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Tag Archives: Customer Experience

Empathy the missing ingredient to drive experience innovation

Two years ago I read a book by Dev Patnaik called “Wired to Care” which had a profound impact on the way we go about conducting our business and  how we approach getting close to customers to truly understand them. The book is about empathy, about really understanding customers, not just demographics and market research reports. Empathy that places you in your customer’s shoes and enables you to make the right decisions for customers because you really truly understand their life and their emotional drivers.

In light of that, I liked the following article by Jorge Barba, simple lessons but never-the-less, good ones to help turn your most valuable customers into raving fans.

Recently I was in Mexico to have lunch with a friend. I went to pick him up from from a meeting but had to wait a few minutes outside of his offices. As I was waiting for him I parked in front of a pharmacy and it dawned on me that in this particular area there where five pharmacies in about a half mile radius. These pharmacies all looked alike, they were not from the same brand and the only distinction was the color of their walls. I have no doubt they operate the same way. It got me thinking about how I could differentiate one from the others…

Experience innovation is a difference maker

Innovating an experience improves or reinvents the customer experience in the purchase or usage of a product or service. Companies such as Disney stand out as a prime example of what it means to innovate a customer experience. Apple is right there too with their Apple store. The reason both stand out is because they’ve , says Scott Gould.

Another great example of a company that stands out is Umpqua. We all know what a traditional bank looks like, well :

Umpqua’s 15-year track record of growth has little to do with the products it markets, which are virtually identical to the products offered by other banks. What’s distinctive about Umpqua has to do with how it offers those products — its commitment to reimagining the experience of interacting with a bank. Davis puts is this way: “If you took a person, blindfolded them, sent them to a bank, and took the blindfold off, 99% percent of them would say, ‘I’m in some bank somewhere.’ We want our customers to say, ‘I’m in an Umpqua bank.’ We don’t want the experience of banking here to feel like banking anywhere else.”

That’s why Umpqua designs its branches to appeal to all five human senses.

What Umpqua understands it that to be and stay relevant, you have to be different in every sense of the word. Not just ‘be different’ as marketing ploy, but ‘do different’ and make a difference.

The entire article can be accessed here

Is customer focus overrated?

I thought it is always useful to look at alternative points of view regarding customer focus. Below is the first part of a good article by Professor Martin Koschat from IMD in Switzerland. He makes a good case that not every company needs to rely on being customer focused to be successful. Although correct, you need to either be so operationally excellent that you can achieve a price advantage on a sustainable basis or you have an innovation pipeline Steve Jobs would be envious of. For everyone else, being customer centred and using a Service Design approach to understanding, designing and executing a great service experience is a great choice if you wish to keep more customers who spend more with you every year.

There is no shortage of extremely successful companies with business models that critically depend upon a high degree of customer proximity and the ability to generate detailed insights into customers’ needs, wants and behaviors – those buying habits and attitudes pivotal in shaping and directing the whole organization. In other words, companies that are customer centric. Yet, there are also many successful companies that don’t go out of their way for customer proximity. By looking at companies that operate on both ends of the spectrum, it becomes clear that customer centricity is not a virtue.

It is well known that BMW delivers superb engineering. Perhaps less well known is the fact that BMW tightly controls the supply chain downstream by owning most wholesale operations and many of its retail outlets. By doing this, BMW enforces, and ensures, the uniformly high level of service befitting a top luxury brand. At the same time, this proximity to the consumer provides direct and timely insights into consumers’ shifting perceptions and tastes.

Nordstrom, a US department store chain, consistently ranks at the top in terms of customer satisfaction surveys. Shopping is made to be a rewarding experience. Nordstrom’s personnel is carefully selected and trained to help customers along the path of finding what they want or need and, in the process, identify and present new products they never knew they needed. Invariably, customers often leave a Nordstrom store with more than what they had planned on buying. The level of Nordstrom’s customer engagement is in line with the retailer’s sales strategy.

For the balance of the article, please click here.

How to turn Leavers into Lovers…baby

When American Express decides it’s time to stop treating customer complaints as a cost centre and start using the opportunity to get closer to their customers and build a stronger relationship with them, it’s time to sit up and take notice!

Over the past 12 months, the Chief Marketing Officer of American Express came out and said in effect they had been ignoring one of the strongest and most important branding tools at their disposal…the telephone. This isn’t an article about Amex, it is a guide to assist those sitting in organisations on how to turn a customer who is on the verge of leaving you and how to turn them around to becoming your most loyal advocate.

Taking a Service Design approach and getting closer to your existing customers so you can find out how to better serve them has to be one of the smartest investments for service providers. It sure beats spending millions on TV making more promises you are not structured to deliver upon(that is is another post altogether).

From Inc. Magazine, they have compiled eight expert tips for dealing with the toughest customers. Here’s how it’s done right.

Want some old advice? The customer is always right. Okay, now you can stick that in your pocket. Today’s best service entrepreneurs are looking beyond old axioms in relating to customers. That’s because today’s best customer service isn’t something that can be faked: it’s personalized and it has a personality. Do you have the certainty you can harness all the feedback customers will give your company, act on it, and keep your best customers coming back for more? We’ve compiled highlights of new expert tips from articles in Inc. and guides on Inc.com to help you take a fresh look at making your customers happier and your business better.

1. Ditch the formalities and break the rules.
The last thing unsatisfied customers want to hear is a recitation of your company’s return policies, Tali Yahalom writes on Inc.com. “Today’s customer expects to be treated as an individual, not as just another number who’s complaining,” Ann Thomas, a senior consultant at Performance Research Associates, a Minnesota consulting firm, says. Consider the case of a department store with a 90-day deadline for returning an item. If there’s a customer who just got married, returned from her honeymoon and, at day 100, realized that a gravy plate adorned with doves is actually not her style, it’s worth looking into alternative options rather than sending her home right away. Your company should know that occasionally bending the rules will ultimately cost less it than it would to lose the customer or, worse, if the customer leaves and relays a negative story about your company. Read more.

2. Don’t give customers too much choice.
What happens when you give customers too much say in how you make what they buy? “Quite simply, overly-demanding customers can undercut your ability to grow a valuable business,” writes John Warrillow, serial entrepreneur, author, and Inc. contributor. He explains that when trying to scale up a subscription research offering similar to a Bloomberg or Forrester research program using a model by which a customer subscribes to a pre-set number of reports provided to all, things started to derail. His company was customizing each report for the 17 subscribers, meaning an annual 102 reports based on six studies, which was untenable for the company’s 20 employees. Warrillow shut down the program. The lesson? “In hindsight, I realize a big part of the problem was my involvement in the selling. I’m just too tempted to make a sale at just about any cost. Next time, I’ll know better than to let my sales instincts undermine my entire business model.” Read more.

3. Monitor your reputation online. All the time.
“Facebook, Twitter, and Yelp have become essential components of many companies’ online marketing strategies, but there are countless other sites on which customers rant and rave about their experiences,” writes Inc. reporter April Joyner. When customers rant online, it has the potential to tarnish a company’s brand—and scare away prospective buyers.  There is a host of new tools to monitor what’s been said about them online. “Eighty percent of companies do fine with Google Alerts,” says Andy Beal, founder of Trackur, an online monitoring software company. “But once you have 30 different keywords to monitor, you’ll outgrow it very quickly.” Companies such as Trackur, Radian6, and Viralheat offer Web-based dashboards specifically designed to monitor multiple brands. Though the most expensive of these can cost more than $6,000 a year to use, many services offer less expensive packages for small businesses, Joyner reports. Read more. 

4. Shut up and listen.
It sounds simple, and it sounds easy, but it’s often not. When a customer starts ranting, just listen.  Tali Yahalom writes on Inc.com: “Often customers feel the needs to vent frustration with a product or service before even considering a proactive solution.” And Thomas told her: “Acknowledge the customer’s emotional state,” Thomas says. And don’t get defensive. Remember that a good empathy statement does not imply ownership of the problem. Another key communication tip involves asking open-ended questions that involve the customer, Thomas says. This technique will not only divert focus from emotional frustration but also generate copious information about the problem at hand and help you arrive at the appropriate solution. “Rather than getting defensive … I need to simply listen to the customer, accept the feedback, thank the person, and then decide what to do,” she adds. As a bonus, the customer might feel appreciated and cared about, alleviating some of their emotional frustration. Read more.

5. Collect lots and lots of customer feedback.
Several companies offer tools that let customers submit feedback and vote on suggestions. Although all of these services offer some basic features for free, they typically require business owners to pony up for paid versions in order to moderate customer comments and integrate the tools into their company websites. With Get Satisfaction, customers can report problems, ask questions, submit ideas, and offer compliments. The most popular package for small businesses, priced at $89 a month, includes design customization and an analytics dashboard. Other options, such as IdeaScale, UserVoice, and UserEcho, are priced from $15 to $589 a month. Read more.

For all 8 tips click here

12 Customer Experience(Profit Improvment) Trends for 2011

It’s nearly the new year and time for some 2011  Trends for designing better services that create improved business value for the organisations that employ them. This was posted by  Omar Zaibak on December 13 on Customer 1. Like all these things it is a good guide and provides some different ways of thinking about how to achieve the much needed balance between creating customer and business value. Enjoy.

Customer experience as a business strategy and competitive differentiator continues to gain traction with corporations around the globe. Here are 12 customer experience trends to look out for heading into 2011.

1, Mobile Customer Experience Matures

The mobile channel continues its explosive growth in adoption, with more than 96% of US consumers owning a mobile phone and almost half with a smart phone according to a recent study conducted by Sterling Commerce and Demandware. The study shows 15% of consumers have used mobile to make a purchase, and almost a quarter to compare prices or products.

As mobile adoption grows, organisations are reacting to improve the mobile experience. A successful mobile channel places intuitiveness, simplicity, and usefulness as core guiding principles. In many ways, the necessity of such principles in mobile experience design can help ensure a smoother experience than other channels.

Mobile adoption in the retail and financial sectors is helping drive more streamlined and targeted experiences for users. I took the dive into mobile banking this year and must say I enjoy it more than the web experience. Why? Less clutter, simpler, and fewer steps to accomplish my objectives.

2. Customer Expectations Impact the Experience

The impact of a customer’s expectations on their experience cannot be stressed enough. It is vital that you set their expectations as early and clearly as possible. Otherwise they will set their own expectations, and react negatively if they are not delivered. This drives up support costs while negatively impacting customer satisfaction, a deadly combination.

Ensure all your customers are provided with clear expectations that you exceed. The perception of over-delivering on your promises goes a long way in establishing customer trust and loyalty.

3. Voice of the Customer Adoption

Emotions account for over 50% of an experience, as Colin Shaw points out in The DNA of Customer Experience. Because a customer experience is inherently emotional, qualitative data is the best way to capture and understand it.

This has led to increasing adoption in Voice of the Customer (VOC) programs, which aim to capture customer expectations, preferences, and satisfaction. Bruce Temkin describes VOC as “A systematic approach for incorporating the needs of customers into the design of customer experiences.”

Successful voice of the customer programs provide organizations with the feedback they require to continually develop a better customer experience. Think of them as the data that drives the customer experience modeling process. The necessity of optimizing the customer experience is leading to more of these programs being adopted and embraced.

4. Revenue vs Cost

Organizations that sacrifice customer experience quality in order to save costs are all too common. However, more and more organisations realize that consistently delivering great customer experiences increases revenues AND decreases support costs at the same time.

As a result, smart organizations do not view customer experience and cost as a balancing act where one must be sacrificed at the expense of another. As customer experience maturity grows, these organizations realize that an investment in customer experience can actually lower costs more than budget cutting in the medium and long-term.

5. Interaction Channel Growth

New customer interaction channels are created and evolve each year. This creates both an opportunity and challenge for organizations. Customers have more and more control over how they would like to interact. The more channels an organization offers, the more likely the customer can choose their preferred channel, inherently creating a better experience.

6. Cross-Channel Experience Still a Challenge

The rate of new channels being created and adopted by customers creates a significant challenge for organizations. How to create a consistent, seamless experience across rapidly growing channels? Unfortunately many organisations are plagued by channel silos, each with their own processes and customer data sets. This makes creating an enjoyable, cross-channel experience difficult if not impossible. Organisations must learn to break down these silos and model the experience across them. Channels should share one view of the customer, be modeled on one set of guiding customer experience principles, and allow easy escalation between channels. Only the most advanced customer experience organizations do this presently, as it remains a formidable challenge.

7. Social Media Impacts Experience

Social media continues to disrupt and change the fabric of customer experience. The experience is no longer driven by just the organization and the customer. Because of social media, expectations and experiences are rapidly shared and distributed between peers. This increases the importance and impact of each customer experience.

8. Power Shift: Companies vs Customers

The customer experience is increasingly being shaped by communities and peers. Technologies like peer reviews and ratings are influencing the customer experience. Customer communities now more than ever are positively influencing the experience in many cases. These communities frequently deliver faster and more accurate responses than could have been delivered by the organization alone, contributing to a much greater experience, even if it was not directly delivered by a company’s representative.

9. Retailers and Hotels Provide the Best Experiences

The leading industries in Forrester’s Customer Experience Index 2010 were retailers and hotels, receiving scores of 82% and 80% respectively. Customer experience has long been a key differentiator in these industries, and as a result it is an area they continue to invest very heavily in. Years of experience has led to significant customer experience maturity in these industries, and we expect them to continue to lead the pack in 2011.

10. Health Insurers and Service Providers Deliver the Worst Experiences

For one reason or another, health insurance companies and service providers deliver the worst average customer experiences out of any industry based on Forrester’s Customer Experience Index. Here are some theories why:

1. Customer experience is viewed strictly as a cost that would cut into profits
2. Competition’s customer experience is no better, resulting in less pressure to improve it
3. Poor customer experience is not impacting high profit margins

It seems like poor experiences are the status quo in this industry. Until poor customer experience has a more significant impact on the bottom line for these organizations, I expect them to stay on the bottom of the list.

11. Customers Co-Create the Experience

Savvy organisations realize the value strong customer experiences bring. What better way to design an optimal customer experience, than having your own customers contribute to its design? This reduces the level of optimization and tweaking of the experience organizations would have to do later on. Most of the leading customer experience organizations embrace this method today, and as other companies become more mature, look for this trend to increase.

A Vovici Customer Experience IQ study performed in 2009 reveals some of the key benefits companies are getting out of customer experience management programs:

1. Increase customer loyalty
2. Increased customer satisfaction
3. Greater positive word of mouth
4. Excellence in customer service
5. Increase revenue
6. Increased profits
7. Increased staff satisfaction

Getting customers involved in the design of the customer experience is an encouraging trend growing in 2011.

12. Customer Experience A Bigger Priority

As outlined in Bruce Temkin’s “The State of the Customer Experience, 2010″ 90% of North American companies with revenues of $500 million or more view customer experience as critical or very important to their company’s strategy. Organizations are increasingly realizing the benefits of improving the experience they provide, so look for customer experience to grow as a priority for more organizations.

Will you take American Express?

I found this little snippet that arose a couple of months ago and thought it was pretty astounding, in a really positive transforming kind of way.

Most large organisations see customer care as a cost. Lets say that again slowly. Most..large..organisations..see..customer..care..as..a.. cost..

Well we believe a little differently to most large organisations, we believe that is it is impossible(apple withstanding) to develop outstanding customer experiences without intimately understanding your customers and the way you do that is by getting up close and personal, not getting them off the phone in 93 seconds.

Hats off to Amex and if only they stop calling me and being faux friendly, I will start loving them again. For now, I am professionally impressed.

In late 2008 Jim Bush, head of worldwide service at American Express, led this charge to again reinvent the company’s approach to customer service. Bush rolled out a three-pillar enterprise strategy called Relationship Care to facilitate this transformation. “The way we look at the service environment is the number of interactions we have with each customer every year—it’s hundreds of millions…. Historically companies view that as a cost…we said, ‘Let’s make that into an opportunity to build relationships with customers,’” he says.
The strategy centers on cultivating a personal connection with each customer when they contact the company. This meant hiring employees from industries like hospitality and sales who can bring real customer savvy, and investing in new technology that can empower American Express’ customer care professionals to increase their knowledgeable recommendations to customers. “We said…let’s leverage [the customer care center] as a means of reinforcing product features and services and deepening relationships with customers,” he says.

Originally sourced from Customers_Shoes: The three pillars of Relationship Care  the AMEX way  and what has made AMEX the most highly rated credit card provider.

For more information on how to get closer to your customers, drop by www.protopartners.com.au or call Damian Kernahan for some great insight into the value of Service Design.

Are you engaging your employees to deliver the right customer experience?

I liked Tamsin Smith’s comment about Service Designers being like Magpies, (and I am paraphrasing here here) picking up pieces here and pieces there to form a robust and workable service design methodology. Hearing that almost 10 months ago at her presentation at the Service Design Conference, I felt, our behaviour here at Proto Partners in pioneering Service Design Thinking and Execution in Australia was well justified.

And so following is an article from the the UK and from Gap Gemini Consulting about the importance of engaging employees to deliver sustainable customer improvements. It’s great to source quality ideas from anyone who shares our belief that when everyone understands how customers think and feel, they are in a much better position to deliver what customers are looking for.

The ex CEO of IBM a decade ago said that business success  was all about execution and he was 100% right….and your employees are the key to brilliant execution.

We employ Discovery and Design as our first two phases for any client and that may be the more fun part for a lot of people, but the money part, the part clients really pay for is the Development and Delivery components. The part where we help our clients start really making money from engaging us. For us at proto partners, that is really the fun part and not surprisingly for our clients too.

Robert Heard writes about the critical role of employees in delivering positive customer experience.
Are companies setting themselves up to fail with extravagant advertising laced with aspirational claims and imagery? How many times have we all been induced by powerful marketing claims by companies, but when it actually comes to purchasing or consuming their product or service the whole experience is something of a let down and certainly not “as seen on TV”.

Unfortunately it is an all too common situation across much of the retail and service sectors. We all know of companies who fall short on the promises that their brand, implicitly or explicitly, makes to customers. Boasting a newer, shinier, better experience, they continue to repeat the same old mistakes, with inconsistent service, poor information, under resourced or under trained staff, and no surprise we get the same old excuses and outcomes.

So how can companies better deliver what they promise in times when customer expectations are so high?

The optimal customer experience recognises the simple fact that customers have needs and they want these fulfilled with the minimum of fuss. They want to receive a consistent experience that satisfies their expectations across all the channels through which they interact with you, from the shop floor, to contact centre, to the website and for this to continue even after they have made a purchase.
When this occurs, a state of congruence exists in the customers minds with what they were told would happen (through various marketing messages) and what they physically experienced.

In this joined up thinking a key component of the equation is so often overlooked, the role that employees play is the crucial. Operating at the sharp end, in other words, the customer-facing part of the business, employees are a critical yet under-emphasised element in delivering the positive customer experience necessary to build a strong brand.

Countless studies show that employees have the biggest influence over whether a customer interaction is a positive or negative experience. The behaviours and emotional intelligence of employees at these key moments of truth is crucial. Organisations must therefore take steps to ensure their employees are engaged with the vision and values of the organisation and capable of delivering the right customer experience each and every time.

The alignment of brand values and culture is a significant part of designing an end-to-end Customer Experience. Ask yourself, are my employees “bought in to” what the company is trying to achieve? Have they got the right tools for the job, are we rewarding employees for customer service, for truly “living the brand”, do employees know what is expected of them and their role in delivering the customer experience? If the answer is yes, then your organisation is definitely on the right path to implementing an integrated customer and brand strategy.

If we look at the brands lauded for their success, Virgin, American Express, First Direct, Marks & Spencer, what do they have in common? At the heart of their business is a real commitment to the customer, the experience is celebrated as more than just a transaction and employees are integral to delivering a congruent Customer Experience. The process of interaction is carefully managed, employees understand their role in the process and what the branded customer experience is designed to be and because of this comes a visceral connection between customer and company which in its self is the essence of the desired brand and corporate strategy.

Today to become a successful brand you have to embed “the right customer experience” in every aspect of the business design. Once you have achieved a fully integrated approach that addresses values and culture, processes and customer communications then your brand will become a powerful tool for achieving sustainable competitive advantage.

The eight new rules of customer service

The eight new rules of customer services

A good article by Smart Company and tapping one of the best minds in the business. I recently completed some work for a financial services firm and post GFC, the perspective of customers of independence vis a vis established and connected businesses has transformed in the last two years. Customers in Australia whether materially affected by the GFC or not have a different view of the service businesses they interact with and these businesses would do well to better understand this new mindset and what it now means to deliver outstanding service.

Of course using Service Design in Australia to address this is new, but hey our goal is to improve the service experience of all Australian customers, one service business at a time. Here are 8 rules to do just that.

The Australian economy might have sailed through the recession relatively unscathed, but don’t think that customers haven’t been changed by the GFC.

That’s the message from international marketing guru Paul Bennett, the managing partner of global design consultancy IDEO, which organisations including Nokia, Intel, Bank of America and the Bill & Melinda Gates Foundation go to for inspiration and business ideas.

Bennett’s recent trip to Australia saw him add to his growing fan base after a series of cheeky, insightful, clever presentations on the future consumer. SmartCompany caught up with him at the L’Oreal Melbourne Fashion Festival (LMFF) and couldn’t resist asking Bennett to help create a take-home version of his keynote for those who missed out.

Bennett, who heads up IDEO’s European bureau and is its chief creative officer, highlighted how well Australia has come through the GFC, but described “apocalyptic” market conditions in Europe and the Americas over the past three years.

“For everyone else it sucked royally,” says Bennett in his take-no-prisoners style. “Consumer sentiment has radically shifted.”

This period of crisis has been much more than an economic crisis for consumers, according to Bennett. He says it has been a moral crisis, with the economic decline being a symptom of deeper problems.

“People were spending and borrowing like there was no tomorrow. Then tomorrow came and the shit hit the fan,” says Bennett.

Here are is eight new rules of customer services:

Rule 1: Consumers are really thinking about what they need, why they need it and if they need it.

There is a new morality among many consumers, Bennett says: “People are acting less like traditional ‘consumers’ and more like citizens who are expressing their values through what they consume.”

Ideo holds regular Facebook “conversations” to gather intelligence from around the world. When IDEO posed the question – where is consumerism going? – a major trend through this IDEO Facebook conversation was a focus on health, learning and knowledge. People in London, Dubai and everywhere in between were talking about fresh air, drinking water, education, equality and quality experiences.

If these respondents are the new consumer, then clearly businesses with a real sense of purpose have a competitive advantage.

Rule 2: It’s back to basics. Simplicity is what the world needs now. Embrace it.

Bennett cites psychologist Barry Schwartz’s theories in his book The Paradox of Choice: Why More is Less where Schwartz rejects the idea that freedom of choice in Western society is a sign of modern progress. Schwartz describes “an explosion” of choice for consumers that has paralysed rather than liberated them.

For example, in his supermarket aisle there are 175 salad dressings to choose from. At his local entertainment store, it is possible to construct 6.5 million different stereo systems from products on offer. (It’s well worth watching Schwartz in action on www.ted.com.

Rule 3: Have a meaningful purpose.

Ikea was on to this idea early with a series of commercials in 2007. Ikea’s “purpose” is what matters in these ads, rather than showcasing a range of flat-packed furniture, we see homes from around the world and the tagline: “Home. The most Important Place in the World.”

Rule 4: Forget about selling products, deliver service.

In March 2010, Bennett went to the Apple flagship store on Fifth Avenue to have his computer fixed during a New York trip. The Manhattan store is right by Central Park, with a glass, shrine-like box out front. Beyond the theatrics, Bennett was blown away by the service. For starters the store is open 24/7, his laptop was fixed for free, it was even polished.

“The experience was a lot nicer than those luxury stores down the street,” he says. This service, rather than the laptop, is what cements a consumer relationship. The stores have tribes of concierges that help customers find their way to the right service area, rather than just having various departments that customers must find.

In order to do this, the staff needs to be really engaged in making the customer’s experience great and they have to really understand the product. Bennett’s way of describing the right kind of staff is that “their eyeballs are burning, they have passion-filled eyes”.

Rule 5: Play well and collaborate.

Brand partnerships are also an important trend Bennett has been observing. Brand sponsorship has been around for at least a century (Coca-Cola has been sponsoring New York’s Madison Square Garden for 100 years), but these partnerships are different. On March 26, Retailer Gap Inc announced a strategic partnership with Brand Republic, a subsidiary of Busby Holdings (that operates Aldo and Guess stores) to open up to 15 Gap stores in Australia. Woolworths is in partnership with HSBC bank to offer credit cards.

This trend is about big brands sharing the stage, rather than the brands fighting each other for their slice of the market.

“Innovation isn’t a one-man band,” says Bennett. “Build networks, coalitions, partnerships and alliances that add to the business, add to the whole pie, not just your slice.”

Rule 6: Have a dialogue with customers, not a monologue.

Listening to customers, really listening, sparking a conversation can lead to new business ideas. IDEO doesn’t just do its market research on Facebook. It is still a fan of wine and pizza market research nights. Its session with baby boomer mums across the US resulted in the idea for a Keep The Change account for client Bank of America, with every purchase from this special savings account, being rounded up to the next dollar, channelling extra money into the savings account.

According to IDEO, this campaign has led to more than 12 million new customers for the bank, proving that savings really is the new black. Bennett’s tip: “Keep listening to customers, keep the conversation going and constantly look for feedback; that’s where great new business ideas (and revenue streams) can emerge.”

Rule 7: One click and you are out.

Acknowledge the power of the internet, especially the immediacy of tweeting, and manage the risk. Bennett’s favourite example at the moment is the filmmaker Kevin Smith who claims he was kicked off a Southwest Airline for being too fat in March 2010. He tweeted his plight and the story went international within hours. Southwest has since apologised but the damage was done. Bad customer service travels really, really fast. It’s not about your website, it’s about the web and how people use it.

Rule 8: Small is the new big.

From little things, big things grow. A little idea from a series of dinners about a new type of savings account can gain incredible momentum if it is allowed to develop.

“Stop waiting around for the big idea and build on the small ideas,” Bennett says.

Secrets of the biggest selling launch ever

Been away for a while, time to return to improving the service experience of Australian customers one Service business at a time using Service Design and spending the time to really understand customers and how they view companies.

Below is an article from Seth Godin. Lots of lessons for all companies but as I see the world through the lens of service companies, imagine using these principles as a launching pad for idea generation for Service Businesses. Amazing!

Secrets of the biggest selling launch ever

Apple reports that on the first day they sold more than $150,000,000 worth of iPads. I can’t think of a product or movie or any other launch that has ever come close to generating that much direct revenue.

Are their tactics are reserved for giant consumer fads? I don’t think so. In fact, they work even better for smaller gigs and more focused markets.

Earn a permission asset. Over 25 years, Apple has earned the privilege of delivering anticipated, personal and relevant messages to their tribe. They can get the word out about a new product without a lot of money because one by one, they’ve signed people up. They didn’t sell 300,000 iPads in one day, they sold them over a few decades.

Don’t try to please everyone. There are countless people who don’t want one, haven’t heard of one or actively hate it. So what? (Please don’t gloss over this one just because it’s short. In fact, it’s the biggest challenge on this list).

Make a product(service) worth talking about. Sounds obvious. If it’s so obvious, then why don’t the other big companies ship stuff like this? Most of them are paralyzed going to meetings where they sand off the rough edges.

Make it easy for people to talk about you. Steve doesn’t have a blog. He doesn’t tweet and you can’t friend him on Facebook. That’s okay. The tribe loves to talk, and the iPad gave them something to talk about.

Build a platform for others to play in. Not just your users, but for people who want to reach your users.

Create a culture of wonder. Microsoft certainly has the engineers, the developers and the money to launch this. So why did they do the Zune instead? Because they never did the hard cultural work of creating the internal expectation that shipping products like this is possible and important.

Be willing to fail. Bold bets succeed–and sometimes they don’t. Is that okay with you? Launching the iPad had to be even more frightening than launching a book…

Give the tribe a badge. The cool thing about marketing the iPad is that it’s a visible symbol, a uniform. If you have one in the office on Monday, you were announcing your membership. And if it says, “sent from my iPad” on the bottom of your emails…

Don’t give up so easy. Apple clearly a faced a technical dip in creating this product… they worked on it for more than a dozen years. Most people would have given up long ago.

Don’t worry so much about conventional wisdom. The iPad is a closed system (not like the web) because so many Apple users like closed systems.
And the one thing I’d caution you about:

Don’t worry so much about having a big launch day. It looks good in the newspaper, but almost every successful brand or product(service) (Nike, JetBlue, Starbucks, IBM…) didn’t start that way.

A few things that will make it work even better going forward:

Create a product(service) that works better when your friends have one too. Some things (like a Costco membership or even email) fit into that category, because if more people join, the prices will go down or access will go up. Others (like the unlisted number to a great hot restaurant) don’t.

Make it cheap enough or powerful enough that organizations buy a lot at a time. To give away. To use as a tool.

They are brilliant as usual

What’s expected vs what is outstanding

I read this blog from Seth Godin the other day and as usual he was on message. Our customers don’t remain with us year after year because we provide good service, they have higher expectations than they did even two years ago, they now expect outstanding service.

That is why organisations need to stop leaving  the delivery of outstanding service  as an accident and set about using a process like Service Design to intentionally design the environment and interaction so that the experience is outstanding. Its the only way that we can ensure that our customers derive great value from our service offering, they stay with us year in and year out and we increase our profitability by factor of 7 times over 7 years.

If your customer is worth $1000 in year 1, look after them well and they will be worth $7000 after 7 years. Now isnt that a recipe for guaranteed revenue and margin growth (see yesterdays article below on the dollar value of customer experience)

Do you have a plan and a process to ensure you deliver Outstanding service every single time? if you would like to discuss how, please contact me on 02 8113 2311 or email me at damian.kernahan@protopartners.com.au .

What’s expected vs. what’s amazing

I visited a favorite restaurant last week, a place that, alas, I hadn’t been to in months. The waiter remembered that I don’t like cilantro. Unasked, she brought it up. Incredible. This was uncalled for, unnecessary and totally delightful.

Scott Adams writes about the cyborg tool that is coming momentarily, a device that will remember names, find connections, bring all sorts of external data to us the moment we meet someone. “Oh, Bob, sure, that’s the guy who’s friends with Tracy… and Tim just tweeted about him a few minutes ago.”

The first time someone does this to you in conversation (no matter how subtly), you’re going to be blown away and flabbergasted. The tenth time, it’ll be ordinary, and the 20th, boring.

Hotels used to get a lot of mileage out of remembering what you liked, but it was merely a database trick, not emotional labor on the part of the staff.

Today, if you go to an important meeting and the other people haven’t bothered to Google you and your company, it’s practically an offense. We’re about to spend an hour together and you couldn’t be bothered to look me up? It’s expected, no longer amazing.

On the other hand, consider Dolores, a clerk with kidney problems at a 7 Eleven, who broke all sorts of coffee sales records because she remembered the name of every customer who came in every morning. Unexpected and amazing.

You can raise the bar or you can wait for others to raise it, but it’s getting raised regardless.What

Yes Australia, There Is A Return On Customer Experience Investments too

What a great way to start the year with rigourous research and resulting article from Jon Picoult of Watermark Consulting
Unlike staff cutbacks, the launch of a new product or generally more tangible management acts, Customer Experience improvement is often seen in similar company as culture or change management improvement. Because it is often seen as intangible, some company leaders are reluctant to investigate it. Just because you cant immediately see the the benefits on the bottom line like you can when you undertake other investments, dsoesnt make it any less valid.

It just means that those of us who work to improve the customers experience for the the purpose of increasing customer retention and hence revenue, need to work harder to communicate the message.

This is an excellent article and a proof that increasing focus on Customer experience through Service Design is not only valuable, but a requirement for leaders of businesses if they are to deliver on their mandate to increase shareholder wealth.

Lets keep spreading the news, in the “tipping point we trust”.

Yes, Virginia, There Is A Return On Customer Experience Investments

By Jon Picoult on Feb 06, 2010, of Watermark Consulting

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In some business circles, getting people to believe in a return on customer experience investments is a lot like getting them to acknowledge the existence of Santa Claus.

Admittedly, it can be difficult to quantify a specific profit or revenue impact from some types of experience enhancers—more robust “voice of the customer” programs, more polished customer statements, better trained front-line personnel, streamlined customer touchpoints, a more user-friendly website, etc. The financials surrounding such initiatives are much less precise than those of hard-dollar initiatives, like the renegotiation of real estate leases or the consolidation of corporate functions.

Of course, that doesn’t mean customer experience investments have any less of a compelling return than these other endeavors. It just takes a little more work to quantify it. And, frankly, in some cases, it requires a leap of faith.

Leap of Faith?

I know what you’re thinking. Most Chief Financial Officers won’t look kindly on a business case grounded in a leap of faith.

The fact of the matter is, though, there are plenty of big business decisions that are routinely made with limited quantification and a healthy leap of faith. Corporate re-brandings, advertising programs, synergistic mergers, and even the hiring of highly compensated, star CEOs—these are all examples of initiatives that bring with them a good deal of risk and expense, yet must be green lit without the benefit of a precise, quantifiable business case.

…there are plenty of big business decisions that are routinely made with limited quantification and a healthy leap of faith.

How does a senior executive, CFO or Board member give their assent under such circumstances? They complement what limited hard data may be available with gut instinct. They get comfortable taking a leap of faith because they simply believe in the concept behind the investment, whether it’s the power of a reinvigorated brand, the potential unlocked by an acquisition, or some other venture.

So when executives push back on customer experience investments, citing the absence of an iron clad, quantifiable business case, their reservations may actually reflect a deeper skepticism about the true value of customer experiences strategies.

One way to address such underlying skepticism is to elevate the dialogue, getting executives—even for just a moment—to focus less on project-by-project justifications and more on the macro impact of experience-oriented business strategies.

Is The Market Rewarding Customer Experience Leaders?

To that end, Watermark Consulting recently conducted an analysis of stock market performance for customer experience leaders and laggards over the past three years, a time period encompassing the market’s run up to its all-time high in late 2007, to its Great Recession-induced nadir in early 2009, to its more recent bounce back.

To identify the leaders and laggards, we used Forrester Research’s 2007 Customer Experience Index study, picking the top ten and bottom ten publicly traded companies from Forrester’s rankings. Then we compared the total return from investing in an equally-weighted portfolio of customer experience leaders to that for customer experience laggards and the broader market (as reflected by the S&P 500 index).

The results were quite revealing:

From 2007 through 2009, through the best and worst of times, the customer experience Leader portfolio outperformed the broader stock market, generating cumulative total returns that were 41% better than the S&P 500 Index and 145% better than the customer experience Laggard portfolio.

During each of the three years, the Leader portfolio always outperformed the index and the Laggard portfolio always underperformed the index. Looking at these data points, it certainly appears that customer delight and customer misery have very different influences on company stock performance.

In addition, while the Leaders portfolio declined in value during the depths of the recession, the decline was less pronounced than that for the broader market. As the recession abated in 2009, the Leaders portfolio also proved quite resilient, more than doubling the return of the S&P 500.

This performance profile supports the notion that customer experience leaders are somewhat cushioned from the most severe impacts of economic downturns, because they represent one of the last places consumers cut back and one of the first places to which they return.

What The Numbers Really Mean

There are plenty of criticisms that could be lobbed at this analysis: the three-year time period is too short, the Leader and Laggard sample sizes are too small, the Forrester study isn’t a good measure of customer experience excellence, stock market returns aren’t good indicators of long-term company performance, etc.

No analysis is perfect and this one is hardly meant to suggest that any company embracing a strategy of customer experience differentiation will outperform the S&P by over 40%. There are many variables at play, not the least among them pure execution (embracing a strategy and actually implementing it are two very different things).

Companies that successfully bring great, end-to-end customer experiences to the marketplace are rewarded—by consumers and investors.

These results are also not meant to preclude attempts to cost justify customer experience improvement efforts on a project-by-project basis. That rigor must remain; this data merely provides some much-needed air cover.

What this analysis does suggest is this: Companies that successfully bring great, end-to-end customer experiences to the marketplace are rewarded—by consumers and investors. Their operational excellence and attention to detail, their simple and straightforward communication, their well-equipped and genuinely helpful front-line staff—the sum of these parts pays off in the end, even if the precise impact of individual components is uncertain at best.

Hopefully, by framing the return on customer experience excellence in terms executives can easily understand (stock price and market value), this analysis will begin chipping away at the lingering doubts that some of them harbor towards experience-oriented investments.

And with that target of skepticism removed, all that’s left to figure out is who eats the milk and cookies on Christmas Eve.

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