The Perfect Customer Experience

Turning Satisfied Customers into Advocates – Dale Wolf, Editor

The Perfect Customer Experience - Turning Satisfied Customers into Advocates – Dale Wolf, Editor

RSS and Podcasts Cited as Best Value in the Web 2.0 World

First, a few facts from Forrester about ROI from Web 2.0 strategies, and then my two cents worth on the findings:

According to a new study by Forrester. much of the value of a Web 2.0 deployment is incremental and "soft" in nature, and as a result, clear business value measurement remains elusive.

Despite this challenge, the 275 IT decision-makers that Forrester recently surveyed indicated that not all Web 2.0 is created equal.

Among current users, Really Simple Syndication (RSS) and podcasting show the highest average business value, while social networking and blogging show the lowest
.

We do find, however, that those firms with the largest number of tools deployed see the best value, although no "killer combination" of tools has emerged. In addition, most firms continue to use traditional value measurement techniques like ROI and total cost of ownership (TCO) when evaluating Web 2.0 deployments. For tech marketers, this means a dual challenge of accommodating clients’ corporate value measurement expectations while helping them onto the right track for incremental and softer value realization from the onset.

Now for my two cents worth …

Fear not, bloggers. Measuring what we do to contribute to a quality customer experience cannot be measured by traditional TCO metrics. We can, as I do on this blog, include links to useful resources and keep track of the sales leads that originate this way. But in the end, blogs are part of a larger customer experience strategy. They contribute to customer loyalty (defined as an attitude that leads a customer organization to consistent repurchase, increased spend and a greater propensity to adopt new products and services from a given supplier).

Blogs, from my point of view, fit into a strategy of learning from customers, teaching customers how we can make them more successful and amplifying the voice and influence of our advocates within our customer base. This is a huge strategic direction and when a blog contributes to this process, it has enormous value to the corporation.

That all said, I am not here to downgrade the importance of RSS and podcasting. We are finding RSS stimulates response rates. And we find podcasting to be a new tool in our arsenal that has many of the same attributes as blogging … it is a tremendous medium for learning, teaching and amplifying core messages and building a positive customer experience.

Now, for your two cents worth …

High Tech Companies Get a Failing Mark from Customers

By Bob Sullivan, MSNBC’s Red Tape Chronicles

Msnbc_sullivan_bob Ever wonder why your computer and your gadgets are driving you mad, and why calling the manufacturer or seller for help seems to make things worse? Perhaps it’s because high-tech CEOs have an inflated sense of their customer support skills.

A new survey shows that 75 percent of high-tech titans say their companies provide "above average" customer care.

OK, I’ll give you a moment to stop laughing. Apparently, these CEOs don’t have to call the standard 1-800 number.

As you might expect, high-tech consumers don’t share this perception. To be precise, nearly 6 in 10 respondents told researchers they were somewhat upset or extremely upset with the way their most recent customer service experience was handled, according to consulting firm Accenture.

"That’s a rather stark disconnect," said Brian Sprague, who runs Accenture’s customer service and support group.

High-tech trouble can be a big time suck for consumers. Another survey released earlier this year concluded that the average consumer wastes 12 hours every month on computer troubles.

‘It’s not us’

The phenomenon of gadget madness isn’t totally lost on high-tech CEOs, Sprague said. It’s just that most executives believe the problems only impact other companies.

"They all think, ‘It’s not us,’ Sprague said. "So we say, ‘I understand you think you are great, but let’s do a little survey.’” At most firms, the survey shows the same disconnect between what executives and their customers think about service.

The consequences can be severe. Consumers who feel they’ve been badly treated are incredibly disloyal, the Accenture survey found; 81 percent said they’d purchase from a competitor next time.

Even average treatment isn’t good enough — only 27 percent of those consumers say they’ll buy again from the same company.

Budget conscious companies in the ultra-competitive consumer electronic industry are always looking to cut corners, and customer service always seems like a good target. Companies save on employee costs by forcing people to work their way through voice mail systems or by skimping on warrantees. But that’s a penny-wise, pound-foolish strategy, Sprague said. The actual cost of providing good customer service — having a human being answer the phone, for example — only costs between $10 and $30 per customer. Acquiring new customers is much more expensive. Direct broadcast satellite system firms like DirecTV spend on average about $600 to acquire customers, he said.

Rest of article

New Whitepaper: The Science of Customer Service

Sykes  Enterprises is  a  family  of  global  companies  delivering  business  process  outsourcing  services  with over  forty  customer  interaction  and  fulfillment  centers  throughout  North  America,  Europe,  Latin  America,  Asia  and  Africa.

I know it’s a good company because a great friend of mine works in their communications department and she would not work there unless it was a great company.

I strongly recommend a whitepaper recently produced by Sykes: The Science of Customer Service. This is an exploration of how  customer  service,  when  applied  with  a  disciplined  and  scientific?like  methodology,  can  be  a  powerful  differentiator  that  sets  you  ahead  of  the  pack.  Applied  consistently  and  keeping  the  customer  at  the  forefront,  providers  can  leverage  their  service  offerings  to  secure  the  brand  loyalty  needed  to  maximize  the  profitability  of  each  customer.

You can download the whitepaper here. Download science_of_service_whitepaper.pdf

Customer Experience Strategies Pay Big Rewards

It is sooooo hard to change a culture from company/product centric to customer centric. We all know intuitively that it is the right thing to do. But dragging all those employees and senior managers along the path to a new way of working is plain hard work. Which is probably why so many companies are still laggards.

And the laggards are paying a big price for their laziness!

A study by Aberdeen has 3 rather convincing facts that should propel every lagging CEO to initiate immediately a sharp course correction and launch a customer experience business strategy. If there are laggards within your company, they have probably seen their best days in service and it is time to replace them with people with a passion for serving customers.

  • Best-in-class companies have average customer retention rates of 63% compared to laggards at 30%.
  • Best-in class companies have annual gross revenue growth of 60% compared to laggards at 38%.
  • Best-in-class companies have a 43% return on marketing investment compared to laggards at 24%.

Customers are rewarding companies who provide a great experience and they are punishing the laggards.

Part 1: The 12 Laws of Customer Loyalty

By Jill Griffin

In 1988, Jill founded The Griffin Group, specializing in customer loyalty research, customer relationship program development and management training. Her clients range from Fortune 100 corporations to fast growth start-ups. Clients include Dell Computer, Deloitte & Touche, Sprint, Days Inn, Advanced Micro Devices, Raytheon Aircraft, Marriott, Ford and the U.S. Navy. Jill is the author of two groundbreaking customer loyalty books, including best seller, Customer Loyalty: How to Earn It, How to Keep It, which is included on Harvard Business School’s "Working Knowledge" list of recommended books.

J_g_photo1. Build staff loyalty
It’s a fact; any retailer with a high level of customer loyalty has also earned a high level of staff loyalty. It’s darn near impossible to build strong customer loyalty when your staff is in constant turnover. Customers buy relationships and familiarity. They want to buy from people who know them and their preferences. The key rule of loyalty: serve your employees first so they, in turn, can serve your customer.

2. Practice the 80/20 rule.

All customers are not created equally. Roughly speaking, 80 percent of your revenue is being generated by 20 percent of your customers. A smart company segments customers by value and monitors activities closely to ensure high value customers get their fair share of special offers and promotions.

3. Know your loyalty stages, and ensure your customers are moving through them.

A customer becomes loyal to a company and its products and services one step at a time. By understanding the customer’s current loyalty stage, you can better determine what’s necessary to move that customer to the next level of loyalty. If your customer relationship processes and programs aren’t moving customers forward, rethink them.

Key Insights for Delivering a Perfect Customer Experience

By Shaun Smith

Shaun_smith_2 Do you know what your most profitable customers value and the 3 or 4 most important attributes which drive their intention to repurchase or to refer you?

Without the answers to these questions you may have data, but you do not have insight. A key difference between simply providing ‘good’ customer service and a customer experience is being differentiated in a way that is valuable to target customers. Being different is not enough.

For example, the Fashion Café, the chain of restaurants created by fashion models including Naomi Campbell, was clearly differentiated in its use of fashion memorabilia in the design of its restaurants. However, its offer had no lasting value for people who go to a restaurant first and foremost for the quality of its food and service. As a result, once the novelty factor had worn off The Fashion café saw a decline in business.

Another example is Barclays, the UK based bank that created a very expensive advertising campaign to promote the fact that it is a big bank. The campaign bombed because most retail customers see no value in their bank being big. In fact quite the opposite; ‘big’ stands for impersonal and uncaring.

One more example: Like a number of business people, I use the Platinum American Express Charge Card for its travel service and benefits, yet I receive unsolicited direct mails shots from an organisation called Capital One on a weekly basis. The mail shots all say the same thing and offer me the same credit card promoting a low rate of interest. They always enclose a cheap ball-point pen in the envelope. This bank clearly has not taken the trouble to understand me, what I value, or develop an offer that is likely to appeal to me. It has gotten to the point that now as soon as I feel the pen through the envelope I throw it away unopened.

We can all avoid making this mistake — treating customers as if they are all the same … or worse yet, treating them all as if they were you. When we look at how we can provide value to each distinctly individual customer, we will be moving in the direction of the perfect customer experience.

Customer Experience is for Every Organization

By Dale Wolf

Companies deliver experiences.

Tesco, the UK grocery chain. And Virgin Atlantic, Harley-Davidson, The Banyan Tree, First Direct, Amazon, Starbucks, Scotti’s Records, Apple Computer, Dorothy Lane Markets. These are a few businesses that have been richly rewarded for their attention to delivering a perfect customer experience – the kind that creates referral, retention and profitable growth.

Non-profits deliver experiences, too.

Consider United Way, Salvation Army and Christian Children’s Fund or an organization teaching adults how to read, or your community church. When a charitable organization fails to meet customer expectations, donations dry up, people go away.

Governments also deliver experiences.

They collect taxes and provide services. The Federal Emergency Management Agency, Social Security Administration, The Security Exchange Commission or Tampa’s Solid Waste Collection Department. Or at the local level, the public school system or the public safety department. When a government fails to meet customer expectations, it is voted out.

Meet My Terms or I will Leave You

By Dale Wolf

Keep in mind, now, that customers are in charge; not you. That boat has left the dock. The toothpaste is out of the tube and no one can put it back in. The war was fought and the customer won.

The new battle is over customer experience.

But to the chagrin of a large office products manufacturer the bar for earning customer loyalty is higher than any of us might want to imagine. This company does over 250,000 customer satisfaction surveys a year. To say they manage customer loyalty is an understatement! When this company did the usual survey of 5 customer loyalty attributes, they noticed an unexpected conclusion.

Customers who were generally satisfied on several attributes did not repurchase as much as those who were satisfied on all attributes. The customers were demanding a 5 out of 5 in exchange for their loyalty. In my books, a 5 out of 5 attributes is a perfect score. Well, I can’t meet that kind of demand, you might be saying. Perfection is out of the question. It is impossible.

Meet my terms, the customer is saying, and I will be loyal to you. If not, well, there are a lot of providers to select from.

Are you kidding? A PERFECT Customer Experience?

By Dale Wolf

Perfection, we all know, is an ideal state — zero defects. Yes, the pursuit of perfection is a quest. Sort of "the impossible dream" search by Don Quixote. If we do not attempt to deliver perfection, we will never get there. The pursuit of perfection is a mission (in fact it is the stated mission for Cincom Systems, where I work).

But it is not enough today to pursue perfection and that is why I call this blog "The Perfect Customer Experience" instead of "The Pursuit of the Perfect Customer Experience."

Why not just set my sights a bit more realistically? Why push the story to a level many would consider unattainable?

The answer is that perfection is now the standard for customer loyalty.

Let me back up a bit to how I arrived at this point.

For years, all kinds of companies have been collecting customer satisfaction data. This has become pretty routine. And lots of companies have used this data to improve their offering. But there was virtually no relationship between having a high satisfaction score and customer retention. In fact a study by Michael Lowenstein a decade ago indicated that only 2% of companies were able to show increases in revenue from customers who were satisfied. Even satisfied customers still bolt. Satisfaction is a standard that a lot of companies can deliver.

It takes something more than satisfaction to hold onto customers.

A large office products and services company that probably does over 250,000 customer satisfaction surveys a year helps me illustrate a critical difference. Upon analysis, what they discovered is that "completely satisfied" customers were six times more likely to repurchase. When this company did the usual survey of various attributes it noted an unexpected relationship. Customers who were generally satisfied on several attributes did not repurchase as much as those customers who had aggregate scores of 5 out of 5. In my books, 5 out of 5 is perfect, and that is the standard that customers put on us if we want their loyalty.

Now, here’s the trick.

It is terribly expensive to move ALL customers to the point where they will give you a 5 out of 5 on all meaningful customer sat attributes. In fact, as we all know, typically 80% of your profits will come from 20% of your customers. That statistic is what has driven the shift to treating different customers differently.

If you can identify your best customers, you can spend more of your limited resources to deliver to them a perfect customer experience while you just meet the basic satisfaction standards for the other customers. You can build a more profitable business by treating these customers like royalty and letting up on the rest of the less profitable customers.

Perfection is The New Rule

You can — and in fact — you must deliver your best, most profitable customers a perfect customer experience. The payoff (if your business model is similar to the office products company mentioned above) could be a six-fold increase in retention of those customers who should matter most to you.

Now, when you arrive at the point where you understand your most profitable customers, you can design a perfect customer experience for them. This will make you unique and highly valued and put you in a position to attract more customers who are like the ones who already produce most of your profit. You can surprise these great customers with a dozen roses and thank them for their loyalty.

Honesty? Gaming the Metrics of Customer Experience Management

Laurabrooks7550 Dr. Laura Brooks, Satmetrix, offers tons of Cx advice on her blog … like this one:

How do you know if Net Promoter is the right metric for your organization? The telltale sign is this: does it motivate employees to change their behavior? In some cases, the score becomes an end in itself—more important than the improvements that impact that score—which leads to “gaming.”

From my perspective, the whole issue of gaming a customer experience score has been taken to new heights. The last several cars I have purchased all had a common experience: the dealer rep that sold me the car practically begged me to give him a good score when the company called me. I walk out of each car deal so worked over on the Cx score that I would feel guilty giving less than a top score on any attribute. And I am theoretically a professional who knows the gig in customer experience metrics.

Surely, auto manufacturers know they are being gamed on these scores. Can’t they figure out some way around the hypocrisy?   Are they so intent on using these scores for public relations? Or are they really interested in improving the experience? Time for the mystery shopper, again!

Metrics are meant to motivate employees to deliver a perfect customer experience. But if the employees gather aroung the water cooler and joke about manipulating new customers to give them a score they did not earn, then the whole thing goes in the tank.

Is Customer Experience a Fad or a Real Business Movement?

By Dale Wolf

Wolf_dale_5x7_150dpi_1 I get asked all the time why I think delivering a perfect customer experience is so important. My knee-jerk response is "do you want to deliver an imperfect customer experience?" Many managers want to know if Cx is a fad or a legitimate business movement. I decided to collect evidence on the reality of Cx as a real, honest-to-goodness, unstoppable and forever-changing business movement is in a document I researched and have attached at the end of this posting.

Without much trouble, I might add, I found 25 senior managers at successful, well-known companies who confirm that at least they see this as a big deal … one around which they are reorganizing, recrafting and reenergizing their companies. In addition to confirming the legitimacy of Cx, these business leaders are also sharing business-critical insights on how they are doing it, I urge you to read this document carefully and underline every comment that one of these leaders makes that you can put to work in your organization immediately to get Cx moving faster.

A few of the high-level take-aways from this document include:

  • These leaders have done their best to get everyone in the organization focused on the customer’s total experience
  • These leaders have found ways around the internal and external barriers that stood in the path of moving from corporate-centric to customer-centric — this has required setting up processes and supporting technology to enable the firms to get closer to their customers, to develop deep insights about customer needs and aspirations
  • These leaders see Cx as a long term, continuous improvement, constantly changing process
  • These leaders have wrapped compensation for achieving customer loyalty as a big stick to get alignment 
  • These leaders are not ducking from the fear and the complexity that breaking away from a product orientation causes … and they are benefiting rapidly with faster, more profitable growth

These 25 business leaders are moving out ahead of their competitors. Are you?

Download business_leaders_on_cem.doc

If you have difficulty in downloading this document, just let me know by posting a comment and I will email it to you.

Addicted Customers Getting Raves

John Todor, one of the most active guest authors on this blog, is getting rave reviews for his book, Addicted Customers. Tom Darcy of IBM calls this book "a roadmap for identifying, developing and creating the ultimate in business relationship – addicted customers." Bill Flitter, founder of Pheedo, Inc. says, "Keep a notepad by your side. This book will inspire great ideas on how you can engage your customers during the buying experience." According to Ron Tonini, CEO of Picture Marketing, "It provides powerful answers that are simple to grasp and easy to put into action."

John is the Managing Partner of The Whetstone Edge, a customer experience consulting and training firm that applies scholarly research on human behavior to buyer-seller dynamics including customer loyalty, trust, retention, customer service, CRM – customer relationship management, and marketing strategy. Customer care, acquisition, and client relationships are profoundly affected by the underlying psychological principles that lead to customer satisfaction, trust, and loyalty, and long term, lifetime value.

Now here’s the best part.

John will be giving a live presentation, co-hosted with Cincom Synchrony Contact Center Software on March 21. Stay tuned for registration details.