Syed's Customer Experience Blog

EFM or CIA? the answer is CEM

It has been refreshing of late to see some of our friends in the analyst community have an open debate  regarding whether it is appropriate to continue to categorize solutions such as ResponseTek as EFM (Enterprise Feedback Management) or by a newer term CIA (Customer Insight & Analysis). You can read more about Forrester’s perspective on EFM on Andrew McInnes’blog here, and Bruce Temkin’s perspective on the terms on his great Customer Experience Matters blog here.  EFM is a term formalized by the CRM group at Gartner back in around 2001 and you can read all about its genesis here.

In 1999 when ResponseTek started using the term CEM (Customer Experience Management) and we defined it as, "the people, process and technology strategies focused on monitoring all customer experiences across the customer lifecycle with the aim of connecting frontline employees and management to the actual customer experience to improve the quality and consistency of those experiences."

Back in 1999 no one else was talking about CEM, it was all CRM and when Gartner did start looking at the kinds of things ResponseTek and a few other companies were doing they eventually defined it as EFM in 2001. I always had a problem with Gartner definition of EFM and what it encompassed as I found it way too narrow a definition compared to the actual conversations we were having with clients. EFM always seemed more like a proxy for a ISO 900x system than something focused on customer experiences and employee behaviours.  In 10 years I can't remember a single client that has talked about their objectives as being the implementation of a EFM system. Our clients have always spoken about their goals in terms of "connecting to customer, improving quality, satisfaction, consistency, etc." I believe everyone has been aware of the framework that EFM embodies but always recognized it as a subset of the broader goals covered by CEM or VOC strategies. At ResponseTek, we have always considered EFM to be a subset of CEM and EFM solutions are a subset of the capabilities that most leading enterprise CEM vendors can offer.

As for CIA I think it is too early to tell whether this has legs (read more here). I know and respect Bruce and he has done a huge amount to getting the customer experience space understood. If Bruce's objective was to start a dialogue and challenge the relevance of EFM then I think he has done the job. However, I am not sure we need another term when CEM and VOC are still ill defined and expansive in the topics they cover. I believe that Bruce and Ed Thompson over at Gartner have some of the best thinking on how the CEM space fits together and I hope they can find a way to rally around a single point of view in relation to CEM.

As for the EFM vs. CIA  debate I would say the answer is irrelevant at the moment because clients are not using either, EFM because it is outdated and CIA because it is too new. For me and our clients it is all about CEM and Voice of the Customer but I am not an Analyst so you don't have to listen to me ;)

Syed

 

Rethink your Customer Value Management (CVM) strategies before it is too late.

Today’s competitive business environment means consumers and businesses have seemingly endless choices and products are commoditized quickly. Despite these challenges businesses must still strive to deliver growth in revenues and profitability.

Unfortunately businesses that are struggling to improve profitability are often guided to focus on the “profitable customers” or “high value customers”. This is often grounded in a misguided view that it is impossible satisfy all of your customers so you should just try to satisfy the high value ones. This approach is termed Customer Value Management (CVM) and although it seems logical it has some very severe side effects for the business.

The main problem with CVM is the message it sends out to employees and the effect on corporate culture of saying that, “we are not going to give everyone a great experience only customers that are high value”.  This gives everyone in the business a message from the top that great customer experience is optional depending on the customer value to the business. Once this message is in the psyche of a business it is very difficult to remove and it will impact all your customers over time.

Customer value management is not necessarily a bad concept in theory but it is very difficult to operationalize without impacting a company's brand perception. Focusing on servicing and retaining the “right” customers may help short-term profitability, but is unlikely to deliver sustainable growth, since resources are directed at servicing a narrow sub-set of potential business rather than building a large number of satisfied customers and customer advocates.

Customer value management also makes it too easy to justify poor customer service by writing off the “wrong” customer segment. Finally, by effectively ignoring a proportion of your customers, you will successfully motivate many of them to churn away from your company. Worse, if you give customers a bad experience, they tend to tell other people about it.

Today more than ever before customers love to share their experiences. We all know how easy it is to rant or rave on twitter, facebook, myspace, etc.. The challenge here is that when customers talk they don’t care about their own "customer value", they don’t know which segment they fit into, they just talk. And it is likely that your most valuable customers will be reading about your brand from the least valuable ones.  This is not a good situation.

So I think companies need to take a long hard look at how, where and why they use Customer Value Management strategies.  These strategies coupled with information in poorly executed CRM systems are probably doing more long term harm than good, both to the brand and the growth potential of the business. 

In the age of social media that we live in companies need to focus on customer experiences not customer value. Investing in delivering good, consistent experiences across the customer life-cycle will deliver far more value to your shareholders and be more sustainable than focusing on only serving high value customers well. Unfortunately delivering a customer experience focused strategy is much harder than a customer value strategy and perhaps that’s why companies have taken the CVM path in the past. The good news is that customers are not going to stand for that approach in the future because now they have a voice and it is getting louder!

Syed Hasan

CEO

ResponseTek

Customer insight strategy: Think Small.

Most small businesses still collect customer insights in real-time.  Every time a customer steps into a store, the owner can watch where the customer goes, offer help, and ensure they’re satisfied. Small businesses ask customers what they’re looking for and what they like, all as part of a casual conversation. 

Informal as it may be, most small business owners will tell you that these conversations are the heartbeat of the business. The information they collect from customers every day influence every aspect of their business, from staff training to purchasing to display.

Unfortunately, most large businesses have lost this connection with the customer. The conversations might still be happening at the front lines, but unlike small business, the customer conversations are not adding intelligence to the business. Valuable customer insights are lost. 

Companies typically think of the value of customer insights in a strategic sense for competitive positioning; hence, billions of dollars are collectively spent on market research to gain some insight from customers, even if those insights are skewed or manufactured due to the built-in constraints of surveys, focus groups and mystery shopping. 

There’s little value in “arms length” relationships that fail to recognize the sophistication, knowledge and technical competence of the customer. Big business needs to recognize that advances in technology now make it possible to capture these conversations once again and use them to make business – and the people who drive it – smarter about the way customers are engaged, every day.

Given the chance, customers will use phones, IVR, SMS, email, the web – and yes, even face-to-face interactions –  to tell you what they want, when and how.  At ResponseTek, we are helping our clients absorb, collate, analyze and distribute customer insights – both structured and unstructured – so they become part of your company’s customer intelligence  By opening up as many channels of communication as possible to collect customer insights, companies can stop viewing insights as problems, and start seeing them as opportunities for innovation.

We have seen that companies that recognize the need for continuous front line customer insights ( example: Lastminute.com) have a greater chance of getting back to the mentality of the continually improving and adjusting small business owner. The biggest challenge? Getting companies to recognize this as the preferred alternative to ‘traditional’ paradigm of periodic, centralized customer research, before it’s too late.

After all, in this economy, there’s always another company out there who’s willing – and able – to listen to your customers.

Best regards,
Syed

When agents get smarter than your customer experience systems

I recently had to call a large hotel chain (the Delaware North Group) to make a reservation.  Before getting through to the agent I heard a recorded message telling me that if I would like to give my feedback about the call I should stay on the line after the call ended.  Of course, being in the customer experience monitoring business, I am always interested to see how different companies handle agent quality monitoring and what kind of information is being collected. 

So after a relatively mediocre interaction with the agent, during which she was not able to address my issue (she didn't seem like she cared either), I waited to go through to the feedback system. As I waited for the system to kick in, I thought about how poor the technology integration must be for the transfer to take so long. After about 20 seconds I realized that I was not dealing with a system problem - the agent was, in fact, still on the line!

At this point the silence became more and more uncomfortable, as I sat in this virtual game of telephone chicken. “It’s my time versus her average handling time,” I thought.  After about a minute of this, I gave up, as much out of embarrassment as frustration. She won!

This story demonstrates the problem when companies with call centers jump onto the customer feedback bandwagon, but don't think through the processes, and how these processes can be compromised by their own staff. If the cost of a truly automated call transfer system is too expensive (as they are for some companies) ensure your manual system has the smarts to quickly identify agents that play the system.

At ResponseTek, we recommend our clients monitor results and completion rates for each agent against a benchmark group to deter this kind of behavior. Alerts are triggered when agent sampling, average score, or handling times move outside expected ranges, which prompt supervisors to take a closer look at the agents call records.

You can never stop agents from playing your systems, but you can make it hard for them to win by building some intelligence into your business rules and monitoring.  My experience is just one of many where companies think they have enabled the "Voice of the Customer" according to industry best practices but fail to pay attention to the technology and behaviors they need for the system to work.  In the case of Delaware North their agents have definitely figured a way around their well intended customer feedback system. Is the same thing happening in your call centers? I recommend you find out.

Syed

Experience Story: I can’t believe they listened to my feedback! ...(eventually)

I got this story from Gord in Vancouver. It is really a customers perspective about what happens when your CRM systems and marketing campaigns are not working together but it also demonstrates the power of listening to the Voice of the Customer (VOC).

After spending millions of CRM over the past 10 years companies should by now have a pretty good view of who you are, what you buy, and how much you spend. If your marketing departments are not using this information to develop thoughtful campaigns then your marketing spend could actually be working against you! The saving grace in this story is that the company did recognize that they didn't know it all and customer feedback might help them improve their campaign.  It worked! they provided the customer with a feedback channel, the customer used it, they acted on the feedback and they converted one customer from a detractor to a advocate.  They probably used this learning to avoid making the same mistake with other customers as well (I hope?). This story is a great illustration of the power of listening to the voice of the customer and shows the potential value to the business when you think about the number of customers that might have been turned off by this kind of experience.

Experience Story:

"First of all, I have been a Telus customer for a long time, since about 2000 – and I think that means that I deserve some respect from them. So imagine my disbelief when I got a package in the mail from for “our” 5-year anniversary. They sent me a small stuffed animal. I’m not joking – it basically said to me “hey, thanks for being such a loyal customer – here is a stuffed animal to show you what we think of your business”. All I could think was “who thought THIS was a good idea??”. Talk about being disconnected from your customer.

Now for the good part. At the bottom of the letter that accompanied the stuffed toy was an invitation to provide feedback using an on-line survey. I immediately filled it out and very clearly let it be known that after 5 years (and about $4000 of money from my pocket) a cheap stuffed animal was a quick way to lose a customer and that doing nothing would have actually been better. For several months I heard nothing. And then another package showed up, with a simple “thanks for your loyalty” letter, and a headset to use with my phone. It was something useful! And even better, they LISTENED to me. Now I felt like I mattered. You know what happened after that? I started telling people about it. In the end, it created a positive experience for me, and I wanted to tell my friends. Free marketing! And that’s the thing here that so many companies don’t get – all you have to do is ask and listen to what I have to say. It’s really not hard, and it works wonders. Respect your customers and they will repay you with their loyalty. I know I will.  Gord (Vancouver, BC)"

My only other comments would be that it would have been great to have given Gord a number of channels to pick from to give his feedback i.e. sms, voice, ivr, email, etc and the cycle should have been quicker. In the months between the customer feedback and the response, how many stuffed animals did these people send out? Who knows how many customers didn't bother to provide feedback and instead just became active detractors of the brand or even worse switched service.  The fact that it took months indicated that Telusdoes not have a systematic approach to VOC feedback and if they think they do they should call back the vendors who sold it to them.

Syed  

Top down vs bottom up improvement strategies

Are you trying to change your customer experience from the top-down or bottom-up? ..........

I am amazed at the number of executives I meet as part of my work at ResponseTek who greet this question with a blank look or a “what do you mean…”?

Assuming that your business has joined the conventional thinking that a good customer experience leads to a higher probability of happy customers (and that happy customers are good), then you have to come up with a strategy that leads to happier customers.

Here is the top down scenario: First you decide hire McKinsey, Bain or BCG…(nobody ever got fired for that). Six months, a million dollars in consulting, and workshops (ad infinitum) later, your consultants of choice will typically deliver you a comprehensive top-down customer experience improvement strategy. It will include marketing messages, slogans for the employees, new compensation plans, a few tracking surveys and some benchmarking with competitors.  If you’re lucky, it might even have an operational framework for continuous improvement, such as customer workshops, panels and focus groups.

So if you spent the money and got all of this, you’ve got your top-down strategy for customer experience improvement.

The good news? You won’t get fired. Hiring big name consultants is always a great strategy to hide behind when you don’t have a clue.

The bad news? Top-down strategies alone rarely work.

To improve customer experience and sustain improvements, employee behaviors must change. Partner behaviors must change. The behaviors of your outsourced suppliers representing your brand must change. Anyone interacting with your customers has to focus on improving the customer experience.

With top-down strategies such as aggregate customer-sat scores or compensation incentives, the behavioral change needed for business improvement is at best temporary. To sustain improvement, you need to ensure your top down strategies are complemented by bottom-up strategies.

Bottom up strategy scenario: Bottom-up strategies focus on making employees accountable for the customer experience every day, during every interaction. Bottom-up strategies take the basic principles of short interval control, used effectively in the manufacturing sector, and apply them to today's service focused environments, such as call centers, retail stores, and field service and support teams.  Bottom-up strategies focus on timely measurement and reporting of customer experiences at the individual or transactional level. By deploying timely measures within a framework of timely, individual reporting, employees can quickly and continuously identify for themselves behaviors that do not enhance the customer experience.  This level of personal awareness and individual reporting can then be very effectively used by supervisors for training or coaching.

The combination of top-down and bottom-up customer experience strategies is powerful…but rarely practiced.  I don't know if this is because corporations lack an understanding of this as a best practice, or because it’s much harder to do than top-down alone. What do you think?

Final thoughts: Perhaps the best way to think about a top-down strategy on its own – that is, without the bottom-up strategy - is in the context of a manufacturing quality improvement strategy. With a top-down strategy, you just have a quality plan, quality targets, quality linked compensation, and monthly surveys of the quality actually coming off the front line. A bottom-up strategy adds a production line quality team that measures quality at every production stage on an hourly basis, and quality addresses issues daily. In today’s environment, no one would try to improve manufacturing quality with just a top-down strategy, without front-line measurement and improvement processes that shadow the production line. And yet, that is exactly how companies are trying to improve the quality of their customer experience using consultants and market research.

I hope this prompts you to ask your executive team about your company’s top-down and bottom-up strategies for improving the customer experience.  Let me know what you find out!

Syed

Experience Story: Bell - Doing the right things but getting it wrong!

I had a recent experience that made me realize that employees are often better at working around our exec grand plans than we can ever imagine.

I recently had to get a service repair man to visit my home from my local satellite provider, Bell ExpressVu because of some issues with reception on my PVR. The first time the guy came over I was not home so my wife had to deal with him. She told me that he wasn't very helpful to the point of rude and had no idea as to what the problem was or how to fix it. He scheduled to come back and this time I made sure I was home. When he returned a week later I spent an hour with him explaining the ins and outs of the wiring in my house to prove the problem was with their hardware and not my wiring. He then used my phone to call his call centre where he sat in the call queue like any other customer while he knocked back any beverage we offered. When he finally got through he told HQ it was a receiver problem and that they should send a new one out.

Just before he left he handed me the job paperwork and told me to sign in two places marked by crosses. I asked if I needed to do anything else but he said, "no, just sign please". Before signing I took a look at the two boxes to sign. The first one asked "was the engineer able to solve your problem" and the second one asked, "would you refer us to a friend". Both sections had a few tick boxes that the engineer was obviously going to fill out on my behalf later!

So this is what I mean by "doing the right but getting it wrong". Bell Expressvu have followed a best practice checklist by collecting feedback around a transaction, measuring advocacy, measuring ability to resolve and I guess based on the engineer's behavior, linking compensation to the employee with these results. However despite following so many best practices by letting the engineer administer the measurement at the front line, they might as well not have bothered.

I am guessing someone at Bell is patting themselves on the back at how "referable" they are and the level of their "ability to solve problem" metrics. They are probably in line for a promotion based on the success of the customer experience program they have rolled out. The reality is that the engineers have figured out how to play the system and the only people benefitting are the employees that are compensated on these false results. The customer is still suffering and Bell probably has no idea.

Nice try Bell, but time to go back to the drawing board.

What is CEM?

Everywhere you look today someone is talking (or shouting) about customer experience management (CEM) and how important it is to their business. However when you start to ask people what is CEM, it is either followed by a wall of silence and people looking off into the distance or a barrage of consulting speak with whiteboards full of impressive conceptual models and 9 box matrix charts.

My view on CEM is very simple (thankfully). "CEM is the processes, systems and measures a company has to have in place to deliver a consistent customer experience that aligns with the brand expectations."

So that isn't too complicated, well not to write anyway, but to do it is one of the hardest things a company will ever do.

CEM is not touchpoint mapping or CRM or NPS(TM) or any of the other things exec's are being sold to make them feel like they are doing the right things. CEM is getting it right for your customers every time! Every thing else should be a means to this end or ignored.

Should you focus on managing customer value or customer experience

Here is a piece that I wrote about 18 months ago (pre blog) looking at the challenges for companies that continue to focus on customer value management in a world where all their customers high value or low value are probably networked together. In today's network economy company that try to deliver better service to only high value customers and attempt to "fire" low value customers run a massive risk of destroying their brand reputation.

check it out after the jump. Manage customer value or customer experience?