How to transform the Customer Services function (Part II)

In this post I continue the conversation I started in the previous post. To recap, this conversation is about transforming the Customer Services function.  When I say transform I am pointing at something different to change. Take a good look at change and you will find that change often deals with changing the content rather than the context which gives rise to the context. Transformation deals with the context.

What does Customer Services really do? 

Step outside of the content of handling calls, emails, or providing agents to respond to ‘click to chat’ requests and look at the Customer Service function.  What do you see?  I see the bigger picture.  I see the powerful functions of Marketing, Sales, Ecommerce, Operations, Logistics, Finance creating ‘garbage’.  This garbage lands in the lives of customers and the customers don’t like it.

Within the current context it is taken for granted that organisational functions will create garbage. Perhaps it is more accurate that this creation of garbage is hidden in the background and not even noticed.   Marketing creates waste by misleading customers, or not providing them with the information that they need.  Sales creates garbage by selling the wrong product or promising and not delivering.  Operations creates garbage by making/sourcing products that don’t do what they are supposed to do. Or are difficult to setup and use.  Logistics creates  garbage by not delivering the products on time. Or not even providing a date when the product is going to be delivered.  Finance creates garbage by getting the billing wrong or not explaining the charges adequately.  The Ecommerce unit creates garbage by not designing the website so that it is both useful, usable and responsive.

This garbage lands in the lives of customers and the customers don’t like it.  So they turn to the people in the business who can help with cleaning up this garbage: Customer Services. Put differently, within the current context the Customer Services function deals with/addresses/cleans up the garbage created by the rest of the organisation.

The access to transforming the Customer Services function is to focus on what is outside of the Customer Service function

It occurs to me that it is madness to focus on improving efficiency and reducing the cost of the Customer Services function.  Why?  Because that is simply finding more efficient ways of dealing with the garbage.  If we use the manufacturing analogy then we have a whole bunch of people creating waste.  This waste lands in the lap of the Customer Services folks to fix.  The Customer Services folks are fixing it as best as they can whilst the rest of the organisation is hell bent on cutting their resources and expertise.  Is this not insanity?

Surely, the lever for transforming the Customer Services function lies outside of the Customer Services function.  Who is the cause of the garbage in customers’ lives that drives calls into the Customer Services function?  Marketing, Sales, Operations, Logistics, Ecommerce, Legal, Finance etc.  If these functions did not create the garbage in the first place then there would be a huge reduction in the call volume coming into Customer Services. And accordingly a huge reduction in the cost of the Customer Services function.

I say that the access to transforming the Customer Services function is eliminating the garbage that the rest of the organisation is creating in the lives of customers.  Put differently, learn from manufacturing and build quality into the system so that the default functioning of the system is quality.

Which begs the question, how to do build quality into the system.  I say you start by disturbing the complacency of the existing system.  And a great place to start is to:

– Analyse the demand coming into Customer Services into ‘value demand’ and ‘failure demand’ where ‘failure demand’ is the demand falling onto Customer Services because of the garbage created in the lives of customers by the rest of the organisation;

– Code the ‘failure demand’ into buckets where the buckets represent the organisational functions (Marketing, Sales, Logistics…) that are the source of the ‘failure demand’; and

– Charge each of these organisational functions – on a monthly basis – 200% of the cost of dealing with the ‘failure demand’ generated by that functional silo.

Please note that for this to be effective, the charge has to be a real charge.  It has to hurt by reducing the money that the organisational functions have to spend whilst being held accountable for meeting their objectives.

Why charge the organisational functions 200% of the cost. To get these organisational functions present to the hidden cost of creating garbage.  When an organisation creates garbage in customers’ lives there are two costs. The first cost is the cost of cleaning up the garbage – the cost incurred by Customer Services.  The second, hidden cost, is the damage done to the relationship and thus the lifetime value of the customer.

You might be wondering how this would transform the Customer Services function.  Here is how I see it.  If that which I am proposing was implemented rigorously it would disturb the system.  The organisational functions feeling the most pain would be motivated to produce less garbage. And to do this they are likely to seek out the Customer Services folks to get a helping hand in better understanding the issues from the customer perspective.  Together they would reduce the ‘failure demand’ falling on Customer Services and take the Customer Services function out of the business of ‘cleaning up the garbage’ thus freeing up capacity some of which could be used to focus on stuff that genuinely adds value to customers and leave them surprised and delighted.

Notice that within this context, Customer Services shows up as a valuable function. One that acts as an independent check on the health of the organisational functioning. And acts as a catalyst for keeping the various organisational actors ‘honest’ and ‘in sync’ with the needs/expectations of customers. Doesn’t that constitute a transformation?

And finally

Clearly for this transformation to occur it has to be led by the CEO and supported/enabled/enforced by the CFO. And their commitment or lack of commitment discloses all that one needs to know about the importance of the customer.

Where does customer focus, customer obsession, customer-centricity reside in your organisation?

I put that question to Google today and I did not get an answer.  The closest I got was a checklist for a customer-centric business and a post on Amazon’s customer experience obsession.  Let’s take a look at both of these before whilst you consider the question that I have posed here.

Checklist for a customer-centric business

According to the folks at YSatisfy you can determine the customer-centricity of your organisation by answering the following questions:

  1. Do your have a clear idea of  who your customers are and their needs?
  2. Do you know which of your customers are most valuable to you?
  3. Does your business strategy / mission mention anything about your customers?
  4. Do you hire / develop your staff with your customers in mind?
  5. Do you have a process by which customers and employees can give feedback and review / act on this within your business?
  6. Do you have a customer complaints process which enables quick resolution of customer problems?
  7. Are all your employees empowered to deal with customer complaints?
  8. Do you know how satisfied or loyal your customers actually are?
  9. Do you provide specific services or incentives for your most valued / loyal customers?
  10. Do you deliver what you promise in your advertising / marketing to your customers?

This occurs to me as a list of features / characteristics as in what are the features/characteristics of a cat.   Yet, knowing the features of a cat (even if they are accurate) does not help me to locate the cat.  Where is the cat?

Amazon’s core value and customer experience obsession

Flavio Martins writes “The successful organizations with massive positive online goodwill and reputation are those that have embraced, live by, and seek to innovate in the area of customer experience and creating customer delight.”  and then he goes on to say that Amazon strives to live by the following values:

Customer Experience Requires Customer Obsession: We start with the customer and work backwards.

Customer Experience Requires Innovation: If you don’t listen to your customers you will fail. But if you only listen to your customers you will also fail.

Customer Experience Requires a Bias for Action: We live in a time of unheralded revolution and insurmountable opportunity – provided we make every minute count.

Customer Experience Requires Ownership: Ownership matters when you’re building a great company. Owners think long-term, plead passionately for their projects and ideas, and are empowered to respectfully challenge decisions.

Customer Experience Requires a High Hiring Bar: When making a hiring decision we ask ourselves: “Will I admire this person? Will I learn from this person? Is this person a superstar?”

Customer Experience Can Be Frugal: We spend money on things that really matter and believe that frugality breeds resourcefulness, self-sufficiency, and invention!

OK, I now know what Amazon’s Tops consider to be the key requirements to play the customer experience excellence game.  For me that is like knowing the rules of chess.  Great, now where is the chess set?  Where does that chess set reside?  Notice that this list of requirements does not answer the questions I posed.

Does customer-centricity reside in your mission, strategy, processes, data, technology, metrics, people?

Mission:  then I ask you “Where does your mission reside and who/how is this mission enacted?”

Strategy:  then my question is “Where does your strategy reside and who/how is it enacted?”

Processes: then I ask you “Where do your processes reside, who works them, who monitors them, who keeps them up to date, who fine tunes them?”

Data:  then my question is “Why do so many people in your organisation complain there is mountain of data and a lack of useful, actionable insight?  And if data is where customer-centricity resides then why the need to turn data into this actionable insight?”

Technology: then I ask you “Why do you people on the payroll?  What contribution do people make?”

Metrics:  then my question is “Who produces these metrics?  Why do you produce these metrics?  What do you do with these metrics?”

People: then I ask you “Which people? The Tops, the Middles, The Bottoms, Marketing, Customer Service, Sales, Logistics….?  And where exactly in people does customer-centricity reside?”

Customer focus, customer obsession, customer-centricity lies in language / conversation

I say that customer focus, customer obsession, customer-centricity, the customer orientation lies in language.  Specifically, a network of ongoing conversations between people.  All the people including customers, suppliers, partners and all the people within the company irrespective of where these people sit in the organisation.  I say that these conversations then  show up in decisions, investments, policies, practices, processes, metrics, data, technology and a whole host of other organisational artifacts.  I say that the ‘quality’ of these conversations will determine both the quality of your decisions and the power of your actions.  I say that the more widely distributed these conversations the powerfully your organisation will enact these decisions, the more powerfully your organisation will live customer focus, customer obsession, customer-centricity.  What do you say?

Want to assess the degree to which your organisation is customer focussed, customer obsessed, customer-centric?  Then take a good look at the conversations that occur and the language that is used.  Ask yourself:

1.  Who takes part in these conversations and are they invited or ‘forced’ to take part?  Is it only certain groups or everyone?  Are customers invited?  What about suppliers? Channel partners?

2.  When and how frequently do these conversations occur? Once a month at the senior leadership meeting?  Once a week at the departmental meeting?

3.  How much time, energy, passion, honesty, truth is put into these conversations?  How much real dialogue and discussion really occurs between the people who participate?  Are people free to voice their honest point of view?  Is there a listening for/to the points of view of everyone irrespective of rank?

4.  What language is used in these conversations?  Are customers talked about as ‘muppets’, ‘targets’, ‘personas’, ‘wallets’, ‘members’?  How are people talked about in these conversation?  What language do you use to describe youre people, your suppliers?  Do you use the word ‘partner’ or ‘vendor’ for your suppliers?

5.  Where do these conversations take place?  Which locations? Which mediums /channels?  Are all conversations channels and mediums used?

6.  What commitments do people take on as a result of these conversations?  What decisions are made?  Does everyone around the table volunteer to take on commitments that move the game forward or is it always a select few?  Are these commitments and decisions shared with all of the people who will be affected, who will be expected to enact these decisions and commitments?

7.  What is the conversation around these commitments?  How are they talked about – owned, enacted, ‘my word is my bond’, optional?   What is the conversation around people living up to their commitments?  Is it OK not to live up to your commitments, to substitutes reasons/excuses for action and results?

8.  What mechanisms are in place for keeping these conversations in tune with purpose? How do you know when these conversations are off track?  Who can call it when he/she sees that people are just going through the motions?  Who can call it if he/shes that the conversations are off track, not creating purpose, meaning, unity, alignment, enthusiasm, the will to act?

9.  What mechanisms are in place to keep these conversations in existence and widely distributed?  Business is a game constructed and enacted by people working in concert with one another and walking the same path to the same destination.  So what are the conversations around how we involve everyone in the conversation, in constructing and playing the customer-centricity game?  What are the conversation around inspiring everyone to participate, to play full out?  Who is taking part in these conversations?

10. Who is the steward, the guardian, the ‘servant leader’ of/for these conversations for customer focus, customer obsession, customer centricity?  What is his/her level of passion / enthusiasm for these conversations and the role of steward/guardian?  How is s/he listened to within the organisation?

A final thought: transform the conversations and your transform your culture

Transform the conversations that take place in your organisation and you will transform the culture of your organisation.  It really is that simple.  Word has awesome power: Word creates World.   Remember when the Word spoke ‘witch’?  How many women died as a result of our speaking ‘witch’?  Remember the Word ‘heresy’?  How many people died as a result of this word during the Inquisition – Papal and Spanish?

Choose your words carefully. Do not suck the life, the power out of them, by speaking ‘customer experience’ when you mean ‘customer service’.  Do not speak ‘customer-centricity’ when you mean ‘profit-centric’.  Do not speak customer relationship management when you mean customer interaction management.  If speak of your people as ‘human resources’ then do not expect them to give your their hearts.  If you speak of customers not as ‘members’ but as ‘targets or wallets’ then do not expect them to give you their hearts, their loyalty.  If you speak about your suppliers as ‘vendors’ then expect them to act as ‘vendors’.

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

This post is the third post of this series.  In the first post I explored ‘the social customer’ and provided my point of view.  In the second post I explored social CRM to make sense of what it is.  In this third post I take a similar look at ‘social business’.  This is a long post and if you have the patience then you will get value out of reading the entire post.  If you are in a hurry and just want the nugget then the first section of this post is all you need to read.

Social business: the nugget to chew on

If you believe that implementing a bunch of social media and collaboration tools into your business is going to make you a social business then you are deluded.  You are making the same kind of mistake that people just like you made when they invested millions into CRM systems in the mistaken belief that implementing these systems would transform relationships with customers and lead to the ‘milk and honey’ of customer loyalty.  If you load a donkey with all the books of wisdom does that make the donkey wise?  No.  And you would never do that, you would laugh at anybody did do that.  Then why do so many tech oriented people think that implementing social tools (collaboration, social media) will make a business a ‘social businesses’?

Why am I so confident?  Because ‘social business’ requires us (our culture, our organisations, our businesses, us) to get present to and live out of / from a social ontology.   Right now our Western culture, our institutions, our businesses and our behaviour (in the public and private domains) are shaped by / arise out of an atomist ontology.  What is required is a transformation. A transformation that requires a shift from the “I-it” mode of relating to people (employees, customers, suppliers, partners….) to the “I-Thou” mode.   I’ll let RD Laing spell it out for us:

“Persons are distinguishable from things in that persons experience the world, whereas things behave in the world.  Thing-events do not experience. Personal events are experiential….

The error fundamentally is the failure to recognise that there is an ontological discontinuity between human beings and it-beings.

Human beings relate to each other not simply externally, like two billiard balls, but by the relations of the two worlds of experience that come into play when two people meet.”

Put simply it says that when you and I treat a fellow human being as an object (an It) then we are doing violence to his (and our) humanity.  Do you acknowledge her  existence by saying hello or shaking hands?  Do you provide the right work environment, a human one?  Do you allow her to voice her authentic voice? Do you involve her in the decisions that affect her?  Do you use words that acknowledge, teach, inspire or do you use words that criticise, condemn, humiliate?  Is the whole person welcome in the workplace or just that part that is useful for work?  And so forth.

If we get that a human being is an organism that is continually experiencing then everything that we do or do not do matters.  We cannot escape our responsibility to one another. Each of us is like a wave continually interacting with other who are also ‘waving’ and thus affecting us. That is what ‘social’ means in its fullest sense and that is what we expect when we are being ‘social’ and socialising.

So that is the challenge: a transformation in our world view, in our society, in our organisations, in our businesses and in our behaviour. We are speaking about a transformation in how we look at “what it means to be human” – form atomicity and instrumentality (“I-It”) to social and experiencing (“I-Thou”).  Looking for good examples of companies that treat human beings with dignity and built great relationships withe employees who go on to create great value for customers and the company then look no further than SAS (more on SAS later in this post).

First, lets address this question:  how easy is that likely to be for those of us who get what ‘social business’ is really about to bring about the kind of transformation that I am talking about here?

Morpheus speaks wisely when he says

“The Matrix is a system, Neo.  That system is our enemy.  But when you are inside you look around, what do you see?  Businessmen, teachers, lawyers, carpenters.  The very minds of the people we are trying to save.  But until we do, these people are still a part of the system and that makes them our enemy.  You have to understand, most of these people are not ready to be unplugged.  And many of them are so inured, so hopelessly dependent on the system, that they will fight to protect it.”  Morpheus, in The Matrix, 1999

What does the latest Deloitte Research tell us?

I came across this piece today which talks about a new global report by Deloitte Research provides guidance organisations should consider on how they can significantly improve bottom-line results by fostering and promoting connections in the workplace.  Here are some of the key points that got my attention and are relevant to the whole notion of a ‘social business‘:

“We are more technologically connected than ever before, being addicted to our computers, cell phones, and PDAs. Ironically, today’s technology-saturated environment can actually weaken the quality of people’s connections that enhance performance.

“…people’s jobs are much more complex, technology can be both a distraction and an asset, and workforces are increasingly more diverse in terms of gender, race, ethnicity, sexual orientation, and generational differences. The report concludes that these changes have made it very difficult for today’s workforce to make quality, value-adding connections.”

Employers need to become connected to their employees to deliver on what they need and want in the workplace, such as interesting work, career development, and flexibility in exchange for their highly sought-after capabilities.

“…it’s critical for employees and employers to foster three primary types of connections:

  • Connecting people to people to help promote personal and professional growth; 
  • Connecting people to a sense of purpose to help build and sustain a sense of organisational and individual mission; and
  • Connecting people to the resources they need to work effectively, such as managing knowledge, technology, tools, capital, time, and physical space.

In my view this research validates my point of view:  tech tools are not enough, we have to work on building the connections between us and our fellow human beings.   Lets take a look at a master at this game: SAS.

What can we learn from SAS?

The Deloitte Report (Connecting People to What Matters) illustrates its reasoning through case studies.  Of particular note to me is SAS (the business intelligence software company which which has experienced 29 years of continued revenue growth and was recently named in FORTUNE magazine’s annual list of the “100 Best Companies to Work For” for the tenth year in a row. What makes it so special, what can we learn from SAS?

Our corporate culture is based on trust between employees, customers, and the company,” said Jeff Chambers, Vice President of Human Resources for US-based SAS. “We care about employees’ personal and professional growth, which inspires them to do great work. Employees who solve our clients’ biggest problems yield happy, committed customers. It isn’t altruism. It’s good business.”

I don’t buy that at all.  Looking into the company and its founder, I am clear that it happens to be both altruism AND good business.  The altruism came first and was the direct result of Jim Goodnights personal experience – how he was treated (an object, an “It”) when he was employed.  Here is what the net throws up:

“When Goodnight founded SAS, he already knew that work environments affect employee productivity and retention. He has also stated that he believes the work culture is key to the creativity inherent in knowledge work. Earlier in his career when he worked for a NASA subcontractor on the Apollo program, he observed the dismal environment of employees working in cubicle farms and how it contributed to annual employee turnover of around 50 percent. It didn’t take a rocket scientist to see the negative effect that work environment had on organisational performance”

This point of view is corroborated by this article in Inc, the key points that speak to me are:

“The fact that we’re private means that we can make long-range decisions,” says Goodnight. “We don’t have to be worried about quarterly profits or about pleasing Wall Street. We just please our employees and our customers………..  So when the economy forced most other companies to lay off employees in 2001 and 2002, Goodnight took a contrarian’s approach. “We decided there were so many people looking for jobs that we should take the opportunity to bring in some really first-class people,”……

“Those new employees landed more than just jobs. They gained entry into one of the most progressive corporate cultures in the country. SAS’s headquarters in Cary, N.C., looks more like a college campus than most college campuses do. There’s a 77,000-square-foot health and fitness center, playing fields for soccer and softball, an on-site medical clinic, a dining hall with live piano music, two daycare centers, an eldercare referral service, unlimited sick days, and a masseuse who makes the rounds several times a week. Goodnight’s explanation for this largesse is fairly simple: “If we keep our employees happy, they do a good job of keeping our customers happy.”

Final words

The challenge of ‘social business’ is not one of technology.  It is one of creating a culture, a work environment, like SAS has done where people matter and they know they matter – where they feel trusted and valued as human beings not just interchangeable cogs who fulfil roles and execute specific tasks.  Companies like this address the fundamental question (coming from employees) for a ‘social business’: why should I participate in all this social stuff?  Once again, lets listen to profoundly wise words:

“Why Mr Anderson?  Why do you do it?  Why do you get up? Why keep fighting?  Do you believe you are fighting for something?  For more than your survival?  Can you tell me what it is?  Do you even know?  Is it freedom?  Or truth?  Perhaps peace?  Yes?  No?  Could it be for love?”  Agent Smith, in The Matrix Revolutions, 2003

Just in case you don’t get it then let me spell it out for all of us.  The ground of our existence is survival – we wish to continue to exist – and there is an awfully lot we will do to earn that paycheck that allows us and the people that count on us to survive.  However, we will only go that extra mile for a) people we love; and b) causes that occur as noble and which stir our hearts and light up our lives.  Does that remind you about the key points from the Deloitte report? The need to foster connections: people to people connections; and people to a sense of purpose?  Without these connections investments in social technologies are a waste, a fool’s errand. 

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.

How to eat the customer experience elephant

Lior Arussy’s latest post got me thinking about organisational transformation.  How do you transform your organisation to make it deliver on the promises that you implicitly (‘brand’) and explicitly (‘value proposition’) make to your customers?  Does it have to be as hard and take as long as Lior suggests?  Before I deal with that question and suggest a way forward allow me to share some experience with you.

How do you transform an organisation?

Many years ago, before I switched to CRM, I used to design and set-up European shared services centres and in the process I learnt a lot about ‘transformation’.  Typically, this meant stripping out everything except marketing, sales and manufacturing from each country and put these functions/activities (customer services, logistics, finance, HR and IT) into a single European shared services centre.  When doing this we had two options: ‘big bang’ or ‘one bite at a time’.  We advised one bite at a time.  Even with ‘one bite at a time’ we found that it was easier to strip the functions/activities out of one country, move them into the shared services centre, deal with the issues and get everything humming perfectly before we moved on to the next country; moving one function out of 26 business units in Europe gave the illusion of ‘one bite at a time’ but was not – we had to learn that the hard way.

Transform the customer experience (and your organisation) one bite at any one time

So how do you eat the customer experience elephant?  My recommendation is to do it ‘one bite at any one time’.  But what kind of ‘one bite’ am I talking about?  Let’s ponder that question together.

The standard and most tempting ‘one bite at a time’ approach is segment your customers and then focus on improving the customer experience of one or more segments.  Does this remind you of the ‘strip one function out of each of the 26 operations and transfer into the shared services centre?’  The problem with this approach is that you will find all kinds of touchpoints are broken.  And that means fixing marketing, sales, customer services, your website/ecommerce operation, logistics, finance…….. That is not easy.  That is not the way to eat the customer experience elephant one bite at a time.

A much better approach is pick an objective and then focus on the one lever (interaction / touchpoint) that has the biggest impact.  For example bmibaby (low cost uk airline)  has increases revenues by £1m+ per annum in their top line.  How?  bmibaby articulated their objective: grow revenues through a better customer experience.  Their consultants identified that the key leverage point was all the customers who had ‘dropped’ their shopping baskets.  The solution was simply to send the ‘dropped basket’ information to customer service agents.  These agents rang up the people who had dropped their baskets and simply offered to help.  The result: between 25% and 45% of the dropped baskets were turned into revenue and the customer experience was improved.

Please remember that the customer experience across the customer journey is like a chain made of links. Some of these links (in the chain) are more important than others from a customer’s perspective: ‘moments of truth’.  Yet not all of these links are of equal importance nor are they all broken or equally broken.  The key is to study the system and work out which link is the weakest link from multiple perspectives.  If you fail to do that then that is like shoring up various holes in the dyke – possibly at great expense – but not the weakest hole.  The net impact is that the water flows through the weakest hole and all of your efforts at shoring up the other holes have been wasted.

Lets assume your objective is to GET more customers.  Then my question to you is “What is your weakest link?”  Put differently, “What is the one area of the customer experience that if acted upon will have the biggest impact in getting new customers?”  In bmibaby’s case it was to help new customer (predominantly) that were having trouble purchasing and had dropped their baskets.

Your objective may be to KEEP more of your customers – to reduce churn.  My question is the same “What is your weakest link?” Put differently “What is the ONE thing that drives your customers to leave you that if acted upon would have the most impact in helping you keep more of your customers?”

If you want to look at it purely from a customer’s perspective then the question is exactly the same: “What is the one thing that is having the most negative impact on your customers?”  Put differently “What aspect of your organisation is the weakest link from the customer’s perspective?”

The beauty of this approach is focus.  Focus allows you to concentrate all your resources and thus allow you to increases your chances of success and do it quicker.   It may be that to keep customers your most important leverage point is the product – improving the quality of it.  So you can focus all of your available resources on just that rather than dispersing them across marketing, sales, customer services, logistics, product enhancement….. Once you have improved the product quality you can study the system again and identify the new link that has become the weakest link and focus your efforts on that.

What do you think?

Valuable insight from the European Customer Experience World event

I read this from Steve West on LinkedIn and feel compelled to share it with you because it provides great insight in few words:

“The European Customer Experience World event held this week in London highlighted a very important fact. Companies whose foundations are built around the customer experience from inception are able to be flexible, fast and focused on implementing process change that is customer centric. Zappos being a prime example. Namely because it feels natural for everyone on the organisation to move with the customer. However, companies whose foundations have been built on commercial objectives that are not aligned with customer centricity find it very difficult to change the legacy of their ingrained attitude and culture. At the event we heard lots of examples from well known brands where it has taken up to 10 years just to get the Board to recognise the value of CEM – and that’s even before customer focused changes can start to take place!”

I want to share another way of saying the same thing but with deep insight into the human condition is:

“One creates from nothing.  If you try to create from something you are just changing something.   So in order to create something you have to be able to create nothing.  To make sure a person does not find out who he is, convince him that he can’t really make anything disappear.  All that is left then is to resist, resist, solve, fix, help or change things.  That’s trying to make something out of something.”

I will let you figure out who said that.  If you really want to know the name of the author – who incidentally teaches leadership and transformation – then email me.