The customer loyalty riddle (Part III): life is an echo

This post completes, for the time being, the short series of post on customer loyalty.  If you have not done so then you can access the first post here, and the second post here.  Let’s close our exploration of the customer loyalty riddle.

Warning:  your sterile, dogmatic corporate mind is not likely to find my conclusion satisfactory.  If your sterile, corporate mind has delivered you loyal customers and filled up your coffers then you shouldn’t be reading this post.  If it hasn’t then remember the saying “insanity: doing what you have always done and expecting/hoping for a different outcome”. If you are happy in the land of insanity, great.  If, however, you are open to looking differently at the situation at hand then let’s continue our investigation.  The “nugget to chew on” lies at the end of this post: first you have to make the effort to harvest that nugget – a lot like customer loyalty!

Let’s get back to the first post and the story that I shared with you

“There was once a Sufi who wanted to make sure that is disciples would, after his death, find the right teacher of the Way for them.

He therefore, after the obligatory bequests laid down by law, left his disciples 17 camels with this order:

‘You will divide the camels among the three of you in the following proportions: the oldest shall have half, the middle in age one third, and the youngest shall have one ninth.’

As soon as he was dead and the will was read, the disciples were at first amazed at such an inefficient disposition of their Master’s assets.  Some said, ‘Let us own the camels communally’, other sought advice and then said, ‘We have been told to make the nearest possible division’, others were told by a judge to sell the camels and divide the money; and yet others held that the will was null and void because its provisions could not be executed. 

Then they fell to thinking that there might be some hidden wisdom in the Master’s bequest, so they made inquiries as to who could solve insoluble problems. 

“Everyone they tried failed until they arrived at the door of man called Ali.  He said:

‘This is your solution.  I will add one camel (of mine) to the number thus making 18 camels.  Out of the 18 camels you will give half – 9 camels – to the oldest disciple.  The second of you will get one third of the total, which is 6 camels.  The youngest of you will get one ninth, which is 2 camels.  That makes 17 camels which your master left you to divide amongst yourselves.  One camel – my camel – will be left over and you will return that camel to me.’

This is how the disciples found the teacher for them.”

What are the key features / learnings of this parable?

The disciples looked in all the usual places, consulted all the usual experts, and got unsatisfactory answers – none, solved the riddle left by their master.

To solve the riddle the disciples had to go beyond the normal, the taken for granted, the obvious, the easy routes.

The disciples were looking for, committed, to getting something out of life – their share of their master’s assets.  The thought that they had to put something into the game of life did not even enter their minds, nor of their tradition bound experts and gurus who looked at the riddle though the eyes of the economist.

The solution to the riddle was putting something into life: the difference that made all the difference because it took something unsatisfactory and made it complete, whole.

At a material level everyone got what they put into the game and nothing more: Ali put one camel into the game, he ended up with one camel at the end of the game; the disciples came with 17 camels and they left with seventeen camels.

Through wisdom Ali did away with the burden that the disciples were carrying / living with and simultaneously delivered the outcome that the disciples were looking for.

Through love (and wisdom) Ali won the hearts of the disciples without seeking to win anything.  Why do I claim that Ali exercised love?  Because he came from a stand of service – he could have told them to get lost, or he could have looked down upon them as being inferior and taken advantage.. And because he put something into the game: when he put one camel into the game he had no assurance that he would get his camel back.  He granted trust.  Read that again, he granted trust.  You can only do that if you come from a context of ‘of service, of contribution, of love’ for your fellow-man,  be that your customer, your supplier, your channel partner, your employee…..

How about this for the solution to the customer loyalty riddle?

If you have the ears to listen to my speaking you will get it and no commentary from me is needed.  If you do not have the ears to hear it then no matter what I say, the time is not right for you and that is OK.  Here is my take on the solution to the customer loyalty riddle, it is based on my lived experience and not on any theory:

Let me finish with a real story

An uneducated family man (wife, three children) worked in the factories of  Yorkshire, England.  One day to his surprise he found out that he had been fired.  Turned out that his best friend had got into a fight and been fired.  This best friend argued for his job back and told his supervisor that if he did not get his job back then he friend would also quit.  The supervisor took him on his word: he fired them both.

Times were hard.  The uneducated man looked here, there and everywhere for a job.  He couldn’t find one and over the course of months he ran out of money.  No money to feed the family.  Finally, out of desperation this uneducated proud man who had known really difficult times (his father died when he was around 12, his substantial inheritance was stolen by his uncle, he worked from 12 years of age to support his mother, two brothers and two sisters) turned up at the grocery store to buy some food and yet he had no money. He went up that shopkeeper, explained his situation and asked for credit.  The shopkeeper could have said no.  From an economic, rational, perspective the right and only thing was to say “No, the economy is in a bad shape.  You have no skills.  You commitment to repay me for the food you are taking is not in doubt.  Yet, your capacity to do so, is certain. No, I am not taking the risk”.

Instead, the shop keeper said something like this “Brother, take what you need.  Pay me back when you can.  One day you will find a job and all will be well.  Until that day, I am here and you are welcome to take what you need on credit.”  Previously, they had talked with each other but just about ‘the weather’ – the uneducated man had been buying from this man, this shop, for many years.

The uneducated man was my father, I was one of the children he had to feed.  He NEVER forgot about that shopkeeper.  The shopkeeper didn’t just feed my father and us.  No, most importantly he fed my fathers hope, trust, confidence in himself and his fellow man.  My father redoubled his efforts and found a job.  The shopkeeper got paid for all that my father bought.  And the two of them became the best of friends.

Now look at this photo again, perhaps with a completely different understanding:

Do you get it?  Welcomers (and Richard Shapiro) get this intuitively, it is a core part of who they are, and they do this instinctively.  Welcomers understand that it is what you put into the game that makes all the difference.  Think about computers, think about music, think about computers, think about tablets.  Why is it that Apple has revolutionised the game in each of these areas?  Because of what the people at Apple put into the game as compared to competitors who were simply focussed on what they could get out of their customers.  And there are no guarantees, Steve Job / NeXT failed, yet that does not matter if you love your fellow-man and are committed to a higher cause.  Then everything is simply an obstacle on the way, a challenge that inspires us to be more creative, more resourceful and tests our commitment.  Welcomers understand that as well – which is why they can deal with ‘difficult’ customers as gracefully as easy customers.

I thank you for your listening.  I love you, I know that like me, you are a soul whose intentions are good.  Remember that the same applies to our customers.

Social Customer / Social CRM / Social Business: snake oil or great medicine? (Part II)

In this (second) post I want to move on and tackle ‘social CRM’.  Before I do that I wish to recap my thinking on the ‘social customer’.

The Social Customer

In the first post in this ‘social’ series I shared my thinking on the ‘social customer’. In a nutshell, I was neither impressed by the ‘anatomy of a social customer’ nor by the ‘social customer manifesto’.  The ‘anatomy of a social customer’ left me thinking that the ‘social customer’ is like the unicorn – fantasy.  The ‘social customer manifesto’ occurs as both mistaken and unrealistic.

Most customers simply want stuff to work.  Most customers want to spend their valuable time on that which matters: self, family, friends, ‘life projects’.  Most customers don’t want to use social media to complain / get service – they want the service to work first time. Most customers don’t want to get into partnership with corporations.  Why?  Because we are interested in making ourselves better off not making corporations better off.  Apple has got rich by creating value for us – enriching our lives, not by engaging us in ‘social’. Finally, the whole social stuff showed up in my world as the kind of thing that life insurance sales folks do: scare the living so that they part with their money.  Unfair?  Perhaps.  Lets move onto to Social CRM.

Social CRM

What is this ‘beast called Social CRM’?  What does it look like?  How does it move etc?  On my travels the internet threw up the following definition by industry guru Paul Greenberg:

“Social CRM is a philosophy and a business strategy, supported by a technology platform, business rules, workflow, processes and social characteristics, designed to engage the customer in a collaborative conversation in order to provide mutually beneficial value in a trusted and transparent business environment. It’s the company’s response to the customer’s ownership of the conversation.”

What?  So let me get this right, Social CRM is:

  • a philosophy – “a way of thinking about the world, the universe, and about people”;
  • a business strategyWiseGeek states that “A business strategy typically is a document that clearly articulates the direction a business will pursue and the steps it will take to achieve its goals”;
  • a technology platform;
  • business rules;
  • workflow;
  • processes;
  • social characteristics – what are “social characteristics” exactly? I remember that when I worked at IDV the management had to make a big effort to suppress the social characteristic of (some) staff members getting drunk at lunchtime and not being fit for work for the rest of the day

OK, it is everything!  The whole point of a definition is that it draws a line so cuts off what is from what is not.  Can you make sense of it?  If you had to draw it, how would you draw it? Do you remember this post on good strategy, bad strategy (fluff)?  No, let me share RR’s quote with you again:

“The hallmark of true expertise and insight is making a complex subject understandable.  A hallmark of mediocrity and bad strategy is unnecessary complexity – a flurry of fluff masking an absence of substance.”

Maybe, I am being unfair, so let’s continue with Paul’s definition to see where else it leads.  Here is what else sticks out for me:

  • designed to engage customers in a collaborative conversation;
  • a trusted and transparent business environment; and
  • companies response to the customer’s ownership of the conversation.

Let’s take a look at these in turn.

Where are the collaborative conversations?  I remember reading that the vast majority of companies that have set up Facebook pages do not engage in conversation with their followers.  On the contrary these companies are using Facebook as a marketing billboard to ‘message’.  And the report suggested that most people who follow companies on social media are doing so for ‘special offers / deals / discounts / privileges’.  Furthermore, even the more advanced companies (and there are not many of them) which have social media centres are mainly focussing on reputation management.  Responding to issues that flare up and doing online PR without it looking like online PR.  Where are the collaborative conversations?  If I am ignorant then please illuminate me, share with me what you know and I do not know.Incidentally, I do know that some companies are using social tools to tap into the ‘wisdom of the crowd’ globally in order to solve specific business problems e.g. Netflix (and the algorithm) – I do not count this as ‘social CRM’.

Where are these trusted and transparent business environments?  Let me be specific and make this even simpler: “How many businesses do you know that operate in a transparent environment?  Can you even imagine what a ‘trusted and transparent environment’ looks like? How likely is that given that a large part of the ‘power of corporations and powerful individuals’ stems from deception – conscious or unconscious? Before you answer get present to what “transparent” is and the revolution it implies in the design, operation and management of organsiations.  Now I ask you: how seriously would you consider the following statement “Social CRM is the island where pigs fly”?  So why would you take this definition any more seriously. From a zen perspective, a key component of living effectively is to distinguish between ‘what is so’ and our ‘delusions about what is so’.  From this perspective, Paul Greenberg’s definition occurs, at best, an aspiration and at worst a fantasy.

In what sense does the customer really own the conversation?  It occurs to me that the customer may want to own the conversation and the reality is there is no conversation!  Really, where are the conversations?  Where is the unrelenting dialogue between the customers and the company?  I recently wrote a post about my shockingly bad Amazon experience, I have heard nothing back.  Not even an acknowledgement that I exist or that Amazon is open to a conversation.  A customer ‘owns the converstion’ to the extent of his ability others to join his cause.  I know that on review sites, like TripAdvisor, customers can have a huge impact simply through the aggregation of their reviews.  Does this constitute ‘ownership of the conversation’?

My take on ‘social CRM’

‘Social CRM’ is classic hyperbole rather like the wizard in the ‘Wizard of Oz’.  Like the wizard it looks interesting, impressive, sparkles and catches your attention.  And if you happen to look behind the curtain this is what you are likely to find:

‘Social CRM’ is a phrase cooked up by technology vendors to sell their latest wares.  What are these wares?  Mainly tools for listening into and reacting to what people are saying about stuff in their lives – including their experiences with companies (people, products, events, advertising;

Social CRM’ is being played for all its worth by consulting and marketing services companies.  Why?  To sell their ‘wares’ to the ‘gullible’, the ‘greedy’ and the ‘desperate’. There are no ready made, cookie cutter, formula’s for social success. And the last people I’d trust are people in consulting companies (who tend to be analytically adept and relationally suspect) and marketing companies (too obsessed with messaging and manipulating).

Some companies are doing interesting stuff like Dell, Starbucks – to engage their customers in sharing their ideas. Is this ‘social CRM’?  I thought it was the ancient practice of tapping your employee for ideas / suggestions for improvement. extended to include customers.

The promises of ‘Social CRM’ are exaggerated. The context that would give life to ‘social’ in its truest sense is simply not there.  First, most companies are not ‘social’ and they absolutely do not want to be ‘social’: transparency is death to the existing institutional models.  Just look at the News of the World hacking scandal – the government, the politicians, the police, the press supervisory body were all able to cover it up for a long time because of the lack of transparency.  Look at the way the business press reacted to Pizza Huts decision to be honest about its pizzas.  Why was this newsworthy?  Because dishonesty / deception is the taken for granted norm.  Second requires a shift from self to the other and from I to you and me, us.  And as such, humanity, generosity, helpfulness, kindness, sacrifice, contribution are key part of social.  This is completely at odds with the current business ecosystem which is centred around selfishness, greed, manipulation, extraction and control – in short, “inhumanity’.  If you doubt me then ask yourself why the Sainsbury story took such hold in the press. Or for that matter ask yourself why our insides warm up, we say “wow” and jump up and down when we hear tales of humanity in business and institutions?

Do you want to get free tickets to the Social Customer Conference, 29th March, London?

If you want to win one of the 3 free tickets then please read the following carefully:

What you need to enter the competition for the free tickets?  You need to send a tweet that conforms to the following specification:

“I’d like 2 attend The Social Customer 2012, London, 29 March http://bit.ly/wCN9MA #MzIq | {give a reason here}”

Who will choose the winners? Me.

How will I choose?  The three tweets that make the most contribution to me: put a smile on my face / make me laugh; and/or put something into the world eg. by contributing to KONY2012.com – a social cause dear to my heart, I love children!

Europe: what does EY’s VoC survey tell us about the needs/behaviour of non-life insurance customers? (Part I)

A week ago I summarised my take on the Global findings from Ernst & Young’s “Voice of the Customer, Time for Insurers to Rethink Their Relationships 2012″. And I promised to take a look specifically at the European customer and the European market.  This series of posts honors that promise – staring today with the first post (Part I).  Please note that I am only looking into and sharing non-life insurance and the related customer needs/behaviour.  Let’s get started.

An introduction to the survey

The basis of the European findings is survey of 8,532 consumers of life and non-life insurance products between August and October 2011.  The survey covered the following countries: France, Germany, Italy, the Netherlands, Poland, Spain, Turkey and the UK.  As you can see that whilst these countries are relatively wealth in comparison to other countries, there are considerable differences in wealth and demographics between these countries.

What Are The Key Findings for non-life insurance?

The survey addresses the following five “key myths”:The future is online; it is only about price;good claims experience builds loyalty; customers don’t respond to cross-selling; and insurers can’t influence customer retention.

The conclusion? According to E&Y: “While there is some truth in the myths around how non-life insurance products are bought and sold, the reality is more complex.” That accords with my experience – the gold, the insight, the levers for effective action are in the details. Today, let’s dig one level deeper for each of the myths to learn what E&Y has to say.

Myth 1: The future is online

Accepted wisdom: use of the internet (online channel) is growing rapidly and in the future online will be the dominant channel for both research and transactions.

Research suggests / E&Y position: use of online channels is growing rapidly and customers want access to offline channels; insurers need to put in place an integrated channel strategy to accommodate customer needs & behaviour over the customer life-cycle (from research through to renewal).

Myth 2: It is only about price

Accepted wisdom: non-life insurance products are commoditised and therefore customers buy only on price – this one factor swamps everything.

Research suggests / E&Y position: Price is an important component of value but it’s not the only one. Many customers also consider and differentiate between provider on the basis of brand (trustworthy?), product features and previous experience. The importance of price varies both by geographical market and by the type of insurance product that is being bought.  For example, when it comes to private healthcare insurance, customers look for ‘indicators suggesting quality’.

Myth 3: Good claims experience builds loyalty

Accepted wisdom: a good claims experience generates customer delight and automatically leads to higher customer loyalty and brand value

Research suggests / E&Y position: customers expect a good claims experience and do not necessarily reward it; they do punish a bad claims experience.

Myth 4: Customers don’t respond to cross-selling

Accepted wisdom: customers resent insurers selling them more products – they don’t enjoy the sales process.

Research suggests / E&Y position: customers are willing to buy multiple products from insurers provided this is done in a certain way that creates value for customers.

Myth 5: Insurers can’t influence customer retention

Accepted wisdom: insurers feel they have little influence / control over retaining customers

Research suggests / E&Y position: customers are not keen on switching as it is inconvenient; insurers can keep more of their customers if they take the right actions at the right times – in particular during the ownership stage.

In Part II, I will be talking a deeper look at both Myth 1.  Specifically, what is the reality when it customer needs and behaviour when it comes to channels.  And spell out the issues and implications for insurers(as identified by EY).

The customer loyalty riddle (part I)

Customer loyalty: a riddle without a solution?

As far as I can tell guru’s have been promising nirvana – revenue growth, profit growth, higher profit margins, sustainable competitive advantage – through customer loyalty.  I remember that this was the holy grail when I started working with Siebel and later moved to The Peppers & Rogers Group back in 1999/2000.

That was 10+ years ago and it would appear that little progress has been made by the majority of companies in doing better at cultivating genuine customer loyalty and improving customer retention. Yet over that time all kind of ‘solutions’ have been attempted and billions have been spent on these ‘solutions’.

Which company has cultivated that much desired loyalty through CRM?  For a little while Tesco appeared to be the poster child for analytically driven CRM through its ClubCard loyalty scheme.  Now it looks like we may have been too hasty: Tesco market share is now the lowest it has been since 2005 and the company, in January, issued its first profit warning in decades. Put differently, if the success of Tesco was attributed to the analytically driven CRM then consistency suggests we should also attribute Tesco’s current failure (profit warning, market share drop..) to analytically driven CRM.

It would appear that customer loyalty is a riddle, if that is so then what is the key to this riddle?  Before I share my point of view with you, allow me to tell you a story that is also a puzzle.  Dive into it, you will enjoy it and you will get value out of it even – paradox makes you think, go beyond the obvious, and opens you mind.

How to divide the camels?

Do you know anything about Sufism? No, that is OK, you only need to know that a Sufi is a special sort of human being – a being that has penetrated into existence and tends to talk ‘indirectly and paradoxically’ so as to by pass the mind which is thrives on logic – think of him as a zen master.  Here is the story:

There was once a Sufi who wanted to make sure that is disciples would, after his death, find the right teacher of the Way for them.

He therefore, after the obligatory bequests laid down by law, left his disciples 17 camels with this order:

‘You will divide the camels among the three of you in the following proportions: the oldest shall have half, the middle in age one third, and the youngest shall have one ninth.’

As soon as he was dead and the will was read, the disciples were at first amazed at such an inefficient disposition of their Master’s assets.  Some said, ‘Let us own the camels communally’, other sought advice and then said, ‘We have been told to make the nearest possible division’, others were told by a judge to sell the camels and divide the money; and yet others held that the will was null and void because its provisions could not be executed. 

Then they fell to thinking that there might be some hidden wisdom in the Master’s bequest, so they made inquiries as to who could solve insoluble problems. 

Everyone they tried failed….”

What is your answer, your solution to this riddle?  Have a go at solving this riddle – you will get value out of it if you allow yourself to get value out of it.

Let’s continue with the story – dividing camels – and get to the solution

“Everyone they tried failed until they arrived at the door of man called Ali.  He said:

‘This is your solution.  I will add one camel (of mine) to the number thus making 18 camels.  Out of the 18 camels you will give half – 9 camels – to the oldest disciple.  The second of you will get one third of the total, which is 6 camels.  The youngest of you will get one ninth, which is 2 camels.  That makes 17 camels which your master left you to divide amongst yourselves.  One camel – my camel – will be left over and you will return that camel to me.’

This is how the disciples found the teacher for them.”

My thoughts on this story, this riddle

– The conventional approaches to solving the riddle did not work, none of them solved the riddle, because the riddle was designed to go beyond the conventional;

– Because the conventional approaches did not work then the ‘conventional gurus’ stated that riddle was absurd and should be ignored or that conventional approaches be used e.g. sell the camels and divide the money in the allotted portions that is always the case, the conventional cannot look beyond convention as they neither have the heart nor the mind for the looking beyond;

– Notice the characteristic of the solution, it has a unique quality:  It has to be put into the game, it is used in the game and at the end of the day it can be taken out of the game whole and complete – it does not lose anything of itself by giving itself.

Final question or two for you

What does this story provoke in you when it comes to customer loyalty?  What avenues does it open up for you that were not present before?  What do you think is the solution to the customer loyalty riddle?  Do you even think there is a solution?

I will share one perspective with you in my next post.  I wish you well and my thanks (to you) for listening to my speaking.


Want to prosper in the ‘age of the customer’? Here’s the formula you’ve been looking for

Some of the people who listen to my speaking have been kind enough to tell me that my posts are too long and can be hard to get.  OK, I get where you are coming from.  Here is a post for those of us who like the short sharp Seth Godin type post.

What is the formula for business success?

“He who does the best job of creating and communicating the most VALUE for the customer wins.”   maz iqbal

What has changed in the ‘age of the customer’?

“The Customer Experience is now a critical component of creating and communicating value.”   maz iqbal

What is the ONE thing that matters and which is not being addressed?

The human touch – genuine caring for the customer as a fellow human being first and a wallet second is missing.  Customers prefer to do business with those that ooze Warmth and demonstrate Competence. Competence is necessary yet not enough.” maz iqbal

What is the hallmark of customer-centricity as seen through the customer’s eyes?

..if it ever comes to a choice between what is right for the company and what is right for the customer you will always choose and put the customer first.”  Prof. M. Sawhney