A Customer Centric Vision

customer-mg-2A recent blog post from Annette Franz reminds us of the importance of a company vision statement that captures the essence of what the company aims to do for customers.

As Franz explains,

A well-defined and clearly-communicated vision becomes the organization’s north star and helps employees understand how they are consistently expected to deliver the experience for your customers.

Franz goes on to list some great examples of customer centric vision statements such as the following:

  • Warby Parker: We believe that buying glasses should be easy and fun. It should leave you happy and good-looking, with money in your pocket.
  • State Farm: Remarkable. Every day. Every customer. Every interaction.
  • The Ritz-Carlton: The Ritz-Carlton experience enlivens the senses, instills well-being, and fulfills even the unexpressed wishes and needs of our guests.
  • IKEA: Create a better everyday life for the many people.

Before going onto articulate how to develop a vision statement and how to apply it.

You can read the full article here.

 

 

The 4 Types of Innovation

4-types-innovation

In a recent HBR article, Greg Satell, articulates there are four basic types of innovation depending on the problem that needs solving. In turn there are various techniques that are best leveraged depending on the situation.

  1. Sustaining Innovation: Where most innovation occurs as we are simply trying to improve what we are already doing. The problem and the domain skill sets are fairly clear
  2. Breakthrough Innovation: Where the problem is well understood but it’s a very tricky one to solve and the skill sets required to solve it are not clear cut.
  3. Disruptive Innovation: When innovating your products or services further won’t help and you need to innovate your business model as the marketplace has changed.
  4. Basic Research: When neither the problem nor the domain skill sets required to solve it are well defined. A base level of research needs to be conducted to gather more data.

You can read Satell’s complete article here, including how a bag of clams saved a microchip manufacturer hundreds of thousands of dollars.

A Case Study In Re-branding Using Design Thinking

double-diamondEarlier this year, an Australian based company specializing in helping organisations improve their customer experience using Design Thinking, The Customer Experience Company, re-branded itself after 15 years of considerable growth. They also created and moved into an entirely new office space. And they wrote all about it.

So for an interesting read how Design Thinking professionals “eat their own dog food” and use the same practices they use with clients for designing their own brand and new office, check out their Brand Manager’s blog post here.

Change your thinking before you change your strategy

3-way-pieIn another recent HBR articleMark Bonchek and Barry Libert, argue that organisations wanting to undertake a transformation are in need of a new mental model and new measurement model just as much as a new business model.

You have to change how you think before you can change what you do, and then change what you measure to close the loop.

The authors cite examples of companies trying to copy the business model of another and failing as they had not change the way they thought or measured results. The primary example given is the Southwest Airlines business model and the attempts to copy it by Continental Lite, Ted by United, and Song by Delta which all failed. Whereas JetBlue, which has emulated all three models, has succeeded.

Southwest cofounder Herb ‘Kelleher is known for saying: “I tell my employees that we’re in the service business, and it’s incidental that we fly airplanes.” Other carriers fly airplanes that carry people. Southwest serves people using airplanes.”

“Traditional carriers were still thinking about their business as flying planes rather than thinking about serving people, still worrying about capturing share rather than growing the market, and still measuring success based on how well they utilized planes rather than how well they served passengers.”

“In contrast, companies like JetBlue decided to emulate Southwest’s entire system: mental model, business model, and measurement model. Like Southwest, JetBlue focuses on people over planes, with a mission to “bring humanity back to air travel.” Beyond the usual financial metrics, JetBlue also measures the strength of its culture and the quality of its experience.”

You can read the full article here.

 

 

Are you Customer Centric or Competitor Centric?

Cus-v-compIn a recent guest post on HBR, Tara Nicholle-Nelson, explains that companies need to obsess over their customers, not their rivals. As she explains, “The question is not who your competition is but what it is.”

Your competition is any and every obstacle your customers encounter along their journeys to solving the human, high-level problems your company exists to solve.

Nicholle-Nelson goes on to articulate that companies need to change their thinking from selling a ‘product’ in a one-time transaction to selling a ‘transformation’ from the “status quo to the new levels and possibilities“.

In turn, your customers are everybody whom has the “problem your business exists to solve”, not just somebody whom has brought something from your previously.

As Harvard marketing professor Theodore Levitt once said: “People don’t want to buy a quarter-inch drill. They want a quarter-inch hole.”

You can read the full article here.

Aussie and example of Australian companies that ‘get it’

aussieIt was good to see at a panel discussion at this year’s annual CMO, CIO and ADMA Executive Connections breakfast event, evidence that some Australian companies are really starting to get what it means to be customer centric.

Particularly Aussie, an Australian retail financial services group,  where Aussie Home Loans’ general manager of customer experience and technology, Richard Burns explained he saw a danger in appointing a chief customer officer. “Debates around who owns the customer, I think, are a waste of time,” he said.

“Debates around who owns the customer, I think, are a waste of time.”

“It shows there are some tensions in the culture, which have to be worked through. Because if everyone in the organisation is not passionate about the customer, you will spend a lot of useless time debating what you should be doing.

“Originally my title was general manager, customer, and I changed that because I didn’t want people in the organisation thinking, ‘well you can take care of the customer’. Part of my role is making sure we are all passionate about the customer – that’s part of the ongoing challenge I have. But to say there is one person, I think is very risky.”

At Aussie Home Loans, a number of operational procedures are taking shape in a bid to break down the siloed approach, according to Burns, such as activity-based working.

“If you came into the studio where my team sits, you wouldn’t be able to tell who’s in technology and who’s in marketing,”

“If you came into the studio where my team sits, you wouldn’t be able to tell who’s in technology and who’s in marketing,” he said. “We have also adopted agile right across the business. That started in technology, but now literally every single team, with every single initiative we undertake, is cross-functional. Right through to executive level, everyone can see what the main priorities are, what we are doing and why.”

Read the full recap here.

Why surveying customers is a waste of time…and money!

SurveyA recent survey by James Dodkins at the BP Group helps articulate why surveying customers is a waste of time and money. Shutting down any customer survey functions or activities within an organisation represents one of the ‘quick wins’ of any Transformation Program to transform any organisation into being Customer Centric. Quite simply put, its not customer centric behavior and it costs money, so stop doing it.

  • Only 16% of customers feel their feedback makes a big impact on business improvement
  • 80% of customers feel their feedback makes no, not very much or only a moderate impact on business improvement
  • 65% of customers only give feedback if their experience is extremely good or extremely bad
  • 67% of customers are most likely to give honest feedback electronically
  • 43% of customers feel they have been led, persuaded or coerced into giving better or higher feedback than they otherwise would have
  • 62% of customers are most likely to give feedback on a numerical scale at the expense of getting actual explanations
  • 55% of customers admit they are not always honest with their feedback
  • 59% of customers feel some level of frustration with the frequency of requests for feedback

Read the LinkedIn article here where there is also a link to download the full report.

Can you still win when you out-source your front line?

callcentreI have to admit, up to this point, my customer centric mindset has led me to believe that if there is one area of your business that you should not outsource, its your front line. These teams are the people interacting directly with your customers and delivering ‘moments of truth’, delight or misery to them every day. They are essentially your brand. But the fact is, many business units and organisations do outsource their internal and external front lines, generally for cost reduction purposes.

But as this interview with a Vodafone Spain executive demonstrates, it is possible to outsource your front line and deliver a great customer experience in line with your brand promise. And its no different to how you should align all your teams inside your organisation to deliver successful customer outcomes. So hold off on the ‘in-sourcing’ and ‘re-shoring’ and read this interview undertaken by McKinsey with Vodafone Spain’s, Carmen López-Suevos Hernández.

Vodafone Spain started with a situation that looked like this:

  • almost fully outsourced (onshore & offshore)
  • large number of vendors as each customer service function had outsourced individually
  • often short term contracts
  • ranked last for service levels among major Spanish mobile providers
  • cost pressures made it hard to in-source
  • first contact resolution rates were low
  • call volumes were growing
  • costs were actually increasing (despite the goal of outsourcing)
  • vendors found it difficult to work with Vodafone
  • focus on costs meant relationships were transactional with an emphasis on volumes and fixed prices
  • vendors disliked the constant price pressures
  • vendors with multiple contracts found it was like working with different companies

Vodafone realised it had to refocus on quality of service, not just cost and reevaluate vendor relationships and front line agents who serve their customers.

Vodafone always had goal to reduce overall cost to serve and reducing cost per call is one avenue to do this but when you squeeze vendors on price, they squeeze back by:

  • reducing the quality of people,
  • reducing the ratio of team members to team leaders,
  • reducing the attention given to development & retention

Attrition increases while skills fall and the result is fewer calls resolved on first contact and up front cost benefits are essentially lost as call volumes rise.

The other way to reduce the overall cost to serve is to reduce volumes by solving more calls at first point of contact. This could allow a higher price per call which vendors could re-invest in further quality improvements while Vodafone still comes out in front.

Vodafone realised it needed to change a lot about how they operated, their mind-sets about the role of vendors, performance expectations of them and how they interacted with them. And while they indeed needed to reduce number of vendors and sites, what they really needed was a new operating model.

Fundamentally Vodafone wanted call centre agents whom could turn customers into brand advocates, not just handle calls.

After a 3 year transformation Vodafone Spain was now ranked first for customer satisfaction among major Spanish mobile providers and operating costs fell by double digits. Not a bad turnaround.

And for all the gory detail on how Vodafone did this, you can read how Vodafone did this here.

 

Design Your Employee Experience As You Would For Customers

In a previous post, HR Departments Have To Change, I highlighted an article on LinkedIn encouraging companies to follow in AirBnB’s footsteps and replace traditional HR with a capability focused on the employee experience.

Now a HBR article, Design Your Employee Experience As Thoughtfully As You Design Your Customer Experience, authored by Denise Lee Yohn, argues that companies already know how to improve their employee experience. They simply need to use the same tools and techniques they apply to customer experience and apply them to their HR processes.

I’m not sure I agree with that view as I know first hand there are still many large companies that are not customer centric – they may pay lip service but in reality they are not – and have no immediate plans to become customer centric.

But I do agree that many of the tools and techniques are transferable should they learn them and apply them. These include:

  • applying needs-based segmentation to your employee base rather than simple and, generally irrelevant, demographic factors;
  • understanding the employee journey through the use of journey mapping while recognising that employee journeys, just like customer journeys, are seldom linear;

The best customer experiences bring the company’s distinctive brand values and attributes to life, and the same is true of employee experiences.

Read the full article here.

Unlearning old ways

In a recent HBR article, Why the problem with learning is unlearning, Mark Bonchek contends that in this age of Digital disruption, companies have been too focused on learning new ways of doing things and have not paid enough attention to unlearning the ways of the past.

In every aspect of business, we are operating with mental models that have grown outdated or obsolete, from strategy to marketing to organization to leadership. To embrace the new logic of value creation, we have to unlearn the old one.

Boncheck clarifies that its not about forgetting what has been learnt in the past, but acquiring the ability to re-frame the situation and use a different mental model.

He gives the example of Porter’s Five forces and the essence behind the model that limits or boundaries must be set and then argues the likes of Google, Uber, Faebook and AirBnB don’t subscribe to this notion of setting limits.

They look beyond controlling the pipe that delivers a product and instead build platforms that enable others to create value. They look to create network effects through ecosystems of customers, suppliers, and partners.

Boncheck also articulates the core problem with modern marketing is the existing “one-to-many mindset” where we pretend “everything is linear and transaction”…

  • We segment into discrete buckets even though people are multidimensional.
  • We treat customers as consumers even when they want to be cocreators.
  • We target buyers and run campaigns that push messages through channels even though real engagement increasingly happens through shared experiences.
  • We move people through a pipeline that goes in one direction even though the customer journey is nonlinear.

He then asserts that “instead of using relationships to drive transactions, we could be building brand orbits and embedding transactions in relationships. Instead of customers being consumers, we could have relationships with them in a variety of roles and social facets. Beyond delivering a value proposition, we could be fulfilling a shared purpose.”

“In the area of organizational design, we are seeing an evolution from formal hierarchies to fluid networks. But this requires a substantial amount of unlearning. Our instincts are to think of an organization as an org chart. We automatically escalate decisions to the boss. I often hear executives talk about being “more networked,” but what they really mean is collaborating across the silos. To truly become a networked organization, you need decision principles that create both alignment and autonomy. But this requires unlearning in the areas of management, leadership, and governance.”

The good news, Bonchek contends, is we can practice unlearning. So get started today!

Read the full article here.

 

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