Posted by: Greg Siefert | October 26, 2009

What is value anyway?

As I interact with executives of mid-sized companies to the Fortune 100, I love to ask this question:  At the core, what do you want to do with our business?

Without fail, the answers fall into four categories:
1)  Attract new customers
2)  Increase revenue by getting people to purchase more from us
3)  Produce loyal customers – customers that keep coming back
4) Reduce our operating/production costs to increase profits

In digging in further, I quickly find that Value is at the center of these responses. We have to demonstrate value to produce loyal customers, to increase revenue by getting people to purchase more from us, and to attract new customers. We have to be committed to delivering value as we reduce our operating/production costs while keeping high product quality.

Let me give you four ways to think about value:
 
Extrapolated ValueExtrapolated Value
The additional revenue that results as an individual customer chooses to continue to do business with a company over time.  This is what many businesses refer to when they speak of loyalty.  The act of coming back is behavioral loyalty.  Attitudinal loyalty implies coming back even when it’s not convenient.

Incremental ValueIncremental Value
The additional revenue that results from an individual customer spending more per transaction on average than they would have in the past.  Increasing incremental value represents gains in share of wallet – many times this is accomplished via the sale of complimentary and add-on products or services.  Instead of one box, they come home with four.

Strategic ValueStrategic Value
The additional revenue that results from and individual customer buying a company’s other goods and services – those unrelated to the customer’s past purchases from this company.  For instance, when a company extends its brands or enters a new line of business, they need customers who give them the benefit of the doubt that this new product or service will meet their expectation even though it is in an area not traditionally associated with the company – Think a few years back to Apple.  They were known for their hardware, but they asked people to buy MP3 players and music from them through this goofy iTunes thing.  That’ll never catch on…Next thing you know, they’ll try to tap into the mobile phone business too…

Social Network ValueSocial Network Value
The additional revenue that results from an individual customer influencing others to buy from a particular business.  This is what happens when a customer becomes an evangelist for your brand.  It is the person’s ability to accomplish viral spread. Isn’t this where we want to be?!

Advertisements
Posted by: Greg Siefert | October 23, 2009

The Four Laws of Customer Experience

So, here’s one of those questions that if you ask 5 people, you would get 5 different answers — “What are we really striving for as we focus on improving customer experience? ”

  • Customer Loyalty
  • Advocates and even evangelists
  • Raving fans
  • Great word of mouth exposure

Each of these is a good answer, but at the core we are really looking to grow our business rapidly and profitably.  Remember, at the end of the day we don’t define success, our customers do.  For us to grow, we need to understand our customers and truly relate to them.  We need to focus our business on creating and delivering experiences that are relevant, meaningful, and memorable to our customers.  A good place to start is with the four laws of customer experience:

  1. Every interaction creates a personal reaction — Too often, we do our customer research, segmentation and targeting based on a view of our customers as rational, logical actors only.  When we fall into this trap, we are missing out on a significant factor.  People are both rational and emotional — in fact, over 50% of all purchase decisions are emotional!  We need to understand our customers holistically.  They are influenced by the same things that we are — the economy, family, faith, success at work, etc.  Every interaction we have with our customers leaves an impression.  Are you catering to real people or just rational actors?
  2. Don’t blindly follow the “HiPPO” — We’ve all been there, discussion a product or service when the HiPPO appears (by the way HiPPO stands for the Highest Paid Person’s Opinion).  It may be for a product feature, packaging, functionality, etc.  That’s what the boss is paid to do, right?  To give their opinion on what those customers really need.  Often times, these HiPPOs make it into the final product simply because that’s what the boss wanted.  The point here is not that the HiPPO is always wrong — that’s not necessarily the case.  The point is to not blindly follow the HiPPO.  Break outside your four walls to truly understand the customer.  Don’t sit around some table getting everyone’s opinion.  Go out into the market to the customers in their natural habitat!  Look at the context in which they use the product.  Look at the context in which they buy the product.  Design it solely around the customer, not based on internal company opinions.
  3. Unengaged employees don’t create engaged customers — OK, the last point was to focus externally.  To understand the customer, you have to focus externally.  However, to deliver a great experience, you have to focus first on your employees.  The customer experience wholly depends on the employee experience.  Don’t blame the employees for a sub-par customer experience…fix the environment.  What is the best place to start?  Make it easy for employees to do the right thing!  Empower employees to make decisions.  Not only will they be more engaged and take on more responsibility, but your customers will have a much better experience. 
  4. You can’t fake it — Customer experience is about a developing a relationship with your customers.  You could craft a great experience strategy, but if your company — from senior management to front-line employees — isn’t completely bought in, you will fail.  Customer experience isn’t just an outward facing facade.  It is a pervasive mindset that looks at everything you do with a focus first on the customer — from sale & marketing to operations to finance to HR, focus on Customer Experience needs to be in your DNA.

Please take a moment and share your thoughts on these four laws.

Posted by: Greg Siefert | July 16, 2009

A new name for the Sears Tower?!

The Sears Tower Renamed:  Top, the granite marker for the Sears Tower.  Middle, the granite marker covered in preparation for the name change on 7/16/2009.  Bottom, the Willis Tower.

The Sears Tower Renamed: Top, the granite marker for the Sears Tower. Middle, the granite marker covered in preparation for the name change on 7/16/2009. Bottom, the Willis Tower.

Having lived and worked in Chicago for a dozen years (my office was kitty-corner from the Sears Tower), I’m wrestling with the announcement that the Sears Tower was renamed today (07/16/2009).  Will the new name hold mystique?  Will it draw people to the building with the highest inhabitable floor?  Will more people come see the new glass balcony on the Skydeck as a result of the name change?

You decide.  The London-based Willis Group Holdings got the naming rights as part of its lease agreement with the real estate investment group that owns Sears Tower.   The Sears Tower is now the Willis Tower. 

As I thought about it, it presents a challenging business decision in terms of customer attitudes.  What company wouldn’t jump at the chance to have such a well known building carry their name?  However, for Chicagoans, the Sears Tower will “always” be the Sears Tower.  I found my initial reaction was very negative toward Willis.  Is this a brilliant move?  Or will there be intense customer backlash?  Well, more than 90,000 people have already joined the group “People Against the Sears Tower Name Change,” on the social networking Web site Facebook.

Will customers eventually embrace Willis?  Or will customers continue to hold the insurance giant at arm’s length?  My prediction is that there will be a very cool reception over the next 24 months.  But, Chicago is a living, evolving city.  In time, people will get used to the new name…and maybe even appreciate the business that Willis brings to town.

For more info, see the MSNBC Article.

Fresh out of college, I went to work for a small technology consulting firm in Chicago.  One of my first customer meetings proved to be one of the most memorable!  I found myself sitting in a most unique office meeting with their technology executive, our business development guy, and another one of our consultants.  Here’s where the fun began.  The executive had both a unique look and quite a bit of personality.  Picture with me a sharp-dressed gentlemen, likely in his early fifties, his chiseled face surrounded by slightly graying hair, slicked back into a shoulder length pony tail.  Every movement he made was fluid yet dramatic. 

As he welcomed us into his office, the combination of his deep, accented voice and his unique look brought images of Transylvania to mind.  The initial part of the conversation was not too memorable…that is until our business development guy started playing with a little metal box on the executive’s desk.

“What” he started (pronounced more like “Vhut”), “What are you doing?”

“Just checking out your business card holder,” Mr. Business Development replied.

The other consultant and I shared a look…oh boy…this is not going the way we thought…but it sure will be interesting…

To make a long story short, after a severe scolding we found what the “business cards” actually were.  He slowly opened the container, pulled out a very expensive cigarette, and placed it in a silver cigarette holder.  In a single motion, his hand glided to the drawer and pulled out a custom Zippo lighter.  With a flick of his wrist, the lighter ignited.  He turned his head to the side and slowly (and dramatically) lit the cancer stick.  

“So…[inhale]…I understand you can help me” he continued as he leaned back in his chair holding his cigarette over his shoulder, turned his head, and exhaled toward some strange vent-like machine in his window.  Yeah…that’s right.  The dude had an iron-lung ventilator thingy installed in his office so that he could smoke inside.  This was starting to feel more like James Bond than Transylvania.

So we gave him our pitch and explained how we could help, all the while making sure our business development guy didn’t touch anything else.  We finished our pitch.

Silence.  A dramatic drag on the cigarette as his eyes bore into us.  Pause.  Head turned to the side and an equally dramatic exhale into the iron lung.  He repeated this another time as he continued to measure us.

Finally he broke the silence.  “Very good (don’t forget the accent).  So, you will travel?”

Picturing a fun international trip for himself, our business development guy jumped right in.  “Absolutely!  We do work around the world: Buenos Aires, Montevideo, Amsterdam… We’d be more than happy to go wherever we are needed.” 

The exec:  “This is good.”  His lips formed a mischievous and somewhat frightening grin as he continued, “Will you travel…[inhale]…[exhale]…even to Baku?”

Without missing a beat our business development guy replied, “Absolutely.  Our bags are already packed.”

The exec’s smile was no longer mischievous; it had shifted and was now menacing as he gave the classic bad-guy, evil laugh.  Then he said, “Interesting.  Do you know where Baku is?”

The other consultant and I, well…our eyes bored into our business development guy trying to communicate “ix-nay on the travel.” Too late.  Our business development guy didn’t quite get the message and jumped in before I could stop him, “We’ll go wherever you need us.  Like I said, we are ready and willing to travel the globe.” 

Looking delighted with himself, the exec replied, “This is good.  My people, they will not even go to Baku.  But you will go?  This is very good.”

Well, it turns out that Baku (which, as a side note, was featured in a James Bond movie) had been under Russian control, but has been quite highly contested as it has quite a bit of oil under its soil.  The hotels walls were riddled with bullet holes and no sane person would voluntarily travel there…especially to do a little technology upgrade.

As this was explained to us, our business development guy quickly changed his story.  “Yeah, these guys love to travel.  Me? Not so much.  But, these guys are ready to go…”

So what’s the point to this story?  As a team, we wanted provide a good experience and good service to our customer.  But we weren’t on the same page in terms of what that meant.  Our BD guy was focused on a great international trip for himself.  Did we really need to be onsite at each hotel to do the upgrade?  Likely not.  Did it really mean that we would ask people to risk life and limb?  Absolutely not. 

At the end of the day, it was apparent to the customer that we weren’t on the same page.  This example is truly an outlier, but we weren’t prepared.  Take some time in your organization to make sure you are consistent in terms of what Customer Experience means – from sales to operations, get everyone on the same page.

Posted by: Greg Siefert | June 23, 2009

Customer Experience Model

Customer Experience Model

Customer Experience Model

I am one to think in models.  So, I wanted to share a customer experience model that I’ve been thinking about. 

At the heart of any business is a model made of three parts:

  1. The business aspect — this filters ideas and brings only the viable, potentially profitable and sustainable ideas to market…at least this is how it should work…
  2. The people aspect — this really refers to the customers who are the ultimate judges as to whether or not a product/service is desirable.  Remember, your management team and employees don’t define your success.  Your customers — the people who want and desire your products/services — define your success.  As a side note, keeping your finger on the pulse of your customers is exceptionally important and something that social media can help with.
  3. The technology aspect — technology makes thing feasible today that were not even imaginable a few short years ago. 
There are a quite a few intersections in this model:
  • Intersection of Business and People — This is where emotional innovation occurs.  Where there is a real connection between the business and the people (customers), two way dialogue will occur.  This will lead to the people becoming more and more loyal as the business listens adapts their portfolio of products/services to the people.  A great balance of desirability and viability are achieved and your customers become your greatest evangelists.
  • Intersection of business and technology — Process innovation is where businesses spend much of their time, constantly on the lookout for cost savings, process improvements, efficiencies, quality control, etc.  This pulls in the opposite direction of the emotional innovation described above.  While emotional innovation is about doing something unique for the customer, process innovation is looking to standardize and create repeatability.  We need to realize that these two intersections are not mutually exclusive and can be balanced.  Unfortunately, many businesses fall into the trap of focusing most of their energy on this intersection instead of taking the time to focus on the people and the emotional innovation.  In other words, the balance is not level, but skewed toward the process innovation.
  • Intersection of people and technology — The functional innovation includes connecting and collaborating with the customers through a variety of means.  It also looks at the features of the products/services and how they can be improved.  This could also be called the design intersection.  It is important to avoid the pitfall of throwing bells and whistles into this intersection just because the technology allows you to (e.g. “just because you can” syndrome).
Each of these intersections is important, but a holistic view is even more important.  A focus on customer experience brings each of these parts together.  For example, it helps you to avoid the “just because you can” syndrome as you ask:  do these new bells and whistles help the people accomplish something or do they just get in the way?
 
Now some questions for you:  What part of this model resonates with you?  Where can it be improved?
 
Posted by: Greg Siefert | June 19, 2009

Can I get some pickle with that?

We had a fast food burger joint open close to our home a few months back. Needless to say, our kids were pretty excited…so excited that we went on opening day. It paid off! They thanked us for coming and gave us coupons for kids meals and a free Big Mac every week for a year.

Well, you’d better believe that I’ve been using that coupon. I pull into a drive-thru and order “I have a coupon for a free Big Mac. Could I get that with extra pickle? I’ll also take a large Diet Coke.” By the way, I can’t tell you how many times the $1 drinks have pulled me in. Great offering because I always buy something more.

Back to the point. All went well for a few months until one evening. I ordered as usual and was told “we don’t put anything extra on free stuff.

My initial thought was bummer. Being somewhat astute and not easily deterred, I quickly asked if they could just charge me a quarter and throw some on extra pickles.

Nope. Can’t do it. We’d have to charge you for the whole burger to put extra pickle on it.

C’mon!

No. We don’t put anything extra on free stuff.

What? You’ve been doing this for three months and suddenly no extra pickle?! Long story short, the manager talked to me and reaffirmed no extra pickle for you (think soup Nazi from Seinfeld). The time they spent telling me now cost them more than the stinkin’ pickles.

I came hope ticked. What started out as a great customer experience – you gotta love 52 free Big Macs – left me frustrated. They would have been better off if they had never given me the coupon card.

Well, the story ends with a good recovery. I went back yesterday and ordered “I have a coupon for a free Big Mac. Could I get that with extra pickle?” The reply was a bright and happy “Absolutely!” Good save. Let’s hope that I keep getting that reply.

Posted by: Greg Siefert | June 16, 2009

Social Media and Our Customers

I had the opportunity to attend Taylor MBA’s session on Social Media with Kyle Lacy from BrandSwag. Social media is changing the way and the speed in which customers interact. How does social media factor into the customer experience? It is a sliver of the overall customer experience, but a very important sliver.

Think about how and when you use social media…we tend to use social media the most in a couple of circumstances:

1) when something extraordinary happens — maybe an example of exceptional service or an incredible product

2) when we feel we have been wronged — when a company doesn’t meet our expectations, or worse, when they treat us unfairly

What are customers saying about your company? How are you leveraging Facebook, LinkedIn and Twitter? If you’re not, I encourage you to rethink your media mix!

See the Taylor MBA’s blog post on Social Media as well.

Posted by: Greg Siefert | June 15, 2009

Launching Springhead

As we’ve been working to launch Springhead, we’ve been on the customer side of a number of services. From hosting and infrastructure to office setup to legal advice, it has been intriguing to observe the differences in how these companies view their customers. One of the companies that I worked with has an excellent focus on the customer. I was impressed with them as they worked with me on the Springhead graphical identity (i.e. our logo).

They listened. They listened very well. They spent time to make sure that my thoughts and ideas were considered. They went through multiple iterations with good interaction and communication between each iteration.

Overall, I’m pleased with my interactions, but one thing keeps nagging at me. As soon as my order was placed, I received a call from my “project manager”. Being somewhat familiar with both project management and sales, I have to tell you that “project manager” was a bit of a misnomer. My project manager began trying to up-sell me on additional services before they had started working and before I had seen any results. Big mistake. This left me questioning where the “project manager’s” focus really was. Are they going to get this done? Will I be nickel and dimed to get the deliverable I want?

Long story short, I’m very pleased with this company and their service. But one interaction left a negative impression. It diminished my experience with them. How does your company do? What interactions might you need to rethink?

Posted by: Greg Siefert | June 13, 2009

So…what is customer experience?

Customers are constantly interacting with your company — on the web, in your stores, with your products, or through your services.  How well do you meet their needs and solve their problems?  How quickly do you anticipate what customers want next?  More importantly, what do they tell their friends or post on their blogs?

Customer Experience is the aggregate of all interactions that a customer has with a company.  From the first impression to the first meeting. From the purchase to the use and support.  Every single interaction forms the customer experience.  You may have a great product, but one bad interaction can spoil the entire customer experience.

My goal is for this blog to explore customer experience and to help others imagine, design, and implement exceptional customer experiences!

Categories