Last week I was doing some research for a speech and I remembered something from a weekend stint at a cooking school that I decided to run down. I was trying to make a point about customer experience when it occurred to me that the idea has ancient roots.
Hospitality law is a body of law that deals with the hotel and restaurant industry and the beginnings of this large body of law can be traced to the Magna Carta. As you might recall from high school civics, the Magna Carta or Great Charter is the first example of constitutional government and the starting point for common law in the English-speaking world.
The charter was written in the thirteenth century and delivered to the English King John in 1215 at the point of a sword to redress certain grievances nobles had with the king’s arbitrary rule. At any rate, the document also dealt with some more pedestrian issues of law, specifically, the idea that innkeepers were sometimes conspiring with highwaymen or bandits to rob travelers. The Magna Carta therefore imposed strict liability on the innkeeper when a guest’s property was stolen during his stay.
As the law has evolved, this doctrine has survived and affects the rights of hotel guests relating to premises liability, property theft and personal injury. In some countries there are also stipulations about purity of beer and wine, food wholesomeness and more.
Common law describes the care owed to hotel guests as “ordinary care” another way to say the basic minimum that any traveler has a right to expect. In effect ordinary care is the guarantor of the customer experience in hotels to this day. I have always thought of the more general idea of customer experience in CRM in the same way, ordinary care. My point is that no hotel competes today on ordinary care. No one advertises a property as a place where you won’t get robbed or where the food is wholesome and the sheets are clean.
So why do we make such a big deal about the customer experience in other areas? I suspect there are two reasons — first because it’s easy and second because it might be part of human nature. I think it’s easy because anyone can make a stab at delivering a good customer experience, after all, we are all customers at some point and we know how we want to be treated. So extending our ideas to customers is not very difficult. It is also easy because any oversights we make in our initial estimates can be dealt with quickly — there is a very short feedback loop in the customer experience.
More importantly though, any other approach to innovating around the customer requires more sophisticated feedback and that feedback has always been hard and expensive to get. If you want to know what your customers think you have to ask and the asking process, complete with surveys and focus groups just to name a couple of mechanisms, has always been time consuming and expensive. Consequently we rely on the customer experience.
Modern social media tools change that equation but here’s the rub. If we go right to blogs, Twitter, Facebook and other tools that let us elaborate before listening, we won’t get very far — that’s what communities are for but when was the last time we talked about communities as social media or social tools?
The discussion today is about how to incorporate social media into our businesses and that’s good. But, too often it seems to me that we fly over the information gathering and go straight to getting a message out. We don’t do anyone any favors when we take this approach and we run the risk of becoming irrelevant to our customers and debasing the tools. We can do better.
Old habits die hard and there’s nothing older than customer experience as an indicator of vendor success in dealing with customers. But we’re now embarked on an era when we can know a great deal more, a time when we can infer far-reaching information about customers and what they want. If we use social media and communities right we can know not only if the last encounter was good but how to plan the next.
In my book, that’s the power of social media in CRM and it is driven not by the tools we use to communicate but those we use to listen. One of my favorite ideas in this vein is Stephen Covey’s Habit 5 from “The Seven Habits of Highly Successful People:” Seek first to understand, then to be understood.
We are stuck in a mode where customer experience is the driving force in much of CRM, especially sales. Do everything you can to ensure a good customer experience and sales will happen, or so we believe. But we don’t define what an experience is and very often we confuse an individual’s experience with a company or product with the concept of elevating a product or service to an encounter that is so substantial that it becomes an experience.
The concept of an experience was predicated on the second definition posed more than ten years ago by Joseph Pine and Jim Gilmore but it was somehow morphed into the first definition.
The problem with the second definition is that most products and services do not lend themselves to becoming experiences. The problem with the first idea is that any vendor can cajole you into believing you had a good encounter, but if everyone is doing this where is the critical differentiation you need to stand out? Together, these definitions sum up the challenge.
I would not say that customer experience or the experiential side of the customer relationship is not important. But I would aver that it isn’t enough. Furthermore, I think we cling to it as though we are drowning and our laser focus on customer experience is crowding out the attention that we should be giving to other aspects, like operations. In the current economy, blind adherence to customer experience is like pushing on a string. For those reasons, I think it’s time to drive a stake through its heart.
Now, let’s wait a moment until the shouting subsides. Just a moment. Maybe two. Ok, let’s proceed. What did I mean?
Whether we are talking about customer experience or its mirror image, operational excellence, we are talking about the same thing, namely, innovation. The question to be answered is how do we innovate in sales situations now, today, in this economy? For reasons related to pushing on that string, I think we need to innovate around operations rather than experience.
The present economy is notable for the demand destruction that has taken place due to the credit crisis. Without credit people and companies have less latitude in purchase decisions. They don’t make purchases unless there are hard, objective reasons for doing so.
In sales and marketing, the focus on customer experience needs to shift to the operational needs of enabling sales people to sell. That might sound obvious, even tautological, but it is not and it can require a significant shift in our thinking. Two recent books illustrate my point.
The first, “Whoever Tells the Best Story Wins” by Annette Simmons explores the importance of story in business. Simmons’ point is that we all have a plethora of hard data about our products and services but that data has a diminishing effect on selling. She quotes George Lakoff, the famous linguist, who said that how we frame an issue has a dramatic effect on perceptions. Framing is part of story telling and stories are subjective — and dramatically different from the hard, data-driven messaging we routinely deliver in a sales process. Ironically, all that data is what we dispense while we are attempting to provide a great customer experience.
The other book, an eBook by Jeff Ernst of Kadient, discusses how the best sales people intuitively know how to deliver the right information at the right time in a sales process to achieve outstanding results. Ernst’s point is that everyone in sales needs to be able to deliver the right information, to tell the right stories.
Ernst boils an ocean of information down into a short book with a handful of new rules for selling, which I think anyone would benefit from. Rather than a rote exercise in sales methodology, Ernst counsels listening to customers and responding with the information that resonates with particular buyers. His differentiation is in how he determines what stories resonate.
The high achieving sales people are telling the right stories instinctively. These are stories with a purpose and the approach, which is embodied in sales playbooks, can be quantified by collecting data about which stories worked best in a very limited universe of situations faced by a sales team. As Simmons writes, “Story is how humans interpret things as good or bad, important or irrelevant, safe or dangerous, and who is ‘one of us’ or ‘one of them.’”
A sales process is all about a sales person becoming “one of us,” long before the customer makes a purchase. And I would suggest that unless a sales representative passes that test the actual deal will always remain out of reach.
Ernst prescribes a sales process in which companies enable their best sales people to share their stories about how they conduct the most successful sales campaigns. The information, as well as advice about when to use it, is captured in sales playbooks and made available in chunks that are easily absorbed by the representatives. Ernst says sales people are just-in-time learners so why burden them with three ring binders and long training sessions they won’t remember in a month?
This approach falls under the heading of sales enablement, a term that has received increasing notice recently. At its heart is a pragmatic approach to doing what works by understanding that people, buyers, make logical decisions for emotional reasons, as the great sales trainers frequently say, rather than relying on a mountain of “facts.”
In her book Simmons quotes Barry Schwartz, author of “The paradox of Choice: Why More is Less,” in which he writes, “There’s a point where all of this choice starts to be not only unproductive, but counter productive — a source of pain, regret, worry about missed opportunities and unrealistically high expectations.”
You could say the same about customer experience. We can’t layer experiences onto confusing processes without risking customer overload. Like anyone, a customer doesn’t know what he or she doesn’t know and customers look to trusted advisers — sales people who have become “one of us” — for answers. The best customer experience is one in which the customer is lead on an exploratory mission through the chaos of a buying process. Providing that experience requires a good deal of operational organization on the other side. It is why sales enablement is so important today.
Apple has been held up as the poster child of ease of use and high value customer experience but how did that all happen? Various commentators have their ideas and so do I, based on my recent Macintosh purchase.
I have always had trouble setting up a network involving wired and wireless computers and when I was at the Apple Store recently, I asked an innocent question of the saleswoman, “Can you send someone to my house to set up the network?”
I expected her to give me some kind of description of Apple’s services or perhaps introduce me to a partner. Instead, she gave me a blank look, as in, “Why would we ever need to do that?” It was sort of like the waiter in the high end restaurant not blinking when you ask for the steak sauce, her answer was a crisp: “No. You just plug it in, and it works.”
“What do you mean you plug it in and it works?!“ I wanted to scream. “Have you ever installed a network that just worked?! I have a Windows network at home right now that took days to install, a sleepless night and a six pack once it was all over. Nothing just works! This is technology! It works only eventually!”
She was right, though.
All this talk about the customer experience, as important as it is, masks something deeper in the marketplace today. When you get to a point where customer experience is important, you are generally late in a market’s evolution. There are usually multiple competent vendors selling similar products, and customer experience is something vendors address when they can’t really cut prices anymore and a product has enough features and functions to bewilder any geek.
At that point, vendors look for secondary or even tertiary characteristics to give them an edge. Other approaches worth considering in an aging market include product line extension, value engineering (building more into the product), cost reduction and improving your business processes (a.k.a. making your company easier to do business with).
Apple chose to make itself easy both to use—as in setting up the network, using an iPod and the like—and to do business with (the Apple store). But Apple executives made that decision a long time ago when they realized Apple would not be the No.1 PC maker and needed to make a niche for itself.
Apple became the über computer company, the manufacturer that made machines that did graphics and sound and movies before anyone else thought those things were important. It was the company that did spreadsheets to show that it made “real” computers. They did all that and made themselves everything the competition was not: easy to do business with and providing a great customer experience.
My point is that in a parallel universe, executives could have decided Apple was going to be another PC company but with greater attention to customer experience. Had they gone that way, Apple would, indeed, have been just another PC company—working on razor-thin margins. Quite possibly, Apple would have gone out of business, as it is it came close to doing it once.
I suspect the reason Apple was able to make that pivot is that the founder was still involved at the time and still is. Founders are product oriented and I suspect that the reason Apple has done so well is that Steve Jobs is still at the helm and still cares fanatically about the product details. In other companies, the usual course of events is that a financial whiz kid takes over from the founder and when that happens the name of the game is pleasing Wall Street first and the customer later. At Apple the product oriented founder learned enough board room politics and developed the business savvy to hang in there.
With Jobs dictating the vision, Apple built ease of use into its DNA, and that enabled the company to invent and re-invent products that no body else thought about. In addition to customer experience they concentrated on product line extension (they were the first notebook computer company, first hand-held, too).
Sony had the personal music niche sewn up for a long time with the Walkman, but Apple saw the limitations inherent in only having one CD in the machine and the need to carry extras if you wanted variety. As a computer company, Apple was able to apply tiny high-density disk technology to the problem, and the iPod was born. In contrast, attention to customer experience led Sony to make modifications to the Walkman but, like asking a fish to invent fire, all the modifications in the world did not enable it to turn the Walkman into an iPod. To create an iPod, someone had to re-imagine the paradigm.
So my takeaway from all this is that although attention to the customer experience is important, even necessary, today, it is hardly sufficient for a company to prosper. Customer experience is a way to compete, but product innovation is still huge. That’s why the CRM 2.0 paradigm stresses getting closer to customers and using information you acquire both for messaging to improve the sales of today’s products and for defining and designing tomorrow’s products.
Today’s markets require some out-of-the-box thinking, and smart vendors will make sure that they don’t paint themselves into a customer experience corner.