Let’s be honest, innovation doesn’t interest most companies as much as sales.
Companies tend to inspect their future when they’re already seeing a drop in sales because their market moved on without them, or because they are doing really well and need to invest some profit.
It’s more often the former than the latter.
So, the first step to getting more customers through the (metaphorical or actual) door is to try to gain referrals. Even in the digital age, referrals and testimonials are the cheapest sales conversion tool. Cheapest, quickest, simplest.
Customer Experience Management
Customer Experience Management (CEM) became a thing for that very reason: to put some numbers around customer behaviours when referrals tail off.
A common acronym used is NPS – Net Promoter Score: the number given to the consumer’s response when asked if you did something right.
Primary research you can’t buy
I’ve got a friend who, like all of us, sits across many consumer segments and tells it differently to NPS.
He’s domiciled in the UK, spends a few months a year in the US, and travels across Europe for his work in SAP. Not your average consumer, but well placed to see good and bad treatment of customers by brands. Where the average shopper might have favourite stores in different towns, he has favourites in different countries.
Last week I wrote a blog about the (Emotional Quotient) EQ factor and how it’s an emerging way of understanding and keeping customers loyal so you don’t need to keep looking for new ones. Afterwards, he and I got into an e-mail trail on the subject that I’ve reproduced here with a very few amends.
The message is: brands that are renowned for their good NPS performance need to wake up. Assumed bastions of great customer service aren’t doing so well and they need to work harder to stay in business.
The chat started with this blog. Enjoy this particular perspective.
Is it great value for money, product quality, service or all three that makes consumers loyal to a brand?
Him. Very few have all three. LL Bean comes [to mind] right away.
Me: I wonder what LL Bean would have to do to lose the loyalty you’ve shown it since we first met [over twenty years ago]?
Him. Yes it’s hard to pick another company in the US. And difficult to pick one in the U.K. besides hotels and B&Bs – which still count as they are businesses.
To me it’s a combo of value for price. And either never fucking up or, if they do, they fix it promptly and kiss your ass for next time.
I find the kissing ass for the next time doesn’t happen much anymore.
Still cheaper to kiss my ass and keep me as a customer than getting a new customer. Because I’ll refer the company if I like them. And the referral will be even better if they fucked up, fixed it and did something to keep my business
There are hotels in Yorkshire and Scotland that get our repeat business.
Volvo [cars] are great but not a UK business. And the [Volvo] dealership experience blows but that’s all over. Such an antiquated business model. Like real estate agents.
The Paul chain in London is great. Does stuff to keep our business. But they are not UK either.
Maybe John Lewis. But my negative experience with them when I first moved to the U.K. tarnishes their standing. Maybe I’m too tough therefore can never be satisfied.
I’ll tell you my favorite section of the Saturday Times and I flip to it first: Customer service horror stories. And of course the [brands] always change their tune when the Times contacts them. I’ll never do business with Vodafone just from reading that over the years.
Businesses always seem to be interested in new customers rather than retaining old. And now they are hot on data mining BLAH BLAH but core values that keep me as, not just as a customer but, a loyal customer meaning I recommend them to friends seem to have been lost.
Take Amazon. I really don’t like them.
I think they are having an overall negative impact. But most times I go to the store or online direct I get more expensive or out of stock product cheaper on Amazon. Free shipping (I’m in prime so my Dad can watch their stuff) and it’s usually in stock.
Aviva insurance seems good but I’ve never claimed. I get loyalty discount.
CapitalOne credit card (US) is great. Cash back and the best exchange rate around. 3 decimal place from interbank and no fees.
BA used to be awesome. They were the best at fixing problems and keeping your business That stopped mid 2000s.
Now they are just like everyone else but more costly. Steve (our local car service garage of choice) the mechanic has been good. He fixes bulbs on the car all the time at no charge other than the bulb. That (Volvo) car blows 5 to 7 bulbs a year.
I’m still thinking about any company in the world I like as much as LL Bean. You can use a product for a year or more and can return it for a refund if you are not satisfied. I’ve never done that but they have replaced zippers on backpacks I’ve used for years.
Zipper quality seems to have declined in recent years.
The brands here are listed and tagged because this is useful, and primary, market research that they’d never receive by sending out a NPS questionnaire.
They’re very welcome to discuss this insight and how room44 can help them work our a consumer-centric plan. All they, and you, have to do is click here.
Future thinking. Future-proofing. It’s what we do.
Every single market has a forum, a conference and a series of businesses running ‘global’ events in that subject. The conference trade booms every time a new industry problem arises.
Take this one: Customer Experience Management (CEM). CEM is that thing you suffer when you call a company and get routed to a resource that provides an answer to your question.
Industries that use CEM technology tend to do so because they receive such huge volumes of consumer traffic that it’s inefficient and expensive to handle all calls with a person. So you are routed, and talked to by bots, and deferred until there is no option but to talk to you.
I’m not passing comment on this, just saying it’s out there and that, maybe, the insight delivered by real consumer contact could be used to resolve frequently occurring issues. It’s not a subject I’ve heard discussed at CEM conferences: dealing with the cause of an issue isn’t as exciting as investing in AI to juggle the call volume.
Anyway, the activity of listening to companies and consumers separately is endlessly fascinating. Listening to brands that sell through retail and to companies involved in automotive technology has proved to be a similar experience.
Retail is under threat. UK news feeds this week feature ToysRUs and Prezzo about to close @200 stores between them. Toys and eating out: low cost desirables, and sectors you might have expected to offer more security. We’ve also commented on the trend for AirBnB-type companies making unused high street retail accommodation available on a day-by-day basis. Seeing a trend yet?
Whichever way you cut it, and even ignoring Amazon Go and reports like ‘The Digital Shop of The Future’, it’s hard to deny that the landscape is changing. In my small market town this month we‘ve seen a butcher’s shop, established 100 years ago, close down, and two more barbers set up shop. We’re up to six now, plus unisex salons and ladies’ hairdressers. Product-based offerings losing ground to services. I don’t think we’re unusual.
So to automotive development. I’m lucky enough to live close to the world-famous Silverstone racing circuit. On its doorstep is a technology park, where very clever people work very fast to make things to service that industry. Some of the components they make as development ideas for F1 and other race series, like Formula E, will eventually filter into mainstream production.
The current hot topic is electric vehicles (EVs) and the effect on the internal combustion engine (ICE). In a nutshell, if the UK government follows current policy, the market for new ICE-driven vehicles is in terminal decline, and EVs are in the ascendance. Of course, there won’t be a sudden switch from one to the other. Over time, the market will taper out of the old technology into the new.
As a component supplier to the car industry, unless you are rooted in heritage vehicles, your market is contracting. You may not have felt it yet, but that’s your new reality. Think of it like the comfortably numb lull between interest rates going up and the first higher mortgage payment.
All those EVs, some running around autonomously. Less demand for car parking and lower still for fuel stations. Charge points will be in high demand, but we may enjoy fast charging one day.
What we do know is that there hasn’t been a fuel station yet that has been converted into a new use that doesn’t still look like a converted fuel station. What will they be?
What will the oil companies do with all that real estate? Who will be our convenience outlet for groceries, confectionery, cheap flowers and barbecue charcoal? The high street perhaps? But what will the guys who make antifreeze do? Who’ll need engine oil? If cars are autonomous, will we even need screen wash?
With all this in a 15-year horizon, it’s the graduates learning to be design engineers now who are working it out.
The tapering out of the current supply chain has begun. Companies that fit out forecourts, make carburettors, produce lubricants, cast engine blocks, extrude fan belts, machine, grind, re-seat, and so on are in trouble – unless they’ve run scenario planning exercises and have an innovation strategy in place.
When you supply a service to a tech sector, it’s always worth looking ahead to see what’s coming; to know what you can do now to future-proof yourself. Whether you get it right or wrong, changes can be made, but it’s better to be roughly right than have no idea at all.
One last question: where will I be able to buy a Snickers and a pork pie without my wife knowing?
Future thinking. Future proofing. It’s what we do.
Is customer service the same as customer satisfaction? As leaders of successful businesses, your job is to see into the future. To know where your competitors and customers are headed and to get there first. To be ready with the solution to a need they haven’t seen for themselves yet and to make sure that their concerns are addressed, hopefully before too much collateral damage is done. It’s not impossible, but neither is it easy.
There’s a market sector called Customer Experience Management (CEM) and we just attended a conference on the subject. With the market for mobile and data services saturated in most countries, telecommunications companies (Telcos) are keen to make their customer feel loved. While you may not get this feeling when you try to change your mobile plan, it’s a fact that Telcos are coming to rely on upselling and customer retention to sustain revenue.
The figures are interesting. Apparently we, as a global consumer base, send 80 billion text and social media messages a day. That’s how dependent we are on our devices. Generally, we are happy enough with our service providers, but sometimes things fall over. Of the people who have a complaint with their service, only 1 in 26 complains directly by phone.
One provider receives 70,000 customer contacts a day, dealt with by 3,200 agents. Customer service satisfaction scores depend on the outcome of these calls – the best outcome being that the call gets answered quickly and the issue is resolved by a human. Has that ever happened for you?
Telcos are trying to reduce their reliance on taking calls by person by introducing automation to route and handle calls. To a consumer this often feels like a cunning ruse to avoid actually talking to us one-to-one. Another development is to use chatbots to answer the call instead of running callers through a series of number selection options. Chatbots draw from a menu of pre-prepared statements and may eventually pass our call on to a real human.
So here’s the dichotomy. Company ‘A’ is working to develop great new ways of fielding calls using machine learning and chatbots. Company ‘B’ says, “Support, don’t replace, humans” with bots. And customers really don’t want to have to make a call in the first place.
The contrast between what seems obvious looking in, and what companies actually do to overcome such issues, demonstrates why design thinking is such a powerful tool: adopt the company approach and try to overcome a problem or apply consumer centricity to resolve the issue at its root.
In practice, nothing is quite as easy as this. Large companies with large numbers of people paid to recruit new technology need to be seen to be doing exactly that. Machine learning is a new tool. It’s often confused with artificial intelligence, but that’s a conversation for another day. The point is that, on occasion, an obvious question sometimes pulls the sheet off the elephant in the room.
What will make a difference to you? Masking the symptoms or treating the cause? Let’s talk about people, product and function of the things you make and can make. Let’s think about designing products and services to meet a real and tangible consumer need, now and in the future. Let’s be as definite as we can about how our markets are shifting and let’s see if we can deliver excellent consumer service and remove the need for a safety net.
Let’s work through the process of design thinking, together. If any of the comments in this blog raise any questions you’d like to talk about please drop us a line here.
Future thinking. Future proofing. It’s what we do.