By Greg Roche, Director, TLF Research
This year’s conference was held at the Sofitel Hotel at Heathrow and, as usual, featured a large array of interesting and varied speakers. This article highlights some of the most interesting speakers who made the strongest points about how to improve business performance through a strong focus on customer experience. Amongst the most enlightening was Anthony Thompson, founder and Chairman of Metrobank, which is featured in a separate article in this issue of Customer Insight on page 12.
Disney Institute: Nicola Lauria
Disney, of course, is long renowned for its focus on customer experience but the Disney Institute is a fairly recent innovation designed to spread the gospel to other organisations. Courses are offered at the Institute in Florida or they will send trainers into other companies to deliver the message on site.
One of Nicola’s strongest messages, and one that we have long preached at The Leadership Factor, is that you should focus on ‘little wows’. Everyone wants to ‘wow the customer’ but ‘big wows’ are not sustainable, you just can’t come up with enough of them, and for most businesses, operating on narrow margins, they’re not an economic proposition on any everyday basis. But ‘little wows’ can be delivered day in day out to huge numbers of customers. For example, one of the most common questions at Disney is “What time is the 3 o’clock parade?”. Of course, there is an obvious answer, but a little wow answer would go something like this............
“where you’re standing right now it will be passing at around 3.25 but I think you’d get a better view if you went to (explain exactly), where it will be better for photos / better for your children to see, and it will be passing through there are around 3.15. Is there anything else I can help you with?”
Another very common customer query/problem is where they have left their car. Hardly surprising in view of the acres of car parks. Disney solved the problem by parking customers strictly by time of arrival and recording that information. So if you ask an employee (sorry, cast member), all they have to do is ask what time you arrived then they can direct you to exactly the right place. It also means that car parks can be labelled by time of arrival rather than by instantly forgettable letters of the alphabet.
As Nicola said, “Are we responsible for that? Strictly no, but of course the real answer is yes because it’s all part of the customer experience. And you really don’t want their last experience to be a bad one. Above all, never forget that it’s all the little experiences that make up the big one.”
QinetiQ: Shane Slater
Shane Slater is Sales and Marketing Director of QinetiQ, a company that was originally a spin-off from the Ministry of Defence. The company tests weapons for the MoD and for other organisations such as arms manufacturers. The customer base is worldwide and tends to be very high value accounts.
In his presentation Shane emphasised some fundamental principles that are absolutely essential to a successful customer satisfaction measurement and improvement programme.
The lens of the customer
There’s no point measuring and improving things that don’t matter to customers. Not if you want to satisfy them anyway. Shane stressed the importance of allowing “long term, high value customers to determine what is important to them in the customer relationship”. This is typically done through exploratory research at the outset of the programme and with high value B2B customers this would usually be implemented through face to face depth interviews of approximately 1 hour in duration. This enable the interviewer to fully draw out (without leading the respondent) everything that is important in the relationship with the supplier prior to ranking all the factors for their relative importance. The most important customer requirements (typically 20 in B2B surveys) would then go forward to the main survey questionnaire. Depending on the size and value of the customer base, and how many different segments are involved, 12 to 20 depth interviews will usually be sufficient for this purpose. When the main survey is conducted, the 20 requirements would be scored for importance across a larger sample to generate a more statistically reliable measure of relative importance. Since exploratory research is normally updated only once every three years, scoring importance as well as satisfaction in the main survey also enables the company to monitor whether there are any significant changes happening in what’s important to customers.
In complex, high value customer-supplier relationships of this type, it is very unusual for only one individual in the customer’s organisation to be evaluating the supplier’s performance. Companies conducting customer satisfaction surveys therefore need to ensure that they cover all the roles in the DMU (decision making unit). As well as the main contact (often in Purchasing), companies should ensure that they also survey, where relevant, individuals in Technical/Engineering, Production, Quality, Sales/Marketing and R&D/Design roles as well as respondents from Senior Management. Don’t forget, even if you have little or no contact with some of these people they may be affected by your product or service, evaluating it and influencing colleagues’ view of your performance. Another useful purpose of the exploratory depth interviews is to gather feedback on the kind of individuals that are involved in the DMU. Even for the main survey, QuinetiQ conducts face to face interviews with key accounts right across the DMU.
Shane made a very strong point about many organisations wasting their investment in customer satisfaction programmes. He pointed out that following customer satisfaction surveys:
50% explain the findings to employees
30% make decisions about things to change as a result of the survey
10% actually implement those changes
5% make the changes and tell customers they’ve done it.
What a waste. QuinetiQ, of course, is one of the 5%! Our research and observations over the years have found that following these four steps after a customer satisfaction survey is what will really make it pay for organisations. And the best returns, because they are so easy to do, will be derived from the two communications steps – telling employees what they need to know about the survey and telling customers about what you’ve learned and what actions you’re taking to address their concerns. In fact, evidence shows that merely telling customers these things will improve their satisfaction. Shane also pointed out that to get the maximum benefit, especially in high value B2B markets, customer feedback should be personal, relevant to the individual concerned and using the right channels. For example, some individuals will be happy with an email whilst others, perhaps because they are very high value customers, or perhaps because you have a very close relationship with them, may prefer face to face feedback.
Frank Capek: Customer Innovations Inc.
Frank is founder and CEO (Chief Experience Officer) of Customer Innovations Inc. He has spent 25 years helping organisations to deliver more effective customer experiences based on his own research into “the cognitive and neurological foundations of how people experience the world”.
Frank’s starting point is that companies need customers who:
Return more frequently.
Are willing to pay more.
Are willing to pay a premium.
Adopt new service offerings.
He says that it doesn’t matter how much companies listen to the voice of the customer, how satisfied they are, how much they are willing to recommend you or how easy you are to do business with if your investments in customer experience aren’t focused on influencing customers’ profitable behaviour. He maintains that many companies just try to improve things, often in an unfocused way, and that this just leads to “better sameness”.
Frank’s advice to organisations is “don’t try to boil the ocean”. Instead, he says that organisations should “major in the majors”. This is what we would call identifying and focusing on a small number of PFIs (priorities for improvement). And we agree with Frank that it’s crucial to select PFIs that will bring the best return on investment – i.e. the biggest increase in profitable customer behaviours at the least cost. Frank’s four points above provide a good guide to profitable customer behaviours, or more simply, focus on Harvard’s 3Rs:
A good example from Frank’s work was an exercise he did to improve customer satisfaction with the crowded lifts in a New York skyscraper. There were plenty of multi-million dollar solutions such as installing more lifts, but after talking in depth with users, Frank came up with a solution that was very effective in improving customer satisfaction at a fraction of the cost. He installed mirrors in the lifts, giving the impression of more space and engaging customers (e.g. scrutinising and sprucing up their appearance, or people watching), which took their minds off the previously negative aspects of the lift experience.
His example of “majoring on the majors” was Fairfield Inns – a low cost hotel that focuses everything on delivering a great customer experience on two key points of differentiation. Cleanliness and friendliness of staff. And if these ‘majors’ are things that are very important to your target customers, it doesn’t matter if you are not so good at something less important, such as room service in their case.
Unilever: Nick Iles
Nick Iles is Global User Experience Director at Unilever. He’s strongly of the view that happy employees make happy customers and that to achieve this you should treat employees as customers. Sounds familiar. Where have we heard that before? Harvard’s Service profit Chain of course – see diagram. Even though Unilever has 165,000 employees across 180 countries and over 100 brands, the company measures internal customer satisfaction with the users of all its internal services such as HR, IT, Finance, Travel and Facilities. Like Frank, Nick emphasised that it’s necessary to major on the majors after the survey and like QuinetiQ he stressed the importance of closing the loop - “telling users what we intend to do as a result”.
Nick says that all of this makes his huge and diverse collection of employees feel part of the big Unilever brand, and contributes significantly to improving employee satisfaction and employee productivity which, together, drive up customer satisfaction and profits. Improvements are further re-enforced by the fact that the managers of the internal services have their bonuses linked to the relevant internal customer satisfaction scores.
Tele2: Nina Gyubbenet
Tele2 is one of Russia’s leading telecommunication companies, providing mobile services to more than 19 million customers in 37 Russian regions. One of it differentiators is providing high class customer care and Nina, as Customer Operations Director, is responsible for delivering it.
The theme of Nina’s talk was how they train their call centre operators to use empathy to reduce customer complaints and to increase customer satisfaction with complaint handling. The first step was to define key empathy behaviours and then thoroughly train all staff to understand and adopt them. Empathy levels were then measured at the beginning of the project and again a year later. Empathy behaviours were added to employees’ appraisals and into employees’ and supervisors’ bonus model.
The goal is to move from processing the customer in a transactional way to a greater emotional involvement which is achieved through improved listening skills, understanding and empathising with the customer’s emotional state, showing interest and being supportive and friendly. Tele2 compiled the empathy behaviours into an eight step model for complaint handling:
Say ‘thank you’.
Get to the heart of the problem.
Get the necessary details.
Say when the problem will be solved.
Apologise for inconvenience and compensate.
Make sure the customer is satisfied.
Be open. Welcome complaints.
According to Tele2, their extensive focus on empathy behaviours has resulted in customer satisfaction with complaint handling increasing from 40% prior to the improvement programme to 90% now.