Why are so many companies vulnerable in the ‘age of the customer’?

So much of what is happening under the Customer umbrella occurs to me as being wide of the mark.  Why?  Because of the unwillingness to honestly face what is so. Which begs the question what is so?

“The reason so many companies are vulnerable is because the state of relationships between companies and customers is so poor. Products and services tend to be impersonal. Responsiveness tends to be uneven at best, or miserable at worst.  

It is reasonable to assert that frustration, annoyance, and anger have been building up among customers for decades. They are tired of being treated as numbers, of being mislead or even lied to, and of being considered targets instead of living, breathing human beings.”  – Michael Hinshaw and Bruce Kasanoff, Smart Customers Stupid Companies

Why now?  Because social media enables transparency of a kind never seen before. Because social media enable customers to easily voice their experiences, share them with the world, and thus influence/shape behaviour – customers, media, governments. And most importantly because of the many who are busy figuring out how to use digital technologies to create a new world of possibilities enabled by digital technologies and social customers.

IBM’s CEO 2012 study: is technology really the number1 priority of CEOs?

In the second half of 2012, IBM issued its fifth biennial Global CEO Study titled Leading Through Connection.  IBM says this study is based on face-to-face conversations with more than 1,700 CEOs in 64 countries.  I have been reading it and want to share with you what I make of it.

Social – concerned, fearful, skeptical, uncertain?

It appears that CEOs are increasingly accustomed to volatility and expect unpredictability.   The same cannot be said for social. 

My reading of the study suggests that CEOs are concerned and fearful about social, in particular, its role in enabling customers to exercise power over organisations.  Second, most of them are skeptical of the value of social media – I suspect in driving revenues and profits. Even those who do see value in getting into social, are uncertain as to how to go about it.  Given that so few of them have dived into social media this does not surprise me.  How does one get comfortable with riding a bike?  By riding a bike – you get on the bike, you ride, you fall off, you pick yourself up, you get back on the bike and soon you are riding the bike.  Is social any different?

Are CEO’s customer obsessed and what is their take on customer analytics?

According to the study, CEO’s told IBM that three leadership traits, in particular, are the most critical for navigating through this disruptive era:  ‘customer obsession’, ‘inspirational leadership’ and ‘leadership teaming across the C-suite’.  I’ll come back to the latter two, let’s take a look at ‘customer obsession’.

When the world is unpredictable and the power continues to shift to customers it makes sense that ‘customer obsession’ is seen as the critical leadership trait.  Yet I wonder what this means?   Does this mean that CEOs will get out of their offices and get deeply involved with customers?  Spending time with them face to face like Lou Gerstner did when he took charge of IBM.  Or undertaking the kind of experience showcased in Undercover Boss.

According to the study, CEOs are investing in analytical capabilities that promise to yield customer insights.  More than 70% of CEOs say that they are looking to get a better grasp of customer needs and generate improved organisational responsiveness to customer insights. So, I suspect that ‘customer obsession’ entails spending money on technology in the hope that this will yield insights into customers that enable the enterprise to stay one step ahead of customers.  This is great news for the organisations selling analytics technologies (SAS, IBM….).  Whilst I see the value of analytics I remain doubtful of the impact this will make until and unless the CEO gets out and actually walks in the shoes of the customer and experiences the experience of the front line workers.

What does IBM advise?  IBM recommends that CEOs orient their organisations to get insight into and engage customers as individuals rather than aggregates (segments, markets).  The earlier IBM CMO study suggested that marketers are stuck on traditional research methods that look at and provide insight into these aggregates and not individual customers.  Where can organisations get insight at the level of the individual customer?  Through harvesting and mining ‘Big Data’ according to IBM.

What are the roadblocks on this ‘data based, insight driven nirvana’?

In its study IBM refers to come organisations as ‘outperformers’ (they are doing better financially than their peers) and ‘underperformers’ (doing financially worse than their peers).  What are the three key differences between these ‘outperfomers’ and ‘underperformers’ according to IBM?

  • ‘translate insights into action’ – 84% better than industry peers;
  • ‘excel at managing change’ – 73% better than peers;
  • moving into adjacent industries – 48% better.

So here we see the two major obstacles in the way of ‘data enabled, insight driven nirvana of business performance’.   Ability to act on insight.  And, in particular, act in such a way as to effect organisational change with efficacy: to make changes in the business (based on the insight) and to get the people in the organisation to go along with and internalise these changes.  And to do so quickly before the window of opportunity closes.  Clearly some organisations are better at this than others – those that excel at this are in the minority.  Interestingly, this issue of taking action/effecting change based on insight has been surfaced by VoC vendors like Mindshare.

Are CEO’s aware of the scale of the challenge?

It appears that CEO’s are aware of the scale of the challenge that is facing them.  How do I come to this conclusion? Leadership traits that are of importance to CEOs and what traits CEO’s are looking for in employees.  Let’s consider the leadership traits first and what they can tell us.

When it comes to critical leadership traits, ‘customer obsession’, ‘inspirational leadership’ and ‘leadership teaming across C-suite’ were almost equal in importance.  Statistically speaking, I suspect there is no significant difference between the three of them.   It kind of suggests, to me, that these are inter-related.  Let’s take a look at the latter two and what they can tell us.

‘Leadership teaming across C-suite’ suggests that CEO’s get that the default state of organisation – the silo structure and silo metrics – is that of optimisation of the parts and suboptimisation of the whole.  It also indicates that CEOs are aware that genuine collaboration and teamwork starts at the very top – if the C-suite does not work well together then it is highly unlikely that the lower ranks will work well together.  I also read into this an implicit acknowledgement that many C-suites do not work well as one team – personal interests and functional agendas compete against the well being of the whole.  This explains why ‘inspirational leadership’ is seen as a critical leadership trait: CEOs get that they have to inspire (to bring forth) the best of their people (starting with the C-suite) including working as one team for the collective benefit.  Is it possible I am concocting a story that appeals to me and is not in the study?  I leave you to decide for yourself.

IBM claims that CEOs are creating more open and collaborative cultures.  That does not strike me as being an accurate description of what is so based on my travels.  And I get that I have only experienced a small number or organisations.  What is more interesting is the claim that collaboration is the primary trait that CEOs are looking for in employees: 75% of CEOs label this trait as critical.  Why?  According to IBM, CEO’s see technology as an enabler of collaboration and relationships and are focussed on changes in how people engage with the organisation and with one another in order to fuel responsiveness, creativity and innovation.

And finally

It is interesting to note that CEO’s put ‘human capital’ as the most important source of economic value closely followed by ‘customer relationships’, with ‘product/services innovation’ being in third place.  If ‘human capital’ is that important then the value placed on collaboration and open-cultures is understandable.  If ‘customer relationships’ and ‘product/services innovation’ are this important then the investments in analytics and collaboration technologies make sense.  What does not make sense, to me, is the attitude around social: customer can be a great source of innovation.

Only 33% of CEOs consider business model innovation as key source of economic value.  This puzzles me given that one of the key issues that organisations have to grapple with is that of coming up with fresh business models that make the most of the opportunities and deal effectively with the disruptions caused by ‘social’ technologies and customer behaviour.   Perhaps many CEOs have not fully awakened to the scale of the challenge/disruption/opportunity facing them.  What do you think?

I doubt that technology is the no1 priority of CEOs.  Why?  Because ‘technology’ got 71% of the votes, closely followed by ‘people skills’ at 69% and ‘market factor’ at 68%.  It occurs to me that there is nothing in it – that all three of these factors are as important as each other.

Social Customer / Social CRM / Social Business: snake oil or great medicine? (Part II)

In this (second) post I want to move on and tackle ‘social CRM’.  Before I do that I wish to recap my thinking on the ‘social customer’.

The Social Customer

In the first post in this ‘social’ series I shared my thinking on the ‘social customer’. In a nutshell, I was neither impressed by the ‘anatomy of a social customer’ nor by the ‘social customer manifesto’.  The ‘anatomy of a social customer’ left me thinking that the ‘social customer’ is like the unicorn – fantasy.  The ‘social customer manifesto’ occurs as both mistaken and unrealistic.

Most customers simply want stuff to work.  Most customers want to spend their valuable time on that which matters: self, family, friends, ‘life projects’.  Most customers don’t want to use social media to complain / get service – they want the service to work first time. Most customers don’t want to get into partnership with corporations.  Why?  Because we are interested in making ourselves better off not making corporations better off.  Apple has got rich by creating value for us – enriching our lives, not by engaging us in ‘social’. Finally, the whole social stuff showed up in my world as the kind of thing that life insurance sales folks do: scare the living so that they part with their money.  Unfair?  Perhaps.  Lets move onto to Social CRM.

Social CRM

What is this ‘beast called Social CRM’?  What does it look like?  How does it move etc?  On my travels the internet threw up the following definition by industry guru Paul Greenberg:

“Social CRM is a philosophy and a business strategy, supported by a technology platform, business rules, workflow, processes and social characteristics, designed to engage the customer in a collaborative conversation in order to provide mutually beneficial value in a trusted and transparent business environment. It’s the company’s response to the customer’s ownership of the conversation.”

What?  So let me get this right, Social CRM is:

  • a philosophy – “a way of thinking about the world, the universe, and about people”;
  • a business strategyWiseGeek states that “A business strategy typically is a document that clearly articulates the direction a business will pursue and the steps it will take to achieve its goals”;
  • a technology platform;
  • business rules;
  • workflow;
  • processes;
  • social characteristics – what are “social characteristics” exactly? I remember that when I worked at IDV the management had to make a big effort to suppress the social characteristic of (some) staff members getting drunk at lunchtime and not being fit for work for the rest of the day

OK, it is everything!  The whole point of a definition is that it draws a line so cuts off what is from what is not.  Can you make sense of it?  If you had to draw it, how would you draw it? Do you remember this post on good strategy, bad strategy (fluff)?  No, let me share RR’s quote with you again:

“The hallmark of true expertise and insight is making a complex subject understandable.  A hallmark of mediocrity and bad strategy is unnecessary complexity – a flurry of fluff masking an absence of substance.”

Maybe, I am being unfair, so let’s continue with Paul’s definition to see where else it leads.  Here is what else sticks out for me:

  • designed to engage customers in a collaborative conversation;
  • a trusted and transparent business environment; and
  • companies response to the customer’s ownership of the conversation.

Let’s take a look at these in turn.

Where are the collaborative conversations?  I remember reading that the vast majority of companies that have set up Facebook pages do not engage in conversation with their followers.  On the contrary these companies are using Facebook as a marketing billboard to ‘message’.  And the report suggested that most people who follow companies on social media are doing so for ‘special offers / deals / discounts / privileges’.  Furthermore, even the more advanced companies (and there are not many of them) which have social media centres are mainly focussing on reputation management.  Responding to issues that flare up and doing online PR without it looking like online PR.  Where are the collaborative conversations?  If I am ignorant then please illuminate me, share with me what you know and I do not know.Incidentally, I do know that some companies are using social tools to tap into the ‘wisdom of the crowd’ globally in order to solve specific business problems e.g. Netflix (and the algorithm) – I do not count this as ‘social CRM’.

Where are these trusted and transparent business environments?  Let me be specific and make this even simpler: “How many businesses do you know that operate in a transparent environment?  Can you even imagine what a ‘trusted and transparent environment’ looks like? How likely is that given that a large part of the ‘power of corporations and powerful individuals’ stems from deception – conscious or unconscious? Before you answer get present to what “transparent” is and the revolution it implies in the design, operation and management of organsiations.  Now I ask you: how seriously would you consider the following statement “Social CRM is the island where pigs fly”?  So why would you take this definition any more seriously. From a zen perspective, a key component of living effectively is to distinguish between ‘what is so’ and our ‘delusions about what is so’.  From this perspective, Paul Greenberg’s definition occurs, at best, an aspiration and at worst a fantasy.

In what sense does the customer really own the conversation?  It occurs to me that the customer may want to own the conversation and the reality is there is no conversation!  Really, where are the conversations?  Where is the unrelenting dialogue between the customers and the company?  I recently wrote a post about my shockingly bad Amazon experience, I have heard nothing back.  Not even an acknowledgement that I exist or that Amazon is open to a conversation.  A customer ‘owns the converstion’ to the extent of his ability others to join his cause.  I know that on review sites, like TripAdvisor, customers can have a huge impact simply through the aggregation of their reviews.  Does this constitute ‘ownership of the conversation’?

My take on ‘social CRM’

‘Social CRM’ is classic hyperbole rather like the wizard in the ‘Wizard of Oz’.  Like the wizard it looks interesting, impressive, sparkles and catches your attention.  And if you happen to look behind the curtain this is what you are likely to find:

‘Social CRM’ is a phrase cooked up by technology vendors to sell their latest wares.  What are these wares?  Mainly tools for listening into and reacting to what people are saying about stuff in their lives – including their experiences with companies (people, products, events, advertising;

Social CRM’ is being played for all its worth by consulting and marketing services companies.  Why?  To sell their ‘wares’ to the ‘gullible’, the ‘greedy’ and the ‘desperate’. There are no ready made, cookie cutter, formula’s for social success. And the last people I’d trust are people in consulting companies (who tend to be analytically adept and relationally suspect) and marketing companies (too obsessed with messaging and manipulating).

Some companies are doing interesting stuff like Dell, Starbucks – to engage their customers in sharing their ideas. Is this ‘social CRM’?  I thought it was the ancient practice of tapping your employee for ideas / suggestions for improvement. extended to include customers.

The promises of ‘Social CRM’ are exaggerated. The context that would give life to ‘social’ in its truest sense is simply not there.  First, most companies are not ‘social’ and they absolutely do not want to be ‘social’: transparency is death to the existing institutional models.  Just look at the News of the World hacking scandal – the government, the politicians, the police, the press supervisory body were all able to cover it up for a long time because of the lack of transparency.  Look at the way the business press reacted to Pizza Huts decision to be honest about its pizzas.  Why was this newsworthy?  Because dishonesty / deception is the taken for granted norm.  Second requires a shift from self to the other and from I to you and me, us.  And as such, humanity, generosity, helpfulness, kindness, sacrifice, contribution are key part of social.  This is completely at odds with the current business ecosystem which is centred around selfishness, greed, manipulation, extraction and control – in short, “inhumanity’.  If you doubt me then ask yourself why the Sainsbury story took such hold in the press. Or for that matter ask yourself why our insides warm up, we say “wow” and jump up and down when we hear tales of humanity in business and institutions?

Do you want to get free tickets to the Social Customer Conference, 29th March, London?

If you want to win one of the 3 free tickets then please read the following carefully:

What you need to enter the competition for the free tickets?  You need to send a tweet that conforms to the following specification:

“I’d like 2 attend The Social Customer 2012, London, 29 March http://bit.ly/wCN9MA #MzIq | {give a reason here}”

Who will choose the winners? Me.

How will I choose?  The three tweets that make the most contribution to me: put a smile on my face / make me laugh; and/or put something into the world eg. by contributing to KONY2012.com – a social cause dear to my heart, I love children!

Bad customer experience: power to the people?

This is a guest post from Karl Indigne – a marketing professional that specialises in services marketing.

We have a choice, we can do something to effect change

Thanks to social media, you and I, can have an impact on bad customer service.  I agree, it can take a while, before things actually change in a structural way. But we have a choice, we don’t have to stay indifferent, we can do something to effect change.  We all know, it is not always the people that “help” us that are the problem. It is more like the procedures of the company and lack of good alternatives. But sometimes, somebody stands up and than it is not just a company that responds, but a society. Youp van’t Hek is a well known Dutch comedian and he almost, accidentally,  initiated a crusade against bad customer service.  The story starts in Holland in October 2010.

T-Mobile angers the wrong person

van’t Hek Junior (“vKJunior”) the son of Youp, has his mobile phone stolen. So he goes out and buys a new phone signing up to a new long term contract with T-Mobile. This new phone breaks and he sends it to be repaired; he was paying an additional monthly insurance to cover these kind of events.  vKJunior does not get his phone back.  So after a few weeks vKJunior rings the T-Mobile call centre to find out when he is likely to get his phone back.  After a long wait (several hours) he learns that T-Mobile couldn’t repair it and they will not replace it nor pay for vKJunior to buy a replacement.   Why?  Because the mobile phone they have on the system is vKJ’s old phone – the one that had been stolen.  He goes to the store (where he bought the phone) and asks for help – they say they cannot help.  He rings the call centre (again)….  At some point the call centre agent tells him to write into the company and make a complaint if he is not happy with the situation.   All of this takes place over a period of several months and is rather messy – I have given you the simple version.

Eventually, the son calls his dad (Youp) and asks for his help.  Youp, who is preparing for a show in Flanders, calls T-Mobile in an angry mood and asks to speak to the manager in charge of the call centre. They call centre agent refuses – the company policy states that they can’t put through angry customers . In a rage, Youp tweets: “The terror of T-Mobile is funny. For every mistake they apologize and they refer you to the customer service. Wait time 4 hours…” Minutes after his tweet he gets a call by a guy from T-Mobile, with a melodious voice, who wants to settle the matter. This manager tells Youp that vKJ (the son) can get a replacement phone, immediately, from the store. The son flies to the store, gets his replacement and thanks his dad.

The T-Mobile voice calls Youp back to ask if everything is ok now. Youp is furious. “Why can’t you treat all of your customers like this? Why is it that I, who happens to be famous, can settle such a matter so quickly”. He keeps on tweeting, gains 5.000 new followers and hits the news – national television and newspapers cover the story. People start complaining about all kinds of bad customer service especially in the areas of telecoms and energy in the Netherlands. And this spreads to Belgium – the country which shares a border, language and culture with The Netherlands.

“Hello, is it me you are looking for?”

In Belgium, Radio 1 (a national Flemish Radio Station), starts a program inviting people to talk about their bad experiences with call centres. Now, two nations are talking about the subject. Why are customers treated that way? Are call centre employees trained to embarrass customers? Why does the sales story seems like a fairytale and the customer service so awful? Shouldn’t advertising have some truth in it?

Some Belgian comedians play a practical joke. They have a large lorry size container dropped in front of the Mobistar (a Belgian Mobile Operator) car park in the early hours of the morning.  Result: the employees arriving for work cannot get into the car park.   On the outside of the container is a contact number -put there deliberately by the comedians. The security officer of Mobistar calls that number to get the container removed.  Call after call the comedians take the calls, invent excuses, stall, give the security guard the run around, hang up on him and so forth.  In total they stall him for 3 hours and 20 minutes.  Every time the security guard rings they put him on hold and play Lionel Ritchie’s”Hello, is it me you’re looking for”.  You can watch the joke being played here (English subtitles!) – it is funny!  By the way, the guard was congratulated because he stayed calm and polite despite the run around he was given call after call.

Eventually, the Belgian Federal Minister urges companies to do something about the matter. He finds it unacceptable that too much time is lost before getting to speak to a real person. In June 2011 the companies with the largest contact centres in Belgium signed up to a charter: to limit the waiting time to 2,5 minutes and to use a minimum service level. It is not a law, it is an intention.


Consumers have more power than ever before, a complaint can go viral now, but the transition from bad service to good customer service does not happen overnight.

As a marketer it strikes me that it is very hard to break through silos within a company and put the customer experience first.  In the case of Telecom operators, most customers only have a choice between bad and worse. Consumers have long term contracts, companies are organized in a specific way.

Is improving the service at the contact centre level enough? In my opinion, the issue of good service is too focussed on the management of contact centres.  For example, why can’t the mobile operators select the right, best, call plan for me?  The giffgaff example on this blog, shows the advantage of a more holistic approach.  My point is this: the customer experience goes far beyond the contact centre only – it is the whole chain of the service across all touchpoints on the customer journey.

The core of the problem is that call centres are too often considered as a cost. The whole telecom industry is managed by the same mantra. This means that contact centres have to work efficient and should process a number of calls within a specific timeframe, I’m afraid we have to wait for new entrants to the market… or keep shouting it out on social media.

Final words

In his book Delivering Happiness, Tony Shieh, CEO of legendary Zappos, explains that for them logistics management and the call centre are considered as the core competences of the business. The call centre doesn’t use any script. They are trained to make people happy on the phone by helping them, even if that means they have to refer a customer to a competitor. And that message goes viral too.

Do you want to improve the customer experience? Wondering where to start? Start here

Where do I start with my Customer Experience programme?

One of the questions that comes up again and again is where do I/we start on improving the customer experience?  Well you can put in place a VoC platform and wait for the results to come in and then act.  You can mine the VoC gold mine that exists in your contact centres if you have call recording in place and if you are adventurous then you can listen to social media.  Or you can map/assess the entire customer experience and then start making changes.

Why not start by making it easy for ‘customers’ to buy from you?

I have a different suggestion: why not start with the broader purchase process.  What do I mean by that?  Here is what I am thinking:

  • Do your target customers know about you?  [Advertising / WOM]
  • Do your target customers want to buy from you?  Have you given them a good reason to buy from you? [Think Nokia and smartphones right now due to OS issue]
  • Do you help your customers to make the right choice: product, price, payment…?  [Options, Configurators, Customer reviews…]
  • Do you make it easy for your customers to buy from you?
  • Do you make sure that your customers get what they bought when they are expecting to get it and the goods are in the right condition?
  • Have you made sure that your product is easy to set-up and use?  [Design, Training, Instructions, Helpline]
  • Does you product actually do what it says on the tin?  [Marketing, Selling, Quality]
  • Have you given the right thought to the returns process?  [Monitoring, Impact, Ease/Difficulty, Cost, Relationship to earlier steps in this purchase process]

I am sure you can figure out the benefit of starting here: by making this process effective you will be helping your company to increase its revenues and profits.  Better still it works for both parties: nothing annoys a potential customer more than visiting your store, making the decision and then finding he cannot buy because you have put hurdles in the way.

If you think you have this sorted then think again

You might be tempted that you have this cracked – that this process (from the customer perspective) is as good as it can be.  As a customer and as a business consultant I can assure you that the vast majority of organisation can do better – a lot better.  Allow me to share two examples with you.

I popped into my local grocery store on Saturday morning at around 8am to buy some milk.  I arrived and was delighted that there was no one there except me and the lady behind the counter.  The only issue is that by the time I had picked up the milk and walked up to the counter ( 1 – 3 minutes) she was no longer at the counter.  I looked around and saw that she was outside arranging the fresh produce.  She saw me looking for her and yet she continued with her stacking. I left the milk on the counter and went to her competitor.  He didn’t leave his counter so I was able to pick up the milk, pay and be out of the shop within two minutes or so.

You might be thinking that this issues is limited to the small ‘Mom and Pop’ stores.  I assure you it is no – as my next example will show.

On Saturday afternoon I was on a mission to get my mother’s house insured and so I turned to Google to find price comparison engines.  The first one I tried is a well known brand.  It looked easy to use so I dived in and started entering all the details.  Once that was complete it went off to find and rate the insurers for me.  The problem was that it seemed to take forever – Internet time forever.  I assumed that something was wrong and opened up another tab (on the browser) and started tapping in the details into another well known price comparison site.    I got to a certain stage where I had to enter my credit card number.  Yet, it would not accept my credit card number – it kept telling me it was wrong.  Why?  The designers had clearly put in a business rule that says that the credit card owner (Maz Iqbal) had to be the same as the person who was taking out the insurance (my mother).  They had not thought that my old mother might not be using the Internet.  Or that she might not have a credit card.  Or that I arrange and pay for her insurance every year as a gift.

By this time I decided simply to go and check out what price her existing house insurer was quoting.  So I went the website and start entering her details so that I could get a quote.  I got to a certain stage and decided to check out the terms and conditions.  Once I had done this I found that I could not go back to the quote process and where I had been.  I had to go back to the start again!  Thinking I had made a mistake I entered the details and this time ‘the system threw me out’ when I started playing around with the options to see the impact on the quote.  So I gave up here and went on to another site.

This site was well designed and the designers had done their homework.  When it came to payment the site spotted that the credit card owner (me) did not match with the person taking out the insurance (my mother).  And the site gave me the option to tick a box that in effect said “I confirm that the owner of the credit card has given me permission to use it”.  And then it went on to ask a number of security questions to confirm that was so.  I ended up buying here because the designers had made it easy to do so.

To sum up: two well know brand name comparison sites and a well know insurance brand  that spend money on expensive TV advertising ‘selling’ how great they are lost out on my business because they made it hard for me to buy.  Instead I went and made my purchase from someone that did make it easy for me to buy.  Which begs the question: How much of their TV advertising is wasted simply because the purchase process has not been designed to make it easy for the customer to buy?

Are you still confident that you have done all that you can do to make it easy for people to buy from you?  Sure?

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