With so much customer focus why am I not drowning in thank you cards?

On the one hand just about every large UK based corporate is professing  their commitment to the customer.  Some say they are committed to customer service.  Some declare their commitment to customer focus.  A few are bold enough to state that they are customer-centric.  And many are busy improving the customer experience.

So how is it that deep in the festive season that not a single corporate – Sky, BT, Orange, Amazon etc – has written to thank me for being a customer over the last year?  If the customer is king – as is so widely accepted – then does the king not even merit a thank you wrapped up in a Christmas card or email?  Maybe I am just a poor customer and you are a good customer.  Are you drowning in thank you’s wrapped up in Christmas cards?

Think what my experience as a customer would be if I received a thank you card at Christmas.  Just a genuine thank you with no up-sell or x-sell message or offer.  Is it possible that would have occurred as positive customer experience?  For me definitely.  How about you?

Interestingly, the only cards that I have received are from small recruitment agencies.  Whilst they have followed the Christmas ritual they have not done so with heart.  Or put differently personalisation and personal are very different.  Business people confuse the two and at their costs.  Enough on that –  I will write a post to explain the difference.

It strikes me that customer-centricity in the UK is like the fresh fruit in the UK supermarkets:  the fruit looks good yet when I bite into the fruit it is almost always tasteless.  Now compare that with France where the fruit does not look as good yet is delicious.

 

The core challenge facing the customer experience designer

From a customer point of view what matters is an ‘effective’ organisation – one that is good at anticipating and responding to the diversity of customers and their needs.  That means designing the organisation to be flexible, adaptable, versatile – this allows the organisation to absorb and effectively deal with the variety of demands that are placed on the organisation by customers.  This in turn requires the organisation to have ‘redundancy’ built into it.  That is a fancy way of saying that it needs extra resources (“fat”) to deal with and take advantages of unexpected difficulties and opportunities – to cater for the inherent unpredictability of the world.  Finally, making the parts work well together (integration) is a key requirement of effectiveness.  Think of a car it is only of value if all the components work well together.

Organisations are enmeshed in an ideology that values efficiency and structure that lends towards fragmentation.  The focus is on cutting out all the ‘fat’ so as to minimise operating costs and thus drive efficiency.   This way of thinking involves lots of efforts in up front forecasting and planning to predict and manage demand.  It also involves finding and standardising on the one best way of doing things and then striving to make customers, employees, suppliers and partners to use that one way.   This way of thinking encourages and insists that managers control the real world – at least their piece of it: to act on it so as to force it into the shape that was envisaged in the plan.

So customers want organisation to dance to their specific, individual, tunes.  Whereas organisations insist that customers fall into line – the line that reduces operating costs and thus maximises profitability.  That is how we come to the gaping hole between what customers want and what organisations deliver.

Sometimes the gaping hole gets smaller – at least for a while – when the organisation finds a way of being effective (customer perspective) by taking actions that improve efficiency.  Enter the category of self-service: ATMs, electronic banking, e-boarding card, well designed IVRs to do standard stuff like top up mobile phones come to mind.   At other times the gaping hole grows larger: sales assistants who know less about the products then the shopper, badly designed IVRs, waiting a long time to speak to a human being, call centre agents who are not in a position to help and so pass you on and then on again and so forth.

The fascinating thing about ‘social media’  is that it provides a great opportunity for organisations to be effective (from a customer perspective) whilst being firmly wedded to efficiency.  Yet, there is little movement in the direction of social media because there are a couple of things organisations are more wedded to than efficiency.  Secrecy, ownership and control – in every organisation lurks the dictator.  Again we have a divide: customers want organisations to be open, truthful, clear and collaborative.  Organisations are wedded to secrecy, spin, ambiguity, ownership and control.  And this divide explains why so few organisations have adopted social media to bring customers into the heart of the organisation.

So the challenge that falls to the customer experience designer is how to deliver the effectiveness, openness, transparency and participation that customers want whilst being embedded in an organisation that worships at the altar of efficiency, secrecy, ownership and control – sacrificing many customers in the process.  This is not an easy trick to pull off and it is why I have profound respect for all the people in organisations battling to improve the customer experience!

On customer lifetime value: I would laugh if I was not crying

I remember the incident as if it was yesterday.  It was the first term of the first year of my degree in Applied Physics.  One of my physics professors took the time to point out a huge mistake I had made in answering one of the questions.  It was a mathematical question and I had used a calculator and thus had written the answer to 6 or so decimal places(xxxx.xxxxxx). I wanted to show off my accuracy, my precision!

Being a benevolent fellow this physics professor asked me to estimate the accuracy of each variable that went into the calculation.  It turned out that the accuracy was typically x plus or minus 5%.  Given that there were four or so variables, my physics professor pointed out that I should have simply given an answer to the nearest thousand – leaving out the decimal places as they gave a misleading impression of certainty, of accuracy, that simple was not there.

This is my first issue with all the people who are fixated on calculating the customer LTV and spending a lot of time and money to do it.  If you were calculating that for me – your customer – what would you need to figure out?  Which products I am going to buy?  How many I am going to buy?  When I am going to buy?  How often I am going to buy?  How I am going to pay?  What the margin is on each of the purchases I make?  What it will cost to serve me?  What discount rate to use to discount future cash flows into todays money to arrive at a Net Present Value?

So here is the question my benevolent physics professor would ask?  How can you possibly work out these variables with any accuracy?  How can you possibly come up with an answer that you can count on, you can rely on?  You have to make so many assumptions that the answer depends radically on your sense of optimism or pessimism than it does on facts on the ground.  In fact you create any answer you want to support any case that you want.

Put differently customer LTV is not written in stone.  It depends on what you do.  It depends on what your competitors do – including some that are not even on your radar.  It depends on the customer and her circumstances and tastes – and these evolve.  If you take chaos theory seriously – and you should as social media is everywhere – then the next Tweet could completely change your customers willingness to purchase from you.

Whilst this is a serious flaw, it is not the most important one.  The legions that are busy calculating a precise customer LTV have totally missed the central point of customer LTV.  This point is simply this: if you view the customer as being a customer for life then you are more likely to behave in a way that creates a customer for life.  How?  You are more likely to do the right thing for the customer: the right product, the right service, the right pricing, the right communications and above all the right attitude.  An attitude of lets collaborate so that we can both come out winners.

Put simply you can either make the assumption that I am only going to buy this one computer from you and treat me accordingly. Or you can assume that you have it in your power to treat me so well that I will buy a new computer from you every three years for the rest of my life.  And the assumption you make has a large impact on the future you create.

Is LTV important? Yes.  Do you have to spend a lot of time, effort and money to get at a precise figure? No.  Does making this effort result in the right kind of attitude – the kind of attitude that creates customers for life? Highly unlikely.

If you disagree then please write and correct my misunderstanding.

Better World Books: great example of customer centricity being practiced

I am curious about all kinds of stuff – that means buying quite a few books.  So recently I placed a number of book order from various Amazon partners – one of which is Better World Books.  Before they were invisible to me and now they are firmly in the limelight.  All because they sent me an email last week that simply stopped me in my tracks.  Here is that email:  Better World Books email.

Their email to me is a great example of customer-centricity.  Better World Books have taken the time to put themselves in my shoes and respond to my needs even before I realised I had those needs!  Specifically, they have:

  • anticipated a situation that is likely to get in the way of delivering on their promise and thus result in a poor customer experience;
  • written to let me know that there is a problem and explained what is causing the problems;
  • apologised for any impact that this situation – which is outside of their control – may have on me; and
  • given me sensible options – stick with them or to cancel the order.

The other noteworthy points are:

  • the tone of the email is just right – it is written in a friendly conversational – human – tone;
  • they have supplied their email address and encouraged me to get in touch with them if  I have concerns or questions; and
  • they have done their best to remind me to take circumstances into account when I rate them on Amazon – clearly this is a company that gets the importance of ratings on future business.

Now here is the thing.  I do not know if Better World Books has a customer strategy or not.  I do not know if they have CRM technology or not.  I do not know if they have optimal business processes etc.  Nor, as a customer, do I care.  What I care about is how they treat me, how they leave me feeling.  In my case I am feeling great about doing business with Better World Books.  And I think that their name is apt – they have helped to make my world better.

Next time I am faced with a choice as to who to buy from Better World Books will be top of mind and most importantly top of heart.