On Wednesday I ran a customer experience master class for Marketing Week as part of the Customer Retention conference. With a colleague, we shared some thoughts with just over 10 senior marketeers during the one day workshop about why having a customer experience strategy is critical to services businesses today and introduced some models that they could put into practical use.
Although over ten years old now, I used the concept of progressing economic value introduced by Pine & Gilmore in their book (Experience Economy 1999) to explain why customer experience strategies can help businesses differentiate. For those unfamiliar with the concept it deals with the evolution from commodities to goods to services and then experiences with increased differentiation, premium pricing and closer alignment with customers needs as you move up the progression. The book uses a coffee example to illustrate the progression from commodity (bean) to goods (ground coffee/packaged coffee) to service (Cafe coffee) to experience (Starbucks coffee) and it easy to understand from this the increasing pricing and differentiation associated with each step.
The big challenge of course is getting from a service to an experience – an experience being something memorable for the right reasons; it is easiest to be remembered for delivering a poor service as the image from Passive Aggressive reveals:
We waited...
Most organisations seem to struggle with the balance between mass customisation and commoditisation of services. If you read my blog about Starbucks I alluded to this very problem. In their drive toward lower cost service delivery they have made decisions about the technology they employ that actually damages the customer experience (IMHO). They hoped to increase the interaction time between Barista and customer but in the process devalued some of the theatre.
The nature of the feedback shown in the photo links me nicely to the subject our guest speaker Guy Stephens spoke about which received a great deal of interest: using social media as part of a customer service strategy. Social media is a fairly instant feedback technology and is increasingly used by disgruntled customers to make their feelings known – perhaps not in as interesting a way as with the use of ketchup and mustard.
It was very interesting to hear about the issues big companies were facing when dealing with social media. In one example a member of staff who used social media in their private lives had decided to get involved on the Twitter feed to try and help customers or deal with the issues of disgruntled customers only to be told not to by PR and legal teams. Similarly there were stories of brand conflict and a lack of clarity about how the process would be managed.
There is clearly a great deal of confusion from big brands about how to deal with social media and of course the problem is not helped by the fact that most senior managers are (in general) poorly educated about social media not being from the “born digital” generation. Nevertheless, customers are using social media sites in their millions and are commenting and debating their experiences (good and bad) with brands all over the world.
Social Media of course is only one set of touch points that brands have with their customers. We ran an exercise at the event to identify different touch points and see if we could get anywhere near the 100 or more that one of our travel clients claim they have. We managed to get well over 50 before turning our attention to user journey mapping and the connections between the various touch points at our disposal.
Finally we discussed measurement strategy and the common errors that companies make. Once again I found that most organisations don’t have a clear measurement strategy and few of the people at the workshop had clear links between the measures and KPI’s they used on a daily basis and the business plan and objectives. Of course the solution is obvious and everyone knew the answer before I presented it but it is clear that in the cut and thrust of the day to day lives of a marketer it is often hard to address this key issue.
Delivering a differentiated customer experience didn’t feature as a strategic goal of any of the companies we met and yet during the afternoon’s practical sessions more than one described their organisations strategy as being to differentiate (rather than lowest cost or focus for those familiar with Porter) from their competition. All seemed to leave the workshop believing it is important but I worry about their ability to make anything actually happen given the silos that exist within organisations. Perhaps a major competitive shift will be the driving force but I think this is an incremental opportunity given the scale of the task.
Travolution Question Time – Sept 23rd
1 10 2008I was lucky enough to be invited to the Travolution Question Time which was held on 23rd September at the Soho Hotel. The evening was very interesting, particularly with the timing following the collapse of XL and the Channel Tunnel fire and the economic outlook loomed large over most of the discussion. Indeed, nearly every question had an economic undertone.
The panel consisted of various luminaries from the travel sector and included Justin Cooke, CEO of Fortune Cookie, the event sponsors, or as question master and Travolution Editor Kevin May introduced him quoting Management Today “the internet in human form”. The rest of the panel was formed of Mark Tanzer, chief executive, Abta, Paul Evans, chief executive, Lowcostbeds Group, Matt Cheevers, managing director, Teletext Holidays and Chris Loughlin, managing director Europe, Travelzoo.
There was a great deal of discussion about how the worsening economy would impact the travel sector and most of the panelist offered views consistent with industry research. This shows that holidays are the last area of expenditure that consumers cut back on in a slow down or recession. However stats offered by Matt Cheevers showed that searches for cheap holidays are down year on year. Last year there was a drop in September of -6% for cheap holiday searches whereas this year the drop is -26%.
One of the many interesting points made concerned the positive impact of a recession. One panellist told of the 2001 slowdown and how it had removed the silos in the industry. Our recent research indicated that silos are a real problem in delivering a decent customer experience. With multi-channel user experience becoming increasingly important this could be a real benefit to organisations and in particular to consumers.
Finally, one of the panelists mentioned a website where disgruntled passengers and employees of United Airlines were venting their frustration. The website is called ‘Untied‘ and was created following an incident in 1996. It is well worth a look and demonstrates how delivering a bad customer experience can come back and bite you.
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Tags: Customer Experience, travel industry, User Experience
Categories : Brands, Economy, General Comments, Multi channel