Chief Customer Officer

Situation analysis internal realities and insights

December 10, 2018

Strategy: Ask new questions to get new answers – Part6 of 6: Internal realities, and conclusion

Maurice FitzGerald / Blog, Strategic initiatives, Strategy / Chief Customer Officer, competition, Customer Experience, CX, Sponsorship, strategy /

So far, the situation analysis has allowed you to dream about what you can do for customers and partners, how you will crush your competitors and how you will lead your industry. This time we move on to the internal realities in your own organization. It’s a tricky subject and can be the hardest of the six areas we have been studying. Let’s be positive: to get new answers, you have to ask new questions.

This is the fifth in a series of articles about what I consider to be the most important aspect of strategy development: an accurate analysis of the current situation and what should be done to improve it. The first article was about customers and is here. The second was about partners and is here. The third was about competitors and is here. The fourth was about industry dynamics and external factors and is here.

Questions about internal realities

While the first five areas are all about what is happening outside your company, you are unlikely to be able to sell and implement every conceivable idea within your company. These questions may help establish what you can achieve:

What is the state of executive sponsorship for your current efforts?
How likely are you to be to get any additional funding and people you may need to implement?
What can you do to prove the value of your work?
How can you secure enduring sponsorship for your work; sponsorship that will survive leadership changes?
What current work can you stop in your own area to provide resources for new work?
Do you have a formal talent management program in your company that you could use to staff improvement work on a part-time basis?
What measurement and improvement systems and processes have your CEO and other key leaders used in their previous companies?
Look at the intranet pages of your business and function leaders. Which ones mention customers as a priority and which seem to have no interest in the topic? Which ones have announced and staffed formal customer-centric initiatives?
Have you grown by mergers and acquisitions? If so, are many different improvement systems and processes in place? Which ones seem to have the best reputations and produce superior results?

These are just suggestions

Each company is different. You need to come up with your own list of questions. Try to find at least some that you believe nobody has ever asked. My draft list is a reasonable starting place. I have tried to include questions that are about people and organizations as well as about sources of funding. The second question on the list is critical, nevertheless; if you have no hope of getting the people and other resources you need to implement a new strategy, well… you should probably change companies.

The answers lead to insights

The result of the situation analysis in each area should be a short list of insights. Each team should aim to have one to three insights and potential initiatives ready to explain and propose at the end of the analysis cycle. If a team has more than three ‘top priorities’, they have probably not put enough thought into it. As French philosopher Rene Descartes said when writing a letter to a friend (and this is often mis-attributed to Mark Twain), “Please excuse me for writing such a long letter. If I had had more time, I would have written a shorter one.”

Useful insights often take the form of “so therefore…” statements. “We looked at the industry benchmark data from Temkin Group and saw that Acme is outperforming us in this area. We believe we are stronger than Acme here, so therefore here is what we need to do…” The point is that the action proposals need to be based on data and analysis, and not on ideas that have come from thin air, with no factual basis for believing they will improve customer or partner experience. Each team’s insights and proposals will be competing with those from other teams for funding. The better supported the proposals are by fact, the easier they will be to explain and support.

Conclusion

We have now covered all six dimensions of a situation analysis and outlined how to turn the questions and answers into insights. The word ‘insight’ is a deep and meaningful word. It is not superficial. The process I have outlined should give you the depth required to decide what areas you should concentrate on and how.

Good luck!

As is often the case, the above is a substantial rewrite of part of a chapter in one of our books; in this case Customer Experience Strategy – Design and Implementation. All of our books are available in paperback and Kindle formats from Amazon stores worldwide.

Situation analysis industry and environment

December 2, 2018

Strategy: Ask new questions to get new answers – Parts 4 and 5: CX industry and external trends

Maurice FitzGerald / Blog, Strategic initiatives, Strategy / Chief Customer Officer, competition, Customer Experience, CX, strategy /

This time the situation analysis process moves on to relevant trends in your industry and in the external environment. Accurate observations about these areas can give you a competitive advantage, even if you have little influence over the trends. Remember: to get new answers, you have to ask new questions.

This is the fourth in a series of articles about what I consider to be the most important aspect of strategy development: an accurate analysis of the current situation and what should be done to improve it. The first article was about customers and is here. The second was about partners and is here. The third was about competitors and is here.

Industry and external trends

These areas require a different approach to others in that it may be harder to find objective data. Please don’t ‘trust your gut’. Whether it be for climate change or business strategy, science will give far superior insights to those your stomach and intestines may provide. These are areas where having someone on your team who has a formal business school education may help. I remember learning something I found surprising in one of my INSEAD courses, for example: American companies that decide to expand into Europe by placing their European HQ in London tend to be far less successful than those that are forced to make language adjustments by placing their HQ somewhere in continental Europe. So, if you are competing in a relatively new industry where everyone seems to be expanding from the USA to Europe, let or even encourage your competitors to go to London while you move to Brussels or Geneva, for example.

Questions about industry trends

Here are some questions that should be relevant for most industries. I have concentrated on things that affect customers only. You may like to add questions about industry trends that affect employees, for example trends like outsourcing and offshoring. There may be some overlap between these questions and those about competitors.

What are the most important customer experience trends in your industry? What ways of listening to customers are most popular? What new improvement processes and technologies are emerging?
What is the impact of social media on customer perception of your products and services? Do you know what is being said about you on social media, and does it matter?
Which measurement systems best predict revenue and market share?
How do the latest developments compare with what you are currently using?
What customer experience competitive benchmark data is available and relevant to your industry?

Questions about external trends

These questions are about the environment in which your company, your competitors and your customers live. It includes government regulation and general concerns and hopes of the people in countries where you operate. These questions come from an exercise that was specifically about customer experience strategy. You should edit and adjust for your needs.

How does government regulation affect the way you want to go about measuring and improving customer experience?
What current and emerging rules about data privacy affect your current and potential survey processes?
How are you required to maintain customer survey opt-out lists?
Do you know what surveys are being run in your company and whether they respect relevant laws?
Are you allowed to transmit customer lists to subcontractors such as survey providers?
Do some governments and countries where you operate have an unusually high focus on the environment, gender equality, fighting corruption or other formal initiatives that you may find useful in building your brand image?

Government regulation trends are quite hard to predict in our increasingly polarized world. Trends can take opposite directions when a different political party comes into power. I worked for a company whose factories were confiscated in one country that had a military takeover, which is an extreme example. And I have to say that the Wrangler HQ reaction to François Mitterrand’s socialist / communist coalition government in France was… well… interesting, to say the least.

The answers lead to insights

If you have asked new questions, the result will be new answers. When most companies work on a new strategy they don’t cover these two areas at all. Cover them well and you will win.

Conclusion

We have now covered five of the six dimensions of a situation analysis. Next time we will talk about your internal realities and how to put it all together.

November 27, 2018

Strategy: Ask new questions to get new answers – Part 3: Competitors

Maurice FitzGerald / Blog, Strategic initiatives, Strategy / Chief Customer Officer, competition, Customer Experience, CX, strategy /

There are two main categories of competitors: traditional and emerging. The emerging category includes companies you do not know about yet, but who may be about to take over your market. There are industries such as steel manufacturing where barriers to entry are high, and you are unlikely to be surprised. There are also low-barrier industries such as software and pure import-export businesses. The focus of this article is a set of questions that may help you to gain new insights about your competitors and what you should do to crush them. Above all, remember: to get new answers, you have to ask new questions.

This is the third in a series of articles about what I consider to be the most important aspect of strategy development: an accurate analysis of the current situation and what should be done to improve it. The first article was about customers and is here. The second was about partners and is here.

Emerging competitors

As Willie Pietersen said during the Columbia course I mentioned in the first article in the series, “Somewhere in the world someone has just had a great idea that is going to kill your company.” I won’t bore you with the extensive list of companies that did not notice new threats or did not take them seriously. I suppose those leaders may have been victims of short-termism. By that I mean they felt that they did not need to worry about the new threat during the current quarter as it would not affect short-term financial results. Think of it as similar to the way some political leaders talk about climate change. Nothing they have to worry about or invest in as the worst will happen after they leave office.

Getting started

As mentioned in prior articles, you should use a cross-functional team to agree the list of competition-related questions and then answer them. In a large company, it takes six weeks to do the situation analysis well. You should have a short progress check with your team members each week. What follows below is a suggested set of questions about current and emerging competitors. Please be clear that the list is just there to get you started. This list was developed for the creation of a customer experience strategy and most questions will apply to any type of strategy. Some will of course not be relevant to your business. And you will certainly be able to come up with additional and better questions.

Remember: Ask new questions to get new answers.

The questions

Do you have competitive benchmark survey data that lets you understand where your competitors provide a superior experience and the situations or touchpoints where you lead. If so, how do you compare with traditional competitors and are new competitors emerging with differentiated customer experience?
How have competitors’ customer experience strategy and results changed over time? What investments have they been making in people and systems? (Going to their website to look at their list of job openings may help with this.)
What do your critical competitors say about customer focus and customer experience in their quarterly and annual reports? Is customer experience mentioned on their website as a formal part of their business strategy? How have they set up their customer experience teams and others that support critical touchpoints?
What customer experience software and consulting companies use your competitors as references on their websites?
Do you have competitors that have no short-term profit objective and so can outspend you in critical customer experience areas?
If another company is the customer experience star in your industry, what are the two or three most important reasons for the leadership? Are you able to do those two or three things better than the competitor, or should you be concentrating on doing things differently? (Both work.)
What customer-experience-related investments have your competitors stopped or radically decreased?
Do you see competitors whose customer experience [Insert your own strategic focus area if needed] approach differs by country?

Your people who manage customer experience may have some relevant data. The most difficult thing to get is an accurate comparative view of customer perceptions of your company and your competitors. Double-blind competitive research is best, if you can afford it.

The answers lead to insights

If you have asked new questions, the result will be new answers. Just a small subset of these will lead to true insights and actions about the trends in the experience you and your competitors are providing customers. The concept of new or emerging competitors is an important one and deserves special attention.

Conclusion

We have now covered three of the six dimensions of a situation analysis. Next time we will talk about industry trends and the external environment.

November 20, 2018

Strategy: Ask new questions to get new answers – Part 2: Partners

Maurice FitzGerald / Blog, Strategic initiatives, Strategy / Chief Customer Officer, Customer Experience, CX, strategy /

The majority of companies have partners for at least some of their business. The three main categories of partners available to most businesses are resellers, implementation partners, and subcontractors. The purpose of any and all business strategies is to crush your competitors and win. Your partners can help you do that. But how? And what can they do to help you win that they are not already doing? Frankly, I don’t know, but I do know how to find out. In short, to get new answers, you have to ask new questions.

This is the second in a series of articles about what I consider to be the most important aspect of strategy development: an accurate analysis of the current situation and what should be done to improve it. The first article was about customers and is here.

Some thoughts about partners

While you may have some partners that don’t work with anyone else, it is more likely that you compete for their attention. It is critical to think about partners in an ‘outside-in’ way, meaning from their perspective rather than yours. Assume they have choices. Assume that your decisions have consequences. Assume, for example, that if you pay your partners 60 days after they deliver a product or service and your competitors pay after 30 days, well, your competitors will get better service. Is the improvement in your cash flow (and deterioration in the partners’) worth it? And what happens if your procurement people go around asking all suppliers to cut prices by 15% and your competitors do not do the same thing? Think about it from the partners’ perspective. There is no single right answer. You just need to ask the right questions.

Note that if you manage a business that uses franchisees to reach end customers, you should consider franchisees to be your customers rather than your partners.

Getting started

As mentioned last time, you should use a cross-functional team to agree the list of partner-related questions and then answer them. In a large company, it takes six weeks to do the situation analysis well. You should have a short progress check with your team members each week. What follows below is a suggested set of questions that concern partners. Please be clear that the list is just there to get you started. This list was developed for the creation of a customer experience strategy and most questions will apply to any type of strategy. Some will of course not be relevant to your business. And you will certainly be able to come up with additional and better questions.

Remember: Ask new questions to get new answers.

The questions

What are the critical touchpoints between you and your resellers, implementation partners and subcontractors? How have these been changing over time? Are these three categories useful, or is there a better way to segment your partners from a partner experience perspective?
Should the top few partners, in terms of revenue generation, be treated differently from the rest?
How does your partners’ experience with your company compare to their experience with your traditional and emerging competitors?
Who are your potential new partners, and why?
Which partnerships are not producing anything useful and should be fixed or stopped?
How do your partner marketing incentives compare to those of your competitors?
How do your partner payment terms compare to those offered by your competitors?
How quickly are resellers able to access any special pricing agreements you may have in place for very large customers?
Do you compete directly with your partners?
If you have a formal partner feedback process, what has it taught you?

Your people who manage customer or partner experience may have some relevant data. If not, you may need to set up some simple new research. If you do so, I suggest just asking partners these questions:

How likely are they to continue to work with you? (On a zero to ten scale.)
Why?
What should you improve?
What do they like or dislike compared to other companies with which they work?

Ideally you would ask these questions to your largest partners face-to-face, with video conferencing / Skype a close second choice. Phone calls are better than asking by email.

The answers lead to insights

If you have asked new questions, the result will be new answers. Just a small subset of these will lead to true insights and actions about the trends in the experience you are providing customers. The concept of new or emerging partners is an important one and deserves special attention.

Conclusion

We have now covered two of the six dimensions of a situation analysis. Next time we will talk about competitors.

As is often the case, the above is a substantial rewrite of a chapter in one of our books; in this case Customer Experience Strategy – Design and Implementation. All of our books are available in paperback and Kindle formats from Amazon stores worldwide.

November 15, 2018

Strategy: Ask new questions to get new answers – Part 1: Customers

Maurice FitzGerald / Blog, Strategic initiatives, Strategy / Chief Customer Officer, Customer Experience, CX, strategy /

Way back in 2005 I had the privilege of attending an executive education program at Columbia called Creating Breakthrough Strategy. The course was far more practical than the other attendees and I expected. The reason was simple: the main content and structure were provided by Willie Pietersen, a South African who has been CEO of a number of multi-billion-dollar companies including Lever foods, Seagram USA, Tropicana, and Sterling Winthrop’s Consumer Health Group. Over a ten-year period at HP, I took what he and Rita Gunther McGrath taught me and applied it to build strategies for individual HP countries (including Russia, Germany, Ireland, and about ten others) and for HP businesses. I also used it to build customer experience strategies for HP in EMEA and in my final job as VP of customer experience for HP’s $4B software business.

What I would like to do in this series of articles is to share what I consider to be the most important aspect of strategy development: an accurate analysis of the current situation and what should be done to improve it. If there is a single message here, it is a simple one: To get new answers, you have to ask new questions. I wish I claim I said this first, but I have to give credit to Willie Pietersen.

I adapted the method over time

I followed the methodology exactly as I had been taught, at least initially. After the first couple of strategy projects, I determined that a major element was missing for HP, and I believe that element matters to all B2B businesses, and to many others. The element I added to the structure you see at the top of this article is ‘Partners’. These are other companies with whom you work to make your business function. More about partners next time.

Getting started

Strategy should be developed by cross-functional teams that cover all areas of your business. What I suggest is that you set up six teams, one for each area of this situation analysis. If yours is a small company, one person may be enough for each. In a large company, it takes six weeks to do the situation analysis well. You should have a short progress check with your team members each week. The first session takes a little longer in that each team needs to agree the questions that should be asked and answered. What follows below is a suggested set of questions that concern customers. Please be clear that the list is just there to get you started. I find that people are better at editing a list than creating it from scratch. This list was developed for the creation of a customer experience strategy and most questions will apply to any type of strategy. Some will of course not be relevant to your business. And you will certainly be able to come up with others.

Remember: ask new questions to get new answers. The purpose of the whole strategy exercise is to develop a set of ideas that will allow you to crush your competitors and win in your market. The overall approach is ‘outside-in’, meaning it is primarily focused on trends outside your company.

The questions

What experiences do your traditional end-customers want at the most important customer journey points? How reliable is your evidence for this?
How and why are the expectations of your traditional customers changing over time?
Are there useful ways you could segment customers and provide differentiated experiences to each segment? Should all customers of all sizes and from all industries be treated exactly the same or should you tailor a specific experience for each?
Should new customers be treated differently from existing customers? If so, how?
If you provide both face-to-face and web-based purchase and post-sales experiences, is the intent that one should complement and build on the other, or are they set up to effectively compete for customer attention? If they compete with each other, is that your intention, or just the result of the way you have set up the work of two independent teams? Are the prices the same, no matter what the purchase channel?
Do you have any information on how your traditional customers consider their experiences with you compared to what they experience with competitors?
What do your formal feedback mechanisms tell you about customer experience expectations?
Do you currently communicate back to customers, telling them what you are doing with input they have provided?
Which are the areas where you just have to be ‘good enough’ and investing more does not provide much return?
Are new types of customers emerging with different expectations?
What experiences are you providing customers that give you no competitive advantage and could be stopped to provide resources for new work?
Do some of your customers have supplier assessment processes in place? If so, how are you doing in their ratings?
If customers have left you, or you unexpectedly lost a deal you expected to win, do you understand why?
If you have an executive sponsor program and / or a Customer Advisory Board in place for your largest customers, do you have any way of getting consensus from the sponsors and the board on the most important improvement opportunities?

At least half the day-to-day work of most customer experience teams is about listening to customers and partners, then summarizing what they want you to improve. This means that much of the necessary situation analysis information is directly expected from and controlled by the customer experience leader. Naturally, in small companies, there is no single central reference point, except perhaps the owner or CEO.

The answers lead to insights

If you have asked new questions, the result will be new answers. Just a small subset of these will lead to true insights about the trends in the experience you are providing customers. The concept of new or emerging customers is an important one and deserves special attention.

Conclusion

We have now covered one of the six dimensions of a situation analysis. The customer dimension is probably the most obvious. My next blog post will cover partners. I hope you will gain some new insights and a new strategy development methodology.

October 11, 2018

When should you ask for customer feedback? And should you survey customers at all? (5-minute read)

Maurice FitzGerald / Blog, NPS, Strategic initiatives, Strategy / Chief Customer Officer, CSAT, Customer Experience, CX, Net Promoter System, NPS, Surveys /

I have a sort of hobby: answering companies’ requests for my feedback and seeing whether they will write back to tell me what they have learned and what they are going to do. I suppose I have responded to about 20 such requests over the last two months, and then heard nothing at all back, except perhaps an auto-reply with a thank-you. So… let me offer my thoughts on whether and when you should ask for customer feedback.

The first step in designing surveys is being selective about what research you are going to do. Make sure you are going to provide customers with more value than you will extract from them.

Sanity check on whether you should gather feedback at all

Here are some considerations that should help you decide where to start:

Are you going to use any new input you get? If you have already established your top five improvement priorities, have staffed them, are implementing, and can’t add a new project in the next six months, don’t do any surveys other than those that provide progress feedback on your improvement work.
Taking a software example, if you are planning a new major release and want user input on what should be in it, ask them in a formal way. After 30 years in and out of the software business, as a leader and as a user, I have never once been asked for formal input about what should be in the next version. Product managers generally feel they know what users want, based on informal and anecdotal conversations, rather than research. This of course applies beyond software.
Not every customer touchpoint is important. Use your overall brand or benchmark surveys to establish which touchpoints customers mention as competitive advantages or disadvantages, and don’t survey anyone about any of the others. To pick a B2B example, surveying people about the friendliness, competence and efficiency of the person who handles a query about the accuracy of an invoice is certain to be a waste of resources that could better be spent elsewhere.

Timing is everything

Survey timing is an important part of research reliability. Seeking feedback about things that are in the distant past is unlikely to be of much value for example. Here are some appropriate times to consider collecting customer input, by type of survey. What follows presupposes that you are going to use the feedback to make improvements for your customers. If not, there is no good timing.

Product surveys part 1 – Unboxing and installing your product

Here we are talking about an individual product, not a generic purchase or other touchpoint experience that applies to all your products. Some products are sophisticated (the marketing word for complex) to install. Others are not. If your product takes time and effort to unbox or download, install and use for the first time, it is worthwhile understanding what your customers think of the experience and how it can be improved. The research needs to be done immediately after the experience. Waiting a week or more will mean losing the positive and negative emotional impact.

If yours is a technology product, I suggest sending the survey request or phoning the customer within 48 hours of delivery. While this will be easy to do in a direct business that sells to consumers, it is more difficult in other circumstances. You want to survey the end user of the product, and they may not be the buyer in a B2B situation, so you might not know who to contact. If you use resellers, they may not want to provide the customer data, and you should offer to run the survey on their behalf, providing them the data for initial screening. If yours is a software product, the installation routine itself should generate the survey request 24 hours after the installation takes place. Requiring or at least suggesting product registration on a website will give you additional sources of end-user contact details.

Product surveys part 2 – Usage

In most situations, you won’t hear anything from a customer who does not have any problems. Unfortunately, the reason for not having problems could be that the customer no longer uses your product. Perhaps they never started using it in the first place. You need to understand the views of customers who have been using your product for some time, and I suggest six months after purchase as a reasonable target for your research. The purpose, as explained to the customer, should be to get feedback for improving the product itself, as well as future products. In my own experience of software product usage surveys, it is common to get suggestions for additional features that the product already has, but the customer has not been able to find. Usage surveys have the same challenge as installation surveys, meaning you may not know whom to contact.

SaaS (Cloud) software is a completely different in that you do know who is using your software and indeed how much they use it. If a customer who has been using your software suddenly stops, contact them immediately. SaaS software usually allows you to see what functions a customer uses. If you can see that they are not using something they really should be using, you can send them a link to a training video, or send over someone who can talk them through it.

Service contracts

The ideal time to get feedback on a service contract is a little before the customer is considering renewing it. This is a bit more subtle than it might seem. If you have a large multi-year contract (for example to provide security services to a company) your competitors will probably know about it, and will start to contact your customer well before the contract renewal data. Since your competitors will be saying how wonderful they are, and how awful you are, you need to have acted well before this point. I suggest an annual survey as a minimum for multi-year contracts, taking place half way through each year. If you have a single-year contract, I suggest doing the research about three months in, so that all improvement suggestions can be implemented before the contract comes up for renewal consideration, probably about nine months in.

Hybrid product / services

An airline flight is a hybrid product & service. This sort of offer should be researched within 24 hours of completion. Most airlines seem to miss the point. Some give you the survey while you are still in the air, not knowing essential things like whether your luggage will show up on the carousel. Others send you the survey after a week or two. Frequent fliers will have completely forgotten about the experience by then, or will confuse it with another flight. This happened to me regularly, as I have been taking over 100 flights per year for nearly as long as I can remember. What did I think of my flight from Atlanta to Paris two weeks ago? Who knows? Since product and service surveys are not mentioned in The Ultimate Question 2.0, this may be a good time to reinforce the definition. An entire flight experience, from awareness, to reservation, to the actual trip itself, involves a sequence of touchpoints. Each touchpoint could be studied by a transactional survey. The airline offers many different products and services, the sum of which might be studied in their brand survey.

Relationship surveys and Brand surveys

Twice a year is a good frequency for your most important customer relationships and may work best for your brand surveys. You may like to run them both on a continuous basis so you can see the effects of things like changes in the economy and your financial and product announcements. This would mean, for example, sampling one sixth of your customers every month. Remember that you need to report results and improvement projects to customers as well as to your own team.

Transactional and episode surveys

While it might seem obvious that they should happen shortly after the transaction takes place, it is surprising how rarely this happens. All too often, I get pop-up windows when I have just started an online transaction. I dismiss the window, and then don’t think about it anymore. For the simplest transactions, surveying just after they are complete seems appropriate. For more complex things, like telephone support for a technology product, it seems appropriate to wait for 24 hours, as it may take a little time for the customer to know whether the issue has been completely resolved.

Your feedback is most welcome.

As is usually the case, this is a slightly-edited version of a chapter in one of our books; in this case Net Promoter – Implement the System. All of our books are available in paperback and Kindle formats from Amazon stores worldwide.

April 11, 2018

#53 – NPS benchmarks – Who is responsible for CX – Infographic – Making employees want to smile

Maurice FitzGerald / Newsletter / benchmarks, Chief Customer Officer, Customer Experience, employee satisfaction, Infographic, Net Promoter System, NPS /

Useful new free source of NPS competitive benchmarks? Where should Customer Experience report? Welcome to the 53rd edition of my customer strategy newsletter. The five topics this week are:

Possibly useful free source of competitive NPS competitive benchmarks
Discussions about who is responsible for customer experience
Latest blog posts
Notable items from other sites – Customer service infographic, and why employees smile
Looking forward

Possibly useful free source of NPS competitive benchmarks

Customer experience leaders and others often ask the following question when they see the first NPS scores for their company: “Is this a good score?” The answer is that good scores and trends are those that are better than your competitors’ scores. NPS trends compared to competition explain between 20 and 60% of market share trends according to Bain research.

The ‘catch’ is that all of these scores have to be measured in exactly the same way. The only solution available up to now has been to pay a research firm for a double-blind benchmark study that already happens to cover you, or pay them even more to start to cover you.

If you happen to be among the 500 largest US companies that sell to consumers, you may be in luck. I have come up with an alternative solution. It is not completely satisfactory, but I believe it is a lot better than nothing. I have used public data from Temkin and ACSI to create an ‘ACSI to NPS translation equation’.

The American Customer Satisfaction Index covers about 500 companies, and can be found here. Bruce Temkin provides public NPS scores by industry. The latest report is here. I simply mapped the benchmarks by industry for the last three years to each other. You can find the full description of what I did here. The result is a translation equation which I will round to NPS = (1.5 x ACSI) – 88. Please try it out an let me know what you think. If you have an alternative source of free double-blind NPS competitive benchmarks, please also let me know.

Discussions about who is responsible for customer experience

I have been engaged in several online discussions about this sensitive topic over the last few weeks. Generally the people initiating the discussions hold one of two points of view. The first is that ‘everyone is responsible for customer experience’ so therefore no single leader is needed for it. The second viewpoint is that Marketing should ‘own’ customer experience. In my view, the first viewpoint is just silly, and the second one is sub-optimal. Here is why…

Customer experience improvement opportunities fall into two categories. The first category is improvements for which a single business or function is clearly responsible and for which they already have all necessary funding and people. They can just get on with it. The second improvement category covers things that cross functions and business units. These items correspond to the ‘Outer Loop’ in the Net Promoter System, for example. Unless someone is responsible for making these things happen, they just will not happen. The second category constitutes the core work of the Chief Customer Officer or equivalent. (I have blogged about the subject here.)

So, supposing the need to have a person responsible for the cross-business opportunities is accepted. Where should that person report? At the risk of controversy, I have to say that if the answer is not ‘To the CEO’, then your company does not consider improving customer experience to be a top priority. My personal view is that the corporate Chief of Staff should have the CX responsibility, if it has to be shared with other work. Marketing would be a distant #3 choice. Personally I would have sales as my #2 choice. The advantage the Chief of Staff has is that he or she sets the agenda for all leadership meetings and events, so CX can always be there. Marketing’s main ‘jobs to be done’ are demand generation and sales support. CX improvement initiatives would be a low priority for the CMO. Not zero, just low. Not optimal.

As always, feel free to disagree…

Our latest blog posts

Here are the latest posts. Older posts are still available on the blog page.

Useful if you have no NPS® benchmarks for your company – Please help me to improve this ACSI to NPS converter

As many of you know, public competitive NPS benchmarks are exceedingly rare. This article proposes an approximate solution for translating American Customer Satisfaction Index data into NPS numbers.

Yet more reflections on why corporate cost benchmarking is often evil and destructive

Regular readers will know that I am not a fan of cost benchmarking. The reason is simple. I think it is almost always misused, sometimes producing disastrous results. The primary reason is that the cost cutting takes place in the absence of clear statements and actions to spend more on the areas where companies want to invest and grow.

Employees love these companies, and customers hate them… and vice-versa

My research this month and a year ago (see below) has established that there is little or no relationship between employee and customer satisfaction. This post simply gives the lists that should not exist: the companies employees hate but customers love, and vice-versa. If the conventional wisdom that the two always go together were true, these lists would not exist.

Notable customer experience items from other sites

16best.net: Infographic – 23 Awesome Customer Service Stories

Anecdotes and personal stories are powerful. They often outweigh other data simply because they are memorable. While their main business is providing users with discount coupons, 16best.net occasionally publishes nice infographics, and this one is no exception. It is massive and includes nice stories from many top American brands. You can read and download it here.

Alain Thys on LinkedIn: How do you make employees smile?

Our Belgian friend Alain Thys is ‘Chief Coach’ at Customerfit, a consulting company whose mission is to help companies become more customer-centric. Alain provides three leadership actions that he believes are key to making employees genuinely happy that they work for your company.

His article reminds me of my brother’s experience travelling from Dublin to Melbourne two years ago. He flew (in sequence) with Turkish Airlines to Istanbul and Bangkok, Thai to Melbourne, then Singapore Airlines and Lufthansa on the way back. I asked him which of the four he preferred. He answered that Turkish was his favorite, saying they smiled and seemed to genuinely enjoy their work. He said that the Singapore Airlines crew seemed to smile 100% of the time, but that it was fake. Read Alain’s article here.

Looking forward

I will be doing the first of what I hope will be a series of webinars for ClearAction Exchange on April 25th. I should be able to provide more details next week.

Here are links to all of our books on Amazon.com. Kindle versions are available in all stores. Print versions are available from the major stores only, with the notable exception of Australia, where print versions are not available from amazon.com.au.

Customer Experience Strategy – Design & Implementation

Net Promoter – Implement the System

Customer-centric Cost Reduction

“So Happy Here”: The Absurdist but Essential Guide to Better Business (Color edition)

“So Happy Here”: The Absurdist but Essential Guide to Better Business (Black & White edition)

Please share this newsletter with your friends and colleagues and encourage them to sign up for it here. I have put links to past newsletters on the subscription page. Finally, please feel free to change or cancel your subscription using the link below.

You can also email me, Maurice FitzGerald, at mfg@customerstrategy.net.

To change your subscription, click here.

February 5, 2018

Executive Sponsors and Project Sponsors – Teams you may want to implement

Maurice FitzGerald / Blog / Chief Customer Officer, customer culture, Customer Experience, Customers, CX, Executive Sponsors /

This is the third in a series of three articles on types of teams you may want to implement if you want to improve customer experience. This time I cover two types of executive ‘sponsors’: those for individual large customers, and project sponsors.

Executive sponsors for strategic accounts

A ‘strategic account’ is a customer who you expect to generate a substantial portion of your revenue in the future. A sponsor should be a senior executive who is able to devote a substantial portion of his or her time to improving the relationship your company has with an individual customer. ‘Substantial’ means two to four days per month. This time is almost never spent directly in selling sessions. Examples of what customer sponsors do are:

Brief the customer’s leadership team on the strategy of your company.
Call the customer’s key people to discuss your latest quarterly results. If the sponsor is, for example, your CFO, they may call the customer’s CFO.
Brief the customer on new products or services entirely outside any possible current sales opportunity.
Brief the customer on the latest change of CEO or other senior executive.
Call the customer to discuss their latest earnings announcement, product announcement or leadership changes.
If the customer has a current escalation in progress with your company, the sponsor should call the senior executives to give them progress updates.
Make a presentation about the customer to your company leadership team on a quarterly basis. A good practice is to have this as a regular agenda item. You can optionally invite the customer to present their company.

In essence, the executive sponsor’s main role is to give the customer confidence that you are going to take care of them. This is particularly important for customers who are neither very positive nor very negative about you. You should stimulate regular two-way communication.

A sponsor should have a personal interest in the customer’s business

An executive sponsor is unlikely to be successful without being personally interested in the company concerned. In my own case, an uncle founded Ireland’s first cable TV company (Phoenix Relays) and I took personal interest in the cable-encryption company Kudelski, when they were an HP strategic account. I consider this to be the most important piece of screening you do. If you have nobody who is interested in a particular customer’s business, I believe you will be better off not appointing anyone, rather than having someone who does not care.

Executive sponsors are also formal or informal escalation points the customer may naturally go to if they are upset about something and are not getting it resolved. Your formal escalation teams also need to keep the sponsor informed of anything serious that is going on at the customer site.

Executive sponsors may be able to do some of your relationship research

You can consider asking executive sponsors to do some of your relationship-survey interviews. They will only agree if the formal list of questions is very short, as in the NPS format. While they may be reluctant to ask the single rating question in such a survey, they will probably get over it. I suggest persuading them that it is a good way of finding out whether the person is willing to be a reference, and if not, what we need to improve to get there.

Doing the work well takes a lot of research and presence. If, for example, you have 20 strategic accounts, and have 20 or more appropriate leaders, they should take one customer each, and plan on spending five to ten hours a week on the sponsorship role, at least for the first few months.

Project sponsors

The project sponsor role is defined in a White Paper by the Project Management Institute as:

Providing clear direction for the project and how it links with the organization’s overall strategy.
Securing project resources.
Ensuring the project is on time, on budget and on scope.
Providing feedback on status reports and making sure they reach the necessary stakeholders.
Championing the project at the executive level to secure buy-in.

Both customer and internal projects should have sponsors. They have as much impact as the project manager. In the case of customer projects, you can consider asking the sponsor to formally interview customer executives about the project once it is complete, or has hit major milestones.

Conclusion

Customer Success teams, Customer Advisory Boards, and these two types of executive sponsors are the four main ‘non-standard’ teams I suggest you implement to improve customer experience, particularly for B2B customers. If you are in a consumer business, but work through retailers, the retailers are the ones who should be on your Customer Advisory Board. When I say ‘non-standard teams’, I mean teams you don’t need to simply survive. Your support team is an example of the latter category.

As usual, this is an edited version of something I have written in one of our books, in this case Customer Experience Strategy – Design and Implementation. Your comments are welcome below.

January 22, 2018

Customer Success Team – First of four types of team you may want to implement

Maurice FitzGerald / Blog / Chief Customer Officer, CSAT, customer culture, Customer Experience, Customer Success, strategy /

There are four types of teams you may want to implement to improve customer experience. I will cover the the membership and work of each in three blog posts. The teams are:

Customer Success teams
Customer Advisory Boards
Executive Sponsors
Project Sponsors

This week, I cover Customer Success teams.

Customer Success

Customer Success teams started in the software industry. They probably exist under various names in other industries that sell complex products. It is a concept that is useful and necessary where you have customer contracts that are renewed each year. Software companies sell a limited range of things. Licenses allow you to use software for the duration of the license, whether the application is in the Cloud or run locally. Implementation services help customers to get up and running. Technical support services are there for when things don’t work as promised. Educational services provide training to users.

While that may seem fairly complete, we often had surprises of two specific types at HP when customers told us they no longer wanted to use our software: first, they sometimes complained that the software lacked particular functionality that was in fact present. Second, especially with complex software, they blamed themselves if they could not get it to work as expected, and did not ask for help. Enter Customer Success teams.

Core role is to ensure customers get the ROI they expect

Customer Success teams work with your most important customers to ensure they do indeed achieve the ROI or ‘Time to Value’ that they expected when they bought your product or service. The simplest way of thinking about it would be to consider it to be usage support. There is no charge for the service. It does not replace or duplicate any of the paid services. For software, a Customer Success person goes to the customer site and sits with the key users, watching them use the software and suggesting how they can be more effective. If, for example, your business is building management services, your customer expected some specific benefits when they handed that work over to you. If the only people who visit the customer are measured on renewing the contract, they will tend to show up towards the end of the contract. Then it may be too late.

Compare renewal rates

When we introduced these teams at HP, we compared support contract renewal rates between similar types of customers that either did or did not have a Customer Success Manager assigned. (Support contracts include both the rights to use new versions of software and the ability to access technical support resources.) The effect of the Customer Success people was dramatic, bringing a spectacular improvement in renewal rates. I suppose I also need to mention that they occasionally discovered customers who had bought the software but never installed it, but had not said anything. Sales people tend not to worry too much about customers after they have been compensated for the sale, and we simply had not noticed.

Deep product expertise needed

Customer Success people should be deep product experts. A lot of ours had worked in software R&D. Each individual tends to only be an expert in one product, two or three at best. They are therefore assigned to your top customers for that specific product, rather than your top customers overall. As distinct from the people manning support helplines, the Customer Success teams are more expert than the customer’s own people. Their primary relationship is with the people using the product, rather than the ones who may have bought it. This is quite an important distinction that needs to be considered for the relationship surveys you have with your most important customers.

Renewal rates are the most important metrics

HP Software, like most large businesses on the planet, had about 40% of all customers in ‘the deadly zone of mutual indifference’. We did not talk to them, and they did not talk to us, or at least that was the case before Customer Success teams arrived. These were the customers most likely to be seduced by competitors showing up with attractive promises of a better life. The constant interaction with their Customer Success manager made it far less likely that these customers would switch.

If you are selling annuity contracts of any kind, it is easy to calculate the value of a one-point improvement in renewal rates. Start with your largest customers and work down. A reasonable starting principle is that one Customer Success person can handle ten customers. If, for example, you currently have an 88% contract renewal rate, calculate affordability based on a 92% renewal rate. Start with half of the relevant customer population for the first year, so you can evaluate whether it really produces the expected results. The Customer Success person should also participate in any regular meetings the sales leader for that customer may hold.

Don’t put them on sales compensation

I recommend that Customer Success people not be compensated on contract renewals or upsells for any individual product or customer they cover. Giving the entire team a collective incentive based on their overall improvement in renewal rates would be appropriate.

Customer Success teams discover issues that are specific to individual customers and generic things that apply to all customers. One approach to provide smaller customers some of the benefits of the investment is to record videos that show your customers how to do things that others find difficult. Make them available free of charge on your website or on YouTube.

Conclusion

Customer Success teams should be a great investment for any business that depends on contracts that renew from year to year. The ROI is easy to measure. Why not try it out on part of your customer base as a test.

As is often this case, this article is a modified version of part of a chapter in one of our books. This time it comes from Customer Experience Strategy – Design and Implementation. Feel free to give feedback below or by emailing me at mfg@customerstrategy.net.

January 17, 2018

#44 – Watermelon problems, Behavioral Economics, and more

Maurice FitzGerald / Newsletter / Behavioral economics, Chief Customer Officer, Customer Experience, CX, Dan Ariely, Daniel Kahneman, Danny Kahneman, Net Promoter System, NPS, Podcast, Rob Markey /

Welcome to the 44th edition of my customer strategy newsletter. The five topics this week are:

Watermelon problems
New Net Promoter System podcast – Behavioral Econonomics
Latest blog posts
Notable items from other sites
Looking forward

Watch out for ‘Watermelon problems’

While I was in LA last month, I spoke with the customer experience leader of a Fortune 100 company. He used a striking metaphor. He described ‘Watermelon problems’. These are situations where all of your performance indicators are superficially green. But when you dig deep into what is going on, you discover it is bright red.

Watermelons are quite common in deep relationship research with your largest customers. They arise when you only manage to speak to customer executives who have positive views about your company. The best way of ensuring you avoid this particular type of watermelon is to use the customer’s organization chart to list the decision-makers, decision-influencers, and of course the end users of your products and services. Make sure you get a representative set of responses. People who refuse to talk to you probably don’t have many positive things to say.

Watermelons are normally tasty and refreshing. In customer research, they are just the opposite.

For some reason, this story inspired my brother to think of a certain movie by Ridley Scott, starring Sigourney Weaver… As my friend Dr. Jamie Borderick said on seeing this “As a watermelon customer, no one can hear you scream.”

Drawing by Peter FitzGerald – Enjoy much more of his work in ”So Happy Here” – Available on Amazon

New Net Promoter System podcast – Behavioral Economics and CX

I recorded a series of six podcasts with Rob Markey way back in June and July. The final one just went live. Rob and I both love Behavioral Economics, and the writings of Daniel Kahneman and Dan Ariely in particular.

We cover the relevance of their work to customer experience. We give examples of when to use the ‘Peak-End’ theory, ‘Loss-aversion’, and the power of apologizing, among other things. I hope you enjoy it.

The podcast should have appeared automatically in your iTunes feed, or wherever you get your podcasts. It is also available on the Bain netpromotersystem.com/podcast page.

Our latest blog posts

Here are the latest posts. Older posts are still available on the blog page.

The Net Promoter System® is defined and documented in one single way – Everything else is fake news

I have been trying to work out why most Net Promoter System implementation I see are missing even some basic things. The root cause, I believe, is lack of common understanding about the reference source of information about what the system actually is…

Journey mapping – The Main Customer Experience Measurement and Improvement Systems – Part 7

This is the final article in a series of seven about CX measurement and improvement systems. I hope you have enjoyed them, and that you learned at least a little.…

The main customer experience measurement and improvement systems – Part 6 – Proprietary systems

Various consulting companies propose proprietary measurement systems. Your company may have its own composite metric too. The Temkin Group, for example, has both the Temkin Loyalty Index and the Temkin Experience Rating. They are useful examples…

Notable customer experience items from other sites

Promoter.io – 13 Hopeful (but absurd) Customer Success Predictions for 2018

Yes, we occasionally get a good laugh. Dana Severson wrote this list to bring in the new year at Promoter.io. (You may remember them as among the first companies that provided technology to allow embedding of the NPS rating question directly in outbound feedback requests.) Personally, my favorite prediction is number 11. There are one or two I don’t understand, but maybe this is because I am not American. The predictions are here.

Quora – Useful from time to time

I regularly read and contribute to some topics on Quora. It is a site with a general principle: you have to ask a question. About half the time, the questions are asked and immediately answered by people who are trying to sell something. The other half tend to be more useful. Among others, I follow the Net Promoter Score feed, and the Customer Experience feed. Why not have a look?

Looking forward

I have been invited to be the chairperson for a January 30th public webcast about AI and its importance for customer experience. More details next week!

It is still January and there is still time to think about your professional goals for 2018. What about doing something for your customers? But what? Our books can help! Here are links to each on Amazon.com. If you use a different country site, you can just open the link, then edit .com to .co.uk, .de or whatever:

Customer Experience Strategy – Design & Implementation

Net Promoter – Implement the System

Customer-centric Cost Reduction

“So Happy Here”: The Absurdist but Essential Guide to Better Business (Color edition)

“So Happy Here”: The Absurdist but Essential Guide to Better Business (Black & White edition)

You can also email me, Maurice FitzGerald, at mfg@customerstrategy.net.

To change your subscription, click here.

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