This is part of a series of posts on modern approaches to customer loyalty aimed at improving it through customer engagement. A fuller discussion is available in my new book, You Can’t Buy Customer Loyalty, But You Can Earn It.
The third of four attributes of customer loyalty programs is contextual interaction and it might not be obvious because it can mean different things depending on the circumstance. Dealing with customers in context can equate to personalization as many people define it. Also, it can refer to enabling customers to jump out of a largely automated customer-facing process to deal with a company representative. xxx, but it can additionally mean getting down in the weeds of some hyper-specific aspect of a customer’s issue.
Personalizing the interaction
A lot depends on what the vendor and customer are trying to accomplish. In a high-end setting where the customer is spending a good deal of money, regardless of whether the situation is B2B or B2C, there is a reasonable expectation that the vendor will have details on the specifics such as the customer’s exact use situation, preferred buying and payment approaches, delivery needs, and a lot more.
In a situation that involves fewer dollars and a commoditized solution the opposite might be true. For instance it takes a lot more understanding of the customer’s context when that customer is buying a room full of servers than when the same person is buying smartphones for all employees. In the latter case especially, the context might come down to design, ease of use, intuitiveness, online tutorials or similar things that deal with a more generic situation.
Changing the process
A vendor might on the other hand, have a business process that can be managed completely through automation in the vast majority of cases. But it would still be necessary to have a graceful way to opt out of the automation to get more targeted help. For example, a hotel guest happily consuming services via a smartphone application might need to interact directly with a human for something unforeseen. In today’s environment that could include a gluten-free menu for room service or some similar situation that has just started trending.
The key to success here is in having some preprogrammed way to connect with a non-machine resource and a good example is the Amazon Kindle’s Mayday button, which users can press to access tech support. According to this article from TechTimes.com, “One person called Amazon for help on an Angry Birds level. Apparently, this person has been stuck on it for over a week, and frustration forced the individual to press the Mayday button. In addition, a group of friends pressed the Mayday button just to ask the tech advisor on which way was best to make a peanut butter sandwich.
Some Mayday tech advisors even got asked out on dates, while others had to sing happy birthday to some customers.”’
This suggests that context is largely in the mind of the customer, but no matter. These incidents tell concrete stories of customers actively engaged with their vendors and behaving in loyal ways. Critics might say that these customers haven’t bought anything and they’d be right. But what they miss is that out of a large customer base consuming this kind of interaction, many will buy more because they are engaged. And even customers that don’t buy more will have a positive association with their vendor and are more likely to act as advocates for the brand.
All of this contributes directly to the idea of the fat pipeline in which automation, proactive personalization, contextual interaction, and journey mapping Contribute to keeping more customers in play than traditional actions that focus on particular groups deemed more likely to transact. These groups can include new sales opportunities, cross and up sell targets in the installed base, and customers in danger of attrition.
The fat pipeline approach doesn’t wait until potential for attrition exists for instance. It looks for and provides solutions for any opportunity that can engage a customer in a moment of truth thus contributing to future sales and developing brand advocates. Importantly this approach is very light on offering rewards in the form of discounts leaving the vendor with happy customers and healthier margins.
Contextual interaction plays well in a community setting but you don’t need a community to make this idea work. In You Can’t Buy Customer Loyalty, But You Can Earn It, I profile Sungevity, a provider of solar panels and services to residential customers. Their contextual interaction strategy is mostly arranged throughout their automated sales process. But it is so successful that once involved with the company, it’s hard for motivated customers to opt out because their needs are so well taken care of.
However you define it, contextual interaction is a boon to automated customer-facing processes because it provides an optimal amount of service exactly where the customer needs it making the most efficient and effective use of resources for both parties.
This is the last of four posts on the key attributes of customer loyalty.
If you want to successfully engage customers, or anyone else for that matter, it helps to have a model of what success looks like. This idea isn’t new. Elite athletes train themselves to see a perfect race in their mind’s eye, or to imagine the arc of a ball to its flawless conclusion. Scientists model physical and chemical reactions that occur at a scale too small to view directly. Business people use spreadsheets to specify business plans and they are really no more—and no less—than models for how a business operates and makes money. It is so common in fact that the business model is one of the most overused terms in business today.
But as good as we humans are at modeling, when it comes to the vendor-customer interaction we think we can wing it; but that’s a mistake. There are too many failure points for engaging customers, and too much is at stake, to wing it. We’ve all been customers and each of us has at some point had to convince others of our point of view and maybe we think that such modeling is just intuitive. But whether we make an explicit plan or simply go over what could happen in an interaction, we’ve modeled that moment and the quality of the modeling will help determine the success of the endeavor.
In the vendor-customer experience it’s best to plan things out concretely because people often act in unpredictable ways and it’s worthwhile to have some forethought about what to do next when things don’t go as expected in real time. If you look at customer sentiment sites and read descriptions of encounters that leave customers disappointed or even angry, you can’t help but notice that many of the stories involve things that went wrong that a vendor should have been able to predict—had there been a model to work from.
That’s what journey mapping is for and although we have been executing some forms of it for a long time, there’s now software that makes it all quick, easy, and accurate. There’s no longer an excuse for bad encounters where a vendor should have known. Moreover, in an era when we are letting machines take over some aspects of first customer encounters and triage for simple requests, it’s critical that we give our machines the ability to accurately carry out their tasks all the way to completion.
There’s nothing worse than a process that ends abruptly because no one thought the process would go that way. Journey maps help us discover all of the things that could go south and plan for how to prevent bad outcomes.
Journey maps have another, even greater, use. Once you have an accurate model of a customer journey you can develop metrics for key points in every process. Is a customer facing process taking too long? Where are the bottlenecks? Who are the customers most directly affected? How can we help the customer before he or she becomes frustrated and about to trash a vendor’s reputation? What is the effect of this frustration on customer retention?
You can quickly see that journey maps shouldn’t operate in a vacuum and that there are two key elements of the CRM suite that must be tightly interwoven. The first is, obviously, analytics. With modern metrics and analytics, a vendor can now easily manage by exception. If a small number of customers have trouble in a part of a process, analytics can help us determine which customers and pinpoint the processes so that no one reaches a dangerous frustration point. Ironically, sometimes even with the best intentions we develop metrics that we may think are important but that don’t enhance the journey.
The other interesting integration for journey maps is the application development and maintenance part of your platform. Ideally, a journey map should influence what code gets written; if your business process needs to branch, a good journey map should be able to drive that code generation. In this way, your customer-facing applications can always stay current with the processes that support your customers.
So that’s it, engaging customers and generating loyalty takes these four things: automation (but the right automation), proactive personalization, contextual interaction, and journey mapping. None of these is independent of the other three any more than peanut butter, jelly, and bread can lead separate lives on a plate. When we focus on engagement through this prism the result is customer loyalty, advocacy, and improved revenue. Customer loyalty is hard to get and it’s true, you can’t buy it, but if you know what you’re doing, you certainly can earn it.
This is the first of four posts on modern approaches to customer loyalty aimed at improving it through customer engagement. A fuller discussion is available in my new book, You Can’t Buy Customer Loyalty, But You Can Earn It.
As I see it there are four basic capabilities or attributes to building better customer loyalty that I learned about in an article from two McKinsey researchers David C. Edelman and Marc Singer in a 2015 Article in Harvard Business Review, Competing on Customer Journeys. Edelman and Singer say (and I agree) that they are,
- Proactive personalization
- Contextual interaction, and
- Journey Mapping
What strikes me immediately is that only two of these attributes are purely or largely technological (1 and 4) while the others are decidedly organized as human mediated processes . This strongly suggests that we can’t simply throw technology at the problem to make it go away. Moreover, the human mediated parts require a good deal of high-level thought to pull off. But this is getting too far ahead. The first item is automation and it deserves full examination.
Most thought leaders on customer loyalty will acknowledge the importance of automation but few get us to the point of understanding that even here, each business’ automation will be vastly different from any other’s. Why? Because circumstances such as products, business models, employees, and many other attributes form unique offers that have to be handled as one of a kind ideas.
The purpose of automation has always been to reduce labor input to derive greater throughput from business processes, maximizing the utility of the resources we invest. On the employer side, this is usually called productivity but automation can have the same impact on the customer side. Simply because a customer isn’t on the payroll doesn’t negate the importance of respecting a customer’s time and effort; thus, automation is a great way to take some friction out of a business process on behalf of a customer—and it works.
Often (but far from always) automation comes down to mobile apps so they’re a good place to start. In my book I look at two very different mobile apps, the Starbucks mobile app and the Hilton Honors (HHonors) app and, as I mentioned, they couldn’t be more different.
The Starbucks mobile app encompasses the company’s revamped loyalty program. It was so successful that it left executives with the happy problem of having to explain a huge revenue bump in an earnings call last year. With the app in place, year-over-year revenues for the company jumped by 17.8%, an unheard of amount. The new automation carved a good deal of friction out of the customer experience for its users by letting them order and pay with their mobile devices rather than waiting in lines. They showed their appreciation with more business.
Of course there was a strong dose of the other three attributes in these results. For instance, the app incorporated the customer journey to a high degree affording the ability to proactively personalize the Starbucks experience and we’ll explore these ideas more in a future post. For now, it’s exciting to see such powerful results from the app’s deployment.
About the only thing that Starbucks and Hilton apps have in common is that they run on iOS and Android. But more importantly, each does a great job of anticipating customer needs, too. For Hilton this means that the app helps people reserve rooms and also lets them check in without standing in line at the front desk. Not only that but with the app customers can select a room on the property, order room service or a morning paper, and the app even enables the phone to function as a room key.
What’s powerful about both apps, and what’s often overlooked, is that they are additive. For example, turning a smartphone into a room key as Hilton has done is not as complex painting Cubism, but few businesses would go out of their way to build just that functionality. The Hilton app’s hidden benefit is that it acts as a platform on which the company can build all manner of solutions for customer outreach. When I wrote the book more than a million people per month were using the Hilton app to check in and that number is likely growing. The same is true for the Starbucks app, which is also functioning as a platform.
We’ll revisit the idea of customer engagement again and again, and it’s worth pointing out that the best automation is designed to make it easy for customers to reach out to vendors. Customer initiated engagement is more valuable than almost anything for developing relationships that lead to customer bonding and loyalty. The secret to developing apps that support customer loyalty is to focus on being present in customers’ moments of truth—the times when they need you most. For Starbucks this meant ordering and payment, remembering favorites, and identifying new locations among other things. For Hilton, it meant reducing friction in the hotel stay.
If you’re looking for commonality between the apps that’s it—being in customer moments of truth. And if you look at your own business you’ll find unique moments that you can take advantage of in the same way.