Saturday, April 26, 2014

Delighting the Customer - or Not!

The best laid schemes of mice and men / often go awry. --- Robert Burns

After completing your initial assessment and detailing your first SWOT analysis, you may now be chomping at the bit to tackle what you think are the most significant customer experience issues facing your organization.  Perhaps you want to address an area of underperformance relative to a competitor, or your company’s executive is pushing you to develop a “wow” experience that will surely result in customers loving your company and buying more widgets.  These may indeed be worthy CX aspirations, but I’m going to suggest that before going there, you first give some thought to one of those $64,000 CX related questions...why do customers defect from your company?  Or, the converse of this question, why are customers loyal?

In their excellent book, The Effortless Experience, authors Matthew Dixon, Nick Toman and Rick Delisi make the convincing case that, “...the Holy Grail of service isn’t delight, but customer relief.”  “The truest test of a company’s ability to delight,” they go on to say, “ when things go wrong.”  In a survey of 97,000 consumers who purchased products or services from over 400 companies around the world, Dixon and his co-authors found that, “there is virtually no difference at all between the loyalty of those customers whose expectations are exceeded, and those whose expectations are simply met.” (1)  That’s a profound finding for several reasons, perhaps most notably, because it implies that spending time, effort, and usually (big) money to develop a “wow” experience, may not be so beneficial after all.  As a corollary to this, the authors say, “...basic competence, professional service, , getting the fundamentals turns out that these things really do matter, maybe even more than we’d led ourselves to believe.”

My epiphany in reading The Effortless Experience came from this quote on page 23, “...we pick companies because of their product (or service, or brand, or price - my addition), but we often leave them because of their service failures.”  On the surface, this seems plainly intuitive, but think again about the organizational tendency to assess things relative to the “wow” experience.  In other words, I would venture that many companies think their customers defect (if they even think about defection at all) because they just aren’t providing enough memorable, fireworks exploding, champagne popping experiences.  Dixon and company conclude that, “...the specific things [companies] do to drive disloyalty among customers are largely associated with the amount of work - or effort - customers must put forth to get their issues resolved.” [emphasis mine]   

Following on the idea that making customers work leads to disloyalty, the authors introduce the Customer Effort Score.  The CES is phrased as, “The company made it easy for me to handle my issue,” and uses an agree / disagree scale of 1 to 7, where 1 is very low effort and 7 is very high effort.  We’ll explore CES and other satisfaction metrics in future posts.

These gems from The Effortless Experience serve as the basis for my advocating the critical need to establish a robust and ongoing customer feedback system before venturing out to tackle other potential CX initiatives.  If designed and used well, such a system should serve as your organization’s foundation for addressing the “service failures” that Dixon references as the principle reason for customer defection.  We’ll begin developing our system in the next post.

Sunday, April 20, 2014

Your Organization’s Customer Experience Maturity

In their highly recommended book, Outside In, Kerry Bodine and Harley Manning introduce the concept of identifying a company’s level of customer experience development or maturity.  The idea is a simple one, with maturity proceeding along a vertical axis from Improve to Transform and finally to Sustain.  Over time, the company advances from one stage of maturity to the next, with each passing stage being substantively different from its predecessor. 

In the first several posts of this blog, we’ve completed an initial qualitative and quantitative based initial assessment of your company’s CX activities.  Based on this evaluation, you should now be able to plot where your organization stands on the maturity spectrum.  Here’s a brief summary of Bodine and Manning’s idea as taken from Outside In...

Stage 1 - Improve
“In this first phase, organizations focus on finding and fixing customer experience problems.  Done right, the Improve phase is a great starting point because it produces steady, incremental advances to the experience over time.  This progression creates economic benefits like cost savings and increased customer loyalty.”

For this blog, we’re going to assume that your company is currently in the Improve phase, and we’ll devote the next several posts to developing a rigorous find and fix methodology that will serve as the foundation to your organization’s CX initiative.  This idea of a find and fix methodology can’t be emphasized enough, as without it, any other CX efforts risk being less than optimal.
For now, have a look at your assessment notes and ask, “ the company in the Improve stage where problems are being found and fixed, or is CX advanced beyond this phase?”  You may also want to consider whether your company is even at Stage 1 the organization in fact routinely identifying and resolving persistent customer issues?

Stage 2 - Transform
In the Transform phase, Manning and Bodine write, “...companies focus on adopting the six disciplines of customer experience (Strategy, Customer Understanding, Design, Measurement, Governance, and Culture).  Their goal is to stamp out the root causes of customer experience problems by changing the way they operate.”  They go on to say...”the point of the Transform phase is to create an environment in which mistakes don’t happen in the first place.” 

Again, thinking about your initial assessment, can you comfortably say that your company is routinely practicing Bodine and Manning’s six CX disciplines?  After a series of Improve posts, we’ll turn our attention to the all important Transform phase.

Stage 3 - Sustain
To again quote from Outside In, “When you routinely perform the practices in the six disciplines, you’ll consistently deliver the customer experience that you want to deliver.”  In addition, “...the obvious benefits of the Sustain phase...include reduced customer service costs because customers will have fewer problems to resolve.”

In the next post, we’ll begin “at the beginning” and assume your company is just starting off in the Improve phase.  We’ll start with a discussion on designing and establishing a closed-loop find and fix system that will serve as your organization’s CX foundation.

Outside-In, by Kerry Bodine and Harley Manning

Monday, April 14, 2014

Making Sense of Your Initial Assessment - Part 2

In the first part of our assessment, we tied together in a one or two page format, the key findings from the quantitative and qualitative portions of the initial investigation.  Your review of recent survey results, coupled with your interviews with various stakeholders, should provide a fairly high-level understanding of where the organization is performing well in serving its customers, as well as identify areas where the customer experience is deficient.

Let’s now take a bit of a deeper dive in our assessment.  You’re no doubt familiar with the SWOT analysis - Strengths, Weaknesses, Opportunities, Threats - but you may not be benefiting completely from this useful tool.  Many SWOT analysis are completed as a catch-all with the emphasis on trying to find as many strengths, weaknesses, threats and opportunities as possible.  When trying to work this, the result is often “paralysis by analysis” because the SWOT items are random entires with no real context.

Instead, before completing the initial SWOT, I suggest completing an initial Moments of Truth (MOT) exercise.  Gather your assessment notes and review them through the frame of “...what are those key make or break interactions customers have with our company that must be executed flawlessly, or else?”  I suggest, at this point, generating a list of 5 to 7 MOTs culled from your assessment notes.  As you proceed with establishing your organization’s CX strategy and framework, you’ll likely add, delete or modify these MOTs, but at this initial stage, you want to build on your assessment by developing an initial hypothesis to guide your strategy development.  How do you go about identifying these Moments of Truth?

A useful “rule of thumb” that may serve as a “North Star” in guiding an organization’s CX is the following.  A customer typically purchases your product or service because of the brand, and its various associations (e.g. luxury, quality, design, etc.), or because of price and value.  They continue purchasing because these initial expectations continue to be met.  Customers cease to do business with a company because the accompanying service fails to resolve any issues they may be having.  A common example may be a restaurant with great food, but poor table service.  Eventually, most customers can tolerate only so much in the way of say, mixed up orders or slow service, and trade off to another restaurant where the food may not be quite as tasty, but the service is first-rate.  In this case, the restaurant, has two MOTs...the meal itself, and the accompanying service...these are both “make or break” touchpoints that must have a first rate execution.  In general, Customer Experience focuses not so much on the consideration and purchase activities, but more so on those touchpoints that occur once a customer has purchased your product or service.  At least initially, in your CX journey, you'll want to focus on the latter before turning your attention to the experience of your prospects.

Once you’ve identified your initial MOTs, proceed to rate them based on your organization’s performance.  Again, go back to your assessment notes, and you should be able to find factual evidence (e.g. survey scores, or comments from your interviews) to support your ratings. Use a scale of 1 (poor) to 10 (excellent) for each of your MOTs.  In our restaurant example, the meal might receive an 9 or 10 rating because customer feedback about the food is always overwhelmingly positive.  The service, however, may receive a 5 or less because it’s a frequent source of complaint.

Now you’re ready to develop an initial SWOT that links with your MOTs.  Remember that Strengths and Weaknesses are internal to your company.  Let’s refer to the assessment presented in the April 7th post.  Recall that we uncovered an area of customer dissatisfaction for widgets shipped to specific stores in the North Region.  Customers purchased widgets that were damaged as a result of inadequate storing capabilities in the North Region warehouse.  So, we can identify one MOT in this instance...the customer’s initial unpacking and use of the widget.  The storage of the widgets prior to shipment would be a related “support point” for this particular MOT.  Weaknesses are, by definition, internal to the organization.  In this case, we can now list the delivery of widgets to the North Zone as a weaknesses,  that is directly related to a customer’s Moment of Truth.  Continue proceeding with this initial listing of Strengths and Weaknesses and try to assure that these are in some way tied to a Moment of Truth.  You’ll then have a starting point for subsequently developing a more comprehensive SWOT when you begin the development of your CX strategy.

Turning to Opportunities and Threats, these are generally external to your company.  While you may have come across some items to put in these categories from the qualitative portion of your assessment, it’s likely you’ll also need to do a bit more research on your own to uncover those that are truly relevant to your organization’s customer experience.  Generally, Opportunities can come from new technologies, products or services your company may be developing, new markets or customer segments, or new a new business model that your company can exploit.  Similarly, Threats can come in many ways,with some of the most common in the form of new products and services introduced by your competitors, disruptive technologies that may allow your customers to be served in a new way, or government regulations that may hinder your ability to conduct your business and serve your customers.  We’ll talk about these in future posts.

For now, you’ve hopefully assembled a reasonably robust initial assessment that should provide you with a 15 to 30 thousand foot view of your company’s current CX situation.  In the next few posts, we’ll begin extrapolating from this assessment and getting a bit more into some details that will then lead us to developing our initial strategic direction and choices.

Monday, April 7, 2014

Making Sense of Your Initial Assessment - Part 1

To recap what we've done so far.  Starting with the numbers, we got our hands on any recent survey results we could find.  Although your company may not have access to these, we assumed for the purposes of this "case study" that your organization collects both internal and external sources of quantitative data.  We defined external external data as "industry" surveys usually conducted by third parties, who in-turn sell the results to their participating subscribers.  All respondents receive the same questionnaire, and these surveys allow you to see how your company ranks against your industry peers across a variety of customer experience metrics.  Internal quantitative surveys, on the other hand, are directed exclusively at your company's customers, and are typically based on your organization's unique questionnaire.

Once we gathered some initial CX-related numbers (e.g. customer satisfaction, Net Promoter Score, and perhaps other product and service measures), we set out to gather qualitative customer experience input.  This hopefully came from a couple of broad sources: 1) formal focus group research of your company's customers and prospects; 2) your own interviews with various internal staff.  This group may include, for instance, front-line customer serving personnel, call-center representatives, and possibly your company's vendors.

I'm now going to suggest a potentially useful approach for assembling your information and beginning to draw some preliminary insights.  The suggested template presented here contains some simplistic information, and your data may be more complex.  The point here is not to focus on the fictitious data, but rather to focus on the key take-away of this approach...the connections between quantitative and qualitative information, and the corresponding insights.