Category Archives: Employee Engagement

How a customer culture frees employees

Symbol of Freedom

There is a great quote in the book I am reading at the moment, The $100 Startup  by Chris Guillebeau that goes something like:

“The quest for freedom comes from pursuing value for others.”

The more value we can create for our customers the greater our financial and personal freedom to choose what we want to do in life.

How does building a “customer culture” relate to this idea?

When we work in an environment with certain norms of behavior and expectations we generally conform to these. It is a form of social pressure that drives group behavior. If you happen to be lucky enough to work in a company that promotes a customer focus you will be exposed to some awesome things.

You will see how the best business people in the world develop a deep understanding of their customers. You will be exposed to their ways of thinking, their processes and how they lead around this important idea. That exposure will help you to build your own customer focus skills.

As you develop your own skills you will increasingly be able to provide more value to your customers, colleagues and to the business you work in. You will spend your time creating real value rather than on activities poorly aligned with customer needs and result in wasted effort, resources and destroy motivation.

Freedom follows this success and employees are free to work on ever bigger and bolder challenges. So what company would you rather work in? One inspired by how to change the lives of customers for the better or a lesser alternative?

Why most companies don’t deliver great customer experiences

Poor Customer ExperiencesWe are all customers and we know what a great customer experiences feels like. We also know that a great customer experience influences our behavior, we want to talk about it with friends and we feel good about doing business with the company that provided it.

We know all this and yet we see time and again examples of poor experiences, just like this Range Rover customer above taking revenge on the company that clearly did not create the right car ownership experience. Why does this happen?

In our work with clients we have found a number of key reasons:

1. Culture – culture drives everything in an organization.  It creates the expectations for how employees behave. It can be left to chance or actively managed. The culture develops not from what people say is important and valued but by what is visibly shown to be important through the way people behave.

For example many companies say that customers are important but then will make decisions that will directly disadvantage the customer in the interests of the business. Bank fee increases, hidden charges, confusing pricing models are great examples of companies trying increase profits without providing customers with any more value.

This is usually the result of short term profit pressures. The message: customers are important until we need to make our numbers – then all bets are off!

2. Goaling – what’s measured gets done. The metrics a business uses will drive behavior, if none of those metrics include measures that are important to customers, people will not focus on the impact they are having on customers.

3. Hiring – hire people that buy into the company’s mission and actually want to add value and contribute to delivering on it. Specifically put hiring practices in place that filter out those that can’t connect their work with customers. Test potential employee’s mindsets, do they have customer friendly skills like the ability to listen, accept feedback, empathize with other people’s positions.

4. Silos – silos can be great, they drive efficiency and specialize expertise but when they become too competitive and an “us and them” mentally develops collaboration is crushed and customers will suffer.

So what do companies with strong customer experiences do right?

Improving the customer experience is about changing a company’s culture.

Companies that can achieve a customer culture take improving the customer experience as seriously as improving financial outcomes.

Our studies of organizations around the globe that have built strong customer cultures have revealed some major themes:

Strong and visible leadership

Leaders are not only committed to the customer experience but also able to instill that commitment in the rest of the organization. There are usually two primary  leaders involved in the process – a CEO or business unit leader who sets the vision and a head of strategy or customer experience who helps execute the strategy. In addition a guiding coalition or customer engagement council that brings in representatives of the broader leadership team it established to oversee progress.

These leaders commit to changing the way they do things in a way that sends the right message to the organization – that customers are important.

A clear mission, vision, and values

A clear purpose beyond “profitable growth”, one that actually does inspire and connect with people emotionally and is contextualized in a customer frame is crucial. This should drive a clear set of behavior standards that capture the intent of the organization and create accountability for customer service and the customer experience among staff members. Amazon’s mantra is “save customers money” and it drives everything (more on this here)

These are not just words on a page. Rather, companies must reinforce these beliefs and behaviors at employee inductions, coffee talks  and the regular team meetings. Companies should use real customer examples to ensure that the mission, vision, and standards resonate throughout the organization.

Customer Immersion

In larger organizations people get disconnected from customers, they lose site of the value being created and what its actually like to be a customer. A process of regular customer immersion sessions helps executives and employees regain that connection. This may include call center sessions, customer visits, bringing customers into internal planning sessions and so on.

Consistent Communication

All messages should incorporate customer focused elements so that managers and staff see the customer experience as a strategic objective that is as important as other financial outcomes. It’s essential that companies consistently communicate what constitutes the right customer experience not only in the strategic plan but also in job descriptions and performance evaluations.

Buy-in from all staff

Defining the reasons for the change and the personal value of being involved in a customer culture change initiative is crucially important. All staff need to understand the reason for the shift in focus and how it will benefit both customers and the business. Staff then ultimately need to see it is in their own self interest to change the way they go about their work.

A way to measure culture change

External and internal measures can be used to assess whether a company is actually changing, the image below shows the relationship between the internal measure of “Customer Culture” relates to the external measure of customer satisfaction and ultimately profit growth.

Customer Culture Foundation Pyramid

A customer culture can be measured using the Market Responsiveness Index which allows companies to see the progress they are making against a benchmark of companies around the world.

A message to leaders

Improving the customer experience is about changing a company’s culture. This change is the most powerful, legacy-defining step a leader can take to improve the performance of a business and the engagement of employees. Senior executives must not only take responsibility to make the customer experience a priority but also must allocate the necessary time and resources to make it a reality.

While there is work involved, it does not necessarily need to be expensive and the payoffs are enormous.  Show me any massively successful company in almost any industry and 8 out of 10 times they have a strong foundation based on a customer culture.

4 ways customer centric leaders demonstrate they care

Customer Centric CEOs

It is a well known fact in the marketing world that many customers decide to do business with other organizations simply because they believed the company did not care about their business. It’s a feeling, not a product characteristic or benefit deficiency that can often drive customers away. On a purely rationale level it makes no sense, they got what they paid for, why not continue doing business with the same company?

This same concept undoubtedly applies to the leadership of customer centric organizations. Leaders that really care about their employees and their customers demonstrate this through their actions.

Some great lessons come from Rick Silva, the CEO of a quick service restaurant chain called Checkers and Rally. Based primarily on the East Coast and South of the United States the chain first came to my attention through the show “Undercover Boss”.

CEO of Checkers and Rally's rick silva in "Undercover Boss"

Lesson 1: DEMONSTRATE you actually CARE.

“People are our most important asset” is a cliche often used by many leaders but it is not usually followed up with specifics. If people are your most important asset what are you doing to demonstrate that? What culture have you created, are people respected for the value they bring? Is collaboration seen as an important capability that is role modelled from the top?

Rick Silva was undercover at one of his 200 restaurants when he observed the manager of the store barking orders at staff, the environment was tense, one based on fear rather than hope. Rick could tell pretty quickly the culture in that store was toxic. He decided to shut the store down then and there.

Lesson 2: If its NOT GOOD ENOUGH for CUSTOMERs stop doing it and GET IT RIGHT!

The other side of the story is the impact on customers, Rick could see the results first hand of a poor store environment. In his case this meant slow service, poor quality food and lack luster customer interactions. Basically in the quick service restaurant business if staff don’t want to be there eventually customers won’t want to be there either.

Lesson 3: Give your employees WHAT THEY NEED TO BE SUCCESSFUL.

The next day Rick visited a new store, one with a high energy customer focused manager. She would go out of her way to make sure customers were happy but was hamstrung by something as simple as an intercom system that actually worked. It was almost impossible to hear the orders from customers on the intercom, something Rick experienced first hand while working to drive through ordering system.

Lesson 4: PEOPLE WANT TO BE HEARD.

Be brave enough to solicit and act on feedback. Many leaders are afraid to get honest feedback from employees, they don’t want to open a “can of worms” or distract them from their work. The reality is employees want to be heard by their leadership. Our company conducts many internal surveys and interviews as part of our consulting practice and it is amazing to see the participation rates and length of open ended responses we often receive.

Rick Silva in “Undercover Boss” was told by one of his employees that staff on the shop floor should participate and be rewarded for a job well done in the same way managers were recognized. Rick listened, recognized that the need made sense for employees and the business and took action to build an incentive program for all employees.

Are you willing to listen and take action?

“Culture is not the most important thing, it’s the only thing” – Costco’s Jim Sinegal

The Costco Experience

Customers walk in to buy six months worth of toilet paper and walk out with the latest flat screen TV and a case of French Champagne.

Where else would this type of consumer behavior be possible but at Costco, the US’s most successful warehouse club/retailer.

Costco has an interesting mix of customers, it tends to attract more affluent customers in as great a volume as lower income customers. It is very selective about the products it chooses and is always varying the merchandise on offer.

Customers tend to shop their regularly and come back for that intangible feeling that is created by the store’s atmosphere. It is always busy, goods are stacked in large warehouse style pallets, there is a “racetrack” style circuit that shoppers are guided through which means that get to see virtually everything on offer each visit.

Why is Costco successful?

One of the key reasons is Costco’s ability  to allay all the fears consumers have when making purchase decisions:

1. Will I get the right product for my needs?

2. Will I get the best price available?

3. Will the product be high quality

Costco takes the risk out of purchasing by having one of the most generous product return policies on the planet, I recall seeing a women return a vacuum cleaner that was at least 5 years old and considerably used. She was refunded – no questions asked.

Costco’s pricing is always tracking pricing of their competition both online and offline and driving hard bargains with suppliers to make sure they are super competitive. They mark up their products by 15% so if they buy at the right price that sales price will always be very competitive.

Costco carries well know often premium brands (they even sold Apple products for a time), their own Kirkland brand has built a reputation as a high quality store brand that reinforces Costco’s value leadership position (great quality/great price)

This strategy puts customers at ease, confident they will be getting great value on high quality products.

Another part of the strategy is to sell in bulk which means consumers buy more than they usually would of particular products. When consumers see the pricing they can get per unit on bulk purchases they can’t resist.

A powerful customer focused culture.

Jim Sinegal, Costco’s former CEO, in a recent CNBC documentary on the “Costco Craze” described the secret of Costco’s success was its culture. Jim has created a culture where there are no divisions between leadership and staff, everyone is on the same page when it comes to understanding Costco’s customers and what makes their model work. Every employee knows their role in creating the right environment for customer’s to have the “Costco experience”. Employees are paid fair wages (higher than competitors) that reflect their importance in contributing to the customer experience.

As CEO he is constantly on the move visiting Costco’s 580 stores across 9 countries every year, getting direct feedback from customers and his employees as to what’s working and what is not. Remember this is a $89 billion business.

How many CEOs set that tone for their organizations?

See more on the CNBC documentary below:

Inside the Box: What’s the secret to Costco’s success?

AND if you want to build this capability in your organization check out our MarketCulture Academy.

What is the purpose of business?

What's the purpose of business?

Ask anyone this question and you will get a variety of answers, the most common being to make a profit. While certainly to make a profit is a requirement I don’t believe it is a business’s reason for being.

Most businesses start out with a problem that needs solving. This problem is one usually experienced by many others. The business develops services and products to solve this problem better than any alternative and WHAMO it has something that people will pay for!

Unfortunately what happens over time is the focus of the business becomes the profit it generates rather than the problems it solves for customers. This often results in short term profit maximization at the expense of customers rather than for their benefit.

The outcome of this short term profit focus often results in toxic cultures where internal groups work against one another rather than for the benefit of the entire organization. The original purpose of the business is lost and employees become disconnected.

By realigning the business with its customers and rallying around a single focus, maximizing outcomes for customers, businesses can find their way again and produce even larger profits.

Remember profit is the RESULT of creating the best possible outcomes for your customers not the other way around.

If you want to create this type of culture in your company, take the Market Responsiveness Index and find out where you stand today.

Employee engagement is simply not enough

Engaged Employee

Employee engagement is an important measure for many organizations. It does provide an indicator as to whether employees are willing to go the extra mile in their work, something that is only driven by passion and meaning in what you do.

However, in today’s business environment it is not enough.

Why? Customers don’t really care how engaged you are in your work unless your are providing them with something valuable.

It reminds me of a trip I took to Paris years ago. My wife an I decided to catch a train from the Gare de Lyon to the south of France and I needed some help to get on the right train. Recognizing an information center, I walked in to find it empty apart from 3 staff at the counter.

Now my french is not as good as it should be (having a French mother!) but I could understand that the 3 staff were passionately discussing their weekend. This went on for about 3 or 4 minutes while I stood patiently infront of them. When there was finally a break in the conversation I tried to get their attention. One of the employees finally begrudging came to answer my questions. Ironically she refused to speak English so I was forced to muddle my way in French to finally get the answers I needed. It reminded me of the quote:

“This job would be perfect if I just didn’t have to deal with customers”

Now I recognize the french have some of the lowest scores for customer satisfaction in the world but my point here is that these employees were fully engaged in their work, no question they seemed very happy to be there. However they had not connected their work with their real reason for being there, to serve customers.

I am not against employee engagement but the goal needs to be higher than that. Employee engagement must intersect with customer engagement for it to be a worthwhile initiative.

The link between customer focus and employee engagement

Employee Engagement and Customer Focus

Customer focus and employee engagement are two sides of the same coin.

Clearly if your customers are going to be satisfied it takes an engaged workforce that is passionate about their work and holds a strong desire to deliver great experiences.

What we have found to also be true however is that employees become disengaged when they lose meaning in their work. This meaning can only come from recognition and acknowledgment from customers (whether internal or external).

In our work with our clients we have found when increases in customer focus occur (measured with our MRI tool) this is followed by increases in employee engagement (measured with the Gallup Q12 tool).

It is the result of getting on the same page as to the purpose of the business, namely creating customers and the personal satisfaction that comes from doing valued work.

What has your experience been? Does customer focus and employee engagement run in tandem in your company?

Does your leadership have a monopoly on brainpower?

Monopoly on customer focused brainpower

In many organizations the leaders act as though they have all the answers.

In customer focused cultures the leaders recognize that great ideas can come from anywhere and their job is to create the environment in which creative thinking can flourish.

Who better than front line people to suggest ideas on how customer service can be enhanced? Why not ask finance how to improve the billing experience?

Unfortunately many organizations ignore this powerful resource by simply not asking or even worse asking and not taking any visible action on feedback received.

Customer focused cultures are closed loop environments where honest feedback is sought out, processed, acted on and communicated back.

I found a great story relating to this issue posted by Craig S. Fleisher on the Competitive Intelligence  forum.

To summarize:

A major international pet food manufacturer had been number one in its market space for decades; however, it had run into a period of market share erosion due to, among other things, new-fangled competitors who developed “gourmet” brands.

The CEO tasked their R&D and Marketing departments to work together to create a new product that could reverse this adverse tide. The R&D people went right to work looking at the composition of ingredients in all of their competitors’ foods, hoping to identify those “secret” ingredients that would help create a new success. They and their marketing colleagues “benchmarked” all of their competitors’ products.

About 12 months after the CEO’s challenge, the group had produced their newest product, which all of the data told them was going to be a huge hit and would help them regain and even add to their market share totals.

The product was launched with all the textbook marketing support a product manager could ever ask for. Coupons were given out, contests were held, web and media spots purchased, events held, celebrity spokespersons giving endorsements, and so on.

A year after its expensive launch, the new product barely registered in the marketplace. It had failed to achieve even a 1% share of its niche.

One late afternoon, the CEO called his executive team into one of their quarterly meetings and started asking questions of all his experienced executives who were a part of this task force about what had happened. Every one of the executives trotted out their reports, PowerPoint slide shows, pages of impressive looking statistics, and the like. The CEO heard for nearly an hour about city-by-city sales figures, competitor reactions, ad pick up rates, pricing considerations, channel efficiencies, etc.

Finally, after the marketing head had finished his spiel, the custodial staff member who had come into the room to clean and tidy it reluctantly chose to open his mouth. He commented, with a shaky voice, “I think I know what happened. I brought home several samples of the stuff you had laying around the offices and gave it to my dog Blackie (a big Labrador who was known for his ravenous appetite). You know what happened next? He sniffed it, took a few kibbles, and walked away. He never would go near his bowl as long as that food was in it. He hated it.”

The smartest guys in the room had clearly focused on the competition at the expense of testing its product ideas with customers and it took the company cleaner to point out their mistake!

Does your leadership welcome input from staff and customers?

Energizing your employees with internal marketing – Part 2

This is part 2 of an interview with Sybil F. Stershic, an expert on internal marketing. (Click here for Part 1)

3. As marketers, how can we incorporate internal marketing tools into the way we do our jobs?

I advocate two types of internal marketing tools. The first type involves what I call the “Employee-Customer Link” – find ways to connect employees with customers. For example, I encourage sharing general customer information, along with the results of any customer satisfaction research and complaint tracking, with ALL employees. Employees need to know who your company’s customers are … why they do business with you … how they use your products & services … and what they think of you. Too often customer information and insight is kept within the marketing, research, and/or sales functions. But the more your employees know about your customers, the better they can serve them. Another way to forge the employee-customer link is to include employees in customer visits or customer events, where appropriate. Some companies even set up “adopt-a-customer”- programs where employees reach out to customers to better understand their needs. These programs enable employees to connect with customers as real people, not just faceless names and account numbers.

The second set of internal marketing tools relates to strengthening a company’s “Internal Service Culture” based on the reality that internal customer service drives external service. These tools are used to encourage and reinforce collaboration, support, and communication across the organization so that employees work effectively with each other to achieve marketing and organizational goals. For example, one company organized a job-shadowing initiative where employees took turns spending time with other employees in different departments outside their respective functions. This effort enabled employees to better understand how their work – individually and collectively – impacts customers and the bottom line; i.e., it reinforced the message “We’re all in this together.” Marketers can be role models for internal collaboration by being inclusive in the planning and implementation of brand and marketing strategy – communicating with, educating, and providing the training and reinforcement that all employees need to understand and effectively deliver the brand promise.

4. What are some of the inhibitors to internal marketing and how can they be overcome?

I’ll comment here on what I consider to be a major inhibitor: the lack of top management commitment and involvement. Consider the popularity of “Undercover Boss” – people are hungry for a real connection between top management and employees.

In such situations, I tell people they need not wait for management to get a clue. If you don’t have the authority to implement internal marketing at the macro level (i.e., across the organization), you can still have an impact at a micro level – you can apply internal marketing on a department, division, or business-unit level. I encourage people to involve other departments at the outset, but if you’re unable to enlist human resources, administration, operations, etc., in internal marketing, you can go it alone. Sometimes all it takes is for one department to start; then when others notice the difference (“Hey, the folks there actually seem to enjoy their work!”), internal marketing can spread throughout the organization.

5. What is the best place for companies to start an internal marketing program?

Start by talking with and listening to your employees. Ask them what gets in the way of their doing their jobs effectively; then brainstorm what can be done to overcome those barriers. You can also ask them to put themselves in the CEO’s shoes and identify one or two things they would do to improve the organization. Another great conversation starter is this question: Would you refer a friend to work here?

In addition, review the results of your current customer satisfaction measurement. What are your customers telling you in their responses to how well the company is taking care of them? If you don’t have such customer and employee research, then invest in it.

Internal marketing involves listening and responding to both employee and customer concerns. Keep in mind that the way your employees feel is the way your customers will feel – and if your employees don’t feel valued, neither will your customers!

For more on internal marketing get hold of Sybil’s book , Taking Care of the People Who Matter Most: A Guide to Employee-Customer Care and visit her blog: Quality Service Marketing Blog

Energizing your employees with internal marketing – Part 1

Sometimes we forget how great customer experiences are created. They are the result of employees that really care passionately about making a difference and delivering maximum value for customers.

In our work we often see companies that have corporate cultures that unfortunately work against this innate goal. Most people want to do the right thing for customers but sometimes their environment makes it harder than it should be. This is where internal marketing can play a role.

The following are the first two questions from an interview with an expert on this subject and a fellow AMA instructor, Sybil F. Stershic.

1. Can you tell me more about what internal marketing entails? How do you define it?

It’s marketing inside an organization to engage employees in delivering a positive customer experience – take care of employees so they can take care of customers, including co-workers who are “internal” customers.

Internal marketing is a strategic blend of marketing, human resources, and management to ensure organizations provide the resources and reinforcement employees need to take care of customers. But don’t be misled by the “marketing” label, since any manager can apply it.

2. What are the trends driving the increased interest by companies in internal marketing?

There are several:

  • With increased commoditization and a cluttered, crowded marketplace, smart companies realize their core differentiation comes from their employees. Think about it – any innovative product or service introduced by Company A today can be easily copied by Company B tomorrow. But the one thing Company B and other competitors cannot duplicate is the relationship Company A has with its customers.
  • Another reason for interest in internal marketing is the intense focus on employee engagement, especially considering how the economic downturn over the past few years has contributed to higher levels of disengagement. Employees are tired of being told to “do more with less” and many are just biding their time until the economy improves and they can change companies. I’ve seen research indicate that only 21% of workers are fully engaged in their jobs (if only one out of five are fully engaged, then what are the other four employees doing?). And more than one-third of employees admitted they’re partly-to-fully disengaged. Gallup estimates the cost of actively disengaged employees to be an incredible $300 billion in lost productivity! We can’t afford to keep working this way.
  • Related to the engagement issue, I’ve also found that despite the amount of corporate restructuring and downsizing that’s occurred over the past several years, organizational silos still remain. The result is many employees feel disconnected and disenfranchised.

In part 2 we will look at how marketers can incorporate internal marketing into their activities…