I just read an interesting interview in Forbes with Simon Cooper, president of the Ritz-Carlton, who provides some insight into Ritz-Carlton’s customer-centric culture. Here are some of Cooper’s remarks:

• We focus on three fundamentals. First, location–making sure we get absolutely the best location. Second, product–building the right physical product for what our guests want today and what they will want tomorrow. That’s the platform. Third, people–our ladies and gentlemen serving ladies and gentlemen. They animate the platform.
• We use what we call “lineup,” which is a Ritz-Carlton tradition… we want every single hotel, everywhere in the world, every partner, every shift, to utilize lineup, which typically takes around 15 minutes every day…That is a wonderful training and communication tool, where every department layers on the department message.
• Part of the lineup everywhere around the world is a “wow story,” which means talking about great things that our ladies and gentlemen have done.
• We entrust every single Ritz-Carlton staff member, without approval from their general manager, to spend up to $2,000 on a guest. And that’s not per year. It’s per incident… The concept is to do something, to create an absolutely wonderful stay for a guest.
• A culture is built on trust. And if leadership doesn’t live the values that it requires of the organization, that is the swiftest way to undermine the culture.

My take: As you may remember, I wrote about my less-than-ideal experience at the Ritz-Carlton in Puerto Rico. After I wrote that post (and complained at the front desk), one of the managers called me, apologized for our problems, and offered us a free dinner in the hotel’s nicest restaurant. It was a great meal; and it created a positive impression of the hotel.

As you can see from Cooper’s remarks, this type of customer-centric behavior is no accident. Ritz-Carlton empowers its “ladies and gentlemen” to deliver great experiences for customers. To get a better sense of how this hotelier operates, take a look at the Ritz-Carlton Gold Standards.

If you want to develop a customer-centric culture, here are some additional posts that should help:

• 6 C’s Of Customer-Centric DNA 
• Free Book: The 6 Laws Of Customer Experience
• Management Imperative #1: Invest In Culture As A Corporate Asset 
• Execs Need To Focus More On Culture 
• Tesco Showcases Strategy + Culture 
• Discussing Zappos’ Culture With Tony Hsieh 
• Joie de Vivre Engages Employees And Everyone Wins

The bottom line: A customer-centric culture takes purposeful leadership.

I’ve been helping several executive teams chart their customer experience journeys. The work typically centers around strategy, culture, organization, processes, and leadership. So I am almost always discussing the role of the executive team; which is a critical component of the journey.

Since customer experience journeys represent multi-year transformational programs, it is critical that the executive team have the appropriate level of commitment to the program. If they’re not committed, then they shouldn’t even start.

I often refer to the 8 signs of executive commitment from a previous post, In order to make that content easier to use, I created this free downloadable eBook: The 8 Signs Of Executive Commitment.

I’ve also turned the list into a self-test that can facilitate discussions. What’s your exec team’s score on the 8 signs?

The bottom line: Customer experience transformation requires strong executive commitment.

Yum! Brands (owners of brands like KFC, Pizza Hut and Taco Bell) identified three key initiatives across its brands: 1) selling more healthy items; 2) offering a greater variety of drinks; and 3) changing menus according to the time of day. But the company was not in a position to take on these bold initiatives. According to an article in the Economist:

The main obstacle to such ideas was Yum!’s corporate culture, in which different brands and operations in different countries had little to do with one another, slowing the spread of new initiatives.

When Yum!’s CEO Dave Novack visited its very successful Chinese organization, he noticed employees using terms such as “future back vision”, “bold request” and “action versus activity” which had created ”a healthy dissatisfaction with the status quo.” It turns out that many of these ideas came from John O’Keeffe, a management consultant.

That’s why the company engaged O’Keeffe on what Novack calls the “biggest culture-change initiative in the world today.” O’Keeffe helped create Yum!’s “Achieving Breakthrough Results” program which was designed to be passed down from manager to subordinates across the company — starting with the company’s top 200 executives.

My take: Kudos to Novack for recognizing that Yum!’s culture is a critical element of the company’s performance. He’s clearly practicing the first of my 6 New Management Imperatives: “Invest in culture as a corporate asset. “

While CEOs can push some change into their organizations, corporate cultures determine the effectiveness of those efforts. In some cases, a corporate culture will accelerate results while in others it will dampen or even block the results.

If corporate culture is hampering your company’s performance, then it’s time to address the issue. Rather than continuing to waste money and time on partially successful initiatives, you should make the long-term investment in improving your corporate culture.

The bottom line: Figure out if your culture is an asset or an obstacle.

The Web is becoming an increasingly important channel for companies, yet online experiences leave a lot to be desired. Our research shows that most sites have poor usability and they don’t reinforce key brand attributes. That’s why I worked with Ron Rogowski (the primary author) on a research report that created a concept called Emotional Experience Design, which we define as:

Creating interactions that engage users by catering to their emotional needs.

Emotional Experience Design is quite different from today’s functional design:

To apply Emotional Experience Design, firms must:

1. Address customers’ real goals. People may come to a Web site to get service or buy a product, but that’s typically not the beginning or culmination of their journey. The mother of a newborn with stomach problems isn’t going to a site for information about medication; she’s looking for a way to bring comfort to her baby — and maybe get a little relief for herself. If firms want to engage customers, their sites must cater to these deeper customer needs..
2. Develop a coherent personality. Web sites can feel sterile — devoid of a brand’s human characteristics, which are often apparent in other channels. But firms need their online experiences to do even more than just reinforce their brands; the experiences should enrich them. How? By developing a coherent, consistent personality that customers can easily recognize throughout all interactions.
3. Engage a mix of senses. Over reliance on text and imagery makes many sites indistinguishable from competitors. Interestingly, most people can’t remember the content of Intel’s commercials, but they can easily imitate the Intel sound.While Web experiences don’t allow users to taste or smell objects, they can and absolutely should engage users’ senses of sight, hearing, and even touch.

The bottom line: It’s time to make emotional connections online.

At its user conference in Colorado Springs, RightNow Technologies announced a new mission: To rid the world of bad experiences. CEO Greg Gianforte unveiled the mission along with its three pillars:

1. Invest in its solution to help RightNow clients eliminate bad customer experiences from their consumer base.
2. Improve the way it engages with their clients to ensure they always have great experiences when interacting with RightNow
3. Give back to the communities in which it operates.

Here are some details that went along with the announcement:

• It renamed its platform: RightNow CX, the customer experience suite.
• It announced three new social media offerings (RightNow Support Community, RightNow Innovation Community, and RightNow Social Experience Designer) which are integrated with its Web and contact center components.
• To enhance its relationship with its clients, the company announced its CX Commitment which has three elements: relentless focus on business results, expertise on every engagement, and delivering on the promise of SaaS.
• It’s adding Client Success Managers to every RightNow account, free of charge. These people won’t carry sales quotas and will be measured on the business results of their clients.
• RightNow won’t start an engagement until the client and RightNow agree on what the results will be; and they won’t consider a project finished until they’ve delivered those results.
• The company has ambitious plans for its SaaS platform which include a commitment to no shelf-ware, complete pricing transparency, and what it calls “invisible updates” – frictionless changes from version to version.

Gianforte ended his remarks by inviting attendees to join RightNow in ridding the world of bad experiences.

My take: I’ve seen many vendors create missions like this; announcing audacious statements about how they want to be perceived. Most fail miserably. But RightNow’s announcement is different from most.

Since the mission dovetails completely with my focus, I sat down with several people across RightNow including its CEO, CMO, and COO to understand what this mission really means. Here’s how I’d rate RightNow’s mission against the 6 criteria that I use for evaluating organizational missions:

• Is it compelling? YES
• Are employees bought-in? YES
• Is it consistent with the company’s core beliefs? YES
• Is there value for all key constituents? YES
• Has the company aligned its investments to the mission? YES
• Are significant changes being made to align with the mission? YES

Ridding the world of bad experiences is more than just a slogan for RightNow, it’s a commitment to an operating model that’s driving all of its key decisions.

I am particularly impressed by the company’s commitment to align itself more fully with its customers’ success – instead of just selling software. If successful, RightNow might actually redefine a more customer-centric model for software companies. That would certainly rid the world of many bad experiences!

The bottom line: Let’s collectively rid the world of bad experiences.

Here’s how Best Buy CEO Brian Dunn ended a recent blog post on CNBC:

You should be happy with what you purchase. This means that the product works the way you expect it to before you walk out of the store, or when you get home. If not, you’ve overpaid at any price.

Dunn’s post discusses the importance of knowledgeable staff in the consumer electronics space. He points to a study by The American Consumer Institute that shows how often consumers selected different attributes as being important for their electronics purchase:

• Product quality (85%)
• Knowledgeable staff (77%)
• Finding someone to help (74%)
• Lower prices (70%)

My take: True! Dunn’s comments are consistent with my previous post about Wal-Mart’s new tech support as well as my research which shows that customer service trumps price across most industries. When consumers chose a retailer, the need for higher customer service increases with age. There are 2% more Gen Y that want good customer service than those that want low prices. For Seniors, the gap between customer service and low price is 14%.

That’s why retailers need to focus on the 4th law of my 6 laws of customer experience: Unengaged employees don’t create engaged customers.

The bottom line: Don’t sell electronics, help people chose and use them.

Wal-Mart has started to sell technical service plans for setting up and using TVs and PCs. Rather than building up in-house capabilities, Wal-Mart will sell third-party services from N.E.W. Customer Service Companies.

My take: Wal-Mart’s move fills a gap in it’s offering; helping customers install the products they buy. But the ideal service scenario starts before a purchase and continues on after installation and setup. So Wal-Mart will eventually need to do more than sell another company’s tech support bundles. To sell higher-end consumer electronics, it will need to bolster its in-store service and deeply integrate support throughout a customer’s lifecycle.

With Best Buy and Apple boosting their technical support capabilities, consumers will increasingly look for more guidance and support from their consumer electronics retailers. And my research has shown that customers who chose retailers based on their service are much more loyal than those that are just looking for low prices.

The bottom line: High-end electronics need integrated support.

You may have missed it on the calendar, but we’re in the middle of National Design Week. In a National Design Week event called The Business Of Design, Jeanne Liedtka, from the Darden Graduate School of Business at the University of Virginia, discussed a three year study that looked at managers who could grow revenue in a slow market. Her advice to executives:

They need to unlearn. The first thing a manager should do is leave the building and talk to a customer.

My Take: Some people may be asking: “Why should I care about National Design Week, I’m not a designer or an artist.” It turns out that “design” is a critical element in many aspects of business. To understand why it’s important, let’s think about what makes good design. 

Good design is something that evokes a positive emotional response from a particular audience (the assessment of design is in the eyes of the beholder). Isn’t that the goal for activities like product development, service design, customer experience, and marketing?

In honor of National Design Week, I urge everyone to constantly ask (and answer) the three questions of Scenario Design that we’ve been using at Forrester for more than a decade:

1. Who are your users?
2. What are their goals?
3. How can you help them accomplish their goals?

The bottom line: Good design is good business.

I’m guessing that many people who read the title of this post think it’s about online experiences. That’s where “design” and “checkout” most often show up in the same sentence. But I’m actually discussing in-store experiences. According to recent research, about 1.6 percent of customers abandon in-store checkout lines. For a typical retailer, that’s over $100,000 per store per year, which is more than $50 million per year for a 500 store chain.

My take: I’ve recently discussed new in-store merchandising strategies for Wal-Mart, Michael’s, and Macy’s. Companies are recognizing that store design has a significant impact on customer purchases during a visit and on the likelihood of customers to return to the store. But the last place you want customers to have a bad experience is when they’ve got a product in one hand and payment in the other.

So companies need to take another look at the design of their checkout experiences. This means examining their queue structure (multi-line, single-line, etc), the queue environment, and in-queue merchandising. Technology offers new options for in-store experiences like self-service checkout kiosks and portable checkout systems.

Since I mentioned online experiences at the start of this post, I’ll end with a comment about online experiences. I’ve written in the past about flaws in the Store to Web experience. With the growth of mobile applications like ShopSavvy, retailers will increasingly need to design experiences that cross-over online-offline boundaries.

The bottom line: Stop losing customers that are ready to buy.

Wal-Mart and Amazon.com are battling toe-to-toe in the book market. Shortly after Wal-Mart announced plans to sell 10 new books for $10 apiece yesterday, Amazon.com announced that it was matching the price. Wal-Mart responded by saying that it would sell the books for $9.

Wal-Mart is serious. According to Walmart.com’s CEO Raul Vazquez:

If there is going to be a ‘Wal-Mart of the Web,’ it is going to be Walmart.com. Our goal is to be the biggest and most visited retail Web site.

My take: Maybe it makes sense to aggressively compete for book buyers with low, low price. I can see the rationale for this strategy: Books are already a commodity, so why not cut prices and build scale so you can squeeze cost from the supply chain and cross-sell other products. But that’s a very boring and uncreative strategy.

So how would I go after this market?

I’d add value to the overall experience. The first step would be to uncover the unmet needs, wants, and desires of different segments of book buyers. This would include ethnographic studies of how consumers buy, use, and discuss books as well as an examination of successful independent book stores. I would then use this information to create experiences that would reduce some of the price sensitivity

Even without the research, I can already think of potential options for creating value for some segments of book buyers:

• The Reading Plan (return a purchased book for a specific price based on how long they keep it and the condition of the book when it is returned. Return could be cash or credit towards another book).
• Usage Price Plan (the price of a book takes into account the return price; buyer agrees to return it in a certain time in a certain condition).
• Author Appreciation Plan (buy a book from an author and you can return it for a significant discount on another book by that same author).
• Book Loyalty Club (buy “x” books and you get the next one for free.)
• Virtual Book Club (earn points based on book purchase and turn points in for experiences like presentations from authors, books with personalized signatures from the author, discussions and lectures from literary figures and professors, and early access to new books).
• The NetFlix Plan (pay a fixed fee for a certain number of books you have out at a time. Maintain a queue online and get the next book in the queue after you send back your current book).

The bottom line: Book buying experiences don’t need to be a commodity.