customer-centric

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NickB

Does your customer panel harness your customers’ superpowers?

My wife has recently had a knee replacement and was delighted with the whole experience (as delighted as you can be with major surgery anyway) at the hospital where she had had it done. However, she reluctantly had to submit a complaint after an error with her discharge notes which were highly inaccurate. The response from the hospital’s quality head was admirably quick and clear. Acknowledging the error and committing to learn from the mistake, she was also asked if she would like to join their customer panel. A veteran of maternity services panels at another hospital she jumped at the chance (not literally, obviously).

The following day I boarded a London North Western train at Euston. Opening up my laptop and logging on the on-board Wi-Fi I was asked if I wanted to join their customer panel. I demurred, but since I was on my way to a customer committee presentation to the board of a housing association, such organisations were very much on my mind. And, falling into the consultant’s trap of drawing a line between two data points and calling it a trend, it could be that customer panels, forums or whatever are increasingly being used as organisations recognise the need to become more customer-centric.

Whether you call it a committee, panel, forum or fan club, having a group of customers to provide you with feedback and guidance is an essential part of customer-centricity. But it takes investment to do it properly and so, to avoid wasting time and money, it’s worth paying attention to the following success factors.

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NickB

What the NHS can teach us about customer relationship management

When you think of the UK’s National Health Service (NHS) then excellent customer relationship management is probably not the thing that springs to mind. Talk to any UK citizen and for all the genuine positive feeling about the NHS – witness the recent “Clap for Carers” and happy 72nd birthday celebration – there will be a good sprinkling of people with awful tales of long wait times, misdiagnoses and all manner of poor interpersonal reactions.

I’m maybe lucky in that most of my interactions – and as we’ll see, there have been quite a few – have been positive, but I’d like to highlight one series that has much to teach the commercial sector about customer relationships.

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NickB

The simple formula you need to shape your post-pandemic planning

In a previous article I talked about the importance of knowing what business you are really in to get a firm hold on what’s going to be critical as your business emerges from the current crisis.

The business you are really in is another way of discovering your deeper purpose or as Simon Sinek puts it, your “why”. But it’s only one side of the equation: as well as understanding this purpose you need to have customers who share that purpose in some way. To use Sinek’s example, Apple would not be successful if their why didn’t resonate in some way for their millions of customers.

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NickB

Want to change your culture? Go green…

Taking lessons from permaculture may be the best way to create a sustainable culture change

As Kermit the Frog memorably put it, “it’s not easy being green” as anyone will know who’s unwrapped and binned or attempted to recycle the plastic from their weekly grocery shop. With images of plastic-bound sea life in our heads we might be feeling a creeping sense of despair… So why apply green principles to the equally vexed question of how to change your organisation’s culture?

The short answer is that it makes a lot of sense to do so – particularly if you want the change to be beneficial and long-lasting. Here’s how…

Culture change – the perennial problem

I’ve lost count of the number of organisations I’ve sat in where there’s an expressed wish that “if we could only change the culture” then the desired change would happen or be a lot easier to make happen. This is a common misconception: that culture is a “thing” that can be changed, like a process or an IT system. It’s not: it’s a consequence of people and systemic issues such as reward mechanisms, recruitment and so on. Affecting culture requires an understanding of these various factors and their interplay but very often leaders prefer a dramatic intervention such as replacing the top team or laying off staff to achieve what are inevitably short-term benefits.

Something more sophisticated is required and rather than come up with my own patented fool-proof culture change method (lubricated with several litres of snake-oil) I’d like to propose the application of some existing principles that will make you think more deeply about the impact of the change you are effecting.

These principles come from a sustainability approach called permaculture. In summary, permaculture – the name derives from “permanent agriculture” and “permanent culture” – is an approach to living that has less of a detrimental approach to the planet. In a discussion with some friends about the topic recently I was struck by how relevant these were to organisational change.

Principals for permanence

Permaculture is based on 12 design principles. There are plenty of good summaries around which are worth looking at. Here’s my take on how they might apply in a commercial organisation

1. Observe and interact

It’s so tempting – particularly if you’re a consultant or a leader operating on a tight timescale – to come up with solutions quickly and implement them as rapidly as possible. Taking time to engage and understand an organisation is critical if you want to identify the points of resistance and, more importantly, the areas of support that will be important in making the proposed change stick.

2. Catch and store energy

In pure agricultural terms this is another way of saying “make hay while the sun shines” – an old saw but often overlooked when implementing change. What are the best times to introduce a change (clue: probably not when you’re doing annual appraisals)? Where are the areas of organisation with more energy and support for the change you want to introduce (hint: start with these first).

3. Obtain a yield 

The reason we do agriculture is that we need our efforts to yield something. Sustainable culture change in an organisation is the same: we need to understand the benefits of what we are doing, whether hard financial measures or softer attitude surveys. Having a good benefits management discipline really helps here.

4. Apply self-regulation and accept feedback

In the permaculture context, self-regulation means putting in the appropriate feedback loops so that a system can continue to function well. In an organisational context, this fits well with continuous improvement approaches such as Kaizen, or the application of systems theory. Understanding what feedback mechanisms – formal and informal – regulate an organisation’s behaviour and then altering them gradually is key to sustainable change.

5. Use and value renewable resources and services 

The Shock of the New was an acclaimed TV series on modern art but I think the title could often be applied to approach used to create a shift in an organisation’s culture, whether it’s “new” concepts (like customer-centricity – mea culpa) or new customers, people, technology or processes. Introducing something new consumes resource (it’s more expensive to acquire new customers than to keep existing ones) whereas it’s better to reduce unnecessary consumption where possible: what existing value is locked up in current customers and people and how can you unlock it?

6. Produce no waste 

Permaculture emphasises valuing and making use of all available resources. Leaving aside my concerns about how much packaging goes to waste, businesses are incredibly wasteful of the talent that’s locked up in their people and the goodwill of their customers. Take a “zero waste” mindset to your business see how it changes your perception of how to create value.

7. Design from patterns to details

This is one of the more obscure permaculture principles but it’s intended to force thinking about the big picture in environmental terms. Effective change management definitely takes this approach – at least in theory – by stepping back and observing how processes work (or not) end-to-end and asking the question “who do they serve?” (clue: if the answer is “the customer” that’s a good thing).

8. Integrate rather than segregate

My gardening knowledge is limited but I do know that if you plant marigolds amongst your tomatoes the chance of them being attacked by harmful root-rotting nematodes is reduced. Permaculture emphasises putting things in places where supportive relationships develop. How often do we do the opposite in organisations and intentionally create barriers and internal competition?

9. Use small and slow solutions 

As someone who cut their consulting teeth in the heyday of business reengineering – the father of which, Michael Hammer, was fond of saying “if it ain’t broke, break it” and where “big change, fast” was the guiding mantra – the idea of being small and slow is anathema to me. However, it’s worth considering how much attrition was caused in those swashbuckling reengineering projects and whether the changes were sustained in the long term.

10. Use and value diversity 

In agriculture, diversity increases resilience to disease and with the commendable advent of diversity programmes across many organisations, we might think we’re ticking this box. I don’t think we’re there yet: bringing different points of view and thinking styles together constructively to solve business problems is valuing diversity not just ticking a compliance box.

11. Use edges and value the marginal

Once again, my knowledge of sustainable agriculture leads me to take at face value the permaculture claim that the interface between things is where the most interesting events take place but in businesses that’s definitely true, with the interface with customers the most productive area for change and innovation. The problem is that this marginal area is often not valued by organisations, leading to cultures that don’t place the customer at the centre of what they do.

12. Creatively use and respond to change

Finally, the most powerful principle of the twelve. Change managers like me might think that we are driving change (other powerful adjectives are available) but it’s more helpful to think of how we respond to change. The author William Bridges, in his book Managing Transitions, recognises this: change is a sudden thing and it’s how we manage the transition to the new state that results that’s important. Taking a creative and constructive view of change events helps that transition.

It’s not easy…

Some of the principles may seem like the blindingly obvious, some a little obscure, but they strike me a setting a challenge for all of us engaged in organisational change: how do we carry it out in a way that increases the chances of sustained benefits? Using the principles to ask questions of and challenge our preconceptions about how change is managed will, I believe, result in change that benefits all of us.

As Kermit says, it’s not easy being green…

Acknowledgements: 1) the author would like to thank his friend Linda Murgatroyd for introducing him to the concept of permaculture 2) the author also recognises that Kermit the Frog was singing about his skin colour not the environment.

NickB

Good news for Blue Monday: the High Street’s not dead – yet

(2 minute read)

Customer-centricity is the way forward

It’s that time of year when we have a succession of variously-coloured days: Black Friday pre-Christmas and Blue Monday today, allegedly the time of year when people are most depressed. To add to the spectrum there was a super blood wolf moon visible in the middle of the night for those Britons whose anticipation of the Monday blues was already giving them insomnia.

For beleaguered UK high street retailers and customers, the gloom continues. HMV the music retailer seeking a rescue package, has come under the radar of Mike Ashley, whose strategy seems to be to buy up any retailer heading for the rocks. For non-UK readers, Mr Ashley has built up a highly successful business – Sports Direct – selling cut-price sports gear to the public in the classic, low-cost, pile-em-high-and-sell-em-cheap model.

It takes a particular skill, in my view, to offer a poor in-store experience – confusing layout, multiple occurrences of similar products – and still achieve commercial success. This doesn’t bode well for HMV though: if the same strategy is applied, I don’t think it would succeed, since the competition for music/video content (these days a digital commodity) is different from that for clothing, a physical one, so no matter how high or cheap your piles of CDs are people have moved on.

I’m sure Mike Ashley realises this, but if he needs some further ideas he’d do well to take a look at the companies covered in a recent Marketing Week article who are bucking the trend by taking a customer-centric approach.

I’m glad to see Greggs included in this as I particularly liked their introduction of a vegan sausage roll to capitalise on the trend for “Veganuary”. In particular I liked their canny use of social media, when breakfast TV host and self-opinionated uber-bore Piers Morgan took exception to their “PC” behaviour. “Oh hello Piers, we’ve been expecting you” has to be one of the best (polite) put-downs of 2019. It’s possible to do low-cost with style and Greggs manage this as well as responding to customer preferences in a creative way.

Focusing on the experience is the way forward for arts and craft superstore chain Hobbycraft who at first sight would appear to be in danger of undercutting by the likes of Amazon. However, their stores provide workshops and how-to content online recognising that their customers outcomes extend beyond simply buying products. Customers want to feel part of a tribe (hobbyists, bakers etc) and acquire skills: playing to these outcomes moves the business away from being a commodity provider.

It’s this preparedness to think differently about the nature of a store that will distinguish winners and losers in the difficult times ahead.

For more thoughts about successful customer-centred practice sign up for our Inner Circle newsletter or, for more about outcome-based thinking. see our article The concept that will change your view of Customer Experience forever.

NickB

Why bother with customer journey mapping?

It’s a powerful technique, but only under certain conditions

Be honest now: if I were to ask you where your customer journey maps are kept, could you – hand on heart – tell me exactly where they are on your company’s intranet?

You can? Great! Now, can you tell me the last time they were used, in anger, to design or improve something that had a direct impact on your business’s bottom line?

If your answer is sometime within the last three months or so, then you can probably skip this article (or go to the comments and let everyone know what a bang-up job you’re doing). If you’re hesitating a little, then read on: I’m going to tell you how this powerful technique can really add value, not just to the customer experience but to the bottom line.

Travelling hopefully

Customer journey mapping is one of those things that you immediately associate with the work of the customer experience (CX) function, along with customer satisfaction/NPS reports, focus groups and surveys and all the competences such a department should possess.

In summary, a customer journey map lays out the elements of the customer journey which, as survey firm SurveyMonkey reminds us, is:

“the complete sum of experiences that customers go through when interacting with your company and brand. Instead of looking at just a part of a transaction or experience, the customer journey documents the full experience of being a customer.”

And this, to me, encapsulates the problem with journey mapping: it’s an all-encompassing approach, but the positioning of customer experience within a lot of businesses doesn’t always enable such an approach to be taken.

When CX is relegated to a department then customer journey mapping will be the technique used by that department. Problem is, other departments with their own commendable desire to improve what they do will adopt a different technique – lean six sigma or process re-engineering for example – and the goal of a comprehensive approach becomes that much harder to achieve.

The problem is that customer journeys are seen as existing only on the customer-facing parts of the organisation, with all the process/back-office elements being someone else’s problem.

This is a big mistake.

When you think about it, the things that go wrong in a customer’s experience are a result of disconnects between front and back office. Simple example: if you order something in a restaurant and it turns up as a cold, congealed mess then chances are there’s a problem in the kitchen’s order handling and communication process, not with the front-of-house staff and the visible parts of the journey. Your “end-to-end customer journey” is definitely affected though.

On a road to nowhere?

But where is this journey heading? The definition quoted above is wider than many organisations use in practice: it’s easier to bite off a more transactional journey. In my restaurant example the transactional journey – where my desired customer outcome might “feed me satisfactorily” is OK in a fast food outlet, but in a more up-market establishment it is more likely to be “provide me with a great evening out/relaxed lunch with friends” or something similar.

In the latter example, the journey requires many elements to be combined, some of which may be out of the restaurant’s direct control e.g. travel to and from the restaurant but will still have an impact on the customer outcome.

The key thing in understanding the journey – whether it’s the delivery of a five-star meal or a four-wheel drive car – is that all the elements in the journey need to be represented when any improvement work is done.

The route to better mapping

This cross-functional view is one of the key elements of any customer-centric change endeavour and therefore is needed to make journey mapping a success. There are some other success factors that you also need to adopt to avoid it becoming a redundant exercise in creating wallpaper for the customer experience department’s offices.

1. Get meaningful input

It follows from the above point that most important thing that you can do in starting a journey mapping exercise is to get input from all elements in the journey – front and back office – but for that to be meaningful there has to be a shared understanding and commitment that the way the current journey works is sub-optimal and that in redesigning it, some of the unnecessary elements, process bottlenecks and so on, will become redundant.

2. Drive from customer outcomes

One of the main dangers in journey mapping is that it links customer touch points and then improves those touch points in the hope that they turn into “magic moments”. This is like putting lipstick on a pig – it may be more attractive but it’s still a pig – if the underlying processes don’t get improved as well. The best way to focus the cross-functional effort required to drive this improvement is to have a clear sense of customer outcomes. It’s essential to do this work first, otherwise you will be designing the journey based on assumptions rather than real insight into customer needs.

Once you have a clear view of customer outcomes, the journey design question should be “what’s the best way we can deliver the customer’s desired outcome” which produces a much more radical approach to processes. (One good example of this is the UK car insurance firm Direct Line who design their customer’s journeys around their outcome of getting to their destination if the customer’s car is involved in an accident, not around having an efficient claims handling process.)

Outcomes also drive the digitisation of the customer journey, not by assuming that digital technology will be the cost-saving panacea (usually by the lazy option of pushing effort out to the customer under the guise of self-service) but by looking for the opportunities to rethink the journey with digital as an enabler.

3. Recognise that journeys and processes are the same thing

If the customer journey is seen as something that exists on the surface of a process, it won’t be designed in an all-encompassing way.

One way of thinking about it is to consider the underlying back-office process as having customers – this way of thinking has been around in quality improvement thinking for many years – and, yes, those customers have feelings too, so the emotional aspect of journey design is important here as well.

4. Use a common technique

This is so obvious it shouldn’t need saying but I witnessed one large organisation that managed to have two different approaches to journey mapping running in the same division – a classic symptom of an organisation where customer experience is relegated to a function rather than being part of a common culture.

I don’t have a favourite technique – whether you use brown paper and post-it notes or the latest process mapping tools the key thing is that everyone should have a common language for describing the journey.

5. Make sure you link mapping to the drivers of RoI

I’ve described how customer experience can overcome the perception that it’s a nice-to-have by linking improvements to the benefits that drive a real return on investment (RoI). I’d go even further to say that if your journey maps don’t flush out real opportunities to eliminate wasted cost and drive up revenue you’re doing them wrong and they’re in danger of becoming an overhead your organisation doesn’t need.

6. Embed in a culture of continuous improvement

“Continuous improvement” is one of those dull, unsexy terms for what is the core competence of all successful businesses. You can term it “cultivating a relentless discomfort with the status quo” or “waging war on mediocrity” if you like but the fact is that once you’ve redesigned your customer journey that’s the start not the beginning. Making sure you capture metrics on performance goes hand in hand with this and enabling people in the organisation to make improvements is essential – and brings the added benefit of greater employee engagement.

So, answering my question at the beginning, if your maps are gathering dust somewhere (OK that doesn’t literally apply if they’re on the intranet) checking back against the above conditions might help you make them relevant and a major factor in your journey towards customer-centricity.

 

NickB

Ten tell-tale signs that show you’re not that customer-centric

It’s not what you say, it’s what you do (or don’t)

Are you customer-focused, customer-driven or customer-centric? If you’re any of those things that’s probably why you’re reading this, but does the organisation you work for feel the same way?

In our work with CX leads we come across a real tension between what companies say they care about and what they actually do. Very often, the tension is so great that it’s a real disconnect. The result? Wasted effort on customer initiatives that don’t have sufficient momentum and under-realise potential benefits.

So, what can you do about this? It’s best to start with what the organisation does: a good reflection of the environment within which a culture of customer obsession can grow. Here’s my take on the tell-tale signs that will tell you that – unless addressed – getting genuine customer focus to take root will be tough.

1. Customers don’t figure in strategy

This is the obvious one, so let’s get it out of the way first. But before I do, I should say that there is no hard-and-fast rule that says you must have customer focus to have business success. You can build a company that successfully prioritises other things: being faster and/or cheaper than the competition, creating innovative products. And in most cases, you’ll need enough customers to buy your super-cheap or fabulously innovative products so obviously that’s part of any business strategy. But if caring for customers, creating a superior service experience, enabling employees to make customers happy, including customers in your community or other words like that don’t feature in your strategy – and even more critically in the plans and budget allocations that follow – then it’s a good bet that your company is driven by something else.

And that’s fine, but just don’t expect a long CX career there.

2. No-one is curious about customers

One characteristic of successful customer-driven companies is that everyone – from the CEO to the front-line – is interested in what customers think, what they want and what they aspire to. That shows up in a number of ways: senior execs don’t go “back to the floor” once a year, they talk to customers and the people whose day job is to provide a service to them on a weekly or even daily basis.

When you have people in your organisation who are curious about customers, you get ideas and you get genuine conversations about customer outcomes that help you build killer propositions. The converse is that if you don’t come across this quality on a regular basis, your organisation is almost certainly focused elsewhere.

3. One measure is pursued relentlessly

As fellow contributors have argued (here and here) it’s senseless to focus all your efforts on measure of customer satisfaction or customer success when customer behaviour is such a complex thing.

It’s one of the subtler symptoms of a lack of customer focus that a focus on one measure of success – yes, Net Promoter Score I’m talking about you – means that an organisation can kid itself that it’s customer-focused when in fact it’s paying lip-service to customers with one simplistic measure. And when you relentlessly pursue the one measure, people get rewarded on it and then start to influence the measure rather than what the measure tells you.

Life, and customers, are much more complex than that, and your measures should reflect that.

4. Complaints are seen as a problem

Does your organisation have a well-resourced complaints department that deals with customer feedback in a prompt and positive manner? Or is the prevailing view that complaints originate from a few awkward customers who probably weren’t in your target market anyway? If it’s the former then you’re mining the rich seam of customer feedback for some customer-driven improvement but if it’s the latter then that’s another sign that something else is the focus, and it isn’t the customer.

5. Difficult or vulnerable customers are shut out or marginalised

Well, no-one would have this as an explicit strategy but it’s a symptom of having an idealised view of the customer rather than reflecting the messy reality that people find themselves in. One way of testing this is to look at your organisation’s policy for vulnerable customers: does it exist, and if so, is it translated into action that means that customers who don’t fit the “norm” are catered for and treated equivalently? Being customer-centric means being focused on all your potential customers.

6. Social media is not understood

I’m often staggered by the ineptitude of media campaigns generally, particularly where the brand takes a bit of a battering as a result of poor service performance. In these situations, social media appears deaf to customer feedback. So, if you see your organisation failing to respond constructively to grumpy tweets or fractious Facebook posts then there’s a good chance that customer-centricity has failed to take root in your marketing department.

7. Cost-cutting hits the contact centre first

Where a business allocates its budgets is a good indicator of what its priorities are. So, if your contact centre is under pressure to cut costs that’s a sign that customers might not be a priority. But again, this is a subtle sign: spending more on contact centres could mean that your organisation can’t stop customers calling who’d rather not have to sit in a call queue for ages. But if the focus is to cut costs first and then ask why customers are contacting you, it’s a sure sign that cost-saving comes before customer experience.

8. Digital streamlining is everything

Of course, the reason for cutting contact centre costs is usually to direct people online where the chances are that they will receive a slicker, more streamlined service. That’s absolutely the right thing to do. But if your streamlined service is at the expense of human contact to handle exceptions, queries or special assistance then you’re digitally excluding part of your customer base.

9. Silos are indestructible

Despite the protestations of management theorists, organisations today look much like they did 30 or more years ago, with Sales, Marketing, Operations and Finance all with a seat at the top table. I’m not advocating a different way of organising as an essential part of being customer-centric: as far as I’m concerned, we’ll need those functions and disciplines for at least the next 30 years. But if the functions turn into indestructible silos, with no genuine co-operation between them, then customer-driven efficiencies from cross-functional processes are going to be hard to generate.

10. Jerks get promoted

In this article I’ve not focused that much on the creation of a positive, customer-focused culture, possibly because you can’t be that prescriptive about what works. It’s easier to focus on what doesn’t help and I have argued elsewhere that the prevalence of assholes in an organisation can have negative consequences for performance. So, if you’re in an organisation that promotes people despite their negative, self-centred or bullying behaviour then you’re in an organisation that it not committed to employees’ happiness and, without that, customer happiness is likely to be in short supply.

Look on the bright side

Customer-centricity isn’t the only game in town, but if you’re in a role that espouses it whilst your organisation shows signs – as illustrated above – that it’s got different priorities then you could be in for a stressful time.

On the positive side, if it’s genuinely committed to becoming more customer-focused, then any of those ten tell-tale signs will be a great place to start your change initiative.

 

 

NickB

Are you ignoring your vulnerable customers?

Stop pursuing the myth of the “ideal” customer

Do you have a strategy for vulnerable customers? If not, then you could be missing out on an opportunity to create a little bit of WOW for customers who need it more than most. It is often a neglected component of genuine customer centricity.

I’ve been working with organisations on their approach to what are – misleadingly – termed “vulnerable customers” and have become a bit frustrated by the terminology as it tends to marginalise groups of customers. This can be a serious mistake – as I will illustrate.

So, what do we mean by a vulnerable customer?

Put simply, it’s a customer whose life circumstances or abilities are compromised in some way and, as a result, run the risk of not being treated in the same way as those customers without such disadvantages.

Vulnerabilities can cover physical impairments such as mobility, sight or hearing as well as less visible ones such as mental capacity or learning difficulties. Life events (stuff that happens) can create vulnerability which may be short or long term: think of the effects of bereavement, for example, which can stretch for a year or more and may impair a customer’s ability to make decisions about, say, a financial product.

Companies should have strategies in place to accommodate the needs of vulnerable customers – in the UK and there are already existing legislative requirements around disability (the Disability Discrimination Act) and in the financial services area it looks like it will soon become a regulatory requirement.

This is all well and good but treating this as a box-ticking compliance exercise is the wrong approach. The right approach is to stop talking about vulnerable customers completely.

Forget vulnerable customers

A quick look at some statistics tells you that vulnerable customers occupy a much larger section of any market than you might think. For example:

  • There are currently 850,000 people with dementia in the UK, with numbers set to rise to over 1 million by 2025 and 2 million by 2051. One in six people over the age of 80 have dementia. (Alzheimer’s Society.)
  • One in every two adults has the arithmetic capability of an average 11-year-old or younger and one in three adults cannot work out the change from a shopping trip.
  • One in four people in the UK will experience a mental health problem each year and in England, 1 in 6 people report experiencing a common mental health problem (such as anxiety and depression) in any given week according to the charity Mind.
  • In England, 7% of adults in England regularly drink over the low-risk guidelines and there are around 600,000 dependent drinkers – of which the majority do not seek treatment (figures from Alcohol Concern) – more than 1% of the population.

Put simply, your customers are quite likely to have problems that could affect their ability to make decisions about buying or using the products and services you provide. But marketing departments and product developers continue to develop products that are aimed around an idealised view of a customer untroubled by the hand that life has dealt them.

Calling a group of customers “vulnerable” exacerbates the problem as it implies that there are a small number who we can adapt products and services for and then the rest who we can blithely leave to get on with enjoying our products in the way they were designed.

This is the wrong approach!

In genuinely customer-centric organisations, products and services should be designed from the customer’s point of view, which means designing and testing – co-creating – with a range of customers not just the ideal ones.

Once that becomes a norm you can find yourself well on the way to genuine customer-centricity.

NickB

Closing the loop – listen to Yoda

For a really effective way to manage complaints profitably, you have to be prepared to learn

I don’t often look to fictional characters for management advice, but if you’ve had any exposure to the Star Wars universe, you’ll know that diminutive Jedi master Yoda is capable of some cornball wisdom that occasionally hits the spot.

When it comes to complaints management his line from The Last Jedi “the greatest teacher failure is” pinpoints the difference between organisations that thrive on complaints management and those that would rather sweep their customers’ gripes under the carpet.

As I’ve mentioned before, complaints are a goldmine of opportunity for turning grumpy customers into raving fans and gaining enhanced revenue as a result. But to do this you have to have a fully joined-up approach that covers detection, handling and learning.

Back in 1990, Peter Senge, then Director of the Systems Thinking and Organisational Learning Programme at Sloan School, MIT, published a seminal book, The Fifth Discipline, that introduced the idea of the “Learning Organisation”. Re-reading it, I’m struck by how much advice it offered appears to fall into the category of the “bleeding obvious” – but on reflection has still not been adopted by most businesses.

Maybe the concept of a learning organisation sounds too academic, non-action orientated, even un-business-like to have gained real traction, but in the world of customer complaints a learning organisation focused on customer outcomes is exactly what you should strive to become.

Discipline

Let’s reflect on Senge’s five disciplines of a learning organisation and see what they tell us:

  1. Systems thinking – the need to view the organisation as a joined-up whole, where actions in one part may have a positive or negative implication in another. Forgetting to think systemically is a trap that complaints managers can fall into. Actions with a positive effect in one area may result in negative effects elsewhere. Looking at end-to-end process rather than silo boundaries can help prevent this.
  2. Personal mastery – the requirement for individuals to commit to a process of wider learning, as the basis of organisational learning and therefore impact. This is straying into Yoda territory, but you need people who are committed to their continuous development so whilst fairly obvious, is key to managing complaints effectively, particularly as wider perspectives can be considered.
  3. Mental models – the need to test the assumptions held by individuals and the organisation about the way things work. Challenging these is essential for customer-centric innovation, particularly in response to complaints.
  4. Shared vision – seen by Senge as essential in motivating staff to learn. Although vision is seen by some as an outmoded concept, anything that motivates staff – I’d prefer a strong statement of purpose (e.g. our purpose is to use our customers’ feedback as the basis for improvement) – is valid here.
  5. Team learning – this“Fifth Discipline” is where the organisation builds on its individual responses to learn collectively about how it can improve. The benefit of this approach is that the problem-solving ability of an organisation is significantly enhanced, so arriving at a solution to a complaint-generated issue should be easier with this discipline in place.

In the loop

My back-of-an-envelope analysis of Senge’s model says that at least 80% of it is critical to closing the loop on complaints, but what is this loop that needs closing?

Put simply, there is a virtuous circle that organisations can put themselves in where what you learn from a failure to delight your customers feeds into improvement activity and a renewed commitment to detect when customers are unhappy.

In fact, this process is a version – admittedly rather high-level – of Senge’s first and most important discipline, systems thinking. So, how do you inject this approach into learning from customer complaints?

Beat the system

Anyone reading this piece who’s involved in complaints will be familiar with the various quality and other techniques used in Root Cause Analysis (RCA). I won’t reiterate them here – like any tool different techniques are applicable in different circumstances – but there’s a danger with the RCA approach. You may be able to get solutions that address the complaint but miss the big picture – or the organisation may feel that the big problem that’s preventing a breakthrough in customer satisfaction is too difficult to address.

The organisation can then find itself in the opposite of a virtuous circle where the solutions implemented from RCA fix point problems in the customer journey but don’t have much overall impact. As a result, RCA will be starved of the resource it needs to do a thorough job on the complaints in its workstack, results will be sub-optimal, and the cycle will continue.

To avoid this, complaints organisations need to make sure that they focus on customer outcomes – i.e. the underlying reason why the customer was using the product/service in the first place before things went wrong. This big picture thinking increases the likelihood of everyone addressing the underlying issues and, if your organisation is practising the other disciplines, it will pull together to fix them.

Chicken

Here in Britain we’re recovering from a crisis (I may be exaggerating) in the fast-food world. Fried chicken purveyor KFC found itself unable to meet demand for its fowl-in-fat products following a switch of logistics supplier. The situation was so bad that it had to close most of its stores while it sorted out the issues. This is a clearly a big cock-up (I’m not the first to make that joke) and the advantage, if there is one, is that the error is glaringly obvious and therefore getting to the root cause should be straightforward – and resources will be thrown at the problem to solve it quickly.

KFC have done a good job of responding, at least in terms of publicity, with a public apology and long-term probably won’t suffer too much.

However, what’s obvious, to me, is that KFC failed to pass on the learning from one supplier to another: the logistics involved in getting chicken hygienically from slaughter to fryer are highly sophisticated, apparently. I assume that their previously logistics supplier had refined their approach in response to customer and front-line feedback, but this learning clearly hadn’t made it to the new provider. In an outsourced environment, keeping the virtuous circle of a learning organisation in motion is even more of a challenge.

As Yoda might have said, “learning organisation the biggest challenge is”.

 

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NickB

The missed opportunity in complaints handling that might save your marriage!

Complaint handling departments mostly miss the opportunity to turn a dissatisfied customer into a raving fan.

I recently talked about how critical it is to detect and, if possible, avert complaints before they even happen. If a complaint does occur, it is so important to make sure it is easy for the customer to provide as much feedback as they want – ideally in the form they want. Once you have received the feedback you have a critical and short time period to not only resolve, but create a raving fan.

Be careful, time is very sensitive in these situations. Any perception of slowness can quickly make a situation considerably worse. Dealing with the complaint effectively – and simultaneously creating a significant jump in loyalty – needs a new and more innovative approach.

Understanding the“hierarchy of needs”

I’ve noticed that complaints are something that most organisations avoid like the plague! No-one wants to admit to making mistakes –all too often the attitude is to deal only with the specifics of the complaint, throw some money or gift at the customer as compensation and then move straight on to the next one. Timescales are often set by a regulator, which leads to incorrect priorities and dysfunctional behaviour.

This is about as far away from customer-centric as it’s possible to get and ignores what I call the Complainer’s Hierarchy of Needs. This is  different from the Hierarchy of Needs developed by Abraham Maslow – except that it also has five levels:

1) Hear me. I want someone to be able to listen, understand and resonate with my complaint. I don’t need an argument, I don’t want excuses and I certainly don’t want shallow apologies with no real action. Ask me questions, but only if it helps unpack the full story.

2) Acknowledge my pain. I wouldn’t be contacting you unless I had suffered in some way. It may be minor, it may be a “first world problem” but you’ve fallen short and I’m upset. Don’t overdo it but please show some genuine empathy.

3) Sort it out.At an absolute minimum, I want to be put back in the state I was in before you screwed up and I’d like some form of compensation for my inconvenience. I also want it quickly – preferably almost immediately.

4) Satisfy me. Remember I was a pretty big fan of your company before this and I’d like to believe this is a one-off and get back to those happy times when you delighted me on a regular basis. Now, what have you got? I’m not talking about a box of chocolates – I’m talking about an outcome that has value to me – assuming you understand me well enough.

5) Delight me and keep me loyal. Give me a reason to stay with you – what’s our future together going to look like? If the value is perceived to be there I will invest a bit of time asking your questions but make sure the outcome is a great reason to stay.

The best part of breaking up

And if that sounds like getting back after a bust-up with your significant other then it’s supposed to be – yes, it’s that serious! Bad significant other experiences have resulted in divorce rates at46% in the US. Interestingly, according to data from NewVoiceMedia, 44% of US consumers switch to a competitor following a poor customer service experience.Like disenchanted marriage partners, customers will exercise that level of rebellion if they don’t get what they think they need.

People in a failing marriage often cite a lack of empathy as a key reason driving the split. Customer rebellion is driven by exactly the same issue. We simply don’t recognise the complainer’s hierarchy of needs sufficiently. We extrapolate that to a belief the company does not care, and our reaction is heightened as a result. In fact, as far as complaints handling goes, we only recognise part of it, getting as far as sorting out the problem and providing what the company views as appropriate compensation without sufficiently understanding the customer’s desired outcome.

The Missed Opportunity

Aligning the customer hierarchy to the what the company does in response is fundamental:

1) Listen. Provide a channel that “works for the customer” – which often means giving choice. Technology is now more widely available and relatively cheap as an enabler. Behind that enabler should be a non-judgemental, open and sympathetic “listener” for the complainer. If you receive the complaint in writing, responding quickly with follow up is key. Customers will react much more favourably to a personal conversation, so call them back within two hours of receiving the complaint.

2) Empathise.This bit is almost obvious to state but much harder to deliver. Empathy is acknowledging that whatever happened was in some way unpleasant or inconvenient for the customer and showing the customer you genuinely care. This is not as easy as it seems. Some customers want only a “leave it with me, give me ten minutes and I will sort it” style response whereas others want more time to air their views even if that is simply to “blow off steam”. Of course, some people are more naturally empathic than others, but it can be taught and if sufficiently practised, internalised into everyday handling that is repeatedly exceptional. Make sure it’s on your training programme for all.

3) Empower people to act – rapidly. It’s too easy to hide behind processes, procedures and rules. Too much “guidance” is in place because an organisation doesn’t trust its staff sufficiently to do the right thing. Having to check or refer upwards again and again, wastes time, reduces productivity, andmotivation, and further infuriates an already-angry customer. The key here is empowerment and flexibility to allow the agent to do what is right. Post hoc checks and regular reviews are a much better way to make sure that staff are doing “the right things” instead of “doing things right”. There is a big difference!

4) Make sure your customers are satisfied. The emphasis is on the word “your”. If you think of the customer as “your customer” rather than the company’s customers, then that is a subtle but significant first step.Very often customers are happy just to have the mistake corrected or a refund provided but equally often we don’t think of asking how the experience of complaining was for the customer and, more importantly, how they feel about the outcome at a detailed level. The investment required to find this out is minimal yet it’s a practical demonstration that you weren’t just following a process, you had flexibility and you really care.

5) Understand the customer’s desired outcome and take it up a level to delight them. Having got a satisfied customer, you need to enhance the relationship and take it to a level beyond what it was before. The single most critical success factor to achieving delight is to understand what their desired outcomeis and deliver it better than the competition. And the key to this lies not only in your feedback and handling on the specifics driving the complaint. The key is to drive a deeper understanding of the outcomes and related experiences that are most important to the customer and creating an environment to deliver against it. At a basic level, reversing their negative feedback – specifically the things they couldn’t do as a result of your screw-up – gives you the starting point for understanding their desired outcomes at a deeper level, aligning your products, services and supporting processes to make it happen. This might sound expensive but the loyalty and revenue uplift that this can bring will make it an immensely profitable and rewarding exercise.

You read it here:applying this approach can make customer complaints into a revenue generator and there’s a case for treating it a profit centre. That’s slightly different to the norm don’t you think?

In the next part of this series we’ll “close the loop” on complaints by making sure that you genuinely learn from your mistakes and build a better understanding of your customers’ desired outcome