Insights: A Small Investment for Big Returns

It’s no secret that the majority of new product introductions fail.  According to the Harvard Business Review less than 25% of consumer packaged goods and retail products fail to earn $7.5m in their first year.  The annals of business literature are littered with failed products from New Coke, Crystal Pepsi, Frito Lay’s Wow Chips, Microsoft Zune, McDonald’s Arch Deluxe, the Pontiac Aztec, and more recently the Samsung Galaxy Gear.  Why did they fail?  Well, it usually comes down to the fundamental problem of not understanding the customer.  This ailment comes in three flavors: not conducting any market research, doing it wrong, or ignoring the results and voice of the customer.

wow_chips

Due to the presence of Olestra, some consumers experienced intestinal discomfort

No Consumer Research

In this failed product scenario there is no consumer feedback collected whatsoever.  This happens often in small business start-ups.   Entrepreneurs tend to love their own babies, even when they may be ugly.  Many times these founders are so passionate they convince their friends and family that their idea is fantastic.  The very passion of entrepreneurs  have can be blinding, which makes the need for consumer insight even more important.   “Research is too expensive” is the statement I hear, to which I retort, “what is the cost of failure?”

Henry Ford and Steve Jobs are both lauded, rightfully so, in the business press as inspirational and visionary thinkers. They both shared a disdain for market research.  While their product legacy lives on to today in Ford and Apple they were both instrumental in bringing to market two huge product failures: the Edsel and the NeXT computer respectively.  Both of these products had some very advanced features and in many ways were well ahead of their time. Unfortunately, in both instances there was a fundamental misunderstanding of the market and customer expectations.

Firebox

Good intent may result in disastrous consequences

Truly great visionaries may get by for a while without any customer feedback, but without any kind of check on the market they run a very high risk of making some very big mistakes. Launching a new product or service without any consumer feedback is like trying to land an aircraft on a runway at night with no instrumentation. You might make it, but it could be catastrophic.  Why risk it?  It doesn’t have to be complicated.

Bad Customer Research

In other cases, the research conducted is just bad. Coca Cola conducted a massive amount of product testing only to find out that people actually preferred the taste of Pepsi. The logical thing to do?  Make it taste better.  That’s actually what they did with the launch of New Coke.  What they didn’t do is realize the love affair the world had with the brand.  To customers, Coca Cola was a national treasure and they did not want their national treasure altered.  The result was pulling of New Coke of the shelf and the accidental re-ignition of the love affair the world had with Coke.

This is an all too familiar instance of not framing the question properly.  It wasn’t all about the product attributes; it was about the brand and emotional connection people had with it. If Coca Cola conducted their research more broadly they would have found that out.  I have seen many instances where consumer research is too narrowly focused on features without understanding the higher order emotional and psychological desires of people.

Of course there’s about a bazillion technical ways to conduct research poorly; bad sampling, bad design, inaccurate data collection techniques, faulty and misleading analyses, but that’s a topic for another article. The basic point here is; if you going to do research make sure you do it with an open mind and get someone not as intimate with your idea to help think about the right questions to ask.

Ignored

It always amazes me the amount of money that big companies spend on consumer research only to ignore it. As one of my more sardonic colleagues is fond of saying…

“Research, when it confirms what we thought it’s a waste of money, when it doesn’t it must be wrong.”

Ignoring customer feedback is the sign of a company out of touch and a tell tale sign of bad things to come.  Arguably one of the ugliest vehicles ever made was the Pontiac Aztec.  Former GM Executive Bob Lutz summarized it best in Road and Track

http://www.iihs.org/iihs/ratings/vehicle/v/pontiac/aztek-4-door-suv/2001

2001 Pontiac Aztec

Early on, the Aztek obviously failed the market research. But in those days, GM went ahead with quite a few vehicles that failed product clinics. The Aztek didn’t just fail—it scored dead last. Rock bottom. Respondents said, “Can they possibly be serious with this thing? I wouldn’t take it as a gift.” And the GM machine was in such denial that it rejected the research and just said, “What do those a**holes know?”

Hubris and a feeling of product invincibility brought down many a goliath organization.  In Jim Collins’ book “How The Mighty Fall” he outlines the stages where great companies fall.  At the apex of a declining organization is Stage 3 entitled “Denial of Risk and Peril”.  One the key markers for this stage is a tendency for the organization to explain away or discount negative data.  Become aware of that is starting to happen at your organization.

Another mistake is ignoring current ongoing customer feedback about products and services.  In a world where word mouth travels to millions in milliseconds, getting on top of this through listening posts and responding is absolutely critical.   Unfortunately, many companies are not monitoring channels effectively.  Many companies have active feedback coming into their call centers or through sales representatives but it is not consolidated and sent back to those who can do something about it. More alarmingly are those companies that actively “hide” from customers once they sell their product.  You can tell these companies as they offer only a text box email to contact them usually with no phone number or address listed on their website.  A company that hides from their customers is doomed to fail.

The Good News

The good news is you don’t have to be “that company”.  Consumer research is not the end all, be all.  Creativity and innovation is not usually distilled from sitting behind a one-way mirror watching a focus group while eating M&Ms. In fact, I think that method of customers has experienced a rightful death and should be buried.

However, not listening and observing your customers as an input into your product development, implementation, and delivery efforts is a guarantee for failure.  So, does gathering this feedback need to be time consuming and expensive?  Nope.  There are many techniques and services that are no cost or low cost that can help you avoid some fatal market place blunders.  In future articles I will be reviewing some of those techniques, services, and data sources that can help you along the way to become a successful and customer centric business.

How to Get Your Front Line Focused on CX

Probably the biggest under-acknowledged challenge in launching a new CX initiative is engaging front line employees. Real time data collection is pointless if only an exclusive group of technocrats in HQ can see the results. We can’t start to think about action if the front line does not have, understand, or feel the information is meaningful to them. But how do we get the word out?

Dashboards

Dashboarding has become very popular of communicating complex data simply. Companies such as TableauDomomTAB, and Dapresy have some very impressive dashboarding tools. These can be assembled quickly and inexpensively. Here is a nice interactive example in Tableau Public of a fairly comprehensive dashboard designed by Gustavo Alberto for the fictitious Krusty Burger chain, albeit in Español.

Most CFM providers have a configurable dashboarding component as well. The fact that most of these tools are also mobile enabled helps field engagement with the information as well.

However, even dashboarding can be asking a bit much for the busy frontline worker. The average working joe or jane who is out in the parking lot, behind the register, or in the call center really might not have the time, interest, or know-how to consult their NPS dashboard to see how well they are doing. How can they find out?

Making CX Public

We know that engaging the front line can make or break the success of a CX initiative. They are the intersection between the brand and the customer in most instances. How do we make them aware of what is going on?

The answer may be simple. Why not go public with CX results? Let’s put our report card on a very public refrigerator for the world to see.

This accomplishes a number of goals. First, it puts CX attitudinal and behavioral metrics right under the nose of the very people who can make a difference. Most motivation theories such as Expectancy Theory and Job Characteristic Model hold that feedback is very important in improving performance. It also makes a good deal of sense. How do I know if I am improving if you don’t tell me on a regular basis?

Second, for customers it provides a degree of transparency about the performance of that location and gives them assurances that this is a good place to shop. The fact that a store isn’t perfect is not seen as a negative any more than your credit score or your score on the vintage Donkey Kong machine in your local pizza parlor. A “Not Perfect” provides motivation for those in the store and creates a sense of trust with the customer that the books are not, in fact, cooked.

In Store Public Displays

Many companies have taken this to heart. This example shows Weis Grocery store displaying their CX efforts in a low-tech but effective manner.

df_feedback_weis

Here we see some challenges in the Produce and Seafood departments but some recent victories in Bakery, Deli, and Pharmacy. This information is posted right in the front of the store for all to see. To associates it is a constant reminder of what still needs to get done and to customers it says we are serious about customer experience and are always striving to improve.

The other nice feature of this simple approach is it involves everyone. Ostensibly the GM and/or department heads are physically updating their scores and changes on a regular basis. As a result, I would imagine the employees in the department discuss regularly and are attuned to those scores. Finally, customers see it every time they shop. In short, it engages all stakeholders where it matters; on the front line.

This second example comes from the London Midlands Railway in the central Britain. This is posted right at the station, not hidden away in some corner of the station, but right next to the ticket counter.

df_feedback_midlands

You can see here they display operational data (e.g., on-time performance), along with the trend. Right next to that information you can see how they handle the human side of the business with information about information provided and “staff attitude”. A very nice summary of all results can be found online here as well.

Online Public Displays

Publicly displayed information about Customer Experience need not be relegated to physical locations. While digital reviews are fairly ubiquitous not everyone has the fortitude to let all reviews get posted unfettered. In some cases, corporate sponsored CX metrics systems either cherry pick reviews or filter out the bad ones. This practice, however, has consequences. The biggest of which that consumers will stop believing them if they appear to be tampered with.

Here is a nice example from Best Buy that lets the CX cards fall where they may. You can see that the reviews are verified (they have to be purchasers). If you were to scroll down you would see many that are not so stellar.

df_feedback_bestbuy

This level of transparency not only helps customers make a good choice, it allows for self-policing of CX so long as it does not degenerate in a quid pro quo economy where there are favors (i.e., incentives) traded for good reviews. That is a topic for a whole different post.

Many others, particularly in hospitality, have adopted a similar approach, thus creating a natural selection system for CX. While some ratings site have been criticized by having reviews suppressed and others have been accused of not being vigilant enough in preventing fake reviews, other companies like SureCritic Reputation.com, and others act as intermediary of reviews that seek out to post the good, the bad, and the ugly.

Driving Engagement and Trust

We live in a time of information transparency. It is expected by customers and integral to consumer decision making. A recent report by Deloitte found that almost 80 percent of consumers have interacted with brands before they even set foot in-store.

While CX information is important for consumer decision making, it also has a large role in driving both employee and customer engagement. Those dashboards and reports sitting back in HQ do little to get buy-in from the field. The private curation of data is seen as Big Brother paternalistically trying to keep tabs on regions and outlets that clearly cannot be trusted.

You can start to turn the cultural ship a bit by democratizing the data. Push CX and operational data down to the lowest level and get the front line’s buy in. If it’s under everyone’s nose every day and they feel like they have some part in influencing it, it will help drive behavior.

Second, I personally prefer the low-tech version in lieu of, or in addition to, technology based solutions. The grocery example is easy to set up, requires about $29.99 of investment and requires local management and front-line employees to engage in the process versus being passive recipients of data.

Third, make CX simple and embed it into the culture. I know many hotels and retailers start the day by reviewing customer feedback. This a great practice that gets everyone focused on the customer rather than the score. It includes everyone in the solution; and most importantly those who can make the biggest difference.

Finally, the practice of cherry picking, tampering, incentivizing, or modifying customer feedback before it gets to the public domain is a very bad one. People aren’t stupid and will catch on to these shenanigans. It will reduce perceptions of trust and they will, over time, dismiss the information as bogus, transforming an entire feedback mechanism into an enormous waste of everyone’s time and money.

Making it Visible

Getting unvarnished customer experience feedback out in the public, in a simple to understand, and non-punitive fashion will help engagement with employees and also engender trust in customers that you are dedicated to making sure they have a rock star experience. When people have access to the data, believe in it, and understand its impact they will be much more apt to do something about it. And action is the whole reason for any CX initiative Continue reading