Empowerment: asking and facing the deeper questions

It occurs to me that empowerment matters. It matters enough for me to think about this deeply and search out those who have thought about this deeply.  If it matters deeply enough to you then continue reading. If it does not really matter to you then I advise you to go and do something that you care deeply about.  With that said, lets start.

What difference does empowerment make?

It really matters if the people in your organisation show up empowered. Empowered to do great work, to create products which show up as ‘magic’, to touch customers in a way that leaves those customers feeling welcomed-understood-validated-helped, to generate an end to end customer experience that simplifies-enriches the lives of your customers.

It really matters, if you, show up as empowered and create a context that allows the people in your business to show up empowered. And allows your customers to show up and experience themselves as empowered.  And creates a space for your suppliers to show up empowered – empowered to share their knowledge and expertise in contributing to the performance of your organisation.

It really matters, if as customers, we show up empowered. Empowered to do business with organisations that stand for purposes-values-behaviours that speak to us. And not do business with organisations that do not stand for and embody that which matters to us. Empowered to get together and apply pressure on regulators and those in government to put in place legislation that protects our interests as customers and to enforce the existing legislation.  We are also empowered to do nothing.  That is our choice; choice is that which comes with empowerment.

In short, empowerment or the lack of it matters.  It occurs to me that empowerment is rather like sunshine in the western world (in the depths of winter) or rain in a region of cursed with drought.  Empowerment creates possibilities which simply are not open-present without the existence-presence of empowerment.

Perhaps because I am so vividly present to the significance and possibility that inheres in empowerment, I chose to put my children in Montessori School.  It occurs to me that it is also the reason that so much of what is written on empowerment (employees, customers) strikes me as shallow and leaves me feeling disappointed-cheated.

Why all the bleating about the lack of empowerment? 

There are two particular aspects of the empowerment conversation that I particularly wish to highlight.  First, there is the assumption that empowerment is a thing to be gifted from the Tops to the Middles and Bottoms.  And from the Middles to the Bottoms. And from the company to customers. Second, is the assumption that empowerment is a blessing and people are yearning to be empowered.

It occurs to me that by virtue of being human you and I are always empowered. You and I are empowered because you and I are free – free to choose. It occurs to me that Sartre spelled this out rather pithily:

Man is condemned to be free: condemned, because he did not create himself, yet nonetheless free, because once cast into the world, he is responsible for everything he does.”

What shows up for me as being a more interested enquiry is this one, given that you and I are empowered why is it that you and I evade this empowerment?  Why all the bleating about empowerment – more precisely the lack of empowerment?  What is it that we are evading through this bleating on the lack of empowerment? Why this supplication at the feet of ‘leaders’?  And why is it that so few ‘leaders’ actually show us as being empowered to chart their own course, and thus lead?

Werner Erhard’s profound insight on empowerment

I share with you the profound insight and wisdom of Werner Erhard. And I encourage you (and I) to listen, really listen to his speaking:

If you are empowered, you suddenly have a lot of work to do because you have the power to do it.

If you are unempowered, you are less dominated by the opportunities in front of you. In other words, you have an excuse to not do the work. You have a way out. You have the security of being able to do what you have always done and get away.

If you are empowered, suddenly you must step out, innovate and create.

The cost, however, of being unempowered is people’s self-expression. They always have the feeling that they have something in them that they never really gave, never really expressed.

By simply revealing the payoffs and costs of being unempowered, people have a choice. They can begin to see that it is possible to make the choice to be empowered rather than to function without awareness.

Empowerment requires a breakthrough and in part that breakthrough is a kind of shift from looking for a leader to a sense of personal responsibility.

The problems we now have in communities and societies are going to be resolved only when we are brought together by a common sense that each of us is visionary. Each of us must come to the realization that we can function and live at the level of vision rather than following some great leader’s vision.

Instead of looking for a great leader, we are in an era where each of us needs to find the great leader in ourselves.”

— Werner Erhard

So what does it take for empowerment to show up?

It occurs to me that it takes the following for empowerment to show up in our way of being-in-the-world:

a) Getting that we are always-already empowered as spelled out by Sartre and so vividly illustrated by Viktor Frankl in his recounting of his concentration camp experiences (Man in Search of Meaning);

b) Caring deeply enough about our being-in-the-world to see-invent possibilities. Possibilities for putting our own ‘dent in the universe’.

c) Courage to put ourselves at risk and act – to live from and into the possibilities that speak to us, to give up comfort and embrace work, to let go of our existing identity and invent-create-embrace the identity that is needed to fulfil on the possibility that we have invented.

What do you say?

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 to profit by taking on more of your customer’s risks

What is the core of the human condition?  If you dig down deep enough you might just find that most of us feel vulnerable and strive for security.  In our social lives we minimise our vulnerability and build up our sense of security by cultivating relationships with people we can trust.  In our business lives we strive to do the same: do business with people and organisations we can trust.

One of the major causes of us feeling vulnerable is uncertainty.  Uncertainty makes us feel uneasy: it exposes us to risk and most of us are risk averse.  Research studies show that most of us will pay a premium to minimise risk – to outsource it to someone else.  The entire insurance industry is founded on this understanding.   Chris Zane has built a successful cycle business through a deep understanding of this principle: he provides a lifetime guarantee!  Zappos have flourished by exploiting this principle: their generous returns policies take the risk (and cost) out for customers.  In return customers happily pay a premium.  This is the reward these companies earn for taking risk out of their customer’s lives.

What am I saying?  People buy products.  People buy services.  People also buy security: peace of mind.   You can build stronger bridges with prospects and customers by taking out risk and replacing it with peace of mindAnd you can make more money!

If you are inspired to provide this peace of mind then might want to make use of some of the insights that Ernest Dichter, consumer behaviourist, came up with back in the 1950s.  He identified that there are at least five dimensions of risk every time someone makes a purchase:

  • Economic – am I wasting my money making this purchase?
  • Functional – will this product work reliably?  Will I get the quality of service I am being promised?
  • Social – what will other people think of me in buying this ‘product’ and doing business with this company?
  • Physical – will this be painful?
  • Psychological – will I think poorly of myself?

When you think about it this way you can get why quality and reliability make such a big impact on customers: quality and reliability makes your customers feel safe.  You can see why good design commands a premium: good design makes us look good in our eyes and in others eyes.  You can see why price counts and why people search out deals: it makes us feel intelligent and good about ourselves.  In the current economic climate price is particularly important as it also gives us bragging rights. 

Now let me ask you two questions.  In your customer experience design efforts what are you doing to take out these risks?  Does your customer strategy make use of risk as a key leverage point?

Thinking strategically about customer experience: the 5 components of customer value

How do you think about Customer Experience?

In my view too many people are thinking about Customer Experience tactically.  Or put simply: too many people are thinking of Customer Experience in terms of making changes to the interaction channels.

Being a strategist, I prefer to think strategically and have been looking for a way that helps me to do that when it comes to:

  • Attracting and keeping customers; and
  • Thinking about, organising and executing Customer Experience.

So how do you attract and keep customers?  And how should you think about (frame) your customer experience efforts?  I assert that the answer to both of these questions is the same: create superior value for your customers and keep doing it continuously.

Which begs the question: what is ‘value’ from a customer perspective?

Fifield: customer value equation

One of the most useful frameworks that I have come across is the one developed by Paul Fifield (by building on some work done by Osterwalder and Pigneur) in his book Marketing Strategy Masterclass.

  • Value = Benefit – Effort – Risk – Price

Maz Iqbal: customer value equation

If it was OK for Newton to stand on the ‘shoulders of giants’ I am more than happy to steal from Professor Fifield.  Yet, I believe that Prof. Fifield’s equation neglects a critical piece of the puzzle.  So I have added it in and thus my equation is:

  • Value = Benefit – Effort – Risk – Price +/- Treatment

Let’s take a closer at the six elements of this equation.

Value

The first point to make is that value does not reside in the product or service that you offer.  Value is in mind of the customer.  Put differently, customer value is the value that each individual customer perceives in:

  • what you are offering including any implied or explicit promises; and
  • getting the job done in the way that you are proposing in your offer.

This means that ‘value’ will occur differently to different customers.  So a customer who is housebound is likely to value the home delivery of their weekly groceries very differently to another customer who is able to and enjoys visiting her local supermarket.

Finally, it is worth stressing that ‘value’ from a customer perspective is much more than price.  And it certainly is not about being cheap.  Recent wine tests have shown that in blind taste tests customers rate the same wine differently: if the wine is priced cheaply then the wine is rated as being of an inferior quality even though it is exactly the same wine in the same bottle!

Benefit

Your offer must promise and deliver the benefits that the customer is looking for.  One way of thinking about this is in terms of the job that the customer wants done and the outcomes he desires.  The closer you offer is to the perfect solution for the job and the desired outcomes, the more benefit it deliver and the more value that you create for your customer.

Clearly, each customer will have a different perception of the importance of the job, the perfect solution and the value of that solution. To make this manageable you must segment your customer base into distinct customer segments.

Effort

Customers have been conditioned to want ease and convenience.   I would go further and say that ease and experience are so important to us that once we have found a supplier that delivers this we stop looking for other suppliers.

The desire for ease and convenience spans the process of finding, evaluating, buying, taking receipt of and using the product or service. This means that the organisation needs to pay attention to more than the product or service.  It needs to pay as much attention to interaction and distribution channels as it does to the product or service.

It is worth noting that real value, from the customer’s perspective, is only created in the usage process.  Too many suppliers neglect to pay sufficient attention to the customer’s actual usage process.  So they fail to come up with solutions that minimise the effort of using these product or service.  This is an area in which Apple has excelled and made its fortune.  Now compare Apples attention to detail (as regards the user experience) to this: How “wrap rage is hurting the customer experience”

As Fifield says “Generally, there will be greater customer value attached to those offerings, where the organisation has spent time, research, effort and insight into finding new ways of making the old jobs easier.”

Risk

The greater the level of risk that the customer sees in you the vendor and your offer, the lower the perceived value of your offer.

The perceived risk is much higher when the customer has a lack of knowledge and prior experience in how best to get his job done.  And in particular how to judge the expertise of the supplier and the quality of the offer.

It is worth noting that risk is always present: usually at a subconscious level.  Customer are particularly sensitive to things that can go wrong and which make them look stupid in their own eyes (self-esteem issue) or in the eyes of others (social standing).  It is the reason that advertising is not dead, will not die and why established brands do well despite doing poorly on other elements of the customer value equation.  We are risk averse and stick with the devil we know;  brand recognition matters – ask anyone who does not have an established brand.

Price

In some ways this is one of the more complex components of the customer value equation.  Why  Because it is not as simple as the price being too high.  From a customer perspective, it cover the following aspects:

  • Price being too low (wine example under Value heading) and thus leading the customer to think that the offer is of inferior quality or not fit for purpose (increasing the Risk component of the Value equation);
  • Price being too high;
  • Seeing the same product cheaper somewhere else;
  • Depreciation in value – how fast the resale value of the product will fall;
  • The time/effort trade-off in searching for the lowest price;
  • Buy now or buy later when price falls etc

Treatment

Treatment recognises that customers are people and as such the place a value in how they are treated as human beings.  Put differently, customers put a high value on ‘service.  In particular, they prefer to do business with organisations that leave them feeling ‘valued’.

I have placed a +/- in front of the Treatment component because if customers are treated well (especially by the employees of the company) then it make a positive contribution to customer value as perceived by the customer.  If the company fails to do that then the Treatment component becomes negative and decreases the value of the rest of the offer.

Two companies that excel in the Treatment component are Amazon and Zappos. Here is an example of the kind of impact this has on the customer:  “Great Customer Service Build your Revenue and Brand: My Amazon Experience”