Life is easy. Customer experience is hard.
Some companies are just beginning to explore the hills and valleys of customer experience (CX) and discover what it can do for their bottom line. Harley Manning has been exploring CX territory for the past 15 years, launching Forrester Research's customer experience practice along the journey. Most recently, he partnered with colleague Kerry Bodine on Outside In: The Power of Putting Customers at the Center of Your Business.
Manning spoke with Direct Marketing News and outlined a customer experience road-map for marketers.
In How to Win Friends & Influence People, Dale Carnegie lays out the foundation of customer relationships: Make the other person feel important—and do so sincerely. When did companies begin to forget that and why?
They lost their way when they could no longer dominate through manufacturing or communication. Competitive shopping used to mean getting in car and going from store to store. Now, online, I can find products that meet my needs and buy them instantly, so companies can't compete in the way they used to. Michael Porter writes about the five forces of competition and the balance of power [between] buyer and seller. The power used to be with the seller, but the Information Age shifted it. At Walgreens, for instance, differentiation used to be location, location, location. Now it's experience, experience, experience.
So now Job One is customer experience. Customer relations is old school. What's the difference?
Customer experience is the trapeze act; customer relations is the net. Customer relations comes into play only if something goes wrong with customer experience. Dan Hesse, the CEO of Sprint, saves $1.7 billion a year from formerly unhappy customers who are now happy. He came to the company when people had a bad image of Sprint. So he reordered the company's priorities and made “Improve customer experience” number one. Not long ago I was watching Mad Money on TV and Jim Kramer was doing a piece on Hesse and saying that Sprint was a good buy now. I'm staring at the monitor and going, "Yes, yes!” These transformations take time, but if you stick with them they really pay off.
In Outside In, you write that there are six essential customer service disciplines: strategy, customer understanding, design, measurement, governance, and culture. Give us real-world examples of how each is put into play?
I'd be happy to.
Your plan. It's important to have a plan and execute it, not to randomly change things on the fly. Holiday Inn started out with a problem. They were losing restaurant business to local casual dining establishments. People would leave the hotel and eat at Chili's. Even worse, they were losing breakfast business to convenience stores at gas stations. Holiday Inn could have just messed with the menu, but instead they broke down their brand attributes and looked at what mattered to customers and what they wanted to be.
They learned that customers had important things they wanted to do besides just eat: connect, socialize, have fun, and relax. The plan Holiday Inn devised was to make the hotel a social hub and give guests flexible options to be themselves. They mapped each customer desire to specific touch points: game areas, media lounges, bars with peninsulas built out so that groups could gather and socialize.
And that leads us to customer understanding.
The key is not to think you know your customers, but to apply some science and really know your customers. There's stuff they tell you and stuff you have to go get. Virgin Mobile Australia was about to change their phone plans. They were about to go from 19 standard plans to hundreds of options that people could mix and match. They had identified a brand attribute of control and they thought that meant giving people options. But first they did a consumer study that asked people to describe situations that made them feel out of control. Well, Virgin found that hundreds of options made customers feel totally out of control. What they really wanted was fewer options that made better sense.
Next is measurement.
There's a knowledge glut. We have all this data and don't know what to do with it. The question we hear from companies all the time is, “What do I measure?” Of course you want to measure outcomes--what drives word of mouth. But you also want to measure what actually happened during customer interactions and what the customers' perceptions were. It's descriptive metrics.
Sounds complex. Is anyone doing a good job with it?
Jet Blue has a great measurement program. When you take a flight, you get an email survey asking about your end-to-end experience, booking through flight through baggage claim. They also ask whether you're going to fly Jet Blue again and recommend it. To that survey data they append operational data: What flight was the person was on? Was there turbulence? Did the TV in the seat-back in front of her work? Now you can see exactly what happened. It allows you to provide immediate feedback to employees and take corrective action. They can call out a certain flight attendant and say, hey, people are not digging you. One recurring complaint they got was that people had a hard time hearing flight announcements in the Jet Blue terminal at LAX. The airline approached the airport and said let's fix that and paid for it.
What exactly does customer experience design mean?
It's one of my favorite topics. Most business people hear it and say, hey, that's for the guys in the black turtlenecks. But in business terms, what we mean by design is a repeatable problem-solving process.
The Mayo Clinic had a problem with its examination rooms. They hadn't changed them since 1954, and when computer monitors were introduced, patients couldn't get a good look at the screens without sitting at odd angles or craning their necks because most of the room was taken up by the examination table. They could separate the exam room from the patient conference room, but that would mean twice as many rooms and they had to deal with the existing space.
So they made prototypes based on a Brady Bunch style Jack and Jill bathroom and put consultation rooms on either side of shared exam rooms. They got doctors to volunteer to see patients in these rooms and give feedback. Doctors and patients both liked it so they built out the entire area this way. That's how you do it. Just don't say this is a great idea. Build it, test, iterate, and go back and test again.
What about governance?
It's about proactive oversight, like corporate governance. Just as a board of directors makes sure your company is following regulations and producing for shareholders, you need a board of governors for customer experience that will make sure that what you want to happen is actually happening.
FedEx has a customer experience steering committee that is chaired by company founder Fred Smith and consists of a group of senior managers. Adobe has a customer advocacy council made up of representatives from product development, finance, marketing, and the business units.
The mistake most companies make is thinking of customer experience as warm and fuzzy. The reality is you have to crack the whip to get it done right. Adobe's website was designed so customers could buy only one license at a time. It was one of those situations where people weren't really the focus and someone on the council did a video of someone trying to buy five licenses online and showed it to senior executives. One of them saw it and said, “You gotta be kidding me.” That's a direct quote.
And last, but certainly not least, is culture.
You have that right. This is one of the toughest things to change, but once you've established a customer-centric culture, it's the best. People tend to make the right decisions by reflex. USAA is still working on customer experience, but its culture couldn't be more customer-centric. It has the highest Customer Experience Index score in banking, credit cards, and insurance because of the special relationships its employees have with their customers from the U.S. military forces. Ritz Carlton and Southwest Airlines have scripted cultures. If you don't have a customer-centric culture, you want to make it that way.
John Deere Financial went about the task by recruiting change agents within the organization. They had crafted a bunch of customer promises like providing fast and easy access to credit and building long-term relationships through trust, but they needed their employees to understand how to do this. So they recruited employees to create cultural change. They put up posters in their offices that said “Is there a little Deere in you?” and got volunteers. In year one the recruits got monthly training sessions that immersed them in customer insights and taught them practical experience skills. In year two they were charged with taking their skills back to their departments.
One of these change agents was actually in the collections department and she decided to refine the manner of making an overdue bill call. She created storyboards and a training program to teach collections people the cash flow of agricultural production cycles. Depending on the farmer, they could be calling at exactly the wrong time. They might find that the customer takes his crop to market in August and ask him could he make a payment then. After all, the last thing Deere wants to do is take their equipment back.
Send us off with one customer experience horror story that will make it impossible for our readers to feel sorry for themselves when pondering their own problems with customers.
Dr. Jim Merlino was finishing up his fellowship at the Cleveland Clinic when his dad entered the facility to be treated for cancer. There was a complication and he passed away five days later. Merlino admitted it was no one's fault, but he was upset with the treatment his father received in his last days. Nurses didn't respond to his calls, doctors didn't give him updates, Jim Merlino decided not to practice at the Clinic after finishing his training.
Not long afterwards, Dr. Toby Cosgrove took over as CEO of the clinic. He heard complaints from patients and he realized that if it really wanted to differentiate itself, the Cleveland Clinic had to have great customer experience. He installed a new culture with a priority on patient satisfaction.
Five years after he declined to take up a residency, Dr. Jim Merlino heard of the turnaround at the facility and interviewed for a position as a surgeon. After Cosgrove heard the story of his father, he knew he had his man. Merlino is now the Cleveland Clinic's Chief Experience Officer.