Google Chrome OS Sets Off Customer Experience War

Google recently created quite a stir when it introduced its new operating system (OS), Chrome OS. Here’s how Google describes its new OS:

Speed, simplicity and security are the key aspects of Google Chrome OS. We’re designing the OS to be fast and lightweight, to start up and get you onto the web in a few seconds.

My take: Will Chrome OS destroy Microsoft? No. Will Chrome shake up the PC market? Yes; especially when it comes to customer experience. Here are a few lessons that Microsoft and others can learn from Google’s announcement:

  • Ultrasimplicity is powerful. Most companies compete by adding features to their products. As a result, offerings (like PC operating systems) get bloated beyond the needs of large segments of customers. That’s why there are many opportunities for radically simplified offerings. This approach, which I call Ultrasimplicity, is one of five disruptive customer experience strategies.
  • PCs are just about passé. The world of large desktop and laptop PCs is past its prime. Computing will increasingly happen on smaller, networked devices like iPhones, Kindles, and netbooks. These portable computing devices will need to be designed like fashion accessories and provide near immediate access to functionality.
  • Unmet customer needs are gold. Companies should assume that they aren’t meeting customer needs. With this perspective, firms will continuously hunt for those unmet needs and actively cannibalize their existing products before their competitors do. That’s why one of the principles of Experience-Based Differentiation is Obsess about customer needs, not product features.

The bottom line: Chrome OS will refocus the “computer industry” on customer experience

Congrats to VoC Winners: Experian, Progressive, and Vanguard

Well, it’s been a wild day; the Grand Hyatt was hopping today as we kicked off our Customer Experience Forum.

My opening keynote speech seemed to go over really well. I weaved the story of the customer experience journey together with the story of Dorothy’s journey in the Wizard Of Oz. I actually ended my speech with a rewritten version of the song “Somewhere Over The Rainbow.” I also showcased some data from my new report that went live today called “Customer Experience Boosts Revenue.” I’ll talk more about my speech and that research in future posts.

For now, I want to congratulate the three winners of Forrester’s 2009 Voice Of The Customer (VoC) Award: Experian, Progressive, and Vanguard. We received 40 strong nominations, so these winners did a really great job. They all were adept at the four key elements of a VoC program: Listening, Interpreting, Reacting, and Monitoring and were able to identify significant business results from those efforts. You can download their nomination forms from Forrester’s customer experience blog.

There were so many outstanding nominations, that we named 11 finalists:

  • Cardinal Health
  • CIGNA
  • Experian
  • Gaylord
  • Hyatt Place
  • iRobot
  • Logitech
  • Oracle
  • Progressive Insurance
  • Symantec
  • Vanguard

Voice of the customer is a critical component for just about any customer experience effort. And the trends indicate that VoC will become even more important in the future. A lot of the advances in VoC are coming from innovative work from a number of vendors. That’s why one of the questions we asked was: “What technology vendors or service providers are critical to your success?”

Here’s a shout out to the vendors that were mentioned by the 11 finalists:

Bain and Company, Burke Research, CAHPS, Clarabridge, Cognos, Convergys, ECHO, Healthways, iModerate, JD Power, Lotus Notes, M/A/R/C, Medallia, Microsoft, National Committee for Quality Assurance, NICE, Opinion Lab, Oracle, Radiano, RightNow Technologies, Satmetrix, Somentics, TeaLeaf, Vovici, and Webtrends.

The nominations were loaded with great insights, so I’ll be writing a lot more about what we found.

The bottom line: Congratulations to all of the winners, finalists, and the vendors that helped!

Will An Efficient Culture Destroy Microsoft?

I just read an interview of Microsoft’s CEO Steve Ballmer in the New York Times that really caught my eye. Ballmer was asked the following question: “Fill in the blank. You want the culture of your company to be more __________?”

Here was his response:

Efficient. The right word is efficient. That’s the direction that every business leader is steering their corporate culture. Given the current economic climate and the uncertainty about how long the recession will last, this is a time when organizations need to do more with less, Microsoft is no exception…

My take: For Microsoft’s sake, I hope that Ballmer misspoke. For all of our sakes, I hope that he’s wrong.

I can’t imagine how awful it would be to work in a company if its culture was built around efficiency. Don’t get me wrong, I aim to be hyper-efficient. But that’s quite different from defining efficiency as the cornerstone of your corporate culture.

What type of an environment would it be if the most important thing that employees cared about, were measured on, and got promoted for was efficiency? The answer: Horrible.

There’s no doubt that Microsoft, like other companies, needs to do more with less in this economic downturn. But creating a culture focused around efficiency would be one of the worst responses to this environment.

So, as I said, hopefully Ballmer misspoke. If not, I anticipate a very difficult time for Microsoft as it struggles to retain employees (who get burned out) and customers (who want more than efficiency). And we can say goodbye to any innovation in Redmond. That’s just not efficient.

My suggestion to Ballmer: Redirect towards a customer-centric culture.

The bottom line: Efficiency may be a good goal, but it’s a terrible culture.

Apple Beats Windows, Part Two

When I published my recent post about customer experience in the PC industry, it seemed to have touched a nerve. A bunch of journalists and bloggers have picked up on the results. Since I’ve provided my thoughts in comments and in other news outlets that people may not have read, I’m using this post to share what I was thinking. Here goes:

  • The OS matters. While our research did not isolate what caused the consumer ratings, it would be hard (nearly impossible) to believe that the operating system didn’t play a role in how consumers rated their experiences. So Microsoft/Windows is definitely a part of the reason why the PC makers did so poorly.
  • Don’t blame the OS. I know this seems to totally contradict my last point, but it doesn’t. What I mean is that the PC makers can and should do better — even if consumers seem to like the Mac OS better than Windows. It wasn’t too long ago that Dell was the darling of the computer industry. And, if I remember, they were selling Windows-based PCs.
  • Microsoft gets short-changed.  While the Windows ecosystem needs to dramatically improve its customer experience, I don’t think that Microsoft deserves it’s overly negative feedback. The amount of things that people do every day on Windows platforms and with Office applications is truly amazing. This blog, as it turns out, is written on a Windows laptop.
  • Apple creates zealots. The comments in my blog have been overwhelmingly pro-Apple and anti-Microsoft/Windows. There appears to be a large cult-like group of Mac lovers looking for outlets to voice their devotion to Apple. Microsoft, on the other hand, has converted few disciples.
  • Microsoft wants to improve. Microsoft hired a former Walmart executive to open a chain of retail stores and unveiled its huge Retail Experience Center in Redmond which I actually visited last year; it’s quite impressive. The software giant also has appointed Julie Larson-Green to overhaul the Windows experience

The bottom line: Hopefully Microsoft stays focused on customer experience.

Microsoft Takes A Giant Leap Into Retail

Microsoft has been contemplating a new frontier…

Retail.

Over the past couple of years, Microsoft has recognized that it needs to take a more active role in the retailing of it’s products. It can no longer leave in-person merchandising and selling to retailers. What’s driving the urgency in Redmond to get into stores?

Apple.

Apple has radically changed the paradigm for retailing in technology. Rather than relying on retailers to deliver in-person experiences, Apple stores have revolutionized both the sales model and the service model for technology retailing.

That’s why it’s no surprise that Microsoft just hired a former Walmart executive to open a chain of retail stores. This effort will report into Kevin Turner, Microsoft’s COO (and a former Walmart executive) who says the aim is to

Transform the PC and Microsoft buying experience at retail by improving the articulation and demonstration of the Microsoft innovation and value proposition so that it’s clear, simple and straightforward for consumers everywhere.

This follows Microsoft’s recent unveiling of its huge Retail Experience Center in Redmond. I actually visted the center last year while doing some work with Microsoft on its retail strategy; it’s quite impressive.

My take: The technology market is maturing. Mainstream consumers are now the largest market; not techies. There’s a broad base of customers who want to buy technology products (PCs, phones, MP3 players, TVs, etc) who don’t understand anything about the underlying technology. So the listing of speeds-and-feeds (along with other technical specs) is an outdated retail marketing approach.

Unfortunately, retailers have not kept up with this shift. If you look at the 25 retailers that we ranked in Forrester’s Customer Experience Index, three of the bottom four were electronics retailers (Best Buy, Circuit City, and Radio Shack). This might also explain why stores like Circuit City and Tweeter are going bankrupt. So manufacturers like Sony, Apple, and now Microsoft are taking a lead in finding the right approach.

Here’s some of the things that mainstream technology users need:

  • Plain language about feature benefits to enable trade-offs (why should I care about 60 HZ or 120 HZ when buying an LCD TV?)
  • Products that are easy to setup and provide very simple interfaces for making common configuration changes
  • Easy-to-use decision making tools for narrowing potential products
  • Human advice (through trained employees and social media forums) for making product decisions
  • Access to help for setup, repair, and usage questions

The bottom line: The electronics retail experience is overdue for a makeover

Gen Y Brands Gain, Financial Brands Lose

Interbrand just published its annual ranking of the 100 best global brands. Here are the top 10 brands on the list:

  1. Coca Cola
  2. IBM
  3. Microsoft
  4. GE
  5. Nokia
  6. Totota
  7. Intel
  8. McDonald’s
  9. Disney
  10. Google

Here’s some of the other interesting details from the rankings:

  • Google is the only new entry to the top 10; it was 20th last year. Which company dropped out? Mercedes-Benz was 10th last year and is 11th this year.
  • The listing also provides the change in value of the brands since last year. Here are the biggest changes in brand value:
    • Top gainers: Google (+43%), Apple (+24%), Amazon (+19%), ZARA (+15%), SAP (+13%), and Nintendo (+13%)
    • Top losers: Merrill Lynch (-21%), Gap (-20%), Morgan Stanley (-16%), Citi (-15%), Ford (-12%), and UBS (-11%).
    • The top gainers are what I call “Gen Y brands,” they came to age during the early adulthood of 20 year-olds, while the losers are dominated by large financial institutions.
  • There were 7 new brands on the top 100 list this year: H&M (#22), Blackberry (#73), Ferrari (#93), Giorgio Armani (#94), Marriott (#96), FedEx (#99), and Visa (#100).
  • The highest ranked company on last year’s list that did not make this year’s top 100 was Kodak (#82 in 2007).
  • For fun, I went back and looked at the top 10 brands from 2001. Here they are:
    1. Coca Cola
    2. Microsoft
    3. IBM
    4. GE
    5. Nokia
    6. Intel
    7. Disney
    8. Ford
    9. McDonald’s
    10. AT&T

The bottom line: Just about everyone recognizes this: 

Can Health Plans Provide Better Member Experiences? Yes!

I was a speaker at Microsoft’s Health Plan Executive Forum in Jacksonville, Florida last week. As you might expect, I talked about customer experience.

Dennis Schmuland, MD, Microsoft’s Health Plan Industry Director kicked off the morning with a video that showed how current and planned Microsoft technologies would revolutionize the healthcare experience — for both patients and providers. It was pretty cool; like something from a Sci-Fi movie. You can see the video posted on Microsoft’s HealthBlog.

Next up was Anthony Nowlan, Chief Medical Officer, CentriHealth, Inc., and former Director of the NHS Information Authority. He gave a great speech called “Organizing Health Care in the Information Age.” He started by walking through the history of healthcare starting in the 1800s. It turns out that one of the key problems that we have today is that our current institutions (hospitals, labs, etc) were created in a period where the primary issue was acute care. As Dr Nolan said, “patients came in, got treated, and then they either got better or died.” But in today’s environment, the majority of costs come from chronic care. And you can’t solve the current problem with the old institutions; consumers need to be more involved. So his speech focused on how to use electronic health records to reorganize the healthcare system.

My speech was titled “Health Plan Member Experience: From Enraged To Engaged.” I borrowed some material from Liz Boehm (one of Forrester’s healthcare analysts) to show that member experience was becoming more important for health plans. One of the reasons is that cost containment for chronic care requires some behaviorial changes. But consumers don’t trust health plans for basic interactions, never mind listen to their wellness and disease management recommendations.

I then showed some of my research on customer experience, loyalty, and satisfaction. Here’s a small snapshot of that information:

  • Health plans came in last place out of 9 industries in our Customer Experience Rankings; and were also lowest in each of the individual areas: useful, usable, and enjoyable.
  • The highest rated plan in the rankings, Kaiser, only ended up 75th out of the 112 firms we examined.
  • 40 year-olds give health plans the lowest customer experience ratings.
  • Seniors give health plans the highest customer experience ratings.
  • Health plans have the lowest rating for satisfaction with online interactions and virtually tied for last place in satisfaction with phone interactions.

Of course, I couldn’t leave the attendees without a path to follow. So I explained how they could use Experience-Based Differentiation as their blueprint for improving customer experience.

After the presentation, one of the participants asked a good question: “Can we (health plans) ever have satisfied members, since we need to reject many of their claims?” My answer was “You can absolutely raise satisfaction levels. While you may never be as enjoyable as Borders, there’s no reason for interactions with health plans to be any less useful or usable than with any other industry.”

The bottom line: Health plan member experience is a chronic problem, but it’s curable.

(P.S. I don’t generally write about my work with specific clients, but Microsoft approved this blog post)

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