Category Archives: Customer Loyalty
As a thinker, I am struck by how rare original thinking is in the organisational world. As a thinker, I am struck by how little thinking – as in stopping and reflecting on that which is occurring and the pattern of this occurrence – occurs in organisations. As a thinker, I am struck by how little space exists within organisational life for ideas to be entertained and grappled with before the mindless rush to implement these ideas usually through some off the shelf methodologies, methods, tools and techniques.
I say that the idea of Customer Loyalty had power. And this power vanished when we rushed to turn this idea into practical customer loyalty programmes: loyalty cards, databases, offers and points.
I say that the idea of Relationship Marketing had power. And this power was drained and Relationship Marketing turned lifeless when the idea of Relationship Marketing was turned into the technology of CRM: systems that enslave human beings in data capture and script/process following slaves.
I say that the idea of Customer Experience has awesome power. And many are bleeding this idea dry, void of power, by turning it into the methodology of customer journey / touchpoint mapping, the blind worship at the voice of the customers, and the technology of Customer Experience.
What is it that I am getting at? Let’s see if I can communicate that which I am seeking to communicate to the practical people that dominate organisational life. I invite you to read the following words of wisdom (bolding is my work):
The word idea supposedly originates in the Greek word eidos, which means something seen like a form and a way of seeing like an eye, a perspective. So, ideas are not only things you can pick up and ponder. They also give you eyes, new ways of seeing things. Ideas are already operating in our perspectives, the way we look at things. We take our usual ideas for granted, and so, ideas have us rather than we have them….
Is the idea fertile, fecund? Does it make you think? Is it surprising, shocking? Does it stop you from habits and bring a spark of reflection? Is it delightful to think it? Does it seem deep? Important? …. This requires you to ponder it, which means weight it, feel its weight…. Pondering is an action of its own and keeps you holding the idea, from letting it go into other kinds of action before it is fully appreciated. Meanwhile you get a better feel of the idea….
You know, to have an idea and thinking about the idea are two different things, and being practical often means skipping over the hard thinking part…
For ideas to be therapeutic, that is, beneficial to the soul and body politic, they must gather into themselves, garnering force, building strength, like great movers of the mind’s furniture, so that the space we inhabit is rearranged. Your thoughts, feelings, perceptions, memories have to be moved around in new ways, because the furniture has been moved.
A long lasting idea, like a good poem or a strong character in a movie or a novel, continues to affect your practical life without ever having been put there. Ideas that live, live in us and through us into the world. Viable ideas have their own innate heat, their own vitality. They are living things too.
But first they have to move your furniture, else it is the same old you, with you same old habits, trying to apply a new idea in the same old way. Then nothing happens at all except the loss of the idea as “impractical” in your haste to make it “practical”.
- James Hillman, We’ve Had A Hundred Years of Psychotherapy And The World’s Getting Worse
It occurs to me that the conversations that take place here, at The Customer & Leadership Blog, are simply an ongoing exploration and pondering of the ideas of customer relationships, relationship marketing, customer service, customer loyalty, customer experience, customer-centricity, and leadership.
I am no expert, no guru, in customer relationships (CRM), relationship marketing, customer service, customer loyalty, customer experience, customer-centricity, nor in leadership. Yet, it occurs to me, that it might just be that I have grappled with these ideas at a deeper level than many. Therefore, any value that i create for you – the person who listens to my speaking – arises out of my willingness to stay with the idea rather than rushing to provide you with a silver bullet for your organisational ills.
Why I have shared this with you? To provoke thought: to provoke you into doing deeper thinking into the Customer realm before you go and buy the latest snake oil from gurus, experts, consultancies, and IT vendors. Incidentally, don’t reach for the dictionary to look up definitions of all things customer: customer service, customer relationship management, customer experience etc. Why? Definitions only provide the illusion of knowledge and understanding. There is no replacement for original thinking. A good start would be the following questions:
- What world of possibility does the idea of Customer Experience open up for us and our customers?
What might Customer Experience Leadership look like, feel like, sound like, taste like – for us, for our customers?
What is the first step on the journey of Customer Experience Leadership for us? Is it really getting access to the voice of the customer? Or is it doing that which we know needs to be done for our actions to be in tune with our words?
And finally, I invite you to consider that many if not most organisations have failed to make a success of relationship marketing, CRM, customer loyalty, customer experience etc because these ideas have failed to ‘move your furniture’ leaving the same old you, with the same old habits, trying to apply these radically new ideas in the same old way.
If you have made it this far into the conversation, I say thanks for listening. These conversations are not easy, not simple. This is deliberate – these conversations are designed to provoke thought from the thoughtful. They are not for the impatient looking for the ten steps to customer success.
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.
2014 State of Customer Experience: Who Are UK’s 2014 Leaders And What Can We Learn From Them? (Part 1)
Yesterday, I received one of the few publications I find worth reading. Which publication? The 2014 UK Analysis put together by Nunwood‘s Customer Experience Excellence Centre. In this series of posts, I will be sharing with you my take on this report and its findings and recommendations. Let’s start with the dominant themes.
Little Change In The State of Customer Experience Excellence From 2013
The foreword by Marketing Week is full of the kind of exaggeration-hype that goes with much of marketing:
With customer experience now firmly established as the main competitive battleground for ambitious leaders, this is a uniquely rich insight into the best practices needed for success…..
- Mindi Chahal, Features Writer, MarketingWeek
Did you get the clue? The clue lies in the adjective ambitious as in ‘ambitious leaders’. It turns out that of the 250+ brands surveyed by Nunwood only a very small number are ‘ambitious’. And as such little has improved overall as regards the state of customer experience excellence in the UK. Which kind of makes me question the claim that customer experience is now firmly established as the main competitive battleground. My experience is that whilst it is talked about, that is pretty much all that happens: talk.
What do the folks at Nunwood say on this matter? This is what they say (bolding is my work):
A minority of brands are shining every brighter …… These examples of brilliance are dimmed by the larger set of brands whose efforts have stalled. Either because they have hit cultural glass ceilings …… or the ambition of their leaders has failed to match the rising expectations of UK consumers … This has meant that across all 263 brands analysed the overall improvement in performance was less than 1%.
The Biggest Improvement In Customer Experience Excellence Has Occurred In The Financial Services Sector
Which sectors show an improvement? Three of them: financial services, entertainment & leisure, and travel & notes.
Which sectors are stagnant? Three of them: telecommunications, restaurants & food, and non-food retailing.
Which sectors have declined? Two: utilities, and grocery retailing.
Did the financial services sector make the 2.2% improvement due to benevolent-enlightened leadership? Or a new found love of the customer? Or was it because some teeth have been put into a regulator and regulation? Here is Nunwood’s take on the situation (bolding is my work):
The financial services sector sees the largest improvement in performance …. This is in no small part due to the burning platform created by the government, media and regulators. New FCA-mandated focus on customer outcomes … has led to massive investments and exhaustive leadership attention.
It occurs to me that here we have a clue as to why there has been little or no change in all the other industry sectors. Organisations and the Tops that lead them do not willingly stop screwing their customers and employees. And so switch from the easy and established way of making ‘bad profits’ to doing the hard stuff of generating superior customer value and thus reaping ‘good profits’. This kind of behaviour is arrested and weakened through a combination of effective regulation and sustained media pressure. Which may explain why it is that the utilities sector, which has been the weakest in terms of customer experience excellence has slipped further down the rankings. In my view-experience the Ofgem, the regulator for gas+electricity market, is about as toothless as you can get.
The Same Brands Continue To Shine And Some Shine Less Brightly
By now, I suspect that you may really want to know who the UK’s Customer Experience leaders are. Here are the top 10:
1. First Direct (bank without high street presence)
2. John Lewis (multichannel retailer)
3. QVC (tv based shopping channel)
4. Lush (retailer)
5. Amazon (online retailer)
6. Appliances Online (online retailer of appliances)
7. Waitrose (grocery retailer)
8. Nationwide (building society, financial services)
9. Specsavers (retailer)
10. M+S Simply Food (grocery retailer)
10. Your M+S (retailer)
Here are my take on this Top 10 list in comparison with 2013:
- Virgin Atlantic and Ocado have dropped out of the Top 10. Virgin is now at number 21, and Ocado just outside the Top 10 at number 12.
Appliances Online, Nationwide, and Specsavers are new to the Top 10. This is what Nunwood says about Appliances Online (ao.com):
A clear value proposition wedded to an excellent service culture sets the brand apart.
- Amazon continues its slide down the rankings here is what Nunwoods says:
Amazon …… continues to slip slightly in the rankings for the third year in a row, as consumers react to declining perceptions of its integrity and the performance of its delivery companies.
Waitrose ascends the rankings moving from being number ten (2013) to being number 7 (2014).
M+S (both Simply Food, and Your M+S) descend towards the bottom of the Top 10 in 2014.
My personal take is that Your M+S is a retailer in trouble. Management, probably in desperation, are bullying store managers. This then cascades down to the people on the shop flower. And in turn impacts the customer experience. So it will be interesting to see where Your M+S stands in the 2015 rankings.
The Secret of Customer Experience Success: Put Your Customers Second
You may have noticed that I insist on the need for and the critical importance of the human dimension: calling forth and putting into play the best of our humanity in order to orchestrate great relationships and generate great experiences. In short, to create a better world, a world that works for all: employees, suppliers, management, customers, shareholders, and the community.
More than once I have spelled out that the access to great customer experience lies through the folks that actually interact with and serve customers: the people working in the business and especially those who interact with and serve customers on a daily basis. Not technology! Technology can enable or hinder the customer experience. It is merely a tool.
Which means that there cannot be excellence in Customer Experience without excellence in Employee Experience. And these two have to be in tune with one another.
What does Nunwood say on the matter? Here is what Nunwood says (bolding is my work):
With only a single exception, the top 10 ‘Champion’ brands are characterised by their evangelical employees and superior cultures. Employees who are exceptionally proud of the brand they represent and the job they do each and every day for customers. Their culture plays a pivotal role in creating outstanding customer experience and they value that some culture first and foremost. In a very real sense, employees come first and customers come second.
Which is the single exception? I take it to be Amazon. And in the longer term this could be the undoing of Amazon.
Enough for today, I will continue this conversation in the next post. In that conversation I propose to explore the underlying factors that show a correlation with Customer Experience excellence. Until then I wish you the very best.
What Is The Access To Calling Forth The Best From Your People and Cultivating Authentic Customer Loyalty?
In the realm of business, first and foremost, I show up (for myself) and travel as a philosopher-strategist. One of the central concerns in philosophy used to be ethics: how to live well in this world with others. This has not been the case for quite some time and may account, to a large degree, to the way the world is and is not. One of the central pillars of strategy is focus: bringing to bear all your resources to the key leverage points at the right time/s.
Looking through the ethical and strategic lenses, I have been grappling with the question of performance and loyalty: what calls forth the best from the people who work in your business and what is he access to authentic customer loyalty? The kind without bribery, without the gimmicks. In my search I came across a wonderful book. Today, I wish to share with you certain passages that speak to me and may provide an answer to the question that I have posed here (bolding is my work):
When people work in conditions of perceived unfairness and unkindness, they fall into a self protective mode. Like turtles, they crawl into their shells and hide. They’re not motivated to take positive risks, to dig deep inside to discover all their talents and bring those talents to bear in creative ways on the challenges of the corporate business. Their emotions are tinged by fear and resentment, and these negative feelings block the flow of positive emotional energy the could be putting to work in their daily activities…..
… employees who feel honourably treated are most likely to pass on that honour and respect in their dealings with customers, potential customers, and vendors. Those who feel badly treated will quite often pass on some of that treatment as well to those outside the company with whom they have contact. And this can become a flash point for whether business is gained or retained. Most people find it difficult over the long run to buy even good products from bad or discourteous people.
Relationships Rule The World
In the course of my life so far, I have become totally loyal to any number of businesses ….. because I felt well treated in each of these places, welcomed, honoured, and respected. Friendliness, kindness, genuine concern, that little extra touch, going beyond the call of duty – these are all exemplifications of basic goodness, applications of the moral dimension that often bring with them the result of loyal relationships and greater business success…
Go ahead and develop a strategy, change the organisation structure, redesign processes, and implement the latest Customer Experience technologies. And it occurs to me that if you don’t talk about, grapple with, and address the questions of liberation and basic goodness as exemplified by friendliness, kindness, fairness and genuine concern for the people in your business (those who work ‘within’ it), the people served by your organisation (customers), and the people impacted by your organisation (community, vendors, partners..) then you are unlikely to ever build a solid foundation that allows you to call forth the greatness of your people and cultivate enduring authentic relationships with your customers.
I know that this is a BIG ask. Sit in on counselling sessions and you will learn that almost every single one of us resists acknowledging, understanding, and dealing with that which really matters. We will do just about anything and everything except that which really matters: how we show up and travel in the world and in particular who we relate to and treat our fellow human beings including those closest to us. And some folks do the difficult work and by so doing the live lives and make an impact in the lives of others that is uncommon.
I wish you a great day, thanks for listening. I welcome your thoughts, your experience on that which I have shared here today.