Blog: customer experience

I recently attended a fabulous webinar sponsored by CustomerThink, part of their Social Business Executive Summit: How to Win in the Social Economy. The specific session that I am referring to is, "Best Practices to Create Online Communities to Engage Customers and Increase Loyalty." During this webinar, Jason Mittelstaedt from RightNow Technologies spoke about social media as part of the customer experience.

Jason mentioned that most companies who are engaged in social media (SM) strategy are taking a very silo'd approach rather than viewing SM as part of an integrated brand experience. So many marketers are worried about capitalizing on the social experience that this becomes an inevitable result - jumping on the tools because that's the easy part. Marketers know that they have to be a part of the conversation or they will be left out so they jump.

Not too long ago, a client with a leading edge reputation and revered loyalty program contacted me to discuss how we can help them re-affirm their direct marketing vision.  They are staffed with long tenured and notable marketers, but were seeking a fresh perspective of the initiatives and capabilities they might consider to drive the very best customer experience.

In a previous blog post, I shared thoughts on a book chapter Naras and I are in the process of writing.  I thought I'd follow up by focusing on one of the key external drivers forcing CMOs to take a hard look at their ecosystems.

Changes in Consumer Behavior

In the not-too-distant past, if you wanted to "buy" something, you went to a store (or several), evaluated your options and ultimately made a purchase.  Now, brick and mortar stores have become little more than distribution centers for people who have done their "shopping" online and want the convenience of picking up in-store.  Since 2000, online retail shopping has grown by 210% and accounted for a $130 billion market in 2008, according to comScore (SCOR).  And while in-store sales are declining, online sales are, in fact, growing.

Identifying customers’ Moments of Truth is a great place to start to build a program for improving the customer experience.  But, it's just as important to figure out how to determine which changes to the Moments of Truth you should implement and how you measure the success of each initiative. Customer Experience improvements need to be a ‘win-win’, meaning it should meet or exceed customer expectations, but should also pave the way for improvements to your bottom line.  To get the commitment for making changes, it’s as important to impress the CFO as it is the CCEO (Chief Customer Experience Officer).

NPR recently did a story on Blue Nile, an online diamond retailer, titled Digital Bling: Diamonds For Sale Online.  Blue Nile does not have any stores, and all purchases are made online, so how do they compete with traditional diamond stores when the sensual experience of evaluating diamonds is not available online?

We are all familiar with the typical social media platforms such as Facebook, Twitter and YouTube, but some companies are bringing social media in-house and reaping enormous dividends.  While shopping for some outdoor gear, I came across Backcountry.com and discovered a whole community of customers who were actively participating in the e-commerce site.  Almost every item I viewed on the site had a collection of reviews, comments, Q&A and customer-submitted photos.  Before purchasing a shirt, I was debating which size to get and decided to post a question to the "Product Wall" about whether it runs large or small.  Within an hour, I received an answer, not from a Backcountry.com employee, but from a fellow customer on the site who had purchased the shirt a week before.  Add to cart, checkout.

I recently started to look for a new set of golf clubs. As I traversed through all of the manufacturer websites, golf magazines, golf club reviews, golfing blogs, Twitter, and numerous Google searches, I realized that shopping for something has become more and more difficult. In fact, the complexity of making a purchase decision has by far surpassed the actual act of paying for and receiving the golf clubs. 

Unlike in 1985, when shopping and buying where one in the same and most often happened in one store with one sales person, 2010 is much different. Shopping and Buying are 2 very distinct processes that a consumer goes through, both of which need to be supported and nurtured. 

Recently, we had interesting conversation with the senior executive in charge of customer service at a major client of ours.  This client uses our Precision email product to communicate with their customers on service issues, such as outages, delivery, scheduling of service calls, etc.

Stayed at a hotel recently?  Each time I have I’ve noticed that the staff seem to be extra attentive, and my assumption is that it’s related to today’s extremely competitive market. Unfortunately, the extra attention has not always had the desired result.

Honda recently caught my attention with their new social media marketing campaign - "Everybody Knows Somebody Who Loves a Honda".  I found this particularly interesting because Honda is directing people to Facebook in order to participate in the experiment.  I could not recall another company of Honda's stature using a foremost social media platform for an official marketing campaign and customer engagement platform.  Interesting!

After visiting the page myself, I see that Honda has amassed an impressive network of 268,000 fans (as of Nov 2009).  Counting all of the fan's friends, this network reaches over 3.3 million Facebook users.

It's Friday night. If your household is like mine, this occurrence is synonymous with pizza and a movie, typically enjoyed in the comfort of our own home. Combining our infatuation with this magical combination of dough, tomato sauce, cheese and you-name-it in conjunction with the visual stimulation of a good flick somehow makes everything right.

Not too long ago, our pursuit of this objective involved a well-defined, perfectly timed-out process: order the pizza by phone, drive to the video rental store, select a movie, pickup the pizza, and return home with the spoils. But we live in a time of great change, when we constantly have to adapt, altering our routines to maintain, or even improve, the overall experience and perceived benefit.

One of the most annoying aspects of the customer experience does not have to do with the shopping experience but with the communication experience.    A constant refrain we hear from customers across the board (whether in B2B or B2C situations) is that they get too many calls or emails but often do not hear when there is relevant news that they are truly interested in.  On the other hand, a surprising (and dismaying) number of marketers still measure their productivity by the sheer volume of outbound communications (email, direct mail, calls, touches, etc.) rather than by the quality or even the relevance. 

I was at the gym this morning - a local establishment I recently joined - and was surprised by how cold it was inside.  I looked at the thermostat to find that it was only 56-degrees.  The individual at the front desk didn't have a key to the thermostat so I proceeded to workout, albeit uncomfortably.  As I was leaving, I saw one of the managers and informed her of my concerns about the environment.  Her response: you need to work a little harder then.  What?  I left, shocked and disappointed by her comment and thinking about my options (read: find a new gym).

In my line of work, we often discuss customer experience management (CEM) from a channel perspective.  How well does an organization present information on the Web?  What kind of customer information is the call center using to handle inbound requests?  How quickly does an email get answered? 

And yet, we know that solving channel complexities is only part of the equation.  Having a solid web strategy doesn't make you more customer-centric.  Treating your customers well all of the time does.  Forrester analyst Bruce Temkin calls it "obsessing about customer needs" and I agree.  No amount of technology can compensate for not putting the customer at the center of everything you do.  

That may be one of the toughest questions your organization has to answer.  A consumer might be completely satisfied with a brand, but does that mean she won't jump at a chance to save money, become more efficient, etc?  It can be hard to stay loyal when there are many options available, and simply providing world class customer satisfaction is no longer enough.

Walker Information Inc. recently polled consumers on the topic of loyalty.   Their research indicated "there's still a yawning gap between the percentage of people who say they're satisfied with a business and those who consider themselves 'loyal' to that business-intent on maintaining the relationship and continuing it into the future."  Jeff Marr, Vice President at Walker offered this, "Many companies have figured out how to deliver satisfaction, but they've not yet figured out how to earn loyalty anywhere near those levels."

On a recent vacation to South Florida, my friend and I decided to take a half-day fishing charter out on the high seas.  Through a little research, we found Capt. Stan of Weedline Fishing Charters in North Palm Beach.

Capt. Stan has a great reputation as an experienced fisherman and charter captain.  The photos on his web site show happy customers proudly holding up their catch.  As the day approached, we looked forward to sunny skies, calm waters and a great fishing experience.   One thing we hadn't anticipated was what was waiting for us.... 25 knot winds and three to five foot ocean swells.

Bruce Temkin, VP and Principal Analyst at Forrester Research and resident expert on customer experience, has developed a framework for improving customer interaction called "The 6 Laws of Customer Experience." These rather tongue-in-cheek "laws" actually provide a great deal of wisdom about the challenges organizations face in providing their customers with the best possible experience in their everyday interactions. In the past few blog pieces I have examined the first three laws:

1. Every interaction creates a personal reaction.
2. People are instinctively self-centered.
3. Customer familiarity breeds alignment.

Today I'll take a look at Law # 4: "Unengaged employees don't create engaged customers," or to put it another way: Customer Experience depends on Employee Experience.

In previous pieces I've spent time examining what Bruce Temkin, VP and Principal Analyst at Forrester Research on customer experience, calls "The 6 Laws of Customer Experience." These rather tongue-in-cheek "laws" actually provide a great deal of wisdom about the challenges organizations face in providing their customers with the best possible experience in their everyday interactions.

Today I'll look at Law # 3: "Customer familiarity breeds alignment."

Bruce Temkin of Forrester Research speculates that customer experience is impacted by six tenants or laws, which he tongue-in-cheek equates with the three laws governing physics. The laws are as follows:

1. Every interaction creates a personal reaction.
2. People are instinctively self-centered.
3. Customer familiarity breeds alignment.
4. Unengaged employees don't create engaged customers.
5. Employees do what is measured, incented, and celebrated.
6. You can't fake it.

It is axiomatic in marketing and customer management circles that it is much more difficult and expensive to acquire a new customer than it is to retain an existing customer.   Estimates range from five to fifteen times as expensive, depending on the industry and situation.   This is a reason why companies ought to pay more attention to nurturing current relationships and ensuring that customers feel valued, whether by providing a great experience or by other means.    Incidentally, happy customers can also be a great source of referrals and can help reduce the above mentioned high acquisition cost.

I recently had an experience with my car which perfectly illustrates the challenges that companies face in coordinating their actions to maintain loyal customer relationships. 

Here's my story ...

My lease was about to expire and I decided that since I had been very happy with my car, I would enquire as to the buyout price on the lease.  So I called the brand's financial services company and asked for the buyout amount.  When I heard the figure I tried to negotiate a little and asked if maybe they would give me a loyalty discount for sticking with their brand.  The answer I got was a robotic "I'm sorry sir that price is non-negotiable".

Each one of us is unique in his or her individual way.  These differences between one person and another add the "spice" to life.  Why is it, then, that most organizations don't recognize these differences and use this information to create customer strategies, experiences, and marketing activities that resonate?

Case in point: a co-worker and I are virtually identical - demographically.  We are both female, the same age, married, without children.  We both own a convertible sports car and our own home.  Our income, credit-worthiness, and interests are very similar.  Each of us travels extensively.  We subscribe to some of the same magazines.  We even live in the same town.  To most organizations, we would be considered "the same" and marketed to identically.  However - we are very different from one other in how we prefer to interact with organizations and buy their products.

A recent white paper authored by Bruce Temkin, Vice President and Principal Analyst specializing in customer experience at Forrester Research, introduces "The 6 Laws of Customer Experience" and rather tongue-in-cheek equates them with the three laws that govern all physics. The "6 Laws" are:

1. Every interaction creates a personal reaction.
2. People are instinctively self-centered.
3. Customer familiarity breeds alignment.
4. Unengaged employees don't create engaged customers.
5. Employees do what is measured, incented, and celebrated.
6. You can't fake it.

I got this email from US Airways today:

"On March 1, we're bringing back free drinks in our Coach cabin. This includes sodas, juices, tea, coffee and water on all US Airways and US Airways Express flights.   We believe in our pay-for-what-you-choose-to-use - or "a la carte" - business model, but it's a work-in-progress. We are committed to remaining competitive and that's the main reason we have decided to bring back free drinks.  You still have the choice to only pay for the things you want - like checked bags, Choice Seats or First Class upgrades. And, those services will continue to be free for our Preferred members" .

Okay, I've always hated the saying about eating your own dog food, but in this case, I think it's appropriate.  And if you're reading this, it means it got your attention! One of the basic tenets of our Customer Experience platform - and a differentiator for us - is that we examine the customer experience from a customer's perspective. So, it's only fitting that we ask our customers about their experience with us.  And now, with the launch of our new (and much improved) customer satisfaction survey, we have put in place a tool to help us understand and measure our customer's perspective of how well we understand and address their needs. 

Customer Experience Management focuses on building a consistent, integrated, relevant customer experience across all touchpoints that leverages customer insights to help enable an organization’s customer strategy. It is much broader and larger than just coordinating marketing messages out to customers. Many organizations are considering or implementing Customer Experience Management initiatives. However, as most of these organizations have found out, this is not an easy task. Consider the following real-life example:

We are living through historic times, with a new president and administration facing a wide range of challenges, not least of which is how to best shore up an increasingly fragile and volatile domestic economy. As decisions are made regarding what policies should be implemented, the Obama administration will begin to examine the impact of their options on many levels. Understanding the best balance between short-term results and long-term value is something businesses do as a matter of course, but which poses unique challenges for non-profit and government organizations.

Many organizations have begun to look at their customer experience with an eye toward increasing the efficiency of their marketing, sales and service efforts while minimizing costs. This can be very effective.

However, organizations that want to maximize their customer experience management activities need to look beyond a “one size fits all” mentality when it comes to the customer experience and incorporate customer intelligence and strategy into the delivery of the customer experience.