nothing will change until something changes

One of the most common hurdles in trying to improve the customer experience, is that we view the customer’s situation through our own internal filters which are ladened with our own limitations, policies and generalization.  In effect, we can hear the customer but what we “know”, doesn’t let us listen.   

Those that touch the customer daily know more than anyone about what the customer considers important.  As surprising as it may be however, I find that those that touch our customers every day are not the ones designing the customer experience.  Those that decide are often somewhat removed and rely on their “past experience” to make the right decision.

Some time ago, I gave a contact center manager a challenge to transform the customer experience with the representative by only changing the rep’s greeting.  At first, the feeling was that the greeting could not change the experience.   The content of the experience was so much more important than the greeting that it could not be overshadowed.  Jut to be nice, she played along.  After considerable thinking and word-smithing, the new greeting was surprisingly similar to the original.  The reasons for the measured change were all logical and full of merit, backed by experience and knowledge in customer service.

Because I had done this exercise before and new the results, I pressed on.  However, if i did not have the benefit of my previous experience, I would have likely agreed with the logic and “let sleeping dogs lie”.  Instead, I provided an idea for the new greeting. “Hello, thank you for calling XYZ, my name is Rudy Vidal.  I am committed to resolving your issue today, please let me help you.”  This new greeting was received with raised eyebrows and determined to be “corny”.  I agreed it could be “corny” , but in whose eyes?

 To a contact center person who knows what happens day in and day out, who is aware of all the difficulties associated with actually resolving an issue, it may sound corny.  But to a customer who is having a bad day, who has just gotten escalated and has lost all hope of ever resolving her issue, this greeting could be comforting, perhaps even surprising.  It could disarm a person who is ready to take 2 full minutes to expound, at high volume,  why she is so upset.  At the very least it is unexpected.   We tried it in a small group of representatives. Customer Satisfaction increased by double digits, representative satisfaction did the same, first contact resolution went up.  

Sometimes, it is difficult to put ourselves in the customer’s shoes.  We see their situation, only through our own.  We try to walk in their shoes, but fail to off our own.

By the way, the most surprising aspect of that experiment, was the effect it had on the representatives.  They were more loyal to the customer, more engaged in the solution, more committed.  First call resolution went up, not because empowerment policies changed, but because the representatives changed.  What they said to the customer changed what they did.

Two suggestions:  

• Make sure to include people that directly touch customers in the creation of new solutions.
     Have them represent the customer without regard to internal limitations or
     common knowledge.

• Try new things, after all nothing will change until something changes.

 

Rudy Vidal
Committed to XCS 

Profitable Loyalty

Sometimes I talk about the idea of Profitable Loyalty and often I’m asked what I mean.  So, here it is:

Not All Loyalty is Profitable, therefore, Not All Loyalty is Good.

Profitable loyalty is the result of a successful alignment of our corporate goals and capabilities with the values of our strategic customers.

When we are aligned with these customers’ values, we have a greater likelihood of setting the right expectations, of delivering on those expectations, and of creating partnerships based on mutual trust and benefit.

When we are not aligned, we find ourselves with large numbers of unprofitable customers who never seem to understand our capabilities and often demand that which we find difficult to deliver.

Profitable Loyalty comes from clearly defining who we are, who we want to become and with whom we want to do business – Segmentation.

Once this is clear we can develop and maintain policies, processes and delivery mechanisms that add value to strategic customers who are aligned with our direction and understand and value what we do.  It is here we want to invest in creating positively emotional touch-points.

There is nothing worse than having customers push us to be something we are not, and don’t want to become.  It adds instability and costs to our business.  It creates frustration in our employees and stresses our processes.

Let me be clear.  I‘m not saying we should not listen to our customers when they are asking for new capabilities or innovation.   Great customer communications and flexibility to meet market needs is a basic tenet of Loyalty.  However, trying to be everything to every customer is a sure formula for failure.  There are things we do well, there are thing we need to improve and there are things to which we need to say NO.

If your company is NOT concentrating on Profitable Loyalty, you may be experiencing some or all of the following:

• Your most important customers are the least profitable.
• Price is the prime negotiating variable
• Process exceptions seem to be the rule
• You are becoming increasingly reactionary
• Customer attrition is increasingly an issue.

At times these symptoms seem endemic to an industry and therefore, par of the course.   Accepting this as our reality, puts us in danger of racing our competition to the bottom.  On the other hand, we can thrive in the face of adversity if we are able to re-align ourselves with the values of our strategic segments.

All customers are not created equal.

Rudy Vidal
Committed to XCS

It’s not our fault, customers demand lower prices !

 

 

During a seminar last week, someone asked the following question: 

“More industries than ever are experiencing runaway price and margin erosion.  Why is that?  More importantly, what can be done?”

 I believe value is being lost as a result of our lack of understanding  of  shifting paradigms. 

 Economies naturally progress through value shifts.  For example, 

from  Raw Material Economies (pre-industrial)
                         to
Product Economies (Industrial)
                         to
Service Economies (post industrial)
                         to
Experience Economies. (information)

Although we can still find economies at all four levels throughout the world, most of the higher systems are now Experience Economies.  In experience economies, by and large, consumers place lesser value on Raw Materials, Products, or Services.  Instead, they place more value and are willing to pay more for the Experience.  Products and Services, although required and expected, are no longer the prime field of differentiation.  Their expected high quality is simply a minimum business requirement.

Sadly, within our experience economy there are companies and entire verticals that may not have yet noticed the shifted paradigm and still offer products and/or services as their key value proposition.  A perfect example is the consumer electronics sector, which continues to assert product features as their key value.  Features, however, are easily copied, creating short-lived differentiation.  In the absence of other differentiating value, they turn to price.  And so, the cycle begins:  Lower prices causes reduced margins which causes diminishing profits which creates pressure to reduce costs which causes layoffs which brings reduced purchasing power which prompts the need for lower prices.  You get the idea.

A surprisingly large portion of top management I meet believe customers demand and cause lower prices, without considering the possibility we may simply be misaligned with customer values, which ultimately forces us to turn to price.  After all, although lowering price is not usually the best course of action, we cannot deny it is an easy and generally effective way of getting attention; if only for a brief moment.

Maybe we should learn from others:

• American auto manufacturer’s have refused to see the new paradigm.  They are still selling cars as if it were 1950. 
• Nordstrom, on the other hand, sells the same exact merchandise as other department stores, but charges a premium based on the experience.

(I’ll leave more, and perhaps better examples to you – please share through a comment.)

Perhaps it’s time we listen to the voice of the customer and align ourselves accordingly.
If we don’t, our only recourse will be lower prices, outsourcing and ultimately layoffs.  

Rudy Vidal
Committed to XCS

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You can’t Buy Loyalty

 

 

 

I often encounter the confusion between frequent purchase programs and Loyalty strategies.  I don’t believe these are equivalent and would like to address it.

For a long time, the marketplace has endorsed the lowering of prices as a justifiable form of value-add.  And, although a lower price does, in fact, constitute value (more for less), it is hardly productive.

By now, most of us have figured out that the incremental sales achieved by a lowering of price will only last as long as the price advantage.  We would all agree this increment should not be attributed to Customer Loyalty. 

Points, free merchandise or discounts through frequent purchase programs, no matter how well camouflaged, still result in a perceived reduction of price.  And, although customers may act more loyal due to the accumulated points in their frequent purchase accounts, they are in fact, attached to the points, NOT the brand.  We should be careful not to equate captivity with LOYALTY. 

I have a Delta SkyMiles account.  Although I am somewhat captive, I took a United flight to LA (which I don’t like) because it was $200 cheaper.   I am somewhat captive, but certainly not LOYAL.  Captive audiences will stay as long as it is advantageous, but let’s not say that we are creating LOYALTY. 

LOYALTY is the ultimate goal in a commoditized market.  To have customers that have accepted our brand as part of their life’s value structure is a privilege and takes hard work.  We can’t buy this kind of LOYALTY.  If we want it, we’ll need to think about adding value to our customers’ lives, and making them emotional in the process.

Most companies have not been able to quantify the ROI on Customer Loyalty and therefore, find it difficult to commit the resources to creating it.

Instead, we continue to feed the price-erosion monster through masqueraded lower pricing, and add insult to injury, by calling it LOYALTY. 

If we want Loyal customers we’ll have to do more than offer double points on any purchase before the end of the month.

 

Rudy Vidal

Committed to XCS