Two Layer CX
Maybe you’ve already considered this but it just popped into my head the other day as I was thinking once again about customer experience or CX as some people shorten it. I have often said that customers experience moments of truth and that the experience should be focused on the things that customers care most about AND that a business can actually do something about.
I make this distinction to try to focus on things that are core to relationships and there are real pitfalls you can avoid if you take this approach. A business is not responsible for every customer issue with a product or service and a good demarcation between what issues you own and what you empathize over might be the warranty or other declarative statements a business makes. At least we’d like this to be true but is it strictly speaking? Not really. There are things that a reasonable customer intuits as implied by the existence of a product. One is its ease of use but there’s also the important area of how the customer consumes the vendor’s policies and processes.
From this I came up with two layers of CX. There’s the obvious layer that we all know that consists of the stuff covered in the warranty but then there’s a lot of stuff that isn’t defined that can make all the difference between a good and lasting relationship and someone stalking off.
The second layer of CX is about how customers experience the business entity. Layer one might include, does the device work, is the coffee hot enough but not scalding and generally, does the thing I sell you live up to the expectation for thinginess? I realize I am inventing a word and that’s intentional to get us all thinking. The distaff end of a spectrum with thinginess on one end might be personable-ness or humanness and it accords with the relate-ability of your business, its people, and its processes with customers thus the two layers of CX.
Thinginess is usually engineered into a product or service because that’s what a business does to ensure that it meets the aspirations it expresses in its communication with the market. They are the ultimate signs of thinginess. Thinginess is a one-time item, you make a product and deliver it and that’s it. But personable-ness is something you need throughout the customer life cycle and hopefully into the next life cycle too. (Let’s not get creepy, I simply mean buying the next iteration of the product I am not making some allusion to vampires.)
It’s personable-ness that delves into your procedures, policies, and the tone you take with customers regardless of the channel they approach you on and it’s here that most businesses need help. Too often the systems that meet customers in channels are retreaded 20 year-old knowledge bases that were originally intended to help internal employees to support customers. Somewhere along the line we got the bright idea that with a shiny new front end these knowledge bases could do the same for end customers too.
Sometimes the knowledge base idea works well enough, helping people find easy answers to questions thus deflecting traffic that would normally invade other channels that require monitoring. But sometimes, it doesn’t work and it leaves customers stranded. This also leaves behind a core of harder issues to be solved by people or possibly more intelligent systems that leverage machine learning and natural language processing.
Even with advanced, intelligent systems, some customers will still need to speak with you or otherwise interact directly (via chat, email, social) with a human. How easy we make that transition says a lot about how we deal with the second tier of CX. If a customer is somewhere in your channels, the customer is on a moment of truth quest and the CX of your product is secondary to the CX of the quest into your processes and policies, the moment of truth. A customer’s experience of that moment of truth will determine to a great degree whether you create or strengthen a bond and ultimately whether or not the customer becomes an advocate or someday buys more.
So here are two ideas for your consideration. First, keep a big picture of CX in mind understanding that it’s not just what you can relate directly to product. Second, recognize that you need to focus on how customers consume your policies, processes and all the rest of the fuzzy stuff around your products and brand. That’s also called the customer journey and it’s why I place such emphasis on journey mapping. Products have blueprints and models, CX has journey maps or it should. The journey map is a model for how you interact and it will become one of the most important parts of your outreach to customers in the near future.
It’s the CUSTOMER Experience
Bill Clinton won the presidency with the mantra, “It’s the economy, stupid,” and I think CRM could borrow heavily from that pithy bit of logic. When in doubt, if you can check your preconceptions at the door and actually perceive the information in front of you, there’s no telling what you can figure out.
Such is the case with the tired phrase customer experience. Much like Mark Twain’s weather prognostication (“Everyone complains about the weather but no one does anything about it”) CX, as it is being rebranded, is something we either can’t or won’t do anything about, notwithstanding all protests to the contrary. Throughout this spring I have attended multiple conferences where CX was trotted out only to be defined in a vendor’s favorite terms; which rarely has included such basics as asking for opinions from customers.
There is no shortage of handwringing and worry (and proof of Mr. Twain’s wisdom) about CX than the data floating around. A new Forrester report claims that only 1 percent of businesses they surveyed are providing excellent customer experiences. Oracle tells us that more than 90 percent of their customers think CX is primo in importance but only about a quarter of them are hitting the ball out of the park.
What’s going on here? If it’s so important why aren’t we doing better? I’d suggest it’s because we’ve misdiagnosed the problem. It’s my belief that the challenge is between our ears.
I spent part of the last week at a conference where yet another vendor paid homage to the concept of CX. They brought in consultants and analysts from big firms to tell the audience of the importance that needs to be placed on CX and then proceeded to tell multiple stories about what executives at various companies did to improve CX. Amazingly though, no one saw fit to mention the vital role of customers in all this.
Customer (an adjective modifying Experience) was bandied about plenty but it never turned into a noun as in let’s ask the customers what they think. It went over most people’s heads and could have missed me except that I just spent the last 18 months studying the issue. To net it out, if you want to know what makes a customer experience you have to ask the customer. If you don’t ask, you are committing the age-old error of letting opinion substitute for fact.
Now, to be fair, the substitution is a natural one. Until the last few years we didn’t have the ability either to collect enough customer data or to analyze it effectively. Opinion was the only thing we had. Expert and experienced opinion from senior executives drove most CX decisions and it worked up to a point. In the 19th century retailer John Wannamaker uttered the famous quip that half of his marketing budget was wasted but he didn’t know which half. He had little recourse since he lacked a fast and efficient way to capture data and analyze it for telltale customer signals. Old habits die hard and despite our harvest of big data and robust analytics we still rely on HIPPOs—the Highest Paid Person’s Opinions—when we should be analyzing community data.
The disconnect is becoming significant. With modern methods and using community approaches to collect data, a business can have a laboratory in which it tests ideas with customers to discover what makes optimum customer experiences for a particular business’s customers. One big finding from my research is that we are engineering CX backwards. Customers experience moments of truth, specific times when they want vendor interaction. If you want to engineer CX start with understanding the customer not with the opinions of “experts”.
The reason is simple: each customer experience is not something completely new that a vendor has to brace for. Imagine you’re a doctor and a patient presents with a sore throat. The you might treat the patient as an individual and with empathy, but you certainly won’t treat the sore throat as if it is a condition new to medical science. There are decision trees and best practices for dealing with any malady and the doctor makes a diagnosis and prognosis based on them and supporting data gathering in the form of lab work.
Notice how the personalization is separate from the diagnosis and treatment. The specific malady, a sore throat, is the moment of truth and it is treated differently from a broken leg though the attentiveness is still similar. That’s what we need today in the front office. Companies that take a moments of truth approach find that rather than preparing for almost anything in sales, service, and marketing, they can limit their horizons to the things their customers care about and that they wish to be great at.
There will always be things that customers want from us that are outside of our capabilities and we need to say, in so many words and business models that this isn’t what I do. Regardless of what the customer experience gurus tell you about customer’s attitudes toward a good steak dinner you don’t prepare to somehow handle a customer request for steak if you run a burger joint.
So my advice for anyone who is confused about all the CX talk today is simple. Treat the experience as an outgrowth of an authentic engagement, a moment of truth. Use analytics and community to ferret out those moments of truth that you need to be great at (some are not obvious even for HIPPO’s), then build metrics around your moments of truth to track your progress. But above all, get rid of the belief that you can know what you need to know without asking customers what they think. If nothing else it will save a lot of resources spent chasing unicorns.
Last Look at Oracle OpenWorld 2013
The ghost of Anthony Lye presided over Oracle OpenWorld’s third-day customer experience, or CX, keynote. For CRM and related things, it was the moment I’d been waiting for. Lye is in robust health as far as I know, but he has been gone from Oracle for about a year. He was the architect of Oracle’s CRM strategy that resulted in the acquisitions of RightNow Technologies, ATG, Endeca, and other brands that the company spent billions on and consolidated into its CX operations.
Lye’s fingerprints were all over the keynote script, ably presented by David Vap, who made a kind of case for why social media embedded in CRM has become or is becoming standard equipment for any company aiming to access 21st century marketing and sales.
Vap updated some concepts about customers deserting vendors when vendors can’t meet their needs — 26 percent now post negative comments about vendors, 86 percent stop doing business after one bad experience, and 69 percent of employees are not actively engaged with their jobs.
While Vap’s effort was intended to present a brief for social’s inevitability, I felt it was more of an indictment of business as usual — of simply trying to apply social Band-Aids to what are fundamentally cultural problems in many corporations today. It was like looking through the wrong end of the telescope.
The corporate culture is still too mired in a manufacturing age — the build-it, ship-it and collect-the-money model untouched by things like subscriptions and mobile technology — and Oracle’s approach to it all seemed to me to be a social overlay on fundamentally broken business processes. As a strategy it works because it offers sinners salvation without asking them to repent. Unfortunately, they keep sinning.
What was missing, to my way of thinking, was the customer. There was little acknowledgement that amending the corporate culture and the business model starts with asking the customer — not once, but throughout the lifecycle — what do you want and how are we doing? It was alluded to in Vap’s talk, but presumably Oracle doesn’t have an app for that, only a methodology, so it didn’t get the attention it deserved.
A big tell for me was Oracle’s reliance on what I think is one major analyst firm’s infinite loop customer lifecycle. The parts of the lifecycle include Need, Research, Select, Purchase, Receive, Use, Maintain and Recommend, which brings us back to Need. I much prefer the lifecycle promoted by GetSatisfaction and some other social vendors, which uses only six stages: Discovery, Evaluation, Purchase, Use/Experience, Bonding and Advocacy.
The first lifecycle aims to provide vendor side solutions for every step — with the possible exception of Advocacy, which is inherently customer side. It is neatly contained by the vendor and its presumed use of customer experience notions.
The reason I like the alternative better is that it admits that the vendor is not in control and actually puts the customer in the center of the model. It admits that the customer is in control from the beginning, leveraging the information resources of the Internet and social media to conduct a purchase process largely free of vendor influence.
It’s the second half of the lifecycle, the back nine of the relationship, where social shows its stuff in this model. Rather than deliver a product and wish the new owner luck, the second approach continues to leverage social leading up to the most critical part of business today, bonding.
Vendors may mourn the fact that they can’t control customers as they did back when they controlled information flow, but they’ve made too little progress on the back nine in understanding that bonding is not only the new black, but also the new everything.
Without bonding you never get to recommendation, which is a tepid form of advocacy, and without either you spend more than you should attracting and maintaining customers at a time when the costs of those activities eats into margins in a nontrivial way.
For all that, it seems that Oracle might be doing well enough with its customer experience strategy, at least in Europe. It was interesting that the major use stories came from Tesco, a large retailer and grocer — and everyone’s favorite Lego. The presenter from Lego showed that he really gets it and told several stories about customer engagement, about being in the moment with the customer, and ultimately about customer bonding. Oracle needs more of that.
Had Lye stuck around, I wonder if he would have been able to turn the ship from a culture of layering technology on old business processes to one that embeds a customer culture into the technology. That’s not a fair question, because everyone moves on and what remains ought to be the culture that drives the organization forward.
Oracle has some amazing tools and the ears of very powerful people in IT across the world, so I am not concerned about it getting its social messaging right eventually. They haven’t been at it very long, after all.
There were many bright spots at Oracle OpenWorld — don’t let this rat hole I’ve fallen into give you the wrong impression. Nearly everyone I interact with said it was the best run thing in years, and much credit for my little part of that experience goes to Susie Penner for her tireless efforts to give us access to Oracle executives.
There was also the little matter of the America’s Cup, which I wrote about last time with regard to analytics. I have had a ringside seat to some of the comings and goings behind the scenes over the last couple of years, and I have to say that while many people were miffed that Larry Ellison played hooky from a keynote to root, root, root for the home team, I think he made the right move. OpenWorld happens every year; America’s Cup on your boat and in your backyard — not so much.
End of a Short Road?
I’ve been having so much fun lately that I may have missed something but let me ask, have we already reached the end of the customer experience trend? I think CX still has a lot of life in it but let me play devil’s advocate for a moment.
CX is a nebulous term and idea and its discussion leads to all kinds of confusion about its meaning. Is CX about how the customer uses or engages with your product? Is it about the idea of turning your product or service into an experience? Is it more holistic and if so what’s that all about?
First off, some threads of CX are not new. For instance Joe Pine was talking and writing about it in the last century (1999, lol!) in his excellent book, “The Experience Economy.” Pine — and co-author Jim Gilmore — have been building on that idea all these years and they’ve added new insights to the original idea.
Basically though, they thought of CX almost like you’d think about a maturation process. Things go from commodity raw materials, to branded products to services to (hopefully) experiences. The classic example is coffee beans that traverse a path from bulk beans to roasted and ground product to service at a counter to experience at a hip coffee shop that gets five bucks for a cup and offers good sounds and lighting. But I’ve written about this before and you know it almost intuitively.
Another school of thought obsesses over the user interface, the store, or whatever is central to the moment of the purchase. That’s a more narrow definition and one that’s taking the original idea down its own trajectory to the moment of transaction.
So here’s why I can make the case that CX is over (though in my heart I don’t believe it fully). I prefer a different interpretation of the time we live in and the importance of how we reach out to customers via what passes for some kind of experience. Since no single definition suffices for me, let me just say that I’d rather we talked about Geoffrey Moore’s idea of whole product rather than messing around with trying to figure out what an experience is.
Experience is ethereal and philosophical while whole product is much more concrete. Whole product is CX and a bit more because it explicitly incorporates the notion of an end-to-end process that even the best definitions of CX only allude to. Philosophical CX may be more CRM while concrete CX is all about business process management (BPM). In mature markets, which we seem to have an abundance of these days, customers buy whole product, which typically includes the core thingie plus the policies, practices and other seemingly extraneous attributes that the company brings to the customer relationship.
We could argue that a low priced but more than adequate product that comes with no obvious policies and practices bucks this trend. Ah, but the low priced and adequate product has been engineered to be so intuitive that it doesn’t need those things and so they are there even if absent.
A couple of decades ago you might have bought a wireless phone for the convenience of being able to make calls from anywhere. All phones and services were about the same and we made purchase decisions based on simple attributes like flip phone style vs. candy bar shape. That was about it, you might have selected a service based on strength of signal or bars but the vendors did a pretty good job of never letting a rival get too far ahead by merging aggressively.
Ok, then things got complicated first by BlackBerry and then by Apple. RIM gave us a big screen and keypad for email while Apple gave us a true mobile lifestyle that, more than providing communication, freed us from lugging around laptops. When that happened the market went into mature phase and suddenly attributes that Apple was only mid-wife for became part of the whole product — I am talking about the ecosystem of affiliated applications — and if you didn’t have an ecosystem, you weren’t a contender. Add in the Apple Store near you with its Genius Bar and well staffed call center and the build out of the CX was complete. Today vendors compete on ecosystems and stores.
So the mobile communications market is a great example of CX reduction and as you can see it more resembles the Pine and Gilmore idea of an experience than the how-can-we-make-buying-our-stuff-even-easier school of thought. The latter seems a pale imitation of the real McCoy to me.
So, to round it out, is CX over? Have we gotten so enamored of it as a tool for “accelerating sales” (I love the naiveté of that phrase) that it has lost its punch? Or have we forgotten the importance of what it means? If we approach CX as an accelerator rather than as the way we need to do business in an era of mature markets where people need to be attended to, then maybe. But savvy companies seeking ways to keep from sliding back down the curve to commodity status will see plenty of life in the idea of CX even though it has too many meanings. Better, I think, to call it what it is, whole product orientation.
Re-thinking the Service Paradigm
I have been known to do things for money. I bet you have too, but doesn’t it sound funny to put it that way?
I just got off a phone briefing with freshdesk, an Indian company with a subscription customer service and support system that they refer to as a help desk. Freshdesk’s got most of the bells and whistles you might expect to find in a solution like that and they’ve also gamified the business processes as well.
That’s what inspired this column. Here’s my thinking.
It starts with customer experience. There is a great deal of buzz around the idea of the customer experience right now (CX). On Monday, Oracle announced the result of a customer experience research study they commissioned that shines a light on the CX challenge. The net of it is that the CX ramp is in its early days — executives aspire to be leaders in CX and their readiness to meet that challenge lags significantly.
If you’ve been in the CRM space for any length of time, you might recall that CX has been around and around for years. I can think back to the beginning of the century when gurus like B. Joseph Pine were evangelizing CX in books like “The Experience Economy,” yet despite all the attention given to CX the needle has barely moved if you agree with the Oracle data. Why?
Well, one good reason is that theory precedes product and practice sometimes by decades. For instance, the original research that got us thinking about social networking came out of Harvard and other universities in the 1950’s and 60’s but it all had to wait for computers and networks and storage and thumb typing before it got real.
CX is like that, I think. It’s been waiting for things like social, Big Data and analytics — and maybe even gamification — to catch up with the big thinking on the subject. But it’s all here now, which brings me back to the folks at freshdesk and my rather simple idea.
With gamification a possibility for nearly any business process, why don’t we drop the pretense that people like to compete for badges, prizes and status? Why not just cut to the chase and use money as the reward? Sound strange? As I said at the beginning, I have done things for money, selling software that is, so why aren’t we exploring more ways to use incentive compensation to achieve some of our CX objectives?
I’m going too fast, let’s back up a moment. Providing outstanding customer experiences is the aim of most companies I know about. They all define CX differently but in the end it’s all about making sure you delight customers and keep them coming back. So why do we provide incentive compensation to sales people but offer trinkets to our customer service people? It might have made sense back in the day to do this because when markets are new you want to heavily incentivize sales people to hunt for the biggest game they can find. At the same time customer service is a necessary bit of overhead that companies invest in to provide the handholding neophyte customers need figure out products that might be just a tad green.
In early markets the fact that the new whiz-bang works at all delights customers, but that’s not the case today. As I have said many times, today’s markets have a strong zero-sum component — the rapid adoption phase is over in many markets and revenue is dependent on cross selling, up selling and stealing (other vendors’ customers that is). The stealing gets done by your hunters in sales but the cross-up sales happen in customer service, especially if you are a subscription company, hence my question, why not use incentive compensation in customer service? Maybe you are and I should write a paper about you.
To be clear, any customer service organization should want its people to be successful and using incentive compensation doesn’t mean going one hundred percent in that direction. But an 80/20 split of targeted compensation (with a base of eighty) might do many of the things for customer experience that we’ve been waiting for software to do.
I don’t think software alone will get you to the Promised Land. A customer service encounter requires agents with high emotional IQ to read people on the other end of the channel and to make the right moves. You have been on the line with really good service agents before and so have I and I can tell you the difference is palpable. So now imagine what it might be like if you could reward those people with something more than a badge or points? What might it be like trying to hire and staff a customer service center if there was real upside compensation potential?
Freshdesk got me thinking about all of this. Perhaps the real home of gamification is in incentive compensation. It seems like all the tools are in place finally to change the ways we provide service. We have CRM, social media, analytics and gamification. Time to reevaluate the service paradigm, I think.