Walker Information Blog

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.

Everyone agrees when customers share their insights, employees should put them to use. So why is it so hard? Without a doubt, taking action on customer insights is the number one challenge of customer listening programs.

Here are three reasons why employees fail to take action:

First, they aren’t aware. In most companies there is so much happening and so many initiatives taking place that customer programs hardly get noticed.

Second, they don’t understand. It’s not clear how customer insights are to be put to use and people don’t understand what they are supposed to do with the feedback they receive.

Third, they don’t believe.  Either they don’t think the feedback is accurate or they don’t think any action will make much difference.

The Hierarchy of Engagement is a framework that helps make sense of how customer strategists can prompt more action from customer listening programs. Good customer strategists do much more than gather insights and crank out reports. They promote customer initiatives, train users of customer insights, and show employees how it all makes a bottom-line difference. In other words, they prompt action.


Patrick Gibbons
Principal/SVP
Walker

This week, Walker hosted a group of channel partner leaders from 10 prominent high tech companies at a Customer-Focused Channels forum designed to dig in to the complexities of managing partner relationships.  While we know that there are many relationships that deserve attention in the customer-partner-company "triangle," this event focused on the partner–company relationship.

One of the many topics that were discussed was how to build strategic commitment to a partner-driven business model – commitment both internally and from the partner organizations themselves.  It was generally agreed that core to achieving this level of commitment is approaching the relationships with an attitude of "we" instead of "us vs them." True, partner relationships can be competitive at times, but that makes it all the more critical to establish clear ground rules for the part of the relationship that will be based on achieving mutually compatible business objectives. 

Further discussion concluded that the best relationships are enabled by elements such as coming to partners with a business proposition that is focused on their objectives, having executive-level conversations that elevate the partnership beyond "today’s deal,"and making the administrative side of the relationship as easy and "resource light" as possible.

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

Each one teach one.

[Full disclosure: I stole that phrase.  From somebody who borrowed the African proverb and tuned it into a philosophy.  That somebody is Stephen Leafloor, better known as Buddha, and I stole the phrase from his TEDxOttawa talk… and since those talks are about ideas worth spreading, let’s call this spreading, not stealing.]

At its core, “each one teach one” is about each of us having mentoring responsibility for another.  Now, Buddha applies this phrase in an environment where it literally changes peoples’ lives, and I encourage you to learn more about how he is improving the future of our youth through the power of hip hop by clicking on the image to the right.  But I want to talk about how this philosophy can help overcome one of the common challenges faced by those who lead customer listening systems: gaining initial buy-in then sustaining momentum for customer-focused action.

If we can embed “each one teach one” into our corporate cultures, we will develop an environment in which each employee feels a sense of responsibility to perform their job functions in a way that sets an example for other employees.  This can develop in an organic way, supported of course by communication of the message; but it can also be developed intentionally, by seeding the organization with employee champions who are trained to be advocates for the customer.  As their actions and attitude spread through the organization, they will be teaching other employees to think and behave in the same way.  And so on, and so on, and so on…  

At the recent CXPA Members Insight Exchange, Fidelity was highlighted for their customer ambassador program… proving that it IS possible to launch this type of mentoring initiative and have it be successful.  Perhaps each of us can be the ‘each one’ who starts the ball rolling in our organizations.

There is a very important and early stage in our lives when we are impressionable and learn quite easily. Many of the things we learn during this stage are taught to us by our mothers and they apply to life as well as to our businesses. Here are three things that apply to our customers:

1.      Do Unto Others. I don’t know about you, but I heard this one a lot. I can still hear her saying, “Would you want your friends to treat you that way?” Same goes for our customers. We should treat them the way we want to be treated as customers…fairly, honestly, candidly, helpfully. This is a pretty simple way to think about how to deal with a variety of situations involving customers…if I were the customer, how would I want to be treated?

2.      Life’s Not Fair. A classic “mom” line, isn’t it? And, of course, the older we get, the more we understand the simple wisdom of the statement. Sometimes things don’t go our way with our customers. Maybe some external influence like the economy or a particularly unethical competitor gets in the way. Hey, life’s not fair. Don’t whine about it, rise above it. If it’s the economy, know that your customer is dealing with it too and help them work through their issues. If it is that competitor that promises the world and can’t even deliver a neighborhood, stay the course, help your customers and you will eventually be rewarded for it. Life’s not fair, but that’s not an excuse for failure to deliver.

3.      You Have a Responsibility to the Team. OK, credit to the coach (Dad) on this one. When you were part of a sports team at my house, you learned quickly that it was not about your individual performance, it was about the team. Many of us serve our customers in team environments, whether they are teams of your people or teams involving customer personnel. Remember your responsibility to the team. You and team should always be focused on driving the customer experience and you must all be pulling in the same direction, working together, collaborating.

Would your mom be proud of the way you are serving your customers today?

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.

If you go to a horse track and intend to place bets on certain horses, you will likely end up looking at a racing form that looks something like this. My first reaction? Wow, there is a lot of data here and I’ll bet most of it is important. But, what I really need to know is which horse is going to win and how much should I bet on that horse.

Same thing happens with customer listening initiatives. There is a lot of data … answers to several questions provided by many customers. And, it is likely all important in some way. But where the rubber hits the road (or in this case, where the hooves hit the dirt) is in the analysis that is predictive (what is going to happen?) and prescriptive (what should I do about it?).

These initiatives should tell you:

1.      Which customers are likely to defect and what can we do to stop them (assuming they are good customers and we want to stop them!)?

2.      Which customers are likely to refer us, buy new offerings, give us additional share of wallet, etc., and what can we do to leverage and accelerate these behaviors?

3.      Given our current customer experience, what is likely to happen to our market share, customer profitability, top line growth, etc., and how can we optimize those success measures?

4.      Which customers are not likely to help us grow and what are the irritants causing them to refrain from helpful behaviors?

Whether you are betting on the ponies or betting resources that you can improve your growth and profitability, having the right data, analyzing it correctly and focusing on the important insights will increase your odds of success. A focus on your ultimate objective—increased shareholder value through profitable growth, rather than an artificial score like satisfaction or NPS—will point your analyses in the right direction.

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. 

• One, the resident notices no ceiling fan, is a bit disgruntled, but doesn’t say anything. 
• Two, the resident notices no ceiling fan, mentions something to the maintenance staff who may say, “Sorry – just following procedures.”
• Three, the resident notices no ceiling fan, responds to a request for feedback, and the issue is addressed.

1. They request feedback 30 days after move-in. This allows them to know if the customer experience is off to a good start. 
2. They request feedback after any maintenance issue is closed. This allows them to know if the experience of having something fixed left them with a positive or negative impression.
3. They conduct a slightly longer survey halfway through their lease. This goes into more depth to understand the things they are doing well and the things they need to improve. Most importantly, it allows them to anticipate whether a resident will be renewing their lease. This important piece of information helps them understand if a resident is moving because they are dissatisfied or they are simply moving on. Either way, they can anticipate the number of vacancies they may have – a vital piece of information in property management.

• Technical Skill (for support and design)
• Capacity/Scalability The buyer company is not only growing and changing, but may also try out a new vendor with a small piece of business before ramping up the purchase.
• Competitive Pricing - the sum of vendor costs help keep the buyers competitive in their own markets
• Reputation/Brand counts, but often more as table stakes in B2B --  such as assuring financial stability, that the vendor stands by its work, etc.

Companies that have excelled at the art of customer focus display many admirable traits, but key among them is empathy for their customers. Here are three ways empathy is manifested in the way they operate:

1.      Focus on Customer Success. There is a strong realization that focusing on helping their customers succeed is the best way for them to succeed. These companies are always thinking about helping their customers. The goal is customer success, not sales figures or customer loyalty scores.

2.      Implement World Class Customer Listening. These companies generally have multiple listening posts and are very focused on understanding the ways in which they interact with customers. Their customer listening efforts are designed to understand the relationships they have with customers and what really drives those relationships. These companies are constantly looking for new and additional ways to generate insights about the ways in which they touch customers.

3.      Never Be Satisfied. One of the common threads I have noticed among some of the most successful companies is their inherent inability to ever be satisfied. These companies constantly strive to make the experience for their customers better. Better than it was the day before, better than their competitors and better than the customers expect.

Walk a mile in your customer’s shoes. Understand what it is like to work with you—from their perspective. If you aren’t too easily satisfied with the status quo, you just might find opportunities to help your customers and your company succeed.

I love Trefoils. Thin Mints are a close second (and apparently the top seller nationwide). Every year my family looks forward to Girl Scout cookies. We buy a bunch of cookies, yet they have a tendency to disappear very quickly.   

My family has a tradition of girl scouting. My mother was a scout, I was a scout, and my nieces are girl scouts. Given that tradition combined with my love of Trefoils, one could say that I am Truly Loyal. 

Imagine my excitement to learn there is a new Customer Loyalty badge for Girl Scouts. "Girls told us they want more challenge, and we've responded with substantive, focused, fun new badge offerings that will prepare girls for lifelong success," said Kathy Cloninger, Chief Executive Officer, Girl Scouts of the USA. 

The new badge is part of the Senior Scout Cookie Business badge. According to the Girl Scout website, their Cookie Program prepares girls for their future by developing business building skills such as goal setting, decision making, and people skills.

To earn a badge, a scout goes through a five-step test to prove her knowledge on the topic. In this case, she will know how to build her cookie business by increasing customer loyalty. 

Although I wasn’t able to find the specific requirements for earning the customer loyalty badge, I was reminded of a Walker client who developed a training program for their employees.  At the end of the training, each participant needed to prove their knowledge on the topic.  A certification exam was used to “earn the badge” for Customer Loyalty. Incorporating the exam into the training ensures employees understand both the importance of customer feedback and how to act on that information. 

I can’t wait for Girl Scout cookie time to see how the Customer Loyalty effort impacts their Cookie Program! In the meantime, should you consider a Customer Loyalty badge for your associates?

Kitty Radcliff
Vice President