Examining Apple Stores And Employee Engagement

In our Employee Engagement Benchmark Study, we found a high correlation between good customer experience and high levels of engaged employees. But many companies don’t understand this connection, which is why we’ve identified “Ignoring Employees” as one of the 10 CX mistakes to avoid.

Apple, however, seems to be avoiding this mistake. Customers tend to love their experiences with engaged employees in Apple stores. That’s why I thoroughly enjoyed this article in the New York Times a few weeks ago: Apple’s Retail Army, Long on Loyalty but Short on Pay. It provides great insight into Apple’s retail model.

So I decided to dissect the article and reconfigure parts of it into some key lessons…

Apple stores are sales machines. There’s no questioning the success of Apple’s retail efforts.

Last year, the company’s 327 global stores took in more money per square foot than any other United States retailer — wireless or otherwise — and almost double that of Tiffany, which was No. 2 on the list, according to the research firm RetailSails. Worldwide, its stores sold $16 billion in merchandise. Divide revenue by total number of employees and you find that last year, each Apple store employee — that includes non-sales staff like technicians and people stocking shelves — brought in $473,000. Electronics and appliance stores typically post $206,000 in revenue per employee, according to the latest figures from the National Retail Federation.

The brand is built on an army of hourly workers. Apple’s brand may be drawn-up and envisioned in Cupertino, but it comes to life through 10′s of thousands of relatively low-paid 20-year-olds. This phenomena is true for many companies. (see CX Law #4: Unengaged employees don’t create engaged customers.)

About 30,000 of the 43,000 Apple employees in this country work in Apple Stores, as members of the service economy, and many of them earn about $25,000 a year.  By the standards of retailing, Apple offers above average pay — well above the minimum wage of $7.25 and better than the Gap, though slightly less than Lululemon, the yoga and athletic apparel chain, where sales staff earn about $12 an hour. The company also offers very good benefits for a retailer, including health care, 401(k)contributions and the chance to buy company stock, as well as Apple products, at a discount. But Cory Moll, a salesman in the San Francisco flagship store and a vocal labor activist, said that on Tuesday he was given a raise of $2.82 an hour, to $17.31, an increase of 19.5 percent and a big jump compared with the 49-cent raise he was given last year.

People seek out a higher purpose. Apple recruits people who love the Apple brand and provides them with a vision for their work that goes beyond selling products to “enriching people’s lives.” Companies need to identify this purpose and communicate it to employees.

But Apple’s success, it turns out, rests on a set of intangibles; foremost among them is a built-in fan base that ensures a steady supply of eager applicants and an employee culture that tries to turn every job into an exalted mission.“When you’re working for Apple you feel like you’re working for this greater good,” says a former salesman who asked for anonymity because he didn’t want to draw attention to himself. “That’s why they don’t have a revolution on their hands.”One manager said it was common for people offered jobs to burst into tears. But if the newly hired arrive as devotees, Apple’s training course, which can range from a few days to a few weeks, depending on the job and locale, turns them into disciples. The phrase that trainees hear time and again, which echoes once they arrive at the stores, is “enriching people’s lives.” The idea is to instill in employees the notion that they are doing something far grander than just selling or fixing products. If there is a secret to Apple’s sauce, this is it: the company ennobles employees.

Train for key customer moments. Apple examines the experience of customers and trains employees how to deal with these critical interactions. Companies need to understand interactions from the customer’s perspective. (see CX Law #1: Every interaction creates a personal reaction.)

Training commences with what is known as a “warm welcome.” As new employees enter the room, Apple managers and trainers give them a standing ovation. The clapping often bewilders the trainees, at least at first, but when the applause goes on for several lengthy minutes they eventually join in. There is more role-playing at Core training, as it’s known, this time with pointers on the elaborate etiquette of interacting with customers. One rule: ask for permission before touching anyone’s iPhone. “And we told trainees that the first thing they needed to do was acknowledge the problem, though don’t promise you can fix the problem,” said Shane Garcia, the one-time Chicago manager. “If you can, let them know that you have felt some of the emotions they are feeling. But you have to be careful because you don’t want to lie about that.”

Apple established an environment for good customer experience. You can’t just push people to deliver good customer experience, you need to  create an environment that encourages them to do so; people typically conform to their environment.  (see CX Law #5: Employees do what is measured, incented, and celebrated.)

At Apple, the decision not to offer commissions was made, Ms. Bruno said, before a store had opened. The idea was that such incentives would work against the company’s primary goals — finding customers the right products, rather than the most expensive ones, and establishing long-term rapport with the brand. Commissions, it was also thought, would foster employee competition, which would undermine camaraderie.

Sales and productivity goals are creeping in. Over time, every system tends to sway away from its initial design. While this may be appropriate, it often leads to competing metrics or to environments that encourage behavior that is inconsistent with the original brand goals.

He had already begun to sour on the job when in 2007, he said, his store began an attendance system whereby employees accumulated a point for every day they did not come to work; anyone with four points in a 90-day period was at risk of termination. “It was a perfectly good idea, but the thing that was terrible is that it didn’t matter why you couldn’t come to work,” Mr. Zarate said. “Even if you had a doctor document some medical condition, if you didn’t come to work, you got a point.”

To meet the growing demand for the technicians, several former employees said their stores imposed new rules limiting on-the-spot repairs to 15 minutes for a computer-related problem, and 10 minutes for Apple’s assortment of devices. If a solution took longer to find, which it frequently did, a pileup ensued and a scrum of customers would hover. It wasn’t unusual for a genius to help three customers at once. Because of the constant backlog, technicians often worked nonstop through their shift, instead of taking two allotted 15-minute breaks. In 2009, Matthew Bainer, a lawyer, filed a class action alleging that Apple was breaking California labor laws. Sales employees, Mr. Garcia and others noted, deal with stresses all their own. Though commissions are not offered, many managers keep close tabs on sales of warranties, known as Apple Care, and One to One, which is personal tutoring for a fee. Employees often had goals for “attachments” as these add-ons are called — 40 percent of certain products should include One to One, and 65 percent should include Apple Care.

Employee engagement requires an ongoing focus. Even companies that have string levels of employee engagement, like Apple, can’t rest on their laurels. It’s critical to track employee engagement and to respond immediately whenever it starts to deteriorate.

Like many who spoke for this article, Shane Garcia, the former Chicago manager, talked about Apple with a bittersweet mix of admiration and sadness. When he joined the company in 2007, he considered it a place, as he said, that “wanted you to be the best you could be in life, not just in sales.” Three years later, his work life seemed tense and thankless. He had little expectation that upper management would praise or even notice his efforts. In recent years, the level of unhappiness at some stores was captured by an employee satisfaction survey known in the company as NetPromoter for Our People. It’s a variation of a questionnaire that Apple has long given to customers, and the key question asks employees to rate, on a scale of one to 10, “How likely are you to recommend working at your Apple Retail Store to an interested friend or family member?” Anyone who offers a nine or 10 is considered a “promoter.” Anyone who offers a seven or below is considered a “detractor.” Kevin Timmer said the internal survey results last year at the Grand Rapids store were loaded with fives and sixes.

The bottom line: Don’t ignore employee engagement.

Google Lacks Apple’s Emotional Design

I really enjoyed an article in Search Engine Land comparing Apple’s Siri with Google’s Voice Actions. It does a really nice job of comparing the two voice recognition operating systems. Here’s a picture from the article:

My take: The essence of experience design comes down to three questions:

  • Functional: Does it do what you want it to do?
  • Accessible: How easy is it to do what you want to do?
  • Emotional: How does it make you feel?

There’s no doubt that Apple has been a master at experience design. Everything from the form factor of its products to its retail store model addresses those three items. Google, on the other hand, has mastered two of the areas: functional and accessible. It tracks efficiency like no other company and delivers amazing results. You can find almost anything you want with Google’s search capabilities.

One company has mastered experience design while the other has mastered engineering, which represents two-thirds of experience design (see my post: Google Squeezes The Soul Out Of Design). The difference between the companies comes out loud and clear when comparing Google Voice Actions with Siri.

  • Personal. Apple gave its application a human identity, Siri. Google, on the other hand, named its voice application after its functionality.
  • Tailored. Apple anticipates the user’s intent and tailors the results to meet a specific use case. Google provides a relevant list of search results.
  • Compelling. Google’s marketing of its voice application was almost non-existent (as far as I can tell). Apple, on the other hand, makes its voice interface widely known. And when Apple showcases Siri, it seems much more exciting and accessible than Google Voice Actions. Look at how each firm describes its offering on its website:

Which voice application would you want to use?

The bottom line: Google needs to focus more on emotions

What I Learned From Steve Jobs

Steve Jobs passed away today and the world lost a great visionary, designer, architect, and technologist. He truly changed the world… for the better!

I recently wrote a couple of posts about Jobs: Customer Experience Lessons From Steve Jobs and Stop Listening To Customers… Sometimes. To honor his passing, I want to share some additional thoughts about what I’ve learned from him:

  • Passion can be an extremely powerful transformational force
  • Great architecture requires a singular vision to align the 1,000s of little decisions
  • Design isn’t something you can just layer on to a product, it needs to be integrated throughout the process
  • Great design can motivate people to try new things
  • Customers can’t easily articulate their desires, especially for new technology
  • Simple and easy is a wonderful design goal
  • Every device has a primary objective that should never be compromised
  • When it comes to design, every little thing counts

The bottom line: Thank you Steve, you will be missed but not forgotten. R.I.P.

P.S. I loved the way that President Obama described Jobs: “…Steve was among the greatest of American innovators – brave enough to think differently, bold enough to believe he could change the world, and talented enough to do it…”

Customer Experience Lessons From Steve Jobs

Steve Jobs is stepping down as CEO of Apple. That’s a big loss for Apple. Jobs transformed Apple from a niche computer maker to one of the most influential technology/consumer product companies on earth. Under his leadership, Apple developed iPods, iPads, iTunes, iPhones, Apple Stores, etc. That’s an incredible portfolio. Thank you Steve!

We can learn a lot about customer experience and design from Steve Jobs. Rather than write a bunch of things, I decided to pull together a collection of Jobs’ quotes. There’s a lot to learn from his words:

  • Design is not just what it looks like and feels like. Design is how it works.
  • Sometimes when you innovate, you make mistakes. It is best to admit them quickly, and get on with improving your other innovations.
  • You can’t just ask customers what they want and then try to give that to them. By the time you get it built, they’ll want something new.
  • That’s been one of my mantras — focus and simplicity. Simple can be harder than complex: You have to work hard to get your thinking clean to make it simple. But it’s worth it in the end because once you get there, you can move mountains
  • When you first start off trying to solve a problem, the first solutions you come up with are very complex, and most people stop there. But if you keep going, and live with the problem and peel more layers of the onion off, you can often times arrive at some very elegant and simple solutions.
  • And it comes from saying no to 1,000 things to make sure we don’t get on the wrong track or try to do too much. We’re always thinking about new markets we could enter, but it’s only by saying no that you can concentrate on the things that are really important.

The bottom line: There’s always a market for simplicity, focus, and good design

American Airlines Site Showcases Design Of Little Things

I’m a very frequent flier and a heavy user of the American Airlines site. One of the things that has bothered me about the site is the login process. In order for my AAdvantage number to show up during my next visit, the site required me to check a box below the password. If I forgot (which happened often), then I would need to input my AAdvantage number again.

American Airlines recently changed their site to keep the box checked if it was previously checked.

My take: While the login issue was not a big problem, it certainly was an ongoing annoyance. And the solution was relatively easy.

The reason I’m pointing out this change is that it’s an example of a concept that I’ve labeled the Design of Little Things, which are the small changes that can dramatically improve the customer experience of much larger investments.

Companies need to make sure that they keep investing in finding and fixing these little things that cause customers to struggle with an experience.

The bottom line: Don’t underestimate the Design of Little Things.

The Design Of Little Things

Large companies regularly spend 10s of millions of dollars to improve their interactions with customers on projects like revamping their websites, deploying new CRM applications, replacing IVR systems, and can spend even more on redesigning their stores.

Do companies get the full benefit from those efforts? Absolutely not.

Companies obsess on major milestones like deployments, but don’t aggressively fine-tune those efforts once they go live. As a result, they don’t add the finishing touches that make things much easier or more memorable for customers. An example of this is the Marriott Marquis elevators; a $12 million system that completely confuses many guests. The hotel could use simple techniques, like signage, to significantly reduce the confusion.

What companies are missing is what I call the Design Of Little Things (DoLT); the small changes that can dramatically improve the customer experience of much larger investments. These are the ongoing adjustments that can have a huge impact. I’ve evaluated hundreds of interactions for companies and just about always find these types of opportunities.

Companies can use the Temkin Group SLICE-B methodology to uncover opportunities for DoLT; paying special attention to the “Start” and “End” categories. Here are some rich veins of DoLT to explore:

  • Provide a clear path for users to start in IVR main menus and Website homepages
  • Confirm next steps and reinforce value on confirmation Web pages for purchases and applications
  • Teach front line employees to keep from using negative words
  • Develop clear signage to help route customers to the right place
  • Eliminate jargon that customers won’t understand — from everything

The bottom line: Sometimes little things can make a really big difference

Marriott Marquis Elevators Lack A Design Touch

I’m staying at the Marriott Marquis in Times Square; a hotel that I’ve been going to for many years; before, during, and after it spent $11 million to renovate its elevator system. The hotel had very, very long waits for its elevators until the new system went live in 2006.

The new elevators have a considerably different user interface. Rather than having people jump into the first open elevator they find heading in the right direction (up or down), this system requires people to input their destination on a keypad outside of the elevator and it identifies which elevator to use. Once in an elevator, there’s nothing to do except wait for it to stop at your floor; there are no buttons to push.

When the system works well, it’s slick. The elevators are quick, spacious, and many of them even have great open views of the hotel’s enormous Atrium.

But there is one major problem. Many people have no idea how to use the elevators. During my last few days in the hotel, I have run into dozens of guests who were completely confused about what to do. It’s difficult to undo a lifetime of experiences that have trained people to get on an elevator before selecting a floor.

While there are some instructions on the keypad, they are too subtle and people very often don’t see them before heading to an elevator.

Does this make the elevator a poor system? Is every new user interface a bad idea? No.

Overall, I think just about anyone would trade-off long lines for this new approach. But the Marriott missed out on some design elements to make this easier on guests. A simple sign would help a lot; something that catches people’s eyes as they enter the elevator banks. The experience would be better for many people if the hotel just added a sign like this:

If Marriott had mastered the competence that we call Customer Connectedness, then it would have understood the magnitude of this problem and used some simple design elements like the one above to alleviate the issue.

The bottom line: One key design element can go a long way.

PNC Bank Breaks Through Gen Y Blindspot

Last year I proclaimed that Banks Have A Gen Y Blind Spot. Well, that’s no longer true for all banks. It turns out that PNC enlisted IDEO to help engage Gen Y and created a new offering: VirtualWallet. According to a recent BusinessWeek article, PNC has signed up more than 20,000 customers (70% from Gen Y) and is on track to break even in two years.

Here’s how VirtualWallet is described on the IDEO Website:

[It is] a family of banking products that provide customers with seamless access to their finances and intuitive, tangible, and direct control of their money. Centered on electronic transactional banking, it is designed to both promote and optimize banking activities with features and visualizations that support the mental models and lifestyles of its Gen Y customers

My take: I really like VirtualWallet. It shows what you can do when you explicitly focus on Gen Y. The long-term success will require ongoing nurturing by PNC, but the initial approach makes a lot of sense because:

  • It applies a strategy called online infusion. While it’s a financial offering, online features like a money slide bar to graphically indicate available funds, a “Savings Engine” that helps customers establish rules around spending, and a playful instant transfer feature named “Punch the Pig” are core to the value proposition.
  • The online experience implements many components of the four strategies we’ve defined for engaging Gen Y: 1) Immediacy, 2) Gen Y literacy, 3) Individualism, and 4) Social Interactivity.
  • There’s a mobile component. While this wouldn’t make sense for many banking applications based on overall mobile usage, it’s almost a requirement if you want to target Gen Y; many of whom view their cell phone as their primary digital device.
  • The approach starts with customer needs. While this is not novel for projects that involve IDEO, many companies aren’t diligent enough in starting with a solid process for uncovering the true needs of specific customer segments. By understanding Gen Y behaviors, the bank can actually charge fees for anything more than 3 checks per month.

The bottom line: Gen Y will be getting a lot more attention from banks.

Good Design Saves Lives In The UK

I was intrigued by a story (forwarded by Jonathan Browne) about designers working with doctors in the UK to redesign resuscitation “crash” trolleys. These carts contain all of the equipment and drugs for handling a cardiopulmonary resuscitation. But there was a problem: The confusing layout of existing crash trolleys was increasing the risk to patients.

The article discusses three components of the newly designed crash trolley (that has already won two Medical Futures Innovation Awards):

  • Put all items out in the open, so that the emergency teams can quickly find what they need; instead of having things buried in drawers.
  • Organize kits based on the three major medical situations: clearing an airway, gaining intravenous access to give fluids, and restarting the heart with drugs and defibrillation equipment.
  • Make the cart intutitve, so that it’s easy to use in a high-stress situation.

crashtrolleys_small2

According Dr James Kinross from St Mary’s Hospital who was on the project::

It is laid out in a more intuitive way so that you have everything you need first at the top and subsequent things lower down

My take:This is another great example of how Design Solutions Can Improve Society. The combination of designers working with doctors delivered the key elements of a design solution:

  • A focus on the true (end user) requirements
  • Innovative approaches that break existing paradigms
  • Efficient solutions that deal with real-world constraints

The bottom line: Healthcare is ripe with opportunities for design solutions that can save lives and cut costs

Wells Fargo Improves Communications With Ethnography

Robin Beers (VP of Customer Insights) and Helene Alunni-Botteri (Vice President, Strategic Planning) at Wells Fargo briefed me about a research project in which the bank used ethnographic techniques to examine its written communications. It was a pretty novel approach, so I published a research report about the effort. Here are some of the highlights of their project.

The objectives.Wells Fargo (like all large banks) sends a wide variety of communications, both online and offline, to their customers. Wells Fargo wanted to make sure that the collection of these communications were “customer friendly.” In particular, the bank wanted to see how customers responded to its “Writing With C-A-R-E” (Consistent, Approachable, Resepectful, and Empathetic) guidelines.

The study.The bank recruited 20 customers who matched their three target personas to comment on all of the communications (e.g., account service notification, marketing solicitations) they received from Wells Fargo and other organizations over a 30-day period. These customers called a toll-free number to share their immediate reaction about the documents and they also kept a scrapbook in which they wrote comments about each communication. The bank brought the most engaged customers together to debrief them in-person about their scrapbooks.

Lessons learned. Here are some of the insights that Wells Fargo took away from the research:

  • The bank’s communications were meeting the basic needs of customers, but were falling short on the humanistic dimensions of “approachable” and “empathetic.”
  • Customers wanted the bank to communicate like it knew them, similar to other communications they received from organizations like AARP.
  • Marketing messages, especially those with presumptive language like “Congratulations!” or “Good News,” were viewed quite negatively; customers used words like “ploy” and “scheme” to describe them.
  • The bank could mitigate negative reactions to bad news like a notice of insufficient funds if the communications provided relevant advice.
  • Many consumers view the bank’s Website as the primary visual reference point; noticing differences with layout, color, and other design elements in the communications.
  • To ensure that the results were actionable, key stakeholders were engaged throughout the process. The findings were “socialized” with 700+ content writers across Wells Fargo during 30+ workshops.

Thanks. Thank you Robin and Helene for sharing this information.

The bottom line: There’s no substitute for the customers’ point of view.

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