Assess Your Four Customer Experience Competencies

In the recent research report The State of CX Management, 2012, we examined how large companies are progressing along their journeys towards becoming customer-centric organizations. We found that only 7% of companies have reached that level of CX maturity.

What does it take to become a customer-centric organization? Our research shows that leading companies master four customer experience core competencies:

• Purposeful Leadership: Do your leaders operate consistently with a clear, well-articulated set of values?
• Compelling Brand Values: Are your brand attributes driving decisions about how you treat customers?
• Employee Engagement: Are employees fully committed to the goals of your organization?
• Customer Connectedness: Is customer feedback and insight integrated throughout your organization?

To gauge how effective companies are in mastering these competencies, Temkin Group created a 20 question assessment. As part of the research in The State of CX Management, 2012, we asked 255 large companies to complete the assessment. As you can see from the overall results, nearly 60% of companies are in two lowest stages of CX maturity.

And when it comes to the Four Competencies, companies struggle with all four areas but have a particularly hard time with compelling brand values and employee engagement.

In case you’re interested, here’s how I describe the four competencies…

The bottom line: Are you building your customer experience competencies?

Small Companies Have More Engaged Employees

The Temkin Group report Employee Engagement Benchmark Study highlighted the connection between employee engagement and both employee productivity and customer experience. But how does the level of employee engagement change by the size of company? We used the Temkin Employee Engagement Index (TEEI) to analyze employee engagement based on the number of employees within companies. Here’s what we found:

Nearly six out of 10 of employees at small companies (those with 10 or less employees) are highly or moderately engaged, well above the level for all other size companies. This engagement level decreases significantly to 45% for companies with 10 to 100 employees and then continues to drop, albeit at at a lesser clip, for larger companies.

The bottom line: Small companies should exploit their higher employee engagement

Report: Employee Engagement Benchmark Study

The report is on sale for $195

We just published a new Temkin Group report, Employee Engagement Benchmark Study. The analysis uncovers a strong connection between employee engagement and customer experience as well as between employee engagement and productivity.

Here’s the executive summary:

Employee engagement is one of the four customer experience core competencies and it’s the one that companies tend to struggle with the most. To examine this critical area, we surveyed more than 2,400 U.S. employees. Here are some highlights of the findings: only 40% of employees are fully committed to helping their companies succeed, 54% will do something good for the company even if it’s not expected, and 26% are likely to look for a new job within six months. We also introduced the Temkin Employee Engagement Index (TEEI) based on how employees feel about three areas: understanding the company mission, feeling that their feedback is valued, and having the required training and tools. Using the TEEI, we found that only 31% of employees are highly engaged. These highly engaged employees are a real asset; they’re 5.8 times more committed to helping their companies succeed and 4.7 times more likely to recommend that someone apply for a job at their company. It turns out that companies with good customer experience have 2.5 times more engaged employees than companies with poor customer experience.

To gauge the level of employee engagement across respondents, we used the Temkin Employee Engagement Index (TEEI), which is based on how much employees agree with three statements:

1. I understand the overall mission of my company
2. My company asks for my feedback and acts upon my input
3. My company provides me with the training and the tools that I need to be successful

Using the TEEI results from the 2,435 respondents, our analysis uncovered a number of interesting items. Here’s a graphic I put together to summarize some of the key data in the report:

The report highlights four recommendations:

• Make employee engagement an executive priority.
• Measure employee engagement.
• Create employee engagement task force.
• Embed employee engagement into the HR fabric.

The report is on sale for $195

The bottom line: Employee engagement is critical for long-term (and short-term) success

Data Links CX With Employee Engagement

We’re woking on a research report for early next year that examines the connection between employee engagement and employees’ attitudes and behaviors. The research is based on a study of more than 2,400 US consumers that are employed in for-profit organizations.The research also looks at the connection between employee engagement and customer experience.

Employee Engagement is one of the four customer experience core competencies. And in research earlier this year, we found that employee engagement was the lowest scoring competency. I’m excited by what we are finding in the initial analysis of the data. Hopefully this research will raise the awareness of the importance of this area.

One part of our analysis examines the link between employees attitudes and behaviors and their perception of how well their company serves customers. Here are some of the early results:

As you can see in this graphic, employees that think their company is doing well in customer experience are more likely to go out of their way to help the company, recruit new employees, help improve the company and less likely to look for a new job. All good things!

Look for even richer analysis in the report next year.

The bottom line: Put employee engagement on your 2012 improvement plans

CX Insights From Marriott And JetBlue

I recently spoke at the Customer Experience Strategies Summit in Toronto. While I was there, I was able to catch a few of the other speakers. I really enjoyed hearing from the Marriott and JetBlue speakers. Both companies did very well in the 2011 Temkin Experience Ratings; Marriott was the top rated hotel chain and JetBlue was the second rated airline (behind Southwest). Here are some of the interesting details that they shared:

Scott Allison, VP of Canadian Operations, Marriott:

• Allison shared this great comment: “culture trumps brand.” Marriott links its strategy as a company with its strategy as en employer. Bill Marriott still visits a lot of hotels and when he does, he first goes to employee areas like employee entrances and break rooms. Employees are also trained on what makes their brand special.
• Hotel general managers need to hit targets for both customer experience and employee satisfaction to get their bonuses.
• Something goes wrong, even if it’s a small thing, during about one-quarter of stays — so hotels need to be good at recovery. That’s why the Ritz Carlton empowers associates to spend up to $1,000 per day per guest to improve someone’s stay. The staff reviews guest situations at the beginning of every day, they call it “Stand Up” at Marriott and “Line Up” at the Ritz.

Vicky Stennes, VP of Inflight Experience, JetBlue:

• Net Promoter Score (NPS) is one of the key measures that the company uses. It also uses J. D. Power which breaks measurements into “people-related” and “non people-related” categories.
• A couple of years ago, the company noticed a slip in its “people-related” scores so it started a program called “Culture is Service” (CIS). [Note: CIS was discussed in the CEO's letter to shareholders in JetBlue's 2010 Annual Report]. As part of CIS, more than 1,000 “crew members” (across the organization) went through training focused on three areas: Inform: Educate everyone on JetBlue’s current state of service, the measurements that it tracks, and share insights on how crew member behaviors affect customer experience; Engage: Elicit an open dialogue with real-time cross-functional problem solving; and Inspire: Give them a sense of the concept of unexpected moments and recognize the great work of crew members over the company’s first 10 years of operations.
• JetBlue sees success of the CIS program because of an improvement in employee NPS scores of training attendees.
• Moving ahead, they are looking to add a few things to the CIS training: cross-functional design sessions and education on linking NPS to specific behaviors and to revenue.
• Stennes shared data that showed correlation between pilot in-flight communications and NPS. They use this data to show pilots that the way they communicate with passengers plays an important role in passenger loyalty.
• The company also tracks a “Net Helpfulness Score” along with NPS for each flight. They will start using these scores to define scores for crews across their different flights.
• Stennes also shared some great data: Every 5 promoters leads to 2 new customers and every 16 detractors leads to the loss of 1 customer. A promoter is worth $33 extra dollars ($27 from referrals and $6 from loyalty) to JetBlue while a detractor is worth $104 less than average. One point change in JetBlue’s NPS is worth $5 to $8 million.

The bottom line: Great brands spend a lot of time focusing on their people

People Are Key To Predictive Analytics

I recently wrote about remarks from General Colin Powell, Scott Hudgins from Disney and Orlando Magic’s Alex Martins who spoke at The Premier Business Leadership Series sponsored by SAS. Here are some additional tidbits that I found interesting throughout the event:

• Paula Puleo, SVP and CMO of Michaels Stores, talked about how the retailer is “living its brand” and “putting Michaels’ brand into the hands of its customers.” She describes that the company used to “shout at customers” with Sunday circulars but have been building more of a dialogue with customers and employees over the previous 18 months. When she discussed the redesign of the frame section in the stores, she described the goal as: We help preserve the cherished moments of our clients. I am planning to interview Puleo and provide more details on the work that she’s doing in a future blog post.
• Tim Belk, Chairman and CEO of Belk, shared these comments: “If you’re going to build your brand, you need to invest in your people” and “You need to make associates happy if you want your customers to be happy.”
• Matt Cappio, SVP of Marketing Strategies at Bank of America, explained how the bank is using analytics to understand what’s most relevant to the customer and beneficial to the bank. It can identify offers that meet certain goals in ares like revenues and credit risk. It’s not just about having the technology spit out an offer. Cappio said: “We need to win our associate over as to the value of the offer or we will have a crisis of confidence.”
• Jim Goodnight, CEO of SAS, discussed how massively parallel in-memory processing allows companies to do analysis on ALL of their data, quickly. Jim Davis, SVP and CMO of SAS, discussed a scenario where SAS reduced the time to complete a marketing optimization for a European telco from 8 hours to 2 minutes and 17 seconds.
• Halina Karachuk, VP of Innovation, Research and Analytics at AXA Equitable, talked about “mining for diamonds” which is a process where they analyze their advisors’ book of business (client and product information) and identify the “next-best offer” for each household.
• Eric Webster, VP of Marketing at State Farm Insurance, explained that the most important question for a life insurance underwriter is “are you a smoker?” It’s so important that insurers insist on a medical exam to validate this answer. State Farm is starting to use predictive models to reduce the number of medical exams; only using this expensive and time-consuming step when it’s most required.
• Best selling author Jim Collins also spoke at the event. His core message was that great leaders wrap three attributes around their ambition: Fanatic discipline, empirical creativity, and productive paranoia. Collins’ analysis showed that great leaders and companies aren’t just lucky. He researched more than 200 “luck events,” which are situations that: are independent of your actions, have significant consequences, and are unpredictable.  It turns out that great companies aren’t differentiated by their good luck, but by their ability to deal with all of the luck events they run into — good or bad. Collins described this as their return on luck.

There’s a lot of different stuff going on in this post. Is there anything that connects all of these elements besides a conference center in Orlando? I’ll give a shot at wrapping it all together:

Predictive analytics will increasingly put deep insights into the hands of people at the point in time when they make decisions. But this won’t have a significant impact on companies unless they use the insights to identify value for customers and engage employees in designing new processes. This combination of left brain analysis and right brain human engagement will help companies more nimbly respond to rapidly changing environments full of both good and bad luck.

The bottom line: Powerful analytics is necessary but not sufficient for successful analytics

Can Cigna Deliver On Promise To Get Personal?

Cigna recently started an advertising push around its new brand promise:

Cigna supports and nurtures the unique strengths of each customer to help them achieve their full potential.

I caught up with Ingrid Lindberg, Cigna’s customer experience officer, to find out if this was just a “marketing pitch” or if the company is really prepared to deliver on this promise. Here’s some of what she told me:

• This campaign is part of  a journey that started in 2008 when the company started a major push to improve its customer experience. According to Lindberg “We started to walk before we started to talk.”
• The campaign is part of Cigna’s goal to make experiences more personal for customers. Lindberg talks about her customer experience mantra: Make it easy, make it helpful, make it personal. Here’s how she describes the connection: “You have to be easy and helpful every time, earn the trust and relationship with customers in order to earn the right to help people live a better life. Without relationship and trust, you don’t have the right to interact at that level.”
• Lindberg discussed the level of engagement of employees, saying “If you don’t have your employees engaged, then you don’t have the right to do anything.”
• The company has pushed to eliminate jargon from all of its communications – internally and externally — in a program called “The Words We Use.” She shared data from a recent survey: 86% of employees were aware of that program and 75% were using the “correct words” almost all the time. The company has a great site describing its simplification efforts.
• Lindberg feels that Cigna really delivers on the promise when customers get on the phone with someone from Cigna’s clinical team. She told me: “Satisfaction and health of the customer goes way up when they connect with a nurse.”

My take: Health plans like Cigna have a long way to go before many consumers will trust them enough to establish a strong relationship; no matter what promises the companies make. As I’ve said in the past, companies don’t own their brands. True brands are an asset that are jointly owned by organizations and their customers… and it’s a fragile relationship. Great brands are made in three steps:

1. Making promises. Companies need to be explicit about the purpose of their organization which translates into promises that they make to customers.
2. Embracing promises. It’s nearly impossible to keep a promise that you don’t know about, so everyone in an organization needs to understand the customer promises.
3. Keeping promises. Companies need to make sure that they live up to their promises during every interaction in every channel.

If Cigna can’t deliver on some of the basic needs of customers, then this campaign will turn out to be nothing more than an “empty promise.” Lindberg has a great view on this, saying that they try and build trust one person at a time. In this industry, that’s probably the best mindset.

The bottom line: It’s very hard to build a relationship without trust

Don’t Rely On Empathy

Last week, New York Times columnist David Brooks wrote an Op-Ed piece called The Limits of Empathy. He argues that empathy doesn’t really affect how people act. It’s an interesting article. Here’s an excerpt:

“Empathy makes you more aware of other people’s suffering, but it’s not clear it actually motivates you to take moral action or prevents you from taking immoral action… Empathy is a sideshow. If you want to make the world a better place, help people debate, understand, reform, revere and enact their codes...”

My take: Let’s assume that Brooks’ observations are correct. They still do not discount the importance of empathy with customers and within an organization. Even if empathy is not a significant motivator for a person’s actions, it still has an impact on the people who experience someone else’s empathy.

A strong implication of his thesis, which I totally endorse, is that companies can’t rely on empathy from employees to drive their actions. I often say that heroes don’t scale; you can’t rely on employees to do things just out of the goodness of their hearts.

One of my 6 Laws Of Customer Experience is that employees do what is measured, incented, and celebrated. If company’s don’t create an environment that is conducive to providing good customer experience, then even the most empathetic employees will stop delivering great customer experience, or they will just leave the company. People tend to conform to their surroundings.

The bottom line: Empathy alone is not sufficient

CX Mistake #6: Ignoring Employees

In this series of posts, we examine some of the top mistakes companies make in their customer experience management efforts. This post examines mistake #6: Ignoring Employees. Not surprisingly, customer experience programs focus on customers. But they often don’t spend enough time cultivating one of their most important CX assets: Employees.

One of our 6 Laws Of Customer Experience is: Unengaged employees can’t create engaged customers. You can’t sustain great customer experience unless your employees are on board. For many companies, the path to great customer experience not only needs to include employees, it needs to start with them. Why? Because there’s a virtuous cycle that comes from engaging employees:

Herb Kelleher, the founder of Southwest, does a great job of clarifying why he built employee engagement into the fabric of the airline:

“If you create an environment where the people truly participate, you don’t need control. They know what needs to be done and they do it. And the more that people will devote themselves to your cause on a voluntary basis, a willing basis, the fewer hierarchies and control mechanisms you need.”

Unfortunately, employee engagement is lower than it should be at many companies because:

• Employee engagement isn’t in the plans. Customer experience efforts focus on fixing customer interactions and processes, but they often don’t address the ongoing engagement of employees that isn’t tied to a specific process or interaction.
• Cultural change isn’t easy. Without a specific plan to improve employee engagement, it’s not likely to get better. Changing a company’s culture requires clear and persistent effort.

Here are some tips for avoiding this mistake:

• Tap into employees’ customer insights. Front line employees know a lot about customers; they interact with customers all the time. All too often, companies don’t use this key insight. Develop a program where you regularly collect feedback from customer-facing employees about what they’re seeing: problems, opportunities, and general observations. If employees see that their insights are being used and valued, then they will feel more engaged with the company.
• Spread customer feedback. The more that employees understand customers, the more they will feel connected to delivering great customer experience. That’s why companies should find ways to deliver relevant customer feedback widely across their organization.
• Measure employee engagement. If you want employee engagement, set goals for it and measure it. Many companies have annual or semi-annual employee surveys, but they don’t systematically act upon it. Companies should establish some clear metrics around customer engagement, maybe using a simple Net Promoter-like question: How likely are you to recommend <COMPANY> to a friend or colleague as a good place to work?
• Design for employee engagement. Companies need an explicit track of effort around employee engagement and communications within their customer experience efforts. Another of our 6 Laws Of Customer Experience is: employees do what is measured, incented, and celebrated. So companies need to purposefully design the measurements, incentives, and celebrations that reinforce employee engagement.
• Stop relying on heroes. When individual employees decide to ignore policies and procedure to deliver a great customer experience, it often makes a great story. But these heroic efforts don’t scale; they can’t be depended upon and they tend to burn out your people. Companies need to invest in their people, developing the processes, rules, tools, and training that make it easy for employees to consistently deliver a great experience.

The bottom line: Employees can make or break any CX effort

Don’t Just Empower Front Line Employees

A new research report in the Journal of Experimental Social Psychology, The Destructive Nature of Power Without Status, examines an interesting phenomena. The research shows that people who have a combination of high power and low status are more likely to mistreat people for whom they have power over. Here’s an excerpt from the research:

… individuals in high-power/low-status roles chose more demeaning activities for their partners (e.g., bark like a dog, say “I am filthy”) than did those in any other combination of power and status roles.

My take: If you apply the research findings to customer experience, it suggests that front-line employees that are empowered with a range of activities may be more likely to act negatively towards customers if they feel that their role at the company is relatively low in status. Here’s an example of what that looks like (in the comically absurd extreme):

To alleviate this situation, companies need to elevate the perceived status of front-line employees. This research provides even more motivation for executives to publicly discuss the importance of front-line employees and to regularly recognize the value of their efforts. Make sure that front-line employees feel that they are an important part of the organization.

The bottom line: Empowerment works best with high self-esteem

CX Mistake #8: Forgetting To Celebrate Success

In this series of posts, we examine some of the top mistakes companies make in their customer experience management efforts. This post examines mistake #8: Forgetting To Celebrate Success. Customer experience leaders spend so much energy focusing on what needs to be improved that they often forget to appreciate the progress that has already been made.

Customer experience transformation isn’t easy. Leaders of these efforts must push through ongoing resistance over several years to guide their organizations towards being customer-centric. So it’s only natural for them to keep looking ahead, trying to anticipate and avoid the next barrier. This non-stop forward charge can cause some problems because it:

• Accelerates burn out. Pushing up against barriers and resistance can be very tiring, which is why many customer experience leaders don’t last beyond a few years. Even if they go longer, they are often tired and frustrated.
• Distresses stakeholders. Executives get tired of hearing that their organizations have problems or that they aren’t changing fast enough. Sooner or later they tune out to the message.
• Limits organizational change. Identifying problems can drive initial change, but organizations get tired of facing an uphill battle of improvements. People don’t get emotionally engaged until they feel good about their efforts.

Here are some tips for avoiding this mistake:

• Institutionalize success-seeking. One of the items that should be regularly on your agenda is “signs of success” where you discuss what’s working well. By putting this on the agenda, people will get in the habit of looking for, and thinking about, the progress that they’ve made.
• Acknowledge your organization’s great work. One of the 6 laws of customer experience is “people do what is measured, incented, and celebrated.” So make sure to celebrate! The wins in the organization don’t happen on accident. Make sure to recognize members of the customer experience team that are making a positive difference.
• Regularly communicate success. The organization wants to know that it’s succeeding. So make sure to communicate the signs of success. But don’t oversell. People will start ignoring messages that don’t match what they’re seeing.
• Thank the organization. Don’t just communicate the success, but widely thank people across the organization for their help. This will make employees more anxious to be a part of the effort, in the hopes that they will also get the recognition.
• Create customer experience awards. If your organization has quarterly or annual awards, then some of those accolades should be channeled towards customer experience champions. The people inside of your company that are making a difference deserve an award!

The bottom line: Focus on the future, but don’t forget to celebrate the past

Fidelity’s Employee Engagement Goes Up And Down

I was recently in a Fidelity Investments office building in Boston and was pleased by the view in the elevator. On the inside door was this prominent graphic promoting the company’s customer experience efforts…

My take: These elevators are not typically used by clients, they’re for employees going up-and-down during the work day. What a wonderful way for the company to signal that customer experience is important. This is a great example of a tool that companies can use as part of their Employee Engagement efforts (one of the four customer experience core competencies).

Of course, it would be a mistake to just put up signage — as I highlighted with American Airlines. But I know that Fidelity is actively working on its customer experience efforts and this is part of a broader effort to engage employees.

The bottom line: Keep customer experience front-and-center up-and-down

Building A Culture Of Service At Cowboys Stadium

I recently spoke with Paul Turner, director of event operations at the Dallas Cowboys stadium. He was recruited to this position from the Philadelphia Eagles 2.5 years ago.

According to Turner, his department is the watchdog for the overall guest experience and the quality of the show and his job is to make sure that there is an infrastructure to consistently deliver on all of the promises that the sales team makes. Here’s how he framed his responsibilities: “We are in the experience business; we can’t guarantee a win.”

Creating a consistently good event experience is not an easy task. There are only a handful of events every year, so most of the game-day staff is made up of part-time employees — and it’s a very diverse workforce. Making the situation even more difficult, there are many organizations working at the Stadium, including other companies like the food service provider, Legends Hospitality.

Paul’s approach has been to create a “culture of service” that is built around the organization’s service mission statement:

We are service professionals at the world’s finest venue creating an exceptional experience for our guests in a safe, clean and friendly environment

The mission statement was created by doing research with the senior executives, so it is widely supported by the Cowboy’s executive team. Turner is empowered by the feeling that even Jerry Jones, the Cowboys owner, is supportive of this mission statement.

Part of the indoctrination for all new employees is to break down the service mission statement into its component parts, beginning with the first word. Employees are taught that  ”“We” we are all in this together. We collectively succeed or fail.” And with “service professionals,” employees are made to recognize that the organization plans to treat them like professionals; which, in return, means that they will be held to a high standard of performance.

The staff is also trained on the service mission statement at the beginning of every season and it is reinforced in just about every communication. It’s at the top of all of their game-day materials and training collateral.

Because of the periodic nature of the events, they can’t burden employees with a lot of procedural knowledge. Employees are given a handbook and told that they’ll be doing the right thing if they use the mission statement as their guide.

What does Turner consider his biggest accomplishment? He’s seen a lot of buy-in and the organization hasn’t gotten distracted with a lot of messages; it’s stayed focus on the service mission statement. Turner explained that with a casual workforce, you need consistency.

And, yes, I did admit to Paul that I am a Patriots fan. But only at the very end of our discussion.

The bottom line: There’s a lot of power in simple, consistent messages

The Container Store Loves Its Employees

For most companies, a proclamation like “we love our employees” would be perceived as corny (at best) or more likely as a complete farce. But The Container Store is not like many other companies. So it’s not surprising that the company proclaimed Valentine’s Day as its National We Love Our Employees Day.

So on Monday, employees were treated to special celebrations, gifts and recognition. Here’s an excerpt from the company’s blog post about the We Love Our Employees Day that gives some context for the event:

“…we all believe that if you work to make your employees the happiest employees around, well then they will absolutely, positively then make our customers the happiest customers around. And if those two are ecstatic, then wonderfully, and almost ironically, you’ll have the happiest shareholders around, too.”

That sounds like an exact narrative of our employee experience virtuous cycle which, interestingly, I introduced in a previous post about The Container Store:

The bottom line: Do you love your employees enough?

I Am The Customer Experience… Not!

I’m in the Phoenix airport and noticed this American Airlines sign at one of the gates that says “I am the Customer Experience.”

Naturally, this sign caught my eye. If this is part of a broader effort around employee engagement, then it could be a sign that American Airlines is heading in the right direction. To test how embedded this message was in the hearts and minds of employees, I went up to the first American Airlines employee that I found and “innocently” asked him what the sign meant. His answer:

“I don’t know; it’s just a promo they’re running.”

My take: First of all, I recognize that this is not a statistically significant sample size. So I can’t say that this one response is representative of the larger population of American Airlines employees (although I have a hunch that it is).

But if this is how many employees would respond, then it represents a common issue that I see where companies treat customer experience as a superficial marketing campaign. They think that they can somehow convince customers that they are customer-centric.This is a type of marketing approach that I call “empty promises.”

Compare this to JetBlue’s approach with its “Happy Jetting” campaign.

Marketing efforts, internal or eternal, are most successful if they ring true to their target audience. If American Airlines was actually working with its employees to engage them in a corporate-wide effort to improve customer experience, than a sign like this might be effective. But if it’s an isolated campaign to convince people that American Airlines is more customer-centric than it is, then it’s a truly bad idea. Employees and customers just see another empty promotional campaign.

Don’t forget the 6th law of customer experience: You can’t fake it.

The bottom line: Take customer experience seriously or don’t waste your time