Apple, John Lewis, Amazon: Masters of the Customer Experience? Christmas is over and three organisations stand out for me: Apple, John Lewis, and Amazon. Why? It occurs to me that the people in these organisations get customers as human beings, are clear about the kind of customer experience they are up for delivering, AND have […]
This post continues the conversation started in the earlier post which disclosed the UK’s Top 10 Customer Experience brands and provided an analysis of the Top 100 brands by industry.
Nunwood’s Six Pillars of Customer Experience
The folks at Nunwood claim “we have used advanced text analytic techniques to derive and then statistically validate the six most important factors that customers talk about when it comes to great experiences”. What are these factors?
Personalisation: using individualised attention to drive emotional engagement
Time & Effort: valuing the customers time – minimising the effort and creating frictionless processes
Expectations: managing, meeting and exceeding customer expectations
Integrity: being trustworthy and engendering trust
Resolution: turning a poor customer experience into a great one
Empathy: achieving an understanding of the customer’s circumstances to drive deep rapport
What can we learn about these six pillars of Customer Experience by looking at the Top 10 brands?
In their report Nunwood list the top brands by each of the Customer Experience pillars. So:
- Amazon sits at the very top for the Personalisation and Time & Effort pillars;
- Virgin Atlantic is the leader in the Expectations pillar;
- John Lewis leads when it comes to the Integrity pillar; and
- QVC leads in both the Resolution and Empathy pillars.
What is not easy to do, from the report, is to see at one glance what each of the Top 10 brands does in terms of these six pillars. So I have taken some time to piece that together for you and here it is:
In the next and last post, I will share with you details of the “brands that have cracked the code” and are making major leaps forward – according to Nunwood. And in particular I will single out one brand that shows up for as being truly innovative in its business model, in customer engagement, in being social and making online community work, in putting its customers truly at the centre of its way of doing business. I also happen to be a customer of this brand.
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.
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.
Harley Manning: You should never put the customer experience ahead of profits
According to Harley Manning of Forrester, the answer to the question “When should you favor customer experience over profits?” is “Never! In his post Harley recounts the following:
After some preamble about the pressures his company was under to increase revenue and profits, he asked, “Given that, when should we put aside the need for profits and fund customer experience projects instead?”
His question surprised me. And I clearly surprised him when I responded, “Never.” I let that hang in the air for a moment so it could sink in. Then I added, “You should never put aside the need for profits when you fund customer experience projects.”
I could see that people were a little confused so I went on. “You should only fund customer experience projects that will produce profits. That’s why you do those projects in the first place. And if you have other kinds of projects that will produce better business results, do them instead. But if you take the time to create the business models for your CX projects you’ll probably find that they’ll produce better ROI than most of the initiatives they’re competing against.”
Does Jeff Bezos agree with Harley Manning’s take on customer experience and profits?
As soon as I read this post by Harley Manning the following thought came to mind: what about Jeff Bezos and Amazon? It occurred to me that Jeff Bezos has consistently sacrificed short-term profits in order to attain the long term leadership. And how has he gone about attaining that leadership? By focussing on creating compelling value for the customer. And what is a key ingredient of this compelling value? The customer experience.
If you doubt my words then read the following post: 6 Things Jeff Bezos Knew Back in 1997 That Made Amazon a Gorilla. Here is one particularly relevant part of this post:
Bezos: It does fit into my view. Our first shareholder letter, in 1997, was entitled, “It’s all about the long term.” If everything you do needs to work on a three-year time horizon, then you’re competing against a lot of people. But if you’re willing to invest on a seven-year time horizon, you’re now competing against a fraction of those people, because very few companies are willing to do that. Just by lengthening the time horizon, you can engage in endeavors that you could never otherwise pursue. At Amazon we like things to work in five to seven years. We’re willing to plant seeds, let them grow—and we’re very stubborn. We say we’re stubborn on vision and flexible on details.
In some cases, things are inevitable. The hard part is that you don’t know how long it might take, but you know it will happen if you’re patient enough. Ebooks had to happen. Infrastructure web services had to happen. So you can do these things with conviction if you are long-term-oriented and patient.
When is it appropriate to favour the customer experience over profits?
There is no simple answer to this question. Why? First, one has to be clear that there are all kinds of profits. There are this years profits. There are the profits that will be made in the next three years. And if you are Jeff Bezos you are thinking about the profits that will be made over the next seven years. If you are Toyota you might just be looking out 20+years.
Second, there is the matter of what falls under the umbrella term of ‘Customer Experience’. Some, possibly like Harley Manning, see it simply as customer interaction management – how the customer is treated at various touchpoints along the customer journey. Others, like me, include the brand (as in reputation not marketing messaging) and the core product under the Customer Experience umbrella.
Where do I stand on this? My answer is “It depends!” What does it depend upon? It depends on you and your circumstances. Do you have the leeway to play the long-term game? Then I say make the short-term sacrifice and go for long-term market leadership. If you do not have that leeway then you have to follow Harley Manning’s advice. And in doing so you will leave open the door to the likes of Jeff Bezos – the disruptors. Which is great because progress relies on disruptors to shaky up things up and create ‘new value’ for customers.