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How Incentives Can Ruin Your CX Program

“If you don’t give me all 10s, I will get fired”

The young saleswoman at the luxury automotive dealer then politely smiled at me.

I was silent for a moment and then drew a deep breath.

I explained to her I was in the business of customer experience and, in fact, my firm at the time, ran the very customer experience system she was trying to influence. 

I went on to express my concern that, while she did an excellent job, she seemed more interested in her rating than my experience.

“I understand, but I need you to give me all top box … or I could lose my job,” she motioned to the glass office behind her momentarily losing her composure and then her wide smile returned, like hostage who doesn’t want to upset her captors.

I wish this was an exception or something new. Sadly, this has been going on for over 20 years. While it is probably most pronounced in automotive, I have seen it everywhere; from telecommunications to moving companies to health care. Cooking the CX books isn’t new and doesn’t appear to be going away anytime soon. 

How Did This Happen?

It happened, as Brett from Pulp Fiction would say, “with the best of intentions”. Folks at HQ needed to find a way to hold people accountable to not just sales, but also in providing a good experience to customers. On a winter’s day in 1982 (okay I am taking some liberties here) some smart fella or gal said, “well hey, we hold salespeople accountable for sales, why not hold folks accountable for customer satisfaction?” Then some other smart person said “yea, let’s put some teeth in it”. Then the head mucky-de-muck said “do it!”, and on that day incentivizing experience scores was born.

People ate this idea up like Data Scientists to free Pizza. The Net Promoter Score (NPS) only added fuel to an already growing bonfire. Before long, entire industries were on the CX incentive drug. While it did put a big focus on customer satisfaction (now called CX), like all addictions it had (and has) some dire side-effects when implemented thoughtlessly.

Side Effect 1: Those being incentive involved mostly hate it

Go into the next retail outlet you find and ask the salesperson two things; 1) if they are incentivized for their customer satisfaction ratings and (if yes) 2) what they think about it. I have yet to find one waitress, technician, salesperson, pirate, or call center rep that likes customer satisfaction linked to their compensation. The practice is universally hated by those being “motivated”. They complain that it is unfair. Some are measured on things completely out of their control or worse, the side effect of bad corporate policy.

A telecommunications installer complained to me he is held to the “would recommend others to a friend or family’ metric when many of the problems that customers have are because of the service provider, not his installation. Incorrect information, bad promises, and faulty equipment are oftentimes the culprit, not the person. The net effect is, instead of “motivating” employees, many are loathed into being compelled to chase numbers instead of focusing on helping customers.

Side Effect 2: Customers Hate It

You have a great experience and then are asked to barter for a good grade. That’s leaves a bad taste in the mouth of anyone. Sometimes, we hear stories of retailers harassing or threatening customers into giving a score. You feel kind of guilty or dishonest depending on which way you go in your evaluation. Think about it, you may be paying big bucks for a system that actually negatively impacts the customer experience? Ludicrous.

Side Effect 3: It Doesn’t Work

After 20 years of trying to incentive retailers and employees to be better at customer experience, customer experience ratings haven’t really budged. 

According to the National American Customer Satisfaction Index we went from a 75 in 1994 to 77 across all industries. Two whole points in a nearly a quarter century! Hurrah!

In Forrester’s Customer Experience Index they reported a decline from 2016 to 2017 in the experiences companies deliver across industries amongst 314 brands collected from 120,000 individuals. In a follow up in 2018 they recently reported no changes. None. Nada. Zero. Zip. Zero.

Forrester Chief Research office Cliff Condon was quoted as saying,

Though brands are catching on to the fact that high-quality customer experience correlates with business growth, it’s alarming that progress on improving CX has stalled for the third year in a row.

Alarming indeed.

After literally billions of dollars spent on incentivizing end users what we do have to show for it? Did it sell more cars or booked more hotel rooms? The evidence isn’t really there. We have to find a better way.

So, should we give up on CX?

I think not. Listening to your customers is a good thing. Companies that do so and act on it are better. That is clear in the data.

After a 20+ year frontline view of the industry, I believe the problem is not in the concept of CX, it is in trying to incentivize behaviors of those who may be indifferent to the concept. We need to move away from pushing the horses to the water to finding horses who are thirsty and smart enough to drink in the first place. We need to stop incentivizing CX scores as the default approach and reallocate funds to areas that will actually make a difference. Wonder what they are? Thought you might ask…

1. Hire the Right Horses

Gallup is spot on here, you are what you eat… or in this case getting the right raw material into your organization. Not everyone is cut out for customer service. Let’s take Bob as an example. He’s a genius technical guru. If you have a programming glitch or data problem, he will burn the midnight oil to find out the problem and fix it faster than a rack of Apache servers with huge buffers and 36-bit quantum processors. However, he is the last person you want talking to customers. Bob lacks that special human je ne sais quoi and is, well, perhaps a bit too direct for the average bear. Should we fire Bob? Hell no. Should he be talking to customers? Hell no. Point is, put the right people in the right places. Hire and promote the right people into the jobs they are good at. Great companies like Disney, Four Seasons, and USAA know this and practice it.

Artist conception of Bob (SNL Nick Burns Tech Support Guy)

2. Look in the Mirror

In doing this for a long time, I would guesstimate more than half of customer experience problems can be traced back to shortcomings in the three Ps: process, policy, or product. There are very few malicious jerks out there just wanting to make your life miserable by screwing up your reservation or fast food order. 

Most employees honestly want to do right by customers and are dismayed when they can’t. Many times, it is a ridiculous or untimely return policy, a process which ping-pongs people around 10 different departments, or substandard product that make people angry. Can it be an incompetent employee? Sure sometimes, but the company also has a very large (and often ignored) role here in improving things.

3. Fix Problems AND Look for Opportunities

Yea yea yea. If you fix a problem for a customer she will come back again if you don’t, she will tell 10 others about how much you suck. This is more than CX folklore having been consistently been shown to be a CX fact. Though a bit of ‘old news’ CXOs and COOs love this stuff and eat it up. 

That being said, it doesn’t exactly light the world on fire for the CMO or CSO. They don’t want to hear about loss avoidance, they want to hear about growth. They are interested in getting more customers and selling more to existing ones. 

CX can do that. Why not? Instead of just worrying about fixing customers, let’s worry about fixing prospects. Irritation with the ordering system is not any different than irritation with the return system, you are just a different status. If we reframe the problems from just retention to sales and retention that will get much more attention from your C-Suite

4. Use the Tools

There are so many great tools afforded by both EFM, ERP, and CRM companies nowadays. There are single and double loop follow up tools, action planning, learning management systems, workflow, expert system, and knowledge management systems. 

Many of these systems have become very affordable and very powerful. Some are also integrated into existing systems. Sadly, these tools aren’t used as often as we would hope. First, they are not always emancipated from the clutches of headquarters or an elite few who have access to them, second if they are, no one knows how to use them, and third they often poorly integrated.

Hmmm…. if there was only some firm that could help integrate all these things…. while you ponder that (hint: it’s us) I think there is one other big change that has to made to make your investment in CX fruitful, but it’s a hard one because it is cultural.

5. Stop Being a Parent and Start Being a Partner

Once upon a time the trajectory of the average professional worker in the United States was linear. You went to college, earned a degree, enrolled into a trainee program worked for one company until retirement upon which time you were given a gold watch and retired to Boca Raton to play golf, worry about the lawn, and turn a rich bronze hue. In these halcyon mid-century days, the company was seen as the benevolent parent figure and the employee as the vulnerable and (hopefully) obedient child.

No longer. In our new economy, both young and old tend more often to be-bop from job to job as the venerable ‘employment contact’ between worker and employer gives way to the ‘gig economy’.

Yet, many corporations have failed to change their view on retailers, outlets, and front-line employees to match with the times.

To some in HQ these stakeholders are just hapless idiots who are a necessary evil in order to sell their amazing product, not the self-sufficient and entrepreneurial that they really are. 

And lest my rancor be wasted on HQ, some franchisees and field personnel view HQ as a hive of mindless sycophantic drones who are out of touch with the realities of getting shit done. The truth is neither one is right… and both are.

The solution to breaking down this stereotype can be found in social psychology, which has been working on a way to mitigate this in-group/out-group dynamic that is hardwired into our DNA. Using simple approaches and application of theory (e.g., contact theory, jigsaw approaches) we can break down walls bigger than Mr. Gorbachev.

Sure it isn’t easy, but as my grandad would say…”if it was easy you probably did it wrong”

But…but…but

“Oh but Dave, if we remove incentives no one will care about the customer anymore!” some might protest. While some would dismiss as poppycock (whatever that is), this argument does hold some water.

I’ve seen CSAT first hand dip after incentives were removed from large CX systems. But you have to ask; was it a decline in the experience or a decline in the measurement of it? I would argue the later. You are now just getting an undistorted picture of what is going on.

If you are just going through the motions for money, you are probably half-assing CX anyway. We have all had all experienced the difference between an I-really-care-empathic follow up call vs. a DMV-style going-through-the-motions type of follow up call. It’s akin to making your child apologize to their sibling. They will do it because you are making them, not because they are really sorry. Any successful business owner instinctively knows that their success is lays in making sure the customers loves what they do. 

Next!

Incentivization merely creates the illusion of caring by spackling over the underperforming retailers who really don’t. It’s a big lie that no one on the supplier side wants to talk about because of the money at stake.

If you can’t trust your employees or business partners to do the right thing by your end customers, you should get rid of them. If you are so out of touch with your end customers that you don’t know, perhaps you should find new employment as well

There Are No Absolutes

Only the Dark Side believes in absolutes1. I, my friend, am no Sith Lord. So, I will tell you this; incentives tied to CX aren’t ALWAYS bad. There are instances where incentives are entirely appropriate. Conditioning new behaviors is a great example. “How do I get people to care about CX in first place” is a common problem statement in nascent CX organizations. In those cases, to get people to engage you’ve got to give a little of that juice. But trust me, you will want to ween your organization of the incentive drug quickly, before it becomes an unbreakable and destructive habit.

Need help in recovery? Let us know.

1 In case you are wondering what I am talking about here, please reference one of the several fine Star War films by Lucas Films

This article originally appeared on Customerthink

God. Family. Pizza.

That’s the life priorities in my small hometown of Berwick in Northeast Pennsylvania. When alone, some locals will confide that their priorities are, on any given day, in a slightly different order.

There are scores of pizzerias in the area but in a recent completely unscientific poll on Facebook of more than 600 local citizens and ex-pats, three pizza places separated to the front of pizza peloton; Stuccio’s, Tuzzi’s, and Dalo’s. Each is very different and each share some very common features.

The front-runner, Stuccio’s (33% favored), is a very thin crust pizza with tons of cheese and a sweet sauce. As of this writing, Tuzzi’sand Dalo’s are in a statistical dead heat for second (24%). They too are unique to the area. 

Tuzzi’s pizza has a thicker, bread-like crust with cheese spread out throughout. Dalo’s has a more concentrated placement of cheese but is also thicker; reminiscent of the

‘Old Forge’ variety served up the road outside of Scranton. Tuzzi’s and Dalo’s are excellent a day or two after served cold. Stuccio’s not so much. 

All three are unusual in that are served in rectangular “sheets” or “slabs” rather than the conventional “pies”.

Locals are extremely loyal to one or more brands of pizza. It is not an Eagles vs. Steelers kind of thing; there is respect, and near veneration for each brand even if you are not an advocate. Folks are rabid fans with ex-pats having it delivered all over the world.

To outsiders, these regional iconic delicacies are often met with a shrug. To them, they seem similar, a little weird, and occasionally not to their liking±. After all, most folks think of Pizza as something you order form Dominos or Pizza Hut, it is round, thin, and sometimes with Pepperoni on top. 

Those places don’t do so well in Berwick.

In fact, despite the Big 3 Pizzerias doing no advertising (Stuccio’s doesn’t even have a website) they absolutely trounce powerful national brands such as Pizza Hut and Dominos for preference by locals (80% vs. 1.2%).

So why are the locals so fanatical? Why do national brands get annihilated?

Sure, the local pizza is good. But there is something more. 

Something much deeper. 

More than a Recipe

Recently I have been seeing many charts in CX presentations where the speaker talks about product experience or user experience or service experience. They delineate amongst those disciplines as if customers do the same. This view may have unintended consequences, as customers do not think in terms of partitioned off pieces of the experience, but as a whole.

In some cases, the presenter then goes on and says something like, “these need to be connected together to create an omnichannel experience.” Yup.

Still others will say “there needs to be a unifying vision that connects everything.” Again, spot on.

But there is something beyond good governance, vision, and effective cross-functional collaboration that can deliver true enduring brand loyalty.

But what are they? I think we can again, of course, look to pizza for answers.

Creating Memories

In Berwick, the iconic halls of mozzarella and tomato sauce have been frequented by folks for generations1. Stuccios, Tuzzi’s and Dalo’s have been operating in Berwick for a nearly a century or longer2. As such, each pizzeria became deeply connected to the social fabric of the town. People eat local pizza for every day occasions such as lunch and dinner, but it is also to celebrate a special event or as a treat.

People remember eating it at birthday parties, the big high school rivalry football game, Christmas Eve, as a reward for the struggling student’s improved report card, or before homecoming. It is a reward for folks who have had a particularly bad day at a, particularly hard job. And yes, you can even find these square treats at weddings and wakes.

While the local pizza is delicious, they are not just selling pizza.

They are selling home. They are selling a sense of identity and pride. Pizza is a common ground that you can argue without about without hard feelings. In fact, they aren’t ‘selling’ anything as it is part of the culture. In their own small-town way, the Berwick pizza syndicate represents extremely powerful brands; certainly, more recognized locally than disruptive brands such as Uber, Airbnb, and Spotify combined.

What lessons are there in Berwick Pizza for creating a powerful brand? 

Be The Rock

First, in the forty odd years I have been noshing on my local pizza (I am a fan of Stuccios and Tuzzi’s for the record) and washing it down with a refreshing Yuengling beer, it has not changed. Not. One. Bit. 

We don’t like our traditions messed with. Coke learned this the hard way with “New Coke” which was a foible lauded as marketing genius. There was a near riot when Twinkies were supposed to go out of business. There was mass protest and a run on grocery stores when Siracha was going to shut its door due to neighbors in Irwindale complaining about the smell. General Mills did a quick course correction turning Trix cereal back to its original neon colors after trying purge non-natural ingredients for its product line up due to the demands of loyalists. In psychology this is called ‘Reactance’; people just don’t like their freedoms institutions messed with and will act out in response.

While brands have to evolve, sometimes you just let something good…be good. So often we think we need to “disrupt” an industry to be a memorable brand. It’s not true. You can be memorable by delivering a consistently excellent, but unique, offering in the marketplace.

There is magic in being manically consistent. As I have written before, there is a vast amount of research that we, as species, HATE uncertainty. It is the definition of fear; the unknown. It is better to be consistently bad than great one day and horrible the next. Be consistent in what you are delivering. The only time inconsistency is good is when you deliver it consistently. For example, a scary movie, a haunted house, sky diving…you don’t know what to expect. But you expect that. 

You don’t have to be a giant brand to be consistent. In fact, the smaller you are the easier it is. The first thing to do is to document your processes. The second is to ensure you are doing it consistently. Ideally, these processes are customer-first following what the customer wants versus what is easiest for you as an organization.

Know Thy Customers

Second, these pizzerias know their customers’ preferences and keep it simple. Each of these shops knows their customers, and their parents, grandparents, and sometimes their great-grandparents. It is generational customer intimacy and resultant loyalty. Venerable brands such as the Ford F-150 and Ram and Chevy Trucks have long used this to their advantage and achieve repurchase loyalty rates above 70% … consistently.

Remember to start with the customer first. Human-centered design is a central tenet of design thinking which I think is the absolute right way to solve problems and innovate. However, make sure, you are not accidentally re-siloing on the basis of the experience by dividing it up into pieces again; this time based on the journey rather than by functional areas.

Connect yourself to the community and your customers. This involves what design thinking folks call empathy. While as species we are pre-wired to naturally sort people into categories, strive to take an “us” perspective vs. a “them” perspective, despite having the psychological deck stacked against you. Be part of the community you serve not an outsider.

As a medium or large business, the lesson here is twofold; resist hubris and really understand your customer. Warren Buffet once said, ““In the world of business, the people who are most successful are those who are doing what they love.” Don’t invest yourself in enterprises that you don’t personally believe in. Also, make sure you are truly trying to understand your customers by not only relying on quantitative methods. Get out and talk with people. Really try to understand them and most of all respect them.

Embed Yourself (before you wreck yourself)

Find ways to embed yourself as part of day-to-day experiences people have in life. Connect the experiences you create to events and occasions. Coke figured out how to sell millions of bottles in India, by repositioning their product as a ‘special occasion’ drink. It sounds cliché’ but great experiences do create memories…big and small.

Finally, make your brand a habit. Facebook has been incredibly successful in having millions of users consult their application as their first task of the morning. Amazon’s Alexa is in the habit business, with people depending on it for news and weather while they go about preparing meals. Make the experience you provide a habit; if not a necessity.

Through journey mapping and ethnography figure out where you might fit into the day-to-day life of your customers and potential customers. Understand what they like and don’t like about the experience you provide. Understand where you can make yourself indispensable… or at least welcome. Ideally this is done before you start down the product development path in the first place.

Coda

As for me, I have to watch my pizza consumption nowadays. It is delicious, but not particularly healthy for you. That said, I do make an exception to call in my order early, stop in and pay my $7.75 in cash for a half sheet (they don’t take other forms of payment) and sit down with my parents to enjoy the pizza. And the memories.

Photo by Dave Fish

Notes:

1. None of the “big 3” deliver…and a few only accept cash…and all have limited hours of operation

2. Dalo’s was founded in 1910, Tuzzi’s in 1919, and Stuccio’s in 1948.

Third Annual Mobility Study

Mobility Presentation2018-5-12 masterJoin me, James Carter of Vision Mobility, d Ashish Khanna and Simon Barret of L.E.K. Consulting, and Katie Murdoch and Junbo Zhu of Michigan State University Eli Broad School of Business  as we review the third installment of new mobility.  Find out if  ride sharing continuing to gobble up Taxi services, if subscription services is catching on, and what is up with those E-Scooter popping everywhere.

 

 

 

 

 

Find the full report here 

The $8 Billion Bet

With the pending acquisition of Qualtrics by SAP the stage is now set for what has been a long time in coming; the merger of CX, ERP, and CRM.  While I’m no Nostradamus, I have been talking about this for some time…and frankly I’m surprised it took so long.  For those of you who have no idea what I am talking about let me explain.

Qualtrics first cut their teeth in self-serve traditional market research software.  It was doing well by all accounts, but probably not growing as fast as they would have liked.  About 2-3 years ago Qualtrics made a hard right turn and starting skating straight for the EFM big guns like Medallia, InMoment, and MaritzCX to name just a few.  I think folks were kind of surprised. I know I was.  Why?  The world of CX is vastly different than traditional market research.

Image result for ryan smith
Qualtrics CEO Ryan Smith

First the level of analytical sophistication for the typical CX user is not as high as what is needed in MR. Most end users running a retail outlet want to know what their customers are saying and would rather endure a week long colonoscopy marathon than deal with discrete choice models using multivariate logit modeling.  After all, they just need to solve for a few pretty simple use cases:

  1. What’s my score (and will I get rewarded or punished)
  2. What customers need my help
  3. How do  I solve “outer loop” institutional issues.

That’s about 99% of all use cases in CX.  However, from there it gets more complicated.  There are some really unsexy issues that great CX providers have to be good at.  The ‘slop factor’ in traditional MR where we can remove one respondent here or there is no bueno in CX.  People are getting paid on those scores many times.  Every return is sacred.

However, the CX industry is big and once you lock in a client switching costs can be high.  That’s great for recurring revenue models which VC software folks are very keen on.  But there’s more.

With one little tweak to the traditional CX canon, the giant world of CRM opens up wide.  That tweak?  The inclusion of prospects as well as customers.

Rather than helping customers, you might be helping prospects find what they want. Rather than redesigning a service experience, you are tweaking the path to purchase to optimize conversion.  Super simple, on paper at least.

Beyond SAP being “kind of  big deal” in the Ron Burgundy sense, they also just happen to have a pretty good CRM and ERP systems already built. Well shucks!  All they need is a nifty snap-on of a CX solution and they are off to the races.  Look out SFDC and Dynamics 365!

The value proposition is great; why buy a bunch of unrelated systems when you can buy one whiz-bang integrated one?  Why are you talking to prospects with one system and customers with another.  Who is that cool guy wearing at flat rim hat?  Still reading?  Just checking.

Now anyone who has been in this business for more than a week knows that technology integration isn’t easy and  I can tell you first hand that cultural integration is harder still. The world will be watching this acquisition to see what they bring to the market. What does it mean to other EFMs?  What does it mean to CRM?  What about those research companies.  All very interesting!

Not withstanding countless prognostications (including my own), the future of the industry is far from certain.  However, two things are very clear to me; 1) I need to start wearing a hat more often and 2) the future of CX is clearly in the integration of CRM and EFM.

Grab some popcorn, it’s going to get more interesting.

Being Persistently Consistent

“Sir please take your shoes off!” the TSA officer commanded.

The befuddled elderly man was rightfully confused… everyone else in line had their shoes on as they proceeded through security.
He looked around one more time as he unpacked his toiletries on the belt.  Why was no else unpacking theirs?

Sir!” 
the TSA officer continued moving toward the man.
Ok ok!” he said as he struggled liberate his beige tasseled loafers from his feet.

He didn’t realize that in this regional airport they had expedited TSA-Pre passengers in the same security line as normal passengers.  Expedited folks didn’t have to take their shoes off…those who weren’t did.  It would confuse anyone. His experience was led by social cues, not the official rules, which were invisible to him.

Surprises are No Good

As a species humans hate surprises. The unknown is the central source of fear and anxiety. Where will I go to school?  What will interest rates do?  Will I get that job I want?  When will Starbucks have Pumpkin Spice Latte available?

We much prefer certainty. With certainty comes the comfort of knowing what is going to happen next. We like that. It allows us to plan and make contingencies.

Psychological research is replete with examples of the human need for certainty at the individual level, from uncertainty-identity theory to organizational level processes such as Mintzberg’s plea to “protect the technical core.”

Our entire financial system loves certainty and rewards investors for it. Scary movies are scary precisely because you are uncertain about what is going to happen next. Research in psychology has long demonstrated that uncertainty makes unpleasant situations much worse.

Your Customers Hate Uncertainty

Your customers also crave certainty in their day-to-day experiences.  When you pull up to that Starbucks drive-through you expect a certain sequence of events to happen.  When they do, you are happy. When they don’t, you are not.

I have found in my research that even really bad processes that are consistently executed are better than good processes that are inconsistently executed.  Even the guys and gals with the big brains at McKinsey agreeIt is better to be consistent than great.

The data consistently supports this assertion.

A study conducted amongst 964 CX executives last year found that organizations who consistent in the processes perform 172% better than those organizations that have inconsistent customer facing processes.  In fact that data showed it was better to have no processes whatsoever than ones that are inconsistent.

The Fear of Becoming Forgettable

Some would say that if we make everything “frictionless’ you end up creating a forgettable experience.  An interesting hypothesis, but one with which I disagree.  Creating a great customer experience is about making the “pain” of the experience disappear but figuring out how to turbocharge the good. Countless companies have figured this out and is the chief source of blowing up and disrupting the most entrenched legacy competitors.

After all, people who are annoyed and don’t come back if you force them into an experience they don’t like, especially if there are other alternatives. We don’t really want to remember the pain of applying for a home loan and hauling your laundry to the dry cleaners.  So, in that respect, the bad aspects of great experiences should be made less memorable…or extinguished completely. The removal of the negative makes the contrast of that new home or fresh dry cleaning that much more memorable.  And of course, after you take care of those hygiene factors you can continue to look for ways further enhance the good aspects.

So how do you get good at consistency fast?  Follow these five steps to get your organization on its way.

Step 1 – Perform process triage

Any process consistently executed is better than chaos. Therefore, the immediate imperative is to get folks to execute consistently on existing ‘folklore’ processes.  Make those latent processes that some of your processes have been doing for years explicit. Get them written down and everyone doing it the same way.  Anything is preferable to randomness. Document existing processes, train to them, and then making sure people are executing to them. This will patch the hole in the dam and you can then turn your attention to the hard work of developing more customer-centric processes.

Step 2 – Uncover the current journey

The next task after getting some semblance of consistency on core processes is to understand the customer journey as it is today and what customers want it to be ideally. This is accomplished by conducting internal and external journey mapping workIf you don’t have time to do the full journey (recommended) then pick a known ‘spur’ which is known to be troublesome today.

Step 3- Find out who is responsible

Once we understand the customer journey as it is today we are well positioned to redesign the processes that influence it. This is often called blueprinting: mapping back to the people, departments and policies that are influential to the process. Once you know who is responsible we can get folks together and get to work.

Step 4- Redesign the process

Business process reengineering was a great idea, but was often focused on redesigning processes around what was best for the company, not the customer. We always need to create efficiency, but not at the expense of losing customers.  Ideally, you should start with what’s best for the customer and then determine how to get as close as possible to that ideal.

In redesigning processes, you want to remove the areas that are negative and irritating customers and add in those that add extra value.  This is the essence of the thinking behind Blue Ocean Strategy. This redesign effort also goes beyond just process to things like communication and introducing toolsets, so process is often not the sole source from which to requisition solutions.

Step 5 – Start small and iterate

Don’t try to take on too much all at once.  Experiment and figure out what works and doesn’t work.  Your journey work should help you figure out what to tackle first, but that should be tempered by the technical complexity of getting it done.  A good enough solution today is better than a perfect solution next month…or next year.

Moving Quick to Get Consistent and Stay Memorable

First, get consistent and do it quick.  People hate the unexpected.  Then focus on the customer journey and take out the bad and amplify the good.  Do it based on the customer preferences and most of all do it consistently. Take away that awful fear of the unknown.  And if you see someone struggling in the TSA line…help them out and maybe buy him a Pumpkin Spice Latte.

Lies, Damn Lies, and …

In the insights field there are few sins more heinous than misrepresenting data.  Our role as insights and CX professionals is to provide a objective perspective and advocate for truth.  So often less scrupulous individuals attempt to use facts and figures to distort the truth to suit their own agenda.  Ryan McCready presents some really good illustrations in infographic form on how graphs are used to warp the truth to the point of breaking….read more here.

Why Curiosity Will Keep You Young

“Don’t act like a child,” used to be an admonishment.

I always liked acting like a child.  Being childish means being fun, spontaneous, and energetic.  It is striving to look at things like a child unclouded by the anchors of experience.  But most of all, being childish means remaining curious about even the most minute details of life. New multi-discipline research now is revealing that quiet possibly the Eldorado of youth can be found in just staying inquisitive…

Stay curious my friends.

Read more here.

A History of CX Tech

This article is third in a three-part series on the past and future of CX with a focus on role of technology in customer experience. Read the first and second pieces on ama.org. The series is a partnership between Dave Fish, Michigan State University visiting professor and founder of CuriosityCX, and Brian Keehner, a candidate in the master of science in market research program at Michigan State University.

The term customer experience (CX) has taken on a much broader meaning than it once did. Initially relegated to post-purchase engagements and viewed as a cost of doing business, CX is now regularly interpreted to encompass the entire consumer journey. It has emerged from the backrooms of customer support to the forefront. The world of customer experience has progressed from a collection of unrelated disciplines that vary by department and company to a coordinated effort with resources and authority.

Origins of Customer Experience

We did not arrive here overnight or even in the past few decades. CX originates from sources as disparate as call center technology and marketing analytics. Clearly, CX will continue to adapt, grow and change in the future. But its origins can help us understand where it is going.

Market Research

Market research emerged in the 1920s as a way of testing and improving advertising. Psychologists such as Dan Starch and George Gallup advanced the fledgling field of market research through the application of scientific principles. Following the post-WWII consumerism boom, market research began to truly emerge as a field of its own. Rooted in advertising and marketing, demand for market research expanded to almost every sector by the 1970s.

Total quality management (TQM) and other customer-focused initiatives rose to prominence by the mid-1980s, and the concept of customer satisfaction subsequently took off. Since customer satisfaction looked like the typical “frame-measure-report-action framework” found in traditional market research, many agencies jumped into customer satisfaction.

One early adopter was Rogers Research, which was acquired by Maritz in the mid-70s. Maritz, a company founded on incentivizing employees to improve performance, used customer satisfaction scores as performance indicators, marking the start of a long and tumultuous marriage between scores and performance. The firm soon started conducting large-scale customer satisfaction studies in Detroit and still does today as MaritzCX. At around the same time, as legend has it, JD “Dave” Power knocked on the doors of Toyota Motor Industrial Equipment and soon started what was to become the quality syndicated business JD Power and Associates. While JD Power initially focused on product quality, it made the jump into the service side of the business in the 1980s.

Process reengineering and quality initiatives increased during the mid-1990s, abetted by a considerable amount of academic squabbling, and created what is often hailed as the “golden age” for traditional market research firms conducting customer satisfaction-focused work. Bradley Gale, author of Managing Customer Value, and others were shifting the discussion from customer satisfaction to customer value. Their theory was that merely ensuring customer satisfaction is not enough, but rather value had to be better demonstrated. Customer value management (CVM) expanded the world from just examining post-purchase aspects to looking at quality, pricing, communication and other aspects of the experience that drive customer value.

Maritz and JD Power became key players in the customer experience arena and were joined by other firms including Gallup, Burke, iSky and Walker Research. At the same time, titans of market research such as Synovate (later acquired by Ipsos), TNS and GfK began gobbling up smaller firms around the world.

In the early days, customer experience research was largely conducted via phone or direct mail. Paper reports were initially used to present findings. With the advent of the internet in the mid-1990s, research companies began transitioning to outbound e-mail and built tailor-made reporting portals. These portals were largely customized for individual client needs and moved paper reports to tabular, web-based reports, which proved to be an easier and more cost-effective way to disseminate data.

Clients quickly became interested in customizing their web reporting sites, and research companies, who were used to accommodating ad hoc requests, happily obliged. This practice resulted in each client essentially having its own highly customized personal reporting website; but these sites were expensive to build, initially plagued with quality issues and required perpetual care and development as new technology and security concerns emerged. It also effectively locked out smaller client organizations that could not afford the hefty price tag associated with these large custom enterprise systems.

It was around the late-1990s when new competitors began appearing from other ad agencies and applied a new approach to the problem of capturing the voice of the customer. The industry leaders were initially dismissive of these new upstarts, as is all too common in industries facing change. Little did they know how this emergence would foreshadow disruption.

The Tech Startups and EFM

In 2001, Esteban Kolsky, then a Gartner analyst, began writing about customer feedback systems, which soon became known as enterprise feedback management (EFM). In the mid-2000s, several tech startups began appearing in Silicon Valley, Salt Lake City, Vancouver, Toronto and parts of Europe.

Early players included Service Management Group (1991), Confirmit (1996), Mindshare (1997), Empathica (2001) (now part of InMoment), Medallia (2001), Qualtrics (2002) and Allegiance (2005) (now part of MaritzCX). While their approaches all varied slightly, the common value proposition was this: We can deliver 80% of your needed functionality in near real-time for a fraction of the cost of bespoke solutions, and we are able to integrate multiple data sets.

Most were able to deliver on the promise of a fast, basic approach to customer feedback gathering and dissemination, but the boom of customization came at a cost. Early players set the stage by creating the demand for ad hoc programs. Firms found the high price of building customized platforms less fiscally prudent than repurposing existing programs that could produce a similar end result.

For a while, large traditional research players were selling high-end custom solutions tailored to large enterprise clients. The new EFM upstarts, in contrast, were selling standard solutions out of the box to small and medium-sized businesses. These differing approaches allowed both to occupy their own respective niche.

Each player seemed to follow the practice of picking their own area of specialty and largely preoccupied themselves with pursuing dominance of that respective vertical. Beyond tradition industries like travel, hospitality and business services, EFM systems have been applied to human resources (e.g., Namely, Workday and ADP), health care (e.g., Access and Perigen) and the nonprofit sector (e.g., Vovici and Ruffalo Noel Levitz).

This started to change dramatically in the mid-2000s. The EFM firms now became mortal threats to the entrenched research firms. But it wasn’t just the EFM players who sensed opportunity and wanted a slice of the action.

Call Centers

Call centers were logical places for customer satisfaction feedback systems to take root and flourish. With large transactional volumes, typically younger and/or less experienced agents, and a strong emphasis on performance metrics and coaching, call centers were aching for the insight voice that the customer could provide. Companies like ResponseTek and others sensed this desire and offered a platform that could handle the complexities of systems with many agents and organizational hierarchies that changed almost daily. It was only a matter of time until call center software companies would design their own EFM platforms.

Sensing opportunity, call center software providers added value to their existing technology. Verint is a very large call center, customer engagement and surveillance technology provider. With sales surpassing $1 billion in 2017, it has also created customer feedback software systems that many of its customers use in addition to their own EFM software application.

Born out of the Israeli intelligence community in 1986, NICE systems now has revenues more than $1 billion as well. With a pedigree for security, surveillance and call center software, NICE built its own EFM software initially for post-call center satisfaction. NICE recently acquired Satmetrix to further establish itself in the CX technology space. Another player of note is Convergys, who also operates in the EFM space and has a call center technology heritage.

The NPS Effect

The seminal work of Fred Reichheld, Bain, and Satmetrix appeared in the Harvard Business Review in 2003. Called the Net Promoter Scores (NPS), it was a simple way to take on two major problems in the CX world at the time: complexity and ROI.

First, many of the voice-of-the-customer systems at the time had complicated weighting systems and indices which were difficult for users to understand. In contrast, NPS was understandable for executives and front-line employees alike. It is a simple, 11-point scale that subtracts brand “detractors” from brand “promoters.” As is the case with many popular ideas, the simplicity of the idea made it appealing and aided in adoption.

Second, client companies were investing millions in CX, often seeing little in return for their efforts. While others have demonstrated the link between customer experience and business outcomes, none did so as eloquently as NPS.

While there is still much controversy around the NPS concept, no one can debate the impact it has had on the industry. When asked whether it helped or harmed the industry, Customerthink editor Bob Thompson said, “I have to edge to ‘helped’…NPS is a key reason that people are interested in CX and why it’s become a boardroom issue.”

Not long after, in 2011, the CX discipline was further advanced with the founding of the Customer Experience Professionals Association (CXPA) by Bruce Temkin and Jeanne Bliss. This created an intellectual home for people from many different disciplines and reinforced the legitimacy of the field of CX.

Where We Are Today

Despite repeated claims of EFM’s death, both the term and the application are very healthy and growing, albeit under alternative acronyms, such as CFM. Likewise, CXPA appears to be healthy and growing with close to 14,000 followers on LinkedIn.

Today, the definition and purview of customer experience continues to grow, with many looking at the “C” in CX and wondering if it does not capture an end-to-end experience. After all, the CVM work of the 1990s was looking at aspects of the experience outside of post-purchase (to a limited degree), but never really established a beachhead into acquisition, the traditional province of marketing. Today, with a call to “bring down the silos” inside organizations, CX is finally starting to break the bonds of post-purchase experience to be more inclusive of the entire journey, from catalyst to disposal.

While there are many different types of organizations in the CX space, the EFM firms who have infused technology into domain expertise form the basis of the industry. Their increasingly large footprint in the CX space has them poised to continue to redefine the industry. These firms vary considerably in the size of their business and the scope of their CX management solutions, but they have a wide global reach. This global presence is supported with myriad office locations, predominantly throughout North America and Europe, which support customers in more than 50 countries across the world. Who will be on top in five, 10, or 20 years is anyone’s guess, but here are today’s key players (listed in alphabetical order).

Clarabridge
Reston, Virginia
Clarabridge is an experience management and text analytics software provider.

Confirmit
Oslo, Norway
Confirmit is a provider of voice-of-customer and market research software.

Customerville
Seattle, Washington
Customerville is a customer experience-focused survey software provider.

InMoment
South Jordan, Utah
InMoment is a customer experience-based management company.

Market Force Information
Norcross, Georgia
Market Force Information specializes in CX management solutions that are designed to deliver location-level customer feedback.

MaritzCX
Lehi, Utah
MaritzCX is a customer experience-focused company.

Medallia
San Mateo, California
Medallia is a provider of SaaS customer experience management solutions.

Questback
Oslo, Norway
Questback is a provider of online survey and feedback management solutions.

Satmetrix
San Mateo, California
Satmetrix specializes in customer experience management software.

Qualtrics
Provo, Utah
Qualtrics is an experience management software company.

ResponseTek
Vancouver, Canada
ResponseTek is a provider of enterprise customer experience management solutions.

Service Management Group
Kansas City, Missouri
SMG (Service Management Group) is a CX technology and insights company.

Cooking With Gas: Leveraging Social Intelligence to Ignite CX

A short story:

As the car snaked through another winding northern Arizona canyon, my trusty pack swelled with the necessities of the camping getaway ahead, and my mind wandered to dreams of fire-roasted s’mores at camp. The campsite was just coming into view, nestled in a cove of juniper and sandstone against a blue and babbling brook. The sign just ahead read…wait, what? “Fire Ban. No Campfires.” (Can you say buzz kill)? Fast forward a few hours. After driving what seemed like 100 miles to the nearest town while pining for a campfire, I was finally back at the campsite with a new propane stove, hungry and tired.

Enter the Coleman camping stove, some chicken sausages and boxed mac & cheese (the fuel station’s finest). The non-campfire meal was reluctantly cooked, and then (surprisingly) thoroughly enjoyed. The delicious meal was cooked in less than 15 minutes and cleanup was minimal. While it wasn’t a campfire s’more, it filled a need and did it well. What at first was a huge frustration, became the weekend’s MVP. Many others in this camping area had similar experiences, as propane was the only option for cooking a hot meal and getting a hot caffeine fix the next morning (enter influx of artsy stove photos on Instagram).

That micro experience at my campsite compounded into a sizeable social media spike for Coleman, presenting a golden opportunity for the brand to harness campers’ conversations online, and to identify a relatively captive audience segment – weekend warrior car campers with no traditional fire option for hot meals, specifically those in this year’s widespread “fire ban” geographies. Alas, no evidence of an understanding of this audience on social media. Instead of a CX fail – this Coleman scenario highlights the opposite problem – while it provided a great product experience, it failed to understand (or acknowledge an understanding) of publicly available online chatter from customers. The point is this: Across all industries, opportunities to learn from unsolicited conversations abound, but companies too often leave untapped terabytes hanging out there in the social sphere, heavy with the weight of missed opportunity.

Why social matters:

As part of the broader CX ecosystem, harvesting and understanding unsolicited, publicly available social data can help us get smarter about customers, better serve their needs, and drive our businesses forward by:

  • Casting a wider net: Integrating social data into our CX ecosystems broadens audiences and extends our reach into true customer understanding
  • Enriching insights: Social adds a qualitative component to quantitative CX data, bringing insights to life and adding texture to CX programs. Imagine the power of unsolicited, customer-generated insight alongside survey data, augmented by inferred data like location
  • Informing intelligent conversations with customers: Social channels give customers an ability to share pain and joy, at any time, with very limited restrictions. Companies can leverage this unsolicited insight to inform survey design, marketing campaigns, and deeper market research projects, without guessing where to aim (e.g. in my Coleman stove example, imagine a flash sale of accessories for the propane stove in the fire ban region, or a donation and nod to local first-responders for the wildfires…)

The big idea is this: by leveraging online sources like Instagram, Pinterest, Reddit, Yelp and others, in harmony with broader CX efforts, companies can tap into the conversations of millions without conducting long, expensive, and laborious formal research. Integrating social data is low-hanging fruit for brands dedicated to further understanding the hopes, pain and dreams of customers (A.K.A: every leading brand in the world). Alas, for many, effectively harnessing unstructured social data as part of a broader CX plan is today’s elephant in the room. Generally speaking, alignment around the issue has yet to be reached and is a common struggle in board rooms everywhere.

The fundamental challenge:

Considering the vast expanse of internet data, even the most sophisticated brands often lose their grip on unsolicited online feedback. With tens of billions of data points floating around, it is understandable that some insights float on, untamed. The tricky part is not in merely data collection but turning those hordes of data into something intelligible and actionable (key word: actionable) and integrating seamlessly into the broader CX landscape.

In many cases, brands are hamstrung by traditional research methods that need to be turned out to pasture. Many brands have spent so much time peppering customers with long surveys and laborious research initiatives that they’ve have lost sight of the fact that these same customers are likely providing rich unsolicited feedback online. While there is a widespread nod to the general importance of harvesting unsolicited social data, the challenge comes in effectively harnessing those billions of data points and translating them into intelligence to inform and ignite CX insights.

While there is undoubtedly a time and place for deep (and sometimes even traditional) research, a CX ecosystem can work harder by leveraging the low hanging fruit that social channels have to offer, to convert the conversations of millions into actionable insights, and to inform research to make brands better. Read on for a few quick tips about integrating social into your CX vision.

Three tips for getting smart about social data in CX:

1. Align on the end goal of integrating social (back to CX basics)

  • Social initiatives manifest in several different ways, all pointed to a different end game. Decide if focusing on social monitoring, engagement or intelligence is most important for your specific business needs.
  • No single firm can meaningfully execute monitoring, engagement and intelligence concurrently, so choose the right partner that will help you move toward specific goals with social. A few leaders in this space include Infegy, Crimson Hexagon and Brandwatch, each with their own unique take on social.
  • As a best practice in CX strategy, I encourage clients to focus on social intelligence as a best practice as opposed to simply monitoring the social sphere, with the goal of gleaning deeper understanding, not simply adding another dashboard to the CX arsenal.

Where to start: learn basic definitions within the social sphere before goal-setting; Here’s a succinct and helpful resource written by leading social intelligence company Infegy about important distinctions to be made when determining your goals with social.

2. Don’t stop with data collection

  • It’s easy to harvest customer-generated data from companies like Gnip and Webhose, which provide high volumes of data in a commoditized form and are frankly useless without a means to understand the data. Simply collecting the data is table-stakes; the real value comes in the analysis and conversion of numbers on a screen into a meaningful action-plan.
  • The sheer volume of social data is incredibly overwhelming. This is why it is critical to leverage sophisticated social analytics software to comb through the noisy landscape of jargon to ensure action (this can’t be stressed enough).
  • Context matters, and social data is only as good as the NLP (Natural Language Processing) engine analyzing it on the back end to ensure contextual relevance, accuracy and recall.
  • Still stuck on a tired NLP engine? Upgrade to ensure the engine driving your social analytics is sophisticated and built for high volumes of text. Be sure to ask your provider about their sentiment analysis score (ensure this score includes precision/accuracy and recall).
  • Social data without a sophisticated text analytics capability is a nightmare and leads to confusion. Ensure you’ve employed a well-oiled text analytics machine before you invest in social as part of CX, otherwise you’ll end up with just more big data sitting on a screen, with no purpose but to cost you time and money.

Where to start: Back up. Breathe. Ask yourself why you’re collecting social data and how you plan to use it to reach your CX goals. If you don’t know the answer to either question, push pause on the social data drowning and recalibrate to ensure social is working for your customer understanding effort, not against it. Then, engage your trusted and independent advisor(s) to help you curate the right NLP engine to fit your specific business needs.

3. Leverage social to augment other research

  • Leveraging social data, including imagery from sources like Instagram and Pinterest, companies can add a rich layer of insight to more traditional research.
  • Using unsolicited feedback, video, and images from the social sphere, CX teams can create more engaging internal materials and garner deeper buy in from stakeholders across the business.
  • Flip your annual analytics plan on its head and allow customer-generated data to guide your strategy, for a customer-centric approach to research.

Where to start: As an inexpensive test and quick win, collect a few publicly available customer videos or images from social channels and put together a simple highlight reel (you don’t need anything fancy, just your smart phone). Next time you host an internal CX planning meeting, share the reel with your colleagues and CX program stakeholders to drive engagement and buy-in for the broader initiative. This exercise is particularly useful for journey/experience mapping.

In sum:

While social media will never completely replace market research or surveys, its ability to augment efforts to understand customers is undeniable. Its impact on the relationship between brands and customers is a dynamic any company that wants to succeed should take seriously. It is time to embrace the reality that customers are having loads of important and unsolicited conversations online; conversations that leading brands leverage, and lagging brands ignore. Harnessed and synthesized in a meaningful way, unstructured social data can fuel your next “ah-ha” CX moment. One such moment for Coleman, perhaps, could have started in that Arizona campsite.

CX leaders, I encourage you to reflect on your current efforts to pull social insight into the CX ecosystem and go to work architecting a smart framework for weaving social with surveys and other market research data. EFM platforms, keep driving toward CX solutions that provide a 360-degree view of customers, harmonizing the unsolicited with the solicited, for a holistic view and actionable path forward. Social can be the spark that lights your CX fire – now, go ignite it!