August, 2016

  • August 18, 2016
  • 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.

    keep-calm-and-optimize-28The 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, “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.

    Published: 7 years ago

    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.

    personalization-conversionLots of CRM vendors talk about personalization but their idea of how to do it leaves a lot to be desired. They do personalization very late using a just in time approach to accessing customer data to support a sales or service encounter in the moment. This certainly is important and it achieves the goal of personalizing the encounter by producing a catalogue of data including the customer’s history, demographics, and other relevant information. With it a customer-facing employee or automated process can make intelligent decisions in the moment and offer, among other things, next best actions or offers. So there’s a lot to like with this form of personalization.

    But why wait until you’re in the moment of truth to personalize? This kind of personalization implies, or should imply, another form that’s further upstream from the moment. In my last two books I’ve written a lot about moments of truth. Briefly, they should be predictable and every business ought to know what they are. Typically, customers experience moments of truth, times when they want or need something from a vendor that the vendor should be able to provide.

    Moments of truth are driven by reasonable expectations that are based on marketing, brand promises, or the nature of a product or service. For example, there is an expectation of ease of use for most electronics today. That’s a vague idea but its based on the vendor’s responsibility to research customer attitudes and habits, to start with, and to design solutions to the expectations that arise from them.

    When a vendor takes on understanding moments of truth and succeeds the results can be powerful. One of my favorite examples is Starbuck’s loyalty program mediated by its mobile app. Starbucks started by trying to figure out how it could enhance its customers’ store experience and discovered that at busy times, customers had to wait in two lines that could be rather long—one line for ordering and another for pickup. Eliminating the wait time became one of the drivers for the mobile app that lets people order from their phones even while en route to the store. Upon arrival it is now a simple matter of picking up the order.

    With its app, Starbucks gave customers the ability to customize or personalize their visit, the onus is on the customer and there’s little need to crunch massive amounts of data.

    Proactive personalization doesn’t require a mobile app though many businesses have made great use of the smartphone as a platform. Another great example of personalization is Hilton Hotels and its HHonors app. With it, customers can reserve a room, see a map of the property and select a room, order services, and even turn the phone into a room key. Similar to Starbucks, Hilton puts control of many aspects of the experience in the palm of a customer’s hands.

    As we’ve seen personalization can mean many things and it’s not always about data or certainly not just data—it implies relationships. For this reason community can have a big impact on how a vendor approaches customers. In most of my research it is hard to come across any situation where a vendor maintained tight control of the information customers could access. In most cases personalization involved giving up that control in favor of giving customers the ability to control their destinies. It involves an amount of trust but I can’t think of a situation where trusting customers wasn’t a good idea.

    A case in point is SOL Republic.



    Published: 7 years ago

    This is the last of four posts on the key attributes of customer loyalty.


    traveljourneyIf 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.


    Published: 7 years ago

    Denis-PombriantThe platform land rush is definitely on. You can’t swing a dead cat, as the saying goes, without finding an announcement about some new platform or some established vendor’s attempt to enhance its existing platform. Some sorting out seems to be in order.

    What’s not a platform these days?

    Well, if you can easily substitute the word application for platform, then use application because it will be more accurate. We’re suffering from word inflation all over the place and application has been split into apps, those things you run on your phone, and applications which vendors shy from preferring platform when they should know better. For the record, an app is still and application and a platform should be more. A lot more.

    Platforms don’t grow on trees.

    Building a platform takes work. It is doubtful to me that you can declare a platform into existence as a startup. Chances are good that a new platform is really a standalone application whose investors don’t want to see it become orphaned. But platforms take time and effort to build. If you look at the majors—Oracle, Microsoft, Salesforce, and SAP, they’ve been in the business for decades acquiring and integrating solutions to make something with a large footprint that they call a platform.

    But it’s not just about quantity of functionality, there’s quality to consider too. For instance, in addition to all of the integrated apps, a platform ought to have a really good tool set that enables users to maintain what they’ve got and build new things including simple database apps as well as sophisticated processing apps that incorporate the social, analytic, integration, workflow, mobile, and other capabilities that make a platform real.

    To be sure, there’s more than a casual difference between the majors and their offerings, but generally speaking, each is trying to become the one-stop-shop for customers needing software technology. Each also differentiates itself through emphasis on different aspects of deliverables while hewing to the cloud mantra.

    Is it too late to become a platform?

    Well, quite possibly it is too late. It takes a very large amount of investment and the time and talent of scarce and very smart people to make a platform, and while all that development is going on the market is not standing still. So recently we’ve seen some successful companies being acquired by large platform providers and I suspect the rationale for the sellers was that it was time to join rather than attempt to compete.

    Microsoft bought LinkenIn recently but they’ve also bought large numbers of other technology companies that more or less fit their vision of platform. Oracle has bought more companies than I can count and continues to fold them into its platform or suite of clouds. Same for Salesforce, which just completed its acquisition of Demandware an ecommerce product.

    What’s next?

    As large as these collections of applications or platforms are, they can easily get bigger. We’re already at the point where very few businesses would likely use all of any vendor’s platform offerings because there’s just too much stuff. Many of these vendors have provided multiple tracks such as SMB and enterprise offerings, which would seem to automatically disqualify an organization from taking on everything on offer. Still there’s the grey area where an emerging business has one foot in each camp so hybridization is a definite possibility. It’s in the hybrids that the true value of a platform emerges.

    Hybrids can also mean mixing offerings from multiple vendors and the gob smacking reality of today’s platforms is that as huge as they are, they are still not big enough to crowd out the competition. That’s a tough reality because part of the reason for embarking on the platform trail is to help lock out competition. But no such luck.

    All vendors know they have to provide an elegant approach to integrating whatever is on a customer’s site. Of course, this goes double for the legacy systems every business runs. The legacy systems might have analogs on every vendor’s platform but legacy systems also go by the name of foundation systems, responsible for a business’s bread, butter, and profits. Businesses are thus naturally cautious about upsetting the apple cart so integration is a critical need.

    Ecosystems come into focus

    The platform wars are in full swing but the outcome seems assured. There will be several major competing platforms and we know which providers have them. Resistance is futile, announcing a new platform today is spitting into the wind. But at the platform level the group of applications made by third parties, commonly called the ecosystem, there’s plenty of opportunity.

    In the bad old days, third parties couldn’t commit to a single vendor because markets were not big enough. Today though, committing to one vendor’s platform is smart business. Committing means abandoning the need to maintain source code tuned to this or that operating system, database, hardware, and even language. With that, it seems to me that smart startups should begin life with a commitment to an ecosystem and thus a platform. It also means figuring out a useful offering in a market that seems to have everything, that’s a story for another time.


    Published: 7 years ago

    Over the summer multiple events have pushed me to the conclusion that CRM and government are natural complements and that it’s just a matter of time before they meet. It would represent a huge opportunity for the industry and my full thoughts are available in this white paper.

    The common denominator is people. Whether we’re dealing with government or with business people want and expect individualized attention to their needs and importantly, they socialize their ideas about products, services, and government in much the same way.

    Business quickly adopted CRM technologies over the last two decades while government has been steadfast in its outdated approaches. The differences in adoption rates between business and government can be traced to some of the disquiet we see in the political arena for example, the populism manifest in the Brexit vote and in the American presidential cycle.

    Where the approaches are similar

    The government approach was also the business approach until social media and CRM emerged as potent business forces in the last decade. Communication was through broadcast media usually in print media, and it was also one way. Capturing the voice of the customer/constituent was not often attempted partly because it was slow and expensive. If you wanted more you had to deal with a representative that didn’t have your best interests in mind. A visit to your local Registry of Motor Vehicles in the U.S. is usually all the proof one needs.

    But when social media came along, we all discovered how quickly an individual could influence a large audience. Some businesses got burned by the criticism and adopted CRM and its associated tools as fast as they could but government didn’t. Perhaps the relative scarcity of elections gave politicos the mistaken belief that there would always be time to fix something that broke. The recent Brexit vote in the UK should disabuse all of us of that belief.

    How they differ

    Business no longer waits for things to break and a quality regime based on the work of W. Edwards Demming has been a strong influence. Today we build quality into the manufacturing process eliminating defects before they occur or engineering them away. We build intuitiveness and ease of use into everything because we know that if we don’t a competitor will. This is where business and government diverge. There is often no alternative to your local, state, or national government though recent events show that the public is growing increasingly comfortable with “none of the above” as an option and that’s turning normal government functions into mush.

    Now, here’s the rub: CRM can’t help all of this, at least not immediately. If we’ve learned anything in the CRM age it is that we need to always be testing our assumptions, gathering data, and analyzing it to figure out next best actions and to discover new opportunities to serve. CRM does all of this very well, but its effect is not immediate. The trust involved in successful CRM takes much iteration to bear fruit.

    Getting started

    This is exactly why its time to apply what we know about CRM and customers to government and constituents. The one-way communication model between government and the people that was successful throughout the 20th century has fractured. People have been trained to expect nearly immediate response delivered to their personal devices on almost any subject. Print and broadcast media can’t do this partly because their business models place gates between people and information.

    Additionally, the journalism business model, which relies on advertising, has taken a hit from the rise of the Internet and the media now chases the controversy around a story rather than the story itself in order to attract the eyeballs that advertisers crave. Chasing controversy is less costly for the news gatherer but it often leaves consumers poorly informed or, even worse, informed about only one side of an issue. CRM would help to partially disintermediate news media from government further democratizing democracy in the process.


    How to pay for CRM in government is a tricky question. Many parties inside of government appreciate the status quo with its rules and procedures that make getting even simple things done quickly difficult. They’d have to be convinced of CRM’s appropriateness, seeing it as a benefit rather than a threat.

    If the model for CRM adoption in business is any guide, at some point the benefits will outweigh the detriments. Establishing the balance between enough and too little CRM is likely to be done through trial and error. At some point breakthrough success will happen in one, or more likely, several locations thus creating the momentum for rapid adoption. Until then we continue living in a world driven by technology and social media but mediated by twentieth century communications. It is an unstable situation and it cannot last.


    Published: 7 years ago