Category Archives: Customer-Centricity

Diagnose Your Customer Culture

Harvard Business Review:

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Originally posted on HBR Blog Network - Harvard Business Review:

What happens when you deliver poor customer experiences and get complaints? You might ignore your customers —  or worse, blame them — and lose them for life. Or you might fix their problems and earn their loyalty. What you and your employees will do depends on your customer culture.

In truly customer-centric companies, all individuals (regardless of their roles) base their decisions and actions on the belief that what’s best for the customer is best for the business. New evidence shows how a strong customer culture drives future business performance and supports market strategies. Our research, based on a quantitative study across more than 150 businesses, spanning various industries and functions, identifies seven cultural factors that drive customer satisfaction, revenue and profit growth, innovation, and new product success. These are important predictors of future results and early indicators of risks and opportunities related to retaining customers and acquiring new ones…

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How Zappos makes sure customers get a great experience everytime

customer service image on blackboard

You see countless articles every day that claim improving a single part of your customer service strategy is the “key” to something. Experts promise how listening to your customers, delivering more timely service, improving employee training and many other things offer a path to providing a better customer experience. The reality is that your customer service is like a machine with many moving parts. These parts include your call center’s hold times, your field sales teams’ ability to make an emotional connection, the helpfulness of information available on self-service portals and more. They all need to function well, and – most importantly – function well together in order to offer an amazing customer experience and rank among the best names in stellar service. Ultimately this requires a customer culture (read more in our new book here)

The most well-known companies in customer service have earned their reputation by recognizing and executing against this reality. This is demonstrated in call center reviewer Ashley Verrill’s recent article, which examined how Zappos perfects quality assurance management for a better customer experience. QA is not typically showcased as a big part of the “machine,” but the Zappos strategies she highlights do more than improve the accuracy and fairness of agent scoring. They also involve the voice of the customer and service reps to improve the experience for all parties involved:

Quality Assurance and Customer Service Reps Join Forces: Each QA team “advocate” is required to spend at least five hours on the floor, taking calls. This helps them stay connected to the real challenges and opportunities reps face on a daily basis and promotes active participation between the two groups.

Scoring Weighted to Reflect Zappos’ Values: (which you can view here): The scores that have the greatest impact on the overall quality assurance score are those in categories that do more to deliver the “Zappos Experience.” The most important factor for Zappos is forging a personal emotional connection with every customer. Also important is the solution to the issue. Knowing what’s most important to your company helps you evaluate your reps based on what matters most.

Self-Check Sessions: Every six months, Zappos evaluates its QA form and asks agents to grade their own calls. This not only helps continue the improvement of QA evaluation – it also empowers agents to voice opinions and innovative ideas.

Involve the Customer: Zappos manages call quality using traditional methods such as traditional Net Promoter Scores, as well as more unique strategies including “sharing great calls” and “customer props.” Again, this empowers the agent to tout an exceptional connection they made with a customer and also gives a voice to the customer, who is invited to give his or her take on the experience.

Custom Coaching with a Clear Path of Progression: Although Zappos has certain standards in place for measuring QA, team leaders are encouraged to personalize training exercises to best fit the learning style of the rep. Providing customized coaching optimizes the agent’s learning potential, interest levels and excitement. Zappos’ leaders take it a step further by outlining exactly how reps will move to higher-tier roles – creating an incentive for reps to continuously be improving their service quality.

You’ll find a pattern with the majority of Zappos’ tactics for quality assurance management: they are constantly creating opportunities for feedback. Whether that feedback comes from the customer, the agent, the QA team or management, all suggestions are welcomed as vehicles for innovation. It doesn’t matter which part of your customer service “machine” you’re working to improve – when you incorporate viewpoints of all parties involved, the closer you get to providing stellar customer experiences.

Driving high value – low cost customer experiences

emerging_customer_centric_airline_indigo

A friend of mine travelled last week from Bangalore to Dubai on IndiGo Airlines. She said it was low cost, with seats that would lean back giving a feeling of more space, along with great customer service. She travelled coach class and yet was addressed by name by the flight attendant.

IndiGo placed its first order of 100 aircraft with Airbus to start its business as a domestic airline in India. The size of this order ensured low operating costs, full maintenance support from airbus and the latest aircraft technology and comfort. In 2005, when other low-cost carriers were working with older, leased aircraft and battling a reputation for inferior service, Indigo inked a deal to buy 100 new A-320 jets from Airbus, purchasing at volume to ensure a lower price and a partnership-type commitment on maintenance. IndiGo’s investment in the training of its staff and its [aircraft] fleet killed whatever difference might have existed between a low-cost carrier and a full-service carrier by offering equivalent service. By 2011 Indigo had neatly 20% of the rapidly growing Indian domestic market. In September 2011 it introduced its first international flight to Dubai.

Indigo turned regular business travelers into loyal customers because it never acted like a budget airline. From the beginning, its purchase of all new aircraft helped it avoid maintenance problems, and superior planning helped it to match or exceed the on-time performance record of its full-service competitors — even though rapid turnaround of its planes was the key to the company making money.

But it also went beyond the basics to reinvent the first-time flyer segment. When Air Deccan, acquired by Kingfisher in December 2007, was struggling to fight the impression that their planes operated like public buses with wings, IndiGo pushed best practices even when there was no compelling reason to do so. In a country where other carriers shared passenger-stair vehicles and the top airline still had to have disabled passengers carried up the staircase to plane height by ground crew, for instance, Indigo brought in larger, handicapped accessible passenger ramps from day one.

Similarly, the company equipped check-in staff with hand-held scanners that allowed passengers without baggage to avoid the dreaded scrum at the counter. And at least in the beginning, flight attendants manning the beverage carts addressed even lowly economy class passengers by name (with the aid of the seating chart).

The strategy paid off: Since 2008, when the company booked its first profit even as high fuel prices and the economic downturn ravaged its competitors, IndiGo’s net income has grown more than five times — from a shade under $20 million to more than $120 million.

With Boeing forecasting that Indian air traffic will grow 15 percent a year over the next five years and that India will require more than 1,000 commercial jets over the next 20, according to the Wall Street Journal, that may just well make IndiGo the fastest growing airline in the world’s fastest growing aviation market.

IndiGo President Aditya Ghosh says India is a hugely under-penetrated market. We have just one commercial aircraft for 1.9 million people. The United States has one plane for every 50,000 people.”

The airline, which earlier ran role specific training programmes like any other airline, decided to merge training into one central operation with three segments: one, functional skills training aimed at specific roles like that of pilots, in-flight crew, ticketing attendants, baggage handling, among others.

The next segment was coaching for customer service and soft skills.

The last came leadership training at all levels.

This last segment of training, designed to encourage all employees to take ownership of customer issues, Ghosh insists, has really helped the airline develop a strong loyal customer base.

Do you have the right skills sets in your organization to drive high value at low cost?

Customer Centric Leadership Practices – Lessons from “the HP way”

the hp way

Source: GIZMODO

In recent weeks I have met several ex-HP employees who told me about the great times they had at HP when the culture embedded by Bill Hewlett and Dave Packard prevailed – a culture of innovation, customer focus and respect for individuals as flesh and blood people.

One told me of his early days as an engineer working in one of the R&D labs in the Test and Measurement Division at Palo Alto. While working on a project at his bench he was expected to watch his colleague working on the next bench and through observation and discussion to see what he was struggling with – then to see if he could solve the problem. If he could, there just might be a lot of other engineers in the marketplace who are struggling with the same problem – and this solution might create a new market.

This practice, or cultural discipline, heightened the awareness of engineers at HP to be looking for problems that their engineering colleagues had that created a sensitivity to the potential needs of their “engineer’ customers. In effect, it made the R&D employees at HP customer focused.

Imagine if accountants in CPA firms or in financial services firms adopted the “next bench” theory. Or IT technologists in IT service firms practiced it. Or HR professionals in large corporations did it. We might just see stronger customer focused cultures emerging organically.

What are the opportunities for “next bench” thinking and practice in your business?

Does Intel have the right culture for the future?

intel's_customer_culture

In a question asking him to summarize the Intel culture, outgoing CEO (in May  2013), Paul Otellini said:

“Egalitarian. Merit based. That came from Noyce. Anyone can speak in a meeting, but you must speak with data. That came from Moore. Take risks. Embrace innovation, but do it with discipline. That’s Grove. World-class manufacturing came from Barrett. I’ve added a marketing component.

The other thing unique to Intel, at least in Silicon Valley, is the mix of older and newer employees. Intel has more 20-year-plus veterans than any Silicon Valley company. I’ve been here 36 years. Yet the average age of our global workforce is 25. Tradition and innovation. We like both.”

Intel’s culture seems to do everything to drive facts and reasons ahead of position and formal authority. One of Intel’s values is something like “constructive confrontation”.

Among large technology companies, only Intel has mastered CEO succession multiple times. Founded in 1968, Intel has gone from founders Bob Noyce and Gordon Moore, who both served as CEOs, to Andy Grove, Craig Barrett and now Paul Otellini without losing its status as the world’s preeminent chip manufacturer. It has had some major tests of its culture.

In the mid-1980s Intel’s memory chip cash cow was being wiped out by Asian competitors and its future star, the microprocessor, was still building. Intel faced scandal in 1994 when it mishandled news about flaws in its Pentium chip. In 2006, the newest CEO, Otellini, had to lay off 10% of workers in what now can be seen as a prelude to the Great Recession.

In 2006, when Ortellini took the helm, he tossed out the old business model. Instead of remaining focused on PCs, he pushed Intel to play a key technological role in new  fields, including consumer electronics, wireless communications, and health care. And rather than just microprocessors, he wanted Intel to create all kinds of chips, as well as software, and then meld them together into what he called “platforms.” He went about reinventing Intel as PC growth began to slow.

In addition top to bottom reorganization, he made big changes in the way products are developed. While previously engineers worked on ever-faster chips and then let marketers try to sell them, there are now teams of people with a cross-section of skills. Chip engineers, software developers, marketers, and market specialists all work together to come up with compelling products. Otellini is convinced such collaboration leads to breakthrough innovations.

Otellini has strengthened Intel’s financial performance and maintained dominance of its industry. The challenge facing the new CEO will be to keep pace with the changing mobile, tablet and social media environment. Intel’s culture took a battering with the major staff cuts in 2006 and again substantial cuts in 2011.

Will it be resilient and adaptive enough with a new CEO to strengthen the future focused, customer oriented culture that was a focus of Otellini’s reign? Has it retained its innovative capabilities? Only time will tell.

4 ways Electronic Arts navigated major Tectonic Shifts impacting their Customers

tectonic_shifts_in_technology_and_customer_impacts

Many industries today are experiencing market and technology shifts in their marketplaces that are somewhat like the clashing of tectonic plates that cause earthquakes and tsunamis. Industries including publishing and printing, education, telecommunications, media, advertising, health and retail are all facing massive change. How does an organization navigate a techtonic shift?

Electronic Arts Labels (EA), the world’s leading developer and publisher of interactive entertainment  faced a techtonic shift in 2007 with the rapid change occurring from retail packaged goods products to new digital delivery platforms. The new CEO at that time, John Riccitello, presented his vision as a burning platform – you are in the middle of the ocean on an oil platform that is on fire. You either hold on and ride it down or you jump off and face the unknowns of a swirling ocean.

In his article titled “Getting into your customers’ heads”, Krish Krishnakanthan finds out what EA had to do to navigate this techtonic shift. To transform from a retail products business to a digital supplier using new platforms such as social networks, mobile phones and tablets.

The key success factors:

1)   Measuring and tracking customer usage of games, external gaming-publication reviews (critical review success is linked with sales performance). For that part of the business with direct sales to consumers, they use technology to measure customer interactions and the lifetime value of each customer.

2)   Changes in the competitive landscape with low entry barriers and the emergence of small game developers has required  EA to restructure its business to give decentralized profit and loss control to product line/brand managers to enable them to compete with specific identified competitors.

3)   Enhanced communication and collaboration between development teams and marketing teams to co-ordinate go-to-market strategies.

4)   Scanning the external environment through consumer blogs and social media to identify new shifts in consumer opinion, competitive plays, new technology impacts on customers and economic forces affecting the market. This has required a culture change by EA. One which centers their whole business around the customer. An adaptive, future focused customer culture has enabled EA to cross the chasm created by the techtonic shift they faced.

Staying on the “oil platform’ would have meant riding the business to the bottom – out of business. Is your industry facing a techtonic shift? If so, check where you stand on “customer culture”. Is it strong enough to be adaptive and resilient to the storm ahead?

How to attain premium pricing in a discount world – Lessons from Starbucks Steel Card

starbucks_premium_steel_card

How do some businesses manage to attract premium prices while others struggle to get sales at any price?

The answer is a combination of branding, customer loyalty and the creation of customer value.

Companies that invest in creating a brand that stands for something and delivers on that are able to attract high prices Why? Customers trust those brands, they connect with them emotionally and feel comfortable working with them. They will pay more for the feeling they get from doing business with those companies, in short they are getting more value and are willing to pay more.

Who would pay $500 for a steel card that only buys $450 worth of coffee? 5,000 loyal Starbucks customers did just that – all within 24 hours. In fact Helaine Olen reported that a card sold for $1074 on ebay soon after.

What drives this behavior? Certainly there is an aspect of “exclusivity and conspicuous consumption” but more than that these are customers that have connected with the value Starbucks offers. Starbucks is part of their lives, it has connected with them on a level beyond a simple business transaction.

Great companies that create unique value for their customers consistently and have a culture that really values customers will attract premium prices.

What can you do to create an emotional connection with your customers?