Customer Experience Strategy

Another in my 140-word series.

As customer experience professionals, we often conduct customer surveys that primarily ask customers to provide answers from a defined set of response options. While I do believe we need to do more qualitative, ethnographic research, I want to take a different direction with this post.

Instead, my hypothesis is that our focus on closed-end survey questions leads us to ask "bad" questions outside of surveys. This hit me as I read this summary of Killer Questions by Phil McKinney. Good survey questions basically ask customers to confirm or disconfirm a hypothesis (our support is great, do you agree or disagree?). These questions are fine in a survey, but we need to use more investigative, Socratic questions within our organizations to drive the learning and innovation necessary to create the customer-focused strategies our companies need to thrive in the marketplace.

Every year, aquatics centers offer American Red Cross lifeguarding classes. They train lifeguards to act with speed and confidence in emergency situations both in and out of the water. Training covers critical areas, including water rescue skills, surveillance and recognition, first aid, breathing and cardiac emergencies, CPR, AED and more.

The value of that preparation was reinforced at the 2012 American Red Cross of Greater Indianapolis Hall of Fame. A group of lifeguards was honored for turning their training into action -- by running to the scene of a fire at an assisted living facility for seniors and people with functional needs, breaking out windows to rescue trapped residents and also providing first aid. Having the advance training prepared the lifeguards to take action and help.

When thinking about your customer strategy, have you ever considered the value that could be realized by your Voice of the Customer program simply by training and preparing your teams to respond to customer feedback? 

For example, a membership organization that is getting ready to launch a member relationship assessment will first prepare their team on how to respond to feedback. They plan to contact selected members each month, asking them to provide feedback in advance of the membership renewal period. The goal is for Retention Specialists to be equipped to respond to feedback, making any adjustments needed to extend and expand the relationships.

In preparation for this activity, the Retention Specialists will be trained on how to respond to the VoC feedback prior to the launch of the program. Through the training, they will be made aware of the initiative, understand what the feedback means, and what they need to do about it. Having that advance preparation will set the stage for the team to respond to feedback and take action to improve the customer experience.

Is your team ready to break through glass to help your customers? 

Kitty Radcliff
Vice President

While Channel Partners are customers too, unlike the traditional customer, partners are able to provide a unique perspective. When it comes to Voice of Partner versus Voice of Customer survey research, consider these four differences:

1 - Many Channel Partners sell competing products and services giving them a unique perspective on what drives customer purchase decisions. Their input can help companies understand what causes a customer to purchase one product over another competing product.

2 - In a similar manner, OEMs can use partner input to understand what drives a partner to recommend one product over another.

3 - Many partners are combining an OEM's products with other products to deliver a complete solution. Having a better understanding of solution offerings, can be valuable input for the product group.

4 - Customers who purchase from a channel partner often go to the partner for support. Partners can provide a unique perspective on what is needed to support the indirect customer. This input can also be leveraged for serving the direct customer.

Corporate business strategy can benefit from insights provided by the channel. The partner perspective can be used to grow market share, enhance the product roadmap, and deliver an experience that both direct and indirect customers value.

If you are working to create a customer focused leadership position, consider including the perspective from all customer types.

Photo credit: stevendepolo

What do the cloud, social media, and lean innovation have in common? Each are impacting voice of the customer programs and changing the way we measure, manage, and deliver an exceptional and differentiated customer experience.

Cloud computing: The cloud changes the way customers buy products. Customers move from product ownership to product subscription. In doing this, the switching barriers are lessened for the customer and the company is rewarded with recurring revenue. Cloud-based companies need to adapt their voice of the customer program to focus on predicting customer renewals.

Social media: Customers don't need to wait for a company to conduct a customer survey research program to share their thoughts and feelings. With social media, customers have channels to share their feedback with the company, not to mention their closest friends, fans, and followers. Companies are reacting to this trend by monitoring the discussion and engaging in the conversation on public and private social media forums. This has resulted in a voice of the customer platform that companies are still trying to understand.

Lean innovation: Have you ever thought that product development happens in a bubble with engineers, scientists, and innovators isolated in a building and left to their own devices? This paradigm is shifting and the voice of the customer is becoming more important throughout the product development cycle. In this article, Ravi Aron, senior fellow from Wharton's Mack Center for Technological Innovation implies, "[Lean] begins its journey when an organization attempts to hear the voice of the customer." As the innovation process looks to adopt lean principles to reduce time and costs, one essential ingredient is the customer perspective, putting the customer perspective in greater demand.

In a world where the only constant is change, our voice of the customer programs must be adaptable to support our ever changing customer retention strategies.

In this video, Allison Melangton, CEO of the XLVI Super Bowl Host Committeee, shares some of her lessons learned while planning and organizing the 2012 Super Bowl.

Allison's advice serves as a nice reminder for those in charge of developing and executing customer retention strategies. Consider these tips:

Be Bold: Allison says, "If you really believe in something, be bold about it, even though you might have some doubters." Are your customer strategies bold? If not, why?

Make it Different: Allison talks about how they decided to use a different approach to submit the bid for the Super Bowl. Instead of sending the bid to the NFL owners via UPS, they decided to have 8th graders deliver the bid. Are your customer retention strategies unique or are you delivering the same customer experience as others?  

Don't Let Logistics Stand in the Way: As a customer strategist, we often face logistical challenges such as, how are we going to train our entire sales organization, or how can we get the right customer names and contact information for our customer survey research program. We can no longer let logistical challenges stand in our way. What logistics are holding you back?

Focus on Your Strengths: Whether or not someone tells you that, "all of your work is self-inflicted," we must focus first on our strengths. What strengths are your customer retention stratgies focused on?

How does your company operate? Are you “winging it” or do you have a plan and a process to get things done?  

According to urbandictionary.com “winging it” means to improvise with little preparation.

There may be successful companies that don’t plan much. But in my experience, without a plan and process to improve the customer experience - nothing happens. 

Companies are much more likely to achieve their goals when their systems and processes work together. This was recently reinforced when a business colleague shared a successful example of using customer feedback in a very tangible way. 

• The VOC program identified issue resolution as a priority area for the support organization. Open case age was over 50 days. A customer could easily get lost in the shuffle. Eventually many had to call in again and start all over. (How frustrating would that be?) 

• The team put a big focus on managing and reducing open case age in their action plan. They created global visibility around the issue and built accountability into the process. (No winging it here!)

• As a result, open case age has dramatically declined. The customer experience is better and customers are more satisfied with the time it takes to resolve issues. 

Case age has been reduced by 67%, but they’re not done yet. The team is working to reduce it even more - and they will. They have the discipline to stick with the process and make a difference.

“Winging it” usually isn’t enough to execute a customer focused strategy. Aligning the customer results effort with process improvement is critical to your success. 

Kitty Radcliff
Vice President, Consulting Services

As a customer strategist, your role is to help your organization listen to customers and develop customer strategies that will help to earn more from customer relationships. (e.g. Strengthen customer loyalty. Retain customers. Attract new customers. Grow market share. Develop new markets. Be innovative.) It’s a big responsibility. As a result, it is important to have the required knowledge, experience, and expertise. 

But, what if you don’t have all of the answers? Our culture often sets the stage for people to feel compelled to give the impression they have all the answers - even when they don't. Despite that cultural phenomenon, I am starting to see signs where vulnerability is valued.

·         In the book Getting Naked, Patrick Lencioni challenges service providers to be, “completely transparent and vulnerable with clients in order to overcome the three fears that ultimately sabotage client allegiance.” 

·         A recent Harvard Business Review - Management Tip of the Day encouraged readers to, “Admit you don’t know all of the answers.” 

·         Steven D. Levitt made the case that it can pay to say, “I don’t know,” on the new Freakonomics Radio Podcast.   Pretending to know the answer to something can be destructive and makes it impossible to learn.

Of course one can’t use this approach all the time. But surely, no one is fooled into thinking we always have all of the answers…

Kitty Radcliff
Vice President

Have you ever had a two-by-four moment? By that, I mean an “a-ha” experience. It’s like someone hit you with a two-by-four and all of a sudden you have clarity about the situation. You see things in a brand new way.

Recently an executive of a leading U.S.-based distribution organization had a “two-by-four” moment when he reviewed their Customer Loyalty results. His company is pursuing a growth strategy, with the goal of increasing profitability and sales. In an effort to better understand the market position, the VOC initiative included a measure to gauge share of wallet. On first glance their results are extremely positive. They have the vast majority of their customers’ business.

But, wait a second. There is a small portion of business that is going to the competition. That share of business going to the competition is increasing. Furthermore, when you translate the amount of business that is going to other organizations into lost sales – here it comes – they are missing out on hundreds of millions of dollars in potential revenue.

The two-by-four moment: They left money on the table by not pursuing all potential business with new customers.

·         When acquiring new customers they targeted the core business, obtaining about 90% share on average.

·         Over time, their share of wallet eroded as the customer grew relationships with other providers (e.g. down to 80% SOW within five years).

Are you maximizing relationships with your customers?

Kitty Radcliff
Vice President

It’s official.  I’ve been spending too much time in the world of IT. 

How do I know?  Because several weeks ago I blogged about BIG DATA, and today… today I’m blogging about the cloud.

Now, it seems like everybody has their own definition of what the cloud is, but most can agree that as customers shift more of their operations to a cloud environment their behaviours and usage patterns will become more transparent to the suppliers of the chosen cloud solution.

For customer experience and strategy professionals, this is great news… because it means a host of customer-specific operational and usage data becomes available to us, and we can start to make the connections to customers’ perceptions of their experiences.

The benefits will be many, including:

• Better experience-based profiling of loyal and at risk customers
• Improved predictability of future behaviour based on usage patterns and evaluations of that usage
• More targeted identification of the weak points of the experience, enabling more focused improvement activity
• Proactive intervention in experiences profiled to become negative
• Identification, celebration, and cloning of the ‘bright spots’ – those profiles where experiences are most favourable

And ultimately, the ability to drive happier, more loyal customers, which means a more secure overall business even in the cloudy face of change.

Serving customers in a way that creates a loyal following is hard. Add in the complexities created by an indirect go-to-market strategy and the degree of difficulty rivals the reverse 4 ½ somersault in the pike position (4.8 out of 5.0).

Why is such a strategy difficult? The main reason is that many of the actual interactions with the customers are conducted by your channel partners, not by your people. It also creates a more complex relationship comprised of several relationships as shown below.

There are several companies that have built a strong channel and leveraged that go-to-market strategy to drive revenues and create market expansion. Here are some of the ways in which these companies have created a strong customer experience with indirect customers.

1.      Listen to your customers. It doesn’t matter so much whether the customers are served directly or indirectly, their demand is still driving your revenues. A strong Voice of the Customer program helps understand the customer experience from their perspective. Make sure to share the feedback and insights with your channel partners—much of the action and follow-up required might come from the partners themselves.

2.      Listen to your partners. Lots to learn here. First, how can you improve the experience of partnering with you? How can you make it easier to work with you? How can you build a preference for your brand? How can we drive more business together, benefiting both our businesses and growing our market share?

3.      Listen some more to your partners. Your partners are dealing face-to-face with your customers and they are learning from your customers every day. They are learning what it is like to experience your products, what unmet needs they have, and how they interact with your partners. These insights can help us to create the consistent experience we know customers thirst for.

4.      Treat your partners like customers. I know we don’t think of them this way, but channel partners are customers. We sell to them (and through them), we invoice them, we collect from them. While they are a conduit to the ultimate customer, they buy from us and help us drive revenues. We need to treat them like customers and focus a little attention on them. Part of being customer-focused is being partner-focused.

The best way to deal with complex situations is to break them down into manageable pieces. Eat the elephant one bite at a time. In this case that means understanding all aspects of the channel and understanding how we interact and create an exceptional experience for channel partners and customers.

This is the fourth part of our ongoing series designed to understand some of the dynamics that help explain how companies in the Walker Index outperform the market by over six-to-one. So far, we have explored the dynamics of Relevance and Alignment, Team and Resources, and Information Gathering. In this entry, we will focus on the role that Communication plays in supporting and reinforcing the customer listening process.

Mary Young and James E. Post published an article in 1993[1] that outlined the approaches that world-class companies use in communicating with employees. Even though the article is a bit dated and focuses on employee communication, the content is still quite relevant. Moreover, I would make the argument that the principles work equally well when considering how to communicate with customers.

The eight approaches outlined by Young and Post were as follows:

1)      The CEO’s role as communicator – Young and Post make the case that the CEO has to not only be the chief communicator, but also must be a believer in communication. Those who excel in this tend to have frequent communication, reinforce their vision, are good listeners, are willing to answer tough questions, and are more disposed to quickly responding to sensitive topics.

2)      Walk the talk – If you talk about being committed to customers, make certain your actions reinforce that – for example, make certain your infrastructure is designed to serve customers effectively, and make certain you view your processes from the customers’ perspective.

3)      Be Open to Two-Way Dialogue – Surveys and other listening methods are a good way to start gathering the perspective of customers, but customers want (and expect) more. In an age of Twitter, Facebook, and other social media outlets, customers expect a two-way dialogue. At a minimum, be certain you are communicating back what you learned, what your action steps are, and when customers can expect to see improvements.

From an internal employee perspective, be certain that employees have an outlet to share their thoughts and ideas on how to improve. This personalizes the experiences for the employee and helps them to see how they can contribute to the bigger picture – plus, from an execution perspective, employees will often be able to identify with the issues the customers articulated and will often have thought of possible countermeasures to address those issues.

4)      Face-to-Face Communication – Customers want you to close the loop and to do it in a way that is personal; when possible, a face-to-face session can help to not only address issues that you have learned about that particular customer’s experience, but can also have an ancillary benefit of providing a framework for strategic account planning.

Employees, too, want to engage in a face-to-face conversation. Given geographic dispersion of companies, it may not be feasible (or cost-effective) to have the CEO (or Chief Customer Officer) visit every single location; however, the management of each location can and should endeavor to engage in a face-to-face communication process to ensure the core messages are being sent and to engage in the two-way dialogue that Young and Post recommend.

5)      Having a Shared Plan of Communication – While the CEO can be the chief communicator, it is incumbent that all employees be aware (and committed to) the key messages you wish to send to customers. This means that a rigorous, detailed plan of communication should be developed to ensure messages are reinforced in a consistent manner at the level that makes the most sense. One method in a B2B context divides the core messaging between two groups:

Senior Management – Addresses the “why,” “what,” and “when” of changes customers can expect related to strategic initiatives that emerged from a customer listening program

Account Managers – Address the “who,” “how,” and “what” of the changes – in other words, those that are generally more focused at a customer vs. systemic level.

6)      The Bad News/Good News Ratio – It is tempting to focus only what is working well; however, if you focus on only the positive, it can suggest that you did not hear the pain points that customers are experiencing, which can further imply that you are not really customer-focused. So, you should plan to share some of the less-than-stellar feedback – it will not only illustrate that you are listening and that you are intent on improving, but it will also make the good news more believable.

7)      Tailor the content to the audience – When communicating, it is important to consider who your intended audience is, what their needs and expectations are, and what methods work best in communicating with them. Even within an account, there are often different strategies for communicating – for example, the way you communicate with your client’s CEO will no doubt be different from how you communicate with your front-line contacts.

Also realize that your employees are a target audience as well. This means making certain you are communicating a consistent set of core messages both internally and externally in ways that best resonate with the unique stakeholder groups.

8)      Communication is a process, not an event – Young and Post suggest that companies migrate from communication being a transactional event that is focused on tactics to building a focus on process and strategy. They further recommend that firms focus on some specific aspects in this process:

a.       Communicate the what, why, and how – Tell a comprehensive story in order to set the expectation of what will occur from this point forward.

b.      Be timely in communicating – This is more important in our fast-paced, highly connected environment of today than it was when this article was published in 1993. It is better to communicate in a timely fashion, even if that means you do not have all the answers. Not doing so risks a loss of engagement and trust from your customers.

c.       Continuously communicate – This is particularly important if you are being timely in your communication – new information and details will emerge, which means you should communicate that not only as soon as possible, but also in an iterative fashion to reinforce the message.

d.      Make the connections – When describing what you learned, be sure to connect how your actions at a macro level will impact the experience the customers has at a micro level – in other words, make certain the message is relevant. For employees, tying how their work will lead to greater levels of customer loyalty (and the financial impact this has on the firm) is extremely important in securing commitment and buy-in.

Having a disciplined approach to communicating both internally and externally will help to ensure that what you learned in your customer listening process is internalized by both customers and employees. However, this internalization by itself is not enough – the communication must represent the initial action that the company takes on the results. This initial action must be followed up by action in both a macro (company) level as well as a micro (account) level. We will tackle the topic of Action in the next entry of this series.

Mark A. Ratekin
Senior Vice President, Consulting Services

The volume and types of information available in today’s customer service organizations, while overwhelming at times, also offers a gateway to better customer experiences. 

It’s true; companies are tracking multitudes of operational metrics, customer perceptions, transaction measures, financial measures, employee perceptions, public perspectives, case histories, and on and on and on…  Instead of letting this data bury us, it can and should be put to use to build and support service strategies that are three things:

Predictive:  By applying advanced analytic techniques, models can be generated that will be predictive of future performance of key customer metrics, as driven by experiences and incidents. 

Proactive:  These models will enable service organizations to become more proactive in addressing service needs, by putting resources in the right places more quickly, and driving strategies to improve the areas predicted to be trouble spots.

Pre-emptive:  What we should be most excited about is the emerging ability to provide pre-emptive support - - - being able to identify which customers or cases are predicted to ‘turn bad,’ identifying them before they that happens, then intervening early to make sure it never does.

This level of service has the potential not just to surprise and delight customers, but also to drive internal efficiencies and the business performance of the service organization and the company as a whole.

In my previous post, I blogged about the art of doing.  In this post, I advocate for being selective about what it is you choose to do.

Last week, while I was at the first Members Insight Exchange of the CXPA (Customer Experience Professionals Association), panelist Joe Wheeler, Executive Director of The Service Profit Chain Institute, referenced Michael Porter (arguably the leading authority on company strategy and the competitiveness), boiling his theory down to this:  the essence of strategy is sacrifice.

In other words, strategy demands focus: it can’t be ten things; it needs to be one or two.  One or two that can be executed against to achieve success.  And choosing the one or two will require sacrificing the other eight, at least for the short term.

This notion of sacrifice is often overlooked at the intersection of customer feedback results and the determination of customer strategy.  Too often, the menu of areas for strategic focus and action is too long, and the result is that insufficient resources are applied to any one area, and none live up to their potential to actually make a difference to the customers’ experience and to the company’s bottom line performance and/or growth objectives. 

Leaders of customer strategy need to recognize the value of sacrifice, and guide executive teams to make tough, but informed, choices that will enable targeted improvement initiatives and result in advances in customer loyalty and business outcomes. 

Last week marked the inaugural Members Insight Exchange meeting of the Customer Experience Professionals Association (CXPA): more than 150 professionals, including practitioners and providers, came together for two days to talk about customer experience best practices, trends, and the emergence of this area as a recognized and fulfilling profession.

In an atmosphere of open sharing and dialogue, it became clear that many companies are making great progress in bringing the voice of their customers into the design of better customer experience and ultimately supporting corporate growth.  It also became clear that even the leading companies have struggled or still are struggling with familiar challenges as they work to evolve their programs. 

In this post, I highlight six themes that I heard over the course of the two days… things to think about as each us builds or enhances our own customer strategies.

Customer strategists must anticipate all the twists and turns and ups and downs that can derail their customer strategy. This was the topic of my last blog, which encouraged customer strategists not only to create effective plans, but to anticipate the things that can derail them. Following up on that, here are three tools that can help keep you on track:

1. Have a good ROI statement. Nothing is more powerful than being able to show the value of your program with a succinct description of the return on investment. If a new executive arrives,  there is a reorganization, or budget cuts are looming, justifying your program in financial terms will be the most effective way to ensure you sustain momentum.

2. Show that customer information is being used. One of the sharpest arguments for inadequate customer strategies is that nobody takes action on customer insights. Smart customer strategists will make sure they track the way people in their company use customer insights. They build an infrastructure to show that people not only receive reports, but there is accountability and action that pays off.

3. Have great stories. The first two items appeal to the rational side of the brain. But there is an emotional side of the brain as well that can be much more powerful. People love to hear a good story about how an employee used customer insights to make an important decision that paid off. It could be an account manager who turned a strategic account around. It could be an engineer who implemented a cost-saving process change. Or, it could be an executive who shifted strategy to provide a competitive edge. Great stories stick with people.

As a customer strategist, if you experience these common items that frequently derail programs, be armed – have a good ROI story, show that people put customer insights to use, and have compelling stories that will showcase how the use of customer insights makes a difference in your company.

Patrick Gibbons
Principal, SVP

Lately there’s been a lot of buzz around having a “chief customer officer.” I’m growing a bit tired of all the “chief” titles that are apparently in vogue, so I’m not stuck on the term. However, the idea of having an executive in charge of customer strategy makes sense. 

While some of the reasons are obvious, I think it really comes down to two things: distractions and priorities.

In fact, at a recent forum we asked a group of customer strategists to identify the things that distract or derail their progress on implementing customer strategies? The following were common responses:

• Administrative process and approvals
• Unplanned budget cuts
• Company reorganization
• New senior leader – need to orient, “re-sell”
• Team members are reassigned

However, the most frequent responses were:

• Other job responsibilities take priority
• Another initiative “overshadows” customer strategy

Those two are the big issues. Most customer strategists juggle their duties with other responsibilities. What’s more, without the right discipline and infrastructure, customer strategy is something that is easily taken for granted. It’s just there and can easily be overshadowed by the corporate initiative du jour. 

A chief customer officer (or whatever you want to call them) provides the ability to focus solely on customer strategies and work hard to make sure the organization’s customer strategy initiatives are widely known and an active part of the corporate culture.

Patrick Gibbons
Principal, SVP

P.S. At a Forrester’s Customer Experience Forum last summer Ginger Conlon, Editorial Director of 1 to 1 Media asked me and several other industry insiders about chief customer officers. Here is the video she posted.

 Take a look at this email example - does it look at all familiar?

Ok, maybe my example is a bit extreme, but is it that farfetched? Sometimes a customer experience team will simply send a message to everyone in the organization with all of the information and details included.   Sure, that’s easy. But, a mass message can get lengthy and is typically not as successful as sending a targeted message to a specific group. (If there is too much information or a long list of action items the critical message gets lost.)

We recommend that you focus communications to have the most impact. To do that, you first need to define the audience. Consider the following: 

1.    Who are the potential audiences for this communication?

2.    What are they focused on from a strategic perspective? 

3.    What actions do you hope will result from the communication? 

Understanding what is important to the potential audiences, along with what you really want them to do, can help narrow in on who you need to target.  Going through this process to define the audience is the first step in communicating for action! 

Kitty Radcliff
Vice President, Consulting Services