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Customer-Centric Leadership: What Can We Learn From Jeff Bezos?
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:
- Trust
- Transparency
- Best interest of customers
- Integrity
- Honesty
- Not being opportunistic
- Customers ahead of shareholders
- Innovation
- Passionate
- Humble
- Proactive
- Delight
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.
Customer Experience: a personal insight into people and organisations (part II)
This post follows on from the previous one – if you have not read it then you may wish to do so, as this post continues the story, the conversation.
Trust – I put my life in the hands of ‘others’
I awaken and notice that I am back in the day ward, what happened, what am I doing here? Confusion. My last memory is of being in the ‘operating theatre’: the nurses are hooking me up to equipment and assuring me that they will be monitoring my vital signs throughout the procedure. The Consultant inserts a needle into my hand, the sedative flows I can feel that it is warm. Now I am awake, here in this ward.
The nurse offers me a tea and sandwiches, I refuse. She gently and confidently tells me that the right thing to do is to take the tea and sandwiches. I agree – she comes across as she knows what she is doing and she is doing it out of care for me. After finishing the ‘meal’ and the paperwork, she tells me someone will be along soon to take me to another ward until my wife can come and collect me.
As I am wheeled along to the other ward I reflect on what happened today and has happened before. How many times have I put my life at risk – in the hands of the medical profession? It occurs to me that trust is present between me, the doctors and the nurses. I trust that they will act in my best interests, to take care of me, to safeguard my life by doing the right thing. I can think of two instances where the medical profession saved my life: at the age of 8 when I walked into the path of van and then in my mid-20s when I had a blockage in an artery ……
What is the bedrock of this trust? I am of the view that the medical profession is bound by the prime directive: do no harm. I am convinced that the doctors and nurses are here for me – to serve me, to cater for my needs, my welfare – and not the other way around. I believe that there are rigorous standards in place to ensure competence – these folks know what they are doing, they haven’t just walked off the street. What would happen if this trust was eroded? Would we, here in the UK, end up in the same place as the USA? Highly likely. Trust is THE lubricant of friction free relationships between human beings. Trust is what makes all forms of social organisation possible.
Now compare this with the business world. What is the prime directive? Can you and I honestly say that the prime directive is to do no harm to customers? What about the design of the business system? Is ‘business’ there to serve me and my needs or is it there to find means to sell stuff to anyone who can be persuaded to buy it? Is it somewhere in the middle? What about competence? How sure can you and I be that the business folks we depend on are competent? I know of a bank where the vast majority of customer services staff cannot accurately answer the top 10 frequently asked questions. And then are the customer facing staff in stores – most of them do not have the requisite product knowledge nor the skills to listen to / talk with customers.
Care: the difference that makes all the difference?
The Consultant telling the nurse that he was going to give me a sedative as that was the right thing to do. And instructing her to find me a bed showed up as care – care for me.
The nurse ringing around, finding a bed, coming back to tell me with a smile in her being, showed up as care – care for me, for my well being.
The Consultant and the team rearranging the operating schedule to put me lower on the list – as I was in lots of pain and not ready to be ‘operated’ on – showed up as care, care for me.
The nurses talking to me, explaining what was about to happen, pointing out that they were hooking me up to equipment to monitor my vital signs throughout the procedure showed up as care – care for me.
The nurse offering/encouraging me to have that tea and sandwich after the ‘operation’ showed up as act of care – care for me.
The trainee nurse coming up every so often to measure my blood pressure showed up as care – care for me.
The nurses on the receiving ward who got that I was not lucid, who first found me chair to sit in and then later moved me to the bed (when it became available) and then put blanket on me showed care – care for me!
What I am present to is the kindness/care of strangers, the kindness of my fellow human beings, the kindness of the medical professionals – at my GP’s surgery and at Heatherwood Hospital. What showed up in my experience was caring and competence. Caring is not enough it requires competence. Competence is not enough, it requires authentic caring for the other as fellow human being. I say that if you care then you make sure that you do all that you need to do to be competent. Put differently, ensuring competence is a key act of caring and if incompetence is present then that shows a lack of caring, indifference.
Authentic caring involves doing what is right including going against the wishes of the customer if that is the right thing to do. After the procedure, when I woke up I was ready to get dressed and literally walk home – I felt that fine. I told the nurses that I would walk to the other ward. I asked the nurses to leave him outside on the lawn until my wife turned up so that I would not take up a bed that someone else needed. They ignored me. Why? They had a better map of the situation – they knew that I was not lucid, not fit to make decisions, not fit to look after myself.
One other thought occurs to me, the level of caring varied from one person to another. Put differently, caring did not show up as an organisational quality, it showed up as personal quality. That is to say that some people cared and showed their caring whereas others did not. Which suggests to that the organisation is not consciously, deliberately cultivating a culture of caring.
Now lets take a look at the business world, how do business organisations show care for their customers? Does care show up in the lives of customers? In what sense do customers feel cared for? What would show up if genuine care, for customers and their well being, was present? How would that effect product development, marketing, sales, customer service, logistics, finance…? Could it be that genuine care will work where all the shiny toys and fashionable tricks are not working?
And finally
I will conclude this series of posts by sharing with you the aspects of my ‘customer experience’ that were not so great and highlighting issues’/factors that need to be addressed.
Book review: Extreme Trust by Don Peppers and Martha Rogers
Let’s get up to date
If you have been reading the recent posts you will know that I have been diving into, exploring and sharing what I have learned as I have been reading Extreme Trust the latest book by Don Peppers & Martha Rogers. This weekend I finished reading the entire book and so this post is my, personal and biassed, review of the book. If you have not read these first 2 – 3 posts then here are the links:
Extreme Trust: can honesty be a means of competitive advantage (part 1)
Extreme Trust: can honesty be a means of competitive advantage (part 2)
What kind of a book is Extreme Trust? Think back to The One to One Future
How best to describe Extreme Trust the latest book by Don Peppers & Martha Rogers? Perhaps the best place to start is to compare it with the other books Don and Martha have written. Which is the book that is the closest to Extreme Trust in its flavour? The One to One Future. That book, The One to One Future, was a delight to read and it said what needed to be said about the state of marketing and spelled out the future. Extreme Trust has a similar flavour and had provided me with a similar experience. What did I like about it? What spoke to me? In Extreme Trust, Don and Martha do the following effectively:
- Inject human beings and in particular the social/co-operative/empathic being of human beings back into the whole Customer conversation – yes, look closely and you are likely to find that for all the talks about relationships the focus of the Customer movement has been on processes, data and technology (that is as true for Don and Martha as any other authors);
- Address the ‘elephant in the room’, the greed based, short term focussed, deceitful/manipulative context of ‘business as usual’ which is oriented towards/focussed on extracting revenues and profits from customers usually by taking advantage of the ignorance/vulnerability/helplessness of customers;
- Explore the theme of trust – why it matters, how it operates, what difference it makes, what benefits it delivers to social life and business/organisational life; and
- Spell out the why/how organisations will have to become ‘trustable’ whether they want to or not – social technologies, smartphones and the fundamentally social/moral wiring of human beings make it inevitable
Extreme Trust is not a book about marketing, it is not a book about customer service, it is not a book about social media. Extreme Trust, if read/viewed through a wide angle lens, is essentially about a new paradigm in business which involves and impacts everyone – the Tops, the Middles, the Bottoms, the Customer, the Community. Essentially, Extreme Trust sets out a new philosophy of doing business based on an understanding of the social being of human beings and how social media has given real weight to the hollow sounding expression “The Customer is King”. If that is the background of the book than the customer and the relationship with the customer sits in the foreground and can best be encapsulated in the following diagram:
Let’s take a brief look at the chapters
The chapter headings are meaningful and so I want to share them with you and provide my brief take on each one.
“Trust: not just a good idea. Inevitable.” Don and Martha make a persuasive argument for the importance of doing the right thing by customers proactively and they spell out the benefits of being trustable (USAA) and the downside of taking advantage of your customers (AOL).
“Serving the interests of customers, profitably”. Here Don and Martha describe and point out the ‘flaws’ of ‘business as usual’ and argue that the central challenge for Tops is to come up with an appropriate business model for the time – a business model that allows the company to generate “good profits” and rule out “bad profits” by aligning the interests of the customer and the company.
“Trustability: capitalist tool”. In this chapter Don and Martha ‘get real’ – they get that the lever for effecting change in business is through the profit motive as opposed to being good or doing good. So Don and Martha strive to show you doing right by the customer, being a trustable company, leads to superior long term performance. In short, trustability is an asset like ‘brand’ is or at least used to be.
“Sharing: not just for Sunday school”. The social nature of human beings as evidenced by co-operation, sharing, reciprocity, sense of injustice and punishment of cheaters is explored here. The key point is that we do not have to be encouraged to share, to cooperate, to reciprocate, to punish those that do not share/cooperate/reciprocate – to be human is to be/do this stuff effortless, it is the default. Social production and the radical implications it has for business is touched upon here.
“Trust and the e-social ethos”. In this chapter Don and Martha take the social being of human beings and look at/describe how this shows up in the e-social world of social networks. The implications are explored through real life examples of companies that got it right and those that did not. This chapter is heavily linked with the previous one.
“Control is not an option”. Business as usual can be characterised by “command-control-secrecy-spin”. Well this used to work great and is now well past it’s sell by date. The world is much more interdependent, fluid, unpredictable – just look at what has been happening since the financial crisis of 2008. And anyone who has studied ‘systems and systems thinking’ will get that control is an illusion. Yet as Kahneman has shown in his latest book (Thinking Fast and Slow) we human beings are wired to strive for control, think we can control more than we can control, and look for/find order when none exists. Don and Martha share these features of our existence and spell out some approaches that Tops can take to deal with the new reality.
“Build your trustability in advance”. In this chapter Don and Martha spell out the advantage of being a trustable company through examples of real companies that encountered hard times and where reputation for trustability (with core customer base) made all the difference. In short, if you look after your customers in the good times they look after you during your bad times.
“Honest competence”. It is not enough to be honest, it is not enough to be competent, your organisation has to show up as being honest and competent. Don and Martha divide competence into product competence and customer competence and explore each one. Turns out that organisations really struggle with customer competence. The key issue – inability/failure to empathise with customers, to see the world through their eyes. Don and Martha share the instructive story around Domino’s pizza.
“Trustable information”. Information is data that makes a difference – it sheds light on a situation, it enables action, it helps attain desired outcomes. One way companies can contribute to customers and the wider community and thus build trustability is through sharing data and/or information that is held by the company. What is often just data within a company, if released to a wide community in a usable format can be turned into information. That is the key point of this chapter, Don and Martha gives some examples.
“Designing trustability into a business”. This chapter completes the conversation, the story and Don/Martha do so by exploring what trustability would involve in various industries – mobile operators, financial services, automotive, airlines, enterprise computing…..
Why I have gone to all this effort to write this review?
Extreme Trust deserves to be read. It opens up a new domain, a new conversation, a conversation that needs to happen. Why? Until this conversation happens, this domain is addressed, pretty much all the money spent on Customer initiatives is wasted. Why? Because the ‘elephant in the room’ is not being addressed and addressing that ‘elephant in the room’ is the key to cultivating genuine affection and customer loyalty. I want to leave you with the parting words of Don and Martha in Extreme Trust:
“In the final analysis, it is almost certain to be the new companies and the start-ups that employ these tactics to overturn the old way. They have less invested in the current paradigm, and less to lose by destroying it. Gradually, they will use trustability to transform our entire economic system, in the same way that interactivity itself has so dramatically transformed our lives already. They will deploy honesty as brutally efficient competitive weapon against the old guard.
As standards for trustability continue to rise, the companies, the brands, and organisations shown to lack trustability will be punished more and more severely…..“
For my part, I am keen for this future to turn up sooner rather than later – the thought occurs to me that this is a future worth operating from and living into. How about you?
Extreme Trust: can honesty be a means of competitive advantage? (part 1)
I enjoy reading what Don Peppers and Martha Rogers write. In fact their point of view spoke to me in such a way that it called me to join up and become a part of The Peppers & Rogers Group, for a while, back in 2000. Don and Martha have published a new book Extreme Trust. In this series of posts on trust I am going to share with you, comment upon and explore topics that are addressed by Don and Martha in their book.
Does trust matter?
Why don’t you take the salesman at his word and buy what he is selling you? Because you have learnt that what is in the interests of the salesman, to make a sale and take our money, is not necessarily in your interest. Why don’t you accept the advertising put out by companies? Because you have learnt that advertising, as a whole, is not truthful – you know that it has been designed carefully, purposefully, to push your buttons so that you buy. Put differently you simply don’t trust the advertising.
Trust matters. Why? Because our lives are tied up with each other. Heidegger pointed out that the fundamental being of human being is being-in-the-world – we are not spectators in the stands, we are right there in the midst the world. Who is there right with us and an essential component of the world? Our fellow human beings! Our experience of living and how our lives turn out depends on how we conceive of one another (selfish, co-operative, selfless) and how we treat each other (help one another, look out for one another, indifferent towards one another, exploit one another). Whether we trust one another or not matters, what we trust another with or not matters, who we trust and who we do not trust matters.
How will you compete against the likes of USAA?
Don and Martha start Extreme Trust by sharing a great story and asking a powerful question that gets to the heart of the matter. Let’s start with the story. It is about USAA a financial service company that consistently comes out as the most trusted financial services organisation in the USA. The culture at USAA if based on a single yet profoundly powerful statement: treat the customer the way that you’d want to be treated if you were the customer.
After the first Gulf War (1991) USAA sent out refund checks to several thousand “members” (customers). Why? USAA figured out that men and women (armed forces) serving overseas weren’t driving their cars in the USA, suspended the premiums for those months, and sent out unsolicited refund cheques when these men and women got back to the USA. USAA did not have to do this and no-one asked them to do it. How did this turn out? Nearly 2,500 of these refund cheques were sent back to USAA by grateful customers who told USAA to keep the money and simply be there “when we need you.”
Now, here is the question that Don and Martha pose: “How will you compete against a financial services institution that customers love so much they sometimes refuse to accept refunds and are loyal into the third generation and counting?”
What makes USAA (and other companies like USSA) so different from competitors?
I have repeatedly asserted that most of what passes for customer-centricity is simply a sham. Specifically, the philosophical base, the moral grounding, the fellow feeling, that is necessary for customer-centricity to show up as customer-centric, in the eyes of the customer as a moral being is absent. This is what Don and Martha say on the matter:
“Most businesses and other organisations operating today think that they’re already customer-centric and they are basically trustworthy, even though their customers would disagree……. Being “trustworthy” is certainly better than being untrustworthy, but soon even “trustworthiness” won’t be sufficient. Instead companies will have to be trustable.
..trustability is a higher standard still. Rather than working to maintain honest prices and reasonable service, in the near future companies will have to go out of their way to protect each customer’s interest proactively, taking extra steps when necessary to ensure that a customer doesn’t make a mistake, or overlook some benefit or service, or fail to do nor not do something that would have been better for the customer”
In short, USAA and companies like USAA (Amazon, Zappos, Apple, Google…) are trustable and as such they practice are built on the three pillars of trustability.
The three pillars of trustability
According to Don and Martha (in Extreme Trust) the three pillars (they use the term ‘principles’) of trustability are:
Do the right thing. Essentially this is about the distinction between ‘good profits’ v ‘bad profits’. Doing the right thing involves giving up practices (like exploiting customers) that generate ‘bad profits’. And it involves coming up with a business model that generates ‘good profits’ by creating genuine value for customers by aligning with the needs and interests of customers and getting a fair return in exchange. Doing the right thing lies in the realm of leadership and strategy.
Do things right. This is all about operations and operational excellence. It is about the domain of management and concerns itself with functions, processes and details so that you make it easy for your customers to do business with you across the entire customer journey and generate the right kind of customer experience at each touchpoint that matters.
Proactively. In Don and Martha’s words “Knowing that a customer’s interests is not being well served and doing nothing about it is untrustable. Not knowing is incompetent…. A company might be scrupulous in its ethics, completely honest in its brand messaging, and highly involved in tracking its customer satisfaction, but will it be proactively watching out for its customers interests? If it wants to succeed in the age of transparency, yes.
What gets in the way of being a “trustable” enterprise?
Why aren’t more companies, even most companies, like USAA, Apple, Amazon, Zappos and the like? This is a domain I have tackled several times and I say it is addiction to ‘bad profits’. What do Don and Martha say?
“The fact is that far too many businesses still generate substantial profits by fooling customers, or by taking advantage of customer mistakes or lack of knowledge, or simply by not telling customers what they need to know to make an informed decision.”
Why become a “trustable” enterprise?
Don and Martha are clear that companies don’t have a choice – the tide has turned, customers have the power, and by wielding this power customers will force companies to become “trustable” or die. This is how they put it:
“.. lots of traditional, widely accepted, and perfectly legal business practices just can’t be trusted by customers and will soon become extinct, driven to dust by rising levels of transparency, increasing consumer demand for fair treatment, and competitive pressure…… Things that companies, governments, and other organisations never meant for people to know they will know.”
“Transparency will increase because of technological progress, and progress is inevitable. It cannot be avoided or slowed down.….. As important as our social nature is.. social media and other interactive technologies have injected it with steroids.”
What is my take on this?
My thinking and philosophical orientation is in line with that being shared by Don and Martha in their new book Extreme Trust. As such it is no surprise to me that I am enjoying reading it. Nonetheless, there are areas in which I find that I am not in agreement with Don and Martha. They make the distinction between “trustworthy” and “trustable” and in my world that occurs as contrived.
In my world you are either pregnant or you are not pregnant you cannot be half pregnant. In my world, either I can trust you because I know that your care for me and are looking after my interest or I know that I cannot trust you. In my world most companies do not merit my trust – I, the customer, simply show up as a wallet to be emptied. And then there are companies that I do trust because they have done the right thing. How does the right thing show up as the right thing in my world? When the company takes a course of action that leaves me better off and it costs the company money. When I hear about what the company is doing to contribute to a ‘good world’. When I hear about the postive experiences of other customers.
I am 100% in agreement with the power of transparency. The potential for the kind of disruptive change that Don and Martha are speaking about lies in us wielding technologies that unconceal that which has been concealed from us. Great example in the UK are the MPs scandal. Once UK politicians used to lecture the world on honesty, moral uprightness and look down on less developed countries on the account of their corruption. For many years the UK politicans got away with being corrupt and then the bubble burst. UK politicians are not in a place to lecture anyone. Another example is Rupert Murdoch and the News of the World phone hacking scandal. For many years Rupert, some would claim, was the Kingmaker and pretty much got what he wanted. He even got the Conservatives to hand him BSkyB on a plate. Then came the disclosure that a dead girls phone was hacked and the moral revulsion of the ordinary folks forced a public enquiry on a reluctant prime minister, the closure of a newspaper and the abandonment of the BSkyB takeover.
In the next post in this series I will share more of what I learn as I progress reading through Extreme Trust. I will conclude the series of posts with a review of the book as a whole so that you can decide if you want to read it for yourself.
Service Providers: why trust matters and what you can do to cultivate it (Part II)
In the previous post I set out the importance of trust especially for services businesses like travel, insurance, banking, media, telecommunications. In this post I want to share with you the insights that come of the research that Prof. Chris Haliburton and Adine Poenaru carried out in 201o on the banking, insurance and mobile telecommunications industries – USA and UK.
What matters to customers?
According to the research customers are looking for service providers to level with them by providing high quality, clear, simple to understand communications that provide useful information that avoids unpleasant surprises and enriches the customers lives. Examples include: keeping policies simple and easy to understand; clear language in policy documents so that customers are not mislead; keep me up to date with all the changes that save customers money; making the pricing more straightforward – easier to understand; letting the customer know as and when there is unusual activity on the customer’s account etc. In my book, customers are asking for service providers to be honest with them – to act with integrity (in the moral sense).
Second, customers are also looking for service providers to make them feel that the company cares for them. Examples that show this kind of caring include: offering existing customers the same kind of deals that the companies offer new customers; putting customers before profits; doing what they said they would do; providing accurate truthful answers to questions; making customers feel valued etc. In my book this second dimension is showing benevolence through action rather than lofty mission statements and fine sounding values that are not put into practice.
Third, customers are a looking for courteous conduct and high level of competency from the front-line employees that interact with and serve them. The kind of things that customers want include: knows my policy inside out; sales people to be honest; dedicated account managers; all front-line staff trained to a high level and knowledgeable about and up-to-date with new plan; courteous and customer focused service etc. To my mind this need speaks to the rational dimension of trust: credibility, competence and reliability.
How you can cultivate trust: 10 lessons
What can you do to cultivate trust between your organisation and your customers? Prof. Chris Haliburton and Adine Poenaru make the following recommendations (paraphrased, added, amended by me):
Deliver the core service right. As previous experience + word of mouth + corporate reputation are the drivers of loyalty then it follows that you must deliver the core service right. Specifically, it means: meet (perfectly) the basic and core customer needs; actively search for, listen to and act on the voice of your customers (including social media); and manage your corporate reputation.
Get it right when it really matters. Find out what events and points in the customer journey matter most to customers and get these right. The literature refers to these as moments of truth. In the insurance field that is likely to include checking if you are covered, getting treatment pre-authorised, making a claim and getting reimbursed quickly.
Make customer feel that you are looking after them. A great way of doing this, as mentioned earlier, is to provide information, advice, product and offers that leaves them feeling enriched (better off). Another way is to provide customers with a choice of channels that they can use to get through to you. It also means having enough human beings on hand to deal with customer enquires as opposed to putting self-service technology between you and your customers and forcing them to use it. I had a horrible experience with the Santander IVR today and could not get through to a human being – I do not feel cared for at all.
Ensure your front-line staff embody high standards of competence and ethics (honesty, acting in the customers best interests).
Customise the customer experience. This means being a ‘sense and respond’ organisation rather than a ‘make customers fit into our standard policies and processees’. It is more than ‘treat different customers differently’ – it includes treating the same customer differently depending on the particular circumstances and emotional needs of the organisation.
Act the best of human: admit mistakes, apologise (genuinely) and fix them. Whilst compensation is OK it is not enough it falls short of what we expect from considerate human beings (and organisations) – this point is spelt out clearly by James Watson in one of his latest posts and I recommend that you read it.
Improve communications (from the customers perspective) across the board. Your communications need to bear in mind the needs (and interests) of your customers. In particular the communications must be speak the language of your customers, be relevant, be concise and above all they must not mislead. Customers will forgive you for making honest mistakes but they will not forgive you for deceiving them.
Look after your existing customers. This means providing existing customers with the same products, offers, service and attention that you bestow on courting new customers.
Provide simple easy to understand and clear contracts. Don’t catch your customers out with cleverly crafted contracts written in legalese that your customers will not read and cannot understand. Do the opposite write fair contracts, spell out the benefits and cons, don’t hide stuff in the small print, and above all write contracts in a language the customers can understand.
More transparency and integrity in pricing. The opposite of this practice is what the oil, gas and electricity companies do – ramp up prices as soon as wholesale prices go up but be glacial in cutting prices when wholesale prices go down. A great example of transparency and integrity in pricing was shared by Howard Shultz in his book Put Your Heart Into It – coffee prices tripled almost overnight and Starbucks did not put up prices because they had plenty of coffee in stock. Starbucks did increase prices eventually (when they had to buy coffee) and they kept these price increases to a minimum and took the time to educate customers why prices were going up. It may be the approach British Gas is taking right now to deal with customer concerns and anger over predatory pricing.
My take on this
Actually my take on the whole topic of trust and how to cultivate it is embedded in this post. Going further here are some of my thoughts:
Complexity takes a double toll on the customer. First, it is hard for the customer to find the right (the best) ‘product’ for himself. Second, it is that much more likely that the customer will be given inaccurate advice by the front-line staff. Why? Because as the ‘product range’ grows and the complexity of the ‘products’ for sale grows (functions, features, terms, conditions, exclusions, excesses etc) it is hard to ensure that the front-line staff actually understand the ‘product range’ and can provide accurate advice. Knowledgebases don’t help much. Why? How well would you perform if the customer was on the phone or right in front of you? Would you not feel the stress – the need to respond quickly? Yes, if you are a normal human you are likely to favour speed over accuracy – to reduce your stress and make your performance targets.
Poorly written communications including ‘product’ literature takes a toll both on the customer and on the front-line. If it is hard for the customer to understand, is ambiguous or deliberately confusing to the customer then it is likely that it will occur similarly to the front-line especially the people who are new to the job. That means that the front-line is that much more likely to misunderstand and provide inaccurate answers and advice to customers. It is also likely to mean that it takes that much longer to train the front-line staff to become competent.
Now that we have the competence dimension out of the way let’s deal with the ethical dimensions of integrity and benevolence. Is it really news to us, to anyone, that customers want us to be straight with them and treat them as if they matter? I suspect it is not. So the challenge is to live – embody – what we already know. Either the issue is that our society is full of dishonest, uncaring people or there is something about many organisations that turns honest, caring people into people who come across as being dishonest and uncaring. What do you think?
