Category Archives: Customer Philosophy
Jeff Bezos and Amazon have been in the news courtesy of Bezos latest letter to shareholders. If you have any interest in what constitutes a customer-centric orientation then I throughly recommend that you print out this letter and read it. If you are up for creating a customer-centric organisation then I recommend that you read this letter every day.
Annette Franz on Jeff Bezos and Customer Experience
Annette Franz over at CX Journey has a written an enthusiastic post referring to Jeff Bezos as a CX dream come true!. I recommend reading it, and I share one particular part of her post with you:
As a leader, Mr. Bezos shows that he’s both the customer and the employee champion. Reading through the 2012 letter again, the following traits and qualities come to mind – all of which are certainly descriptive of a customer-centric culture:
- Best interest of customers
- Not being opportunistic
- Customers ahead of shareholders
Do any of those describe your organization’s values and culture?
Bruce Temkin on Amazon and the customer-centric blueprint
Bruce Temkin says that Bezos letter describes Amazon’s customer-centric blueprint. Bruce picks up on Bezos strategy of making investments and sacrifices today (to benefit customers) knowing that some of these will pay of in the long term. There is one particular paragraph from Bruce’s post that I share with you here as I say it goes to the heart of the customer-centric orientation (bolding is my work):
Bezos understands the value of Amazon’s most critical asset, customer loyalty, which I’ve defined as the willingness to consider, trust, and forgive. That focus is what put Amazon.com on the top of the retail sector in the 2013 Temkin Experience Ratings. Great leaders focus on building that customer loyalty asset with the knowledge that it will generate the best returns for all stakeholders in the long run.
My take on Jeff Bezos, Amazon and the customer-centric orientation
I say that the core of authentic customer-centricity is a relentless ongoing commitment to creating compelling value for customers. What does Jeff Bezos say? Here is an extract from his 1997 letter (highlighting is my work):
From the beginning, our focus has been on offering our customers compelling value….. we set out to offer customers something they simply could not get any other way, and began serving them with books. We brought them much more selection than was possible in a physical store, and presented it in a useful, easy-to-search, and easy-to-browse format in a store open 365 days a year, 24 hours a day. We maintained a dogged focus on improving the shopping experience, and in 1997 substantially enhanced our store. We now offer customers gift certificates, 1-ClickSM shopping, and vastly more reviews, content, browsing options, and recommendation features. We dramatically lowered prices, further increasing customer value.
But we are not in 1997 and Amazon is now the gorilla of the online space not an upstart, a revolutionary. So lets take a look at the present situation. I say the real test of authentic customer-centricity is what you do when you have arrived, when you dominate the marketplace. I have worked with many large successful organisations. Again and again I have seen these organisations ‘squeeze’ the customer and take ‘advantage’ of the customer’s trust or the customers weakness to maximise profits. Has Amazon fallen into this trap? Here are two paragraphs from the April 2013 letter:
When you pre-order something from Amazon, we guarantee you the lowest price offered by us between your order time and the end of the day of the release date…….. Most customers are too busy themselves to monitor the price of an item after they pre-order it, and our policy could be to require the customer to contact us and ask for the refund. Doing it proactively is more expensive for us, but it also surprises, delights, and earns trust.
In 2012, AWS [Amazon Web Services] announced 159 new features and services……. AWS Trusted Advisor monitors customer configurations, compares them to known best practices, and then notifies customers where opportunities exist to improve performance, enhance security, or save money. Yes, we are actively telling customers they’re paying us more than they need to. In the last 90 days, customers have saved millions of dollars through Trusted Advisor, and the service is only getting started. All of this progress comes in the context of AWS being the widely recognized leader in its area – a situation where you might worry that external motivation could fail. On the other hand, internal motivation – the drive to get the customer to say “Wow” – keeps the pace of innovation fast.
Why has Amazon bucked the trend here? Why is Amazon not exploiting its dominant position? Why is Amazon not extracting value from its customer relationships to maximise short-term profits and drive up the share price?
My answer is that Bezos is not playing the profit maximisation game. I say that he is playing “maximise service not profits” game and as such he has built a culture and management doctrine that drives the appropriate thinking and behaviour. Here’s what Jeff Bezos say in his l2013 letter:
One advantage – perhaps a somewhat subtle one – of a customer-driven focus is that it aids a certain type of proactivity. When we’re at our best, we don’t wait for external pressures. We are internally driven to improve our services, adding benefits and features, before we have to. We lower prices and increase value for customers before we have to. We invent before we have to. These investments are motivated by customer focus rather than by reaction to competition. We think this approach earns more trust with customers and drives rapid improvements in customer experience – importantly – even in those areas where we are already the leader.
I say there is value in simplicity. I say that there is value in exceeding customer expectations. I say that one of the best ways of exceeding customer expectations is to give customers more than they expect. I say that customers expect companies to play dirty and take advantage. I say a sure route to delighting customers is not to do this and instead treat people right. What does Jeff Bezos say?
To me, trying to dole out improvements in a just-in-time fashion would be too clever by half. It would be risky in a world as fast-moving as the one we all live in. More fundamentally, I think long-term thinking squares the circle. Proactively delighting customers earns trust, which earns more business from those customers, even in new business arenas. Take a long-term view, and the interests of customers and shareholders align.
In amidst all this content it is easy to miss what really matters: the context. So let’s just take a look at the context. Between the 1997 letter and the 2013 letter, a span of 15+ years, there has been consistency:
- Leadership: Jeff Bezos continues to be in charge
- Focus: creating compelling value for customers
- Strategy: take calculated risks, innovate, invest today to create value for customers and look for payoff in terms of customer loyalty and market leadership in the longer run
- Management doctrine: the fundamental pillars of the management doctrine are set-out in the 1997 letter.
I have been reading Ten Principles Behind Great Customer Experiences by Matt Watkinson. What Matt writes and how he writes it resonates with me. It may resonate with you as well. So in this post I want to share some passages that particularly speak to me
Companies keep getting it wrong
There is a widespread view that there is a lack of understanding on the customer experience. That the reason the customer experience is so poor is that executives just don’t get it. It does not seem like Matt agree with this view.
Despite widespread understanding that the customer experience is critically important …… Products are too complex to use, small print leaves us feeling cheated, adverts bear little resemblance to reality, customer service is often rude……….
Is the cause the Vulcan death grip?
I am delighted to find that Matt and I are on agreement that the obsession with people and organisations as machines leaves no space for humanity and a feel/respect for the most human of human to show up: emotions.
Businesses primarily follow the Vulcan model, seeing their enterprises as a supremely rational endeavour….. As the doyen of design Don Norman concludes ‘Business has come to be ruled by logical, rational decision makers…. with no room for emotions. Pity!”
Clearly the more in touch a business is with with our emotional wants and needs, the more its products or services will resonate with us.
…. while Kirk is captain, Spock serves as his first officer….. This should serve as an excellent model for business to emulate when making decisions: a total understanding of the consumer – their thoughts, feelings and experiential requirements – balanced by rigorous analysis… In most cases, however, the rational and analytical have become substitute for a more empathic, human understanding rather than the other side of the coin…
Out of touch with the customer and addicted to measurebating?
There is no substitute for empathy. And empathy requires us to be in direct contact with their customers: to see their faces, to look into their eyes; to hear their voices, the tone of their voices…. Yet, that is not the way that businesses work, especially not the Tops who make the decisions.
….’Companies have become so dependent on models that many organisations have started to lose touch with reality. Without personal connection to the people they serve, companies lack the context, immediacy, or experience they need to make good decisions. Far too many leaders make critical decisions without any personal feel for the territory.
When working on website projects I’ve often been asked to make the phone number for customer services less prominent. ‘We have a strategic objective to reduce traffic to our call centres’…. This demonstrates a tendency for people to advocate decisions that can degrade the customer experience when numbers and analytics work against empathy.
What is the impact of our addiction to numbers, measures and calculations?
After covering the Eichmann trial, Hannah Arendt coined the term the ‘banality of evil’. As I understand it her point was that Eichmann was ordinary and most of the people who were directly and indirectly involved in the evil of the concentration camps were ordinary. What allowed them to do what they did? In part it was by replacing people with numbers.
What does Matt Watkinson say? He points out that when we reduce human beings to mere numbers, statistics, it’s hard to see them as people. And that has consequences, it allow us to treat people badly.
Numbers and calculations can rob people of their humanity with truly harrowing consequences. In his deeply thought-provoking paper ‘Accounting in the Service of the Holocaust’, Warwick Funnel argues that ‘Accounting numbers were substituted for qualitative attributes of individuals thereby denying them their humanity and individuality…. (Accountability) was not only a means of expediting the annihilation of the Jews but was also one of the means by which people who had no direct involvement in the murder of millions of Jews were able to divorce themselves from the objectives and consequences of their work.’
Worshipping at the altar of efficiency has a price?
The modern organisation violates a fundamental principle of organisms that have been adapting-evolving-surviving for millions of years. What is that principle? It is the principle of redundancy. Have you noticed that you and I can do with only when kidney if we need to yet we have two. And if one fails then we can still get along, survive. What does Matt Watkinson say?
..the optimisation and standardisation of processes to reduce waste and maximise efficiency has dominated the focus of many organisations…… Computers and machinery are mercilessly replacing humans…… in their zeal for efficiency, some of engineered out all the slack … at the expense of agility. The consequences for customer experience can be severe: hyperefficient companies are usually unable to respond to customer expectations, and any customer issue that does not fit neatly into the optimised solution cannot be dealt with satisfactorily.
Lack of vision driven by an obsession with the short-term
One of the most remarkable aspects of business is the disconnect with reality. I am fond of comparing what it takes to make a safe flight happen. That is to say in the real world of flying one has to deal with reality as it is. And when one doesn’t planes fall out of the sky. Yet, it occurs to me that the business world, especially Tops, are often deluding themselves. Here is how Matt puts it:
… its no good getting on a late plane and telling the pilot to just fly faster. If you want it sooner, you need to start earlier, and that means looking further into the future. Therein lies the rub. Too much of what business undertakes is driven by short-term thinking. A poor customer experience is often symptomatic of a bigger problem: a lack of vision at the top or a programme structured around quarterly profit statements.
The empty chair of Customer Experience
Matt points out that in almost all organisations the Customer Experience chair is empty. And that has consequences.
In the business that you work for, who is responsible or indeed accountable for the customer experience? …. Getting the customer experience right necessarily involves coordination of almost every part of the business, but if no one person is ambiguously calling the shots then failure is almost certain…
I have only touched a little of the great, easy to read, book that Matt Watkinson has written. If you have any interest in Customer Experience then I recommend buying and reading it.