Category Archives: Market Culture Inaction

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 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


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?

Can Nokia regain its customers and former glory?


As Nokia’s new chief executive, Stephen Elop, took over in September 2010, he faced a formidable task: to regain the company’s lost ground in the smartphone segment of the global phone market, especially in the United States, while maintaining its worldwide dominance as the largest maker of mobile phones.

His biggest obstacle, according to Mr. Hakkarainen, a former manager responsible for marketing on the development team, as well as two other former employees and industry analysts, may well be Nokia’s stifling bureaucratic culture. In interviews, Mr. Hakkarainen and the other former employees depicted an organization so swollen by its early success that it grew complacent, slow and removed from consumer desires.

“Nokia in a sense is a victim of its own success,” said Jyrki Ali-Yrkko, an economist at the private Research Institute of the Finnish Economy. “It stayed with its playbook too long and didn’t change with the times. Now it’s time to make changes.”

Elop’s assessment of Nokia in February 2011:

“We fell behind, we missed big trends, and we lost time. At that time, we thought we were making the right decisions; but, with the benefit of hindsight, we now find ourselves years behind.
“There is intense heat coming from our competitors, more rapidly than we ever expected. Apple disrupted the market by redefining the smartphone and attracting developers to a closed, but very powerful ecosystem.”
“The Shenzhen region of China is able to produce phones at an unbelievable pace. By some accounts, this ecosystem now produces more than one third of the phones sold globally – taking share from us in emerging markets.”
“Our competitors aren’t taking our market share with devices; they are taking our market share with an entire ecosystem.”
“We poured gasoline on our own burning platform. I believe we have lacked accountability and leadership to align and direct the company through these disruptive times. We had a series of misses. We haven’t been delivering innovation fast enough. We’re not collaborating internally”

During the last 2 years Elop has swept away many layers of Nokia’s previous organisational structure. He has refocused the business on leadership (managers taking decisions and responsibility) and markets (innovation driven by people competing in key mobile phone segments). Decision-making has been delegated to local/national teams rather than relying on decisions by an overly-centralized senior management team. Goals and incentives for the senior leadership team are now more transparent. The new strategy brings clarity and a sense of direction to Nokia.

Nokia’s recently launched new 620, 820 and 920 Lumia Windows 8 smart phone range has succeeded in garnering generally positive reviews. It is changing the perception that the embattled company may yet regain its former glory as the world’s premier mobile phone maker says Ray Shaw who provides a review of the pros and cons of Nokia phones compared with its rivals.

But will this be enough? In order to survive and prosper against Apple and Samsung in the smartphone market, Nokia will need a customer-focused culture throughout its entire business (not just at the front end) to drive innovation and sustained growth and profitability. This requires embedded behavior change that goes beyond restructuring, beyond a refocused strategy and beyond decentralized decision making. It requires a completely new mindset where there is an understanding and belief, translated into behavior, that’s what is best for the customer is best for the business.

Imagine your business faces the challenges that Nokia faces. What would your priorities be?

The wrong way to fire your customers – Lessons from Wells Fargo

firing your customers

Not all customers are created equal and unfortunately from time to time as a business’s strategy changes or market conditions alter it is necessary to cull certain customers.

Now this may sound strange coming from a customer centricity advocate but this is the reality of running a successful business. After all with out profits there is no business.

However there is a customer centric way to fire your customers and it does not mean kicking them on their way out the door! Every customer is valuable to a business and that includes past customers.

Customer centric businesses treat all customers with respect and when it is time to part ways with a customer, the company is still looking at ways it can do that in a value adding way. What does that mean? It may mean making recommendations to customers on alternative companies that can help them solve their problems.

A professional colleague of mine who runs a small international consulting business recently told me the story of how he received the message his business was no longer wanted by his bank, Wells Fargo.

He had been doing business with Wells Fargo International (an internationally focused unit within the bank) for more than 10 years when the following message arrived randomly in his in box:

wellsfargo customer firing letter

An interesting way to part ways no doubt! Now I don’t know all the details behind the decision to stop doing business with these customers or this specific consulting firm’s financial arrangements with the bank but it appears like a missed opportunity.

To throw away a 10 year business relationship because of an internal decision about the profitability of a certain part of the bank? Surely customers that received this message would be welcomed by other parts of the Wells Fargo?

What do you think?

What is Hewlett-Packard missing in creating its future? Only the most important ingredient!

the missing piece - customer culture

Almost all organizations develop annual plans and budgets. Many have strategic plans that are designed to chart their way through the next 3 to 5 years. A few use scenario planning to identify possible future environments and plot strategies and contingencies to deal with different scenarios as they occur.

In Chaotics, authors Philip Kotler and John Caslione demonstrate that it’s a simple and profoundly important fact that the practice of management needs retooling. They go on to provide business leaders with a system for navigating the turbulent times we are facing.

The tool that most companies have missed in working to create their futures is the adaptive, future oriented, customer-centric culture that enables them to prosper in an environment of continuous change and turbulence.

Hewlett-Packard is one of many examples of missed opportunities and lack of attention to cultural fit – both in terms of the absorption of their acquisitions such as its latest debacle with Autonomy and through losing its customer-centric culture led by a succession of CEOs that lost focus on what has made HP great – its people and their relationships with customers (supported by quality products).

HP cannot re-create its former greatness unless it revisits the fundamentals of developing an adaptive, future-oriented customer culture. To do this it must start by measuring its current level of customer-centricity in all its businesses – in all functions and in all groups. This will tell it where its strengths and weaknesses lie and what it needs to do to create the culture it needs for the future. These measurement benchmarks will tell HP which parts of the business are most at risk to current and future turbulence and what it must do to mitigate those risks. They will also tell HP what they can expect in trends in business results (revenue, profit, customer retention, new product success) in different parts of their business.

If HP does not use the right diagnostic tools to measure and benchmark its level of customer culture which includes its adaptability and future orientation it will be missing its most important element for creating its future. It will be making decisions in part blindfolded and it will be relying on luck, rather than well founded judgment to secure its future.

Does your business have a culture that can secure its future? Do you systematically measure it in a way that ties relevant cultural attributes to future business performance?

Why some companies succeed without focusing on customers

Ben Wignall, when owner of the Tasmanian firm, Blue Banner Pickles, used to get a lot customer complaints. Each time Ben’s response would be the same – he put his prices up.

The complaints were from supermarkets that were not able to get enough stock of the famous (in Tasmania only) pickled onion brand. Ben figured that if he put up the price it would dampen down demand and the complaints would disappear. He was right – and very profitable. Blue Banner had 90% of the Tasmanian market for pickled onions – a virtual monopoly – and, like other monopolies, it could dictate the terms and not be too concerned about focusing on customers.

Ben was in for a shock when he expanded into other geographic markets in Australia where there was strong competition and his Tasmanian strategy would not work. He hadn’t realized that the remote island state of Tasmania acted as a market fortress where he could act as a monopolist – but not elsewhere. If you have a monopoly you can probably succeed without focusing on customers….

In fact where everyone in an industry provides a poor customer experience it is still possible to be profitable. Forrester’s Customer Experience Index shows this to be the case in the wireless services industry in which all competitors show similarly low scores. Customer experience is not a differentiator and other factors like market footprint and price dictate results in this growth industry. As my college marketing professor used to tell me:

“Even Donald Duck could run a company profitably in a rapid growth market!”

Dominant market leaders can survive offering poor customer experience for a time due to better distribution or a broad product range. Inertia carries these companies through. But a time comes when these factors are not enough to retain leadership. We have seen this with the successful emergence of online (only) banks and online retailers that have decimated competitors in those industries that could not provide a consistent high-level customer experience.

These are some of the reasons why companies can be successful while offering poor customer experience.

“Make sure you know why you are winning.”

If it is not based on good customer experience, it is likely you are on living on borrowed time.

How long can you continue ignoring your customer’s experience?

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.

Is Apple heading for a fall?

Apple Maps Virtual Reality?

One of my favorite authors Jim Collins in his book How the Mighty Fall describes a 5 stage model of decline that many companies pass through on their way out of business.

The first stage he describes is the “Hubris Born of Success”. Hubris is an ancient greek word that means extreme pride or arrogance.  It is an overarching estimate of one’s own importance that one is blind to the views of others or to potential dangers to one’s own position. In the great Greek tragedies hubris invariably precedes destruction.

Unfortunately we have seen an example of that from Apple with a decision to replace Google Maps with their own inferior mapping software. Now don’t get me wrong, I am a massive Apple fan, I write this blog on a Mac and have spent a small fortune on Apple products over the years. However if the decision to provide a product not ready for prime time wasn’t bad enough, Apple actually replaced one that was far better (Google Maps). This is a sure sign of Hubris. Here are a few recent apple maps user images:

apple maps highway image

apple maps puts burger king in the wrong place

Interesting new store design for Burger King!

Why would Apple make this decision?

Perhaps Apple believes it can do it better? Maybe it wants to own every core application on its iPhone platform? Certainly Google and Apple have become more like competitors than collaborators over the past few years. This is thanks to the Android cell phone operating system that competes with the iPhone.

What ever the reason, it’s a decision that does open the door for the competition. It’s also an example of the types of decisions that can lead them down the wrong path. Would Steve Jobs approve of the Apple Maps release?

Now Apple has always been a challenging company to partner with (I spent a number of years working with them in my days at HP). However when they deliver outstanding innovative products many things can be excused. What happens when they stop delivering? Unhappy customers and partners hungry for alternatives will rapidly look elsewhere.

Apple is the world’s most valuable company at almost $700bn in market capitalization, its iPhone business alone is worth more than Microsoft’s total business. It changed the smartphone market forever. But Hubris is a dangerous affliction. Will this be Apple’s fatal flaw?

What do you think, is this just a blip on the radar or a signal of something more serious?

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.


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?

Why Tesco’s Fresh and Easy concept is struggling in America

fresh and easy miss understands the american consumer

The world’s 3rd largest retailer, UK based Tesco, has been closing some of its “Fresh and Easy” stores in California this year. The Fresh and Easy chain was launched in 2007 with the goal to provide consumers with smaller neighborhood style stores with a variety of fresh organic and reaonably priced prepared meals.

So far Tesco have invested $2billion and opened more than 150 stores in California and are yet to break even.

No doubt Fresh & Easy has run into market obstacles, including California’s weak recovery from the recession but more importantly some of its merchandising practices (commonplace in Britain) have dumbfounded many American consumers.

For example, Fresh & Easy initially wrapped much of its produce in cellophane to preserve freshness. But skeptical U.S. shoppers — accustomed to examining their broccoli and lettuce up close — mistook the wrapping as a way to hide inferior products. American consumers assume produce in plastic bags is not as high quality as those in bulk. This led to an initial lower quality perception that has been hard to shake.

Adding to Tesco’s worries is the fact that many American consumers are conditioned to the idea that”big is better”. While smaller stores maybe more personal and convenient, Americans are used to driving distances to large retail warehouses (think Costco, Walmart etc) and often value bulk buying and competitive pricing over convenience.

There is also strong competition from revamped Safeway stores and the continued excellence displayed by Trader Joes and Wholefoods that really understand their customer base.

So where does this leave Fresh and Easy? They still have time to reposition themselves and find their place in the market but Tesco’s shareholders are getting impatience so they will need to find out what American consumers value most about their store’s value proposition and turn up the volume!

Similarly to Home Depot in an earlier post, Tesco should have started smaller and not ramped up until they knew they were hitting their sweet spot.

A culture that is customer centric, starts with the customer, understands what frustrates them about the current market offerings, builds a solution, tests it, then scales it.

Can Fresh and Easy survive?