Category Archives: Customer Loyalty
Let’s leave aside the theoretical aspects and arguments related to the suitability of using NPS. Instead, let’s consider the implications of using NPS as a performance management tool rather than simply as an indicator which tells us who well we are doing, as an organisation, in building meaningful relationships with customers.
Every human activity produces both things that we want – “goods” – and things we don’t want – “bads”.
- Garrett Hardin, Filters Against Folly
It occurs to me that when we use NPS as a performance management tool we act on the people in the organisation, we act on customers, we alter the balance of power between the multiple parties. And we inject high does of fear and greed into the rich tapestry of human interactions.
This is how we end up generating the “bads” – the dark side of using NPS as a performance management tool. Let’s get specify and look at the dark side. What shows up?
- Customer facing employees (sales, service) and their managers game the system to generate high NPS scores;
Some customers are either ‘bribed’ and-or ‘pressured’ to give high scores;
Some customers, especially the more powerful ones in B2B, exercise their new-found power to extract concessions – free ‘products’, more discounts, credits, special treatment – from the sales reps and account managers; and
Some sales reps and account managers ‘give away’ more than they need to’ in order to play safe and assure high NPS scores. This ‘giving away’ tends to be in the region of services which do not directly impact on the revenue figures and commission cheque of the sale rep.
I leave you to decide whether the “goods” generated by using NPS as a performance management tool outweigh the “bads” that I have shared with you. I do assure you that points 3 and 4 above are not just theoretical – this behaviour is occurring.
Next time you are planning an intervention in the rich web of human relationships get together a diverse group of people, including those who are likely to be impacted, and explore this question: what is likely to happen – today and over the course of time – after we make this intervention?
Marketing and Customer Experience: 6 Core Emotional Needs That Shape Human Behaviour (Part 2 – Control)
If you read the first post of this series you may remember that Mark Ingwer in his book Empathetic Marketing asserts that there are 6 core emotional needs of customers: control, self-expression, growth, recognition, belonging, and care. In this post I share my thoughts and Mark’s assertions-insights regarding the primary emotional need: CONTROL.
Satisfying the need for control provides the best access for building customer loyalty
Mark Ingwer is bold in his assertion when it comes to the need for control and the access it provides the smart business:
… satisfying the control needs of the consumer, more than any individual need discussed in this book, holds the most potential for a company to build loyalty to a brand, product, or service through intrinsic motivation, which is the internal sense of satisfaction with the purchasing process and the resulting purchase.
Through the iPod and iTunes, Apple handed control of music over to the music listener. Through the iPhone, iPad and the apps store, Apple handed over much more control over these devices to the user such that each iPhone, each iPad, can truly be customised to the user by the user. Please notice the genius here. By handing so much control over to the user and making it easy for the user to exercise this control, Apple has created a context where each iPhone, iPad is unique and thus irreplaceable. Hence, the value if iCloud.
Why is the need for control such a vital need?
Think for a moment about the last time that you did not have any control over an important aspect of your life. What showed up for you in your body? What emotions surfaced? Was it a pleasant experience? An experience you want to repeat? If you are human then it is likely that this experience was a deeply unsettling one when it occurred. Here’s what Mark Ingwer says on this matter
The need for control fuels our motivation in every aspect of our lives. Positioned near the individuality pole of the needs continuum, control is essential to our every day functioning. We see how this need influences our lives most profoundly when we’re not in control. Some of life’s worst and most stressful predicaments are colored by feelings of helplessness – events in which we are unable to prevent or alter the inevitable.
I invite you to consider the direction of human progress. Is this progress, as in increasing control over that which showed up an threatening for us or made life uncertain or merely difficult? Do you doubt that our ideal, even if unstated, is to have complete dominion (control) over that which shows up on planet Earth. And then our galaxy and eventually the universe. Why might this be? Here’s Mark Ingwer again:
Many situations that fall outside the purview of personal agency hit us in the gut. We feel insecure. We feel small. We fear losing control. And we strive to regain that control. Not only does that loss of control prevent us from achieving our specific outcomes, but it is also often wrenching evidence that signifies our relative insignificance in a large (and largely random) universe.
When we feel in control of external events, in control of ourselves, and in control of our core relationships, we have a broader and more satisfying feeling of contentment and confidence …. we can’t grow as individuals without attending properly to this need.
Customer service and the power of control
Why is it that I do most of my shopping online and do all of my banking online? Because I experience being in control of the shopping process, the banking process. Why is it that I dread having to call up most call-centres? Because, even before I pick up the call I expect a long-tedious-unpleasant experience where I am at the mercy of the IVR, long waiting times, call-centre agents who lack the expertise-will-freedom to actually help me ….. Here is what Mark Ingwer says on the matter:
Nothing reveals the power of control – and the destructive power of lack of control – than customer service situations. Companies that sell services or routinely interact with their customers in service settings must pay special attention to a customer’s sense of control.
Poor customer service results when proxy control is ineffective. If the proxy does not behave as the customer desires, the customer loses control of the situation.
If you are wondering what proxy control is then think about wanting to do your banking online and finding that the website is out of operation. Or imagine needing cash, turning up at the ATM and finding that it is out of order and there are no other ATMs available. Or imagine, ringing up the call-centre and coming face to face with an call-centre agent who speaks with an accent you find hard to understand. Or imagine going to the restaurant with the family, having eaten your meal, finding your young ones tired, looking for a waiter to pay the bill, and the waiter seems to take forever to come back to take your payment. You are desperate to go home and yet cannot do so until the waiter comes over to you and takes your payment.
What advice does Mark Ingwer have for marketers and customer experience specialists?
What I like about Mark Ingwer’s book is the practical suggestions that he provides at the end of each chapter. Here is his advice for marketers and customer experience specialists, as it shows up for me:
1. Review your core marketing message. It should say to customers: you can be in the driver’s seat – assuming products and service can deliver.
2. Examine the customers’ experience. Are prospects and customers in control throughout the path to the final sale and afterwards?
3. Simply after-sales processes.
If you want to learn more about these practical recommendations then you will have to buy the book and read it as I do not want to give away Mark’s secrets and deprive him of readers for his book.
If you remember only one sentence then remember this one
It occurs to me that when it comes to the end to end customer experience then this is the one sentence that captures it all when it comes to the human need for control:
From start to finish, customers must never sense that they are at the mercy of a company or product.
The last time I was in such a situation I walked out of the cinema, choosing not to watch a film that I really wanted to watch, rather than be at the mercy of the cinema and its staff.
In the next post, I will cover the human need for self-expression. It occurs to me whole industries are based on this need. I thank you for your listening.
You are most effective when you act out of essential human values. When you behave with integrity, you use the challenges in your life to express your higher self. You might not always achieve success, but you can always behave honourably……
Essential integrity allow you to develop strength, inner peace, and self confidence. It acts like a climbing harness, catching you when the challenges of the world prove too arduous. When you trust this harness, you feel more enthusiasm and less fear during the climb.
Essential integrity provides the secret to achieving happiness in a world where you will inevitably end up losing all your possessions – even your life and the lives of those you love.
- Fred Kofman, Conscious Business
I say that essential integrity is also the access to living the brand promise, treating employees and customer right, and cultivating enduring-meaningful relationships with all stakeholders including customers. Think Amazon. What does Amazon do amazingly well? Live the Amazon mission (of being the Earth’s most customer-centric company) by keeping its promises to its customers.
I thank you for listening to my speaking. I am grateful that you exist and that in your listening my speaking finds fertile soil. I thank you for reaching out to me and letting me know that my speaking, my existence makes a difference to your existence. What is present between me and you is love.
Imagine coming across a car that grabs your attention – in particular you are taken with the handling and performance of the car. So you take a look at this car and identify the features that contribute to or help shape the performance of this car. Having done so, you set about adding those features – bigger tyres, different exhaust system, different engine – to your car. How likely is it that you car will generate the kind of performance that you are after? How likely is it that your car won’t even start and if it does the performance will be less than it was before you added the ‘shiny objects’?
Given that so few of us would be this stupid in the domain of cars why is it that so many are this stupid when it comes to the organisational domain? Why is it that so many organisational people take ‘shiny objects’ or ‘best practices’ and start adding them to their organisation in the expectation that they will replicate the success of high performing organisations?
Can you take this cherry picking approach to Customer Experience and customer loyalty? Can you just tack on a veneer of Customer Experience to your organisation and thus cultivate customer loyalty? Can you tack some Customer Experience ‘shiny objects’ (almost always these involve technology) and ‘best practices’, here and there in your organisation, and reap the benefits that come with a loyal customer base? No!
I want to take you back to 1993 and the wise word of Frederick Reichheld:
Building a highly loyal customer base cannot be done as an add-on. It must be integral to a company’s basic business strategy. Loyalty leaders like MBNA are successful because they have designed their entire business systems around customer loyalty. They recognize that customer loyalty is earned by consistently delivering superior value ….. Designing and managing this self-reinforcing system is the key to achieving outstanding customer loyalty.
When a company consistently delivers superior value and wins customer loyalty, market share and revenues go up, and the cost of acquiring and serving customers goes down. Although the additional profits allow the company to invest in new activities that enhance value and increase the appeal to customers, strengthening loyalty generally is not a matter of simply cutting prices or adding product features. The better economics mean the company can pay workers better, which sets off a whole chain of events. Increased pay boosts employee morale and commitment; as employees stay longer, their productivity rises and training costs fall; employees’ overall job satisfaction, combined with their knowledge and experience, leads to better service to customers; customers are then more inclined to stay loyal to the company; and as the best customers and employees become part of the loyalty- based system, competitors are inevitably left to survive with less desirable customers and less talented employees.
I recently read Setting The Table by Danny Meyer. This book shows up for me as inspiring, useful and entertaining. In this post I want to share with you a few passages from this book and my thoughts on these passages. In the process I question the value-power of Customer Experience.
What gave rise to Danny’s way of showing up in the world?
In France we usually stayed in low-key, family run inns where the welcome felt loving and the gastronomy was exceptional. Those trips left a lasting impression. The hug that came with the food made it taste even better! That realisation would gradually evolve into my own well-define business strategy……..
Take a look at your business, your organisation and ask yourself whether your welcome occurs as loving and your ‘product’ as exceptional as experienced by your customers. How did you fare? I say many, if not most organisations, have huge room for improvement here.
Does genuine customer-centricity lie at the heart of Danny Meyer’s business strategy?
The heart of Danny Meyer’s business strategy is being on the customers’ side. Here is how he puts it:
Hospitality is the foundation of my business philosophy. Virtually nothing else is as important as how one is made to feel in any business transaction. Hospitality exists when you believe the other person is on your side……. Hospitality is present when something happens for your. It is absent when something happens to you. Those two simple prepositions for and to - express it all.
I invite you to take a look at the policies and practices of your organisation and assess how your organisation rates on the for and to dimensions. If your organisation is like the multitude of organisations you are likely to find that your organisation is not hospitable. Put differently, you are likely to find many instance of to and few of for if you look at your organisation through your customers’ eyes.
Is there power in distinguishing between hospitality and service?
When we make new distinctions new worlds of possibility open up for us. Danny Meyer has generated such a distinction and living it has been the source of his success.
Understanding the distinction between service and hospitality has been the foundation of our success. Service is the technical delivery of a product. Hospitality is how the delivery of the product makes its recipients feel…… To be on a guest’s side requires listening to that person with every sense, and following up with a thoughtful, gracious, appropriate response. It takes both great service and great hospitality to rise to the top.
My question for you is this, has your organisation invented new distinctions that open up new possibilities? Or are you stuck in the taken for granted and common distinctions of your industry? I say that everything starts with inventing new distinctions. Lets take the area of customer service. What happens when you invention the distinction ‘customer love’ and contrast it with ‘customer service’? Notice ‘customer love’ cannot be collapsed into ‘customer service’. Why? Something new-fresh is born with ‘customer love’. The distinction ‘customer love’ calls forth a very different way of being-showing up in the world to ‘customer service’.
Incidentally, I say that there is no power, no vitality, no freshness, and no possibility in the distinction ‘Customer Experience’. This distinction has been made empty and meaningless by the way that it has been embraced. I’ll let you chew on that and get back to me if you disagree.
Do most businesses delivery plenty of light but no warmth?
I love the way that Danny Meyer uses concrete metaphors to make instructive points. Here is one that is particularly valuable and in line with the lamentations of Colin Shaw:
Imagine if every business were a lightbulb and that for each lightbulb the primary goal was to attract the most moths possible. Now what if you learned that 49% of the reason moths were attracted to the bulb was for the quality of its light (brightness being the task of the bulb) and that 51% of the attraction was to the warmth projected by the bulb (heat being connected with the feeling of the bulb).
Its remarkable to me how many businesses shine brightly when it comes to acing the tasks but emanate all the warmth of a cool fluorescent light. That explains how a flawless four-star restaurant can actually attract far fewer loyal fans than a two or three star place with soul.
How does your organisation fare on the light-warmth scale? And in your Customer Experience efforts are your business cases and people focussed on improving the light or the warmth? From what I have seen, and what Colin says, it occurs to me that the bulk of Customer Experience efforts are focussed on the light.
Does your organisation lack soul?
It occurs to me that the distinction ‘with soul’ is worth savouring. I invite you to ask yourself how many businesses show up in your experience as showing up ‘with soul’? When was the last time you experienced a product ‘with soul’? Or the last time you were served ‘with soul’? What about the last time you came across marketing literature ‘with soul’? When was the last time you came across a salesperson ‘with soul’?
I say that most workplaces and most brands lack soul. And the challenge is for these organisations to put soul back into workplaces and brands. It occurs to me that even that is not enough. It occurs to me that the true challenge is for us to show up ‘with soul’ each and every day and collectively put soul back into the game of business. What do you say?