The importance of the 3V’s to customer-based strategy

How do you go about developing a customer-based strategy?

If you are a strategist you will have come across all kinds of frameworks including: 5 Forces(Porter); Core Competencies (Hamel & Prahalad); Ansoff’s Matrix; BCG’s Growth-Share Matrix; 7S McKinsey Model; GE-McKinsey Matrix; 3Cs (Kenichi Ohmae); PEST(LE) model; SWOT analysis; IDIC (Peppers & Rogers)…..   Each was developed in a particular era, for a particular problem and represents a particular point of view about what matters in shaping success.

In addition to these frameworks, I’d like to suggest the 3V’s – Vision, Values and the Value Proposition.

Vision

Valeria Maltoni at the Conversation Agent has spelled out the value of having a Vision Statement.  I am going to take her lead and explore the Virgin Group especially as I had the good fortune to provide digital marketing services to the Virgin brand some years ago and walked away impressed at the culture, the customer orientation and how we (the supplier) were treated.  If you take a look at the Virgin website you find the following statements:

  • “We have always succeeded in business by offering consumers another way, a better way and being willing to fight their corner.”
  • “Our lifestyle is the way that we choose to live our lives – the things we buy, the things we believe – it is who we are. As global citizens we want to provide people with products and services that will help them to embrace a more sustainable lifestyle.”
  • “Our vision is to contribute to creating happy and fulfilling lives which are also sustainable – surely a vision worth aspiring to?”
  • “We believe that we have a part to play in making this a reality and so our vision for sustainability within the Virgin Group is: “to make a credible contribution towards sustainable lifestyles whilst meeting or exceeding the expectations of our staff, customers and other stakeholders”.”
  • “We want our Virgin companies to provide responsibly produced, sustainable, low carbon services and products that are desirable, easy to use and good value above all else so that our customers can enjoy their lifestyles safe in the knowledge that Virgin is acting responsibly on their behalf.”

What is the point of putting forth a Vision Statement?  Let me say that is no point in a Vision Statement if it is just a PR exercise or a desperate attempt to revive flagging fortunes.  The power of a Vision Statement lies in its ability to enroll a diversity of actors (Tops, Middles, Bottoms, Customers, Suppliers…) in an inspiring point of view on the future such that they co-operate in moving towards and creating that future.  This means that first and foremost the Vision Statement has to be authentic for the leader who crafts, speaks and lives it.  Notice the last point:  the Vision Statement lives to the extent that it is lived.  The more people that live it the more likely it is that the vision will become reality.

Values

You and I might craft the same Vision Statement and yet go about it very differently.  Why? Because our values (and beliefs) are very different.  For example, in the ‘struggle’ for independence from British rule in India several leading figures wanted the same thing – to bring an end to British rule and rule themselves as a people – yet some leaders valued taking up arms, others valued pleasing the British and Gandhi valued non-violent resistance.

Here is what Virgin says about values:

“The Virgin brand values have remained unchanged for 40 years. They aren’t just an image but a reflection of our very essence and the way we do business. Virgin has always stood for value for money, quality, innovation, fun and a sense of competitive challenge. But now our brand values have gone three dimensional; we no longer have a list of brand values but a brand cube to which we have added the Wellbeing & Happiness of People and Sustainability of the Planet. “

Made up values are cooked up to brainwash the intended audience and in that sense are simply the lipstick that hides the pig.  They are an either an attempt to hoodwink the gullible, a good sounding slogan or simply a desperate attempt to turn an also ran into a contender (think back to the highly successful Avis campaign “We try harder”).   Which makes me ponder about British Airways suddenly finding its core values: “To fly, to serve”.  Is it authentic?  I don’t know.  Will it lift its fortunes?  Possibly.

Real – authentic – values act both as guides and as constraints on what you will and will not do and how you will conduct yourself. One of the essential aspects of strategy is choosing what courses of action you will take and what courses of action you will not take.  Real values also have another advantage they allow you find / attract value chain partners – it is simply easier to do business with those that hold the same values as yourself and arguably it is more fun as well.

Value Proposition

In my way of thinking the Value Proposition is where you spell out your promise to your target customers.  It is where you take all of your insights about yourself, your target customers, your competitors and the world at large and spell out what your customers can count on you for. If you get the Value Proposition right then you will attract hordes of customers.  If you actually deliver on the Value Proposition – the customer experience delivers the value proposition – then you will keep customers and they will get more customers for you through word of mouth.

Let’s take a look at the Value Propositions for Richer Sounds (award-winning high street electronics retailer); TED (one of my favourite sites); and John Lewis (renowned for customer service):

Richer Sounds:  “Biggest Brands, Best Prices, Expert Advice…and take it home today!“;

TED: “Riveting talks by remarkable people, free to the world”; and

John Lewis:  “Free Standard UK Delivery on Orders Over £30”; “Click and Collect From Our Shops”; “International Delivery”; and “Never Knowingly Undersold.

Conclusion

It is worth thinking about what you stand for in the world (Vision, Values) and clearly articulating the promise that you are making / the bargain that you are striking with your target customers (Value Proposition).  Why? Because these are fundamental strands of a customer-based strategy.  What do you think?

 


Easy ways for smaller businesses to improve the customer experience

Over at Focus Courtney Sato asked the following question:  “What are easy ways for small businesses to (almost) instantly improve the customer experience?”  To answer that question it is worth getting clear on what constitutes ‘customer experience’.

One way of looking at Customer Experience Management: effectiveness of interactions

Here is how Richard Snow (VP & Research Director at Ventana Research) defines ‘customer experience management‘:  Customer experience management is the practice of managing the effectiveness of customer interactions so the outcome meets the customer’s and the company’s expectations.

How do you improve the effectiveness of these interactions?

If we accept this definition (and largely I do – there is a piece missing) then the question is what do we need to do to improve the effectiveness of the customer’s interactions with our business?  In his article Richard sets out the four steps:

  • Measure the outcome of all customer interactions (across all media, all touchpoints, all aspects of the customer journey);
  • Identify the reason for the interaction (from the customer’s perspective);
  • Figure out why the outcome was the way it was (root cause analysis); and
  • Make necessary changes to generate more of what works and eliminate/minimise what does not work.

What we can learn from Guy Letts, the founder of CustomerSure and formerly Head of Services at Sage UK

Before he founded CustomerSure, Guy Letts was the Head of Services at Sage UK; Sage describes itself “Sage is a leading supplier of business management software and services to more than 6 million customers worldwide. From small start-ups to larger organisations, we make it easier for companies to manage their business processes.”

As the Head of Services Guy was responsible for improving the customer experience, driving up satisfaction and increasing revenues through repeat and additional business.  This is a goal that Guy achieved and in the process he learned valuable lessons which were the seeds of the business he has founded: CustomerSure.   What are these lessons?

The critical point to make is that the rational approach – the one that is commonly practiced – did not work well.  The response to customer surveys was less than ideal.  The quality of the information that was provided was variable.  Providing statistics – customer satisfaction scores – to his services staff did not leave them inspired to do things differently. And pushing the employees to do more / better / different was exhausting and did not deliver the results.  So how did Guy ultimately improve the customer experience and hit his customer satisfaction and revenue goals?

Guy had an Aha moment when he visited a Richer Sounds store (hi-fi / electronics retailer which won the Which? retail customer experience award in 2011).  What was this Aha?  He noticed that the Richer Sounds customer survey was simple (5 questions) and these questions were focussed on the customer and what mattered to a customer.  Questions like: “Was the item in stock?”; “Did our staff know what they were talking about?”; “Where you served quickly?” etc.

So Guy had cracked the first part of the puzzle: how to assess the effectiveness of the interaction from the customer’s perspective. The answer was cut down the surveys sent to Sage customers down to the essential five or so questions and ask the questions that matter to Sage customer – the key stuff that determined the Sage customer’s experience of the Sage services team.  And to survey these customers immediately after a services engagement or interaction rather than wait for the next annual survey to come around. 

The next challenge was inspiring change within his team.  Here Guy learned that sharing the verbatim (unstructured) customer feedback with his services team made an emotional impact that quoting customer satisfaction scores simply did not do.  Yes, you have to share the customer’s word and emotions with the people who directly or indirectly impact the customer experience.  Why?  Because it is more effective at altering their perceptions, attitudes and ultimately behaviour; numbers simply do not have this effect – they do not touch the Elephant, they they might speak to the Rider.

Sound good so far yet Guy found out that asking the right questions and sharing the verbatim feedback with his services team was not enough.  If any of you have been on any motivational training courses or seminars then you will know how long the emotional high hangs around.  For most people when an emotional high meets resistance (from the powerful) and hard work (of changing ingrained behaviours) that high tends to dive pretty quickly and you arrive back at the status-quo.  So Guy introduced the practice of assigning actions (with specific deadlines) and monitoring to ensure that members of his services organisation did what they had agreed to do / assigned to do. 

Next Guy instigated the practice of sharing and closing the loop.  The first part was sharing with customers: sharing what his team was doing with the feedback provided by customers with a particular focus on actions to address the key issues as highlighted by these customers.  The second part was sharing with his services team: sharing the next round of feedback from customers – thus showing that the actions of the services team were paying off in happier customers and higher revenues through additional business and repeat business.

If you are a small business / medium size business (less than 1000 employees) then check-out CustomerSure

Guy’s customers at Sage UK were small and medium sized businesses and as Head of Services for 4 years he got to know a lot about these businesses – their situation and their needs.  He learned that there was and is plenty of scope for these businesses to improve the customer experience and keep more of their customers.  He learned that these businesses want to keep things simple and were looking for a guiding hand – a simple process and easy to use software tool. And they are only willing to spend so much money on surveying customers to get their feedback.

Guy put together this insight with what he learned leading/managing his service team (described above) and then put his 10+ years of software development experience to work and created CustomerSure – a platform designed to enable small / medium size business to replicate his success.  The CustomerSure platform enables the small business owner or a departmental head to easily survey customers, share that feedback with staff, set up / assign and monitor actions and then share feedback on what is being done and the results of actions taken. Furthermore, CustomerSure has put in place a platform where customer feedback and the actions that the company is taking to address customer issues is displayed and available for the world to see.

If you are are a small / medium sized business and you are looking to improve the customer experience then I wholeheartedly recommend that you give CustomerSure a test.  You cannot lose out as you get a 30 day trail period – at least that is what I got when I tried it out.

A final point: answering the question I started with

I am not sure that there is quick – instant – way of improving the customer experience.  In my world excellence is more like marathon than a sprint.  Excellence in customer experience involved playing the long term game.  It involves the kind of approach the Guy Letts used at Sage UK: open to insight, trial and error, selecting what works and revisiting what did not work, it involves passion and commitment to the longer term – engendering customer loyalty by doing the right things by your customers.  If you want to play the longer term then you can learn a lot from Guy Letts and if you are a small business then the CustomerSure platform will help you to play that game.

Disclosure:  I have absolutely no financial or commercial interest in CustomerSure.  I have no financial or commercial interest in Guy.  Guy and I are not friends – we have never met.  Guy is a reader of the CustomerBlog – actually he was one of the first readers.  Yet we are connected because we are customer evangelists.