Dialogue on CRM, Customer Experience, and Customer-Centricity

Colleague: So much money has been spent and continues to be spent. On CRM. On CX – voice of the customer, journey mapping etc. In the name of customer-centricity – whatever that means.  Yet, there is little to show for it.

Me: Seems that way.

Colleague: Which big company, as in the kind of company that we end up consulting to / working with, has anything to show for the time-effort-money that has been spent on the whole Customer thing?

Me: I am not aware of a single one. Maybe there is big company out there that has become customer-centric as seen through the eyes of the customers. And If there is I am not aware of it. I distrust whatever the folks who go to the Customer circus (conference circuit) say about themselves. What matters is what the customers say.

Colleague: What’s your point of view on what’s going on?  You’ve always got a point of view on pretty much everything! Let’s hear it then.

Me: Have you come across a philosopher called Heidegger?  His thinking provides a good clue as to what’s going on.

Colleague: Never heard of him. What’s he got to say that’s relevant.

Me: He introduces the distinction between “in order to” and “for the sake of”. This distinction sheds light on the failure of the whole Customer thing. And what it will take to generate success.

Colleague: Explain then!

Me: Imagine a man in a workshop working on wood.  He happens to be sawing a piece of wood.  Why is sawing this piece of wood? In order to make a cabinet.  Why is he making a cabinet? In order to sell it?  Why is he looking to sell the cabinet?  In order to get money / make a living. Why do that? In order to care for / feed his family? Why do that? For the sake of his own conception of what it is to be a good father/husband.  Why does that matter to him? It just does!  Here the chain of in order to comes to an end.  There is no in order to. Showing and travelling as good father/husband is the sake of which he gets up in the morning and works/lives.

Colleague: There you go again not answering the question. What the fork has this to do with the whole Customer thing?

Me: Let me explain it another way.  Imagine that there are two spherical round hollow cylinders. The walls are quite thin, and of the same size.  It is possible to fit/slide into the other one by squeezing it as the cylinders are made of flexible material.

Colleague: OK.

Me: One is labelled “Revenue & Profits”, the other is called “Customer-Centricity”.  You are told that you need to slide one of these cylinders into/inside of the other cylinder.  Which one do you slide inside? Which one has to fit inside the other one?  Do you fit/slide the “Customer-Centricity” cylinder inside of the “Revenue & Profits” cylinder? Or do you choose to do the opposite: squeeze/fit the “Revenue & Profits” cylinder inside the “Customer-Centricity” cylinder?

Colleague: No question, the ‘Customer-Centricity” cylinder goes inside of the “Revenue & Profits” cylinder. That’s the whole purpose of CRM, Customer Experience, and Customer -Centricity – to boost revenues, increase profit margins, and so boost profits. And to keep on doing this year after year.  Isn’t it?

Me: As a philosopher I say that purpose does not inhere in the things itself. Purpose is a human construction. And as such the speaker who speaks of purpose gets to say what the purpose is. And sure, pretty much everyone that has taken on CRM, Customer Experience, and Customer-Centricity has done so for the sake of ambition/greed: for revenue growth, raising profits margins usually by cutting the costs of serving customers, and for profits and profit growth.

Colleague: What’s wrong with that!

Me: Wrong is not found in the world.  Wrong is a human construct. It’s wrong if you say it’s wrong and get enough other folks to agree with you.  I’m not saying there is something wrong with it. I am saying that when we choose one course of action over another there are always consequences.

Colleague: I think you are saying that there is little that big companies have to show for the time-money-effort they have spent on CRM, Customer Experience, and Customer-Centricity because they have been squeezing “Customer-Centricity” inside of “Revenues & Profits”.  Is that what you are saying?

Me: That is exactly what I am saying!  Yes, that is exactly what I am saying. Almost every big company has gone about it that way. The prime, unquestioned directive, is to make the numbers, and grow the numbers. The latest magical recipe is CRM, Customer Experience, or Customer-Centricity. So lets hire a bunch of consultants to fit these magical solutions into our organisation so that these solutions help us deliver on our sake of: sake of making the numbers, sake of “Revenues & Profits”. And this approach has generated that which it has generated: limited benefits, incremental improvements in cultivating genuine loyalty.

Colleague:  The alternative?  Squeezing/fitting “Revenue & Profits” inside of “Customer-Centricity”, how does that work?

Me: As members of the senior leadership team you show up & travel in a way that makes it clear to all that you, and the company, that you represent is there for the sake of enriching the lives of your chosen set of customers.

You can do that as Zappos does through it awesome customer service.  You can do it as Apple does by creating great (as in cool, high quality, unique) products for folks who are willing to pay a premium. You can do it as Amazon does – attractive prices, huge product range, ease/convenience of shopping, and next day delivery.

Amazon, in particular Jeff Bezos, sets a clear example.  You choose to be customer-centric, to build that long term customer loyalty, to play for the long term, and you take the hit to “Revenues & Profits” over the short and even medium term. And you tell your shareholders that this is what you are about.  If they don’t like it then they should sell their shares and move on to other enterprises.

Zappos is also an instructive example.  The leadership team of Zappos started out putting the “Customer Centricity” container within the “Revenues & Profits” container. At a critical point when the Zappos was on its last legs the leadership team had to make a choice: to continue providing a lousy customer experience or do the opposite.  And it looked like doing the opposite changing the operation model so that “Revenue & Profits” had to squeeze into / fit into “Customer-Centricity” would leave to ruin faster.  The choice they made? To make “Revenues & Profits” subservient to, and for the sake of “Customer-Centricity” as in delivering an awesome customer experience.  It so happened that this change worked out for Zappos. And there is no guarantee that another company in the same situation as Zappos taking the same course of action will generate the same result.  You have to be a particular kind of idiot to believe that taking the same course of action in a open/dynamic/non-linear/uncertain/unpredictable world will yield the same results as you got last time.

Colleague: But CEOs of big listed companies cannot do this. They have to make the numbers – that’s what the analysts want, that’s what the shareholders want.

Me: Which is why I say that big listed enterprises will continue to make incremental improvements at best when it comes to the customer experiences (as viewed through the eyes of the customers) and customer loyalty.  And the field for creating an awesome customer franchise belongs to outsiders – the Zappos, the Amazons, the Apple’s of the future.

 

 

On Customer Obsession

Customer Obsession Is Fashionable

I hear more and more Middles & Tops mention the importance/need for customer obsession. It’s often used as an exhortation to the Bottoms – those on the front line.  Something interesting happens when I ask the speaker what s/he means by, is pointing at, when s/he speaks of customer obsession. Silence followed by stuff that shows up for me as either banal or made up on the spot.  Little in the way of thinking (as in contemplation) has occurred in many instances.

Is Customer Obsession New?

Interestingly, customer obsession isn’t new. What’s the basis of my assertion?  I remember 2000/2001: my colleagues and I start a customer strategy engagement (centred on 1to1 marketing) at a well known mobile telco. What do we find? We find a dedicated research unit in the marketing function.  A unit which has budget of many millions. What is this money spent on?  Understanding the market (totality of customers for mobile phones/services); understanding their own customer base; and understanding the customers of their competitors.  I categorically state that the head of this research unit and the folks that worked in that unit were obsessed with customers.

The interesting question is this one: Towards which end/s was this customer obsession directed?  Was it directed towards driving product development?  Or the customer’s experience of signing up for the right phone/package?  Perhaps, helping the customer’s make good of that which s/he had purchased?  No, not at all. The purpose was to work out how to drive up sales and profit margins through marketing: targeting the right messages/offers to the right customers or potential customers.

Was 2000/2001 the start of customer obsession? No.  I remember the power and practices of the various brand marketers whilst in the employ of International Distillers & Vintners back in 1993.  I say customer obsession of this kind -figuring out how to squeeze more out of the customer has a long history.

Let’s consider alternative conceptions of customer obsession.

Satya Nadella on Customer Obsession

In his book Hit Refresh Microsoft’s CEO says (bolding/coloring is my doing):

“First, we need to obsess about our customers. At the core of our business must be the curiosity and desire to meet a customer’s unarticulated and unmet needs ….. There is no way to do that unless we absorb with deeper insight and empathy what they need.….. When we talk to customers, we need to listen. It’s not an idle exercise….. We learn about our customers and their businesses with a beginner’s mind and then bring them solutions that meet their needs. We need to be insatiable in our desire to learn from the outside and bring that learning into Microsoft, whilst still innovating to surprise and delight our users.” 

Jeff Bezos on Customer Obsession

Here’s what Amazon’s founder & CEO says in his 2016 Letter to Shareholders (bolding/coloring is my doing):

“There are many ways to center a business. You can be competitor focused, you can be product focused, you can be technology focused, you can be business model focused, and there are more. But in my view, obsessive customer focus is by far the most protective of Day 1 vitality.

Why? There are many advantages to a customer-centric approach, but here’s the big one: customers are always beautifully, wonderfully dissatisfied, even when they report being happy and business is great. Even when they don’t yet know it, customers want something better, and your desire to delight customers will drive you to invent on their behalf. No customer ever asked Amazon to create the Prime membership program, but it sure turns out they wanted it, and I could give you many such examples.”

Shortcuts on The Route of Customer Obsession

It occurs to me that many executives are all for customer obsession as long as they can just speak it sitting comfortably in the stands.  It’s another matter altogether when customer obsession requires leaving the stands and entering the arena.  Which arena? The arena in which customers show up and operate.  And the arena in which the customers interact with the organisation’s front line – websites, mobile apps, sales folks, customer services….

Take a look at the CX movement and ask yourself what is it characterized by?  Is it not journey mapping almost always in the comfort of a workshop in the corporate offices, and the results of voice of the customer surveys?  What are these?  They are proxies for the real thing.  These proxies are attractive as they allow folks to pretend they have insights from the arena whilst sitting comfortably in the stands.

Here’s what Jeff Bezos says with regards to proxies in his 2016 letter (bolding/coloring is my doing):

Resist Proxies

As companies get larger and more complex, there’s a tendency to manage to proxies. This comes in many shapes and sizes, and it’s dangerous…

A common example is process as proxy. Good process serves you so you can serve customers. But if you’re not watchful, the process can become the thing… The process becomes the proxy for the result you want. You stop looking at outcomes and just make sure you’re doing the process right…..

Another example: market research and customer surveys can become proxies for customers – something that’s especially dangerous when you’re inventing and designing products.

Good inventors and designers deeply understand their customer. They spend tremendous energy developing that intuition. They study and understand many anecdotes rather than only the averages you’ll find on surveys. They live with the design.
I’m not against beta testing or surveys. But you, the product or service owner, must understand the customer, have a vision, and love the offering. Then, beta testing and research can help you find your blind spots. A remarkable customer experience starts with heart, intuition, curiosity, play, guts, taste. You won’t find any of it in a survey.”

Enough for today.  I thank for your listening. Until the next time….

Maz Signature

 

 

 

What Does It Take To Delight This Customer?

Story: The Customer Experiences Sadness & Delight

Last week, Friday, it’s 10:00 and I am working from home.  Andy’s not arrived yet.  I’m wondering if he is OK or if he has forgotten. Neither of these thoughts occurs as a pleasant experience. Then I hear myself speaking: “It’s Andy, most likely he’s simply running late – its who he is. Relax. He’ll probably be here in the next 30 minutes.” I relax, and get back to work.

The doorbell rings. I open the door and see Andy standing there with his smile. I notice that I am happy to see him. I tell him that I am pleased/happy to see him. And invite him into my home whilst asking if he wants a drink. Andy says “A tea would be nice!” I ask him how he likes it and get busy making that tea.  The tea is brewing as Andy likes his tea strong; both of us are standing up in the kitchen.

Andy says “Sorry about contacting you amidst your cancer. What’s the news?”  I thank him for the discreet ways (email, SMS) that he kept in touch and reminded me that the vents had arrived and he was ready to install them when it worked for me.  I tell him that sorting out the condensation problem in the loft (the job to be done from my perspective) continues to be something matters and I am happy that he is here to do that for me. Then I answer his question around my cancer.

After listening patiently Andy shares his (relevant) experiences. His health, the blood tests he has to undergo, the medicines he has to take, and the way this has impacted his existence.  He also talks about his late mother and her cancer journey. We talk a while. Then I excuse myself as nature calls.  Andy gets busy with that which needs doing in the loft.

A little while later Andy comes down and finds me working on my laptop. And says something like “Sorry for disturbing you and I’ve finished”.  We get talking again. In the process he tells me that he noticed that the insulation in the loft is minimal. He tells me that his house had been in a similar situation and that he had managed to get a grant for extra insulation. He gives me the name of a website.  I thank him.

We move into the kitchen and he sets about writing me an invoice. I notice that the labour charge is a fraction of that which Andy had quoted. I point this out.

Andrew Laney Carpentry

Andy says in a matter of fact “It was a lot easier than I thought. It only took half an hour. So that’s the labour charge.”

I say let me pay you now and set about logging into my mobile banking app. Turns out that I no longer have Andrew Laney Carpentry and Maintenance set up. So I ask for Andy’s bank details. He gives me his bank card and make the attempt to pay him. Problem: there is fault in the mobile banking app that does not allow me enter his full name (somebody has not done good enough UX testing on the banking app).

I say, “Let me take a photo of your bank card. That way I’ll have your details and can punch them into the website using the laptop.  I will text you once I make the payment. Please text me back to confirm that you have received the payment.”

The outside door is open and Andy is in the midst of stepping out.  I say “Thank you Andy. Give my regards to John when you next see him. And remember that I work from home on Fridays. If you’re in the area then come around for a tea. You’re welcome.”  Andy tells me that is in the area from time to time, on a Friday, and will take me up on my offer.  I shake his hand and we part company.

I get present to my state of being  – noticing that I find myself experiencing both sadness and delight.

Who/What Is The Cause of Customer Sadness & Delight?

I look into my sadness and delight.  What is going on here?  Why the sadness?  What is the cause of delight?

Sadness. I notice it is the kind of sadness I experience when parting company with a friend. Interesting, at some deeper level than my conscious/rational mind, Andy is showing up for me as a friend.  Makes sense, he is friendly and we do have history together in the sense that some months back he did some work on my home. He was recommended by the fitter that i was using for a major refurbishment – I wrote a conversation on that here.

The delight. Why am I delighted? What is the source of the delight?  I notice that there are several dimensions:

  1. The job to be done (fix condensation problem in loft) occurs as done and is no longer on my mind – I had been carrying this problem for over a year;
  2. I enjoyed my interactions/conversations with Andy – genuine human to human relating had occurred where I found myself with a richer picture of Andy including knowing stuff that I would never have guessed unless he had shared it with me e.g. his military service, his mother’s cancer etc;
  3. The whole thing had turned out to be less troublesome and less costly than I had thought it would be; and
  4. Andy had done right by me all along validating my decision to put my problem (job to be done) in Andy’s hands and trust him.

Which might explain why it is that immediately after Andy left I logged into my Mac, paid him electronically, and texted him to tell him that I had done so, and asked him to confirm that he had got the payment. Doing otherwise, did not occur as an option – not even delaying it to the afternoon.

How Has Andy Laney Done Right By Me?

Looking into my experience of delight, it struck me that the defining factor in my experiencing delight is the thought-feeling “Andy’s done right by me; I made the right decision to trust this man!”  So I got busy looking into that – to see finer detail of doing right by me is made up of in this instance.  Here’s what shows up for me:

  1. I shared the problem with Andy and I proposed the solution – that of replacing some of the roof tiles with vented roof tiles;
  2. Andy looked into the matter and came up with a much cheaper/easier solution that of using internal vented tiles;
  3. My focus/priority to switched from this job to be done to dealing with cancer – and in the process I neglected this job to be done;
  4. Andy had kept in touch discreetly and minimally via non-intrusive means – mostly email about the job e.g. “The vents have arrived,” and SMS to ask about my cancer;
  5. Andy had seen the job through and been honest/straight all the way to the end – he could easily have played around for 2 to 3 hours, made the job look more complex, and charged me that which he quoted or more as I would have paid; and
  6. Andy had also been on my side (helpful) to the end – by pointing out that I do need to improve the insulation in the loft (work that he does not do) and telling me where I could get a government funded grant to cover all/most of the cost.

What Was The Real Gift That Andy Laney Left Me With?

Looking deeper still it hits me that Andy Laney gave me a gift. What gift? A gift that really matters to me!  What gift?  Evidence/experience of folks (in the world of business) who are decent/good.  Folks for whom money is not the measure of all things. Folks who embody a certain kind of old fashioned human dignity. And show up/operate with a sense of dignity/honour.  Folks for whom cheating customers does not occur as an option – even to consider this seriously would be to sully one’s self-esteem.  Thank you Andy for this gift.

I thank you for the listening. I wish you the very best.  Until the next time…

Maz Signature

CX: Using Intelligent Generosity To Cultivate Customer Delight

Certain businesses deal with products that perish or become useless if not used by a certain date/time.  This is often seen as a problem – a problem of generating demand to drive sales, and a problem of inventory management. I have yet to see this viewed, by Tops, as an opportunity to delight customers, and cultivate gratitude / loyalty between the customer and the business.

What am I talking about? Allow me to illustrate using a recent experience.

Recently, I booked a double room at the local Hilton (St. Annes Manor) hotel via Hotels.com.  I made a mistake – I booked it in my name, and for only one adult. So when time came for my wife and daughter to go to the hotel I rang the hotel. The voice on the other hand was professional and warm. The young lady didn’t just change the booking. Once she learnt that the room was for two adults, she took charge, and without me asking, found a room with two beds. I found myself pleased and grateful.  Later that evening my wife sent me a photo of the room – it was a room with two double beds.  Delight – my wife was delighted, my daughter was delighted, and I was delighted.  Along with this kind of room came four towels – ideal for those of us who needed access to that room merely to shower – until the major renovation work is finished in our home.

Think about it. What did the hotel lose by giving us that bigger (deluxe) room?  Nothing!  It was late in the day, the room was free, and if it had not been used it would have created no value for anyone.  Through intelligent generosity the lady on the front desk did create value: for us (the customers) and also for that hotel. How so for the hotel? I am writing about the hotel right now am I not?  Also, it was the first time any member of the family stayed there – those that got to experience it (wife and daughter) love it and have been talking about it – recommending it to others: the room, the peaceful / beautiful location, the spa…..  I also suspect that sooner or later my wife will check us in there for a quiet weekend away from the children.

It occurs to me that every business that deals with ‘perishable’ inventory has an opportunity to exercise intelligent generosity:

If you are an airline then you can offer seats (that your analytical models show will go unfilled) to some of your customers for free – as a thank you;

If you are a hotel you can do as our local Hilton did and/or offer some / all of the rooms likely to go unfilled to some of your customers for free – as a thank you or as taster;

If you are a supermarket, you have an opportunity to give food that is reaching its sell by date to certain customers (you choose which ones) or to local community organisation / charity that supports those in need…..

I know that some organisations do something this  e.g. airlines which offer free upgrades to certain customers.  I know that some hotels do this also. What I am talking about here is this and more than this – in some instances giving perishable product away to customers for free – free flight, free hotel stay, free train ticket, free concert ticket……

The question I am posing is this one: what opportunities does your business have to exercise intelligent generosity – the kind of generosity that causes customer surprise / delight / gratitude, holds the promise of increased revenue and/or brand reputation over the longer term, yet costs you little or nothing today?

Before you dismiss the question that I have posed, I ask you to consider that if ‘perishable’ inventory is not used by its sell-by date then it is waste. Is waste a better outcome / way of showing up and traveling in life than intelligent generosity?  All I can say is that the field of intelligent generosity appears large and largely unoccupied.

I thank you for your listening, until the next time…

A ‘Fresh’ Look at Customer Retention and Loyalty (Part II)

Let’s recap Part I of this conversation. The key points as I understand them are:

  • You cannot have customer loyalty without cultivating employee loyalty and investor loyalty. Why? Because they are fundamentally and inherently interconnected.  So debates about which comes first (customers, employees, investors) shows that folks lack a fundamental grasp of that which we are dealing with.
  • Customer retention-loyalty has implications that extend to every corner of the business. It is necessarily a strategic matter. As such the ownership-responsbility-accountability  belongs with CEO.  It cannot be handed off to the Marketing function (or any other function) nor given over to a Chief Customer Officer.
  • Retention is not just another metric. It is the defining metric for the whole business. Retention is used to integrate all aspects of the business into a coherent whole.

OK, now we are in a position to move forward and conclude this conversation. Allow me to set the scene by sharing this assertion with you (bolding mine):

“Stemming the customer exodus is not simply a matter of marketing; it demands a reconsideration of core strategy and operating principles.

I say that it demands a reconsideration of core strategy and operating principles in the context of a new theory of doing business.

What Theory of Business Enables Customer Retention and Loyalty?

Practice is always based on some theory of how the world works. The dominant theory that fuels just about every large business is one of profit maximisation and shareholder enrichment.  With this focus customers and employee are seen purely as means and almost never as ends in themselves.  Which is to say that they are viewed and treated as tools rather than human beings.  Human beings do not tend to be loyal to folks who treat them as tools.

If you are serious about generating sustainable improvements in customer retention and loyalty then you will need to jettison this theory and embrace a new theory of business. Why?  Lets listen – bolding mine:

The new theory sees the fundamental mission of a business not as profit, but as value creation. It sees profit as a vital consequence of value creation – a means rather than an end, a result as opposed to a purpose…

Profits alone are an unreliable measure because it is possible to raise reported short-term earnings by liquidating human capital. Pay cuts and price increases can boost earning, but they have a negative effect on employee and customer loyalty….  

…there are two kinds of profit. Call the first kind virtuous: it’s the result of creating value, sharing it, and building the assets of the business…. the other kind of profit is destructive. Destructive profit does not come from value creation and value sharing; it comes from exploiting assets, from selling off a business’s true balance sheet. This is the kind of profit that justifies terms like profiteering…..

When profit is a company’s goal and purpose, virtuous and destructive profits serve equally well. But once you see profits as a means to, and a consequence of, the sustained creation of value, then only virtuous profit will do.”

What Kind of Stand Do Those Who Excel in Customer Retention and Loyalty Take Toward People?

Which means that a customer retention and loyalty centred approach to doing business requires a particular way of seeing-treating people, and managing the business. Let’s listen – bolding mine:

“…see people as assets rather than expenses, and they expect these assets to pay returns over a period of many years. Loyalty leaders choose human assets carefully, then find ways to extend their productive lifetimes and increase their value. Indeed, loyalty leaders engineer all their business systems to make their human inventories permanent. They view asset defections as unacceptable value-destroying failures, and they work constantly to eradicate them. 

Why treat people (customers, employees, investors) in this manner? Because loyalty to count as loyalty has to be given willingly. Listen:

“You cannot control a human inventory, which of course has a mind of its own, so you must earn its loyalty. People will invest their time and money loyally if they believe that their contributions to your company will yield super returns over time. The secret is … to select these human beings carefully, then teach them to contribute and receive value from your business…”

Is Loyalty a One-Way Street?

The assumption (and practice) as I see it is that the game of loyalty is all about loyalty from customers to the company. Which is to say loyalty is a one-way street. Is this the right way to cultivate and demonstrate loyalty?  Let’s listen – bolding mine:

“The need to keep losses under control led many companies to cover the claims required by their contracts…. then refuse to renew customer policies to avoid future losses. State Farm took a radically different view. It had no intention of canceling customers it had expended so much energy and expense to acquire and maintain, most of them for many years….. Most important, disloyalty to customers would be philosophically unacceptable. Loyalty is a two-way street. Moreover, loyalty must be seen to be a two-way street. How could State Farm possibly expect its customers and agents to remain loyal if the company did not demonstrate loyalty when the chips were down.”

Why Is It The So Many Have Accomplished So Little When It Comes to Customer Retention and Loyalty?

I’ve in the customer retention and loyalty game for 15+ years. I’ve been in the arena not just a mere spectator. I have witnessed many talk fine words, I have seen many undertake all kinds of projects and programmes to increase retention/loyalty. Yet, I have seen none succeed in any meaningful-sustainable way.  Further, when I read about which companies are doing a great job in this domain it is always the same names or new entrants with new business models.

What gets in the way of existing large, publicly quoted, companies excelling at cultivating customer loyalty?  Almost every company approaches retention and loyalty tactically. So you have a bunch of business practices that drive customers to leave. Instead of changing these practices executive put in place retention teams. Let’s be clear, most organisations have merely added on retention teams and other gimmicks to their existing way of doing business. Is this enough? Let’s listen:

Building a highly loyal customer base cannot be done as an add-on. It must be integral to a company’s basis business strategy. Loyalty leaders …. are successful because they have designed their entire business system around customer loyalty…

 

Summing Up and Closing Out This Conversation

 

I have shared a particular perspective with you and I have invited you to listen to the speaking of a particular author.  How does this strike you?  Revolutionary? New? Fresh? Stale? Impractical? Nonsense?

Now is the time for me to come clean.  The perspective that I have shared with you is the perspective that I have held since my earliest days in the Customer arena. And the speaker you have been listening to is none other than Frederick F. Reichheld.  When did he speak the words that I have shared with you?  The words were put on paper and issued as a book (The Loyalty Effect) back in 1996.

Look around at what is going on and you are likely to find that customer retention and loyalty has been approached tactically. The usually result is add-on’s to the existing way of doing business. The add-on’s can take many shapes: new website, Facebook / LinkedIn presence, customer retention team, an online customer community, new CRM system…. The results?  Are they not meagre?  Which companies by taking this approach have vaulted into loyalty leaders?  I cannot think of a single one.

Why is it that those who have jumped on the Customer bandwagon have jumped on it tactically, and not strategically?  20 years ago, Frederick Reichhheld said this:

The real trouble is that many, perhaps most, executives today have adopted a paradigm which at its heart is inconsistent with loyalty-based management. Press them, and few will insist that the primary mission of their companies is to create superior value for customers and employees so investors can prosper…”

This strikes me as being the heart of the matter. Within the context of the current paradigm it is simply not possible to cultivate meaningful loyalty. So all that is left is tactics, add-on’s, poverty of increases in loyalty, more tactics….

I wish you well and thank you for your listening. Until the next time….

 

Book Review: The Endangered Customer by Richard. R. Shapiro

I enjoyed reading Richard Shapiro’s first book: The Welcomer’s Edge.  In this book Richard set out a 3 step model (the greet, the assist, the leave-behind) for making a human connection with customers through every customer interaction.

In his latest book – The Endangered Customer – Richard expands the 3 step model into eight steps in the customer’s journey from the initial encounter to making a repeat purchase. The book is relatively short (less than 150 pages), easy to read, and each of the eight chapters addresses one of the eight steps.

What Is The Endangered Customer About?  

It’s about retaining customers through superior service.  Superior service necessarily involves seeing customers as persons and striving to cultivate a human connection with them. Here’s how Richard puts it (bolding mine):

“Poor service followed by poor service – that’s how you endanger your customers into becoming someone else’s customers.”

Why bother going to the effort of generating good/great service?  After 28+ years spent working in the customer service industry, Richard makes the following assertion (bolding mine):

“.. companies of any size and in any consumer channel, can survive and thrive in the Switching Economy by making human connections that build sustainable customer relationships…..”

“As automated transactions become faster, easier, and more reliable, making human connection will become increasingly rare – and therefore increasingly more valuable. The greatest differentiator for any company will be how well it makes that human connection with its endangered customers.”

What Are the 8 Steps to Guarantee Repeat Business Through Human Connection?

In the Endangered Customer Richard sets out the 8 steps for cultivating human connection, delivering personalised service, and inviting-cultivating lasting relationships with customers.  These steps and associated nuggets of wisdom are:

1 – Make me feel welcome

“Human beings come to you with hope in their hearts. They need or want something they haven’t found elsewhere, and hope you have the answer…. Your job is to give them hope that they’ve come to a place where their problem or desire will be addressed in a helpful, friendly manner....”

“Offering hope beings with a welcoming smile.”

“The goal is not to create a relationship with every interaction. The goal is to invite a relationship…. This is why it’s important to faire the right people for customer-facing positions.”

2 – Give me your full attention

“Customers carve attention. They want and need to feel that you’re interested in them.”

“Fundamentally, giving your full attention requires an ability to acutely listen.”

“Joe Girard, the Guiness Book’s world record-holder for retail sales: “People may have had to wait for an appointment, but when I was with them, I was with them body and soul.

3 – Answer more than my question

“Questions are the customer’s way of inviting you to become a valuable guide in his or her journey. A sales associate accepts that invitation by taking the time to anticipate the “detours” and other obstacles that might lie ahead. That’s often the information that has the most profound effect on the customer. “

4 – Know your stuff

“There is no sales tool as powerful as knowledge. When we were shopping with Rochelle, we knew we were in good hands. Her expertise, coupled with a smile and an uplifting attitude, made all the difference.”

“… in a retail environment, I believe that the greatest cost of employee turnover is the one that is rarely quantified or even discussed: the diminished capacity in terms of customer relationships and institutional knowledge.”

5 – Don’t tell me no

“Never saying no is all about trying your best, because people will always come back to do business with a company that gives them the feeling that it is there for your.”

“…. many companies have standard practices that needlessly leave their customers feeling disappointed and uncared for.”

6 – Invite me to return

“The leave-behind represents any number of little things that associates can do and say to make customers want to visit again…. The point of every leave-behind is to make it easy for the customer to stay in touch.”

“When you are invited to return, it makes you feel wanted and accepted.”

“I can’t emphasise enough that feelings of loyalty naturally develop towards a person and not the business.”

“Relationships are cultivated on a person-to-person basis, not through impersonal automated “thank you” emails.”

7 – Show me I matter

“We are all innately suspicious of someone who seems to lose interest in us after money has changed hands. People just hate feeling seduced and abandoned. People like feeling important and special.”

“… demonstrating genuine concern and care after the conclusion of the interaction is something that many companies do not consider. When it does happen, it’s just an accident.”

“Take a good look at any company that is known for being “loved” …… You will discover that the company has instituted any number of consistent procedures and practices that assure customers of their importance….”

“Everything about the customer experience has to be genuine or it loses its punch.”

8 – Surprise me in good ways

“Customer satisfaction is a minimal standard; loyal customer relationships are built around surprise and delight. Customers crave human interactions that leave them with the experience of feeling special, and nothing conveys specialness better than surprise. “

 

The Heart of Customer Loyalty: Paying It Forward?

Richard has some interesting things to say when it comes to the implementation of the 8 steps, and the cultivating of long term relationships with customers.  Lets listen to his speaking:

“Of the eight steps…. the final three are perhaps the most difficult ones to implement because acknowledgement, appreciation, and delight have noting to so with closing sales and raising short-term revenues….”

Pay it forward is really the ultimate expression of customer service, because it’s a practice that puts people before profits….. A pay it forward culture …. will naturally reap dividends in terms of customer loyalty and repeat patronage because customers will naturally keep returning to anyone capable of giving them this feeling. And they in turn will tell their friends about you ….. as a way of paying it forward.”

Concluding Remarks

I enjoyed reading The Endangered Customer. I am clear that Richard Shapiro knows his subject matter – building enduring bonds with customers by cultivating the human connection between the customer-facing employees and the customers. I am also clear that Richard provides valuable advice if you have the listening for this advice.

My concern is that the very people who are in the position to effect change in organisations – especially big corporations – do not have the listening for that which Richard Shapiro speaks. The human connection seems antiquated in the age of worship at the altars of process and technology.

Please note that this review is necessarily biassed. To be human is to be biased – always and forever.  In my case, my bias is that I consider myself to be a friend of Richard R. Shapiro even though we have never met / nor talked.  Finally, I offer my thanks to Richard for sending me signed copy to read.

I thank you for listening and I wish you the very best. As the French say: until the next time….

 

 

Experience Centric Business: A Bridge Too Far For Many?

I experience, you experience, s/he experience, they experience, we experience.  That is what is so.  Yet how deeply are you (and me) conscious of the quality (or the lack of it) of the experiencing that is occurring? Further, where does the quality of experience sit on the business priority ladder?  Let’s shine a light on these questions by looking at a recent experience.

I attended a training course in London not that long ago. Here are the facets of this experience that are still with me:

  • Cramped. The train room showed up as small for the size of the audience. No – small is not the right word. It lacks the flavour of experience. The experience-full word is cramped. There was not enough space for the most basic/normal of human needs. Example: whenever I needed to leave the training room I had to ask people to move their chairs into the tables so that I’d have just enough room to slide past them.
  • Hot. Stuffy. Hot. Stuffy. Due the room being packed with bodies and the lack of an adequate ventilation system the room got hot.  Not true. If we are going to stick to experience then it is more accurate to say that I got hot as in hot/uncomfortable. By the end of the first day of training I had a headache and felt so exhausted.
  • No internet!  We all needed good quality internet access in order to do the exercises. Some of us got good enough access. Others didn’t – I was one of those that didn’t. By the end of the second day of the three day training course the internet access issue had not been sorted out. Given that some 50% of the classroom time was given to doing the exercises I found myself to be frustrated and bored. It really took willpower to stay in the training room on the second day.
  • Long sessions, no breaks.  Imagine starting at 8:30 and having to wait until 12:30 for the first formal break – break for lunch. A computer may be totally ok with that. A brain in a vat – a purely cognitive being – may be totally ok with that. I was not. I got restless. I longed to stand up, stretch, walk… That is what goes with being an organism designed for movement.
  • Poor visuals.  What is the point of splashing something on the screen if the folks in the room cannot read it because the font size is too small?

Why was my learning experience so poor?  Was it because the folks who did the training lacked intelligence? No. Was it because there is a lack of knowledge about what kind of environments are conducive to learning? No. Was it because the folks who delivered the training had no personal experience of being learners in a training room?  No.

 

I draw your attention to the distinction between training and learning experience. I say that my learning experience was so poor because the focus of the training makers and doers  was on the training.  Notice, that when you focus on training you focus on the functional – activities (tasks, resources, materials) that go into training. Whereas when you focus on the learning experience you are focusing on the human – the experience of the learners.

Is that all there is to the matter? No. I suspect that the drivers that shaped the training were cost and time.  Not experience.  Why not hire a better-larger training room-venue? Because it would have cost more.  Why not break the training down into two smaller groups thus giving more attention to each learner?  Because it would have cost more.  Why not schedule more breaks during the day and reduce the learning day to a more humane one?  Because then it would take more days to get through the training. More days for the learners to take off to do the learning. And more time for the trainers to do the training. In business time is money – in this case a bigger cost.

Now I wish to draw your attention to what I found most interesting. During the course of the first day of training most of the experience issues were voiced by the learners. And brought to the attention of the trainers. Yet no effective action was taken – to deal with any of these issues.

 

Summing up, there is huge gap between the talk of Customer Experience and the customer’s experience.  It occurs to me that this is largely because of the following:

  1. Revenue and Cost are the primary drivers of business not Experience.
  2. The default and pervasive way of showing up and travelling in organisations is Function (processes, activities, tasks, resources…) and not Experience. Further, the folks who often play pivotal roles in Customer Experience efforts are pervaded through and through with Function. And they automatically assume that improving Function improves Experience.
  3. Experience requires Flexibility of response to this particular customer in this particular context yet the organisational default is Standardisation on the one best way to carry out this function.
  4. The language of experience  is a human kind of language. That poses a challenges in organisational contexts because the human is unwelcome in organisations.  Organisations prefer a rational / scientific language – the language of the engineer, the economist, the technician.  Notice, how I have had to correct myself in my speaking a few times just to be true to my experience.  Language matters – as a famous philosopher said “Language is the house of being.”
  5. The work that is necessary to generate the kind of experiences that customers desire is simply work that folks in organisations are unable or unwilling to take on. Maybe it shows up as unnecessary. Maybe it shows up as merely ‘nice to have’. Maybe it shows up as too much hard work for little benefit – lack of ROI. Maybe it shows up as disruptive.

This may show up as bad news. I am clear it is good news. Why?  Because the rewards of Experience excellence are only open to those few willing to make sacrifices today to harvest the promise of reward in the future.  Put differently, the route of Experience excellence is available only to those who truly believe in the value of Experience centred business.   For the majority, I say that experience centric business will continue to be a ‘bridge too far’.

I thank you for your listening and wish you a great day. Until the next time….