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Forget Working On The Customer Experience, Focus On Competition

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

SouthWestTrainsPacked

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:

  • Gillette
  • Proctor & Gamble
  • Reckitt Benckiser  – €121m
  • Unilever – 2nd largest fine, €172.5m
  • Colgate-Palmolive
  • 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.

Summing Up

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.

Why I Prefer Not To Do Business With Customer-Centric Businesses

Why is it that I prefer not to business with a customer-centric business? Allow me to share my answer by referring to the UK grocery market.  Which supermarket chain was applauded, by many, for its customer-centred way of doing business? Tesco.  What was held responsible for fuelling this customer-centred way of doing business? The Tesco Club Card. Through this loyalty card, Tesco captured and made effective use of customer shopping data to grow revenues and optimise profits.  In the process Tesco came from nowhere to became the world’s second largest retailer.

Where is Tesco today? Here is what The Economist said back in July 2014:

… on July 21st Tesco abruptly announced that Mr Clarke would be leaving his job, apparently prompted by a warning that profits in the first half of 2014 would come in “below expectations”. In June Tesco revealed a drop in same-store sales that Mr Clarke admitted was the retailer’s worst performance in 40 years….

Recession taught middle-class shoppers that discounters like Aldi and Lidl were cheap but not nasty; they spent some of the money they saved at higher-end grocers, such as Waitrose and Marks & Spencer……

Tesco is faring badly. Its sales dropped by nearly 2% in the year to June while those of its closest rivals, Asda (which is owned by Walmart) and Sainsbury’s, rose by 3% or better. Despite his exertions, Mr Clarke failed to persuade consumers that Tesco offers better value than the discounters or quality to match the upmarket merchants.

Is this as bad as it gets? No. Here is what the Guardian newspaper stated in on the 22nd of September this year:

Tesco has suspended the head of its UK business and called in independent accountants and lawyers to investigate after discovering that its guidance to the City overstated expected first-half profits by about £250m….

Tesco shares fell almost 8% on Monday morning to an 11-year low of 212p, making them the biggest faller in the FTSE 100 index and wiping £1.5bn off the retailer’s market value. More than £6bn has been wiped off share value since 21 July, when the previous chief executive, Phil Clark, was ousted.

Why is it that Tesco is in such deep trouble? I say that Tesco has arrived at where it is at due to its customer-centric way of doing business.  What do I mean by this?  I mean that the Tops got fixated into harnessing the data yielded by the Club Card to get customers to part with more of their money in Tesco stores.

Was this done by offering customers superior products as in higher quality products? No.  The products were middle of the road yet ways were found of selling these at higher prices through clever marketing and merchandising.

Was this done by providing superior customer service in the stores? No. Tesco cut back on the number of people working in the stores so it was not unusual for the customer to find that there was nobody around to help when help was needed or find long queues at the checkout tills.

Was this done through a superior shopping experience? No. Management chose not to invest in the stores or the shopping experience in the stores. As a result the stores become less and less attractive over time.

I prefer not to do business with a customer-centric business because the management of such a business is more likely to be focussed on extracting value from their customer base through a variety of clever manoeuvres than earning its keep through superior products (Apple, Waitrose), superior service (John Lewis, Zappos), low prices (Lidl, Aldi), or a combination of service and low price (Amazon).

If you are a customer and your supplier is touting customer-obsession then  you might want to think about whether that is a good thing. Is the obsession with providing you with a superior product, superior value,  and/or experience? Or is it an obsession with with finding clever ways of getting you to buy more, pay more for what you buy, and get less in return? You might want to keep in mind that which many remind me of: business is not altruistic.

If You Can’t Prove The ROI Of Your Customer Experience Effort Then Consider This Option

Where is Customer Experience Management At?

What are the highlights of the Harvard Business Review Analytic Services study: Lessons from the Leading Edge of Customer Experience Management?  It occurs to me that there are many. And for the purposes of this post I want to concentrate on a subset.

According to the study: Less than half of the companies view customer experience management as a strategic priority.  Most are struggling to develop clear and consistent customer experience strategies, support, processes, and metrics across the organisation. 

Put differently, even the 50% who see customer experience management as a strategic priority are finding it hard.

What are the biggest obstacles-hurdles on the path of Customer Experience?

The authors of the study point out three challenges that making the going hard:

  1. Proving ROI – folks are finding it difficult to prove ROI as they are not able to link business outcomes to customer experience effort.

  2. Data & Integration – single customer view turns out to be a lot like enlightenment only a select few have realised it (after years of effort) the rest are having a difficult time knitting together their data and systems.

  3. Customer-focused culture - it turns out that speaking-writing-evangelising about customer focus turns out to be easy, creating an organisation which is genuinely customer focussed is ‘a bridge too far’ for most (if not almost all) organisations.

If you want to access the authors prescription for addressing these challenges then I suggest you read the study. For my part, I find their recommendations rather unsatisfactory. Why?  Their six lessons in Customer Experience Management start with ‘Lesson One: Create A Customer-Centric Culture’!  What genius!  And how do they recommend that you do that?  Rewards and punishments!  Our stupidity never ceases to amaze me.

What Option Is Open To You If You Cannot Prove ROI? 

Three options show up me for me when I consider this question. First, stop flogging a dead horse and do something else in the organisation that you find interesting or which holds the promise of success that you aspire to.  Second, move to another organisation – one which seems to you to be more receptive to the Customer Experience thing.

What is the third option?  Allow me to introduce this option by sharing the following quote:

Under-think your life’s purpose

Finding your ‘purpose’ in life is an attractive ambition, and I’m sure there are plenty of people who’ve simply said “This is what I was born to do,” but not everyone is as lucky as that.  The simple alternative for the rest of us is to ask “What is the next useful action I can take?” Keep it simple – if you notice a problem that needs solving, solve it, and if you meet a person who needs help, help them.

- David Turnball

Looking at this pragmatic advice through a Customer Experience lens, it occurs to the that the third option is as follows:

  • If you meet a customer who needs help, then help that customer;
  • If you notice a problem (that impacts the Customer Experience negatively) and have the capacity to solve that problem, then solve that problem; and
  • If you have an opportunity to do something unexpected-special for a customer then go ahead and do that something special.

Your small actions may get noticed, they may infect your colleagues and through them feed into the larger organisation.  At the very minimum, you have the satisfaction of lived true to your values and made a difference in the lives of some of your customers.

 

 

 

 

 

The Paradox At The Heart of Customer-Centric Business

I am no longer a fan of customer-centricity nor customer-centric business. I am not a fan of the way many are going about customer focus, customer-centricity, or customer obsession.  It occurs to me that the approach taken by many towards arriving at customer focus, customer-centricity, and customer obsession is not gold, it is fools gold.

Why? Because it occurs to me that an organisation that shows up as customer-centric does not centre itself on its customers. At least not in the simplistic sense that is being written-talked about, promoted and acted upon by many.

I get that I make a bold, even controversial statement, and it highly unlikely to win me applause. That is OK, given that my commitment is to write my truth and take a skeptical stance towards the dominant ideologies and practices.

I get that you might want to better understand why it is that I assert that which I assert here.  Allow me to point at, illustrate, and unconceal that which I am getting at here by sharing with you some quotes.  Let’s start with Emmy Van Deurzen, chartered counselling psychologist and registered existential psychotherapist:

…. one can never ignore the needs of others when making personal decisions but neither can one allow others to entirely determine oneself even when alone. This is a paradox

Yes, you do need to consider customers – their needs, their desired outcomes, their ‘jobs-to-be-done’, their preferences etc.  And you cannot run a successful business just by focussing on your customers. The game of business involves other players whose needs have to be considered.  For example, a facet of business life caught my attention whilst working with smaller businesses, which had not so gripped me for most of my life working in big businesses.  What facet? The critical importance of finding, hiring, organising, enabling, inspiring, channeling, and retaining the people who actually work inside the business to do that which is necessary to create value for customers.  It occurs to me that this is just as important for big businesses, it is not so evident because the dysfunctions of a demotivated workforce don’t show up as vividly in a huge organisation.  Or take a look at Zappos, its success is partly built on the way the founders and management team treated suppliers (as a valuable part of Zappos) and thus called forth co-operation from them.

Furthermore, if you simply follow what customers are telling you then you leave yourself open to the disruption caused by those who can see beyond what customers are saying in market research and customer surveys. Here, I share a passage from Matt Watkinson, the author of The Ten Principles Behind Great Customer Experiences:

It is not only consumers who have shifted towards other-directedness and ended up struggling: businesses have too. The dominant obsession with market intelligence, competitor analysis, and customer research is all about developing a more powerful radar, and the endless hand-wringing and strategising over social media betrays the kind of anxieties that are most often found in those eager for the approval of others.

In contrast, we most admire those businesses with a strong inner direction – a clear set of values, integrity and sense of purpose – and tend to lionise celebrity CEOs who bring that ethos to life…….. Customers churn between suppliers to find the best deal, not because we are all extremely price sensitive, but because there is nothing to be loyal to.

What Matt is pointing at here is that we are not simply the kind of beings that economics says we are.  Nor are we the kind of beings that rationalist philosophy, behavioural psychology, and scientific management assumes that we are.  The human being is a richer human being. A human being that strives for meaning and connection, open to being loyal to ideals, values, missions that elevate human life.

Finally, I want to leave you with wisdom from John Kay, an British economist:

If you want to go in one direction, the best route may involve going in another. This is the concept of ‘obliquity’: paradoxical as it sounds, many goals are more likely to be achieved when pursued indirectly. Whether overcoming geographical obstacles, winning decisive battles or meeting sales targets, history shows that oblique approaches are the most successful, especially in difficult terrain.

Obliquity is necessary because we live in an world of uncertainty and complexity; the problems we encounter aren’t always clear – and we often can’t pinpoint what our goals are anyway; circumstances change; people change – and are infuriatingly hard to predict; and direct approaches are often arrogant and unimaginative.

So let me remind you of my central assertion:

A customer-centric organisation does not centre itself on its customers. It is a paradox. And I say that it occurs to me that the way that many organisations are going about customer focus and customer-centricity, will not get them there. The path heavily promoted, and commonly taken, is fools gold.

Whilst I abhor combat, I do welcome conflict: conflict is simply the showing up of difference. And if difference is approached through the spirit of dialogue then it unconceals aspects of the world that are hidden from each of us. So if you disagree with that which I have written then please speak your mind, educate me, share that which you see and which I do not see.  I wish you a great day and thank you for making the time to listen to my speaking.

The Dark Side of Customer Focus, CRM, and Customer Experience

What is the cost of putting profits before customer interests?

This week one of the UK’s largest insurance brokers got hit with a £7.4m fine. Why? This is what Tracey McDermott, the FCA’s director of enforcement and financial crime, is reported to have said:

Swinton failed its customers. When selling monthly add-on policies, Swinton did not place the consumer at the heart of its business. Instead it prioritised profit. 

At the FCA we have been clear in our expectation that firms must behave in the interests of consumers. Today’s outcome shows our approach in action and will act as a deterrent for other firms tempted to put profit figures above the fair treatment of customers.

 The Dark Side of Customer Experience

Is Swinton the only organisation where people in the business put revenue and profits ahead of treating

customers fairly?Not according to Monique Reece:

The dark side of customer experience is the way in which some companies take advantage of their most loyalcustomers. For example, if you are a loyal cable subscriber, you may very well be paying more for your service than a new customer who just got a deal for switching carriers. Or if you are a magazine subscriber, you might asked to renew your subscription at a much higher price than if you just let the subscription lapse and subscribed as a new customer.

Dark patterns: carefully crafted user interfaces that trick users 

Is the limit of the dark arts that companies use to fleece customers?  Here’s what Michael Hinshaw says in a recent post of his:

According to darkpatterns.org, a dark pattern is “a type of user interface that has been carefully crafted to trick users into doing things.”  Put another way, firms that employ dark patterns trick their customers into buying/signing up for things they almost certainly don’t want.

It can be as egregious as getting rental car customers to buy insurance they don’t want or need, or signing up for recurring shipments, billed monthly, when all they want is a single purchase…..You get the drift. Dark patterns get customers to do things they wouldn’t typically choose to do, if they were presented the options in a straightforward manner.

What does Michael Hinshaw recommend?  He recommends finding the source of these “bad profits” and taking the necessary action:

So, ask yourself: does your company ever try to “trick” your customers? If the answer is yes, put up your hand and “out” the practice, pushing your firm to do something, well, better. There’s always an alternative to using dark patterns.

Is customer focus the antidote to these dark practices?

Time and again I have called attention to the ‘extraction’ context that lies hidden underneath the content of customer relationships, CRM, customer focus, customer experience, and customer-centricity.  And it has occurred to me that I have been a lone voice spoiling the customer love fest. Not anymore.

I share with you selected passages from Bruce Kasanoff’s latest post which shows up for me as being the best post I have ever read when it comes to customer focus and/or customer-centric business:

The vast majority of “customer-focused” initiatives reek of a taker mindset.…. They do not think of customers’ interests first. They do not give major new benefits or services to customers. They seek to take more money out of people’s wallets.

In short, these initiatives were designed by takers, and if you are a giver it is enormously frustrating to deal with the hypocrisy that surrounds you: your company says it wants to help customers, but its policies and procedures are designed to take from customers, not give to them.

The taking mentality creates systems that make it so hard for customers to stand up for themselves that it’s easy for companies to “legally” lie, cheat and steal from them.

Putting takers in charge of customer experience is like asking a bear to guard your honey.

If you really, truly want to grow your company faster than your competitors, hire, promote and empower givers.

Givers are people who think of other people before they think of themselves. They are the people who should be designing and running customer-focused initiatives. They are the folks who have the vision and ability to grow revenues, because they are focused on the needs of others.

As I have said before, an authentic shift towards customer-centric business requires a genuine shift in consciousness. A shift from a “You OR Me” context to a “You AND Me” context. A shift from shareholder capitalism to conscious (stakeholder) capitalism. A shift from maximising short-term profits (at the expense of people and planets) to maximising long term wellbeing for all. A shift from calculating mind towards a generous heart. A shift from taking-keeping-excluding to giving-sharing-including.

What do you say?

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