Customer Experience Reading List for Execs

Here’s a short list of posts that I’d recommend sharing with executives that want to get up to speed on customer experience:

1. The Four Customer Experience Core Competencies. The path to customer-centricity requires mastering these four competencies: Purposeful Leadership, Compelling Brand Values, Employee Engagement, and Customer Connectedness. The report also has a self-assessment tool that execs can use to gauge their organization.
2. The 6 Laws Of Customer Experience. Every executive should understand these fundamental drivers of how organizations deliver customer experience.
3. My Manifesto: Great Customer Experience Is Free. Provides a perspective of how to think about customer experience management.
4. 10 CX Mistakes to Avoid. Highlights common mistakes that inhibit customer experience efforts and provides advice for overcoming these obstacles.
5. The Future of Customer Experience. Shows where customer experience is heading and identifies competencies and skills necessary to gain CX maturity.
6. The ROI of Customer Experience. Shows the link between good customer experience and higher loyalty and revenues.
7. Three Characteristics Of Transformational Leaders. Identifies what leaders need to do if they want to drive change in their organizations.
8. Lessons in CX Excellence. Provides details of the customer experience efforts of 11 organizations that were finalists in Temkin Group’s 2012 Customer Experience Excellence Awards.

If your execs show interest in customer experience, then sign them up for the monthly CX Journal so they can continue on their CX learning journey.

The bottom line: An informed executive is a critical CX asset.

Happy Birthday CXPA.org!

It’s hard to believe that it was just two years ago that Jeanne Bliss and I co-founded the Customer Experience Professionals Association (CXPA.org).

For those of you who aren’t familiar with the CXPA, it’s a non-profit association that’s dedicated to supporting and enhancing the profession of customer experience management. Thanks to the support of a wonderful board of directors and a myriad of people who have volunteered their energy, passion and time to the CXPA, we’ve been able to do wonderful things. Here’s a sampling of what the CXPA has achieved in just two years:

• Built a thriving community of more than 2,100 CX professionals from 50 different countries
• Created “Ask the CX Experts” program where a team of CX experts responds to questions submitted by members
• Held more than 40 local networking events in 15 cities including Toronto, London, and Sydney Australia where CX professionals come together to learn, share and network.
• Offered Best Practice Visits to Fidelity Investments and Intuit where CXPA members gained deep, first-hand access to leading-edge CX programs
• Delivered more than 70 community calls and webinars on critical areas of CX content, all of which are available in the CXPA’s online member center
• Created a growing library of more than 40 CX Tools, which are artifacts shared by CX practitioners that can be downloaded from the online member center
• Maintain a continuously updated list of job postings in the CX Career List
• Offer research, white papers and case studies on a variety of CX topics
• Will be holding our third Members Insight Exchange in a few weeks in San Diego, which is a highly interactive event for learning, sharing and networking.

Here are the reasons we founded the association (from my April 2011 blog post: Announcing The CXPA; Customer Experience Professionals Unite!):

• There are many customer experience networking groups, but the industry has hit a stage where it needs a single, collective voice to map its evolution
• We want to help customer experience professionals embed customer experience management skill sets across their organization
• Our goal is to identify standards and best practice approaches and transfer those skills across the industry
• We want to ensure that that customer experience management continues to generate a vibrant set of opportunities for customer experience practitioners

It’s only been two short years, but I think we’ve made strong inroads against those goals.

As proud as I am about what the CXPA has accomplished so far, I’m even more excited about its future. As we go deeper into the era of CX professionalism, the growing number of CX professionals will find new and enhanced programs from the CXPA helping them to succeed. The association will also be doing more work to raise the stature and visibility of the entire profession.

I want to send a big thank you to everyone who has helped the CXPA reach this major milestone!

The bottom line: Every CX professional should be a member of the CXPA

Report: Social Media Benchmark, 2013

We just published a Temkin Group report, Social Media Benchmark, 2013. This data snapshot examines how often consumers use social media on their computers and mobile phones.

In January 2013 we surveyed 10,000 U.S. consumers about their social media use patterns and compared the results to data that we collected in January 2012. This analysis examines the use of Facebook, LinkedIn, Twitter, Google+, and third-party rating sites. This report also examines how the data varies by type of mobile phone and identifies consumers’ preferred communication channels. The analysis breaks down the data by age group.

Download report for $195

The first figure in the report (out of 10 total data graphics) shows the change in social media use between 2012 and 2013, highlights a reduction in active Facebook usage especially by younger consumers.

Here are some interesting factoids about social media and mobile usage in the U.S.:

• The percentage of active Facebook users has declined for consumers younger than 55, but it’s on the rise for older consumers.
• One-quarter of consumers use their mobile phones to access Facebook daily while 10% access Twitter, 8% access Google+, and 6% access LinkedIn that frequently.
• More than 90% of  consumers under the age of 45 who use LinkedIn, Google+, and third party rating sites daily on their computers are also doing so on their mobile devices.
• iPhones and Android phones dominate younger consumers while Blackberry’s sweet spot is with 35- to 54-year-olds. Windows Mobile has only 2% of the market, but its share is consistent across age groups
• iPhone users are the most likely to access Facebook and Twitter daily while Blackberry users are the most likely to access Google+, LinkedIn, and third party rating sites.
• Young consumers prefer to connect with friends via text message, but that preference has declined since 2012. Older consumers prefer to make calls on landlines while those in their 40s and 50s prefer to talk on their cell phones

Download report for $195

The bottom line: Mobile is a big catalyst for social media

 

Bezos Letter Describes Amazon’s Customer-Centric Blueprint

In his recent letter to shareholders, Amazon.com CEO Jeff Bezos provides insight into a truly customer-centric organization. The letter demonstrates how Amazon operates with a long-term view of customer value. Here are some of the most powerful components of the letter:

“Proactively delighting customers earns trust, which earns more business from those customers, even in new business arenas. Take a long-term view, and the interests of customers and shareholders align.“

“I frequently quote famed investor Benjamin Graham in our employee all-hands meetings – “In the short run, the market is a voting machine but in the long run, it is a weighing machine.” We don’t celebrate a 10% increase in the stock price like we celebrate excellent customer experience. We aren’t 10% smarter when that happens and conversely aren’t 10% dumber when the stock goes the other way. We want to be weighed, and we’re always working to build a heavier company.”

Bezos understands the value of Amazon’s most critical asset, customer loyalty, which I’ve defined as the willingness to consider, trust, and forgive. That focus is what put Amazon.com on the top of the retail sector in the 2013 Temkin Experience Ratings. Great leaders focus on building that customer loyalty asset with the knowledge that it will generate the best returns for all stakeholders in the long run.

Here are some other components of Bezos’ letter that I want to comment on…

“As regular readers of this letter will know, our energy at Amazon comes from the desire to impress customers rather than the zeal to best competitors… One advantage – perhaps a somewhat subtle one – of a customer-driven focus is that it aids a certain type of proactivity. When we’re at our best, we don’t wait for external pressures. We are internally driven to improve our services, adding benefits and features, before we have to.”

My take: Too many companies overly focus on their competition, a process that leads to collective mediocrity. Great companies focus their energies, from learning to innovating, on three questions: who are our customers? what do they want and need? how can we provide them even more value?

“We build automated systems that look for occasions when we’ve provided a customer experience that isn’t up to our standards, and those systems then proactively refund customers.“

My take: This type of proactive approach is not only great for building trust with customers, but it also establishes pressure within Amazon to do the right thing all the time. It creates an environment where mistakes are proactively found, fixed, and prevented in the future.

“Our business approach is to sell premium hardware at roughly breakeven prices. We want to make money when people use our devices – not when people buy our devices. We think this aligns us better with customers. For example, we don’t need our customers to be on the upgrade treadmill. We can be very happy to see people still using four-year-old Kindles!“

My take: If you want to align your interests with your customers, then create pricing models where you only make money when customers gain value. This is an increasingly important concept as more products and services are connected online where usage and value can be more closely monitored.

“As proud as I am of our progress and our inventions, I know that we will make mistakes along the way – some will be self-inflicted, some will be served up by smart and hard-working competitors. Our passion for pioneering will drive us to explore narrow passages, and, unavoidably, many will turn out to be blind alleys. But – with a bit of good fortune – there will also be a few that open up into broad avenues.”

My take: Every company makes mistakes, but companies that build loyalty with customers also earn their forgiveness. That’s why Amazon scores so high in the Temkin Forgiveness Ratings. It also allows employees to have the confidence to try new things.

The bottom line: Customer-centric organizations are purposefully built

30% of U.S. Workers Have Practical Wisdom

In a previous post, I discussed a wonderful TED talk by Barry Schwartz called Our Loss of Wisdom. Schwartz references what Aristotle called “practical wisdom,” the combination of moral will and moral skill.

As an analyst at heart, I decided to quantify practical wisdom. How? By creating two statements that are indicative of moral will and another two that reflect moral skill.

• Moral will statements:
  • I have an obligation to help other people when I’m doing my job, even if it’s not part of my job description
  • I am willing to work harder or longer if my efforts will help other people
• Moral skill statements:
  • I regularly do things that aren’t on my job description because they will help other people
  • I understand when it’s appropriate to break my company’s rules in order to help customers and other people

In the recent Temkin Group consumer benchmark study, we asked more than 5,000 U.S. employees if they agreed with those four statements. As you can see in the chart below:

• More people agree with the moral will questions than the moral skill questions
• We classified people as having moral will or skill if they agreed with both of the related statements. Sixty-nine percent have moral will, but only 36% have moral skill
• When we looked at the combination of these skills, we found that 30% have practical wisdom—the combination of moral will and moral skill

I will continue to dig deeper into our dataset to understand the demographics and attitudes that go along with practical wisdom. So stay tuned.

The bottom line: When it comes to morality, there’s more will than skill

Two Thumbs Up For UK’s Engage For Success

I want to congratulate the UK government for understanding the power of employee engagement. In 2009, the Labour Government engaged David MacLeod and Nita Clarke to produce a research paper on the importance of engagement to the UK economy. Based on that study, the government backed the launch of the Engage for Success movement last November. In a video that was made for the voluntary movement, a young worker proclaims…

“…give employees a voice… create a place where people want to shine… I’m not a human resource; I’m a human being.”

Here are a few comments from the authors of the initial study and leaders of the movement:

• MacLeod: “We can show you places where the workforce has been reduced but levels of engagement have gone up. It’s because the challenge has been explained to the workforce, their ideas have been taken on board and there’s been a partnership. Anyone who says ‘we can’t do this because there’s a recession on’ just doesn’t understand what engagement is.”
• Clarke: ”If you’re not trying to improve engagement, you may as well be standing on top of a building chucking money away… “HR needs to be expert, they need to orchestrate how to find engagement in a transformational way… This is HR’s opportunity to be at the top table, to help the CEO and top team ensure people are behind their strategy.”

My take: I totally agree. Employee engagement is critical for an organization’s success, it represents an opportunity/imperative for HR to become more strategic, and it could even be a catalyst for improving the competitiveness of an entire country.

To achieve those benefits, however, the prevailing approach to management must change. Rather than imposing layers of strict controls over employees in an attempt to ensure financial success, companies need to engage employees and reap the benefits. While this may seem like a subtle difference, it leads to a profoundly different approach to management—from controlling to leading.

Employees aren’t a fungible commodity that you burn through on the way to success, they are your critical assets. Herb Kelleher, founder of Southwest Airlines, does a great job of describing his enlightened approach to employees:

“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.”

The following chart, which is the initial figure in the Temkin Group report The Five I’s of Employee Engagement, highlights how employee engagement is the start to a virtuous cycle and showcases compelling data from our benchmark study of U.S. employees. As you can see, our research on U.S. employees concurs with MacLeod’s and Clarke’s findings.

Unfortunately, HR has not yet embraced employee engagement as a strategic imperative. In a recent Temkin Group study of HR professionals at large organizations, we found that 75% of HR professionals recognize that employee engagement is important, but only 61% rate their HR group as being good or excellent in this area. As you can see in the chart below, employee engagement has the second highest capability gap amongst the 14 areas we examined.

In our work with organizations, we rarely see HR organizations driving any serious employee engagement activities. HR groups are more focused on transactional activities such as hiring, firing, compensating, and training. Given the opportunity for creating value, it’s time for HR to take the lead in this critical area. As Clarke stated: “This is HR’s opportunity to be at the top table.”

The bottom line: Employee engagement is critical for organizations and for HR

Seven Steps for Developing Customer Journey Maps

In Temkin Group’s previous report on B2B CX best practices, we provide examples of companies using a customer journey map (CJM), which is a critical CX tool. We included this graphic which is valuable for any company, B2B or B2C, that is thinking about using CJMs.

Let’s circle back with the basics, what is a CJM? It’s a representation of the steps and emotional states that a customer goes through during a period of time that may include some interactions with your organization. CJMs are valuable because they help identify how a customer views an organization by putting the interactions with a company in the context of the customer’s broader activities, goals and objectives. The output often includes an easy to understand graphic such as this example I’ve used from Lego for many years:

Here’s an example of a CJM we created to showcase the power of CJMs. Note how the journey represents the customer’s point of view and not just the company touchpoints.

Often times, companies mistake a CJM for a touchpoint map, which is looking at individual interactions or “touches” with customers. The problem with this approach is that it often loses the broader context of how that touchpoint fits within the overall goal and objectives of the customer. As a matter of fact, mapping internal touchpoints is one of my 10 CX Mistakes to Avoid.

Given the importance of CJMs, I put together answers to some FAQs:

• Do we need to do customer research? No, but it is much better if you do. If you assemble the right front-line employees who have day-to-day interactions with customers, then your CJM may be somewhat accurate. But very likely it will be missing some steps and perceptions of customers, especially in areas of the journey where the customer doesn’t think about the company. And if you just pull together a bunch of people in headquarters, then your CJM will often represent an oversimplified, fantasy about what customers go through. The best CJMs start with internal information to frame the effort, but spend the time to validate and update the CJM through strong customer research.
• What type of customer research do we need to do? This is all about qualitative research. You won’t find how customers feel about the journey in your quantitative datasets. You will need to go out and speak to customers within your different segments to understand how they view the overall journey. This can include ethnographic techniques like journaling and contextual inquiry. After you have the journey defined, you can use some quantitative methods to identify how often some activities occur.
• Do we need to hire an outside firm to do a CJM? You don’t need to, but there are some good firms with a lot of experience in this area. If your internal research organization has strong ethnography skills, then you can probably follow our seven steps above and complete it on your own. As with any activity, the vendors that have done a lot of these are going to be more skilled at the process and in making sure that the output is actionable. If you can’t afford to hire an outside firn, then it’s still worthwhile to go ahead and do the project internally as best as you can.
• Is there a CJM that we can copy? There are a lot of examples of the physical maps, but that’s not what’s important about the process. You are doing CJMs to uncover specific insights that you will use for fixing problems, wowing customers in the future, or establishing measurement tracking systems. If you focus too much on copying someone else’s CJM, then you will often miss the nuances that are key for your customers and your company. And, more importantly, you lose the institutional learnings that come from going through the process.
• Do we need to do a CJM for every customer segment? Yes, at least every important one. It may be that some of your customer segments follow the same journey, in which case you can combine them but you don’t want to have CJMs that are an amalgamation of multiple segments. You’ll end up with a bunch of generalities and less useful insights. It’s okay to have the output show one journey with different variations after you’ve examined each segment individually.
• Are CJMs for the entire lifecycle of a customer or for a specific stage? Yes and yes. CJMs can be used at different levels of the customers’ journey. They can examine how customers go through a multi-year journey like the car ownership experience to a more specific journey like going on a family vacation.
• Are CJMs good for finding mistakes to fix or for designing future state experiences? Yes and yes. CJMs can be used to identify gaps in the current state of experiences as well as helping to identify the opportunities for better future state experiences. Depending on your goal, you will likely want to adjust your customer research approach.
• How much detail do we need? It depends on what you are trying to accomplish. The maps shown above are at a level that would help point a company into specific areas for improvement. If you wanted to redesign an area such as rebooking a flight, then you would really want to get much more granular information about the customer journey in that area.

The bottom line: Good things happen when you focus on your customers’ journey