Timpson: shifting/transforming culture through ‘language and practices’

Why did John Timpson commit to making this shift in culture?

This is what he says:

“I am embarrassed that it took me 22 years as a Chief Executive before I found the secret behind good personal customer service.  But i’s true.  I didn’t discover Upside Down Management until I met Ian Siddall at UBS……  I learned that we faced a new threat, a competitor with more money than I could possibly imagine, who was well placed to inflict major damage to our business.  He could have opened shops next door, bribed our best people to jump ship and undercut our prices.  To survive we had to be good at shoe repairing and key cutting, engraving and watch repairs and be great at looking after our customers.”

What are the  fundamental principles behind Upside Down Management?

There are five fundamental principles:

  1. All colleagues have the freedom to do their jobs they way they choose;
  2. Every boss’s job it to help his or her team;
  3. No KPI’s, no boxes to tick;
  4. Bosses don’t issue orders;
  5. Head Office is a helpline – it does not run the day to day business.

What does it take to make this shift in culture?

I suspect that some of you are confronted by this.  Upside Down Management is not just some change from ‘business as usual’ (command and control management), it is transformation – a genuine one akin to that of the caterpillar and the butterfly.  What does it take to make this shift?  Is it a question of technique or implementing a new information technology?  No, it requires an existential quality – courage.  Here is how John Timpson puts it:

Upside Down Management isn’t for wimps, it’s for managers with the courage to give people their freedom……….. It took me 10 years to ingrain this way of working into our culture.  My deepest thinking colleagues realise that this is never ending project…….’We always live on a tightrope – it wouldn’t take long for the magic dust to disappear‘”

How easy was it get the people in the organisation to step up, embrace, live into/from Upside Down Management? Here is what John Timpson says about that:

“I put an upside down chart on the front of our weekly newsletter and wrote a letter to everyone explaining my new philosophy, but nothing changed…..  What I proposed was so contrary to the way a normal business is managed that they simply didn’t trust me.  I discovered that lots of people like rules; they don’t want the freedom to make up their own mind.  The rules give a degree of comfort, providing something to complain about and something or someone else to blame.” 

And here is a revelation about the role of the middle managers in any culture shift:

One of our biggest challenges is to get area teams to treat their people the way we want………  It was only when I spent a day out with one of the most experienced that I understood why they seemed to be so uncooperative…… Then he revealed the real problem.  ‘Apart from anything else,’ he said, ‘if I let my assistants do my job, what will be left for me to do?’  That comment made me realise my mistake.  I had changed the job of an area manager but I hadn’t described what their new job was or how to do it.”

Shifting the culture through language and practices

I say that shifts in organisation culture occur through the heartfelt and persistent shift in the language and practices of the CEO and the Tops.  When I use the term ‘language’ I mean more than speech, with ‘language’ I am pointing at everything about the CEO that speaks to people who come into contact with the CEO.  If the CEO comes into meetings late that speaks to people.  If the CEO dominates talk and shoots down anyone that disagrees with him then that speaks to people.   Allow me to give you an example, back in the 90s Ernst&Young got a new ‘CEO’ and he asked partners to ‘give up their offices’ as they took up a lot of space and were rarely used.  Nothing changed.  Then the new ‘CEO’ gave up his office, this spoke to some partners and they followed in his tracks, and then more followed.

So what did John Timpson do to get the people in the Timpson shops to get that he was serious about Upside Down Management?  Through language that spoke powerfully to everyone – the customers, the staff in the shops, the area managers.  Here is how he puts it:

After a time I realised that just telling people that they’ve got the freedom to act was not good enough.  I had to give them examples of what that freedom meant, so I stuck a notice up in every branch:”

I want to draw your attention to a feature that is so important and you might miss.  John Timpson, the CEO, went in person to each of the retail shops and stuck that notice up in every one of them.  He did not delegate to anyone else.  He didn’t just visit one shop – he visited every single shop.  This is powerful language, I say the most powerful language.  It says this is mine, I own this, it matters to me, I mean it, I trust you, I take responsibility.   It occurs to me that here you have an act of leadership and an existential commitment that is in the same vein as the American Declaration of Independence signed by the founding fathers of the USA.

Now onto practices,  these are not exhaustive and yet should give you a good insight as to what I am pointing at when I say that the access for shifting culture is to shift ‘language and practices’:

Notice, the change in ‘language’ around the Head Office.  The most obvious example is the change in name from Head Office to Timpson House.  The less obvious is the fact that no-one is allowed to use the term Head Office.   And that is accompanied by practices that do genuinely take away Head Office.  Put differently, a Head Office that does not have the right/authority to issue edicts and expect compliance is no longer a Head Office.  Which is my way of saying that the ‘language’ and ‘practices’ have to complement one another to be effective in shifting culture.  Finally, notice how the practices tie up as a whole under an overarching philosophy around doing business.  The philosophy guides the language and practices and in turn the language and practices give life to the philosophy – a virtuous circle.

For those of you grappling with culture and culture change, you might want to read the two earlier posts I wrote on culture change:

Culture change: what does it take to change culture in business? In banking?

‘Collaborative customer-centric’ culture: what does it take to make the shift?

This post concludes this mini-series on culture and culture change.  I hope that you have found at least some of it disturbing / thought provoking.  Last tip/POV – most of the stuff out there on culture change is mistaken and not useful, it really isn’t because it works from a mistaken view of human beings. If you want a more useful access to people and culture then contact me I can point you in more useful directions.

Why price matters and how it is tied up with marketing, service and customer experience

In a recent post, I wrote:

“Bob Thompson shared the results of research he had been involved in some years ago.  When customers were asked what constituted ‘customer-centricity’ they came up with:  product quality/fitness for purpose; customer service excellence; being treated fairly; and price.  Bob made a big play, as do others, about price only being fourth on the list.  I will be writing a post on the price myth soon.”

Can you count on customers to tell the ‘truth’?

Before we can grapple with the ‘price is not that important, other stuff is more importantmyth we have to grapple with the customer/market research myth.   Why?  Because the people who make customer related claims – including on the matter of price – almost always refer to the results of customer surveys and market research.

Research simply discloses how a specific bunch of people responded to/answered a set of questions given the way that these questions were worded/framed and how/when the research was conducted.  ‘That is it – that is all it tells you!  You cannot use it to make declarative statements of ‘truth’ about what matters to customers nor what they actually do when they are shopping in the real life shopping environment. Even if we assume that all bias has been stripped out of the surveying/research process we are confronted with this:  people deceive themselves whilst being convinced that they are espousing the truth – neuroscience suggest that this is a fundamental feature due to the design of the brain, which is really many brains in one.

Asking about price, and how much it matters or not, is like asking about sex.  Why?  Because the question is laden with meaning which puts one’s identity, self-esteem and ‘social face’ at stake.  If you are a woman and answer that you have had many partners and love sex then you are likely to be thought of as being ‘loose’ and looked down upon.  And you, the woman that is being asked that question know that and so you modulate your answer – you lie.  Now imagine that you are a man.  How likely are you to say that you have had no sex at all in the last three months?  I recently took part in a speed awareness course where only 2 people out of 23 claimed not to be ‘better than the average driver’  Was it because most of us in that room (including me) are deluded or is it some of us were not willing to admit that we are not good drivers in front of our fellows?  Possibly and most likely both.

First the price question will be answered differently by different segments and you cannot average it out – to some people it might matter a lot, to others not at all. Second, there will be a ‘right’ answer (socially desirable) given the current circumstances – have you noticed how thrift is in and conspicuous spending out?  Third, what people say (and even think they do and what matters to them) is often very different to what is so.  And even when you educate them on what is so they tend to ignore it – they were blind to it for a very good reason.

In short,the scientifically correct thing to do is to be skeptical about what people say: you simply cannot count on human beings to have accurate insights into themselves or their behaviour.  And you cannot count on them to tell the ‘truth’ as it shows up for them if their ‘social identity’ is at stake.

What is our relationship to price?

Take a look at what is happening on the high street. We go and try out products and get advice in stores and then go home and buy it online because we can get the same product cheaper.  Is this why so many stores have closed in the UK and why high streets are littered with empty or boarded up shops?  Remember Gateway?  The  online PC seller who opened stores and designed/delivered a great shopping experience?  It ended up closing the stores.  Why?  Consumers tuned up at the stores got great advice and then they went home and bought online from Dell because Dell was cheaper.  What was the fear with the internet?  Ease of finding/comparing prices.  Why?  Because it would enable buyers to buy from the cheapest seller.  Why do offline retailers fear smartphones?  Because they enable shoppers to compare prices and either buy it online (cheaper) or head for a store down the street that supplies the same product at a cheaper price.

Look at Ryanair and Easyjet – these low cost airlines exist because they have come up with a low price value proposition for air travel that speaks to people whose first and foremost requirement is price – cheap.   Look at IKEA – it had done the same for furniture.  Then there is WalMart in the USA and Matalan in the UK – doing very well by selling merchandise at value prices.  In short these players are doing well because they are playing the price card well.

Price can also be an indicator or quality and thus assuage our concerns about being swindled/making the wrong choice.  For example, experiments show that if you have a high end product and a low end product then you can do better by introducing a ‘in between product’ in terms of price.  When you do that what happens?  You make more money because you help people to buy.  Most people will buy the ‘in between’ priced product – these people fear buying the ‘cheap’ products (quality concerns) and are not up for buying the top priced product.  Note: it is essential that the shoppers is uncertain about the quality of the products for this behaviour to show up.

What is my point of view on Price?

I say that price does matter especially in the current economic climate.   We are all sensitive to price – our sensitivity depends on our sense of our financial well being.  It depends on current savings, current income and how we see the future. If our income/savings are low then we will be price sensitive.  Last summer I spent some time in the New Forest and in particular in a locale where only the rich can afford to live – property price are high.  Yet, I was shocked to see busy ‘cheap stores’ nestled in amongst the expensive stores. Then I got that there are plenty of old folks who have retire in this locale.  They have used their savings to buy their homes and their incomes are limited and so they use the ‘cheap’ stores.  Finally, the future matters, if the future looks bleak then we are more price sensitive than if the future looks bright.

I say that we will not willingly pay more than we have to for the same product if all things are equal.  A great example of this is insurance – most people buy on price as they assume that all companies, all policies are alike.   Only those that have made a claim, become wise to and factor in what the policy covers and the claims experience.  That means that if store A wants to charge us more than Store B  for an identical product then the people at store A have to invent differences and communicate these differences so that the customer can justify paying the higher price.

The central challenge of business continues to be inventing differences – real and imagined – so as to get the customer to pay a higher price than s/he would otherwise pay.  The factors that companies have to play with are: product and product development; marketing and the art/science of impression/perception management (notice the interest in neuroscience and neuromarketing); service (not the function called Customer Services) and in its broadest/modern sense Customer Experience; and business model design – what you charge for, how you charge….  Apple does it through great products.  Zappos does it through great service. Amazon does it through the ease of the purchasing process.  USAA does it through the ‘community’ and ‘integrity’ and ‘service’.  Zane’s Cycles does it through the customer experience and ‘community’………

Put differently, the justification for investments in marketing, in service, in the customer experience are based on counteracting the buyers propensity to buy on price if all things are equal.  That means that the purpose of marketing, service, customer experience is to ensure that all things are not equal in the minds of buyers.  Manipulating perceptions – the role of marketing – used to be enough because only marketer had access to media. Media exists to shape minds – always.  Marketing no longer works that well due to the democratisation of voice. Which is why there is pressure to actually be different: stand out products; stand out service; stand out customer experience. This requires a fundamental change in organisational behaviour: investments have to move from marketing (impression management) to the product and/or the operations that enable buyers to buy, own and use the product.  Few organisations have made that shift in priorities and spending.  Which is why so much customer talk is simply empty talk.  Now compare that with the companies that stand out in terms of product-service-customer experience: do you notice that they don’t spend anywhere near as much on marketing as their competitors?

What is the good news?  Whilst price matters it is not the only thing matters.  Our dignity matters to us – we are selves who are aware of ourselves and who are driven to relate to ourselves as worthy/important/as mattering.  And this need is as important as the need for a ‘good deal’.  As such this provides an opening for organisations who honour our need for validation, for dignity, for wanting to feel there are good guys out there and that we live in a ‘good’ world.  Which is why companies like Zappos and Zane’s Cycles are doing well – they charge premium prices in turn for honouring us ‘as the best of ourselves’ .  And enough of us are willing to pay the premium price and talk about these companies as if they are our friends.  Because they show up for as being our friends.  Amongst friends, price is not the most important thing, it is trust, it is looking after one another, it is acting equitably/fairly.  It is giving a helping hand now, in the full knowledge that our friend will be there when we need that hand in return.  As and when that expectation is violated by our friend/s then we speak out – think Netflix.


Howard Schultz/Starbucks: 18 insights and lessons from a customer experience master

It is worth learning from the masters

You may have noticed that I am an avid student of all things customer.  Over the last few months I have been reading Onward by Howard Schultz and I have found it to be an insightful and inspiring read – I recommend you buy it and read it!

Perhaps, I love the book because it validates my point of view (bias) on customer-centricity and customer experience – as a philosophy rather than a strategy or simply tactics (I’ll get into that distinction in a follow up post).  For today I simply want to share with you some stuff in the book that resonated with me in the hope that you may find it useful too (any stuff in bold is my doing).

18 insights / lessons from Howard Schultz

“A well built brand is the culmination of intangibles that do not directly flow to the revenue or profitability of a company, but contribute to its texture. Forsaking them can take a subtle, collective toll.” (p23)

“I always say that Starbucks is at its best when we are creating enduring relationships and personal connections. It is the essence of our brand, but not simple to achieve. Many layers go into eliciting such an emotional response.  Starbucks is intensely personal.” (p23)

“Unlike other brands, Starbucks was not built through marketing and traditional advertising.  We succeed by creating and experience that comes to life, in large part, because of how we treat our people, how we treat our farmers, our customers, and how we give back to the communities.  Inside the company, there had always been an unspoken level of trust….” (p27)

“I suggested something to the group as the ideas began to percolate. “The only filters to our thinking should be: Will it make our people proud? Will it make the customer experience better? And will it enhance Starbucks in the minds and hearts of our customers?”” (p75)

In my head I knew that no silver bullet would transform Starbucks overnight, but in my heart I was on the lookout for a big idea – what would be the next Frappucino, the most successful new product in Starbucks’ history?” (p75)

“But there was an even more important reason that I chose to eliminate comps from our quarterly reporting. They were a dangerous enemy in the battle to transform the company…….The fruits of this comp effect could be seen in seemingly small details. Once I walked into a store and was appalled by the proliferation of stuffed animals for sale.  “What is this?”  I asked the store manager in frustration…..The manager didn’t blink. “They’re great for incremental sales and have a big gross margin.” This was the type of mentality that had become pervasive. And dangerous.” (p89)

“In any well run retail business, there is, by definition, a maniacal focus on details……..In 2008 I felt very strongly that many of us had lost our attention to the details of our business…..Like a doctor who measures a patient’s height and weight every year without checking blood pressure without checking blood pressure or heart rate, Starbucks was not diagnosing itself at a level of detail that would help ensure its long-term health….We thought in terms of millions of customers and thousands of stores instead of one customer, one partner and one coffee at a time. We forgot that “ones” add up.” (p97

Their instruction at this “seeing” exercise was to consider each retail experience not as a merchant or an operator, but from the point of view of the customer. What did they witness, smell and hear? What non-verbal cues enhanced the experience? ……That journey helped put our leaders back in customers’ shoes, providing an enlightening and for some emotional exercise that underscored how important it was to put the customer at the centre of every meeting and business decision.” (p107)

“Starbucks coffee is exceptional, yes, but emotional connection is our true value proposition.  This is a subtle concept, often too subtle for many businesspeople to replicate or cynics to appreciate. Where is emotion’s return on investment? they want to know. To me, the answer is clear: When partners like Sandie feel proud of our company – because of their trust in the company, because of our values, because of how they are treated, because of how they treat others, because of our ethical practices – they willingly elevate the experience of each other and customers, one cup at a time.” (p115)

I have always believed that innovation is about rethinking the nature of relationships, not just rethinking products and as Michael explained how Ideastorm was helping Dell listen to customers and improv its products and services…..Thee was definately something here for Starbucks.  A chance to reconnect with customers we had lost touch with.” (p120)

“..one of the most important pieces of advice I’d heard upon my return…….”Protect and preserve your core customers.”…..”The cost of losing your core customers and trying to get them back in a down economy will be much greater than the cost of investing in them and trying to keep them.“” (p129)

“Some corporations are built, or rebuilt, on data driven business plans and hired guns with formulaic strategies. They may succeed, but they lack soul.  Starbucks is, by its founding nature, different……..transformation was not only about tightening nuts and boltsIf we did not also feel, if we did not have conviction in our values and believe that we really were in the business of human connection – on our farms, in our offices, in our stores, in our communities – then we were doomed.  We had to preserve our humanity.” (p131)

“But what many or our people had in spirit they lacked in business acumen and tools…….We also observed too much waste…….Something subtler was being wasted: our people’s time and energy……The fault did not lie with our people in the stores.  They were doing the jobs they had been asked to do with the resources and training they’d been given.  For all the brand’s marketing success, Starbucks needed a more disciplined operations system…..” (p145)

Growth had been a carcinogen. When it became our primary operating principle, it diverted attention from revenue and cost saving opportunities, and we did not effectively manage expenses……..Then as consumers cut their spending, we faced a lethal combination – rising costs and sinking sales – which meant Starbucks economic model was no longer viable.” (p149)

“As I stared at the list of 600, a lesson resonated: Success is not sustainable if it’s defined by how big you become.  Large numbers that once captivated me – 40,000 stores – are not what matter. The only number that matters is “one”. One cup. One customer. One partner. One experience at a time. We had to get back to what mattered most.” (p152)

“Kristen summed up Lean’s benefit well: “We were spending too much of our time fixing moments , but not actually solving problems. But fixing moments, like mopping a dirty floor, only provides short-term satisfaction.  But take the time to understand the problem – like how to keep a floor from getting so dirty in the first place – solves, and maybe eliminates a problem for the long term.”” (p278)

“At it’s core, I believe leadership is about instilling confidence in others..” (p302)

“There are companies that operate huge global networks of retail stores, like us.  Others distribute their products on grocery shelves all over the world, like us.  And a few do an extraordinary job of building emotional connections with their customers, as we have learned to do.” (p311)

My recommendation

Buy the book – it is a great read and has lots of real world lessons and insights.  For most business people it is likely to be a challenge because Starbucks is Starbucks because it is not built on nor operates on conventional business wisdom and practices.

The future of retailing: is it really all about technology?

I recently viewed the following slide deck (PSFK Future of Retailing Report 2011) and was struck by how the introduction focusses upon the human, the social – shopping as a social experience as much as an economic one, and yet the rest of the report focusses almost exclusively on the wonders of technology and the difference it will make to the shopping experience.  I believe that the report implies that by putting an array of technologies into the retail stores less staff will be needed and possibly these staff need to have less product knowledge because they will be able to access that information through handheld devices connected to the right systems.  Let’s just take a look at these assumptions.

Do you find that life is more complicated or less complicated?  Do you find that you are more time or less time?  Would you prefer to spend your time doing research, talking with your social network, evaluating options, find the right products and then making the purchase?  Do you do that voluntarily or out of necessity because either you do not trust retailers or find their staff to lack the product knowledge?  Do you do that for all product categories and before every single purchase?   Do you look forward to serving yourself through the website, the IVR and FAQ’s never encountering another human being at the company your are doing business with?  Can you really imagine turning up to the retail store, scanning in the bar codes, reading the reviews, reading how the product was manufactured, getting your friends opinions…..?  How long will that take?  Do you have the time?  Can you do that standing up in the store with lots of other shoppers jostling around?

What would it be like if you trust the retailers?  Retailers that stock products that you can trust – the quality is sound, they are fit for purpose; the products are appropriately priced; there are plenty of welcoming, helpful and knowledgeable staff who can and do help you with making the right choice including selecting the right products.  What if these staff are also enthusiastic about the products that they are selling?  Do you think some of that enthusiasm will rub off on you?

Allow me to share a personal story with you because I believe that it illustrates another perspective on why and how we shop in the retail stores.

I was handed an iphone 4 and told that I needed to get a protective cover for it – sound advice given that it is an expensive advice.  Yet, I had never owned an iphone and so did not know what kind of protective cover to get.  So I started by observing and noticed that different people had different covers and so I wondered which one would be right for me.  I even asked a couple of people for recommendations yet the recommendations landed as lukewarm to me so I lacked confidence on those recommendations.  Then I turned to the internet and there were all kinds of covers and all kinds of reviews.  At the end of this process I simply felt that I had wasted my time – too much choice, too many opinions and fundamentally I could not touch/feel/use the cover to see what it added to the weight, bulk and use of the iphone.  So what did I do?

As the retail centre was only five minutes walk I went shopping.  Where did I go?  Carphone Warehouse.  Why?  Probably because I have a mental map that says ‘independent advice’, ‘friendly in the past’ and ‘stocks lots of accessories’.   I walked over to the accessories section and started looking.  That did not help me because the signposting was poor – I simply could not find the iphone4 covers.  So I turned to the three people on the counter and asked them for help.  One young man stepped forward with enthusiasm.  He showed me the iphone covers and there was considerable choice.  So he asked me what I was looking for and I explained.  He then made his recommendation with conviction and enthusiasm yet he did not stop there.  Without asking he opened up the packaging, took out the cover and snapped it into place and invited me to feel it and use the phone.  I did and the cover did the job perfectly and it was reasonably priced as well.  So I thanked him for his help and bought the cover – all of this took less than five minutes; I had wasted some 3o+ minutes shopping online.

Insights into the shopping experience

There are some categories of products that we simply have to see, touch, hear, feel and experience in order to know if a particular product is right for us.   And this is where offline retailers have an advantage over etailers.

Sometimes it is really hard to choose because we have no prior experience and there are so many products to choose from.  This is where knowledgeable, enthusiastic, helpful staff can make all the difference: right there and then they can learn what you want and let you experience their recommendations.

There are occasions when you simply cannot wait a day or more to get your hands on stuff that you need.  Again this is where offline retailers have a great advantage because we can turn up and walk out with the stuff that we want when we exit the store – clearly not so for all products e.g. fridges, washing machines etc.

Convenience matters.  The fact that I could easily pop into the shopping centre made it that much more likely that I would do so when I needed to buy something quickly – on that day.

I enjoyed the human interaction with the young man that sorted out my problem for me / helped me find the right cover.  He is no longer just another face he is a human being to me: I know that he has an iphone, that it is white, that he had considered buying the cover he recommended to me but did not do so because it did not go with the colour of his iphone…… Put differently I was enriched by the social encounter (in the real world) which simply would not have occurred in the online world. And this social encounter matters to many people – the challenge is to get it right by retailers investing in the right people and the right number of people.

Conclusion

The basics of good retailing have not changed: location, merchandising, knowledgeable staff, great service, value for money….  Some retailers are suffering because on the whole many retailers have forgotten these fundamentals especially the human and social aspects of the shopping experience. Despite the lure of technology what really matters in the offline retail world is the human to human encounter:  the people that we meet in the stores, how helpful they are and how they make us feel about ourselves, our fellow human beings and the world that we live in.  The proper role of technology is to add to this hi-touch not to detract from it or to replace it.   I can imagine that there is a consultant or IT vendor out there selling the fact that with the right technology in place the retailers can dispense with their human staff: the customers will simply turn up and serve themselves or maybe robots will do the work of the human beings. To be in love with this dream is to be fundamentally mistaken about human beings and shopping.

A framework to help you to think about and make sense of Customer Experience Management

A high end retailer and a discount retailer offer the same value for money

I was reading Marketing Week and the following piece caught my attention:

Consumers perceive that John Lewis and Primark offer the same value for money, despite their widely different brand positionings, according to a new retail study.

The “Re-imagining the retail store” report, by Arc Worldwide – part of the Leo Burnett Group, found that both John Lewis and Primark scored 112 on its quantitative scale for value for money, as rated by consumers.

The scores demonstrate that both deliver good value for money, but in different ways. Consumers’ perceptions of Primark’s value stems from its low price, while John Lewis’ value perception comes from its range of choice and quality.”

How do you make sense of Customer Experience?

How do you decide when you have got the customer experience right?  How does the customer experience fit / contrast with customer service?  How does customer experience fit into the bigger picture? Put differently if customer experience is the foreground then what it the background (the context) into which it fits?  I have been grappling with these questions and want to share my thoughts with you and get your feedback.

Here is how I make sense of Customer Experience:

In my way of thinking the focus of enterprise effort should be to create (and communicate) superior value to the customer segments that the Tops have decided to focus upon – to serve.   So that is why “Superior value” sits at the centre of my thinking and this diagram.

Which begs the question: how do you create superior value?  My answer is made up of two parts. First, you have to come up with (and communicate) value propositions that meet customer needs/wants – whether these needs and wants are expressed or not by the customers themselves.  Second, you need to deliver a customer experience that matches the promises implied within the proposition.  And the brand plays a role because there are a set of promised associated with the brand by customers and these are inherent in any value proposition.   For example, you will expect different stuff when you think of Mercedes and say GM.

The key point I want to stress is that in this framework we can think of the value proposition as the promise – the bargain that is being struck between the customer and the enterprise.  And the customer experience is the delivery of that bargain as experienced (lived) by the customer.

If you think about value, value proposition and customer experience then the fact that a high end retailer and a discount retailer as perceived as being par on value makes perfect sense.  They both excel because they have crafted value propositions that speak to their chosen customer segments and deliver the customer experience that goes with the value proposition.

How do you craft the right value proposition and associated customer experience?  This is where insight comes into play.  In my model I distinguish four different types of insight: customer insight – your customers needs, wants, behaviours; competitive intelligence – what your competitors are up to; technology insight – what technology enables and how it disrupts what is taken for granted today; and other insight for example regulation around how you treat customers, privacy etc.

The final point I want to make is that I strive to think like a ‘systems thinker’ and I see all of these pieces as being interdependent.  Each affects everything else.  So customer insight informs the value proposition and the customer experience.  Yet the customer experience will inform/feed customer insight and the value proposition cannot be developed solely based on customer insight: competitive intelligence has to be factored in because we, humans, make sense of things through comparison and contrast.  You may have a great value proposition and customer experience yet if your customer comes up with a better value proposition then you are likely to find yourself in trouble: think Nokia, think RIM.

Customer Experience Management – a tentative definition

I take the view that all knowledge is provisional and as such I offer you my ‘faulty’ yet ‘rigorous’ definition of Customer Experience Management:

Customer Experience Management is the practice of designing, orchestrating and overseeing the efficacy of customer interaction (direct and indirect) such that the phenomena (experience) and outcomes of these interactions as a whole deliver on the promises implied by the value proposition and meet-exceed the expectations (implicit and explicit) of the customer, the customer facing agent and the management of the enterprise.

If you want a much simpler definition then here it is:

all the stuff that you need to do to create happy customers, have them stick with you, incentivise them to ‘recruit’ new customers for you (free of charge) AND to do this in a way which delivers a fair reward for the investment/sacrifice that you make in time, money, effort and risk.

What do you think?

I’d love to get your feedback on what I have written here.  So what do you think?

9 observations on the retail shopping experience

I think it is fair to say that there is tremendous pressure on the retail sector.  This would suggest to me that the retail sector has to up its game: to provide interested value propositions and attractive customer experiences in order to counteract the ease and convenience of ‘mouse shopping’ – internet shopping.  Looks like I am wrong.  Recently I accompanied my wife whilst she was out shopping for a dress.  Here is what I noticed and experienced:

1. No welcome

We went into countless clothes shops and not once did we get a welcome from anyone.  There was no welcome as in the greeting “Welcome!”.  There was no welcome as in eye contact and facial expression (smile) which suggests “Welcome!”.  We were simply invisible – at least that was our experience.  It strikes me that the entrance into the shop is no different to a guest entering your home – the welcome or lack of it sets the tone for the entire stay.

2. No signposting

In just about every shop we entered there was one rack after another of clothing.  There was no signposting (like you might find on a well designed site e.g. Amazon) to help us go to the right section.  No signposting in terms of types of clothes or size of clothes or colour of clothes…… Nothing to help the shopper to figure out where to head to find the clothes she is looking for.  I noticed that my wife was flitting from one rack to another and getting quite frustrated at times simply trying to find the right clothes!

Good signposting is what every good hostess does.  She sizes you up and points you towards the right people – those that you are likely to be interested in – and away from the people who you have no interest in.  It is also the heart of ‘information architecture’ on websites.  So why do the retail shops not do the same?

3. Information not made available

More than once a piece of clothing hit the mark and yet my wife was disappointed to find that it was in her size.  So she ended up wondering if the shop had that item of clothing in her size.  Yet she had no easy way to find that information.  Sometimes she ended up asking the store assistants, many times she did not because the store assistants were busy or simply not at hand.  When she did ask the store assistants some of them simply said “No”.  Did that mean “No that is not in stock.” or “No, I can’t be bothered to look and see.”  Those assistants that did go and look were sometimes absent for up to 10 minutes.  Is that an efficient use of a customer’s time?  Is it an efficient use of a store assistants time?

Now imagine having kiosks in store that provide the customer with that information.  Not only can the customer see what is and is not in stock she can also what other items of clothing go with the article that she finds interesting.

4. Size and pricing information was not easy to find

I noticed that my wife had to move clothes around and really make the effort to find the size and price information.  Why is this information not easily available?  The other thing I noticed was that in some of the shops there was a mismatch between the size quoted on the garment itself and the size on the price & size label tied onto the clothing. Which made me wonder how many women end up buying the wrong size?

5. Lack of an inviting atmosphere

It was clear that the retailers had invested in the exterior and interior of the shops.  Yet, I was struck by the lack of an inviting and engaging atmosphere in the shops themselves.

Some of the retailers (those on the cheaper end yet not cheap as these were outlets in a designer clothes mall) were packed full of ladies: there as little room to move and clothes were lying on the floor.  It simply felt like being in a cattle pen – how anyone can shop in that environment and enjoy it I do not know.

Walking into the high-end retailers felt a little like walking into a well run hospital.  The shops were spotless and the staff simply looked like and behaved robotic: cold, stand-offish, snooty – anything but human, helpful, hospitable.  Interestingly, there were relatively few shoppers in many of these retailers.  With simple dresses selling for £2,000 perhaps you do not need to sell much to make the numbers.

6. Fitting rooms: not fit for purpose?

Clothes are an item that you simply must try on especially if you are a women.  Given that is the case I assumed that a lot of thought would have gone into the design of the ‘fitting room experience’.   What I noticed: sometimes no assistant was available at the fitting rooms; almost all of the fitting rooms did not have enough hanging space to hang more than say 4 pieces of clothing; my wife remarked how hard it was for her to see how the dress looked on as she does not have eyes in the back of her head; and some  of the stores only allowed women into the fitting rooms.  The last policy meant that my wife had to do a parade in front of all the customers if she was going to get my opinion: a private act became a public one and my wife did not like this at all.  Which made me wonder how many other women feel like that.

It also struck me that the ‘fitting experience’ is a ‘moment of truth’.  It is here that the staff assistants can really contribute to the customer.  It is here that they can answer the customer’s question, provide feedback and offer to get the same clothing in a more suitable size.  Yet only one assistant did that.  She let me into the fitting room area it was against official policy – she pointed out that there were no other female customers so it was ok.  She actually asked if she could look and offer an opinion on how the clothes looked on my wife.  She provided her view in a friendly helpful manner.  She suggested alternatives and went out to find those alternatives and bring them back.  And she went into the stockroom to find the right size.  She made a difference and ultimately ‘landed the sale’ and the gratitude of the customer (my wife) and her husband (me).

7. Payment and departure

In more than one shop I saw customers standing at the payment counter waiting to be served.  The issue was not that there were too many customers in front of them being served.  No, the issue was that the shop assistants were busy putting clothes on the clothes racks or manning the fitting rooms or taking questions from customers.  In one instance I saw two shop assistants walk by a customer (who was waiting to be served) four times – not once did they acknowledge the customer.  After about five minutes I saw this customer leave the clothes on the payment counter and walk out.

During the payment process not once did any of the shop assistants make any comment on the clothes that customers had purchased.  No acknowledgement of the customer’s savvy in choosing that item of clothing.  No useful tip for caring for the item/s of clothing.  No mention of any other item of clothing that might go with a particular item being purchased.  No sincere “Thank you for shopping with us.  And we are looking forward to seeing you again. ”  Nothing – just robots taking out tags, processing credit cards, bagging the clothes and handing over items.

8. Options – where are they?

What about providing the customer with the option of having her items delivered to her home?  Or the option of leaving her email address and getting an alert when the items she wants is back in stock?  Or the option of a stylist to help her choose the right clothes/colours?  And so forth….

9.  Alienation is rife

Alienation is a fancy sounding name from being emotionally disengaged from the situation / task that you find yourself in.  It can be contrasted to ‘flow’ – the experience of being one with the situation and the task such that time flies by.  What I noticed was that most of the shop assistants were alienated from their work – that of serving their customers.  So I took the opportunity of talking to many of them.  Most of them are young, paid the minimum wage, given little or no real training and do not feel valued.  They are simply doing the shop assistant job until something better comes along.

How are the people that are staffing the shops going to make customers feel welcome and deliver an attractive experience for shoppers when they are so disconnected from their work?

Final thoughts

It strikes me that (offline) retailers still think that they are selling goods. They still think that the are running warehouses that happen to be located on the high street or the shopping mall.  That their role is simply to put the items on the shelves, let the customers pick them, bag them and take payment.  They do not seem to get that if they are to survive and prosper then they need to create and sell experiences: experiences that engage the physical senses and leave customers with a smile on their faces and something to talk about and share with friends and their broader social network.   This may be why many UK retailers are struggling.  The exceptions being the likes of John Lewis an ’employee owned’ organisation that puts great customer service at the heart of everything it does and where the employees have voice, are treated well (generally) and share in the profits.

The opportunity to re-envision and re-invent retailing is here I wonder who is going to take it.  What do you think?  What is your experience?