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 […]
Misunderstanding, reality and narrative
There are so many misunderstandings around customer-centricity that it is hard for me to know where to start. In this post, I want to deal with a particularly dangerous and widespread misunderstanding. Some of you have led yourself to that misunderstanding after reading my last post on customer-centricity. Before I deal with this misunderstanding I want to draw your attention to the following:
Reality is amenable to and readily supports any narrative that we place on it. Once upon a time the narrative was the earth is flat. Later the narrative changed to the world is round. Once upon a time there were witches in the world, now, at least in the West, there are no witches. For a little while the narrative was almost all of the DNA in the human genome was junk DNA. Today the narrative is that vast majority of so called ‘junk DNA’ is essential to and involved in key biochemical processes. I hope you get what I am getting at.
No single definition and/or ‘understanding’ of customer-centricity will exhaust customer-centricity. Put differently, customer-centricity seems so obvious until you really grapple with it. And when you grapple with it all kinds of stuff shows up – some of it rather surprising. Furthermore, what shows up as customer-centric in one context may not show up as customer-centric another context.
With that out of the way and the context set, lets grapple with this misunderstanding.
To be customer-centric you have to be nice and give you customers what they are asking for
Far too many people confuse customer-centricity with doing what the customer wants, giving the customer what he wants, and being ‘nice’. Some go further and equate customer-centricity with being a patsy, a pushover. I say this is the most serious misunderstanding plaguing customer-centricity.
Why is it so dangerous? First, there are the people who understand customer-centricity this way and for them it shows up as unrealistic and distasteful. Given this way of understanding customer-centricity they dismiss it and/or want nothing to do with it. Second, there are a different group of people who speak and act as if customer-centricity is as simple as giving the customer whatever he asks for.
Customer-Centricity is neither this simple nor this simplistic
To both of these groups of people I say that you are mistaken. You’re mistaken, badly mistaken. Customer-centricity is neither that simple nor that simplistic.
I say that being customer-centric is a stand that you take and not a fixed set of behaviours. What kind of stand am I talking about? The kind of stand that says that the only acceptable profit is that made by creating genuine value for customers. It means letting go of existing policies and practices that enrich the company at the expense of customers – ‘bad profits’. Taking the customer-centric stand is not possible without courage. The kind of courage Tony Hsieh and the Zappos management team showed when the business was in deep trouble financially and they gave up a lucrative source of revenue, profits and cash because it did not fit with their vision and stand to be the brand renowned for great customer service.
I say that being customer-centric is as much about being proactive in coming up with new products/services/experiences that you believe will create value for customers as it is about reacting to what customers say/ask for. As I write this Apple/Steve Jobs/iPod/iTunes/iPhone/iPad come to mind immediately. Or think of Amazon, ebooks and the Kindle.
I say that being customer-centric is as much about influencing/persuading customers as it is listening to/obeying customers. Yes, there is a role for the right advertising, marketing and selling. Customers are human beings and they do not necessarily know what is best for them. Even if they do know, customers often do not do what is best for their well-being. This is where you can use insights into the human functioning to come up with a design that nudges the customer towards the right behaviour. It is also where something more forceful than a nudge can be necessary. Again I cannot help but think about how Jobs handled the antenna/signal reception issue around the iPhone. Or think about how Zappos persuaded shoe buyers that it was OK to buy shoes online without trying them on.
I say that customer-centricity only makes sense in a particular context and as such being customer-centric requires a “yes” when it is appropriate to say “yes” and a “no” when it is appropriate to say “no”. This point was the key point made by Frances Frei and Anne Morriss in their book Uncommon Service. As they say “you have to be bad in the service of good”. They talk at some length about Commerce Bank: to be great at convenience and service Commerce Bank chose to only offer one banking product (checking account) and paid the worst rates of any bank in the market place. Look, if you turn up at my Mercedes dealership and want to pay Ford prices then the most ‘customer-centric’ behaviour is for me to drive you to the nearest Ford dealership! Furthermore, sometimes a “no” is simply in the best interests of your customer even if he does not know it. This was the point I was making in this earlier post.
I say a lot. What do you say? If you the situation at hand differently to me then speak up and share your understanding.
This is the fourth in the series of posts on strategy making using Richard Rumelt’s masterpiece: Good Strategy Bad Strategy. If you have not already done so then you may get value out of the reading the first three posts:
What passes for strategy and strategy is so often simply muddled thinking or why so many websites generate a poor user experience
One thing that I have noticed is that so many websites are poor – from the users perspective. Why is that? I have my point of view which I pleased to see validated by Mark Adams of PortalTech Reply in the May edition of Internet Retailing:
“If your strategy, for example, is to use mobile to generate significant revenues the key considerations, technology choices and approach are going to be very different from setting out to use mobile as brand engagement channel…….. Often the strategy is to accommodate selling, loyalty, brand engagement, in-store integration, social marketing, payments and so on with no clear path on how each of these areas are going to be addressed and at what point.”
Sounds like a ‘dog’s dinner’ of aims/objectives masquerading as strategy to me. That got me thinking that it is worth sharing what Richard Rumelt has to say on the matter of aims, objectives and strategy.
What does Richard Rumelt say about aims, objectives and strategy?
Richard Rumelt says that strategic objectives are one domain that differentiates good strategy from bad strategy:
“One of the challenges of being a leader is mastering this shift from having others define your goals to being the architect of the organisation’s purpose and objectives. To help clarify this distinction it is helpful to use the word “goal” to express overall values and desires and to use the word “objective” to denote specific operational targets……. Good strategy works by focusing energy and resources on one, or very few, pivotal objectives whose accomplishment will lead to a cascade of favourable outcomes.“
In his book, Rumelt identifies two pitfalls in the areas of objectives: ‘dog’s dinner objectives’; and ‘blue sky objectives’. Let’s take a look at each in turn.
Dog’s dinner objectives
This is what Rumelt says (keep in mind my earlier comment on poor websites and the quote on mobile):
“A long list of “things to do”, often mislabeled as “strategies” or “objectives”, is not a strategy. It is just a list of things to do. Such lists usually grow out of planning meetings in which a wide variety of stakeholders make suggestions as to things they would like to see done. Rather than focus on a few important items, the group sweeps the whole day’s collection into a “strategic plan”. Then, in recognition that it is a dog’s dinner, the label “long term” is added so that none of them need be done today.“
I absolutely love this paragraph, it strikes as pointing at the ‘truth’ in a similar way to the Dilbert cartoons and leaves me saying “How true!”. How does it strike you?
Blue sky objectives
Back to Mr Rumelt and his wisdom on strategy:
“The second form of bad strategic objectives is one that is “blue sky”. A good strategy defines the critical challenge. What is more, it builds a bridge between that challenge and action, between desire and immediate objectives that lie within grasp. Thus, the objectives a good strategy sets should stand a good chance of being accomplished, given existing resources and competence.…… By contrast, a blue-sky objective is usually a simple restatement of the desired state of affairs or of the challenge. It skips over the annoying fact that no one has a clue as to how to get there.
The purpose of a good strategy is to offer a potentially achievable way of surmounting a key challenge. If the leader’s strategic objectives are just as difficult to accomplish as the original challenge, there has been little value added by the strategy.”
Lets revisit 1997 and Steve Jobs return to the helm of Apple
Back in 1997 Apple was burning through its cash and was expected to become bankrupt in months. The imperative was survival – increasing the cash pile and cutting costs to buy time to focus on product renewal. What did Steve Jobs do? The very first thing, the most thing, he did was to persuade Microsoft, the arch enemy, to invest in Apple. By doing so he was able get his hands on $150 million (in return for non-voting shares). This dismayed the Apple faithful, left them stunned and led to heckling and booing. Something that Jobs had not experienced before. Nonetheless it was a masterstroke as it bought him time to:
- Cut the number of products from 15 to 4;
- Streamline distribution by selling through an exclusive national dealer as opposed to many retailers;
- Focus marketing on a single message “Think Different”;
- Terminate licensing deals that enabled other manufacturers to undercut Apple with Mac clones.
Result: operating expenses were cut nearly in half. Within months, Apple was back in the black and could focus on developing and bringing to market ‘killer products’ worthy of the Apple brand as personified by Jobs.
It occurs to me that Steve Jobs was more than creative or a showman (like Richard Branson). He was a master strategist he focussed relentlessly on the essence. How different to so many others who call themselves strategist and claim to put forth strategies. What do you say?
Customer focus: no progress in ten years?
In a recent post on CustomerThink, Bob Thompson shared his experience with AT&T and Colin Shaw made the following comment:
“No progress in ten years…
I am sorry to say Bob but this doesn’t surprise me. I used to work for BT before setting up Beyond Philosophy ten years ago. In that ten years I don’t see a lot of progress on being more Customer focussed.
We have recently undertaken new research in Telecoms. The biggest surprise to me was when we asked Telecoms companies “Which Telecoms company do you most for CE ?” There was a deafening silence.
I can totally appreciate your feeling of ‘doubt’. This, unfortunately is a common emotion that organizations generate. Do you think this is what they want to generate? Obviously not, but their actions have led you to feel this way. In my view there is a massive opportunity for someone to get the CE right in the CE space. But they will need to look outside of their industry for examples.”
Why has there been no progress?
I say that the reason so little progress is due to the lack of genuine care for people (customers, employees, suppliers, community…) as fellow human beings. When we label a customer as an asset we have turned our fellow human being into an object, equipment, a resource for our purposes. HR tells us all that you need to know about the relationship between the Tops and everyone else in the company: human resources – equipment, tools, resources that come in a human form.
Human existence, being-in-the-world, is characterised by CARE. We care about how our lives turn out – we are designed to survive and we strive to flourish. Care gives rise to and is tied up with CONCERN – we have concerns that we have to address if we are to survive and flourish. John Bowlby pointed out that we need ‘SECURE BASES’ – people, places, organisations, communities where we matter, where we feel cared for, where we can count on others to care for us and what matters to us.
What can we learn from Jonathan Ive of Apple?
I was reading this article on Jonathan Ive (Apple’s design guru) and the following jumped out at me:
“I think subconsciously people are remarkably discerning. I think that they can sense care.”
“One of the concerns was that there would somehow be, inherent with mass production and industrialisation, a godlessness and a lack of care.”
“I think it’s a wonderful view that care was important – but I think you can make a one-off and not care and you can make a million of something and care. Whether you really care or not is not driven by how many of the products you’re going to make.”
“We’re keenly aware that when we develop and make something and bring it to market that it really does speak to a set of values. And what preoccupies us is that sense of care, and what our products will not speak to is a schedule, what our products will not speak to is trying to respond to some corporate or competitive agenda. We’re very genuinely designing the best products that we can for people.”
Is there any doubt that the people who run Apple care, deeply, about making great products that generate a great user experience? And if care is the access to breakthroughs then why is it that more companies do not care the way that Apple cares? Is it because it really takes something to genuinely care when we swim in a culture that does not embrace and encourage caring?
Lets just get present to what ‘care’ involves and why it is so important
We use words automatically and without really getting present to what they signify, what they point at/towards, what they make present/available to us. So here is definition that I find particularly useful as it is a rounded definition:
noun. worry – concern – attention – solicitude – trouble
Zappos: a great example of a company based on and operating from a context of authentic CARE for people as fellow human beings
The results that show up in the world are always in line with and bounded by the context which gives rise to these results. If your organisation operates from a context of ‘not caring’ or plain ‘indifference’ then this will shape what occurs and how it occurs. With this kind of context it is possible that people who do care may from time to time do stuff that is characterised by care and shows up as care in the world of the customer. Yet, this will not cultivate loyalty between the customer and the organisation. Why? Because this act of caring will been seen as an exception when compared with the lack of caring in all the other interactions with the company and its people.
Zappos is the poster child for the customer-centric orientation and great customer service. Why? Because the Tops have intentionally created and operate from a context of caring: caring about their people; caring about their customers; caring about suppliers; caring about what they do; caring about what they stand for. What is this context? “Delivering Happiness”. Two words, they say it all, and for many companies these would simply be empty words. Not for Zappos because they were not crafted for brand messaging nor for brand positioning. No, these words, are an expression of the philosophy of Tony Hsieh and the founders/senior leadership team of Zappos. The other point worth noting is this: how many of us would stand up and argue against a philosophy and a stand centred on “Delivering Happiness”? Do this not meet/ address a fundamental need of human beings?
Tommy Walker, host of “Inside The Mind” a show about online marketing strategy. Here is his story, in his words:
“Just over a year ago I bought a pair of sneakers from zappos and was very excited to get them in the mail. However, after about a month and a half they fell apart. After wearing other inferior footwear, I settled upon wearing my indestructible work boots for the rest of the year, and while they did make me a little taller, they weren’t terribly comfortable and started to cause me pain. And just when I thought I had enough, I got an email from Zappos that essentially said:
“Hi Tommy, you bought these shoes a year ago and we wanted to say thanks, and remind you that we have more of the same. If there’s anything we can do to improve our service, please don’t hesitate to let us know!”
To which I responded:
“Hey there, thanks for reminding me . Though I have to admit, these shoes only lasted me a month and a half. I’m not overly hard on my shoes but for some reason, these just fell apart.”"
What happened next? How did things turn out? What was Tommy’s experience? If you want to find out then click here.
In a world of indifference, authentic caring is the difference that makes the difference
You want your customers to care about you. Do you really care about your customers? If you don’t genuinely care about your customers, as human beings, then how/why do you expect them to care about you? What is so remarkable about Zappos other than the genuine context/culture of caring about people and “Delivering Happiness”? What is so special about Apple other than the care that goes into envisaging and making products that customers will love and find useful.
And finally you may wish to consider and act on the following:
CARE: Customers Always Remember Empathy
CARE: Customers Are up for Reciprocating Empathy
CARE: Customers Always want to Reward Empathy
Is eliminating the bargaining power of customers more important than working on the Customer Experience?
Listening to the Steve Jobs biography by Walter Isaacson I am left with the impression that nothing was more important to Steve Jobs then using technology to produce great products that delivered a great user experience. Good enough was good enough, even great, for many in the computer industry. Only insanely great was good enough for Steve Jobs. Anything less was simply not good enough, it was not ‘art’ and not ‘worthy of artists”; great artists don’t want to put their names on good enough art.
Given that Apple, Amazon, Zappos, USAA, SouthWest Airlines, Zanes Cycles, Richer Sounds, Salesforce.com, O2, American Express.. have shown what can be done by focussing on the customer, why aren’t companies focussing on the Customer Experience? According to Mindshare the biggest issue with companies and executives is turning VoC into changes in the business such that a powerful impact is made on the Customer Experience. Why is it an issue? Because of ‘Other Priorities’. What can these other priorities be?
Clearly THE priority is the share price and the way to hit that is to focus in revenue generation and profitability. How do you increase that? The standard framework is that put forth by Michael Porter in the Five Forces model. According to this model, the companies that do well are the ones that:
- Reduce/eliminate the bargaining power of customers”;
- Reduce/eliminate the bargaining power of suppliers;
- Reduce/eliminate the threat of new entrants;
- Reduce/eliminate threat of substitute ‘products’; and
- Reduce/eliminate competition by ‘taking out’ competitors
Do you notice what is implied in this framework? Do you notice that the assumption is that the company and the customer are in competition? The aim is to reduce the bargaining power of the customers. It occurs to me that the Tops are not sitting there fretting over customer and the Customer Experience. It occurs to me that they are sitting there figuring out how to outmanoeuvre customers, suppliers, competitors and regulators.
The financial crisis, the BP Gulf of Mexico oil spill and the phone hacking scandal (in the UK) have shown that regulators are easy to ‘buy’/outmanoeuvre. That leaves customers, suppliers and competitors. Isn’t the best way outmaneuvering customers to set up barriers to entry (patents, ‘buying off’ regulators, buying/holding key assets…), buy up/share the market with the competition and creating a difference where no difference exists through advertising and PR?
As I was mulling this over the folks at The Simple Dollar emailed me this graphic about how AT&T and Verizon are doing extremely well due to the duopoly that they have created and maintain. I can’t help but think that to arrive at this place is business nirvana for just about every CEO and his band of merry men (the Board of Directors)!