Customer Experience: what matters most to customers?

Customers are demanding greater product quality in tough times

In my last post I set out the key organisational attributes and barriers that organisations face in excelling at crafting and delivering a positive multichannel customer experience.  But what do customers want?  What matters most to customers?  In Jodie Monger’s latest post she looks at the analysis performed on calls into call-centres (automotive, appliance, electronics indudstries) and points out that customers are demanding greater product quality in tough times.  Specifically, she writes:

  • Economic hardship is causing customers to seek to repair instead of replace products.
  • There is a growing perception on the part of customers that things are no longer “made to last.”

What about efficient customer service and low prices?

I have been reading the Customer Experience Consumer Survey Report published by Econsultancy this month.  Across five industries (Banking, Mobile Phones, Retail, Travel, Gaming) the attributest that matters most to consumers are:

  • Efficient customer service
  • Low priced products;
  • High quality products.

Looking at these responses through the lens of my customer value formula this makes perfect sense. Efficient customer service increases value (for the customer) by reducing the effort involved in dealing with the company (buying, using, troubleshooting).  Low priced products help the customer to make their budget stretch further. And high quality products increase the benefits received by the customer.

Let’s dig a little deeper to see what the variations were for some of the industries.

Banking – what matters to customers?

Mobile Phones – what matters to customers?

Retail – what matters to customers?

Travel – what matters to customers?

Gaming – what matters to customers?

What do I think about the findings?

First of all I find it interesting that customers do not hold out the expectation that companies put their needs first.  I interpret this as customers are living in the real world and they have a pretty good grasp of reality – most companies put their needs first and customers are used to that.  However, that does not mean that you cannot differentiate yourself by putting your customers first.  Remember that consumers were not asking for or expecting coloured computers – when Dell provided them their sales took off.

Second, customers are simply asking and expecting companies to get the basics right.  Provide me with good value (product quality, price) and make it easy for me to do business with you – take the hassle out, save me time.

Third, the ‘fancy’ stuff that so many commentators focus on and which matters most to companies (joined up experience, consistent branding, relevant and timely communications) does not matter that much to customers.

Finally, never take consumer research at face value.  Why?  Because consumers are not that great at figuring out what really drives their purchasing decision and what really influences them.  .  If you were to ask consumers if advertising mattered and influenced them most would probably say no.  Yet, advertising does influence hearts, minds and behaviour. If you spend time counselling people and you will be amazed at how little insight many of us have into our lives – what matters to us, what drives our behaviour.

What are your thoughts?

Highlights From The 2011 Multichannel Customer Experience Report

Back in June/July Econsultancy and Foviance carried out an online survey on the multichannel customer experience and published this as a report.  The majority of the 650 respondents (68%) were UK based and represented a variety of sectors including retail, financial services, telecoms and travel.  So what are the highlights?  In the rest of this post I’ll share with you the points that stood out for me.

Integration of Customer Touchpoints

There is larger (“more pronounced”) gap between the leaders (the top 25% in terms of customer experience maturity) and the other companies when it comes to the integration of digital channels: website, email and digital advertising.

What are the most important organisational attributes for delivering a positive customer experience?

In terms of importance, starting with the most important, the report identified the following ten attributes:

  1. Commitment to customer experience from the Tops
  2. Motivated and empowered staff
  3. Enabling customers to interact seamlessly across channels
  4. Quick resolution of problems
  5. Exceeding customer expectations
  6. Efficient customer service
  7. Joined up internal systems and processes
  8. Visibility of customer behaviour across channels
  9. Single or joined-up customer database
  10. Consistent branding across channels

Customer experience takes some doing and I am not surprised that commitment by the Tops is rated as the most important attribute by 46% of the respondents.  I have my doubts on whether some of the other attributes are really attributes rather than outcomes e.g. exceeding customer expectations.

What are the key barriers organisations face in improving the customer experience?

The report identifies the following barriers with the most important first and the least important last:

  1. Complexity
  2. Difficulty of unifying customer related data sources
  3. Lack of strategy
  4. Organisational structure
  5. Lack of resources
  6. Lack of budget
  7. Channel conflict
  8. Focus on short term profit
  9. Lack of buy-in from the Tops
  10. Poor staff training

I am pleased to see complexity at the top as crafting and delivering a positive customer experience is not like putting some decorations on the cake.  It involves major change at all levels, across functional and channel silos and can involve significant change in policies, processes, data, technology and people dimensions.  Given the complexity I am surprised that so many respondents cited a lack of strategy as an important obstacle.  Where you have to grapple with complexity and make signficant ‘structural’ change you absolutely need a well thought out strategy and an associated implementation plan.

What are the key takeaways from the report?

The report ends with the following points:

  • The leaders (top 25% of companies when it comes to customer experience maturity) are much more likely to rate ‘motivated and empowered staff’ and ‘efficient customer service’ as being amongst the most important organisational attributes for positive multichannel customer experience.  These leaders are also most likely to have overcome technology and data related issues.
  • With the data, technology and process pieces already in place, the leaders are that much more likely to be exceeding customer expectations through motivated and empowered staff.
  • The leaders are also much better than other companies at using the full range of data sources to understand the customer experience.
  • A commitment to customer experience from the Tops is regarded as the key organisational attribute – significantly higher than other organisational attributes.
  • Complexity is viewed as being the key challenge (barrier) to improving the multichannel customer experience.
  • Only one quarter of the companies have a well developed strategy in place for improving the customer experience.

How to increase (online) sales by focusing on the customer experience

Let me share an interesting experience with you

Last week I got fed up of lugging a heavy backpack around whilst travelling on business – it was putting a strain on my neck, shoulder and back.  As I was busy doing some consulting work with/for a bunch of fabulous people in Ireland I asked Sue to look into some suitable laptop bags with wheels and a telescopic handle.  This is the bag she ended up buying for me:

What is so great about this bag?  Before I answer that question I want to backtrack and let you in on the process that I went through to select this bag.

Sue did her research based on my sketchy requirements and offered me two options – two URLs.  I clicked on the first link and it took me to this bag.  I clicked on the second URL and it took me to another website and a bag that looked remarkably similar to this one.  So why did I ask Sue to buy this bag?

The first etailer is practice Sales 2.0 whilst the second etailer is firmly stuck in Sales 1.0.  What is the difference you might ask?  From my eyes, the customer’s eyes, the first etailer has looked at the sales process through my eyes and designed it such that it is a no brainer for me to buy from this vendor.  The second etailer has a product and is simply putting it on display and hoping that someone will buy it.

Who is the first etailer? Amazon.  Who is the second etailer? Some online luggage etailer – I think because I cannot even remember the name of this etailer.

Why did I buy from Amazon?

When I was faced with making a simple choice – two similar (but not identical) bags from two different etailers – how did the situation occur for me?  The most important question was this one: which bag will perform the service (‘the job’) that I have in mind?  I was not looking for a bag – I was looking for a solution to a problem!  Amazon provided reviews of this bag.  The reviews were from actual users of this bag (including a pilot) and through these reviews I was able to picture how well this bag would do the job. The competing retailer simply provided a list of product specifications – data – that simply had no meaning, no imagery, in my mind and thus did not provide the assurance I was looking for.

What was my other main consideration?  Can I count on Amazon to get this bag to me this week when I return to the UK?  Notice that I had already favoured Amazon and Amazon would only be selected out (and the competing retailer in) if it failed this test.  This was an easy question to answer because I have bought many times from Amazon and it gets my order to me within 2 -3 days. And recently, the next day – when I paid for next day delivery.

So, lets revisit this through the lens of my favoured formula: Customer Value = Benefits – Effort – Risk – Price +/- Treatment

I asked Sue to buy the bag from Amazon because Amazon created more value for me. How?  The ‘Treatment’ variable does not matter because I was interacting with websites not human beings.  The ‘Price’ variable did not matter because the price of the bags was almost identical – this bag from Amazon was slight more expensive.  That leaves three variables: ‘Benefits’, ‘Effort’ and ‘Risk’.   I had done business with Amazon before and it has an outstanding reputation (as evidenced in the latest survey) so it won hands down on ‘Risk’ – that is to say no risk in doing business with Amazon versus unknown risk with the competing etailer.  Amazon won again on both ‘Benefits’ and ‘Effort’ – Amazon, through the user reviews, did a better job of illustrating the benefits and made it easy for me to find out about these benefits.  The interesting part is that for all I know the other bag from the competing etailer may have been stronger on actual ‘Benefits’ – that is to say that it might have done the job better than this bag from Amazon.  Yet, I will never find that out because the competing etailer did not do a good enough job of illustrating those benefits.

What are the lessons?

1. We, the customers, don’t buy products we are looking to get specific job/s done through products and services. So go and figure out what the job/s are.

2. You can have the best solution to the job that your customer wants done and lose the sale if you don’t really know the customer’s needs and buying process.  So go and figure out what matters to customers (during the buying process) and how exactly they go about buying (notice I made the product decision before the vendor decision, someone else may have done it the other way around). Different customers will buy differently so ensure that you have flexibility in any process / interface that you build.

3. Take the risk out of the buying process – the product and your company.  Provide a product selector that makes it easy for the customers to select the best product for the job the customer has in mind. Provide testimonials from credible sources: customer like them, trusted independent bodies like Which? Provide figures on how many of these products you have sold and what kinds of people buy them.  Provide easy to understand, no quibble, guarantees.  By the way the more important the purchase the more the importance (weighting) of the ‘Risk’ variable: there is more risk in hiring a consultant than buying soap powder.

4. Make it easy for the customer to buy from you – take all the effort out of buying.  Look at the buying process from the customer’s eyes and take out all the obstacles.  Take out all the industry jargon that confuses customers.  Take out the complexity in any decisions the customer has to make – reduce the number of decision and reduce the effort needed to make a decision.  Reduce the number of steps.  Ask for the minimum information that you need.  Make it easy to pay through a number of different payment options.

5. Brand (reputation) matters.  I cannot help but think that I was already favouring Amazon even before I clicked the URLs.  How do I know?  Because I clicked on the Amazon URL first.  Why? Because I recognised the brand and have a positive story running around in my mind about Amazon being a great company to do business with.  If I have not done business with you before then all I have to go on is your brand (your reputation) – if I have any concerns around your brand then you increase the ‘Risk’ and that may drive me to your competitor or lead me to ask you to reduce your ‘Price’ to compensate me for that risk.  So brand is particularly important for winning new customers. 

Do you see anything that I do not see?  What are your thoughts / experiences?

How much do you really know about your customers? 5 areas to look into

How much do you really know about your customers?

If you are going to create superior value for your customers through the Value Proposition and the associated Customer Experience then you need to have sound insight into the lives of your customers.   Which is why in my model Customer Insight, Value Proposition and Customer Experience are interlinked.

How much do you really know about your customer?  Allow me to be more specific – how much time, effort and emotional investment have you made into stepping into and living the lives of your customers?  Have you even spent a day walking in their shoes seeing what they see, hearing what they hear, experiencing what they experience and possibly thinking and feeling what they feel?  What kind of insight would be available if you were to step into the customer’s shoes and live their life for a week?  Who in your organisation had done that even once?

Word are easy, deeds are harder.  My experience is that few organisations truly understand their customers because it is still rare for people within the organisation to walk in the shoes of their customers and experience the world through the minds and bodies of their customers.  Yet, this is exactly what is needed if you are to come up with both the insight and the emotion around that insight that inspires you to make the changes that will create value for your customers.

Shifting from an organisation-centric mindset to a customer-centric mindset

The more I dive into Customer Experience and Customer-Centricity the more convinced I become that what we are really taking about is business model innovation (including leadership, culture, mission & strategy) – the outer ring of my Create Superior Value framework (the first diagram in this post).  As such I wish to share with you a table that I adapted from Osterwalder & Pigneur’s book:

Conclusion

Shifting from a company-centric to a customer-centric mindset can be remarkably difficult – most people live and breathe the organisation so their natural, taken for granted, way of being, seeing and doing is company centric.

Only those people who have a strong enough reason (competitive forces) or a strong desire will step into the customer shoes and by doing so they will shift their perspective from company-centric to customer-centric.  Therein lies the opportunity: to come up with novel insights that are simply not available to those looking at customers from afar with industry/company coloured telescope.

What do you think?

How to cultivate strong customer relationships: focus on the “sliding door” moments and ATTUNE

Don and Martha say practice the Golden Rule

In their latest post – “Empathy, Self-Interest and Economics” – Don Peppers and Martha Rogers spell out the importance of the Golden rule.  They point out that at a behavioural level only psychopaths conform to the view of human nature taken by neo-classical economics.  To business leaders they say:

“Companies that want to earn their customers’ trust have to be willing to act in their customers’ interest—sometimes even when the customers’ interest conflicts with their own (at least in the short term). This is why i-Tunes will remind you that you already own a song you are about to purchase, for instance. And it’s why USAA won’t sell you more insurance than you really need, even if you mistakenly ask to do so.”

“The point is that having empathy for others is a critical part of human nature, and if you want your business to succeed, then you have to show empathy for customers, also. That means treating a customer the way you’d want to be treated yourself, if you were that customer.”

Is the UK utility industry listening to Don and Martha?

It doesn’t look like the Tops in utilities industry in the UK are listening to Don and Martha.  Npower has been slapped with a £2m fine by the regulator Ofgem.  Why? According to Marketing Week:

“Ofgem says Npower failed to record all details of the complaints it received and did not put in adequate processes to deal with complaints. It was also accused of not giving dissatisfied customers enough information about the Energy Ombudman’s redress service.”

Now you might be tempted to think that this is a one-off, an aberration.   Well British Gas (the major player) was fined £2.5m back in July.  Why?  Well in the words of Marketing Week:

“Ofgem’s investigation found that British Gas had failed to re-open complaints when the customer reported and unsatisfactory resolution; failed to provide customers with key details about the service provided by the Energy Ombudsman and failed to put in place adequate processes and practices for dealing with complaints from small businesses.”

And Marketing Week goes on to write EDF Energy is also currently under investigation from Ofgem over the way it handles its complaints.”

So where are we at?  Two of the six big players that dominate the gas and electricity market have been fined for mishandling customer complaints and a third player (EDF) is under investigation for the same offence.  What does Npower have to say:

“A small number of processes were not correctly adhered to. Ofgem is now satisfied that all problems have been rectified and we are fully compliant with our obligations to our customers. We have zero tolerance for this type of issue and we’ll continue to work hard to make sure our customers are put first.”

I don’t know about you but to me that sounds like a load of bull: if Npower really did have a zero tolerance for this type of issue then it would have made sure that an effective complaints management process, team, system was in place.   When you lookmore deeply at the industry you see that the structure has been designed to extract profits at the expense of customers: complex pricing, too many confusing tariffs, bills that are difficult to understand……

Making the customer relationship work: what we can learn from John Gottman

I you do operate in a competitive industry then you might be able to learn from the research of John Gottman – he is been studying what makes marriages work (or not) for over 40 years.  In a recent article he sets out the key things that he has learnt:

“What I found was that the number one most important issue that came up to these couples was trust and betrayal. I started to see their conflicts like a fan opening up, and every region of the fan was a different area of trust. Can I trust you to be there and listen to me when I’m upset? Can I trust you to choose me over your mother, over your friends? Can I trust you to work for our family? To not take drugs? Can I trust you to not cheat on me and be sexually faithful? Can I trust you to respect me? To help with things in the house? To really be involved with our children?”

“.zero-sum game.” You’ve probably all heard of the concept. It’s the idea that in an interaction, there’s a winner and a loser. And by looking at ratings like this, I came to define a “betrayal metric”: It’s the extent to which an interaction is a zero-sum game, where your partner’s gain is your loss.”

“But how do you build trust? What I’ve found through research is that trust is built in very small moments, which I call “sliding door” moments, after the movie Sliding Doors. In any interaction, there is a possibility of connecting with your partner or turning away from your partner.

In his article John provides a good illustration of such a sliding door moment when he saw the sadness on his wife’s face.  Here is what he says about that:

“I had a choice. I could sneak out of the bathroom and think, “I don’t want to deal with her sadness tonight, I want to read my novel.” But instead, because I’m a sensitive researcher of relationships, I decided to go into the bathroom. I took the brush from her hair and asked, “What’s the matter, baby?” And she told me why she was sad.  Now, at that moment, I was building trust; I was there for her. I was connecting with her rather than choosing to think only about what I wanted. These are the moments, we’ve discovered, that build trust.”

ATTUNE: how you cultivate trust and build strong relationships

John Gottman’s graduate student has taken their work on trust and broken it down into the idea of being in attuenment and has come up with an acronym (ATTUNE).  If I replace “partner” with “customer” we have:

  • Awareness of your customers’s emotion;
  • Turning toward the emotion;
  • Tolerance of two different viewpoints – yours and your customer’s;
  • trying to Understanding your customer – to look at the situation through his/her eyes;
  • Non-defensive responses to your customer;
  • and responding with Empathy.

My take on this

How you handle a complaint from a customer is a “sliding door” moment.  It is also a great opportunity to practice ATTUNE as complaints are high emotion events that you can use to build or rupture emotional connection.  Given that is so I continue to be surprised at how few companies do well in the complaints process.  If Npower and British Gas had taken such an approach (call it a customer friendly approach) to the complaints made by their customers then they could have: gotten insights into customer needs; learned where their business practices were failing customers; built a better relationship with customers; and avoided a fine.