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Lessons Learned From My Jimmy Fund Walk September 17, 2007

Posted by Bruce Temkin in Customer experience, Customer loyalty, Executive leadership.
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Yesterday I walked with my family in the Boston Marathon Jimmy Fund Walk which covered the route of the Boston Marathon to raise money for the Dana-Farber Cancer Institute. I described this walk in a previous post called “Something More Important Than Customer Experience.” Although our feet are a bit sore, we really enjoyed the day. The weather was perfect — it was sunny and in the low 60’s. And all along the way, people were psyched to be there — from the nearly 8,000 walkers to the countless volunteers that worked at stations all along the route.

If you want to get a feel for the day, here’s a 2 minute video on YouTube…

While I was walking, I couldn’t help but notice a number of things that other organizations (both non-profits and for-profits) could learn. Here they are:

  • People like feeling connected. All along the route, everyone that we ran into was talking to each other. I probably had at least a small conversation with fifty people that I didn’t know. Why was there so much conversation? Because we all felt good to be connected to a common (and great) cause. It was great to share that feeling with thousands of other people.
  • Empower your teams. There were almost 600 different teams walking yesterday; each one focused on there own special effort (typically in honor of or in memory of someone they cared about). All of the teams had their own things going on like custom T-Shirts, special rest stops, and reinforcing message boards along the walk. The Jimmy Fund recognizes the power of these teams — and actively supports them with everything from highlighting the teams at the start/finish to making the Website easy for a team to be setup and managed. 
  • Leadership matters. Behind every successful venture you’re likely to find an outstanding leader. This event is no exception. I was lucky to be part of a great team, called Amy’s Admirers, that raised the second highest amount last year (and we hope to be at that level again this year). Our team’s success was based on the tireless efforts of our leader, Peggy Grodd. She demonstrated some key attributes of leadership: 1) Clear and consistent communications; 2) passion for the objective; and 3) caring for the well-being of each person on the team. Thank you Peggy!
  • Keep reinforcing the core message. It was a beautiful day and we were walking along the Boston Marathon route — an easy enviornment for distraction. But the Jimmy Fund made sure that we remained focused on why we were all there – to save kids from cancer. Every mile or so, there was a picture of a different child who was fighting (or had been fighting) a battle with cancer. The pictures also provided some small details about the children – enough to remind us all about what was truly important. 
  • Make constituents feel good. While we were all there to raise money for the Jimmy Fund, the walkers felt more like heros than fundraisers. At every juncture, the walk was setup to make us feel good. At the starting line, there was a band making things seem very festive and announcing each group as they started the walk. Along the way, there were a ton of signs with reinforcing messages – thanking us for our efforts. At every rest stop, volunteers cheered us on and put stickers on our number badges to acknowledge the success of making it to that point. When we crossed the finish line, we were greeted by rousing cheers and a medal. And then there was a big party on the other side of the finish line.
  • Purpose is more compelling than profits. As I discussed in a previous post called “Don’t Let Profits Replace Purpose,” many companies lose site of their constituents and, instead, focus too directly on profitmaking. Firms need to think of profits as a reward for serving key constituents. So organizations needs to focus on how they serve key constituents — and not on making money. The Jimmy Fund Walk showcased the power of this concept. While we were there to raise money (for companies, that’s the equivalent of making profits), the entire day was setup to make us feel good about a more important effort — our collective fight against cancer. And, I’ll bet that most of the walkers are already looking forward to participating again next year (for companies, that’s the equivalent of loyalty).

The bottom line:  Let’s keep up the fight against cancer!

Lesson From The Streets Of New York: Keep It Real August 30, 2007

Posted by Bruce Temkin in Customer advocacy, Customer experience, Customer loyalty.
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My family was recently in New York. We had a great time — except for the Yankees sweeping the Red Sox. And if you’re interested, at the bottom of the post I’ve listed a few of the restaurants that we enjoyed during our visit.

While we were walking around the city, we ran into a number of people asking for money on the streets. One guy was selling candy on the subway. Here was his shpeel:

I’m here to sell candy. The money is not going to charity or any organization. I will use the money to buy more candy to make more money. And I will spend the money wisely.

Another guy on a street near Yankee Stadium was holding out a cup and had a sign that said: 

I’m not going to lie. I really need a beer. Keep it real.

Both of those interactions made us laugh. But then I thought: “why is the truth so funny?”

My take: It’s unfortunate, but we’ve all become used to having things “marketed” to us in a less than honest fashion. Consumers end up developing filters for either ignoring or just not believing any advertisements. So when something shows up as being truly honest, it stands out.

Our research shows that many types of firms (especially banks, insurers, credit card firms, investment firms, and health insurers) get more loyal customers when they are seen as a ”Customer Advocate” (take a look at an earlier post called Banks Prepare For Customer Experience Wars). And, what better way is there to show advocacy than by being honest?

So here’s a new strategy for firms to consider: brutal honesty.

The bottom line: Honesty may be more than just novel, it may also be profitable.

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Some restaurant recommendations in New York:

  • La Bonne Soupe (48 West 55th Street, between 5th and 6th Aves). Great spot for lunch. As the name suggests, great soups. But also excellent fondue, chopped steak, and other french bistro options. My kids tried Escargots de Bourgogne for the first time and loved it!
  • Rosa Mexicano (61 Columbus Avenue at 62nd Street). We really enjoyed dinner here. Make sure to get the guacamole appetizer that they make at your table. We enjoyed both the chicken the goat tacos (which are prepared more like fajitas — you assemble them yourself). The short ribs were also outstanding. When you’re done, order the guacamole ice cream if they have it. The mix a bunch of things with ice cream at your table — just like they make the guacamole. But don’t worry, there’s no avodaco in the dessert.
  • Balthazar (80 Spring Street). This was another French bistro lunch spot that we really liked. Everything was good — from the french onion soup to the french ham and gruyere sandwich. But you must try the roast pork chop. Much pricier than La Bonne Soup.  
  • Rice To Riches (37 Spring Street). If you like rice pudding (and who doesn’t), then you need to drop in here. You will be treated with a wide range of flavors and a really funky environment. Great place for dessert or just an afternoon snack.
  • Norma’s (in the Le Parker Meridien, 119 W 56th Street). An unbelievable breakfast spot — a truly unique menu. We loved everything: flat-as-a-pancake crab cakes, very-berry brioche French toast, nutella fruit-filled crepes, and risotto oatmeal. But plan on spending top dollar for this breakfast experience: $25 or more per person.

Words Of Wisdom: Peter Drucker On Customers July 30, 2007

Posted by Bruce Temkin in Customer loyalty, Executive leadership, Words of wisdom.
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I often like to refer to the teachings of great business minds. In this case, I’ll point to a couple of quotes that have been attributed to the late management guru Peter Drucker. 

The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.

The purpose of business is to create and keep a customer.

He was a true genius!

These two quotes highlight the importance of truly understanding and serving the needs of your customers. There really isn’t anything that’s more important to a business. While most execs won’t argue with this point, Drucker probably recognized what I see every day: companies create so much bureaucracy and conflict that employees often lose site of what’s really important.

It reminds me of a story that I heard about a theme park (probably Disney, but I don’t remember exactly):

There was a staff member who was responsible for picking up trash. He was diligent in his work, but got irritated when people dropped trash in an area that he had just cleaned. One day his supervisor had to talk to him about his attitude. The supervisor asked him: What do you think your primary job is? The employee said: To keep the park clean. The smart supervisor responded: No, that’s not your primary job. Your primary job is to make sure that our guests have a good time during their visit. If they want to drop trash on the ground, then that’s okay.

We all need to have our perspectives recalibrated now and again.

What have you done to help your customers today?

Net Promoter And Satisfaction Battle For King Of The Ring July 6, 2007

Posted by Bruce Temkin in Customer advocacy, Customer experience, Customer experience measurement, Customer loyalty, Voice of the customer.
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Let’s start with a confession: I’m a big professional wrestling fan; so I really enjoy a good battle. One thing that I’ve learned from the WWE, is that it’s the storyline that makes a battle come to life. And the Net Promoter vs. Satisfaction debate has all of the story trappings of a great tag team match!

One one side of the ring in the blue trunks is the tag team of Fred Reicheld, ”father” of the Net Promoter System (NPS) concept and Satmetrix Systems, implementor of NPS-based survey systems. On the other side of the ring in the red trunks, we find Claes Fornell, ”father” of the American Customer Satisfaction Index (ACSI) and ForeSee Results, implementor of ACSI-based survey systems.

Both of these teams are fighting for their approach to be recognized as “THE” measure for tracking customer relationships. To put this into perspective, this type of measure represents only one of the five levels of a voice of the customer program (see my earlier post on voice of the customer programs).

Let’s start by handing out some awards to the teams:

  • Best marketed: Net Promoter (Reichheld is very good at touting his concept — and in writing compelling books about it)
  • Most mature: Satisfaction (The ACSI has been tracking data since about 1994 and satisfaction has been around as long as I can remember)
  • Most quantitative: Satisfaction
  • Sexiest: Net Promoter (it’s caused a lot of hooplah)

Net Promoter has gained a lot of momentum over the last few years as many large companies have adopted it. The methodology is pretty straightforward: ask people if they’d recommend your firm. Based on their response, they get categorized as a Promoter, Detractor, or neither. You take the percentage of Promoters and subtract the percentage of Detractors and that leaves you with a Net Promoter percentage.

This debate was enhanced by a recent study cited in the Journal Of Marketing which found that…

Using industries Reichheld cites as exemplars of Net Promoter, the research fails to replicate his assertions regarding the “clear superiority” of Net Promoter compared with other measures in those industries.

Well, if you’re wondering what I really think about this Battle Royale, then here it is. Just like wrestling – the storyline is much more exciting than the reality of the battle. Here’s my take on the contest:

  • Net Promoter is not the “ultimate” measure for a customer relationship
  • Then again, neither is satisfaction.
  • But companies are better off when they have more satisfied than dissatisfied customers and more Promoters than Detractors.

My recommendations:

  • Don’t expect any single measure to be eutopia. Both measures are good, but neither one has enough information to fully guage customer relationships and to provide enough diagnostic information to make all of the necessary improvements.
  • Focus on one measure to build alignment. Picking a single measure to focus on (whether or not it’s perfect) can be very valuable in aligning the organization. If you can get your entire company focused on either raising satisfaction or increasing the number of Promoters, then you will likely see some significant improvements in the reallt important metrics: retention, sales, etc. So, if in doubt, pick one and move on.
  • Evolve your metrics over time. The previous two bullets may seem to contradict each other, but they don’t when you look at it over time. The value from locking into a single measure like Net Promoter is as much from aligning the organization as it is around the perfection of the metric. But after the organization gets aligned, firms will need to build out the portfolio of metrics — and find out for themselves which measures are both predictive and diagnostic.
  • Look at Customer Advocacy. The ring was too crowded to add another contestant to the match earlier in this post, but for some industries we’ve found another measure that is a powerful indicator of loyal customer behavior. So, in the purple trunks is Customer Advocacy, the perception that the firm does what’s best for customers, not just what’s best for its own bottom line. We strongly recommend that financial services and healthcare firms take a very close look at this measure.

The bottom line: Don’t get too caught up in determining the winner of this battle. Just make sure that you do something and are prepared to learn and evolve over time.

If you’re a client of Forrester, then I also recommend that you read these two research documents:

USAA: A Positive Example Of Customer Experience June 18, 2007

Posted by Bruce Temkin in Call center customer experience, Customer experience, Customer loyalty, Online strategy.
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I was recently giving a speech to a group of executives at a large financial services firm; talking about my favorite topic: Experience-Based Differentiation. After I was done, one of the attendees came up to me and shared a recent experience that she had with USAA. (Note: USAA was not the organization that I was speaking to at the time).

She told me that she was looking for an auto loan and had called around to get a number of different quotes. Before she picked one, she thought she’d give USAA a call (she’s a member of USAA). While she was on the phone, the USAA phone agent asked her a few questions and then said that she could beat the lowest rate that the woman had received by a point. That’s right – one full percentage point lower than any other provider. The phone agent asked her how much she needed for the loan, but she wasn’t sure. So the phone agent said that they’d send her a blank check and that she could fill in the amount up to a specific amount (well above what she needed for the car). The phone agent told her that all she had to do was to go to the Website and answer 5 questions to finish the process.

Well, the woman went to the Website and answered 5 questions and received a blank check the next day.

Let’s disect what went right.

  1. It was a great sales process. All large financial institutions want to cross-sell products, but not many make it quite as easy as this. The combination of a low rate and a no-nonsense process immediately closed the sale.  
  2. USAA acted like it knew her. How was USAA able to offer such a great rate? She was a member of USAA, so they have  a lot of information about her. They used the information to deliver a rate that reflected what they already knew about her. 
  3. The phone agent was empowered to solve problems... How many financial institutions allow phone reps to send blank checks to customers overnight? Probably not too many. But that’s part of what was needed to meet the customer’s needs.
  4. … And the agent knew the online process. In many organizations, phone agents aren’t very familiar with what happens when a customer goes online. In this case, the agent clearly understood (and communicated) the process that the customer needed to go through online
  5. The online process was simplified. The only way that USAA can cut the online process down to 5 questions is by limiting their questions to things that they don’t know about the person. Since the loan applicant was a member, USAA didn’t make her input information that it already knew about her.
  6. USAA did what it said that it would do. When a company doesn’t live up to its promises, you can say goodbye to customer goodwill. But that’s wasn’t an issue here. USAA set clear expectations with the customer — and delivered exactly what itpromissed.

This type of experience is not a random occurance for USAA — they have very high levels of member loyalty. As a matter of fact, USAA has been at the top of Forrester’s Customer Advocacy rankings for the last three years. It wouldn’t hurt if other financial institutions (and companies from other industries) learned a thing or two from USAA.

Experience-Based Differentiation June 17, 2007

Posted by Bruce Temkin in Branding, Customer experience, Customer loyalty, Experience-Based Differentiation.
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Earlier this year, I published a report called Experience-Based Differentiation (only Forrester Research clients can read the full report). As of this point in time, it’s Forrester’s most-read report this year.  I’ll get into some of the details about the report a little later in this post, but I’d like to talk about the report’s popularity a bit. Why have so many people wanted to read this report?

I don’t have hard data on why everyone’s reading my research, but I’ll throw out a hypothesis: Many execs believe that: 1) customer experience is critical to their future success (I do have data on this in my research) and 2) they currently deliver subpar experiences to their customers. This alone provides enough motivation for reading the report. But I think there’s something else at play as well.

Customer experience is, well, that’s the thing… what exactly is customer experience? Many people know that it’s important, but most people don’t really know what it is. That creates a black hole of insight — which generates a lot of demand for this type of research. My goal is to help shrink this black hole.

Now, on to some information about Experience-Based Differentiation (EBD) which we define as:

A systematic approach to interacting with customers that consistently builds loyalty.

Don’t focus too much on the definition. Instead, take a closer look at the three principles of EBD:

  1. Obsess about customer needs, not product features. Rather than racing to bring new product features to market, companies need to refocus on the needs of their customers — who might even want fewer features. While most firms have invested in customer analytics, even the largest data warehouse and most sophisticated software can’t model the nuances of human likes and needs. That’s why firms should augment data crunching with some old-fashioned techniques like talking to customers and observing their experience. This insight needs to be widely communicated across the organization.
  2. Reinforce brands with every interaction, not just communications. Traditional brand messaging is losing its power to influence consumers — that’s why branding efforts need to expand beyond marketing communications to help define how customers should be treated. To master EBD, firms must articulate their brand attributes to both customers and employees, clearly describing how the firm wants to be viewed. That’s just the first step, because companies must go on to translate brand attributes into requirements for how they’ll interact with customers.
  3. Treat customer experience as a competence, not a function. Delivering great customer experiences isn’t something that a small group of people can do on their own — everyone in the company needs to be fully engaged in the effort. It all starts at the top; the CEO and his executive team need to be fully engaged in the effort. To keep a companywide focus on customers, companies need a systematic and continuous approach for incorporating customer insights into all of their efforts. That’s why we recommend building a voice-of-the-customer program. (Note from Bruce: voice-of-the-customer is another hazy concept out there – that’s why we defined a five level model for voice-of-the customer; we’ll definitely touch on that topic in later posts.)

EBD is a core focus of my research, so you’ll definitely find these concepts making their way into future blog posts. But for know, I encourage everyone to add thoughts or examples of how companies can head towards Experience-Based Differentiation.