If you are not working on dismantling the walls of separation then you are wasting your time

One picture can say more than a shelf full of books.  When it comes to forging a mutually beneficial relationship between companies and customers here is the picture that says it all – at least to me.

This picture was put together by David Armano and is part of his visual archive on his Logic + Emotion blog.   It is a blog that I rate highly and have listed under my “Worth Checking Out” links.

Why am I drawing attention to these walls of separation today?

Too much of what passes for Customer Experience is simply customer interaction management (the engineering mindset) or customer interaction design (the digital design mindset).  If the Customer Experience movement is to make any impact then the people working in it, leading it, have to rise several levels above interaction and deal with the stuff that really stands in the way of organisations and their customers: the deeply ingrained, taken for granted, walls of separation.

Put differently, if you are not willing to dismantle the walls of separation then you are wasting time, effort and money on Customer Experience, CRM and Social Media.  If you disagree then please do write and share your point of view and the reasoning behind it.

Customer Experience: the gulf between the talk and the reality in the UK banking industry

Is Customer Experience the latest fad?  Are some organisations, perhaps many organisations, simply paying lip service?  Or is it that clever people who have risen to the top of the corporation simply are confused and have a mistaken view of Customer Experience?  Is it possible that they simply see it as the gift wrapping?  Something that you put on the outside to make the product – which may not be that great – look prettier.

Complaints are a great opportunity to learn, to build an emotional bond and generate advocacy

From a customer perspective, customer complaints are  a key ‘moment-of-truth’.  As a customer I am reaching out to you to let you know that I am not happy with the way that your organisation has treated me.  And if I am making that complaint then I am implying that I think you are the kind of person, the kind of organisation, that it is worth complaining to.  That is to say that you will listen to me, investigate the matter efficiently, and come up with a fair resolution.  If I did not believe this, even if it is at a subconscious level, I would not bother complaining; time is in short supply and there is a lot to do.  As such a complaint is a great opportunity for the organisation to build a stronger bond with the customer.

How well is the UK banking industry handling complaints?

Now lets take the UK high street banks as an example – only because they are in the news.  I am pretty confident that there is at least one person at each bank with a Customer Experience title.  Yet, it appears that these banks do not even deal effectively with customer complaints.

According to Consumer Focus the UK banking industry received over 1.25 million complaints in the first half of 2010 and over 47% of the people who had made a complaint are not happy with the response they have received.

Is it that the UK banks have their house in order and the 47% of customers that are not happy are simply being difficult.  This is what Consumer Focus has to say:

“Consumer Focus is calling for banks to take complaints more seriously and devote more resources to improving customer service. The consumer champion is also urging the Financial Services Authority (FSA) to continue using the prospect of financial sanctions to keep the pressure on poorly performing firms.  The FSA previously concluded that banks’ complaints handling is ‘poor’ with more than a third underperforming in this area.

So why is it that the banks are so poor at handling complaints?  Back to Consumer Focus: “Consumer Focus thinks that poor customer service and complaints handling is a sign of weak competition.”  Frankly, the banks are doing such a poor job because customers are not bothering to switch – partly because of the perceived difficulty of switching and partly because consumers see all the banks as being pretty much the same.

What are the Customer Experience folks working on?

All of which makes me wonder what the Customer Experience folks working in the UK banking industry are working on?  Maybe they are working very hard and the Tops are simply not listening – after all complaints cost money today.   Or maybe they busy working on the sales side of the customer experience?

If you are working on improving the Customer Experience in the UK banking industry then please write and let me know as I am genuinely puzzled.

Why marketing is one of the main drivers of customer dissatisfaction

I find it interesting that on the one hand the CMO is often given the leadership role in improving the customer experience and on the other hand the marketing function is one of the  prime culprits in generating customer dissatisfaction, calls into the call centre and customer churn.

How exactly does the marketing function contribute to customer unhappiness, negative word of mouth and customer churn?  By misleading the customer – sometimes unintentionally but often intentionally.  Lets make this real by sharing some examples:

Recently Vauxhall (GM brand in the UK) has had to change its Lifetime Warranty advert after customer complaints.  Why did some people complain and get the ad changed?  If you read the small print you find that the Lifetime Warranty is not a lifetime warranty in the sense that the normal person understands it.  Specifically, the warranty covers only the first 100,000.  And it applies only to the first owner – the warranty is not transferable to later owners.

How many people will buy a Vauxhall car without reading the small print and then be disappointed?  How many of these customers will then ring the contact centre to complain?  How many will go on to tweet about their negative experience?

My wife shops with La Redoubte regularly so she was pleased when she got a promotional offer through the post.  She proceeded to spend a considerable amount of time and psychic energy in choosing the two garments she wanted.  Then she range the contact centre to place her order.  Only after she had placed her order did she find that she could not get the promotional discount: apparently the promotion did not apply.  Yet the agent could not explain why not – at least not to my wife’s satisfaction.

Result: my wife is no longer an advocate and a loyal shopper that La Redoubte can take for granted.  I will be writing a post about this soon to draw out some insights.

In the UK, the mobile operators are advertising very favourable offers.  When you look at the offers you find that at a price point in the 18 month contract, the customer has to reclaim a certain discount (that is used to advertise low monthly charges) and has to use specific procedure and complete this procedure in a specific time.

The marketing thinking behind this is clear:  you can get customers because the pricing looks attractive and yet the customer’s end up paying more because the redemption process has been designed to make sure that only the most diligent customers will successfully redeem the discount.   How many of these customers will ring the contact centre to complain?  How many are being taught to distrust marketing communications?

Then you have my BSkyB experience that I wrote about back in September 2010.  Where I shared my story of how I was lured in by the slick marketing promising a bundled offer and an easy life only to find a very different reality:  How to turn an advocate into a detractor?

Are these the only companies that are engaged in these practices?  No.  I am not pointing my finger at these ‘bad’ companies – they are no better and no worse than the majority of companies.  Why is that?  Because the practice of misleading customers either through sloppy communication or deliberate manipulation is widespread.  It is even considered good marketing!

6 reasons why companies continue to struggle with customer centricity

I can think of six reasons why many publicly quoted companies continue to make slow, painful, progress towards customer centricity:

  • They are publicly listed enterprises and they are expected to be shareholder centric not customer centric;
  • They make a significant part of their revenues and profits at the expense of their customers and are not willing to forgo the practices that deliver these ‘bad profits’;
  • They are designed to make and sell standard products not to create and deliver customer experiences;
  • They are structured into silos and each silo has its own agenda, priorities and metrics that makes it rather difficult to play the joined up game of customer experience;
  • The Tops are totally divorced from the day to day reality of the way that the organisation works (just watch Undercover Boss); and
  • They seem to believe that customer centricity lies in the realm of the marketing function rather than a total transformation in business philosophy, corporate strategy, management mindset and organisational design.

What do you think?

How about thinking and talking about business in customer terms?

It strikes me that organisations can take a big step forwards in becoming customer centric simply by measuring, reporting and talking about the impact of their actions on customers and the value that customers represent to the business.

Allow me to illustrate this by using a consulting experience at a brand name telco.  One of the things that really matters to customers is how easily, quickly, effortlessly, conveniently they can get a replaced handset if they have an issue with their existing handset.  The functional department that is charged with this task is the Device Logistics.

What do you think the focus of the typical Device Logistics function is?  The focus of the function is, typically, on devices, operating cost and service levels.  As a result management talk about and measure the no of devices that needed to be shipped, no of devices on back order, lead time between ordering and receiving handsets, no of devices shipped, no of devices delivered to the customer address within the SLA, productivity and cost of operations.

Not once did I hear conversations about customers, nor the impact of policy and practices on the customer’s life or attitude towards the company.

Now imagine thinking about the Device Logistics function in terms of impact on customers.  If such an approach was taken then management would be measuring and talking about the following types of matters:

  • How many of our customers have been impacted by our delivery process in the last month?
  • How many customers have we lost as a result of our policies and practices?
  • How much revenue, profit, lifetime value has walked out of the door as a result of these policies and practices?
  • What kinds of customers – Gold, Silver, Bronze, Young, Professional, Older – are we losing?
  • What will it cost the business to replace these customers with new customers so as to replace the revenue, profits and lifetime value that has walked out of the door?
  • How many potential new customers have we lost as a result of the bad word of mouth from existing customers who have been disappointed by us?
  • What is the cost associated with this bad word of mouth?
  • How many customers ended up calling the contact centre to ask questions and/or make complaints about the handset replacement process?
  • What cost did the business incur in dealing with these customers – their questions, their complaints?
  • How many hours did customers spend waiting for us, at home, to receive their replacement handsets?   What is the cost to our customers of this waiting?
  • How can we do away with the biggest cost and inconvenience – making them staying at home all day – we impose on our customers?
  • What would be the impact on customer retention, customer loyalty, as a result of designing the handset replacement process from a customer perspective?
  • How can we engage our customers in the handset replacement process so that we all come out as winners?

Thinking in terms of customers and impact on customers – in terms of customer satisfaction, customer retention, customer loyalty, word of mouth, brand reputation – can be applied to every single function that touches the customer.

My assertion is that organisations will only make the transition towards becoming customer centred, designing and delivering better customer experiences, when the organisation as a whole and silo’s in particular think about operations in customer terms.  Specifically, the impact of operational practices on customer retention, customer loyalty and word of mouth.

What do you think?  Have you seen this in practice? If so where?

2011: what is likely to stay the same?

Right now there are lots of people putting forward there views on what will be hot /new / different in 2011.  As I do not have a crystal ball and because I believe in the fundamentals, I am going to focus on the key themes that are not going to change in 2011.

Customer will continue using trusted resources to find information and make decisions

Customers live in a world that is full of suppliers, brands, products and services.  Choosing between them is difficult and there is always the concern around making the right choice.  So for low consideration products (the basics of food, drink, utilities, retail banking..) customers will simply continue using the brands that they use today. Some customers will continue to be tempted by ‘specials’ – to try other products, other brands, other suppliers.

For high consideration purchases, customers will turn to trusted sources: the internet, Google search, social network, other customers and independent sources.  Customers will particularly value trusted resources that take out or cut the hassle associated with doing all the research and coming to a decision.

Companies will continue to shoot themselves in the foot as the content and tools are often created by marketing.  And too many marketers are disconnected from the real lives of customers and their real needs.  Too often the need for spin outweighs the need to provide useful, informative, honest content.

Customers will continue to have the same needs around products

Most customers will continue to look for products that are easy to understand, easy to set-up, easy to use and which work as they expect them to work.  Some customers will pay a premium for products that are novel, beautiful and/or well designed.

Many products will fail to live up to customer expectations either because the marketing communications are misleading, or the product has not been well designed or because the customer has unrealistic expectations.  And this will result in calls into the contact centre and negative comments offline and online.

Customers will continue to look for, be attracted to, special offers

Direct marketers are the masters of special offers – they know that the right offers will drive purchases.  Human beings are drawn to all kinds of  special offers.  The offer can be around membership of an exclusive club, or a special edition product or simply one of a price discount.

Businesses will continue to offer attractive ‘specials’ to get new customers.  In the process they will continue to cut loyalty from existing customers and thus encourage them to move to competitors to get their special offers.

Customers will continue to look for and value good service

Customers live in a complex world where they have a lot more to juggle and less time to do it; a world where choosing the right products and solutions can be a tricky and time consuming task; a world where they need help in setting up and using products effectively.  For example, one time you could just go and buy a tv, try doing that now with the latest HD tvs.

As a result customers will continue to cry out for good service in the form of correct and informative marketing material, customer centred sales advice, convenient product delivery, ease of product set-up and use, accurate billing, easy access to the right people in the company to deal with problems and issue and responsive caring customer service.

Many companies will continue to give less than good service because of the internal, silo centred, efficiency oriented metrics, processes and culture.

Companies will continue to focus on the shiny new stuff and neglect the basics

Time and again companies are attracted to the shiny new stuff, the silver bullets, the miracle cures etc.  Social media, mobile, location-based services, group buying (Groupon), customer experience – are examples of the latest shiny objects

In the process, companies will neglect the basics such as making good easy to use products, easy to use websites, improving the delivery process so you don’t have to take a full day off work, sorting out issues that prevent sales and customer service staff delivering the kind of service that customers expect etc. Here is an example of neglecting the basics: Toyota Just Doesn’t Get It

Companies will continue to focus on the sell side of the business at the expense of the service side

The majority of companies will continue to focus their best people and the bulk of their money on the areas of the business that generate or promise to generate revenue. Revenue and market share growth are the top priorities of the C-suite in most companies.

These companies will also continue to spend money on products and services that promise to cut operating costs – thus boosting profits.  That means more investments in technology and less in people – especially those that actually interact with and serve customers.

It also means that companies will continue to focus on getting new customers than on keep existing customers through good service and fair treatment. This is partly because the it is easy to show the return on getting customer and difficult to show the return on retaining customers.

Companies will continue not to embrace and make effective use of social technologies

The philosophy – transparency, openness, interaction, connectivity, sharing, participation, co-creation etc – of social is fundamentally at odds with the command and control philosophy that is at the heart of almost all businesses.  The powerful love to exercise power – this applies to all kinds of institutions including corporations.  And it applies to the C-suite executives.

This clash of idealogies and operating practices will stop the majority of companies from harvesting the true promise of social technologies:  transforming the way that work is done – collaboratively between employees, customers, suppliers, partner etc – within the enterprise.

Instead companies  will continue to dabble in social media treating this as simply another marketing and customer research channel.  Does this remind you how digital marketing and ecommerce operations were treated?  And how some are still treated today?

Companies will continue to talk about innovation and customer experience tranformation and yet fail to deliver

Whilst every company wants to the fruits of innovation very few are willing to go through the birthing process and experience the pains of giving birth to these innovations.

It is no easy matter to make the silo’s work together.  It is no easy matter to change the technology infrastructure – most companies still do not have a single customer view despite the mountains of ink on that subject over the last ten years.  It is no easy matter to change the culture of the company.  It is no easy matter to give up the practices that are resulting in ‘bad profits’ and recapture these profits by creating products and services that customers value.  And there is absolutely no incentive when you are the category leader or the market is dominated by up to four big companies.

The task of category level innovation will continue to fall on companies that specialise in this (e.g. Apple, Virgin) or newcomers that have no investment in the existing way of doing things (e.g. Metro Bank, Groupon).

2011: are you ready to move beyond the 4Ps and the 4Cs to embrace the 5Hs?

In the period of 1950s the concept of the marketing mix was introduced and this led to the birth of the 4Ps: Product, Price, Place, Promotion.    This has been extended  to include another 3Ps: People, Process, Physical Evidence.

With the birth of the Customer age in the 1990s Robert Lauterborn proposed the 4Cs: Customer, Cost, Convenience, Communication.  Whilst this is a move in the right direction it is not enough.   To my mind it smacks of the abstract, the intellectual, a machine way of thinking and talking.  A move forward yet still within the Newtonian paradigm of the universe (including human beings) as a gigantic clock.

How about embracing the 5Hs: Human, Heart,  Honesty, Hospitality and Harmony?

Human:

Get that you are dealing with flesh and blood human beings and treat your customers as human beings.  Strive to treat them with the best of our humanity: kindness, benevolence, humaneness.

Being human, we notice, even if it is at a subconscious level, when these qualities are present or not.  Given the choice we walk towards organisations that have a human look and feel:  that are humane and treat us as human beings not machines.

How about starting with a small step that makes a huge difference: speaking with a human, conversational, voice?

Heart:

As the expression goes “Have a heart!”.  What does that mean?  In a word it means compassion.  The ability and willingness to put yourself in the shoes of your customer.  To see life through her eyes, to experience what she is experiencing.  It means following the golden rule “Treat your fellow man/woman in the manner in which you would like to be treated if you were in his/her shoes?  Go further and embrace the platinum rule “treat your customer as he/she would like to be treated”.

How about following Zappos and making it easy for your customers to reach out and speak with you?  To reach out to you – via chat, click to call etc – when she is shopping and needs guidance or reassurance?  To reach out to you when she needs help in using your product or service?

How about making it easy for customers to make complaints?  How about making it easy to return faulty goods?  And so forth.

Honesty:

Let go of the spin and be honest with people in a tactful way.

Human beings stay clear of people who they find to be dishonest.  When you are honest I may not like what you say yet I will respect you for being honest.  Tell it as it is – upfront – it will save you a lot of pain later on: sooner or later your true colour will show especially in this densely connected world.  When I catch you being dishonest (including omitting stuff that you do not want me to know) then I no longer trust you.  If I don’t trust you then you are going to have to pay in way or another if you want to do business with me.

Put bluntly put as much focus on the steak – the product, the service, the reality – as you do to the sizzle of advertising and other marketing messages.   Another way of saying this is to say ensure that there is a harmony between the sizzle and the steak.

Hospitality:

Be a good host, be hospitable – to prospects, new customers, existing customers and customers who have either left or are on their way.

When you are being a good host you take the time and trouble to think of your guests and their needs.  You do your best to welcome them, to make them feel at ease, to introduce them to people that they will find interesting or useful. And when the time comes for them to leave, a good host will see them to the door and wish them well and mean it!  How about behaving the same way with your prospects, new customers, existing customers etc?

How about inviting your customers into the business?  To listen, to share, to collaborate on new product ideas, product development, marketing communications, customer services and so forth?  Incidentally, the important part about ‘social media’ is not the media, it is the social.  In a social environment your character, your reputation and your manners speak so loudly that few listen to your words.  A good host is mindful of this and acts accordingly.

Harmony:

As human beings we love harmony and we strive after it.  Harmony is pleasing as it gives us peace of mind.  So how about focusing your efforts on creating harmony?  What does that mean in practice?  Lets take a look at the dictionary definition: “the just adaptation of parts to each other, so as to form a complete, symmetrical or pleasing whole”.

How about a harmony between the promises made and the experience delivered?   How about orchestrating harmony between all the silos that impact the customer experience?  How about harmony between the short-term and the longer term?

It is my belief that if you don’t get the social part – that is the human desires for beauty, for meaning, for connection, for honesty…. – you are going to be increasingly lost in the 21st century.    Maybe I am deluding myself.  What do you think?