Tuesday, December 31, 2013

A Remarkable Customer Experience Trumps...

Image courtesy of Ben (Falcifer)
I originally wrote today's post for 360Connext on November 8, 2013. 

What does a consistently great customer experience trump?

You've read a lot of posts about "this trumps that" and "that trumps this." I'm guilty; I wrote one. But let's talk about the customer experience. What does it trump?

 Believe it or not, a lot of things! Like...

  • Expensive marketing initiatives
  • Super Bowl-sized ad campaigns
  • Rebranding efforts
  • Competitive pressures
  • Sales efforts
  • Price
Advertising is the tax you pay for being unremarkable. -Robert Stephens

Why does all this matter?

Being a brand with a consistently great customer experience means your company can focus on current customers, on keeping them - and not on acquiring new customers. Why? Assuming a current customer loves the brand, has had nothing but great experiences, and is a true fan - an advocate - he will work for you. You don't need to spend massive budgets on advertising and marketing; the experience speaks for itself. And you'll benefit from some other cost efficiencies, too. Let me explain the economics of loyalty.

Your most loyal customers, i.e., your advocates, your raving fans:
  • Are less price sensitive
  • Will pay a premium for a better experience
  • Stay longer, spend more, churn less
  • Expand their purchases/relationships to other/new products or services you offer
  • May overlook product shortcomings
  • Are more likely to forgive occasional/infrequent service shortcomings (just make it right, though!)
  • Cost less (e.g., marketing, advertising, promotions)
  • Have fewer complaints
  • Provide feedback and want to help you improve and succeed
  • Become technical support for you by helping other customers (answer questions, solve problems)
  • Will evangelize the brand for you
That all sounds pretty good, right? Don't believe it, do you? Here are some hard numbers from Temkin Group's latest The Economics of Net Promoter report:
  • Promoters are almost six times as likely to forgive: 64% of promoters are likely to forgive compared with 11% of detractors.
  • Promoters are more than five times as likely to repurchase: 81% of promoters are likely to repurchase compared with 16% of detractors.
  • Promoters are more than twice as likely as detractors to actually recommend: 64% of promoters have recommended the company compared with 24% of detractors.
And from Temkin Group's ROI of Customer Experience report:

Customer experience leaders have more than a 16 percentage point advantage over customer experience laggards in consumers’ willingness to buy more, their reluctance to switch business away, and their likelihood to recommend. A modest increase in customer experience can result in a gain over three years of up to $382 million for US companies and up to £263 million for UK firms, depending on the industry

This infographic from Desk tells us that 9 out of 10 customers will pay more for a better customer experience.

There are a ton of other studies and stats out there to show that the proof is in the pudding. If you're not focusing on delivering a great customer experience, you're missing out. And you're wasting time and money. Customer experience trumps all that.

O, and there's one more thing that a great customer experience trumps: the market! Customer experience leaders have outperformed the market for the last six years.

What can you do? Get started! Focus on the customer. Focus on delivering a great customer experience. Provide a memorable experience - create fans - and trump all that other stuff.

Everything starts with the customer. -Louis XIV

Having just given a royal nod to the customer, there is this, a bonus question: What trumps a great customer experience? Only one thing. Can you guess?

Not sure? Read this post for the answer: This Trumps Customer Experience.

Thursday, December 26, 2013

Five Key Questions to Ask to Achieve a Customer-Centric Culture

Image courtesy of rachaelvoorhees
I originally wrote today's post on July 2, 2013, for Entrepreneurs Questions.

When I think about customer-centric cultures, companies like Zappos, Southwest, and Ritz-Carlton come to mind.

Herb Kelleher, former CEO of Southwest Airlines, knows a thing or two about culture, and he defines it as: “… what people do when no one is looking.” There are a ton of examples of how people-centric (both employee and customer) his organization is. I love that concept and definition. But how do people know what to do? How do other organizations achieve a similar culture?

Southwest is a great company to aspire to be like, but just know that you will never be able to replicate its culture or anyone else’s. Why? Because a culture is unique to the organization; it’s like your fingerprint – one of a kind and unique to you. How, then, do you go about establishing the culture you desire within your organization?

I’ve posed two great questions above: how do people know what to do, and how do you get the customer-centric culture you desire? I know I’m answering questions with questions, but bear with me. Let’s dive in and identify five key questions you must address in order to achieve the right culture within your organization.

1. What’s your purpose?
Your purpose is your why. It is the reason you’re doing what you’re doing. It is your guiding light. Everything you do, from hiring to designing your customer experience, will be aligned with this purpose. Make sure that your purpose is clear, succinct, focused, and communicated. Everyone in the organization needs to understand who you are and then live and breathe it every day. Remember that customers buy from – and feel commitment to – brands with which they align, and if you lose your focus and try to be everything to everyone, you’ll flounder; you’ll lose your footing and your following. And then the business falters and fails.

2. What are your core values?
Your core values are those things that you believe are important to you and to the business. They are your standards or norms. They are your beliefs that guide you in identifying what is right and wrong, both internally for your employees and externally for customers. Like your purpose, values must be aligned with, and integrated into, everything you do. They drive behavior and decisions; when in doubt, you must always ask: Is this the right thing to do? Does it fit with our values?

3. Are you hiring the right people?
Hiring the right people is extremely important to achieving a customer-centric culture. What does “right people” mean? I can best summarize it as: those people who are aligned with values and your purpose; they are passionate about what you do and about what they will be doing for you. They may not have all the skills needed for the role, but they have the heart to do the job and be a good cultural fit. Why do this? Because the right people will be more focused on what they do and on the success of the business, want the business to succeed, and will do anything to ensure it does.

4. What is leadership’s role?
Even though, technically, culture is a grass-roots effort driven by employees, leadership still has a key role in ensuring the culture stays on the right track. Leadership must model the desired behaviors, support and reinforce the right behaviors, be transparent and trustworthy, communicate, and quite simply, care about the employees.

5. Are you listening to customers?
Last but certainly not least, you must answer this question. It is at the heart of a customer-centric culture. Customer-centricity means that the customer is at the center of every decision, but this type of decision making and culture cannot be achieved without not only listening to customers but also acting on their feedback and including that voice in every corner of the business.

Summary: Culture is the set of values and norms that guide how the business operates, i.e., how your people think and act, day in and day out. A customer-centric culture is one in which the customer’s perspective and viewpoint is ingrained into the company DNA, is at the center of every action, decision, conversation, process, strategy, etc. The best customer-centric cultures are built at a grassroots level; they are the most sustainable because your employees are the ones responsible for creating them, own the outcomes, and understand the implications of any missteps. Yes, there must be support and guidance from the top, but when the troops are rallied around this cause, great things will happen.

Revolve your world around the customer and more customers will revolve around you. - Heather Williams

Tuesday, December 24, 2013

Missing the @Target on Customer Service

Image courtesy of JeepersMedia
Are you one of the 40 million people affected by the recent Target data hack?

If so, then you know exactly what I mean when I say that Target failed with its post-incidence communication.

On December 19, the world found out through the media that hackers had "unauthorized access" to payment card data of 40 million customers who had shopped at Target brick-and-mortar stores in the U.S. between November 27 and December 15.

My first thought was: "Why did I hear about this from the media? Why didn't they contact me directly?"

You see, I am (or was) a Target REDcard debit card holder. They know me. They can communicate with me about sales, promotions, products, and anything else they want to communicate with me about. THIS would have been a thing to communicate to me! Directly.

After the announcement in the media, they put the onus on you to go find information about what happened and how to respond/react. I went to the Target website to see if there was any information there. Yes, of course; there was a banner across the top of their site that, when clicked on, led to a page with details about the hack.

Great! So they had time to talk to the media. They had time to throw up a web page that included details (that weren't all that immediately helpful) that I'm sure had to be blessed by lawyers and executives. And yet, they had no time to send an email to customers on that day (or sooner).
By the way, that web page contained no details about how to cancel your card or what to do with your card - but it gave lots of options for how you can keep tabs on your credit and identity. I appreciate that, but especially if you have a debit card, you'll want to make sure that the connection to your bank account is severed. I wanted to be able to just cancel my card from within the account management page on their site. No can do. There was a phone number to call if you had questions, concerns, or had fraudulent activity on your card. Good luck getting through on that phone number!

I posted a link to that page on my Facebook page and added this note:

If you shopped at Target in the US in the last three weeks, you should read this.

They put the onus on you to make sure you're not a victim of identity theft, but there are two things they don't do themselves, which I think they should have done immediately: (1) cancel and reissue all Target credit/debit cards, and (2) provide information on this page (the link below) on how to cancel your card and/or get a new one. This is something that could bite you in the ass down the road, not necessarily tomorrow, so by retiring at least those Target credit/debit card numbers, they're off the market.

Whether or not you're a fan of Customer Effort Score, this is a huge fail with regards to customer effort. It is now several days later, and I still cannot get through their phone lines to talk to a person; their customer service line is perpetually busy. (What if I'd had fraudulent activity on my account? I couldn't reach a live person if I wanted to.) Someone told me that they had hired extra people just to man the phone lines through this crisis, but clearly that wasn't enough.

I think they could have saved their customers  a lot of heartache and themselves a bit of cash (spent to hire additional customer service reps) by canceling any and all Target REDcard accounts that were used during this time period. Why wouldn't they do this? Well, too much work for them. And FOLO - fear of losing out. Or FOLC - fear of losing customers. I think they'd lose far less customers if they had done that than causing anxiety for all those folks who have yet to be able to call in to inquire about or cancel their REDcards.

I digress. Back to the communication issue.

This is a problem. Companies should talk to customers, not to the media. Customers first, media second. Look at what Beyonce did. Companies need to take a page out of Beyonce's playbook and communicate with their customers, not at them through some other medium:

"I didn’t want to release my music the way I’ve done it. I am bored with that. I feel like I am able to speak directly to my fans."

Stop doing what you've always done; it's a new world out there. Customers interact with you differently, and customers want to hear from you - not from the media. Relationships are built on trust; they are broken when you break that trust.

And for Pete's sake, put some substance into the message. The webpage content was a mile long, but it was all about how to protect your identity. But guess what, Target? I trusted you to offer secure payment options and to protect my identity. I trusted you to make sure that my transactions with you would always be safe. You failed. So don't make me work so hard to resolve your screw-up.

I realize that those without REDcards would need to hear about this incidence somehow, but I bet many had shopped at Target previously, and I bet Target can crosscheck their credit card numbers with previous purchases with contact information somehow. They were able to figure out  that an 18-year-old was pregnant before her dad did, right? Remember that story, in which the author told us: Target assigns every customer a Guest ID number, tied to their credit card, name, or email address that becomes a bucket that stores a history of everything they’ve bought and any demographic information Target has collected from them or bought from other sources. Yup. I think they can figure out how to contact you. And if they don't have your contact information, i.e., if you're not a Target cardholder, they could have worked with your issuing bank.

They took four days (December 15 was the last day of unauthorized access; December 19 was the day the media reported the issue.) to announce the issue. They had four days to run the data. They had time to figure out who should be contacted by email. Why did it take so long? Never mind the fact that the breach occurred over a period of three weeks. How could it go on for so long, unnoticed?

So let's continue through the chronology.

On December 20, I received an email from Target about the incident. Basically, it was the same communication that was on the aforementioned webpage.

On December 21, I received an email from Target's CEO that basically said the same thing.

What we have failed to hear up to this point is an apology. Instead, what Target has done is to offer customers a 10% discount ("same as our employees") to entice you to come in and shop. Or to add insult to injury. I've seen some comments on Facebook by people who have said not to blame, or be mad at, Target. Who should customers be mad at? Target did not protect them. No, Target wasn't the hacker, but they should be doing everything possible to protect customers. Again, why did it take three weeks for them to discover this breach?

Last night, Target sent out another email, which outlined the following:
  • You do not need to call us unless you found charges on your account that you didn’t make.
  • You will not be held liable for any fraudulent charges.
  • We have made changes to our REDcard fraud detection and authorization procedures to further protect you.
  • We are offering free credit monitoring for one year to every single person who was impacted by this crime. We will give you more information about that soon.
Don't tell customers not to call you; this is their credit, privacy, and identity that have been invaded. And in the case of a debit card, perhaps their entire bank accounts! If customers want to call and want to be reassured, by all means, encourage them to call.

Target's not the first retailer or company to experience a security/data breach, and it's likely not the last, unfortunately. But there are lessons to be learned here, for sure. The key takeaways today are:
  • Target is a B2C (business to customer) business, not a B2M2C (business to media to customer) business. Cut out the middle man. Talk to your customers. Directly to and with your customers.
  • Make a mistake? Issue an apology.
  • Have a security breach? Take swift action. Four days is not swift; neither is three weeks.
  • When it comes to this type of issue - or service, in general - reduce your customers' effort in whatever way you can.
I ended up calling my bank to put a stop payment on any charges that might come through from the Target card number. I had to get creative, and it ended up costing me a fee ($31) to do that. I'll still cancel my Target card - as soon as I can get through to Target's customer service.

What do you think?

Trust takes years to build, seconds to break, and forever to repair. -Unknown

Thursday, December 19, 2013

Customer Experience: Marketing without Marketing

Image courtesy of Archman8
Were you one of the hundreds of thousands of people who downloaded Beyonce's new album last week?

Let's take a closer look at this recent phenomenon.

Unless you were hiding under a rock last week, you probably heard that Beyonce released a new album digitally to her fans, in the dead of night, without any prior leaks, announcements, marketing, or other hoopla. As a matter of fact, it was said that fans weren't even expecting an album from her until 2015. Instead, she announced the new album via Instagram at 9pm PST a week ago. Shock and awe! Surprise and delight!

Fans went nuts. There were 80,000 downloads in the first three hours - temporarily taking down iTunes! - 430,000 total in the first day alone, and more than 828,000 in the first three days, setting a new download record.

Why is this relevant to customer experience? O, it has everything to do with customer experience, from a few different angles.
  1. It's a great example of what having a raving fan base means.
  2. It meets the criteria for a great customer experience that I've mentioned previously.
  3. It shows that a great customer experience = marketing without marketing.
  4. It demonstrates the power of word of mouth.
A Raving Fan Base
First of all, I'm reminded of someone else with a similarly raving, and extremely loyal, fan base: Lady Gaga. Lady Gaga calls her fans Little Monsters and has her own social media site, just so she can engage those fans and rally her community around a common message. Jackie Huba wrote Monster Loyalty: How Lady Gaga Turns Followers into Fanatics to pay homage to Lady Gaga's incredible ability to build that community of, and for, fans, who are connected not only to her but to each other.

But did Beyonce just show that she can do the same? Or even better? Did Gaga get one-upped?

Maybe. Not in the volume of followers but just in the pure surprise and delight she just unleashed in her fans. Lady Gaga's got her work cut out for her; I'm sure she won't disappoint!

For those who don't know (I didn't), Beyonce has built her own community, called BeyHive. Think of the word play. It has a Queen, of course (Beyonce, right?!), different types of Beys (pronounced "bees"), and its own vocabulary. (See the graphic to the right.)

The community is her way to share "all the inspiring things I come across every day," while at the same time allowing her to feature "beautiful creations from my talented fans." Beys also get early access to concert information, presale tickets, VIP packages, and more.

I had to look it up, but she refers to her fans as stans, which, according to the Urban Dictionary, means: an overzealous maniacal fan; it's formed by combining "stalker" and "fan." (I'm not sure that's really a good thing, but I also didn't just sell a zillion album downloads, so who am I to judge?!)

And finally, the Queen Bey has put forth her own Golden Rule of the community:

We protect our own. We are all beautiful. One Bey should never turn on another. We defend each other. Let love & respect guide you, and always be good to each other. Follow the golden rule, Beys!

Just a little background on her community. I think we all know the power of the community; if you're not sure about that, I provided seven reasons raving fans are important in this post about cult brands.

Let's move on to the next angle.

Criteria of a Great Customer Experience
I've written previously about what comprises a great customer experience. It must be:
  • Personal
  • Memorable
  • Remarkable
  • Emotional
  • Consistent
Queen Bey covers all of these; it's the reason she's got the loyal fans that she has today. It's one of the reasons this album release was a huge success. It's what fans have come to expect from her. Don't get me wrong (sometimes expectations can set, well, the wrong expectations), it was a surprise. She's just raised the bar.

Marketing without Marketing
Having this community of loyal fans saved Beyonce a few dollars in her marketing budget, right? Seems that way. Providing a great customer experience means that customers come to expect great things from you. It means you don't have to spend months and dollars figuring out how to position, place, or promote your product. You can focus more on the product and on the experience instead, as Beyonce did.

Consistently providing a great experience for your customers/fans yields a win-win for everyone in the long run.

Customer experience is the new marketing without marketing. As Robert Stephens of Geek Squad said (and I've used this quote often): Advertising is the tax you pay for being unremarkable.

Beyonce is remarkable. Her fans love her. They love her music. The experience she delivers through her concerts, her music, her BeyHive, social media, and more is exactly the reason this release was successful. She's Beyonce. And if she puts out a new album, the Beys must have it.

The Power of Word of Mouth
This album was announced in a fun way on Instagram. Releasing this album digitally meant Beyonce was relying heavily on the power of social media and word of mouth. And the power of her community.

Her social media stats: Within 12 hours, 1.2 million tweets were posted about “Beyoncé” and within the first 24 hours more than 430,000 albums had sold for $15.99 on iTunes.

Her reasoning for releasing the album this way, rather than the traditional approach:

"I didn’t want to release my music the way I’ve done it. I am bored with that. I feel like I am able to speak directly to my fans. There’s so much that gets between the music, the artist, and the fans. I felt like I didn’t want anybody to give the message when my record is coming out. I just want this to come out when it’s ready and from me to my fans."

I love that: imagine if brands talked more to customers than to or through the media. Would that lend a bit of realism, authenticity, trust?

What's the power of word of mouth: if your customers love you, they'll work for you; they'll be an extension of your sales force. And it won't cost you a dime.

What's your take?

The weird set an example for the rest of us. They raise the bar. They show us through their actions that in fact we're wired to do the new, not to comply with someone a thousand miles away. -Seth Godin

Tuesday, December 17, 2013

The Third Rail of Customer Experience

Have you ever wondered what "the third rail" of customer experience is? 

I have.

But first, for those of you who have never heard this phrase, what is it? Here are a couple of definitions to get you started.

Urban Dictionary defines it as: A dangerous area of discussion, a point at which the mere mention of a subject result is disaster. Commonly used in politics.

Wikipedia defines it as: The third rail of a nation's politics is a metaphor for any issue so controversial that it is "charged" and "untouchable;" any politician or public official who dares to broach the subject will invariably suffer politically. The term is most commonly used in North America. The "third rail of American politics" is often said to be cutting Social Security; the "third rail" of Canadian politics is said to be health care.

So, let's return to my question: What is the third rail of customer experience? Or is there one? I posed this question to several customer experience experts. Here are their responses.

Shep Hyken: The third rail in customer service is the loyalty killing phrases employees use to defend their position to the customer.  A couple of obvious ones are, “We can’t do that. It’s against company policy,” or, “I’m sorry, that’s not my job.”

Chuck Wall: There is a powerful third rail and it's staring at both you, and me, in the mirror. It's called the business ego.  It tends to afflict most of us.  Business schools, mentors, co-workers, and bosses have inadvertently conspired to deceive us into believing a kind of divine right of business that says, "We're right, and they're wrong."  But there's now ample evidence that proves that this is a short-term attitude killing long-term opportunities.  We need to take a fresh look at this myopic view and get the big picture from our customer's point of view.  A bit less certainty...dare I say, humility...needs to be present as we navigate our way forward in 2014.

Jeff Toister: The customer is a third rail. I don’t think there’s enough discussion about how customers sometimes sabotage their own experience. They occasionally make mistakes, get confused, and have unreasonable expectations. When this does happen, many customers direct the anger, frustration, and embarrassment caused by their own mistakes at the people and companies serving them. It’s our job to help customers succeed, but it’s not always easy.

Case in point: I once witnessed two women on a hotel shuttle berate and belittle the driver and another hotel associate who tried to assist them. The problem was the hotel couldn’t find their reservation, so the women’s arrival experience was off to a rocky start. It turned out the two women had made a reservation at a completely different hotel! The hotel associates were gracious and professional the entire time, were resourceful enough to call other hotels to find the women’s reservation, and even offered them a complimentary ride to their hotel. Despite these efforts, the women were unsatisfied and ungrateful.

Kate Nasser: Whether or not there is a third rail of customer experience for business leaders depends on the courage and grit of the top leader.  A courageous visionary leader does not have a third rail.  They tackle customer experience from every angle. For leaders who want to play it safe, the third rail of customer experience is the concept of "leading from the heart."  They mistakenly believe that heart-based customer experience and profits are mutually exclusive.

Stan Phelps: The third rail in CX is declaring any one metric as the top measurement device. Or even just talking about one standard without mentioning others.  Can't we all agree that putting our eggs in one basket isn't prudent? Highlighting or favoring one doesn't mean you are excluding the others.

James Lawther: The third rail for the customer experience is that most executives only care about themselves:
  • They care about looking good.
  • They care about prestige.
  • They care about hitting their targets.
And most of all they care about getting their bonus and the fancy BMW it will buy.They don't really care about their customers at all. But not one of them cares to admit it.

Adrian Swinscoe: It would seem to me that the 'Third Rail' might be: Customer Service or Customer Experience doesn't matter. However, I am not sure that anyone has been brave enough to make that stand or that case. Even Ryannair in the UK now seems to be coming round.

Other 'rails' might be: most companies are rubbish at customer experience and customer service as they don't care enough OR we care more about new customers than we do existing customers as they are more profitable with respect to our current business model OR we care more about short term value and the stock market and our bonuses than we do about long-term value and our customers.

Adam Toporek: The third rail of customer experience is the conventional wisdom that social customer service is crucial to every business. It’s simply not true. For most businesses, investing in social media is an important way to connect with customers. However, in certain verticals, particularly in B2B, engaging in social media for customer interaction is simply a waste of time. The point of social customer service is to be where your customers are; if they are not there, you do not need to be there either.

What do you think? I love that these responses are so varied. To me, it means that we still have our work cut out for us!

And me? I've written before that I've been talking and touting for the last 20+ years about how critical the employee experience is to the customer experience. There are still too many execs who don't want to discuss the importance of the customer experience to business success; the customer experience itself is the third rail, it seems. But assuming it's not, then I would say, the numbers don't lie: There is a chain of cause and effect running from employee behavior to customer behavior to profits." When we stop avoiding the conversation around how important employees and the employee experience are to the business, then we can hop off that third rail and proceed on a smooth journey.

Let me pose the question to you: What do you think the third rail of customer experience is? What topic is so charged that it is untouchable - or should remain untouched?

UPDATE (1/17/14): I did an interview today with Quality Digest Live, as they published this post in Quality Digest last month. We spoke today to add a little color commentary.

The purpose of a business is to create a customer who creates customers. -Shiv Singh

Thursday, December 12, 2013

The Role of Talent in Your Customer Experience

Image courtesy of Maryalena Photography
Today I'm pleased to present a guest post by Jorie Basque. It's a great follow-up to my post earlier this week about the linkage between employee experience and customer experience.

Think of the best – and the worst – customer experience you have had recently. Chances are, what is foremost in your mind is a person – the courteous and efficient employee at the home improvement store who helped you solve that tricky DIY problem and guided you to the precise tools and parts you needed. The abrupt call center employee who sounded like she was chewing gum, left you on hold without letting you know what was going on, and eventually disconnected you. If the customer experience is critical in establishing and maintaining customer loyalty, the people who impact the customer experience are critical in its execution.  How you choose, train, manage, and reward your talent may be the most important factors impacting your customer service climate.

Maybe it is time to have a closer look at your talent management processes. Here are some steps you can take.

Step 1: Identify the people who are critical to the customer experience
Although talent management process improvements will positively impact all the employees in your organization, you may choose to focus on those most impactful to the customer experience. Use journey mapping to analyze the customer experience and to identify who and how people along the route are engaged in it. From that exercise, you can determine the roles to focus on.

Step 2: Identify the competencies that impact the customer experience
What does good customer service look like? Examine performance review data to find your top performers in the roles you have identified and observe the skills and behaviors they demonstrate. A report by DDI lists the top-ranked customer service behaviors as:
  • Listening carefully to what customers have to say
  • Interacting with customers in a warm and friendly way
  • Taking immediate action to meet customer needs or requests
Step 3: Embed key customer service competencies into talent management processes
Now that you know what they are, you can use talent management processes and tools to build key customer service competencies into your workforce.
  • Recruiting and selection. Include customer service competencies in job descriptions, advertisements, interview questions, and selection tools so new hires - as well as those you promote from within - are well skilled in them.
  • Goal setting. Cascade and communicate organizational customer service goals and metrics.  Engage employees and their managers in setting performance goals and evaluation criteria that support organizational goals and reflect customer service competencies. For example, call center employees may have a goal to check back with customers who are on hold within a certain time frame. 
  • Performance management. Once the competencies are known and the goals are established, managers and supervisors should observe performance, provide feedback, and reinforce the key behaviors when they occur. Address enablers and barriers to success and document findings to chart progress.
  • Rewards and recognition. Although paying for performance is important, there are many ways to reward and reinforce good performance. Celebrate accomplishments, goal achievement, and the acquisition of new competencies that positively impact the customer experience. Share progress on organizational customer service goals.
  • Employee development. Identify development tools that will build customer service competencies.  Use information obtained through compiling performance management data to identify skill gaps that can be filled through targeted training and other learning strategies.
  • Engagement and retention. There is plenty of research linking employee engagement to retention as well as many other business priorities, including customer satisfaction. If you have been addressing the talent management tips described above, you may already be seeing an uptick in employee engagement and retention. 
  • Succession planning. As you to watch over the key customer experience roles, think about which would create chaos should you suddenly lose the incumbent. These are the roles for which you need a succession plan. Use performance management data to identify high potential successor candidates and employee development plans to get them ready.
Using talent management processes to create a customer service climate will positively impact the customer experience and bring added benefits to the workforce as a whole.

Jorie Basque is a Certified Human Capital Strategist and a Customer Account Manager at Halogen Software.

Tuesday, December 10, 2013

This Trumps Customer Experience

Is there really anything more important than a great customer experience?

A few weeks ago, I wrote a guest post for Jeannie Walters of 360Connext titled, A Great Customer Experience Trumps... . At the end of the post, I posed the question: "What trumps a great customer experience? Only one thing. Can you guess?"

Today, I'm going to answer the question. Quite simply, the answer is: the employee experience.

I've been talking about the importance of employees in the customer experience equation since my days at J.D. Power and Associates 20 years ago, and yet, in the heat of customer experience design efforts, employees are forgotten.

Don't believe me? There's a ton of evidence out there now that makes the link between the employee experience and the customer experience and, ultimately, on business outcomes.

Temkin Group published their Employee Engagement Benchmark Study earlier this year, and here are some findings:

Among companies whose financial performance is significantly better than that of their peers, 75% of employees are highly or moderately engaged, compared to 47% at under-performing companies. Companies with a significantly better customer experience than their competitors, 75% of employees are highly or moderately engaged, compared to 34% at lagging companies.

Edelman put together a compilation of seven studies on employee engagement. One of those studies is by Aon Hewitt, and according to Edelman, it reveals:

Every one percent increase in employee engagement indicates a 0.6 percent growth in sales, accordingly to Aon Hewitt’s 2013 Trends in Global Employee Engagement report. Applying this logic to a $5 billion company with a gross margin of 55 percent and 15 percent operating margin, a one percent increase in engagement would be worth $20 million – hardly pocket change.

Gallup has done a lot of research, as we know, on employee engagement. They recently published some findings:

In a recent study, Gallup examined 49 publicly traded companies with EPS data available from 2008-2012 and Q12 data available from 2010 and/or 2011 in its database. This study found that businesses with a critical mass of engaged employees outperformed their competition:
  • Companies with an average of 9.3 engaged employees for every actively disengaged employee in 2010-2011 experienced 147% higher EPS compared with their competition in 2011-2012.
  • Companies with an average of 2.6 engaged employees for every actively disengaged employee, in contrast, experienced 2% lower EPS compared with their competition during that same time period.
This graphic summarizes nicely how employee engagement drives business outcomes.

Towers Watson has conducted their own employee engagement research, and their findings show that companies with high levels of employee engagement saw a 19.2% increase in operating income, while those with low levels of engagement experienced a 32.7% decline in operating income.

An HBR article fr0m 2010 states this interesting statistic: "...some - including Starbucks, Limited Brands, and Best Buy - can precisely identify the value of a 0.1% increase in engagement among employees at a particular store. At Best Buy, for example, that value is more than $100,000 in the store’s annual operating income."

Beyond Morale offers an e-book with 99 interesting statistics about employee engagement, like this one:

Increased employee engagement was accompanied by a 12% increase in customer satisfaction and significant double‐digit revenue and margin growth over the past three years. -Serco Study

And this one:

Companies in the Best Companies to Work Study for in the period 2004 – 2008 increased their revenues by 94% and their profits by 315%.

In their Sharpen Customer Experience Focus with Employee Engagement report, Forrester cites this example:

Dell found that customer Net Promoter Scores (NPS) were twice as high for experiences delivered by highly engaged employees.3 And a meta study of 7,939 business units in 36 companies, published in the Journal of Applied Psychology, found that higher employee engagement scores correlated with higher customer satisfaction and loyalty measures.

Brian Gareau has put together a page of resources that highlights some of the research done over the last 10 years that proves the linkage between employee experience and business performance. Kevin Kruse has also put together a similar list of research and resources on the link between employee engagement and various business outcomes.

I've taken liberties in this post to skip right from the employee experience to business performance without mentioning the customer experience. We already know, with perhaps one exception, that a great customer experience drives business growth and success. What we fail to acknowledge is that the people behind the delivery of that customer experience must come more first.

Need one more bit of evidence? I could cite a bunch of other studies, but let's go to the grandfather of all evidence, the Service-Profit Chain. Read the HBR article - as well as their follow-up, which shows how companies are applying its principles today - and the book(s).

Image courtesy of HBR
This 1998 article from Harvard Business Review summarizes the work that 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 this: their model is data-based. (See the notations regarding the colors/shapes in the sub-heading of the image below.)

Make no mistake. Employees who enjoy their work - are passionate about what they are doing and for whom they are doing it - deliver results. I wrote previously: Because of that enthusiasm and passion for the brand, for the business, employees are eager to contribute to its success. And when we're all working together for the success of the business, I believe that, ultimately, customers will win, too. As will your shareholders.

If people relate to the company they work for, if they form an emotional tie to it and buy into its dreams, they will pour their hearts into making it better. -Howard Schultz

Thursday, December 5, 2013

Don't Waste Money on Analytics

Image courtesy of reynermedia
Today I'm pleased to present a guest post by Gregory Yankelovich.

Analysis is an instrument of learning, defined as "a process of acquiring modifications in existing knowledge, skills, habits, or tendencies." There are substantial volumes of academic research produced over the years on a subject of relationship between learning and beliefs. You can search for them with the keywords "deep learning," "deep belief networks," etc. The gist of these academic inquiries points to an observation that deeply-held beliefs impede learning process, and network- (think groups or organizations) shared beliefs have a tendency to suppress learning process aggressively.

As long as you and/or your executives are not ready to question your current beliefs, no amount of evidence will make you or them to act.

The power of analytics is in its ability to expose patterns of data that can help us to learn. When new knowledge is rejected/ignored by the organizational belief system, all the cost of learning is wasted. If you think the last sentence does not apply to you because you use "free" tools, think again. The time, effort, and political capital you have to invest in the use of "free" tools for learning can be substantial. The probability of acceptance by your "network" of new knowledge, discovered with the use of "free" tools, is even lower.  That is because you bypassed an opportunity to (a) socialize the idea that you may discover something your organization does not know yet and (b) gain conceptual adoption of such result.

Use of "free" tools rarely require any approval process within organization. Therefore nobody knows what you are doing and as a result are not prepared to consider any findings, unless they support and re-enforce existing beliefs. Presenting new findings that challenge status quo as a surprise is a very bad idea. The process of selection and acquisition of a tool prepares your audience to consider the findings, as participation exposes them to a potential value.

People and organizations are most likely to consider a challenge to their beliefs at the times of extreme "pain." At such times, leaders open their minds and examine their beliefs to learn how they need to act to improve their lot; the rest are looking for excuses and complain about circumstances beyond their control. Here is an example describing such a moment at Best Buy in 2012:

The one critical thing we offer the world is choice,” said the Best Buy chief executive officer Brian Dunn in a March 2012 phone interview. He was trumpeting in particular his company’s role in guiding customers through the expanding smartphone universe.

“We provide the latest and greatest choice of all technology gear, from Apple products to Google products, and that brings more opportunity to help people put technology to use. That is a great place for us to be.” A week later, reality intruded. The consumer electronics retailer posted a $1.7 billion quarterly loss and announced it would close 50 stores nationwide. On Tuesday, Dunn resigned.

The belief of the Best Buy CEO (at the time) - "The only critical thing we offer the world is choice" - was challenged by customer intelligence that exposed the evidence of "most critical" things from "the world" perspective are in-store service quality and products reliability. The evidence was ignored and a new CEO had to come in.

Here are a few ideas on how to deal with this challenge:

1. If you focus on intelligence that can help to improve the probability that the enterprise will increase its market share, your challenge to status quo is more likely to be tolerated. Business executives are motivated by two desires:
  • An increase in revenue or market share and
  • A reduction of expenses, i.e., increase of profit margin
and two fears:
  • Decrease in revenue or market share and
  • Decrease of profit margin.
Intelligence that improves probability of realizing their desires, and/or forewarn that they are on the path of realizing their fears, is aligned with their system of values and therefore deserves their attention.

2. New knowledge that does not conform our beliefs is a natural suspect.  We credit our beliefs with helping us to achieve our past successes, while new intelligence has no "resume." Applying the new intelligence to historic data can overcome the trust challenge if that application successfully exposes patterns that correlate with actual results in the past.

Gregory Yankelovich is a Technologist who is agnostic to a technology, but "religious" about Customer Experience and ROI. He has solid experience delivering high ROI projects with focus on both Profitability AND Customer Experience improvements, as one without another does not support long-term business growth. Gregory currently serves as the Customer Experience (CX) Whisperer at Amplified Analytics, provider of software as a service for Customer Experience Measurement to support Strategic Marketing and Brand/Category/Product Management applications.

Tuesday, December 3, 2013

A Customer Experience Carol

Image courtesy of Pixabay
This is my favorite time of the year. Christmas is such a magical holiday filled with wonderful stories and memorable moments!

I love all of the holiday classics (stories and movies), especially those that make us pause for a moment to reflect not only on who we are but also on who we want to become. This holds true both for us as individuals and for companies/brands.

Have you read or watched A Christmas Carol yet this holiday season? It's a classic written by Charles Dickens with the intent of bringing attention to the plight of the poor, while in the end also creating a wonderful celebration of both Christmas and the ultimate good of the human spirit. (Warning: I'm a hopeless romantic!)

In the story, we witness Ebeneezer Scrooge's transformation as a result of visits by three spirits who show him who he was, how he became who he is now, and who he has yet to become. No doubt a scary experience for anyone who might partake in such a ghostly journey!

Of course, you know that I'm not just writing to tell you about this story but about how it relates to the customer experience.

Have you taken such a journey for your business? What would you learn from each of these visits?

Ghost of Customers Past: Would he show you that: you've failed to focus on the employee experience? you've hired the wrong people? your company failed to be customer-centric and customer focused? your leadership is misguided? your customer experience was dreadful?

Ghost of Customers Present: Would you see a crumbling organization with high turnover, low employee engagement, dissatisfied customers, and executives who still don't get it?

Ghost of Customers Yet to Come (Future): Does your organization/brand end up suffering the same fate as Blockbuster, Kodak, Borders, or any of these other Ten Brands That Will Disappear in 2013?

Before it's too late, before another year begins, take that journey. Reflect on what has gone right and what has gone wrong with your customer experience this year and in the past. Begin with mapping the customer journey and taking a good, hard look at what happens at every step along the way. Believe me - if you haven't does this yet, it's an eye-opener!

Change your future now. Start putting a plan in place to change the course of your organization. It's no easy task, but taking a step in the right direction is where you must start. If you have skeptical leadership, have them read this post about Truly Human Leadership and watch Bob Chapman's TedX video. I think Bob could've turned around Scrooge's "Bah Humbug!" attitude in no time!

It is good to have an end to journey toward, but it is the journey that matters in the end. -Hemingway