Research Group Forrester recently released a report, The State Of Customer Experience Maturity In Australia, 2015, in which they surveyed 52 Australian and New Zealand businesses.
Of those surveyed, from a strategy perspective:
- 98% of respondents say Customer Experience is a strategic priority
- 50% say it’s their top strategic priority
- 75% of firms have made it a top strategic priority for two or more years
- 24% are focused on creating radical Customer Experience innovations
- 24% are changing their business model to align with the experience their customers want
- Those who are focusing merely on incremental improvements to Customer Experience have declined by 9% to 48% since last year
But strangely, nearly 70% of companies say they have not aligned their Customer Experience Strategy to their Corporate Strategy!
From a people and leadership perspective companies are backing up the importance they place on Customer Experience:
- 60% of companies Customer Experience improvements are being led by an executive, up by 11% from 49% in 2014
- the number of companies whose Customer Experience is driven by a chief customer officer or a chief experience officer is up 20% to 24%
- while the number of companies who place this responsibility with a non-executive manager has declined 16% down to 31%
- the number of companies planning to increase their FTE on customer experience teams is 47%
But from a budgeting perspective it does not appear they are putting their money where their mouth is:
- the number of companies with a dedicated budget for customer experience improvement has declined by 21% to 41%
- Those who do not have a dedicated budget, and are not actively considering it, has increased by 11% to 24%
- The number of companies planning to spend more than last year on Customer Experience increased by 4%
While at least the barriers appear to be reducing:
- Lack of cooperation across organisations down 18% to 39%
- Lack of urgency down 5% to 30%
- Lack of a clear customer experience strategy down 11% to 26%
“I’ll need to speak with my manager.” This probably sounds familiar to most of us, and there’s nothing inherently wrong with involving ones manager in helping to make decisions. However, when a service failure occurs, it is essential to resolve the issue quickly.
A recent Disney Institute Blog post offered three tips for empowering employees so they could recover service failures quickly.
To effectively empower your staff, proposed solutions must be:
- Achievable: Your recovery must be realistic and able to be carried through. You are fulfilling a genuine promise to the customer; so be sure to only offer products or services that can realistically be delivered.
- Accessible: Service recovery solutions must be readily obtainable. For example, if you have determined that a meal voucher is a reasonable solution for a less-than-perfect dining experience, be sure the vouchers are available to employees when needed—not just when the one person with the key to the “voucher drawer” is present.
- Appropriate: In any situation when a service failure occurs, it is important to make up for the failure with a suitable or fitting resolution. Many customers will already feel a level of reassurance from knowing that the first person they encounter can actually help them, so listen closely and focus on a solution that is tailored to each customer’s unique situation.
You could read the full post here.
Michael Schrage, in a recent HBR article, Customers Like Self Service, Unless It Underlines Customer Support, highlights…
In reference to how he “lobotomized” his smartphone and was attempting to recover it, Schrage goes on to explain that…
Customer-centricity that confuses and conflates self-service (systems design approach that lets people service themselves efficiently, effectively, and conveniently) with self-support (self-service when things go wrong) is bad design.
He goes further to argue..
True customer-centricity requires that answers can be quickly found and easily implemented with a minimum of muss and fuss. Respectful UX design doesn’t just lie in how quickly and easily customers can do what they want; it depends on how quickly and easily they can fix—or recover from—something that’s gone wrong.
Doing self-support should be as easy—or easier—than not doing self-support.
The full article can be read here.
In a recent CMO article, Customer Experience Economy Requires Corporate Culture Rethink, former NAB CMO, Sandra de Castro explains that organisations need to break down the long standing silos.
“There is an opportunity to create a revolution in customer experience, but you’re only going to do that if you forget the silos. And there’s the rub,” she said. “You must step across boundaries and look at everything from a customer’s perspective and challenge the fundamental tenets of how we do business.”
And digital is forcing some organisations and providing opportunities to others.
What’s to stop me the next time you log into Internet banking to now only present you with an ad, but an offer, or simple application form to that travel card you’re interested in?” she asked. “And when I do that, it’s not marketing anymore, it’s sales.”
“As you create engaging experiences, and you please your customer, sales becomes fulfilment,” she claimed. “Whether you point someone to an online application form or whether you get someone from the branch or call centre to contact them, when you get engagement right, sales becomes fulfilment.
“The tools of personalised communication can be used just as effectively to create beautiful service experiences for customers as they can to create beautiful marketing,” she said. “We started with pain points and experiences that traditionally had been difficult for customers. In doing that, not only have we taken the pain out of the experience, we’ve actually created engaging experience that communicates customer care.
“So now service is advertising. Or it could all just be experience.
“The boundaries in which the silos of large organisations operated are disappearing faster than ever before and fantastic experience is sitting in the boundaries.”
Read the full article here.
Customer loyalty is at the root of success for any lasting business. And when that loyalty turns into passionate advocacy, a “superfan” is born. For brands, these dedicated followers can help transform a satisfactory business into a sensational one. The obvious question for brands is: How do you create superfans?
You can read the full article here but the 10 takeaways are as follows:
- Strive to offer exceptional customer experiences that far outpace the competition. By winning consumers over with your great products, service, and history, you can drive loyalty and win customers for the long term to advocate for your brand.
- Nurture your relationship with superfans by bringing them together in a setting that fits and supports the reputation of your brand.
- Remind consumers of the value you offer, whether through low prices or outstanding products, to entice people to keep returning to your brand and singing your praises.
- Create compelling stories tied to your brand to keep superfans hooked and craving more.
- Find ambassadors who embody your brand and who inspire and resonate with your customers. Don’t be afraid to switch them up to keep your brand fresh and trendy.
- Inspire consumers to live a better life. This motivation will help dedicated followers develop a greater appreciation for your brand.
- Build your business up over time and allow your loyalists to be part of a shared experience that spreads across generations and inspires them to show their brand passion.
- Create something wildly imaginative and popular that consumers want to be part of to transform your ordinary fans into superfans.
- Bring your fans together and make them feel part of a powerful and unique experience.
- Offer your most loyal customers ways to engage to discover new ideas that can improve the business and help you collect more passionate superfans along the way.
Following is a Blog post from the Disney Institute…
“What time is the 3 o’clock parade?” On any given day in the Magic Kingdom at Walt Disney World Resort, you might hear Guests asking our Cast Members this seemingly peculiar question. And, while the question appears to have an obvious answer, we also know that frequently the true question lies beyond the obvious.
As our Guests are often excited and distracted by the myriad of sights and sounds in our Theme Parks, we know that when they ask this question, more than likely, they want to know more than just the start time of the parade. So, Cast Members will ask some additional questions to uncover what it is that the Guest really wants to know…such as, “What time will the parade get to me?” “When should I start waiting to get a good viewing spot?” and “Where is the best place to stand?”
Instead of simply repeating the obvious answer—the actual parade start time—back to the Guest, our Cast Members take this opportunity to draw from their theme park knowledge and Disney service training. They may share with the Guest what time the parade will pass by certain locations in the park, offer possible vantage points to view the parade or advise when to leave another area and still arrive at the parade on time.
This is important, because rather than dismissing the “3 o’clock parade?” question as something trivial and offering a blunt response, Cast Members understand that it offers the opportunity to exceed the Guests’ expectations and make them feel special by further personalizing their experience.
This understanding of our Guests, and our Cast Members’ ability to anticipate and respond to this question in a way that exceeds expectation, is not new. Since opening Walt Disney World in 1971, both frontline employees and leaders have worked to fully understand and operationalize our service approach. Today, the “3 o’clock parade” question is commonly used to help Cast Members understand that their answer can either end the conversation, or it can begin a quest for richer discovery.
At Disney Institute, we have seen that an organization can never have exceptional customer service without a profound understanding of its customer at the individual level. Therefore, in order to provide an exceptional service experience, the organization must understand each customer’s needs and wants, and be able to respond accordingly in the service moment.
From what we have observed, every organization has its own “3 o’clock parade” question. First, you must find yours—asking front-line employees is often the best place to start. Then, you must train employees how to anticipate such questions and use them as an opportunity to exceed customer expectations. This represents a huge opportunity for organizations to differentiate themselves by reassuring each and every customer that they are truly listening and empathetic to their concerns.
Ask yourself, what is your organization’s “3 o’clock parade” question? How can you help train your employees to forgo the seemingly obvious “need” in favor of understanding what each customer truly “wants”?
In a recent CIO.com feature article, Julia King, took a look at a number of companies and how CIOs are refocusing their staffs on Customer Centric IT.
“Increasingly, a customer-centric approach is a matter of competitive advantage, even business survival. By 2020, customer experience will overtake price and product as the key brand differentiator, according to Walker Information, a national consulting firm focused on customer intelligence.”
King looked at JetBlue, Chico FAS, Pulte Group, Ashbury Automotive Group, Giant Eagle and AgCo. Following is an abridged version of the article.
At JetBlue, CIO Eash Sundaram’s IT team looked to – and continue to emulate – highly regarded, customer-focused companies like Google, Apple and others outside of the airline industry. JetBlue also partnered with Stanford University’s Graduate School of Business and the Hasso Plattner Institute of Design at the Stanford School of Engineering on multiweek projects to immerse JetBlue leaders, including many from IT, in a customer-focused case study of the airline. The program included classroom training plus field research at San Francisco International Airport to help executives better understand customers’ needs and JetBlue’s practices.
At the company’s headquarters in New York, IT is a stand-alone organization, but IT employees are integrated into various functions, like marketing and operations. Sundaram also leads the company’s multimillion-dollar customer experience innovation program, along with JetBlue’s chief commercial officer and chief customer experience officer.
To gain a deeper understanding of new customers, JetBlue dispatches IT staffers and other employees on trips to expansion markets. In the Dominican Republic, for example, many people pay in cash instead of using credit cards, “so IT is now working on a next-generation kiosk to act like an ATM,” Sundaram notes.
Internally, JetBlue also has made customer satisfaction a key factor in employees’ compensation. One-third of Sundaram’s job performance rating is based on how much customers enjoy traveling with JetBlue, he says.
Shifting IT’s mindset to look beyond company boundaries and focus on paying customerschanges the equation entirely, according to Eric Singleton, CIO at Chico’s FAS, a $2.6 billion specialty retailer with 1,547 stores. “You think about things differently,” he says. “You ask different questions that you don’t ask if you’re in a basement writing code for internal customers.”
That’s why Singleton and other members of his 250-person IT organization regularly visit the company’s stores–to get up close and conversational with shoppers. Singleton is especially keen to observe how women interact with a 24-in. touchscreen that’s mounted in a cabinet near the back of the store. Known as the “tech table,” the touchscreen lets shoppers browse beyond the 60 percent of inventory displayed in physical stores to view and buy hundreds of additional products online.
He describes the table as “a social watering hole” and “an augmented shopping experience that is fueled by the customers’ social energy around it in the moment.”
Best of all, tech table sales routinely add 15 percent to 20 percent to in-store sales totals every day–a figure that’s higher than anyone at Chico’s anticipated.
A major break came when PulteGroup decided to relocate its headquarters from Detroit to Atlanta. CIO Joe Drouin says that, after he arrived in 2013, he seized the opportunity to overhaul the IT organization, hire about 35 new people in Atlanta and “bring IT out from behind the curtain to engage on the front lines of the business.”
“We created new roles that would be visible to the rest of the business and engage with our customers and partners,” he says. “We hired a director of customer engagement and a team of people under him. Technology skills were table stakes. We brought people in from a variety of places with the notion that we were looking for people who could sit across the table from a marketing person or homebuilder, or walk into a model home and sit with a sales consultant and have a conversation about what they needed, all in a non-technology-focused way.”
“We viewed every single hire as a critical hire,” he says. “It was so important to make this [customer-centric] shift and this transformation that we couldn’t afford to say ‘This guy is strong technically, but I can’t imagine his ability to really engage.’ So we didn’t make any exceptions to the picture of the person we were trying to hire. It was critical enough to me personally to be in the room and spending time personally because I couldn’t afford to have one person slip by that wouldn’t be there to drive this major shift in the organization.”
“There was this very traditional idea that IT was a service provider and the customer was everyone else inside Pulte,” Drouin says. “Today, we don’t talk about IT and the business. We talk about IT as part of the business–as ingrained and as tightly woven as any other function, and contributing to business strategy. Our customers are [the company’s] end customers.”
Ashbury Automotive Group
More than a few CIOs make the point that precisely defining the word customer is a critical first step toward customer-centric IT. “We make a big point of defining the word customer. A customer is the same in IT as it is for the rest of the business. A customer buys cars, buys services and buys parts,” says Barry Cohen, CIO at Asbury Automotive Group, a $5.9 billion automotive retailer with 82 dealerships. “We don’t even say ‘internal customer.’ In fact, we make a big point of saying IT is part of the business and not like an island off by itself. These are small but important nuances because we’re trying to build a culture where everybody is thinking the same way.”
Asbury’s IT infrastructure is made up mainly of automotive-specific systems and software developed and provided by third parties. The company’s 39-person IT group is focused on managing the service providers and handling field engineering and support at dealerships. For now, IT staffers don’t work directly with people who are shopping for cars but with employees in the dealerships and in other departments who work directly with customers.
The IT team is focused on taking some of the hassle out of the car-buying experience. “If you’ve bought a car, you know that you can spend an entire day in the dealership, so we’re working on customer-facing things like digital signatures and removing some of the paperwork in that process,” Cohen explains.
One of the surprising things Cohen and his team have learned at the dealerships is that, although they do have store hours, they have no set closing time. “I’d always ask what time they go home and they always said ‘When the last customer leaves.’ So, my IT staff is really focused on that now,” he says. “We don’t have hours that we are open or closed. It’s when our customer is there.”
For customer-facing technologies, IT has upgraded its quality-assurance and user-interface testing to get insight into what customers want, CIO Anuj Dhanda says. Giant Eagle conducts workshops with customers that IT teams observe. All IT staffers also work in one of the company’s stores to experience firsthand how IT works on the front line for both employees and customers.
“The days of [merely] building a product and bringing it to market don’t work anymore. Between social media and the collapse of distribution channels, there’s a very different customer expectation. One of the biggest shifts everyone in IT has to make is getting from an IT focus to a customer focus,” CIO Sheryl Bunton says.
To get there, IT has to prove its status as a valued partner to the business over and over again. “You have to do it enough so that you build trust. It’s becoming very strong at execution that keeps the business engaged and builds that trust,” she says.
Before business partners are willing to bring IT to meet with external customers, they must be confident it will benefit the customer relationship, Bunton says. “If I was making a sales call, I’m only going to expose my customers [to someone] from IT who I can trust and who will add value to the conversation and who will make me look good,” she says. “Otherwise, the risk just isn’t worth it.”
Read the full article here.
The Economist Intelligence Unit recently conducted a global survey of over 500 senior executives across 21 countries, including 165 CEOs. The results conclude that,
“if done well, CX initiatives can reduce costs, increase profitability and revenues, and improve customer satisfaction.”
Other key findings included:
- 27% of companies will increase investment in Customer Experience Programs over the next 3 years by more than 25%
- 57% of companies plan to increase investment by at least 10% in the next three years
- 86% of A/NZ c-level executives surveyed considered “improving CX” a key driver for their company’s digital transformation
- an upsurge in investment is linked directly to the correlation between CEO engagement in customer experience and company performance in revenue growth and profitability
- 58% of A/NZ companies said the CEO directly leads CX initiatives, followed by the CMO (1%) CXO (9%) and CIO (9%).
- A direct correlation between CEO engagement in customer experience and profitability is also driving investment
- CEOs leading CX initiatives are more likely to transform a company’s future success
- 58% of A/NZ companies reported a much higher profitability than their competitors when the CEO was in charge of customer experience
- 67% of A/NZ companies were more likely to measure the success, or return on investment, of CX initiatives
- Spending on traditional CX channels in A/NZ companies were set to drop to 45 % in terms of importance in the next three years. These are being overtaken by social media, Web self-service and online assistance.
- 60% of business leaders still believe face-to-face interaction between companies and customers is an important and effective CX channel
Read the full report here.
In a recent article, How IBM, Intuit, and Rich Products Became More Customer Centric, published by Harvard Business Review, Brad Power and Steve Stanton share their research into different pathways companies are taking to become more customer centric.
“…wanting to be closer with customers, and knowing what actual, operational pathways to take in order to achieve this are two very different things.”
IBM “assembled teams for each product or service that combined designers with engineers and created a new development process.” IBM “came up with a hybrid method for product development that combined elements” of both Continuous Delivery and Design Thinking.
Rich Products replaced their “old, functional “silo-based” process, [where] a marketing person with a new customer opportunity would contact his or her favorite R&D associate, the regulatory and quality assurance departments, packaging, and the plant. This ad hoc, sequential approach was replaced by a cross-functional team, which simultaneously accelerated its time to market and created a much more “intimate” relationship between Rich’s associates and its customers.”
Using the principles of Deep Customer Empathy, Go Broad to Go Narrow and Rapid Experiments with Customers, “Intuit began driving design thinking deep into its culture and operations. To do this they trained and deployed a cadre of 200 Innovation Catalysts who were embedded into the business units, created and held a large number of immersive experiential workshops, and added design thinking into their leadership training programs.”
The full article is well worth a read.
With all this talk about becoming Customer Centric or an Outside In organisation, how did we lose focus of our customers anyway and what is it we have been focusing on instead?
Many point to Adam Smith’s seminal work “The Wealth of Nations” and in particular his observations of the division of labour in English pin factories at the beginning of the Industrial Revolution for the answers. To paraphrase Smith…
A pin-maker could perhaps make one pin a day. But if the task of making a pin is divided up into 18 smaller, specialised tasks – i.e. one man draws out the wire, another straights it, a third cuts it, a fourth points it, a fifth grinds it at the top for receiving the head, and so on – split up among 10 people, then they could make the equivalent of 4800 pins per man per day.
Essentially the division of labour in the pin factory Smith observed was responsible for a 4800% increase in productivity. Now which business is going to ignore that sort of productivity gain? As a result, the industrial revolution saw the productionisation of businesses and other organisations into conveyor belts of specialised labour that resulted in astronomical improvements in productivity and huge reductions in per unit costs. Conveyor belts with the customer at the very end, many steps removed from both the workers in the middle and those at the start who decided what product to build and how to build it. We became ‘product centric’.
Over time many of these products became commodities though and there would be a need to differentiate yourself by the service you offered. Of course some businesses and organisations, generally those that were small in size and local in geography, never lost sight of this.
Unfortunately though, particularly in large organisations, the production line mentality dominated and is as strong as ever even today. Take a look at this Mckinsey & Co article from 2014 “The Enterprise IT Infrastructure Agenda for 2014“, which recommends that IT departments “Make the transition to a plan-build-run organizational model”. Plan-build-run, hmmm, what does that sound like? At least it is heartening to see that some practitioners like Julian Dunn at Chef are not swayed.
Reading on, though, I came across the section entitled “Improve organizational execution”, and I have some concerns about McKinsey’s proposed remedies. It’s certainly true that organizational execution needs improvement, because IT organizations today are widely seen as being too slow, bureaucratic and inefficient to keep up with business demands. Why, then, does McKinsey advocate a “plan/build/run organizational model” when this kind of silo-ization is what negatively affects the speed of IT service delivery today?
The DNA of the industrial revolution has also found its way into the education systems of developed nations. Hence it has become ingrained in modern human history and is constantly perpetuated. This fantastic shortened and animated video of a talk given by Sir Ken Robinson explains how this same DNA has led to education systems that are not customer (student) centric and essentially “educate” our creative capacity out of us.
And here’s another take from American Author and Marketer, Seth Godin, along a similar vein.