Customer Experience Management Rebooted

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1 Customer Experience Management Rebooted

2 Steven Walden Customer Experience Management Rebooted Are you an Experience brand or an Efficiency brand?

3 Steven Walden TeleTech Consulting London, UK ISBN DOI / ISBN (ebook) Library of Congress Control Number: The Editor(s) (if applicable) and The Author(s) 2017 The author(s) has/have asserted their right(s) to be identified as the author(s) of this work in accordance with the Copyright, Designs and Patents Act This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. Cover image erhui1979/getty Printed on acid-free paper This Palgrave Macmillan imprint is published by Springer Nature The registered company is Macmillan Publishers Ltd. The registered company address is: The Campus, 4 Crinan Street, London, N1 9XW, United Kingdom

4 Do you think Apple, Zappos, Geek Squad and Amazon achieved Experience brand status by just focusing on Efficiency? Do you think companies only create customer value by being the best at fixing problems? Create experiences that motivate not just manage experiences that don t?

5 This book is dedicated to Rachel, Lorna and Lydia.

6 Preface There is no technology in this book. Technology is an enabler of the customer experience (CX); it is not the experience. For instance, no customer buys the website. They buy the benefits of using the website; to book that flight, to browse on itunes 1. Hence, it is these frequently underlying and intangible customer motivations that we have to uncover and create if we are to do customer experience. Otherwise we risk investing our money in tools, processes and methodologies that focus only on achieving efficiency for the firm rather than on memorable customer benefit 2. Which is, of course, exactly what we see in today s market, deluged as it is by so-called customer experience management (CEM) solutions! Hence, the mission of this book is to reboot our understanding of customer experience; to make us realise that we need to put the customer back into customer experience management (CEM). After all, when the unit of measurement is the human mind, the aim of CEM as a strategy must be to create Experience brands. For instance, consider how Apple, Zappos, Starbucks, Geek Squad, Giff-Gaff, Overbury, Cerritos Library, LUSH, Hotel Chocolat, Stew Leonard s, Disney and Amazon became so successful. They did not cre- ix

7 x Preface ate competitive differentiation by focusing on efficiency or even product and service delivery alone but by creating experiences in the mind of the consumer. And not any old experience, but authentic personal and memorable ones that are meaningfully different and connect with customer value creation. Experiences that are memorably effortless, seamless as well as experiential! While of course having one eye to efficiency but efficiency without contradiction. And they were able to do this, because they knew what it is like to be a customer. They had empathy. Unfortunately, this message now seems to have been lost. Which surprises me for while efficiency is important to the experience the customer has, there is no point in using a term like customer experience unless it means something else! 3 And remember, even if we do go down the path of confusing customer experience with firm efficiency gains, we cannot claim even these things for experience if we fail to show in their execution how they have improved the subjective experience the customer has! Hence, I argue that in order to do customer experience we don t need to be ever more obsessed with efficiency. In most cases, customers will, rightly, assume that these things should be a given, they are seen as simple basic competence and do not move us as consumers. Customer experience is not about making things so efficient that customers don t notice them. Even worse, since creating experience is a design principle involving trial and test, the actions of constraining command and control efficiency processes can limit our capability to create experience if taken too far. As an example, think about how the animation company Pixar makes films such as Toy Story and Monsters Inc. Typically it takes over 100,000 storyboards to make one film of 12,000! At one level that represents an immense amount of waste, but without it there would be no great film. Now imagine what would happen if Pixar only allowed their teams to create 12,000 storyboards per film!

8 Preface xi Recasting Our View Hence, the current dominant approach to CEM is flawed. It is also not right to think physical use (poorly conceived user experience) is equivalent to psychological engagement (customer experience). By following such an approach we lose the intent of customer experience: to differentiate based on the provision of a memorable experience. Therefore, we must recast our view of customer experience and accept that it is concerned with creating value from how customers think, feel and behave. But of course, many tools vendors will not agree with this, but all I have seen over the last 10 years from their approach is a CEM market that has lost its marbles! For instance, companies now use the term experience as an over-brand for anything that vaguely touches the customer or they race around summing up touchpoints to produce a meaningless number, desperately concerned with hygiene. In my view, this represents the sale of software based on a ridiculous belief that consumers respond to experience like a machine: a viewpoint at best touchingly naïve, at worst coming close to selling snake oil. It also leads to a deep disconnect between the C-suite, looking at their dashboards and what actually happens on the ground, in the minds of our consumers and employees. Yet you also have to accept that maybe this focus is creating a platform for something else. All this effort may well end up leading us back to experience, based on the design of disruptive personalised journeys and putting real power in the hands of the consumer not the firm. United Kingdom Steven Walden

9 xii Preface Notes 1. A cognitive assessment of experience is about intangible benefits as well as tangible. That is why a focus just on the tangible such as website, network performance or booking misses the point that customers see the world qualitatively, influenced by their subjective senses, based on feel together with reason. Examples of this include their sense of trust, how satisfied they are, the feel of the brand and so forth. 2. An objective-only definition will focus investments on technology, which is a considerable cost in terms of asset base if not connected to customer value. In this way, it may constrain opportunity-seeking behaviour, the ability to look for frequently small effective changes in the experience that mean something to the consumer. So a smooth tech platform that works, while being very important, would not on its own deliver a LUSH or Metro Bank experience. Nor would it lead to better people engagement. A technology-focused environment also risks creating an obsessive focus on risk management and hygiene factors with operators confusing machine data with that must be how the customer thinks. Hence, we lose the capability to focus on intangible benefits, the very thing consumers buy. Tangibility is only important as an enabler of intangible benefits. 3. This is what happens to many marketing concepts. You can t scale an idea or expertise, but you can scale software. So, if we take the experience the customer has, then feed it through the mincer, TQMing it, breaking it down into components and in the process miss out on how cognition really works, we can measure and monitor it. And voila we have a practice. This has the unfortunate effect of giving us false hope while at the same time failing to account for experience losses.

10 Contents 1 The Squonk 1 Part I Understand 7 2 Right Understanding 9 3 Right Commercial Principles 33 Part II Data 73 4 Right Data 75 5 Some Key Things That Make Subjective Data Different from Objective 83 6 The Subjective Data Line 97 xiii

11 xiv Contents 7 Customer Experience Is Complex 107 Part III Customer Experience Research Traditional Surveys Are Efficiency Surveys Best Practice CX Research Methods 129 Part IV Emotions and the Customer Experience The Value of Emotions 153 Part V Mindset Right Mindset 187 Part VI Not Do Customer Experience Bad 207 Part VII And Finally Interconnectedness 219 Footnotes 241 Index 249

12 About the Author Steven Walden has taken a number of senior roles in CX. He is currently Director of CX at TeleTech Consulting, a worldleading customer experience firm comprising leading brands in culture and mindset, analytics, loyalty, service excellence, sales transformation, as well as technology and call centre operations. His role encompasses consulting and thought-leadership through the leading CX professionals network: CX in Action. He has also been Director of Customer Experience at Ericsson and prior to this he spent over 8 years as Head of Consulting and Research at boutique customer experience research and consultancy firm Beyond Philosophy. In Ericsson, he designed and managed their Experience Management Centre (EMC) and CEM Partnership programmes; rolling out global best practice in social media analytics, CX maturity assessment and customer experience measurement using, in particular, story based metrics. Agency side, his insights, techniques and strategic approaches have been used by many FTSE and Fortune 500 firms in their customer experience programmes. In addition, his CX techniques won the UK CEM Awards 2013 (insights category love the customer ) while the methodologies he created for emotional measurement and design have been cited as best practice by Forrester. xv

13 xvi About the Author Steven is a keen advocate for integrating complexity science with customer experience: especially in the area of measurement using stories (he ran the first NPS study using stories as the measure) and in its approach to culture and innovation. In addition, Steven regularly speaks at conferences, authors books on customer experience, conducts thought-leadership research, much of which has been published in leading business journals, and writes/blogs on CX.

14 List of Figures Fig. 2.1 DEM approach to understanding customer experience 18 Fig. 3.1 Subjective asset management in a service 39 Fig. 3.2 SAM Tier 1. Service and product efficiency 42 Fig. 3.3 SAM Tier 2. Service and product excellence 49 Fig. 3.4 SAM Tier 3. Product and service drives 53 Fig. 5.1 Subjective experiences are fuzzy composites 87 Fig. 5.2 Figure ground in CX 90 Fig. 5.3 More of objective dashboard 92 Fig. 5.4 Change meaning subjective dashboard 93 Fig. 6.1 Perception data curve 98 Fig. 6.2 Managing resilience 102 Fig. 6.3 The blue dot effect 103 Fig. 7.1 Complicated effects 110 Fig. 7.2 Complicated NPS 110 Fig. 8.1 Traditional view and customer experience view 124 Fig Emotix study 159 Fig Emotion framework 179 xvii

15 List of Tables Table 2.1 Why text algorithms don t measure emotional drives in entirety 16 Table 3.1 Customer account and firm account 34 Table 3.2 Summary of personal gains from excellence 51 Table 3.3 Summary of customer experience approaches 60 Table 3.4 Quality questions 70 Table 12.1 Myopic inside out view 214 xix