Friday, February 27, 2015

The 7 Deadly Sins of Customer Experience

Is your company committing the 7 Deadly Sins of customer experience?

Recently, my kids asked me about the 7 Deadly Sins; I don't remember how the topic came up, but when they ask, I answer. Of course, as I ran down the list and explained them (in a PG kind of way), I pondered sins of the customer experience.

I guess that put me on a 7 Deadly Sins kick. I just hosted a webinar about the 7 Deadly Sins of Journey Mapping. I'll take a broader stroke in this post and look at customer experience management overall.

The 7 Deadly Sins are mortal sins (as opposed to minor sins) and are considered to be the root of all other sins. If you commit these sins, failure is certain. Are there more than seven sins in customer experience? Yes, probably. But I think these are the most egregious; if you are guilty of these, you won't successfully transform the customer experience for the better.

So, without further ado, the 7 Sins are, in no particular order (although #1 is probably #1)...

1. No executive commitment
Probably the biggest Sin to commit is to think you can transform anything without executive buy-in. If company leadership isn't on board with focusing on the customer, then forget it; it won't happen. Oh sure, you might have localized or departmentalized efforts, but those will be silo'd efforts that translate to silo'd experiences for the customer. Without executive commitment, you'll never get resources - human, capital, or other - to execute on your customer experience strategy.

Some posts I've written related to this Sin include:

Kicking the #CX Can Down the Road
Help! My Execs Don't Get It!

2. Lack of CX vision and strategy
Following up to my last statement regarding executive commitment, you must, of course, have a customer experience vision and strategy. CX Strategy refers to your approach to delivering a great customer experience. It's your plan or direction. Your strategy outlines how you're going to achieve the goal of delivering a great customer experience.

Without a vision and a strategy, you can't achieve your goals, and your employees can't deliver a great experience. Without knowing what you're delivering, it's really hard to execute! If leaders don't define the vision, communicate the brand promise, and outline what success looks like, employees can't be expected to deliver on it.

A post I wrote related to this Sin:

Is Your Customer Experience Suffering from Short-Sightedness

3. Failing to outline a governance structure
Without a governance structure in place, we perpetuate silo thinking and fail to achieve cross-functional alignment, involvement, and commitment. Why? Because a governance structure outlines people, roles, and responsibilities when it comes to your customer experience strategy. Who is going to ensure that there is alignment and accountability across the organization? We often see this piece of the governance structure refer to a core program team, an executive sponsor, and cross-functional champions. Your oversight committee should include the team of people you believe will best carry out the strategy, driven by your corporate and customer experience vision, for your organization.

You'll need to have clearly-defined rules and guidelines for how the customer experience management strategy will be executed. Who will drive the efforts and how? How will you transform to a customer-centric culture? How will organizational buy-in be achieved? How do you continue to motivate employees to focus on the customer? How will you listen to customers? Who will use the data and how? Where does accountability lie? What processes and policies must be in place in order to roll out these efforts? How will change management be handled? How will you measure success? How does it all tie in to our desired business outcomes?

A post I wrote related to this Sin:

Are You Flying by the Seat of Your #CX Pants?

4. Not understanding - and listening to - your customers
You can't transform something you don't understand. Included in that "understanding" is not only the current state of the experience but also (especially) the customer himself. Who is he?

Do you know - really know - who your customers are? They might be partners, resellers, and/or end customers/users. Why do they buy products and services from you? What are their needs? What problems are they trying to solve? What are they trying to achieve? And how do they feel about how you are performing or how you are meeting their needs? I'm talking about personas, journey mapping, and voice of the customer.

Some posts I've written related to this Sin include:

What's the Cost of Listening to Customers?
Does It Pay to Listen to the Voice of the Customer?
Do You Know Who Your Customers Are?
Customer-Driven Transformation via Walking in Customers’ Shoes

5. Not acting on what your customers tell you
This one is simple: You can't listen to your customers and then not act on what they're telling you. How disappointing! It's wrong on so many levels!

Are you making improvements based on customers' feedback? Are you letting customers know what you've done as a result of their feedback? You must! And if you don't, then you're missing a huge opportunity, for a variety of reasons.

Some posts I've written related to this Sin include:

Tips to Help You Close the Loop with Your Customers
Transforming the Customer Experience with Big Data

6. Making the employee experience an afterthought
... or not thinking about it at all.

Why? Because we know that the employee experience drives the customer experience. It's called the spillover effect, or “the tendency of one person’s emotions to affect how other people around him feel.”

I like to quote this 1999 article from Harvard Business School's Working Knowledge that summarizes the work Sears executives did to rebuild the company to focus on customers. The article talks about the new business model and what they discovered: There is a chain of cause and effect running from employee behavior to customer behavior to profits. Imagine: their model is data-based!

Some posts I've written related to this Sin include:

It's Time to Focus on Employee Experience
Putting Employees More First
Does "Employees More First" Disparage Customers?
Define Your Employee-Centric Culture
 
7. Perpetuating inside-out thinking
Inside-out thinking means your focus is on processes that are designed and implemented based on internal thinking and intuition. The customer's needs and perspectives do not play a part in this type of thinking. You make decisions because you think it's what's best for the business.

On the other hand, outside-in thinking means that you look at your business from the customer's perspective and subsequently design processes and make decisions based on what's best for the customer and what meets the customer's needs. You make decisions because you know it's what's best for your customers.


Some posts I've written related to this Sin include: 

The Problem with Inside-Out Thinking
Are Your Customers Persona Non Grata?
Building a Customer-Centric Culture
Five Key Questions to Ask to Achieve a Customer-Centric Culture

Which of these Sins is your company guilty of?

Everything starts with the customer. -Louis XIV


Tuesday, February 24, 2015

The Extra Mile or The Last Mile?

Image courtesy of S.O.O.C
Which is more important: the last mile or the extra mile?

A couple months ago, I wrote about first and last impressions, posing a similar question there:  which is more important?

Today I'm wondering about the last mile and the extra mile. Which one should you focus on more? Which is more impactful to the customer experience? Which one creates raving fans? Or, at least, happy customers?

Let's start with some definitions.

What do we mean by "the extra mile?" According to FreeDictionary.com, to go the extra mile means: to try harder to please someone or to get the task done correctly; to do more than one is required to do to reach a goal; to make more effort than is expected of you. Of course, we knew that; we talk about that all the time when we describe what companies do to delight or to deliver a superior customer experience. Stan Phelps gives us a lot of examples of how great companies consistently go the extra mile for their customers and their employees.

What about "the last mile?" This is a phrase mentioned much less often in our world; hence, my question, is it as important as the extra mile? According to Investopedia, the last mile is: a phrase used in the telecommunications and technology industries to describe the technologies and processes used to connect the end customer to a communications network. I suppose I'll equate this to doing it right, getting it there. Or quite simply, delivering at the moment of fulfillment, as in, making sure customers get what they expected to get. So, in the telecom industry example, the phone lines come into my home, and I can make and receive calls. There's no delight there. It works; it just does what it's supposed to do. I'm happy.

Do you see my dilemma?

There are those who argue that companies don't need to put forth the extra effort - or go the extra mile - to delight, that they should simply spend more time just getting things right. In the HBR article, Stop Trying to Delight Customers, the authors state:

According to conventional wisdom, customers are more loyal to firms that go above and beyond. But our research shows that exceeding their expectations during service interactions (for example, by offering a refund, a free product, or a free service such as expedited shipping) makes customers only marginally more loyal than simply meeting their needs.

Does that then support focusing on the last mile?

Forrester has stated that there are three requirements of a great customer experience; it must be...
  • enjoyable
  • easy
  • effective
So, it's enjoyable; customer effort is low; and it meets your needs.

Does that also support focusing on the last mile? Or both?

I have to draw some parallels to my first/last impression post, in which I said: You won't get one without the other. There won't be a last impression if you don't get the first impression right. You know what you need to do.

Which is most important? Well, I think you can't have one without the other. You can't go the extra mile if you haven't completed the last mile.

You know what you need to do.

There are no traffic jams along the extra mile. -Roger Staubach


Thursday, February 19, 2015

Stakeholder Management Strategy for #CX Success

Image courtesy of xianrendujia
Today's post is a modified version of a post I originally wrote for Confirmit in April 2013.

In Tuesday's post, I discussed the rationale - and preparation - for conducting stakeholder interviews before embarking on a VoC program.

In today's post, I'll focus on what to do immediately prior to, during, and after the interviews to make sure you get the most out of the process. Just like with your customers, there’s no faster way to alienate a stakeholder than to ask her questions and then take no action based on her responses.

Prior to the Meeting
Send a copy of the discussion guide/interview questions to stakeholders far enough in advance of the meeting that they have a chance to review the questions and any supporting materials, allowing them time to collect their thoughts and responses. When the stakeholder has time to prepare, you'll not only stick within your allotted/scheduled time but you'll also receive well-thought-out answers to your questions.

During the Meeting
As the meeting begins, explain your VOC efforts and CX strategy and their intended outcomes, and summarize the objectives for the interview. Other guidelines to follow include:
  • Follow the question flow that you’ve outlined, but adapt to the person as the conversation evolves.
  • Probe for details, if anything is unclear.
  • Not all questions may be relevant to all stakeholders, so be flexible during the interview and skip questions, if needed.
  • Don’t forget to focus on the customer, not just on the company.
  • Keep the discussion on course but allow for some sidebars, if relevant.
  • Make it a discussion, not an interrogation.
  • Upon completing the interview, thank the individual for his/her time, ask for other thoughts or concerns, and briefly summarize next steps.
After the Meeting
Compile the findings from all interviews. Prepare a Summary Report of the findings that provides a solid overview of the information gathered from the pre-work and the interview process. Where relevant, use direct quotes to highlight or illustrate key stakeholder points or to support the objectives of your VoC or CX efforts. This report includes details you'll use to design your efforts to ensure stakeholder needs and requirements are met along the way and that the outcomes match their expectations.

Then you'll need to compile a Stakeholder Analysis, which will identify and outline:
  • Interest levels of the various stakeholders
  • Conflicts of interest among stakeholders
  • Misalignment of goals and objectives for your program
  • Believers and naysayers
  • Objections and risks
  • An overall picture of program readiness
Along with your Summary Report and the Stakeholder Analysis, you’ll want to identify next steps in the form of a Stakeholder Management Strategy, which will include a Stakeholder Map that plots each stakeholder based on her interest in, and her power and influence over, the initiative. The Strategy document outlines how you'll utilize stakeholders who support your efforts and what your strategy will be to overcome the objections that naysayers have, which will be crucial to success. Speaking from experience, if you can't overcome the naysayers, you will have a tough time getting off the ground. The Strategy document will also inform each stakeholder of his or her role in your VoC and CX efforts and how you’ll involve them.

It seems like a lot of work, but you’ll be glad that you took the time to incorporate these interviews into the design of your VoC and CX strategies. This is one more tool to help get buy-in and commitment for your efforts. The bottom line is that when people are involved or know how and why they are involved, they're more likely to step up, commit, and help ensure you have the resources you need for success. If you force this on them, they'll probably push back.

It is not every question that deserves an answer. -Publilius Syrus


Tuesday, February 17, 2015

Stakeholder Engagement for #CX Success

Image courtesy of HZ University of Applied Sciences
Today's post is a modified version of a post I originally wrote for Confirmit in April 2013. 

What is a stakeholder? And why should I engage with or interview one?

According to Investopedia, a stakeholder is...

A party that has an interest in an enterprise or project. The primary stakeholders in a typical corporation are its investors, employees, customers, and suppliers. However, modern theory goes beyond this conventional notion to embrace additional stakeholders, such as the community, government, and trade associations.

Basically, a stakeholder is someone with an interest in a project or process and will affect, or be affected by, its outcomes.

Consider this. Is a customer a stakeholder? Yes. By that definition, a customer is most certainly a stakeholder. In this post and its second part, though, I will address executive stakeholders.

So, based on the definition above, I probably don’t need to explain why it’s important to talk to stakeholders as you begin to build out your VOC strategy, but I know that many companies skip this very important step in the process. So here’s a little refresher on what stakeholder interviews are and some guidelines to follow to conduct them.

Stakeholders should be interviewed very early on in your VoC efforts, as their input and alignment is key to defining and designing your strategy. We want to ensure these efforts effectively align with stakeholders’ business objectives, priorities, and needs; gather information about stakeholder needs and concerns; and identify believers and naysayers, in other words, their level of engagement in the process.

Other objectives of the stakeholder interviews include:
  • Clarifying the vision, strategy, and key metrics of the business units
  • Uncovering pain points, bright spots, and general information needs
  • Identifying key customer segments and critical relationship factors
  • Defining customer insights needed to support business planning and operations
  • Getting buy-in for the work that lies ahead
To expound on the last point, stakeholder interviews can help to achieve executive buy-in, an important, nay, critical requirement to ensure success in building a customer-centric culture. Giving stakeholders an overview of your strategy, along with the objectives, highlights of their involvement, and well-documented reasons for putting customers at the center of the universe will set things off on the right foot. At the same time, understanding stakeholder needs, concerns, and roadblocks as well as identifying what insights they'd like the initiative to provide will help you identify ways to better engage them. Whether you're just kicking off your CX and VOC strategies or have a more-mature program, stakeholder interviews can help to bring executives (back) into alignment with the effort.

To start the interview process, you’ll need to identify your stakeholders. Start with an org chart, and make sure you look across your various business units. Identify stakeholders in each department. Stakeholders might be supporters, opponents, influencers, and/or beneficiaries of these VoC efforts.

In this post, I'll take you through getting prepared for the interview, and in the next post, I'll tell you what you need to do before, during, and after the interviews to ensure you get the most out of them.

Preparation
Do your homework about your company; get your hands on (and read/review) the following information:
  • vision
  • mission statement
  • brand promise
  • background on recent acquisitions
  • leadership changes
  • previous/current VoC work
  • org chart
  • annual report
  • marketing and/or strategy document
  • and any other background information that will help you understand the business
Prepare an interview discussion guide. List your key questions but be sure to include probative questions in case responses are not thorough enough and you need more detail.

Have a high-level understanding of your customer types (including the various personas), customer touchpoints, and the customer journey.

Create supporting materials, e.g., customer journey map, potential governance structure, etc., to use during the discussion.

Send out meeting invitations:
  • I prefer a 1:1 meeting so that the individual stakeholder can speak freely; it also allows individuals to “keep their own stories straight” and not be influenced by other participants.
  • Interviews should be scheduled for no longer than one hour.
  • Your invitations should include the purpose for the interviews and some background information, if necessary.
In the second part of this blog post, I'll share instructions for what to do immediately prior to, during,  and after the interviews to make sure you get the most from the process.

If you work for - and eventually lead - a company, understand that companies have multiple stakeholders including employees, customers, business partners, and the communities within which they operate. -Don Tapscott


Thursday, February 12, 2015

Winning the #CX Dating Game

Image courtesy of The Round Peg
Today I'm pleased to share a guest post by Bob Daly, President of DuSentio.

If you’re reading this, it means you've reached a level of maturity, age, and wisdom to have likely heard the following classic dating quote:

It’s not about you, it’s about me.

If you were ever on the receiving end of this message, hopefully with distance and experience you’re able to chuckle and shrug off the bad memories associated with this relationship killing poison pill.  When first heard, though, this message typically generated a great deal of emotion: pain, confusion, denial, self-pity - and heartbreak.  It also led to three pressing questions that demanded answers:
  1. What happened to you - to us - that we can’t make this work anymore?
  2. How can it NOT be about me?
  3. If it’s not about me, why are you leaving ME?
In the moment, it was certainly difficult to see this as a learning opportunity because it’s personal, and we’re talking about relationships here!  But in the end, every broken relationship becomes a learning opportunity; if not, you’re doomed to end up in a long string of flawed, unsustainable relationships.  As you reflect on the truth of this, let’s move to the broader point, to why we've raised these painful memories in the first place.  Dating experiences - and the personal relationships they lead to - are an excellent allegory for the relationship battles every company, every brand faces.

On the one hand, like building personal relationships, winning customers is a never-ending journey.  From creating awareness (do they even know you exist?) to getting that first date to (hopefully) maintaining a solid, long-term relationship, relationship building - be it personal or customer - is hard work! However, unlike dating and personal relationships, we all know customers are rarely (if ever) truly monogamous with the companies and brands they do business with…which brings us to the heart of the matter.

Before continuing, first quickly re-read the above, changing your context from personal to customer experiences.  Then, having done that, let’s turn back to address the three questions posed from a CX perspective…

1. What happened to you - to us - that we can’t make this work anymore?
For years, CX practitioners on all sides (researchers, consultants, and clients) have striven to understand and improve the customer experience - but what is that, really?  Call it what you will (customer satisfaction research, customer experience management, customer experience transformation, change management), the answer was always right there in front of us, hiding in plain sight - yet somehow, we've struggled to really see the truth of it.

Defined in any variety of ways, the broader point has been clear and universally singular: delivering the best customer experience we possibly can.  We've done this, and continue to do so, with the expectation and understanding that our labors would ultimately bear the fruit of corporate life: return on investment (ROI), increased revenue, increased share of wallet (SOW), and greater market share.  However, in pursuit of improvement, we fell into the ultimate relationship paradox: as with unsuccessful personal relationships, it wasn't about you…and yet it was ALL about you.

Ah, and there’s the rub: despite your best efforts, even after implementing what by all measures and inputs should be a winning CX program, customer defection and retention issues are not always about what’s happening within the four walls (physical and virtual) of your business.  So, the answer to “what happened to you - to us - that we can’t make this work anymore” is oftentimes more about the broader market offering and what your competition is doing than what you’re doing.

2. How can it NOT be about me?
Admit it, we’re all control freaks, to one extent or another.  Taking the 6 truths of CX transformation as a given, we know in our hearts that if we can only find out what makes our customer relationships tick, we can do the heavy lifting to change, transform, and become the best version of ourselves - BE whoever we have to be, DO whatever the data tells us needs to be done - to ultimately delight our customers.  In the end, we’re animated by the core belief that, if we can create a customer-centric culture focused on delighting customers/creating promoters/reducing detractors, we will make it to the Promised Land, sustaining our business, leading to increased SOW and revenue.

Whether you choose to focus on it or ignore it, the truth is that experience doesn't always follow core belief.  Despite your best efforts, sometimes customers spend less.  Other times they defect.  In both cases, you find that NPS/satisfaction doesn't strongly correlate with revenue or SOW increases, as hoped.  What are we doing wrong, then?  At times, attrition and defection are less about who you are and more about who you AREN'T.  Simply put, your customer experience doesn't exist in a vacuum.

While CX practitioners may overlook this critical fact, customers certainly don’t.  They know it well, for choice is the essence of the consumer experience - which is why you’re not getting 100% of their wallet.

3. If it’s not about me, why are you leaving ME?
When it comes to issues of retention and defection, new research points to the fact that there’s often nothing you can do to effectively mitigate these issues if you’re not only aware of, but also tracking, your RELATIVE PERFORMANCE vis-a-vis those competitors your customers are also interacting with, and regularly shopping at.  Asking current customers to rate your performance yields important insights, making it possible to uncover key drivers of satisfaction, NPS, or loyalty - whatever your metric, the insights are both helpful and necessary.  However, being necessary isn't the same as saying they’re sufficient - in other words, something's missing.  Again, recent research points to a new reality, and a new way.

The reality should by now be clear: it’s not about you…and yet it’s ALL about you.  Taking the classic approach to CX analytics, as noted above, you’ll generate drivers of delight/NPS/loyalty, yes, but the reason they fail to strongly correlate to business outcomes, like higher revenue and SOW, is that these classic drivers are unable to speak to what’s driving customer choice - why, for example, your customers choose to distribute their limited spend across 2, 3, or more of your competitors.  Don’t we want - indeed, NEED - to know that?

It stands to reason that this is both the daily reality all businesses must contend with, as well as the answer - call it the Ultimate Answer - that we should all strive and hope to understand.  We know that knowledge is power, and surely THIS knowledge would be powerful to have.

To win The CX Dating Game, therefore, you're going to need to be able to answer the following questions:
  • Where else are my customers spending their wallet for the main categories I compete in?  These are your competitive set.
  • Of these competitors, who gets the largest portion of each customer’s spend?  Who’s 2nd, 3rd, etc.?
  • What are the drivers behind this ranking process?
  • More specifically, what’s the driver of first choice?  Knowing what drives spend toward the SOW winner becomes the Ultimate Answer that then guides your CX transformation strategies.
Remember, none of us competes in isolation. For CX transformation to be rooted in reality and, ultimately, tied back to business outcomes (revenue, SOW, etc.), we need to know how to win The CX Dating Game.  Along the way, never forget the 6 CX transformation truths, for the journey is both dynamic and never-ending.

Bob Daly is President of the customer-centricity and software consultancy, duSentio, where he specializes in helping clients make customers #1 by combining CX-focused strategies with best-in-class enterprise software. When he's not working or writing about CX issues, you'll find Bob on the slopes (he's a Ski Patroller), running, reading, hanging out with his family or working around the house. 


Tuesday, February 10, 2015

Discounts Sabotage

Image courtesy of JSF0864
Is your customer acquisition (and retention) strategy based on discount pricing? How's that working for you?

Discounts might be working well to bring customers in the door, but do they stay after they're in? Can you keep those that you acquire? Are you creating a precedence that is not sustainable?

A couple weeks ago, I wrote a post about the phenomenon where customers buy on price but also leave on price. I answered the question, why do customers really leave?

Today, I want to address the acquisition/retention strategy that many companies undertake -  discounts: how they play into the price/value equation and how they impact or sabotage acquisition and retention efforts.

Is your customer acquisition strategy based on discounts, discounts, discounts? Whether your business is a subscription-based model (think dish/cable or telecom) or you're a retailer (think Kohl's) - or it's Black Friday - you've used discounts to bring customers in the door.

No doubt, customers love coupons, sales, and other discounts! I confess, I do, too. But I don't always buy a product or shop at a store because of a coupon. First, I have to have a need, or I have to be in the market for such a product. Second, if I've purchased from that company before, depending on the experience, the coupon may or may not entice me to purchase from them again. Discounts aren't a given; discounts don't mean that it's a slam dunk, that you'll make a sale. You still have to work for it.

I know that acquiring customers is important; I just wish that companies would put at least as much effort into keeping the customers they already have, with a real CX strategy. If they did, they wouldn't have to work so hard to get new ones. Not that they wouldn't need them - you always need customers to keep the business alive - but your existing customers would become an extension of your sales force and do some of the work for you. And save you money!

People who buy because of discounts are classic examples of “mercenaries.” Mercenaries are one segment of customers in the classic HBR Apostle Model, a model used to segment customers based on two dimensions, satisfaction and loyalty. They are defined as customers with high satisfaction and low loyalty and are in your store or have subscribed to your service because they are/were driven largely by price.

How do these customers feel about your company? Your brand? How was the experience? Can you keep them? On Black Friday, for example, they achieve at least short-term high satisfaction because they bought something they want/need at a reduced price; however, they are not committed to your company, hence not likely to purchase again (unless, of course, you offer up some more discounts). They aren't customers for life. You have not connected with them nor have you created a relationship with them. And, most likely, the experience was an after-thought. They haven't connected with you, either. The rest of the year, if you keep feeding them coupons every month, oh sure, they'll come back - if they need something and happen to have your coupon in hand. If they don't have a coupon, will they go elsewhere?

How do customers feel about your brand? There's an interesting story I'll share. It has many variations, and its origins are unclear; it is often attributed to Winston Churchill:

Churchill: Madam, would you sleep with me for five million pounds?
Socialite: My goodness, Mr. Churchill... well, I suppose... we would have to discuss terms, of course... 
Churchill: Would you sleep with me for five pounds?
Socialite: Mr. Churchill, what kind of woman do you think I am?!
Churchill: Madam, we've already established that. Now we are just haggling about the price.

Something to contemplate...

Can discounts be a viable acquisition strategy? Perhaps. The better question is probably, is it a viable retention strategy? If it is, it's a transactional relationship, not a long-term, ongoing relationship. As soon as something goes wrong - and it will - or a better deal comes along - and it will - customers are ready to switch (again, think cable, dish, or telecom providers).

Once customers are in the door with discounts, they need to get hooked. I think you need to set expectations and then wean customers off discounts quickly. Price fairly. Deliver a great overall experience. (Price is part of the experience; it just shouldn't be the driving force behind the overall experience or behind why people stay/leave.) And help customers see the value over time. Price is what you pay, value is what you get... right?! So let's help customers see what they're getting for the price they pay - and help them understand that the relationship is not going to be based on that addictive drug called discounts.

Think about your cable, dish, or telecom provider. These companies are notorious for their discounts, especially for new customers. By the time the customer's first year of extremely-discounted pricing has ended, he forgets that his fees are going to increase dramatically. When he gets that first bill at the new rate, he either wants to switch or demands another discount because, let's face it, the service was likely not that great (right, Comcast?). It sets a precedence; it creates an expectation for ongoing discounted pricing. And it creates and perpetuates that buy-on-price/leave-on-price phenomenon.

Which came first, companies relying on discounts as an acquisition strategy or customers demanding discounts? Which is worse? Need some examples of companies that don't need to offer discounts? Apple and Ritz-Carlton come to mind.

The customer rarely buys what the business thinks it sells him. One reason for this is, of course, that nobody pays for a ‘product.’ What is paid for is satisfaction. But nobody can make or supply satisfaction as such—at best, only the means to attaining them can be sold and delivered. -Peter Drucker


Thursday, February 5, 2015

Is 2015 the Year of #CX?

Image courtesy of Axim2013
Today I'm pleased to share a guest post by Robi Ganguly, CEO of Apptentive.

We’re one month into 2015, and it’s already apparent that Customer Experience is on everyone’s agenda - or at least on those of the 95% of retailers surveyed by Boston Retail Partners,who identified customer experience as a top-three priority in the new year.

As both an outsider and an insider in the Customer Experience movement, I wanted to share (and weigh in on) three CX predictions made manifest through firsthand conversations with hundreds of companies leading the way in customer experience and engagement.

#1 Customer Experience will become the major differentiator
In the news: According to Deloitte, 82% of brands perceive customer experience as a competitive differentiator. And this number is only rising.

By 2016, 89% of companies surveyed by Gartner plan to compete primarily on the basis of customer experience. And by 2020, customer experience is expected to overtake both price and product when it comes to differentiating a brand.

My take: Customer experience is absolutely a powerful differentiator. However, I’d caution that in order to create sustainable value, your CX strategy must be intertwined into your entire business and not simply a function of marketing.

For the long term win, Customer Experience Management needs to be a continuous process of collecting - and acting on - customer insights. It needs to be a comprehensive strategy with engineering, analytics, sales, marketing, and all job functions sharing the same appreciation for the customer and aligned with the same objectives.

#2 Customer Experience Management will become a designated job function
In the news: The number of openings in CX Design has skyrocketed, and CX as a priority is permeating every part of an organization - from marketing to engineering to the C-Suite. According to AT&T’s Office of the Customer, “CX knowledge will be required at higher levels in every position in the organization. This will come in the form of education, skills training, support, enhanced data, expanded partnerships, and a new focus on innovative design skills and talent.”

At the highest level, we’ve seen the rise of the Chief Customer Officer (CCO), an executive with the authority and visibility to create a culture of customer-centricity. While there were fewer than 20 CCOs in 2003, the Chief Customer Officer Council today recognizes over 500 CCOs across the world - including 22% of the Fortune 100.

My take: The numbers here are hard to deny. Even in companies that don’t take the CCO route, I  expect to see a breakdown of silos between CMOs and CIOs. I anticipate marketers and information analysts honing in on the same metrics and digging for the same customer insights in the pursuit of an exceptional customer experience.

#3 Customer experience will be realized as a major revenue driver
In the news: Customer experience has traditionally been a touchy subject for many executives. Yes, it’s important. But how important?

Creating a customer-centric culture can be a big investment and, if not done right, can take a lot of guesswork about what your customers actually want. Customer experience is all too often seen as a discretionary cost and not a revenue driver. In 2015, that’s all subject to change - and rightfully so.

In addition to building a brand, creating customer loyalty, and providing opportunities for differentiation, we’re seeing customer engagement fueling sales. Consumers are not only influenced by engagement, they desire engagement. A Moxie study revealed that 72% of consumers want to be engaged by their favorite brands - and are happy to spend more if engaged.

My take: We’re expecting to see investments in customer experience offer up a tangible and measurable impact on the bottom line. Advances in marketing analytics will shed much-needed light on the increased spending, lifetime value, and the power of referrals from happy customers.

Investments in customer experience will be seen not as another cost to incur but as a way to cut costs. Given continued increases in acquisition costs, particularly in a space as crowded as the app stores, I'm expecting brands to place a renewed emphasis on retention marketing. I'm anticipating a shift in priorities and a focus on reducing churn by doing more to delight current customers through loyalty and CX programs.

Furthermore, the smarter brands get about collecting actionable insights, the better prepared they are to design actionable objectives - aligned with measurable goals - around their customer experience strategy.

It won’t be easy meeting these three predictions in the next 11 months, but we’re excited to see what’s in store for the customer experience and are already witnessing CX pioneers pave the way for customer success.

About the Author: Robi Ganguly is the CEO of Apptentive, the easiest way for every company with an app to talk with their customers. Robi is a frequent writer and speaker on topics related to customer experience, retention, and lifetime value. When he’s not at the office, you can find him running, reading, cooking, spending time with friends, or hanging out on Twitter.


Tuesday, February 3, 2015

You Can't Transform Something You Don't Understand

Image courtesy of Touchpoint Dashboard
Why is journey mapping important?

I kicked off 2015 in a big way. Isn't that what a new year is all about?! Every year is a new year to get it right - on a personal or professional level and/or on an organizational improvement level, i.e., employee and customer experience.

For me, it was about elevating my customer experience thinking and expanding my horizons. This was a no-brainer. I joined the executive team at Touchpoint Dashboard (TPD), the world's first journey mapping software. I've used TPD for client engagements in the past, so it was exciting for me to have the opportunity to head up marketing and customer experience initiatives for this great company! After all, I have written many times about customers and employees aligning with the purpose of the companies for which they work or from which they purchase. I walk the talk.

As such, I have to stick with my mantra and practice what I preach: the customer experience is a journey. And you must map that journey in order to understand your customer and his experience.

Lately, I've been known to preach:
You can't transform something that you don't understand.
Journey mapping is the tool that helps you understand. Without knowing what steps your customers currently take to complete some interaction or task, there's no way for us to make improvements or change it. Imagine trying to change something that we have no clue about, that we have no idea how it transpires today. That's just silly. And yet, so many companies attempt to do that.

So, when Jim Tincher of Heart of the Customer approached me about an interview about journey mapping, I had to jump on it. This is my passion. Helping companies understand the customer experience so that they can transform it from current state to future state, the customer's desired state.

Jim asked me some great questions:
  • Why is journey mapping such an important topic?
  • What helps companies realize they need to map their journeys? Is it an event, a project kicking off, or something else? (My answer might surprise you.)
  • How do companies use their journey maps to drive their CX programs forward?
  • Do you have any examples of where a particular organization was able to use journey maps to propel their CX program forward?
  • If you had to give one piece of advice to a company considering journey mapping, what would it be? (I give three!)
To find out the answers to these questions - and more - check out the interview on the Heart of the Customer site. And let me know your thoughts...

A map does not just chart, it unlocks and formulates meaning; it forms bridges between here and there, between disparate ideas that we did not know were previously connected. -Reif Larsen, The Selected Works of T.S. Spivet