Friday, August 29, 2014

The Problem Solving Process - Step 3: Selecting a Potential Solution

Continuing with the example of the long line-ups at the cashier, depicted in the August10th post, let’s focus on how the retailer might go about resolving this problem.  After studying the Fishbone Diagram (see below), the cross-functional CX team has decided to start the problem resolution process by addressing two items : 1) the store’s floor plan at the cashier space; 2) the scheduling of cashier staff.  How did they go about selecting these two areas as the starting point?  

Using the Fishbone Diagram to guide their strategic thinking, the team took the following approach:

  • What is the goal or aspiration?  To improve the customer’s shopping experience by providing an efficient method to pay for the items they’ve purchased.  Notice that the wording here is specific to a particular issue (paying for items purchased), yet general enough to allow for various potential solutions (“by providing an efficient method to pay…”).

  • What’s preventing us from reaching our goal?  As identified in the Fishbone Diagram, there are three potential obstacles: 1) the cash registers; 2) the expertise and / or availability of the cashier staff; 3) the store’s floor plan.

  • Which obstacles should we address such that the resolution comes with the lowest cost and correspondingly highest benefit?  This is an important concept because you’ll want to start your problem resolution by getting the most bang for your buck.  In this case, for example, it may be tempting to jump straight into the purchase of more technologically advanced cash registers, or perhaps consider using a mobile point of purchase application.  These potential solutions, however, likely come with high price tags, and may in fact, not result in the best outcome from a customer experience perspective.   When faced with several potential solutions, taking an iterative approach is prudent.  Select the obstacle or problem whose potential resolution comes with the least cost (time, resources, budget).  Design and evaluate the solution, and then determine whether this results in an improved customer experience…how do you do this?  We’ll address this question in an upcoming post which will discuss the closed-loop customer feedback approach in more detail.

We’ve now identified some potential causes of our store line-up problem, analyzed these causes in greater detail using a Fishbone Diagram, and most recently, selected a couple of possible solutions using the criteria of least cost and highest corresponding benefit.  In the next post, we’ll continue with the solution stage by looking at some tools that can be used for designing new processes.  Following that, we’ll then wrap-up our problem-solving process with a discussion on using customer feedback to determine if they think the solution we’ve developed is doing its job.

Saturday, August 16, 2014

Forrester’s Next-Generation Customer Experience Index

Let’s take a break from our recent series of problem-solving posts to familiarize ourselves with Forrester Research’s recent enhancement to its Customer Experience Index (CXi).  

Recall from previous posts that we introduced a couple of simple and preliminary measures to consider when establishing your company’s customer experience initiative.  As mentioned in those posts, no satisfaction measure in and of itself, is a slam-dunk indicator of how your customers assess their experience with your organization.  Indeed, this blog strongly recommends that the measurement method for your customer experience initiative adhere to the following two guidelines: 1) regardless of which metric or metrics you select, the measurement must occur on an ongoing and consistent basis, and it must be directed to a widespread sample of your customer base.  Sporadic measurements and / or surveys sent to a limited number of customers will be of little use in supporting your CX strategy and tactics, and consequently, will be a waste of resources (i.e. your budget).  2) Relying on a single survey metric is dangerous.  In a previous post, for example, we looked at an MIT report that was (rightly) critical of the often catch-all “rate your satisfaction” type of question.   As we’ll discuss in more detail in a forthcoming post, your CX activities need to be informed by a measurement framework that is rigorous enough to capture the various facets of customer feedback at key points in time, while also being intuitive such that it’s understandable to those in your company who are not familiar with consumer research.

Let’s now turn our attention to Forrester’s recent introduction of its updated CXi.  Forrester introduced the original Customer Experience Index in 2007.  To quote Forrester, “That original CXi successfully captured the essence of customer experience quality (emphasis mine): how customers perceive their interactions with a company…” (1)  The original index contains three related metrics: how effective the brand is at meeting customer needs; how easy it is to do business with; how enjoyable was the experience.  I personally like this index because it captures both the left brain component of an experience (ease and met needs) with the desire of the right brain (an enjoyable experience).  According to Forrester, the next generation CXi “…measures how well a company delivers customer experiences that create and sustain customer loyalty.” (2) 

The enhanced Customer Experience Index purports to link the customer’s experience with the resulting loyalty (and revenue, or lack thereof).  It does this by deconstructing loyalty into three components - retention, enrichment, and advocacy - and then using an index made up of the 3-E’s 1) Effectiveness - did customers get value from the experience; 2) Ease - did customers get value without difficulty; 3) Emotion - did customers feel good about the experience.  

To add rigour to the CXi, Forrester assigns a weighting to each of the E’s based on the relative importance to specific industries.  Companies in the entertainment industry for example (amusement parks, theatres) would have a relatively higher weighting associated with the Emotion component of their CXi, reflecting the “feel good” nature of these experiences.  

The calculation of the index itself is relatively straightforward.  For each of the E’s, subtract the percent of bottom box responses (e.g. a 1 and 2 on a 5 point scale) from the percentage of top box replies (4 and 5).  Then, sum the result from each metric and divide by 3 to get a raw index number.  From this, Forrester would apply its proprietary industry related weighting mentioned in previously.  

I suspect that Forrester’s Next-Generation Customer Experience Index will be a significant contribution towards the continuous advancement of CX in many organizations.  We’ll visit the CXi again in an upcoming post on designing your framework for measuring customer experience.

Introducing Forrester’s Next-Generation Customer Experience Index, June 26, 2014.  Forrester Research Inc. Page 2.


Sunday, August 10, 2014

The Problem Solving Process - Step 2: Analyzing the Problem

As mentioned at the conclusion of the previous post, analyzing a customer experience problem is best done in a group setting with individuals who are in some way involved with the issue under discussion.  A typical “gap” that’s causing customer dissatisfaction will likely consist of numerous components that may or may not be obvious upon initial inspection.  That’s why a cross-functional team, with representation from throughout the organization, is critical in both developing a thorough understanding of the problem, and in devising an effective solution.

For this post, let’s look at two analytical tools: the Five-Why’s, and the Fishbone Diagram.  

The Five-Why’s is a component of Kaizen, the Japanese manufacturing process that focuses on continuous improvement.  Underlying this tool is the idea that the root cause of most problems can be identified by asking 5 why questions in succession, with the source of the problem typically apparent by the fourth or fifth question.  

Let’s use the customer problem illustrated in the diagram below to work through a five-why analysis: a retail store is experiencing extended line-ups at the check-out counters, resulting in customer complaints.  Starting the five-why’s might proceed as follows: 1) why are there long line-ups at the check-out counters?  Because the cash registers require that the cashier manually input the price of the item; 2) why do we have cash registers that require manual input?  Because previous budgets have not included a provision to upgrade the check-out technology.  3) why have we not budgeted for an investment in new check out technology?  Because lower than expected revenues and higher than expected costs have not allowed for sufficient funds for technology investment; 4) why is the company’s fiscal position such that we cannot make these needed investments?  Hmmm…this seems to be a logical question, but is this line of inquiry really getting to the root cause?

We could start our five-why’s with a different focus…1) why are there long line-ups at the check-out counters?  Because the cashier staff is generally slow and prone to making mistakes;  2) why are the cashiers working slowly and making mistakes?  Because they generally don’t have the ability to enter items quickly and accurately;  3) why do they seemingly not have the competence necessary to process purchases quickly and accurately?  Because they haven’t been provided with adequate training.  4)  why haven’t they received sufficient training?  Because their isn’t sufficient budget to design a proper training course;  5) Why isn’t there sufficient budget? Because lower than expected revenues and higher than expected costs have not allowed for sufficient funds for training investment.  Hmmm, once again, we’ve proceeded through a series of questions, but have not identified a persuasive root cause.  This illustrates some of the limitations of the five-why’s tool.  Specifically, it’s not terribly effective in situations such as this where there may be multiple root causes underlying a specific problem.  

Generally, the five-why’s work best in a well defined linear process that contains a logical beginning and end flow.  This is typically the case in a manufacturing environment, and perhaps explains why the tool is popular in these settings.

Customer experience issues are generally not as straightforward as those encountered in an assembly plant.  CX problems typically include multiple stakeholders, and potential root causes, and thus lend themselves to a more involved tool.  To illustrate this, have a look at the fishbone diagram below.  The basic idea behind a fishbone diagram is to think of all the possible perspectives of a particular problem, and then identify as many viable components as possible that are associated with that particular perspective.  In the fishbone below, for example, 3 potential perspectives have been identified with our cashier line-up problem.  These perspectives are technology, staffing and personnel, and the physical space of the store.  For each perspective, several associated components have been added…this provides a robust perspective of the complete environment of our problem.  Remember, our problem solving team is ideally a cross-functional representation from throughout the company, so each member should be able to offer a substantive contribution representing their particular perspective.  Ultimately, this should result in a well thought out solution.

As you can see, a well designed fishbone diagram requires a fair amount of work and brainstorming, but the resulting illustration should make it a bit easier to organize thoughts and effectively resolve the problem at hand.