Customer delight can be worse than a baby bonus

December 20, 2011 By Leave a Comment

Recently there was much ado in Australia as the Federal Government slightly reduced (less than 10%) the amount of money that it gives to new parents: the so called Baby Bonus. The reduction in this grant has caused a lot of dissatisfaction in the community. Could your customer delight program cause a similar backlash?

Customer Delight can be counter-productive

Introduced about 5 years ago the $5,400 baby bonus was given to parents on the birth of each child and was seen as a true bonus by families who had no prior expectation of receiving it. However, that was when the world economy was not on the financial edge and Federal Government finances were flush. At the time, at the Federal Government level, Australia had a net government surplus, i.e. cash in the bank. Almost unheard of in the Western world.

Well times change and in the November mini-budget the government cut the amount to $5,000 and the media was full of unhappy people: it’s just not fair they shouted in chorus. “How dare the Government take my money”. How did we go from voters delighted at an unexpected windfall to voters decrying the government taking what is “rightfully mine”?

Now it’s fair to say that there may have been a level of media beat up in the response to this announcement but it doesn’t mean that there was no impact on the perception of government.

The problem that the Government faced is very similar to the one that many customer loyalty programs suffer. One you get a customer used to a certain level of service or functionality it is very difficult to reduce that level without backlash and dissatisfaction.

If you give them a Gold Card with exclusive benefits because they travel X thousand miles a year they will love you but try taking it away when they change jobs and only travel twice a year.

What is the solution?

I think that the current mantra to delight the customer is over rated and most organizations are unable to convert the idea into a reliable process [1]. More importantly delighted customers have their basic expectations upgraded and are less satisfied and loyal if you try to return to the previous level of service.

Even though I do not subscribe to all the points made in “Stop Trying to Delight your Customers” I do agree with the concept that delivering your core offering efficiently, accurately and consistently is key to long-term success.

Why do I buy from Amazon: because they deliver on the core requirements and make it easy.

If I want a book I can be 99% sure that Amazon will have it. When I find it I know that I can buy it with one click and have it delivered in hard copy in a few days (I live in Australia) or instantly via Kindle. Total time to complete the task, maybe  30 seconds. Really, there is no delight in the process but there is loads of competent, easy to use, service offering.

Customer delight may seem like a good idea but you are more likely to generate long-term, loyal customers by consistently delivering your core offering and making it easy for your customer. Plus it is a lot easy to implement than customer delight.

More Information

Customer Loyalty Program Health Check

Even the best and most effective customer loyalty programs need to be monitored and assessed on a regular basis to ensure they are operating at peak effectiveness. See our Customer Loyalty Program Health Check for a check-up on your program.

 

 

[1] If you can’t convert an idea into a process it has no place in business. While it’s nice to believe that every employee is an individual and can star in their own right and in their own way, it’s not practical, scalable or fair. How can it be fair to exhort staff to delight customers but not give them any way to reliably to do it or measure their success?

By Adam Ramshaw

 

Filed Under: Customer Loyalty Management, Customer Strategy Tagged With:

People are not thermometers so customer feedback is messy

December 14, 2011 By Leave a Comment

ThermometerWhen examining any type of customer feedback, one issue that you will come up against is that the feedback people give is not like the feedback you get from a thermometer.

If you want to know what the temperature is you need only consult a thermometer of the correct type and it will tell you that information to any level of accuracy required. However, the feedback you receive from customers is not quite so neat and tidy.

Ask a customer to provide feedback on a particular touch-point and you are likely to also get information on other areas of the business. You will also get halo affects and other human based biases. They will miss key areas, include unrelated items, score you based on one bad experience three years ago and ignore perfect performance since, etc. In short the data that you receive will be messy.

But that doesn’t make it useless

Clients will often cite the lack of accurate data as the reason that implementation can’t progress or that a decision cannot be made. Messy customer feedback is a prime target for this excuse.

Unfortunately people often overestimate how accurate data needs to be in order to make a decision. This is because there is a prevailing attitude that data must be very accurate in order to be useful. This is simple not true.

Let me provide a quick thought experiment to prove my point. Imagine for a few seconds that you are standing on the side of a road. Just as you step out to cross, from the corner of your eye you perceive something moving towards you. You look quickly, see that it is a car, and jump back to the kerb. Safe.

If I saw this happen and asked, “Before you jumped back did you calculate how heavy the car was, check how many passengers were in the car, determine the make, model and speed?”, you would look at me as if I was mad. It was a car and moving towards you so you jumped out of the way: end of story. But without a highly accurate set of data how could you decide whether or not to jump back?

Patiently absurd, yet this is how many organizations go about the decision making process. Very often, before people are comfortable making a decision, far too much accuracy is demanded in the information inputs. In my example you only needed two pieces of low fidelity information to make a decision: the object was likely to be heavy and coming towards you, the rest was superfluous to the decision.

Data can be messy but also useful

This whole area of how accurate information needs to be is covered in greater detail in an excellent book: “How to measure anything” by Douglas Hubbard. Much of this book is dedicated to helping companies, and people, to determine how accurate information has to be before a decision can be made. Critically it looks at the idea of the value of increased accuracy and how to trade that off against the cost of obtaining that accuracy.

If the value of increasing the accuracy is less than the cost of obtaining that information then you should not expend energy in collecting the data. In our thought experiment above: the value (“how badly am I likely to be hurt if I don’t jump now”) was much lower that the cost (“I am going to be hurt if I don’t jump now”) so you don’t bother to collect any more accuracy.

I highly recommend this book to anyone who has to make or recommend decisions based on data, i.e. everyone in business. After reading it you will never look at data accuracy and the need to be “really sure” the same way again.

Back to our customers

So the data that you will receive from your customer feedback process may be messy and somewhat inconsistent and generally not perfect. That’s because people are messy, somewhat inconsistent and generally not perfect. However, that data can and will be better that no feedback at all and used correctly will be the basis for solid decision making.

More Information

Download our free report: How to implement an effective customer feedback system for more information on how to run a great customer feedback process.

By Adam Ramshaw

Filed Under: Customer Feedback Process Tagged With:

How To Drive Customer Experience Innovation Using Transactional NPS

December 6, 2011 By 1 Comment

innovationI wrote recently about how engineers in process plants are never happy with the status quo. They are always looking for improvements and tweaks to the manufacturing process that can drive incremental improvement in profit and efficiency.

This post is about how you can use Transactional Net Promoter Score to do the same thing for customer loyalty, through its key driver; customer experience.

Two types of innovation

Lets start by identifying two key types of innovation: discontinuous and incremental.

Discontinuous innovation creates whole new genres or products: think T-Model Ford replacing the horse, the Sony Walkman creating a whole new product category, the IBM PC. Discontinuous innovation generates major leaps forward but is relatively rare and risky.

Incremental innovation slowly but surely improves a product or category. Incremental innovation is how the car went from the T-Model Ford to the F1 racing car we see today. All the key features of the T-Model are present in the F1 racing car, they are just much, much improved. A million small incremental innovations over 80 years has generated a product that is essentially the same but completely different.

The simple truth is that while discontinuous innovation is sexy, it is also risky and rare. Incremental innovation is less exciting but very low risk, and generates enormous value day in and day out.

Driving incremental customer experience innovation

So how do engineers drive incremental innovation? Not by focusing on the whole process but by breaking it down into sub-areas areas and focusing on the worst performing areas first. To identify the worst performing areas, and how to fix them, engineers then use systems that collect thousands of measurements from all over their manufacturing process.

This very same process can be used to drive incremental innovation in your customer experience. Simply swap the industrial manufacturing process for the customer experience (where we manufacture customer loyalty) and the Transactional Net Promoter Score process for the engineer’s temperature and pressure sensors.

From a practical perspective you can achieve this by breaking your customer experience down into distinct touch-points and sub-processes and then apply Transactional Net Promoter Score to collect data at each of the touchpoints.

Start with the worst

Now you have a series of customer experience manufacturing steps, each with it’s own customer experience sensor to collect data about what works and does not work. Using NPS you can now rank the customer experience manufacturing steps from best to worst; highlight the pain points and focus on those areas that most need attention first.

Put simply; the touch-point with the lowest NPS will be the one that is performing the worst, and the one that you need to start work on first.

If you have implemented Transactional Net Promoter Score correctly you will also have a range of other diagnostic information to let you know what is wrong with the touch-point and how to fix it. It is then up to you to apply the current quality system toolkit that your organization uses (Six Sigma, Lean Six Sigma, etc) to take this information and drive change.

Customer Experience a Process not a Project

Once you have improved the worst touch-point you can move on to the second worst touch-point and repeat the process. Now you can see that customer experience is not a project but a process. It is a never ending cycle of incremental innovation that can and will move you a long way from your Model-T customer experience to a Formula 1 customer experience.

More Information

For more information on Net Promoter Score and how/why it works download our free Introduction to Net Promoter Score (NPS).

If you are thinking about implementing Net Promoter Score (NPS) in your organisation give us a call. We can help you to implement an effective Net Promoter Score customer needs survey program for your business.

Net Promoter, Net Promoter Score and NPS are registered trademarks of Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld.

By Adam Ramshaw

Filed Under: Best Practices, Customer Experience Management, Customer Feedback Process, Net Promoter Score Tagged With: ,

Do Your Customer Experience Initiatives Have These Flaws?

November 29, 2011 By 1 Comment

It seems to me that many customer experience initiatives are deeply flawed. They start out well intentioned but lack the right process improvement mindset to drive long term change.

The customer experience strategy that seems to be best practice at the moment is:

  1. Do some research on what people want: ask a focus group, run a survey, etc,
  2. Design “the best” customer experience based on the research.
  3. Test it in a limited way –asking people what they think, doing some usability testing (i.e. watching what people actually do either actually or via analytics) of your systems.
  4. Roll-it out.
  5. Relax

The critical part is that the design process (steps 1 and 2)  is run only once. Then, having agreed that it is perfect just let it run. This is wrong.

I spent 10 years working in the industrial process control industry. Let me describe how a completely different type of business runs a very similar process in a completely different way.

Consider a manufacturing plant, say an Oil Refinery. In many respects it goes through the very same process:

  1.  Do some research: engineers gather information about the industrial manufacturing process based on relatively well known chemical and physical processes.
  2.  Design the plant: based on the specification and the research, design an appropriate plant.
  3.  Test it in a limited way: often for a new types processes a smaller pilot plant is created to test the idea.
  4.  Roll-it out; Build the full scale plant and start manufacturing. This is often a long and complex task, especially in the case of an Oil Refinery.So far it’s all the same.
  5. Relax Start the work of improving the design of the plant. As soon as the plant is up and running, engineers are looking for ways to improve performance. They have banks of feedback data from sensors all over the plant. Using that data and starting on day one they are trying to work out how to improve production to more than 100% of rated capacity.

This last step is missing in many organizations working on the customer experience. They may design and build lots of different areas of customer experience but this continuous improvement piece is missing. There are two issues that prevent the last step form occurring:

  • The lack of a continuous improvement mindset
  • The lack of real-time feedback data.

Continuous improvement mindset

Engineers are trained to look for problems and fix them. “If it ain’t broke don’t fix it” just doesn’t apply. Continuous, improvement within the process parameters that currently exist, is the order of the day.

You can think of it as a giant test and learn process. You wouldn’t think of running your next direct marketing campaign through a one off design and go approach so why are you trying you do it for your customer experience.

No, instead you constantly test different copy, layout, offers etc.. It should be exactly the same for the customer experience. Never be happy, always be looking for an extra 1% improvement.

In truth this can be hard to do in a customer experience process because of the lack of real time feedback data.

The lack of real-time feedback data

Engineers have access to an extraordinary array of feedback about the manufacturing process. Every pump, valve, heater, switch, etc is monitored in real time and it’s history tracked by the second. That is literally thousands or tens of thousands of separate measurements and history with which to work.

In customer experience what have you got: an annual survey of a small proportion of your customers and a few paltry complaints.

[You also have contact centre reports, sales figures, and web logs but these are indirect measurements.]

At least that was what you use to have. Enter Transactional Net Promoter Score. The customer experience equivalent of all those sensors.

Transactional NPS allows the customer experience professional to get a real time view of the quality of the product that is being manufactured, sorry customer experience delivery, sorry loyalty of the customer. In this case the product being manufactured is loyal customers.

Transactional Net Promoter Score As Your Customer Experience Strategy

But TNPS is more than just a measurement it is also a continuous improvement process. Yes the “would recommend” question is the most well known element of NPS but there is also a full change management, continuous improvement element present in best practice Net promoter implementations.

This means that Transactional Net Promoter Score can be the Customer Experience Strategy for your business. By implementing TNPS you get your customer experience strategy included. No extra charge.

In a future post I’ll expand on exactly how to use Transactional Net Promoter Score to drive business improvement.

More Information

For more information on Net Promoter Score and how/why it works download our free Introduction to Net Promoter Score (NPS).

If you are thinking about implementing Net Promoter Score (NPS) in your organisation give us a call. We can help you to implement an effective Net Promoter Score customer needs survey program for your business.

Net Promoter, Net Promoter Score and NPS are registered trademarks of Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld.

By Adam Ramshaw

Filed Under: Customer Analytics, Customer Experience Management, Net Promoter Score Tagged With:

Data Analysis 101: Seven Simple Mistakes That Limit Your Salary

November 24, 2011 By Leave a Comment

The idea that a picture is worth a thousand words relies on the picture being clear and meaningful. Presenting data in a way that tells a clear, unambiguous, story is on-going trek for me and this article is another step along the path.

This post over at Occam’s Razor by Avinash Kaushik provides some good insight into making that picture clear and meaningful.  If you have to present data to others, and that is basically everyone in business, jump over and have a look, despite the heading this is not about salaries.

Data Analysis 101: Seven Simple Mistakes That Limit Your Salary

Filed Under: Best Practices
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