… loyalty actually plateaus once customer expectations are met.
2. Satisfaction is not a predictor of loyalty
“… we found virtually no statistical relationship between how a customer rates a company on a satisfaction survey and their future customer loyalty..
3. Customer service interactions tend to drive disloyalty, not loyalty
“.. according to our research, any customer service interaction is four times more likely to drive disloyalty than loyalty…”
4. The key to mitigating disloyalty is reducing customer effort
” … four out of the five drivers of disloyalty are about additional effort customers must put forth…..”
What showed up upon a closer-questioning look at these ‘profound’ findings?
If one reads the book carefully it becomes clear that one has to be very careful about these findings. Why? Because the scope of the findings is limited to only one domain, one piece, of the end-2-end Customer Experience:
“We wanted to know ….. exactly which elements of the customer interaction with customer service have the biggest effect on making people more (or less) loyal….
In the first of these surveys, over 97,000 customers – all of whom had a recent service interaction over the web or through calling a contact centre….. – were asked a series of questions about their recent service interactions….
An important disclosure before we reveal the results and their implications: we intentionally limited this study to service transactions and their impact on customer loyalty.”
Now you understand the scope of this “exhaustive study” is limited to interactions between the customer and the contact-centre. And you understand that the data was collected through post call surveys.
Take a look at the four findings again. And think back to your telephone interactions with contact centres. Get present to the situation that led you to call the contact centre. Get present to the state that you were in just before you made the call. Get present to your experience of being on the phone to the contact centre. Now ask yourself if these four profound findings are not a statement of the obvious?
Looking into my own experience, the four findings showed up for me as being true to my lived experience. And yet nothing new. These so called profound findings show up for me as a statement of the bleeding obvious. In the next post (in this series) I will share my rational with you. I will also set out and explain my assertion that reducing customer effort in customer interactions with the contact-centre is a ‘strategy of delight’ and does generate delight in customers. Until then, I wish you the very best and invite you to share your perspective by commenting.
Many aspire to be great, few are great. It occurs to me that this applies at just about every level and all spheres of human life. Why is this the case?
What is missing the presence of which would make a difference in enabling more individuals-groups-organisations-nations to be great?
- Is it information? Do we lack adequate information?
- Is it a lack of frameworks, methods, tips and techniques? Do we need more-better frameworks-methods-tips-techniques?
- Is it perhaps lack of process? Do we need to inject more process into the human world, make it even more mechanistic than it is today.
- Is it a lack of metrics and management on the basis of these metrics? Do we need to come up with and put in place more-different-better metrics?
- Is it the lack of suitable tools? Do we need more-better-different tools?
- Is it strategy? Do we need more-different-better strategic frameworks and tools?
Consider the business world. Why is it that few organisations come up with great products like Apple does? Why is it that few companies get the online user experience and logistics right like Amazon does? Why is that few organisations call forth the best from their employees and deliver great customer service like John Lewis does? Why is it that few airlines excel in the ways that Virgin Atlantic and SouthWest do?
Or consider how it is that there has been so much talk and spend on Customer since 1999 when Siebel touted itself as the ‘fastest growing software company in history’, yet so few companies have got anywhere in cultivating meaningful relationships with their customer and/or really making much of an impact on the effectiveness of marketing, sales and service operations.
What answer did you come up with? Whatever it is that you came up with I ask you to put that aside for a moment and listen to the insight of Eliezer Sobel:
I finally figured out why I’m not enlightened. Over 30 years ago, when I had just made the proverbial first step on a “journey of a thousand miles” I heard the following well-known tale:
A man approaches a Zen Master and asks to be shown the path to enlightenment. The Master replies, “Okay, follow me,” stands up, and walks the man to a nearby river and into the water. Without warning, the Master forces the man’s head under the water and holds it there as he struggles violently for his life, until he is nearly dead. At last the Master pulls the man up, gasping for air, and says, “When you want to be enlightened as badly as you wanted to take your next breath just now, come back and see me.”
Again and again in the spiritual literature, and particularly in the fierce world of Zen, we come across stories that are similar………the message seems to be that enlightenment, or the realization of Truth, is not a casual affair for mere spiritual tourists, but only for the very rare individual willing to sacrifice any and everything, including his or her very life, in its pursuit.
It would mean putting enlightenment at the top of our To-Do list and priorities, ahead of career, family, comfort and security……..
Ram Dass, the well-known teacher and author of the canonic Be Here Now, once spoke of a picture he saw in the newspaper of an abused and battered infant wailing as it was taken out of the arms of its mother, reaching back desperately for its abuser. The message was clear: we are wired to choose the familiar and the comfortable at any cost.
What advice does Eliezer Sobel have for those of us – individuals and organisations – with the ambition or pretensions of greatness say in leadership, product design, customer experience, customer loyalty etc? Let’s listen once more:
Yet now, looking back, I’m wondering if I could have saved myself a lot of trouble had I simply answered the question implied by that story honestly: No. No I do not want to get enlightened more than life itself, more than I would crave my next breath in that situation.
If you have aspirations for greatness – for yourself, your team, your organisation, or your nation – then it occurs to me that it is well worth pondering Eliezer Sobel’s insight over this Christmas period.