Customer Helix

Is Tesco a lesson in taking your eye off the customer?

tesco bagTesco’s share price has fallen 50% in a year. Profits dropped 6% in the year ending April 2014. In July, the CEO stepped down after failing to turn the company around. And, today, the company announced a “profit hole” of £263 million. It shouldn’t be a surprise then to hear that the company’s Chairman, Sir Richard Broadbent, has also announced his departure.

I was in London three years ago when former CEO, Sir Terry Leahy retired as Chief Executive, and it was front page news in every British broadsheet. Leahy had overseen the rise of Tesco from a perennial follower to Marks & Spencer and Sainsbury to become the largest British retailer, and the third largest retailer in the world measured by revenues.

And, Tesco had been an admired company. Their focus on the customer, and their success with the Tesco Clubcard made Tesco a “go-to” case study on how to leverage customer intelligence to provide personalized benefits to individual customers. And, thanks to the Clubcard success, dunnhumby became a household name among retailers.

But, thinking back to when Leahy stepped down, I remember reading the multitude of articles about the firm’s success and about its future. And, there were warning signs then. Over-reach in the US and outdated stores were cited concerns, but more troubling still was the reference to the firm taking their eye off the customer.

What’s happened over the past several years? Rewards for being a Clubcard member have been cut back, and according to press reports interviewing “insiders”, the focus shifted from the customer to making sure Tesco didn’t miss its numbers. Well, as Rick Perry would say, “Ooops!” Unfortunately, now for Tesco, they can only hope to be a case study of another kind – the turnaround story. A retail analyst with HSBC reckons a turnaround could cost as much as £3 billion.

From the outside looking in, it seems like Tesco shifted from an engagement strategy to a revenue strategy. And, if so, it backfired! While there are always a myriad of reasons for business success or failure – not all of which are visible from the outside looking in, I’ll be watching intently to see whether, and how much, the pendulum shifts back to the consumer – and to observe whether any such shift correlates with a return to business success.

Here’s wishing Tesco’s new executive team and board members all the success in the world!

Cheers,
Dave

As if Comcast weren’t hated enough

Comcast has done it again!

Almost a decade since the infamous sleeping technician (it’s only 8 years, but the “almost a decade” quote is relevant — read on*), Comcast has managed to demonstrate once again just why, and how much people hate the company. What’s the latest snafu? A customer service rep (in title at least) barked at a customer and her husband for almost 20 minutes while they tried to cancel their service. The husband managed to record the final 8 minutes or so — it makes for really painful listening.

Unfortunately, for Comcast, the husband — Ryan Block — is a bit connected online. He pasted the recording and it went viral over the past couple of days.

Many of the comments by readers to the various and sundry articles that I read call for the rep to be fired. Heck, CNET even asked in its headline whether he might be the worst customer service rep in the world. What all of this ignores is that this isn’t an isolated incident. Anyone that has tried to cancel internet/cellular/TV service, a credit card, or just a magazine subscription has experienced something similar. Generally, you need to put aside a chunk of time to spend on hold, arguing, and prepping with every last shred of information you might need — the third initial of your grandmother’s middle name? No, sir, that’s not what is in our records!

The barriers that firms place — hiding phone numbers, forcing you to run an exit script gauntlet, patronizing questions about why you’re leaving — do nothing but instill hostility towards the company. Why is it so hard to see that these actions are counter-productive?

In their statement in response to this incident, Comcast claimed to be “very embarrassed by the way our employee spoke with Mr. Block” and claim that the way the rep spoke to Block “is unacceptable and not consistent with how we train our customer service representatives.”

That smells like an incredibly large pile of horse manure to me. It’s staggering difficult to believe that this rep — and every colleague and peer of his with whom I’ve ever spoken — went off-reservation and decided to bark at a customer out of the blue. I would bet my shirt that not only is he trained to do everything he can to retain the customer, but he’s no doubt also compensated on “saves.”

While this call is horrifying to listen to, it’s not surprising. This is really what the media might call a “dog bites man” story — albeit an excruciatingly painful one. It would be a “man bites dog” story if this happened at Zappos or Disney. While Comcast might describe this as a “very unfortunate experience”, I can’t help but think that what they think is unfortunate is that the call was recorded and went viral. If they are truly bothered by it they need to change. What should Comcast — and the rest of us do? If I may channel Souza, they need to:

speak

as though the world is listening

respond

as though the world were watching

act

as though you actually care

Cheers,
Dave

* The recording brilliantly captures the rep’s incredulity that these customers are leaving “after a decade” as customers of the best service out there.

 

What every brand can learn from T-Mobile’s “uncarrier” strategy

Since publishing the Customer Relationship Architecture report, one of the most common questions I’ve received relates to the notion of a collaborative customer relationship strategy. Among other questions, folks have emailed to ask which companies we would classify as collaborative. Well, as we state in the report, they aren’t all that common. And, even where they do exist, not many firms are executing on the strategy particularly well. We’re not in a position to disclose the companies that took the survey, but what we can do is provide some examples of companies that appear to be pursuing this strategy.

T-Mobile

t-mobile international fee ad

 

One company that comes to mind is T-Mobile. At least in the States, T-Mobile is pursuing a really interesting “uncarrier” strategy. I saw Peter DeLuca SVP of Brand Communications for T-Mobile USA speak at the recent Ad Age Digital Conference and he explained their approach as one that was rooted in customer understanding. Essentially, they looked at the major pain points that customers had with their carriers and sought to change the dynamic in the wireless industry.

How? By introducing policies and procedures that turn the traditional cellphone industry approach on its head. For example, they eliminated contracts. They offered to pay prospective customers’ early termination fees if they left competitors and signed up with T-Mobile. They introduced new ways for customers to upgrade to the newest phones.

When you think about these moves through the lens of a customer relationship architecture, each one feels like they checked the “understand your customers” and “apply that intelligence” boxes pretty well. But, let me give a personal story about where they check the “to the mutual benefit of the company and the customer” box. I was heading to Ireland just after Christmas and saw ads in the airport that claimed T-Mobile was no longer charging for data usage overseas. I was so skeptical I went to their website found the relevant explanation, read it with a fine tooth comb, and took screen shots of the pages in case I had to go back and fight any charges. Sure enough, my data usage while I was there was free. Fast forward a few months later and I received an email telling me that my bill was going to drop by $14 a month because the company was no longer charging for texts sent overseas. I was paying for both my wife and I to have unlimited international texting and they were simply eliminating the fee. It’s fascinating to me that in an industry renowned for the lack of customer concern, T-Mobile has changed the game for me as a customer and begun to act in our mutual interest – not just their own. The zero-sum game has ended.

Strategy or tactic?

Overall, T-Mobile appears to be pursuing a collaborative strategy. And, it’s only fair to point out that we could debate whether it’s out of necessity as the number four player or not. But either way, as a customer I feel that the company understands my pain points and is making strides to eliminate them.

I can think of lots of anecdotal stories about other companies. I’ve written previously about GoDaddy’s call to me that saved me money initially and had me gladly spending more with them by the end of the call. Or, I could point to BankUnited with whom I bank. I landed off a flight one day to three voicemails and an email asking me to call them. Before I had the chance, they called me again. A check I had written was about to bounce and they wanted permission to transfer money between my accounts so that I wouldn’t be hit with an overdrawn or returned check fee. They lost out on the $35 or whatever it might have been, but made me feel like they had my best interest at heart. Does that mean that GoDaddy and BankUnited are following a collaborative strategy? I’m not sure. So far, it feels more like a tactic than a strategy. That doesn’t make it a bad thing, but it does highlight the point that a collaborative tactic — while admirable in its own right — does not a collaborative strategy make.

T-Mobile is one company that stands out as approaching a collaborative relationship strategy — and not simply stringing together a series of collaborative tactics. Who else do we think of as collaborative? Some of the old reliables like Disney and Zappos also jump to mind, but I’m curious to hear about your experiences — who stands out to you either at a strategic or tactical level as collaborative? Email me or post a comment below and I’ll continue to post examples over time.

Cheers,
Dave

An alternative to “Random Acts Of Kindness”

One of the great buzz phrases in the world of customer experience is “Random Acts of Kindness.” These programs — which even have their own acronym: RAOK — empower employees to randomly do something nice for customers. This isn’t systematic and algorithmically calculated in the way an airline or hotel might upgrade one of their better customers, but something that is truly random.

Two of my favorite examples were shared by Sean Risebrow, then of Virgin Media at Forrester’s Customer Experience conference in London a couple of years ago. Sean referenced a Virgin Media employee who sent a picture frame to a new broadband customer who mentioned that he had just become a grandfather for the first time. He wanted the faster speed internet to be able to Skype or FaceTime his family to see the baby as he grew. The employee sent the picture frame along with a note of congratulations – just because it was a kind thing to do. In a separate example, another Virgin Media employee received a written cancellation notice from an elderly woman who had bought two smartphones — one each for her husband and herself. When the couple received the phones, they discovered that their elderly and shaky hands weren’t the greatest for using a touchscreen smartphone. She wrote and said that she loved Virgin Media but was going to have to cancel her contract because the phones didn’t suit their needs. Rather than slapping the couple with hefty cancellation fees, the employee went online and researched the best phones for elderly people. She bought two of them (yes, they weren’t phones that Virgin Media sold) and sent them to the elderly couple with a note that expressed their hope that they would work better for their needs and said “We love you too.” Now, admittedly, I’ve heard from plenty of UK-based friends that they’ve had markedly different experiences with Virgin Media, but regardless of your direct experience, I think these are two great examples of how a RAOK program should work.

But, whether or not your company has a formal RAOK program, it’s worth considering whether they have an unofficial CAOH program. Yes, I’m coining my own acronym which stands for “Concerted Acts Of Hostility”. Unfortunately, in my experience, they are far more common. I think of these as different to Reicheld’s ‘bad profits’ — you know those charges that firms slap on their customers, usually when the customer is trapped into the relationship. Instead, I’m thinking of policies and procedures that are deliberately unfriendly to customers. And, policies that employees either won’t or can’t circumvent to help the firm appear less deliberately unkind to their customers.

I’ve written previously about Apple’s lack of employee empowerment, and my experiences with Starwood, Hertz and JetBlue as it relates to customer animosity. As an update to my US Airways experience, I was back in Dublin last week and worked with my mother to complete the requirements to get the value of her canceled ticket transferred over to me – minus the $150 fee, of course! Today, they called me to tell me that the letter that she had signed and witnessed — as requested — has to be notarized. At what stage does a company stop and consider its policies and realize that they are engaging in Concerted Acts Of Hostility? In the case of US Airways, that stage clearly hasn’t happened yet. Have you taken a look at your own policies lately? Even if you don’t have a formal RAOK program, for the love of your customers, please take a look and see if you have any CAOH behaviors that are damaging your customer relationships.

Cheers,
Dave

Earth Day: a worthy bandwagon?

As an occasional imbiber of fine wines and craft beers, I’ve noticed a big emphasis in the past few years on “sustainable” farming and all things organic. And, then there’s a few companies out there that make sustainability and saving the planet core to who they are and what they do: consider Patagonia, Seventh Generation or The Body Shop as cases in point.

And, then when Earth Day rolls around, there are a ton of posts, tweets, and claps on the back as firm’s promote their commitment to our planet. But most of it smacks as

CSAT-Graphic-for-blog-post

really inauthentic. When we asked consumer-facing executives in our recent survey about what drives executive and board decisions, 12% of respondents highlighted “environmental issues” and 15% selected “corporate social responsibility”.

But, really, regardless of how important the environment ranks, the key question for me is what drives the business. And, how well aligned are executives and employees behind that driver. If you were to ask employees and customers of Patagonia or  The Body Shop, a significant majority would probably say that environmental issues are one of the major concerns for the business.

What would they say about your company? And, how consistent would they be? Establishing customer expectations and enabling employees to exceed them require a clear sense of direction and alignment. Alternatively, we can jump on every Hallmark holiday and industry bandwagon and continue to yell in the hopes that someone is listening — and gullible enough to believe.

Happy Earth Day everyone!

Cheers,

Dave

Announcing a consulting partnership with Targetbase

TB Element logo

I’m excited to announce a partnership with Targetbase which has hired Customer Helix to help establish a consulting practice — Targetbase Element — to service existing and prospective Targetbase clients.

The goal for the new division will be to help firms develop an optimal customer relationship architecture. “Customer relationship” is a loaded term thanks to firms’ history with CRM, but when Targetbase and I got together to discuss the idea of working together, we tried to strip away all the marketing-speak and acronyms and determine how we could collectively help firms. We reduced it all down to helping senior leaders to establish the right relationship for their specific company with their specific customers. We were in complete alignment that there isn’t and shouldn’t be a cookie-cutteer approach to customer relationships. So many elements affect the type of relationship that one can have — some of which are in a firm’s control, and some of which are not. So we plan to help firms determine what the right strategy is for them and their customers; assess whether they are set up structurally to deliver against that strategy; and determine where to invest to either remove barriers or execute even more effectively.

Ultimately, we’ll evaluate four things: the desired customer relationship strategy for the firm; how well it executes on that strategy; the consumer’s expectation in a relationship with the firm; and how well those expectations are being met. Once we know the answers to some or all of these questions, we can help firms to align in the mutual interest of the consumer and the firm.

Going back to my Forrester days, I was always impressed with Targetbase’s strategy offering, so I’m flattered to be brought on board to help them establish a more formal and standalone strategy consulting group. I look forward to bringing my thought leadership to the table and have begun by conducting a survey of 200 customer-facing professionals to better understand their current and desired approach to customer relationships.

To learn more, see the Targetbase Element site, their blog, or see my “consulting offerings” page here.

Cheers,

Dave

Research report: Consumer relationship strategies

Customer relationship architectureWe’re delighted to release a research report that we’ve been working on for the past few months focused on the nature of company/consumer relationships. Ignoring the CRM-esque acronyms and buzzwords, we set out to understand the current state of how firm’s approach relationships with their consumers. To ground the research, we surveyed 200 consumer-facing professionals at large North American firms, and interviewed scores of others.

The research is founded on three simple questions that we see as key to any relationship:

  • how well do you know your customer;
  • how well do you apply that knowledge; and
  • to who’s benefit?

Based on the results, we identify 5 distinct relationship strategies

  • non-relationship-focused;
  • revenue-focused;
  • experience-focused;
  • engagement-focused; and
  • collaborative.

We don’t advocate that any one strategy is better than another. In fact, one of the headlines in the report is that “The ‘best strategy’ is the one that’s right for you.” But, we found lots of opportunity for improvement for most firms. For example, while 58% of survey respondents are “company focused” (i.e. either non-relationship or revenue focused), 52.5% wish they were “consumer focused” (i.e. either experience-focused or engagement-focused) and a further 17% desire to be collaborative.

Meanwhile, despite these aspirations of more consumer-centric strategies, as few as 0 to 24% of firms perform well at their specific strategy (defined as a 4 or 5 out of 5 in our scoring).

The research goes on to show how relationship strategies permeate the entire business and have broad impact on business culture and results.

If you’d like to take the survey and receive a free diagnostic that shows your current strategy and “score” assessing how well you perform against that strategy, you can do so for free here.

I hope you’ll take the time to read the research and take the opportunity to examine your current relationship strategy.

Cheers,

Dave

Customer satisfaction is a board room concern. What about “customer relationship”?

CSAT-Graphic-for-blog-postWe recently surveyed 200 customer-facing professionals and asked respondents about what three things they perceive drive board and executive level decisions at their company. Answers ranged from revenue and profit to internal politics, corporate social responsibility, and confidence in their ability to deliver. While it was encouraging to see “internal politics” lowest on the list, it was even more encouraging to see “customer satisfaction (including Net Promoter Score)” selected as the third most common response (38%), behind profit (51%) and revenue (42%).

Net Promoter Score (NPS) has generated a fair number of column inches and pixels — and has it’s own share of promoters and distractors. But, I’ve noticed it coming up more and more in conversations with practitioners. I’ve interviewed several customer-facing executives lately who referenced NPS specifically as one of their key corporate metrics. In these firms, NPS is part of their operational model. It impacts every employee’s MBOs and compensation, and serves to rally the whole firm around the customer.

None of the folks that I interviewed described it as a panacea. But, I do notice too many firms use it as an objective rather than a metric — in my opinion the objective should be something along the lines of improving the customer experience or boosting customer loyalty. NPS is just one way to measure the customer’s reaction to that experience. The best description that I’ve heard in recent interviews was from a senior retailer who said “NPS gives us a scorecard/benchmark on where our customer-focused-activity is working and where there’s friction. But, it’s not about relationship building. It’s a scorecard on how well we’re doing something”. If your objective is to build relationships, beware of assuming a high or improving NPS or CSAT score as a proxy for strong or improving relationships. It might be. But, you won’t know unless you look beyond the metric.

Cheers,

Dave

P.S. We’ll release a report with additional findings from the survey in the next few days.

The Ministry of Customer Relations

Customer Complaints DepartmentHave you ever noticed how almost every airline has a script that the cabin crew say on arrival at your destination? There’s a welcome to whatever city, the time, temperature, and usually some form of promotion à la “We thank you for flying XYZ airlines, and we hope that when your plans call for air travel that you choose to fly with XYZ Airlines again.” And the person reading the script usually says it with the same enthusiasm as they had for the safety briefing at the start of the flight — that is to say, not much.

Airlines get a bad rap when it comes to customer service. I’m a big fan of Louis CK’s miracle of flight monologue – and sometimes guilty as charged! But, it’s one thing to complain about having to pay for a sandwich or sitting on the runway for 40 minutes, and another to expect some semblance of customer service when you speak to a customer service representative.

After more than a year trying to get a ticket transferred or refunded, I spent 35 minutes on the phone today with US Airways. I ended up speaking with a “customer service” representative, albeit from their reservations team. The corporate “customer relations” department — as they call it — has no outside phone number and can’t be reached internally by phone either, allegedly. Think about that for a second. A department that is called “customer relations” and there’s no way for a customer to contact them.

Here’s the back story: last year my mother was supposed to come over to the States for my son’s First Holy Communion. We booked the ticket in February and she was supposed to fly here in April. Just before she was due to travel, she was diagnosed with stage 4 cancer and her doctor advised her not to fly due to a concern they had with blood clots in her type of cancer and treatment. I contacted US Airways right away — before her departure date — to see if we could transfer the ticket to a family member or to refund it. I was advised to go online to their “customer service” portion of their website to provide the details. Which I did. And, I got a response — in August — with a case number that should be quoted and advising me that my mother should contact them directly for privacy reasons. So my mother sent the doctors note requested (there’s no way to upload that online, of course) and referenced the case number, and we waited. And, at irregular intervals we sent a note asking for a response to the original email, but none came.

Today, I tired of emailing into the ether and called US Airways. I got through to reservations because that seems to be the only place one can call when you call US Airways. The first rep I spoke to told me that it is unlikely that I’ll have the ticket refunded because a year has passed since it was purchased. The supervisor — who was quite the expert in monotone policy recitation — suggested I go to the website and fill in the form I filled in more than a year ago and explain my story. Why? Because there’s no way to speak to someone in “customer relations”.

You couldn’t make this stuff up. Why don’t they go the whole hog and call the department “The Ministry of Customer Relations”? Thank you US Airways for demonstrating that even when we thought airline customer service couldn’t get any worse, it can.

Pretty soon, if I keep going at this pace in my airline relationships, I’m going to be swimming back to Ireland!

Cheers,

Dave

Expectation is context

If “the message is the medium”; I reckon “the expectation is the context”.

It’s probably true of most things, but I’m really hung up on the idea of how our expectations create context for our experience and satisfaction with a brand. Sure, it’s pretty obvious that if we’re paying hundreds of dollars for a meal, we expect a very different experience than if we’re paying less than twenty. But, I’ve been thinking about this partly in light of my previously documented JetBlue experiences, that it’s not just the money we spend, but the expectations that are set. Based on my previous experiences, I expected more of JetBlue. Just as I expect more of Apple, and Zappos, and Disney based on my experiences. So, when one of those companies falls down, it’s more bothersome than when even a competitor of theirs underperform.

But, here’s the good news: it works both ways. I had an experience recently when I got a call from a GoDaddy “strategy consultant”. Initially, I kicked myself for not screening the call. I have multiple GoDaddy accounts – some of which are about ten years old (yes, dating back to way before those Super Bowl ads). But, I’ve always thought of GoDaddy as the WalMart of domain name purchasing — cheap and relatively easy. Well, this strategy consultant was calling to explain that I could structure my relationship differently and wind up saving myself a pretty significant chunk of change. I was using bits of multiple services — a couple of email addresses per domain, for example — and this guy showed me how I could consolidate them and then cancel some. Only after about 20 minutes on the phone, all focused on saving me money, did he ask me if I wanted to consolidate renewal dates and extend them to benefit from a bulk rate. By then I was on a GoDaddy high. I was happy to extend my contracts and maybe get this wonderful gentleman a bit of commission; and obviously to save myself what ended up being a couple of hundred dollars. And, yes, I know that I saved myself money the way my wife does at Bloomingdales (“look at all the money I saved, honey”), but GoDaddy had so exceeded my expectations and delivered value for products and services that I use and will continue to need, that spending the money was a no-brainer.

Amazon, JetBlue, and Apple aren’t the only firms that could learn a thing or two!

Cheers,

Dave

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