I say that the way to make a significant impact on the quality of the customer experience (as experienced by the customer) is for the organisation not to focus on improving the Customer Experience. That is a bold assertion and shows up as nonsense to many. So what is it that I am getting at?
It is my experience that after accessing the voice of the customer and doing the journey mapping a range of initiatives are on the table. So the folks around the table getting busy figuring out which initiatives to take forward. Which ones do they take forward? The ones that don’t rock the boat. The ones that are the least risky. The ones that are usually called low hanging fruit: the easy ones that involves a tinkering at the edges, and in the bigger scheme of things make little difference.
To Improve The Customer Experience Ramp Up The Quality Of Competition
Take a look at this photo. Notice, the people standing up – how many there are, and how closely packed they are against one another. I invite you to step into this picture. Imagine yourself standing up in this train. And finding yourself packed in like sardines in a tin.
I found myself on this train – standing up. This train was so packed that it took considerable skill to just get my smartphone out of my trouser pocket – to take this photo. How long was I standing up in this train? For one hour and ten minutes.
So I ask you how is it that this kind of occurrence is actually a regular occurrence on the trains going into and coming out of London at peak travel times? It is so because there is no competition. On each line there is one company that has won the right to run the train services. A monopoly is in place and the folks who need to use the train have no choice but to put up with whatever they have to put up with.
Now consider that the Tops of just about every business strive to minimise the competition. Why? Because where there is no genuine competition, Tops can ignore customers, and run the organisation in a manner that extracts surplus profits from customers.
Looking at the situation from the Customer’s point of view I am clear that the most effective way of causing improvements in Customer Experience is to effect genuine competition into every industry, every market place. Genuine competition for customers will force companies to do that which they are not willing to do today: focus on creating superior value for customers – that includes the Customer Experience.
I don’t know about your country, I do know about the UK. I assert with confidence that there is no genuine-significant competition in many industries: retail banking, grocery retailing (Aldi, Lidl are starting to make a dent), energy (gas, electricity) suppliers, telecom’s providers….
Consider that if business genuinely had the interests of customers at heart then the Tops of every business would welcome increased competition in their market place. Why? It would provide the impetus to do better: to focus on creating superior value for customers – including providing a better Customer Experience.
Is injecting genuine competition into a market place enough? Is it enough to ‘force’ the incumbents to pay attention to customers and do right by customers: focus on providing superior value for customers?
Effective Regulation Is Necessary To Make Competition Work
For two years I was leading a data mining and predictive analytics practice which operated across Europe. So I got to know something about how different countries went about implementing-enforcing the European Data Protection directive. Some countries were effective (Germany, France, Italy, Spain) and others (UK) ineffective. Why? The Germans, French, Italians, and Spaniard adequately funded their national data protection agencies and allowed them to levy unlimited fines (usually running into millions of Euros). I believe one of these countries set up the funding arrangements so that the data protection agency had to fund itself through the fines it levied on those companies found bending or simply not following the legislation. Whereas the UK government provided the minimum funding possible, and limited the fine that the national data protection agency could apply to £50,000.
Let’s get back to the issue of competition. Is it necessary for national governments to put in place effective regulations and enforcers of these regulations? No? Are you of the view that multinationals so love their customers, and are so committed to the Customer Experience, that regulation is not necessary? If so I invite you consider this: business, especially, big business is not customer friendly. Allow me give life to this assertion.
Yesterday I read this Guardian article: France fines 13 consumer goods firms €951m for price fixing. Which companies are involved? Companies include:
- Proctor & Gamble
- Reckitt Benckiser – €121m
- Unilever – 2nd largest fine, €172.5m
- L’Oreal – largest fine, €189.5m
- Johnson & Johnson
- Henkel (maker of Persil) – €109m
- Biersdorf (Nivea) – €72m
- SC Johnson
Which products were involved? As far as I can figure out, just about everything. Here’s what the Guardian says (bolding mine):
The price-fixing affected a large number of popular brands, such as Vanish stain remover, Palmolive washing-up liquid, Sun and Calgonit dishwasher tablets, Sanex and Petit Marseillais shower gel, shampoos including Head & Shoulders, Fructis and Elsève, and Colgate and Signal toothpaste. Mouthwashes, deodorants, shaving creams and razors, female hygiene products, body lotion, facial and sun creams and insect sprays were also affected.
So what went on? What did the folks at these companies do to merit such a large fine? This is what the Guardian says (bolding mine):
The regulator said the 13 companies ….. had colluded on price increases between 2003 and 2006. “These two sanctions are among the most significant imposed to date by the competition authority,” it said. The regulator added that the price-fixing had kept prices “artificially high” affecting consumersand “caused harm to the economy”.
…. commercial directors and other sales officials from the companies involved met “regularly and in secret” to co-ordinate price hikes at restaurants or via correspondence to private homes, as well as through telephone calls. The groups in which they met were called “Team” or “Friends”.
Consider that if business genuinely had the interest of customers at heart – were committed to creating superior value for customers – then business Tops would not only welcome regulation, they’d want it enforced rigorously and big fines handed out to those who cheat customers. Name me a Top that advocates this position – can you think of one? I cannot.
I say greed, selfishness and even corruption permeate our way of life. It permeates politics, national government, and local government. It permeates the police. It permeates business. It permeates the broader society – us. Given this context, I say, all talk of customer - customer focus, customer service, customer relationships, customer engagement, customer experience, customer obsession – is totally and utter bullshit.
Do you study history? I have. This is what I have learnt: every right that you/I enjoy today was earned and paid for through blood of brave souls many years ago. So if you and I are going to be treated right by folks in big business then it behoves us to fight for genuine competition in the market place, stronger customer protection legislation, and effective enforcement bodies. What you and I cannot count on is business itself: yes, the words have changed, and business as usual (screwing customers) continues unabated. I say that the true customer strategy of most business is something like this: blind customers with bullshit, and empty their pockets whilst they are not looking.
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.
Tesco: The Darling of Customer Marketing Guru’s Issues Its Fifth Profit Warning
Tesco continues to struggle. According to this piece from the Guardian newspaper, Tesco has issued its fifth profit warning, share price has plunged (down 16%): Tesco is on the floor. Why does this matter? Why is it worth me writing about. Let’s go back a little.
In the early 2000s Tesco was much lauded my many: the customer-centricity gurus, the 1:1 marketing gurus, the data mining and predictive analytics players, and customer loyalty program vendors. Tesco was the exemplar of harnessing customer data through a loyalty programme (Tesco clubcard), using data mining and predictive analytics to generate insights and then doing database driven marketing based on these insights. In the process Tesco went from being just one player amongst the UK grocery retailers to the the dominant retailer. At one point it looked like there would be no stopping Tesco.
Today Tesco is on the floor. Why? Because Tesco’s management ended up doing what management teams do: exploiting customers to extract surplus profits for the Tops and Shareholders. I think some wise person said something like “power corrupts: absolute power corrupts absolutely.”
What Can We Learn About The Challenge Of Building A Customer-Centric Organisation?
So what is it that you and I can learn from Tesco if we are grappling with the challenge of shifting a business towards a customer-centric orientation: one not based on using data/insight to exploit customers; one based on using data/insights to generate superior value (product, proposition, customer experience) for the customer? Here are the paragraphs from this Guardian piece that catch my attention (bolding is my work):
Lewis [CEO], who marks his 100th day in the job on Tuesday, said he was building “a new Tesco” that would eventually reward shareholders. “We need to get back to core principles. We need to improve the service and availability and that is what we are doing.”
Here is what strikes me, how I make sense of this statement based on my prior lived experience:
1. Moving an organisation from a business as usual (product-centred, extractive, short-term focussed) to a customer-centric organisation is akin to building a new organisation;
2. Building a new organisation is not simple, not easy, not quick. It requires the persistent application of substantial energy across a large number of people for a long period of time – years. Only a CEO who has the power and genuinely cares about the wellbeing of the organisation will do what it takes, and keep doing it over the long term of many years.
3. Part of the challenge in building a new organisation is sacrifice. This sacrifice especially involves shareholders. Why? Because usually the shareholders have gotten fat through ‘bad profits’ delivered by their agents (Tops) putting in place strategies-structures-people-practices that collectively take advantage of customers, suppliers, and the employees – extracting surplus rents (to use the term used by economists);
4. Building a customer-centric organisation is matter of getting back to core principles. Notice, it is not discovering some secret recipe nor the latest shiny miracle technology. It is about honouring already discovered, well known, rarely enacted, core principles. How does one honour a principal? By living it – being an exemplar of that principle in action.
What Specific Actions Does It Take To Be A Customer-Centric Retailer?
Let’s continue this conversation by looking at another paragraph that speaks to me. Here it is:
In a bid to improve customer service, the retailer has taken on 6,000 more staff since mid-October, and despatched 6,000 existing head office staff to spend one day a fortnight on the shop floor to get a taste for the sharp end of the grocery business. Lewis has decided not to lay off people after Christmas, a traditionally slack time for retailers, as part of this customer service drive. “Certain activities help you manage profits, but can have a detrimental impact on how you serve customers,” he said. “What we are trying to do is deliver better for customers … I believe that is the foundation from which we can build a new Tesco, which is financially attractive to shareholders.”
Here is how I choose to make sense of this paragraph:
- A customer-centric organisation is one which “delivers better for customers”. Delivers what better? Delivers better products. Delivers better service. Delivers better value propositions. I sum this up by saying it delivers a better Customer Experience.
Customer service is a key thread of Customer Experience. Organisation which seek to show up as customer-centric have to get customer service right. This is especially so for service heavy businesses where the employee to customer encounter is important, even critical.
Getting customer service right means investing in the people who actually are the customer service of the organisation. Please notice the word “are“. Your front line people are your customer service; they do not merely deliver the customer service that someone else (perhaps in head office) has already produced. This critical aspect of reality is much ignored: your front line people simultaneously invent-create-deliver customer service every time they encounter the customer – they are your customer service!
Investing in people is long term play. Think Warren Buffet: you select the right people and then you hold on to them over and for the long term. That means not laying people off during traditionally slack periods. Why? Because two way loyalty (sticking by one another) is essential to creating the context for greatness to show up from your people. When you, the CEO, take the pain for your people you are putting a deposit in the bank account of goodwill. And this allows you to draw on the goodwill of your employees when you need it. Think Market Basket.
The core challenge of building and then keeping in existence (over the longer term) a customer-centric organisation is this one: “Certain activities help you manage profits, but can have a detrimental impact on how you serve customers”. It occurs to me that this is THE most critical insight. There is a broad range of ingrained, celebrated, management practices that deliver the numbers over the short-term whilst at the same time chipping away at the quality of the Customer Experience. Over the shorter-term there is no visible impact. Then the hit occurs and when it does it is big. I refer to this as the ‘straw that broke the camel’s back’.
The people who collectively constitute the biggest obstacle to making the shift to a customer-centric organisation and keeping this customer-centric orientation intact (and effective) are the people who work in head office: those who make policies, set targets, dictate management practices…. I am talking about the Tops and Middles: those who work with concepts and not reality. John Timpson of Timpson recognised this and turned the role of the head office from a dictatorship to a helpline, and in the process reduced the number of people in head office, and moved them to the branches where the real work of interacting with and serving customers occurs.
Final Thoughts: Leadership and Governance
If find it interesting that the management practices that have brought Tesco to its knees ended up being unconcealed when an outsider (no relationship to the Tops running the organisation) took over the role of CEO; and
It is the competitive world in which Tesco competes which has forced Tesco’s leadership to deal with these management practices. It is only when that which had been hidden (bullying of suppliers by head office folks, bullying of store managers by head office folks, manipulating profits through shady accounting practices) could no longer be hidden that both people and management practices are being addressed.
It occurs to me that Tesco is in crisis as there has been a fundamental breakdown in leadership and governance. The Board of Directors failed to do that with which it is concerned. Ensuring that the right person/s are running the organisation. And overseeing the actions (and management practices) of these people. Interesting then that the Chairman of Tesco has had to walk the plank.
I thank you for listening to my speaking. And I invite you to share your thoughts and experience with me. Looking forward to reading your comments.
For those who have a certain kind of listening to language, language in its speaking says much. Take the English for example. You ask the typical English person “How are you today?” What is the typical response? “Not bad!” Take the typical French person and the question becomes “How’s it going?” And the typical response from a French person is “It’s going well.” Notice the difference between the English “My name is X” and the French “I call myself X”. As I said, if you have the listening then language speaks richly – of a culture.
I have been listening to the speaking that occurs in relation to Customer Experience. I hear people talking about:
- mapping the Customer Experience;
- improving the Customer Experience;
- managing the Customer Experience;
- delivering a multi-channel Customer Experience;
- providing an omni-channel Customer Experience;
- driving the Customer Experience;
- gluing up the Customer Experience;
- consistency of the Customer Experience across touchpoints / channels;
- coming up with a Customer Experience strategy;
- business case for Customer Experience ….
To date, I have not heard a single Top say anything like:
- I get what Customer Experience is about and am passionate about putting Customer Experience at the heart of this organisation;
- Wow, Customer Experience opens up a world of possibility on what we can do to simplify-enrich the lives of our customers;
- As a senior leadership team we are committed to competing on the basis of the Customer Experience.
What does this tell you?
It tells me that Customer Experience is viewed-treated as an operational matter. It tells me that Customer Experience is viewed as technique to power and continue the longevity of business as usual. It tells me that the folks at the Top do not get the full power of Customer Experience: a radically different way to show up and do business, to compete for new customers, and keep existing customers.
Steve Jobs was committed to putting a dent in the universe. Tony Hsieh was committed to Zappos being the word for the very best customer service in the world. Jeff Bezos is committed to building the Earth’s most customer centric company. Just about everyone else I have come across is open to / would like improve the Customer Experience if someone else (usually lower down the hierarchy) can come up with a compelling business case. Is it any surprise that almost all talk so much and make so little impact when it comes to the Customer Experience?
Consider this. What Customer Experience lacks is not a toolbox of methods-techniques-tools. What Customer Experience lacks is not certified customer experience professionals. What Customer Experience lacks is not technology nor the consultants to implement the technology. What Customer Experience lacks is not a bunch of folks doing lean to the organisation and ‘improving’ business processes. What Customer Experience lacks is leaders and leadership.
Yet I am optimistic. Why? Because, it only takes one Steve Jobs to make a dent in the universe. It only takes one Tony Hsieh to show us all what Customer Service authentically-radically is. It only takes one Jeff Bezos to transform retailing and show us what the digital Customer Experience can be / should be. It occurs to me that those who will walk the same path, are likely to be working in smaller companies. And as such it is simply a matter of time when they make themselves visible on the radar of big business. Then extinction time! For my part, I welcome and embrace the phenomena described as “creative destruction” by Schumpeter.
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.