Category Archives: Market Culture Inaction

How a customer culture makes or breaks new product success: A lesson from Comcast

For those of you familiar with our work you will know that we successfully validated the link between a customer centric culture and new product success. Our chart below shows the links between our 8 dimensions of a customer centric culture and the key business performance outcomes.

8 Dimension Performance Links

Essentially organizations that develop a cultural focus that is obsessed with customers, outperform everyone else in the markets in which they play.

I just came across a great example of how this can work in reverse for a company that has not developed a customer culture – Comcast Cable.

Comcast recently announced a major new product – they are now a cell phone provider in the US market:

Comcast New Product Intro

Here is the reaction I found in some comments people who saw this announcement on LinkedIn (the majority of the comments were along the same line….):

Comcast New Product Intro Reaction

This is of course only anecdotal evidence, however, it is going to make it tough to make this product launch a success with an undercurrent of negative feelings towards the experiences many customers have had with the brand in the past….

How you treat your current customers today will have a massive impact on how they will respond to new product introductions in the future. 

Build your company’s customer culture today to ensure you continue to be successful in the future. Learn more in the Customer Culture Imperative, our award winning book.

What happens when you don’t have a corporate culture obsessed with customers – Lessons from United

united_man_removed

A man is forcibly removed after not giving up is pre-paid seat on a United Flight

We witnessed one of the most extreme examples of what can go wrong in a business that has truly lost sight of its purpose.

As a former United Global Services member (United’s top tier for frequent fliers) I was appalled at how badly United handled a relative routine situation that probably happens multiple times a day in various cities across the US. What on first pass looked like the removal of a potential terrorist happened to be a paying passenger who was also practicing physician.

United sometimes over sells airline tickets in order to make sure they fill their flights and remain profitable. I am not against this practice, it makes business sense. However when this impacts customers, (and it inevitably will) this becomes a true test of an organization’s customer centric culture. Will it do what’s best for the customer? (A customer centric view) or will it protect a short term myopic view of its profits for that particular flight (a transactional view).

In this case United choose its policy and procedures over doing the right thing for its customers. Clearly there was an upper limit on what was available to be offered to make this situation right for their customers. United claims they offered $1000 to passengers to take another flight so that crew members for another flight could board to go to another plane – there were no takers. Instead of upping the compensation to a point that passengers felt like it was a fair deal, they decided to pick passengers based on their frequent flier status and other connecting flights. Three left peacefully although clearly unhappy and one refused resulting in the social media and traditional media storm that came after a video showed the passenger being forcefully removed.

Company Centric CEO Reaction – Oscar Munoz

Those of us that work in the culture space know that the CEO and top team set the tone and shape organizational culture.

Oscar’s initial response was to apologize for having to “re-accommodate these customers”. While externally he made attempts to diffuse the anger at the situation internally he sent a memo to employees that defended the crew’s actions, calling the passenger ‘disruptive and belligerent’ and praising his staff for going ‘above and beyond‘.

united_comment_twitter

I understand he wants to stand behind his employees, support them and not throw them under the bus for this incident but really he was trying to “protect” the company and the United Brand. This message also reinforces poorly thought out policies that do not get to the heart of what great companies do – they have a culture that puts the customer first.

Finally, two days later Mr Munoz has accepted responsibility for the disgraceful incident:

“I continue to be disturbed by what happened on this flight, and I deeply apologize to the customer forcibly removed and to all the customers aboard………. “No one should ever be mistreated this way.”

A colleague of mine recently relaid an experience he had in a very similar situation on an Emirates flight. He said they just kept increasing the enticement to get of the plane. Eventually enough people took up the offer. They ended up giving away 2 business class return tickets from Australia to Dubai  as well as accommodation plus $US600.

This price was small compared to what United will now go through…..

United takes a $255 million dollar bath.

The value of United has fallen by $255 million as a result of this one incident and the bad press and social media storm surrounding it. How much were they offering passengers to deplane again?

Eric Schiffer, CEO of Reputation Management Consultants, termed United’s handling of the incident “brand suicide.”

“When you go onto a United flight, you shouldn’t have to be concerned there will be blood or you will get slammed in the face,” Schiffer said. “I think you will see an effect on sales from those who are disgusted by the gruesome action. And it’s catastrophic for a brand’s trust.”

No doubt United will lose customers and it deserves to, what comes next is a question of leadership and culture.

If all employees have a customer centric mindset and are empowered to do what is right by the customer this would not have happened.

That’s what we do at MarketCulture. We help companies understand the importance of putting the customer at the centre of the organization – a mindset that establishes the idea that “What’s best for the customer is best for the business”

Are you making life easier or harder for your customers?

A_frustrated_customer

The credit department of most organizations is quick to ask customers to pay their accounts – particularly if they are overdue. If you get a call from a certain cable company in the US and are asked to pay your account, it should be easy to do so – but it is not! The options you are given as a customer by the caller are:

  • you find your invoice and pay it
  • you go to a shop and pay it or
  • you go online and pay it

Each of these 3 options require you to do something – taking extra time you don’t have. The person calling you on the phone is not able to either send you another invoice (since you can’t find the original one) or take your payment by credit card. Their reminder call has already taken up your time and you are obliged to spend more time.

A simple change in process would add value for you as a customer. The current process reduces the value of your relationship with the company.

If customer relationships are important to your business find out if your finance department adds or reduces value for your customers. It may be inaccurate or confusing bills for the customer, difficulty in paying bills online or in person, unhelpful customer service people or confusing terms and conditions relating to payment. If it reduces value then you are at risk of losing customers through their frustration and dissatisfaction.

Being customer-centric is just as important for the finance department as it is for the marketing, sales and customer service groups. They need to have a view that they are not only collecting money, but they are in the business of retaining satisfied customers.

Without a strong customer culture, this behavior will continue, unquestioned as its just the way we do things around here

Don’t let this be the case in your company!

Macy’s Customer Experience: the good, the bad and the ugly.

RETAIL SALEMacy’s, like most retailers, has frequent sales to generate store traffic and boost sales. Here is an account of what happens in- store based on customers’ experiences.

The good: If something is purchased just a few days prior to an upcoming sale, Macy’s will offer the customer the sale price for the items purchased before the sale – that’s good!

The bad: The administrative process for sales assistants to record these pre-sale purchases at the sale price delays the customer 10-15 minutes for the procedure to be carried out. If there is a line of people having this done (which is common due to the shortage of staff on the floor) then a customer can be waiting 30-40 minutes. The pre-sale purchased products are put away for the customer to return to collect on sale day – that’s bad!

The ugly: The customer must return to the store during the “sale” period to collect the goods purchased pre-sale. Again, a line of people waiting for the sales assistant to go out back, locate the goods, bring them back to the counter and process the transaction – that’s ugly!

Why is it like this? The alternative can be such a better experience – either online or in stores that have streamlined processes and found added value to make it a much better experience for customers.

At Macy’s it seems that none of the executives or store managers have actually “walked in the shoes of their frustrated customers”. If they had they would be asking the questions:

What do we have to change to simplify this process for staff and shorten the wait for customers, knowing we are always short of staff on the floor?

How can we improve the customer’s experience while they are waiting in line?

What innovations can we introduce that will enhance the customer’s buying experience?

This is so basic, yet to even ask these questions requires a complete mindset and cultural change starting with senior leadership and through all levels of the organization. If Macy’s and similar stores can’t do this they will accelerate the shift to online buying and hasten their own demise.

You can read more on what it takes to become a customer centric organisation in our award winning book, The Customer Culture Imperative.

78 Years of Customer’s Trust Destroyed in an Instant

vw_up_in_smoke

Source: The Economist

One of the most dramatic instances of breaking a promise to customers came during this past week as VW admitted to deliberately misleading regulators and customers about its car exhaust emissions.

More than 11 million vehicles had been fitted with software designed to trick emissions testers. What the hell were they thinking? Clearly not what we see from customer centric organizations that live by the motto – “What’s best for the customer is best for the business”.

If that one phrase had been part of the culture at VW it might have stopped what has turned out to be a multi-billion dollar problem. According to the Economist  they have set aside more than $7bn to resolve the issue.

This massive betrayal is not only going to impact customers but employees around the world will lose their jobs through no fault of their own. No doubt it will be a massive blow to the morale of those employees still left.

When companies align their interests with those of their customers both profit, surely it is the only way to conduct business in the future?

 

How does your business compare with America’s 3 worst industries?

Frustrated Customer

The state of customer service in 3 US industries is driving customers to distraction.

3 Industries That Desperately Need Customer Service Makeovers

In 2014 Comcast, the cable company, “won” the annual Worst Company in America competition as voted by Consumerist readers. The state of customer service has been so bad for so long that consumers are skeptical to new announcements about improving customer service. Even the recent announcement that a long serving executive, Charlie Herrin, has been appointed as Comcast’s new senior vice president of customer experience has been met with some derision.

The related industry of pay TV-Internet providers including Time Warner, DirecTV and Verizon is also known for poor customer service and consumer complaints that the industry players lack real competition.

Studies also show how frustrated and dissatisfied consumers are with wireless providers including AT&T, Verizon, T-Mobile and Sprint. A vote at Ranker.com placed AT&T at the top of the list of “Companies with the Worst Customer Service.”

These 3 industries are the tip of the iceberg. There are many more that deliver a poor customer experience and do not seem to be able to overcome the roadblocks.

Is your company like one of these? Are you finding roadblocks to improving customer experience across all the organizational touch-points you have with your customers? The chances are that you do not have buy-in from all parts of your business, other priorities are taking precedence and your customer experience is not improving at the rate or level that you want.

What’s your response? Are you adopting an ad hoc approach to plugging the weaknesses which is eating up all your time and showing little progress? Are you spending time at endless meetings trying to persuade cynics of the importance in taking a “customer” approach or are you really looking for a solution that works?

There is only one way to get a solution that counts and can be sustained. You must first identify why customer experience is poor. To do this you must get insights about your customers’ needs and behaviors and what you must do to deliver value that satisfies them. There is only one way to act on this – to identify weaknesses in your customer-focus culture and take action to strengthen it. If you don’t act on this you won’t fix customer experience problems. We have found through extensive research that the right action to strengthen customer-focus culture will provide your business with valuable insights that will improve customer experience and increase customer retention and revenue.

How? You must start by measuring your customer-focus culture. If you don’t measure it, you can’t manage it. This will show the source of your customer experience problems and create a focus for all in your business and relevant functions to act on a permanent solution. It will galvanize buy-in from those areas that are resistant. There are usually clear, simple and quick actions you can take. These actions will strengthen the customer experience mindset and habits around creating more value for customers with enhanced customer experience.

If Comcast is finally serious, its new senior vice president of customer experience will need to take the actions proposed above. If he wants a proven roadmap and methodology to introduce real customer-centric change into Comcast he can find it in The Customer Culture Imperative: A Leader’s Guide to Driving Superior Performance.

Stop doing stupid things to customers

stupid_things_companies_do_to_customers

A good friend of mine in Sydney recently relayed a story I have heard many times over. Yes it involves buying a car and yes the experience was less than ideal to say the least…..

This particular story comes down to three underlying emotions – fear, trust and anger.

Here is what happened:

My friend’s wife decided on the car she wanted at a local car dealership. The car was actually a demo model on the lot and had everything she was looking for apart from leather seats. She told the sales rep she would take the car so long as the seats could be upgraded to a black leather with a white colored highlight on the trim. Of course this could be done – “no problem just sign here!”

When the car was finally ready for delivery, my friend’s wife went to pick it up and noticed the highlight was red rather than white. When she mentioned this to the sales representative he suggested she had requested the red rather than the white. I guess this is often where many customer service problems begin – mis-communications….

Unfortunately this is also where the emotions kick into gear. Perhaps out of fear (loss of commission, loss of job, loss of face) the sales person stupidly persisted with the suggestion that this customer (my friend’s wife) had made the mistake and essentially it was up to her to cover the cost of any changes. The customer understandability did not respond well to being told she made the mistake – there was an immediate loss of trust. This always leads to anger and frustration on the part of the customer.

This is where the death from a thousand cuts begins. Many people take the attitude that its just one customer with one problem, it will just go away. When emotions are involved things don’t just go away they are remembered vividly and recalled often. This customer will never have a good thing to say about this dealership for the rest of her life. She will actively recommend against going there to her circle of influence.

In the future the dealership will miss out on business not only from this one customer but the many customers she and her husband influence.

All this for a few hundred dollars on the part of the dealership to make things right. It’s obvious you have to think of this as a marketing investment rather than a customer service cost.

As a leader at your organization what are you doing to make sure your people are not doing “stupid things” to customers? Do you have the type of culture that reinforces the lifetime value of customers?

What do you think?