Customer experience as IP
Thanks to all of you who took the time to comment on yesterday’s post. The response was very positive both in emails and in comments. The experience showed me that there are at least two schools of thought on the subject. One side is the vendor and analyst camp, which is supportive of the customer experience idea. The other side is customers who have seen the results and many of whom are not impressed. I consider myself in the middle. I understand the usefulness of customer experience ideas but I am not persuaded that the empathetic approach is enough.
I went digging at the Harvard Business School website and found a trove of commentary by business gurus on the shortcomings of customer experience and if you are interested in the subject, please check it out. What comes across in all this is that while a focus on customer experience is nice — even good — it’s not enough if there’s no culture behind it. Not just any culture but one that sees customer input as more than a bother but as a real opportunity.
I have started calling the information that customers want to share with their vendors, intellectual property because it is. Customers have valuable information that can benefit their vendors exclusively and it’s free if a vendor knows how to ask. The asking should take place in communities set up to gather the information and such communities also can help surface new product and service ideas. Even policy can be influenced through communities and it’s all intellectual property.
So what might it mean if vendors aren’t collecting this freely available IP? They’re probably leaving money on the table. Now, with that in mind, should customer service or customer interaction be seen as a cost or a hidden benefit?
Can Customer Experience Block Progress?
Customer experience reared its head in my life this month. My phone service went out which was not a catastrophe for me because in addition to the landline (which went out) I have a cell and a nifty VoIP line that lets me talk through my computer. Parenthetically, I love my VoIP line because — though I live in the Boston area, the VoIP line has a 415 area code, which you may know is San Francisco. I don’t know if it’s my heart that’s out there but certainly a piece of me lives in San Francisco and for some reason that makes me happy.
At any rate, the landline went down, first with an annoying background hum and then I lost dial tone. I’ve become an old hand at diagnosing the problem because it happens every winter when a certain manhole gets some water in it. When the weather dries up the problem recedes into memory but it comes back every winter.
I am also something of an expert at summoning the phone company by filling out the obligatory form on the web site and, because I am a repeat customer, I have a special phone number that I can call directly. Actually, after this latest round I have multiple numbers down to supervisors’ and technicians’ cell phones.
No matter. The problem I had got fixed a couple of times and each time I got calls from customer service, some of which were automated, telling me that the phone company had wrestled the problem into submission. In one incredibly ironic moment, when the phone company’s survey team called to check on my satisfaction with the service, the hum came back on the line and the person on the other end had to admit that she couldn’t hear me well because of it. So, the problem is solved as I write this but the weather is threatening so it remains to be seen whether the fix is permanent.
I thought I could use this experience as sort of a thought experiment in customer experience. I am happy to admit that the way the phone company handled my problem was top notch. Everyone seems to have been trained in customer empathy — a term that I prefer over customer experience. But empathy only goes so far.
Over the years I have seen a parade of empathetic phone company representatives, usually the technicians who stand outside on rainy days or climb down into the wet manholes to make the repairs. These people do everything that they can to provide service but what’s management doing?
The technicians fix the problem and they do a great job but it’s management’s job to zero in on the root causes and spend the money necessary to eliminate the possibility of repeat. So the question I have is this: Does management hide behind customer experience optimization in order to deflect more serious problems? And if so what does this say about the proper use of CRM? In helping deflect customer issues, has CRM become part of the problem instead of the solution?
I have always been skeptical of the customer experience movement for this reason, because if you can focus on the generic “experience” instead of putting processes in place that actually solve problems this is what you get.
My landline woes are a tempest in a teapot; being without phone service these days is not a hardship since most of us have multiple lines that get to us one way or another. So it’s easy to watch the resolution play out with a sense of detachment but consider the mess that has become the Toyota recall fiasco.
As the congressional hearings investigating the problem of sudden acceleration played out I heard about and read story after story of customers who experienced unintended acceleration and the common denominator was never found to be a mechanical or electrical problem. Toyota refused to believe an electrical problem could exist. Instead the common thread was dismissal by the company or by the US Department of Transportation of the complaints. Often the finding was operator error.
What I saw was stonewalling over ever really trying to locate the problem wrapped in polite letters and diligent dealers trying to figure it out. Customer experience.
All this has a tragic dimension because people have died due to the problems with these cars. Even more tragic though was this heartbreaking revelation. I was watching Ed Shultz on MSNBC on the day of the hearings before the House Energy and Commerce Committee. Shultz was interviewing Bruce Braley (D-IA), one of the committee members, and mentioned the case of Koua Fong Lee of St. Paul Minnesota.
Mr. Lee was sentenced to eight years for criminal vehicular homicide because his 1996 Toyota Camry accelerated on an off ramp and plowed into another car, killing a father and son and leaving another child a quadriplegic who later died. Lee’s defense at trial was sudden uncontrollable acceleration but the jury didn’t believe him because, heck, he was driving a Toyota and we all know how reliable Toyotas are. Sadly, Lee’s story is not unique.
As far as I am concerned, customer experience had a part in killing those people. It gave a company a way to deflect a serious problem while pretending that it was doing the right thing. Customer Experience is an important part of dealing with customers but it should not be seen as a panacea. Companies have to take responsibility for top notch business practices that address root causes. Customer experience is table stakes at best and when it comes to building sustainable customer relationships it is not good enough.
Sell specific benefits
I was in a conversation with the CEO of a CRM company the other day discussing the latest moves in the industry over ideas like SaaS, single tenant and multitenant deployments. It has occurred to me and I said this to the CEO, that we spend far too much time and brain matter on the delivery model and too little on how we provide value to the customer.
It’s a problem that you see a lot if you know what to look for. It happens whenever one vendor or even an individual comes up with an idea that seems to attract customer attention. Once that happens, the competition is all over the idea like flies on a fresh meadow muffin and the whole competition moves to one dimension. I’ve seen it on numerous occasions in my ten years covering CRM and the single tenant vs. multitenant debate is just one example. Other examples include the customer experience and social CRM.
Now, to be sure, all of these ideas are important but they also hit wide of the mark. The mark ought to be how I as a vendor deliver value to you the customer and whether that value is sufficient to warrant a purchase. Ideas like low cost and fast implementation or improving the customer experience are, by their nature, designed to appeal to the buying influences in the complex sale of CRM. They appeal to the CFO or the CEO. Customer experience may appeal to the VP of sales or the VP of service and so on. But you can’t take any of that to the bank.
There is an implicit assumption in all of this, that a CRM product is in all other respects the same as all others in the market and that this single idea is the one worth contending over. That’s a road to disaster if you ask me because only one company can be the best at the attribute in question and then everyone else is scrambling for second place. That’s a path — no, make that a short cut — to commoditization.
It’s a harder sell to talk about the customer’s needs and what makes them unique and deserving of unique treatment — often the customer doesn’t know and the sales representative might not have the training or knowledge to help figure it all out and sell to those needs. Too often in early markets customers buy market leading products regardless of their merits and vendors accommodate this need by bragging about market share.
If we could focus more on how we deliver specific value, the sales and marketing conversation would be richer and you might actually see one vendor competing for business based on a specific need as well as other vendors competing on delivery model or price etc. But that’s a scary place to be if you are a sales person. Your customer wouldn’t necessarily be comparing you with the other guys in an apples to apples way so how would you know if you were winning?
Selling has always been a numbers game meaning that sales people needed to see as many people as possible, have as many contacts and opportunities as possible in the hope of closing some of them. That was the original assumption of CRM. But if you are at all cognizant of the marketplace these days, tightness in the credit markets has caused a significant amount of demand destruction and that has changed the terms of selling.
We don’t have full pipelines because of demand destruction or, if we do, there are many more suspects who can’t buy for one reason or another tied to budget. In this world selling the advantages of your delivery model or your low cost may not be as valuable as telling your customer specifically how your product can help make money or save it.
We’re in a cross sell/up sell market today in which we’re trying to sell something else to a customer that has bought from us before. In that climate it should be easy to talk about using products that enhance a specific business process or function.
Customer experience or service product?
There is a difference between a customer experience and a service product and it is worth noting the distinction. We seem to obsess about the former and almost ignore the latter and that’s too bad because I think there is money to be made in the difference.
The distinction reminds me of the big discussion that went on a few decades ago over quality. At the time imports from around the world, but principally Japan and Europe, were cleaning our clocks because they were perceived to be of higher quality than domestic brands.
In typical American fashion we mounted a comeback strategy to bring our quality up to world standards and for a while smart business discussions were all about quality. It reminds me of the last few years and the relentless emphasis we have placed on the customer experience. Let me say that emphasizing anything as fundamental as this can’t be bad, in moderation, but there’s more to consider.
My interest in the customer experience was provoked by a long series of calls between my wife and our mortgage company, a typical big bank. The problem was that the bank had failed to pay our property taxes though it was clearly their responsibility because they collect the money each month and hold it in escrow. The problem got worse as we waded into it. Not only did the bank not pay our tax bill but also they had inadvertently paid someone else’s with our money.
My wife had a series of calls with bank representatives who work in the call center. Each bank agent promised to fix the problem, each tried to reassure us and each was pleasant and professional told my wife to have a nice day at the end of the call. My wife ended each call thinking that the agents were “nice” and that the problem had been solved. Unfortunately, there was no follow up and here I will let you imagine the rest. After four “nice” conversations the problem is still there.
Now if this was a manufacturing problem I would say that the product is broken and that the bank has a quality problem. The typical response when quality became an important value in manufacturing was to improve final inspections and it worked. Certainly a lot of inferior product was kept from the customer but the manufacturer also ended up with a lot of products that needed fixing. Clearly something else had to be done and that led to the idea of designing quality in rather than inspecting for it.
I think our focus on customer experience is a lot like focusing on quality. Just as you can’t separate quality from the whole manufacturing process you can’t separate the customer experience from offering a high quality service product. My wife is more tolerant than I am and left each encounter (so far) encouraged that the situation would be rectified.
Intense focus on the customer experience has left us with a hollowed out service product, at least in this case but I will extrapolate here. It appears to me that the bank might be incenting people to be nice but also to pass the ball and not care too much if the ball falls on the ground and dribbles away.
This experience vividly shows me and I hope others that there are two parts to customer service — the customer experience for sure, but also delivering a quality service that goes well beyond being nice or professional or any other qualifier that to attribute to the people involved except one. You still have to get the job done, and CRM needs to ensure that aspect as much as it addresses the experience.
Customer experience or service-product?
Last week I made the suggestion that we have over done our reliance on customer experience as a customer intimacy tool — something that I stand by. The idea of customer experience looms large and there is no denying its power as a theme in CRM. But if our interpretation of customer experience is off the mark, as I think it is, then what is the right approach?
First, by way of review, customer experience has come to mean a literal experience had by a customer with a vendor, product or service rather than a product or service cultivated — through value add — to be an experience. The customer experience as we know it today is a method of establishing customer intimacy and it is only one of several intimacy strategies that we should consider using — along with product line extension, product enhancement and marketing. All of the other intimacy strategies require some greater knowledge of the customer, especially understanding customer attitudes, which can be gained through communities and other social media whose focus is information gathering rather than message or idea elaboration.
What separates customer experience, in my mind, from other intimacy strategies is that all the other strategies deal with “the thing itself”, either a product or a service. Customer experience is a meta-intimacy strategy because it operates at a level of abstraction above the thing itself.
It strikes me that when we talk about the customer experience, what we really mean is our service-product. That might seem like a distinction without a difference but it is not. The hyphen between service and product is deliberate. In conjoining the words it emphasizes an idea that might not be strange to us but it is often subliminal.
Customer experience, is generic, a thing to be achieved through prescribed processes within an organization, an outcome with few inputs. A service-product on the other hand, is more open-ended. It takes whatever shape a customer gives it and it is different from brand to brand, person to person. A service-product also has this key difference from an experience — it captures or ought to capture customer input well beyond the hoped for conclusion of satisfaction. A well-executed service-product looks for root causes, captures data and influences future company decisions about product and brand.
Replacing a customer experience orientation with a service-product idea will do several things for any company. As I have tried to say elsewhere, the current description of customer experience amounts to little more than the “ordinary care” that hotels owe guests. But no one competes on ordinary care because it is so easy to supersede.
We try to develop customer experience as a way to differentiate and while that may be a good thing, some products and services simply cannot be cultivated into customer experiences. Consider root canal. It is a service that will never be cultivated into an experience — except for the pain killers as one experienced patient told me recently. If we attempt to convert a service like this into a customer experience we run headlong into a wall. Far better to look for ways to improve the service product than attempt to make it something it is not. Also, since only some services can be cultivated into true experiences, it can relieve managers and line of business people from the contortions necessary to attempt to achieve a customer experience.
A true service-product orientation is an instant differentiator. Like any other product, a service-product can be differentiated based on customer input. In contrast, a pre-determined customer experience is a playbook to be executed and the customer is almost a by-stander.
The good news is that many companies already approach the customer experience as a service product and they are highly successful at knowing their customers as well as ensuring their satisfaction. Notwithstanding this success, I believe it is critical to get our terms right, to focus on the service aspect rather than sticking to the literal meaning of experience. If we fail to get our terms coordinated we risk ignoring real opportunities for innovation in our businesses. And at some point an ossified customer experience idea will fail to meet the needs of those whose need is for service-products. When that happens we will wring our hands and ask how and why CRM failed us. Of course it won’t be CRM that failed but our vision.
