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It’s Time To Engage Your Employees August 27, 2009

Posted by Bruce Temkin in Customer experience, Customer-centric DNA, EBD #3: Treat Customer Experience As A Competence.
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4 comments

As I was catching up on my reading, I ran across an article in BusinessWeek that discusses research from Gallup showing that less than 30% of the corporate workforce is truly engaged in its work. Why does this matter? The article points to some findings at Best Buy:

For every one-tenth-of-a-point increase in employee engagement, each Best Buy store increased profits by $100,000 a year.

My take: Less than one-third of employees are engaged in their work. Wow, that’s a huge opportunity! Companies that are looking to build more loyal customers need to look at their employees first. As I discuss in my eBook The 6 Laws Of Customer Experience: Unengaged employees don’t create engaged customers. Companies trying to improve the customer experience without figuring out how to engage the other 70% of their workers will likely fail.

That’s why I like what Alaska Airlines did with its North Of Expected campaign. Even with the backdrop of a difficult economic environment, the airline seized the opportunity to energize its workforce. Prior to rolling out its external marketing campaign, the company spent 10 weeks on an internal campaign called “Be North Of Expected” that engaged employees in Alaska Airline’s heritage of good customer service.

The bottom line: Employee engagement is a required path to customer loyalty

Wawa Succeeds With Experience-Based Differentiation July 19, 2009

Posted by Bruce Temkin in Customer experience, Experience-Based Differentiation.
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2 comments

I’m always on the lookout for leaders who seem to understand and apply the principles of Experience-Based Differentiation (EBD). So in this post I want to highlight some of the comments by Howard Stoeckel, CEO of Wawa.

Wawa is a convenience-store chain saw its merchandise sales grow last year.  How does this private company with 8,000 employees and more than $5 billion succeed in the recession? By focusing on Experience-Based Differentiation (EBD).

This recent quote from Stoeckel represents a great example of the second principle of EBD, Reinforce the brand with every interaction, not just communications:

If there’s anything that we’re doing through these challenging times, it’s digging deeper into the soul of the brand. We’ve got to do what we’re known for that much better.

In another quote from Stoeckel, we see an excellent example of the third principle of EBD, Treat customer experience as a competence, not a function:

When we ask customers what do they like about Wawa, they say, ‘We like your people.’ And when we ask them, ‘What is it that you like about our people?’ it’s that our people like each other – and customers get caught up in that experience.

The bottom line: EBD is even more important in this economic environment

My Marketing/Branding Favs Over 2 Years July 1, 2009

Posted by Bruce Temkin in Branding, CMO advice, Customer experience, EBD #2: Reinforce The Brand With Every Interaction.
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In a continuation of the look back at my first two years of blogging, today I’m listing some of my…

Favorite Marketing/Branding Posts

From my perspective, brands aren’t color palettes or logos. They’re not tag lines or advertising campaigns. They’re an organization’s raison d’être. Here’s how I describe branding:

True brands are more than just marketing slogans, they’re the fabric that aligns all employees with customers in the pursuit of a common cause.

The bottom line: Most organizations need to re-establish their raison d’être.

Brands Are Dying; Deal With It March 6, 2009

Posted by Bruce Temkin in Branding, Customer experience, EBD #2: Reinforce The Brand With Every Interaction.
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19 comments

In my presentation at Adaptive Path’s Mx Conference earlier this week, I mentioned that brands are dying. This turned out to have more of an impact than I thought. Helen Walters from BusinessWeek (who was in the audience) ended up interviewing me and posting a video of our conversation on her blog.

Why did I say it?

I often discuss Experience-Based Differentiation (EBD), a blueprint for customer experience excellence, in my blog (and in every other forum where people will listen). In my research, I track how large companies progress towards EBD. It turns out that they’ve actually regressed when it comes to the second principle of EBD: “Reinforce the brand with every interaction, not just communications.” Here’s one of the data points from surveys of large North American firms:

brandchart2_vsmall

Why are brands dying?

It’s simple: Companies have let profits replace purpose. As firms optimize left-brain management techniques for squeezing out additional profits, they’ve lost something very important — their raison d’être. True brands are more than just marketing slogans, they’re the fabric that aligns all employees with customers in the pursuit of a common cause.

This quote from Mohatma Gandhi gives insight into how companies should think about their brands:

All compromise is based on give and take, but there can be no give and take on fundamentals. Any compromise on mere fundamentals is a surrender. For it is all give and no take.

The bottom line: Don’t let your brand slip away.

10 Innovation Steps For CEOs January 25, 2009

Posted by Bruce Temkin in Customer experience, EBD #1: Obsess About Customer Needs, Innovation.
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As I’ve described in the 6 new management imperatives, senior executives need to turn innovation into a continuous process. This is even more important in this economic downturn where innovation is sorely needed, but can be easily ignored during cut-backs.

In a book called Innovating at the Top: How global CEOs drive innovation for growth and profit, researchers at INSEAD examined the innovation efforts at nine corporations: 3M, Research in Motion, Genentech, Unilever, SAP, Bosch, Nokia, Infosys and Toyota. The research uncovered ten innovation drivers:

  1. Appoint the CEO as the innovation champion
  2. Celebrate an innovation culture
  3. Engage more innovation partners by sharing knowledge
  4. Organise diversity to promote positive friction and cross-fertilisation
  5. Use customer needs to drive simultaneous R&D and Business Model Innovation
  6. Set high-quality standards and demanding challenges
  7. Encourage youth and keep a challenger mentality
  8. Appoint appropriate decision-makers and encourage transparent information-sharing
  9. Use processes judiciously
  10. Incentivise people to innovate continuously

Given my focus on customer-centricity, I really enjoyed these quotes:

Innovation, based on the needs (of customers), is faster, cheaper and a more dependable approach.
     – Fujio Cho, chairman of Toyota Motor

Unless our researchers realise what the outside world is and what is happening in the trenches, their innovations will have no value for the customer.
     – N.R. Narayana Murthy, chairman of Infosys

The bottom line: A recession is a great time NOT to forget about innovation.

PNC Bank Breaks Through Gen Y Blindspot December 3, 2008

Posted by Bruce Temkin in Customer experience, Design solutions, Disruptive customer experience strategies, EBD #1: Obsess About Customer Needs, Financial services, Gen Y, Innovation, Marketing to Gen Y, Online strategy.
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3 comments

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.

Forrester’s European Forum, Part 1 November 9, 2008

Posted by Bruce Temkin in Customer experience, Experience-Based Differentiation, Managing in a recession.
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4 comments

I just got back from London, where I gave one of the keynote speeches for Forrester’s European Consumer Marketing and Financial Services Forums which were co-located at the Park Plaza Riverbank. It was a great event. The content was strong and the attendees seemed really engaged. It was also wonderful seeing my European colleagues and clients. And I always like visiting London.

My speech examined how to focus on customer experience in these difficult economic times. I used film clips to make the point that customers are like film viewers; they form their opinions based on visceral reactions to a specific set of scenes (a.k.a., moments of truth). So in these tough economic times, firms need to be even more attuned to the emotional side of customer needs and focus on those key scenes. I went on to discuss this environment in conjunction with the three principles of Experience-Based Differentiation:

  1. Obsess about customer needs, not product features. In a changing economy, consumer needs change. Their basic needs don’t disappear, but their priorities shift and they look for creative ways to satisfy those needs. So it’s more important than ever to research what’s going on in the lives of your most important customers.
  2. Reinforce the brand with every interaction, not just communications. In a down economy, many companies are developing contingency plans and cutting budgets. So it’s easy to lose site of your brand’s core tenets. Don’t let this happen. Make sure to use your brand as a framework for making these decisions and keep reinforcing the importance of your brand with employees.
  3. Treat customer experience as a competence, not a function. Firms can’t forget that customer experience is like a film; customers interact with front-line employees (actors), but there are many people across the company (entire production crew) that create those moments (scenes). If senior executives don’t keep customer experience top of mind, than it will likely deteriorate. The result: Loss of customers (disappointing box office results).

I attended a number of other sessions, so here are some highlights from a couple of those speeches. I’ll also discuss some cool customer experience initiatives at Barclays, HBOS, and Credit Suisse in one of my next posts.

  • John Micklethwait, Editor In Chief, The Economist
    “New Politics Of The World Economy“
    Micklethwait called his discussion a “paranoid prophetation,” and it was a bit depressing. He said that Obama had a temporary global mandate and history will judge him based on two things: 1) Did he deal with capitalism? and 2) Did he unite world leaders around Western ideals? He discussed a long-term shift of power and wealth to Asia and outlined five nightmares from the current economic environment; calling the fist three inevitable: Larger public sector debt, missed opportunities, mission creep from regulators, bashing of the rich, and geopolitical unrest (especially in Iran and Russia)
  • Fred van Ommen, SVP Innovation Excellence, Philips
    “Strategies Driven By Consumer Sense & Simplicity”
    Philips maintains a database of more than 1,000 consumer insights that it can tap into for product innovations. They are constantly adding to those insights through the company’s ongoing experience testing labs: HomeLab, ShopLab, and CareLab. Philips has formal processes for infusing customer insights into innovation projects, including what van Ommen called “Value Proposition House” and “Voice Of The Customer Tree.” The firm looks for over half of its revenue to come from consumer products that it has introduced in the previous year and business products that it has introduced in the previous two years.

The bottom line: Focussing on key customers is more important than ever.

Wells Fargo Improves Communications With Ethnography November 5, 2008

Posted by Bruce Temkin in Customer experience, Design solutions, EBD #1: Obsess About Customer Needs, Voice of the customer.
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3 comments

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.

Mattel Showcases Online Listening Community November 1, 2008

Posted by Bruce Temkin in Customer experience, EBD #1: Obsess About Customer Needs, Voice of the customer.
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2 comments

In a previous post I highlighted the 2008 Groundswell Award winners. Given my focus on voice of the customer programs, I wanted to take a closer look at the winner for Listening: Mattel’s “The Playground.”

Mattel's The Playground

Here’s an excerpt from Mattel’s submission for the award:

Mattel’s Worldwide Consumer Insights Department created The Playground, a private online community of 500 moms with kids aged 3—10, with Communispace in June 2007 to help them listen to and gain insight into the lives and needs of moms to help drive growth and innovation. During the fall of 2007, Mattel had a series of product recalls on popular toy brands that sent the organization reeling… Moms from the community provided Mattel with insights around how they felt about the recall, how they felt about Mattel, how they felt about China-produced toys, their perceptions of Mattel’s response plan, what their biggest fears and concerns were, and what Mattel could do to help them.

My take: I’ve been looking at social technologies a lot more lately (don’t worry, I haven’t turned into a Web 2.0 fanatic). It turns out that many companies like Mattel are successfully using online communities to get deep customer insight, especially in two of the five levels of voice of the customer program: Continuous Listening and Project Infusion. Here are some things to keep in mind if you’re thinking about creating a private online community for the purpose of customer listening:

  • Make the case for an online community based on the speed of getting insight and the depth of the insight
  • Use a vendor like Communispace or Think Passenger to provide online community expertise
  • Dedicate internal resources to understand how to best use online communities
  • Recruit community members that represent important customer segments
  • Plan on an ongoing set of activities to keep the community engaged
  • Look for feedback across a wide range of areas (e.g., idea generation, product development, marketing messages)
  • As with any voice of the customer tool, don’t forget to focus on all aspects of LIRMing: Listen, Interpret, React, and Monitor. (Debi, thanks for reminding me about this one)

The bottom line: Online communities are a key tool for voice of the customer programs.

Recession Strategies From IDEO And Potatoes October 23, 2008

Posted by Bruce Temkin in Customer experience, Disruptive customer experience strategies, EBD #1: Obsess About Customer Needs, Executive leadership, Managing in a recession.
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7 comments

I ran across an interesting article on the IDEO Website called Reframing Recession: Lessons from the potato (.pdf). The article discusses how potatoes became a popular food item in the 1790’s amidst the turmoil of a devastating grain market and repeated crop failures. The potato’s rise to the family table was driven by consumers’ innovation in trying to fill an overarching goal — feeding their families.

The article does a nice job of using this story to frame the reality of poor economic times: There’s still opportunities for growth. Here’s a very interesting observation from the article:

When the economy is down, people look to different product categories to solve persistent needs, making trade-offs that reflect both conscious and unconscious decisions. In the last recession we called this “The Lipstick Effect” – as budgets tightened, women still sought out ways to address their need to flaunt a little and sales of cosmetics went up. Just as in 2002, Estée Lauder’s makeup sales have recently felt an uptick – 11% in the third quarter of 2007.

The article ends up by making the following five recommendations:

  1. Hang out with your customers. Since customers will be looking to fill their needs in  different, cheaper ways, you need to spend time understanding their core needs. This is pretty much the 1st principle of Experience-Based Differentiation: Obsess about customer needs, not product features.
  2. Watch out for a new breed of unlikely competitors. Just like the potato replaced grain in the 1790s, consumers may turn to new categories of products as substitutes for your offerings.
  3. Be inspired by extreme value. Look for models to copy, across any industry, where people are getting more value for less.
  4. Go elephant hunting with a slingshot. Go find opportunities where you can provide a cheaper, simpler solution to replace expensive, complex ones. I like this one a lot. As a matter of fact it’s very close to one of the five disruptive customer experience strategies that I’ve called Ultrasimplicity.
  5. Don’t be afraid to prototype. Get some changes out in the field and be willing to learn, even through small-scale failures. The article provides this good advice: “Tougher times are exactly when you should give those managers who are closest to your customers the freedom to act on their insight and to experiment.” In the post Keep Customer Experience Momentum In A Recession, I also discuss the importance of innovation in a downturn.

The bottom line: Don’t react to a recession by clamping down on innovation.