Category Archives: Customer Strategy
It occurs to me that we, human beings, are curious creatures.
We pride ourselves in our rationality and yet are permeated through and through with ideology and superstition. We are convinced of our individuality whilst at the same time being terrified of sticking our heads above the crowd. We are capable of amazing feats yet find it hard to resist taking the short-cut.
Allow me to share the following story with you:
Nasrudin sometimes took people for trips on his boat. One day a professor hired him to ferry him across the wide river.
During the journey the professor, wanting to impress Nasrudin, talked on-about many topics: politics, the great books of literature… When Nasrudin didn’t respond the professor asked him if had anything to say.
“I didn’t go to school and I can’t read,” said Nasrudin.
“In that case, half your life has been wasted!” replied the professor condescendingly.
Nasrudin said nothing.
Soon a storm blew up and Nasrudin boat start filling up with water. Nasrudin leaned towards the professor who was looking rather pale.
“Can you swim?”
“No. I never learned to swim. It didn’t seem that important,” said the professor.
“In that case, schoolmaster, ALL of your life is lost, for we are sinking.”
It occurs to me that in the world of business we are so bewitched by ideologies (which are invisible to us), fanciful stories and the latest silver bullets. Being so bewitched we neglect the fundamentals.
What are the fundamentals of your business? It occurs to me that this is a good question to grapple with as an organisation. And to come to an agreement. Yes, it sounds simple and you would be surprised how rare it is to come across a management team that has grappled with this question and come to an shared agreement. It is even rarer to find a shared agreement that stands up to deep questioning.
When it comes to the fundamentals as viewed from the eyes of the customer, I tend to find myself in agreement with Patrick Barwise and Sean Meehan in their book Simply Better:
Customers don’t want bells and whistles and don’t care about trivial differences between brands. What they really want are quality products, reliable services, and fair value for money. Yet most companies consistently fail to meet these basic needs.
It occurs to me that Amazon does so well because the folks at Amazon are relentless on the fundamentals of internet retailing: site design, site performance, customer reviews, ease of buying, on-time delivery, quality products, valuable services (ebooks), ease of returns, value for money …
Finally, it occurs to me that the real value of Customer Experience lies in encouraging your organisation to get present to and pay attention to the fundamentals of your organisation as they show up for your customers.
What Is The Achilles Heel of Strategy?
My colleague and I put our whole selves into our work talking with folks in the business, listening to customer conversations, reviewing research, looking at competitors and trends, looking at various approaches, evaluating these approaches and coming up with optimal course of action for our client and our client’s customers.
To our delight the strategy was accepted-approved by management. A month or so later we got busy on implementation planning. It was during the implementation planning when hard decisions had to be made that the commitment to the digital strategy unravelled. Our clients got the value of pursuing the digital strategy and they found themselves in a particular situation which called forth and drove a different set of choice and actions.
This is the Achilles Heel of strategy, every executive finds himself in a particular situation. And every situation has its own ‘logic’ and a momentum. As such it really it takes something to alter course and make any significant headway. It takes resolve – fierce resolve, the kind of resolve that grabs you and keeps hold of you. It is not the kind of resolve that is created through the intellect.
Why Don’t We Do What We Know We Should Do?
Have you wondered why your organisation sucks at being authentically customer-centric: practicing relationship marketing, client centred selling, pleasing customer service? Have you wondered why it is that your organisation sucks at calling forth the best from your people?
Now and then someone speaks and their speaking is wisdom. Today, I share with you the wisdom of David Maister as articulated in his great book ‘Strategy and the Fat Smoker‘:
“In business, strategic plans are also stuffed with familiar goals: build client relationships, act like team players, and provide fulfilling motivating careers. We want the benefits of these things. We know what to do, we know why we should do it, and we know how to do it. Yet most businesses and individuals don’t do what’s good for them….
The primary reason we do not work at behaviours which we know we need to improve is that the rewards … are in the future; the disruption, discomfort and discipline needed to get their are immediate…..
Our default pattern and why it doesn’t work
When it comes to improving performance at the individual, team or organisational level we tend to follow a self-defeating pattern. I have seen this pattern played out again and again over the last 10+ years as organisations have grappled with relationship marketing, CRM, customer experience, employee engagement, digital. Here’s what David Maister says:
We start self-improvement programs with good intentions, but if they don’t pay off immediately, or if a temptation to depart from the program arises, we abandon our efforts completely – until the next time we pretend to be on the program.
That’s our pattern. Try a little, succumb to temptation, and give up. Repeat until totally frustrated. Unfortunately, there is rarely, if ever, a benefit from dabbling or trying only a little. You can’t get half the benefits of a better marriage by cutting out half your affairs, cure half the problems of alcoholism by cutting out half the drinks or reduce the risks of lung cancer by cutting out half the cigarettes.
You can’t achieve competitive differentiation through things you do “reasonably well most of the time.” You not only cannot dabble, but you also cannot have short-term strategies ….. The pursuit of short-term goals is inherently anti-strategic and self-defeating.
You are either seriously on the program, really living what you have chosen, or you are wasting your time.
Why strategic analysis and listening to customers is not the answer
I worked in an organisation which expended considerably time-effort-cost in doing NPS quarterly. We had access to the voice of the customer. And the voice tended to speak the same tune quarter after quarter. Why? Because the people in the organisation were not willing to change behaviour in any significant way.
Is it possible that setting up VoC listening programs are a ruse? A way of saying to yourself and others that you are serious about improving the customer experience so that you hide your unwillingness to change your behaviour, the behaviour of your team, your organisation? What does David Maister say?
Improving the quality of the analysis is not where the problem lies. The necessary outcome of strategic planning is not analytical insight but resolve.
What are the essential questions of strategy?
If we know the why-what-how of employee engagement, meaningful customer relationships, and customer loyalty then what are the strategic question? Here’s what David Maister says:
The essential questions of strategy are these:
 Which of our habits are we really prepared to change, permanently and forever?
 Which lifestyle changes are we really prepared to make?
 What issues are we really ready to tackle?
Now that’s a different tone of conversation and discussion (and the reason that real debate is so often avoided).
What am I getting at here?
To come up with products that enrich the lives of customers requires resolve, analysis is insufficient. To create-deliver truly personalised-relevent marketing requires resolve, analysis and marketing technology are insufficient. To call forth the kind of service that generates gratitude from customers and makes them feel good about doing business with your organisation requires resolve, analysis-outsourcing-technology are insufficient. To orchestrate an end to end customer experience that calls forth customer loyalty requires formidable resolve, VoC and customer journey mapping are insufficient. Put different, dabbling won’t do; it occurs to me that most are merely dabbling.
I say, it is worth listening to David Maister once more:
There is no shame in aiming for competence if you are unwilling to pay the price for excellence. But don’t try to mislead clients, staff, colleagues or yourself with time-wasting, demoralising attempts to convince them that you are actually committed to pursuing the goal.
Relax, it’s ok to be just ok
As I get present to the world of business as it is and as it is not, I get present to the following and contradicts all the evangelising about customer focus, customer service, customer experience, customer relationships and customer-centricity:
1. Almost all businesses are unexceptional. They provide ok products (that do the job well enough). They provide OK digital real estate (websites, social media, apps, mobile). They provide OK stores. They hire OK people. They provide OK customer service – whether in stores or via the call-centres. And they generate an OK end to end customer experience, by default. As a result they do OK – they survive and make OK profits.
2. It is only against this background of OKness that the exceptional can and does show up. It is because almost all banks and insurance companies are ok that USAA glow so brig and htly. It is because most digital retailers are OK that Amazon shines brightly. It is because most high street retailers are OK that John Lewis and Waitrose (part of the John Lewis Partnership) shine brightly. It is because most organisations provide OK customer service that Zappos and Zane’s Cycles shine brightly.
The genesis of this post lies in the following article: Is Customer Experience Manageable? An Industry Pundit Says No. In reading this article and listening to the embedded interview I was struck by the importance Esteban Kolsky attached to defining Customer Experience clearly. In fact Vala Afshar, the author of the post starts with the following statement:
“What is customer experience (CX)? To get customer experience right, companies need to first get the definition of customer experience right, according to an enlightening talk I had with Esteban Kolsky,…
How important is it to clearly define Customer Experience?
Think of a tree. Ask yourself if any definition of tree fully grasps and discloses tree? Can you come up with a definition that will clearly point out the entity tree to someone who has never seen-experienced tree – say a Martian?
Think of service. Ask yourself if any definition of service accurately captures, discloses and exhausts service? Furthermore, ask yourself what use a definition of service is, to a being that has not experienced service?
Consider that the definition, any definition, discloses little about the phenomena and/or entity as it is in itself. Consider that the definition discloses he who is doing the defining. In particular, it discloses his/her worldview, understanding and interests.
Getting back to Customer Experience, consider that it is not possible to get the definition of Customer Experience right. Further, consider that even if it was theoretically possible to arrive at one accurate-precise definition of Customer Experience, this definition would not yield any practical value.
What did the distinction CRM bring into being which was not already present?
I invite you to take a look at CRM as a distinction. What arrived on the scene with the arrival of CRM as a distinction. I say that the following arrived:
Customer lifetime value – looking beyond signing up a customer, or effecting a single transaction, and seeing, perhaps for the very first time, the economic value of the customer over his/her lifetime.
Treat different customers differently – using one’s understanding of each customer’s needs-wants-preferences and her lifetime value (£/$) to tailor one’s products, propositions, communications, conversations, and interactions so as to create superior value for the customer and the company.
The learning relationship – using each customer conversation and interaction to enrich the company’s understanding of the customer AND enriching the customer’s understanding of the company. Thus enabling the company to become better at ‘treating different customers differently’ and increasing the ‘customer lifetime value’.
Now here is the joke and it is not funny. Most organisations in the rush to embrace CRM technologies did not fully get present to and hold on to these powerful distinctions. Instead they rushed to automate to reduce costs or do what they were doing faster. Or they used CRM technologies to effect more control over their staff so enabling micro-management. Or they used CRM technology to bombard with personalised marketing messages that did not show up as personal to the customers. Or they started on the path of single customer view – many still have not arrived there.
Then there is Chris Zane of Zane’s Cycles. He attended a conference (according to him in his book Reinventing The Wheel) and heard a speaker share the concept of customer lifetime value. Chris, seized by the world opened up by this distinction, of taking the longer term orientation (maximising customer lifetime value), altered his way of doing business so as to maximise customer lifetime value. And as a result has built a great business.
What does the distinction Customer Experience open up which was not present before?
What arrived on the scene with the arrival of the distinction Customer Experience? It occurs to me that the following arrived on the scene either present for the first time or moved from the background (where it was hidden) to the foreground:
Customer Experience as ‘product’ and differentiator in itself – this was the central assertion of Gilmore and Pine in their book The Experience Economy. When I think of this I automatically think of Build A Bear and Apple with the launch of the iPod, iTunes, iPhone, iPad, iPad – the entire ecosystem.
Enter into the customer’s world and experience it as she experiences it – think of this as ‘walking in the customer’s shoes’ in the broadest sense not in the narrow sense of what it is like and how it feels interacting with your organisation. This broader sense of ‘walking in the customer’s shoes is the access to surfacing the customer’s unmet needs and thus the source of lucrative new revenue streams. This moving-enlightening-human video point towards that which I am pointing at here. And at the same time it only gets us somewhat towards the destination that I am pointing at here. I read the other day that a huge industry – prepared and packaged salads – was created when someone figured out that folks in the USA wanted to eat salad and did not do so because they were not willing to do what needed to be done to put the salad together.
Experience your organisation as your customer experiences your organisation – this is what I call the narrow sense of ‘walking in your customer’s shoes’. How does the customer experience your organisation: your company, your brand, your products, your people, your processes? How does the customer experience your marketing, your selling, your service, your billing, your return policy, your charges…? United Breaks Guitars is the classic illustration of this. Undercover Boss at it’s best shows the Tops getting to the front lines and getting some access to how the customer experiences the organisation.
Emotions – pay attention to human emotions. Every conversation, every contact, every interaction will call forth human emotions. Emotions lie at the root of ALL decision making! To shape human decisions focus on and influence-shape human emotions. The best way that I can explain this is by sharing what my wife said with such gusto “I love my iPad!”. This is coming from a woman that hates computers and did not want the iPad to start with. Now she is using it throughout the day, every day. Through her enthusiasm she has influenced her father to buy an iPad and her mother to buy a Mac for the first time in her life.
Forget definitions of Customer Experience. Leave that to the people who make a living out of defining and arguing about definitions. Instead follow in the steps of Amazon (Jeff Bezos), Apple (Steve Jobs), Zane’s Cycles (Chris Zane), UCLA (Dr Feinberg), Zappos (Tony Hsieh): explore and live the distinctions that are unconcealed and opened up by Customer Experience. Or don’t. As always the choice to take the road less travelled will only be taken by a brave few. That is OK. The death of the old gives space for the new to flourish. And when the new flourishes the old dies. Think of Nokia, think of Apple.
I thank you for listening to my speaking. I continue to be drawn to share that which I share by those of you who continue to subscribe to this blog. I wish each and everyone of you the very best.
Is Customer Experience just fluff?
Is all this talk of customer service, customer-centricity and customer experience merely fluff? That is the question that someone put to me recently. Allow me to answer that question from a practical perspective – lived experience at the coal face.
Imagine you are in this situation
Imagine that you review your Top 10 accounts and find that one of these accounts has been one of your longest customers. And this customer makes up a significant portion of your revenues and profits. You are grateful for the contribution that this customer makes to your business. And you have a problem to deal with and a decision to make.
Looking into this customer it occurs to you that if you can persuade this customer to move from their existing solution to one of your latest solutions you can cut the customer’s monthly bill by half. The cost of doing this is obvious: substantial loss in revenue and profitability. The benefit? There is no obvious benefit. So the question is what to do? Should you leave the situation as it is and hope for the best? Or do you choose to contact the customer and spell out how the customer can save money?
Being unsure about what to do you consult with your customer strategy consultant. Together you look more deeply at the situation and you come up with following:
1. The customer got a significant saving when the customer switched to your business many years ago. Since then the market has changed mainly through new technology that has made available lower cost solutions.
2. The customer has not complained nor asked you to come in and give advice on how to save costs or help decide which solution best meets the customer’s needs.
3. The customer is ‘out of contract’ and has been for sometime now. You are not sure that the customer even knows that this is the case.
4. Another supplier could approach this customer and offer to cut the customer’s costs by half. If that were to happen then you might lose this customer. Or you might have to re-bid for the business to keep it.
5. Right now your business needs as much revenue and profit as it can produce. And talking to this customer and offering a solution that cuts billings by 50% does not show up as smart. You are not sure the Finance Director will support such a move.
What choice would you make?
Given this information, what is the smart thing to do? What is the right thing to do? What would you do if you were the CEO of this business?
Are you tempted to continue just as you are? Are you tempted to let things be? Are you tempted to take the least risky route? Are you tempted to do that which shows up as being the least hassle, and the most comfortable course of action?
Would you say to yourself something like “Now is not a good time to make revenue and profit sacrifices. Besides the customer is responsible for looking after his own interest and finding the best solution for his needs. In any case the customer has not made any complaints or asked for any price reductions which means that the customer is happy. It’s best to leave things as they are. I am sure that we can match the offer any other supplier makes. I’ll cross that bridge when I come to it.”?
Context-structure drives behaviour: why there is plenty of talk and little real action
Now you know how it is that there is so much talk about customer-centricity, customer relationships, customer experience, customer service, and customer obsession and so little real-effective action. Now you know what Robert Fritz is pointing at when he says “Structure drives behaviour”. Put differently, we are always embedded in a specific context-situation and this context-situation has powerful impact on the choices we make. To go against the prevailing context-situation requires profound courage especially when you have taken over and are running a sound established business. You do not want to be the one that fails and is ridiculed, the one that loses his reputation, his status.
Please note that rather than blame people – Tops, Middles, Bottoms – it is more ‘profitable’ to look at the context-situation that is shaping the behaviour of Tops, Middles, and Bottoms. And it is true that Tops have more leverage over influencing-shaping changes, even transforming, the context-situation and thus enabling breakthroughs in performance.
The critical importance of courage: daring to be different, to take the road less travelled
Some do put courage into the game of business and life. They are the ones, if successful, build great companies. Look behind the scenes of customer experience exemplars (John Lewis, USAA, Amazon, Zappos, Apple, Zane’s Cycles) and you will find one or more people that went against the taken for granted rules of the game.