strategy

December 22, 2018

The plural of ‘anecdote’ is ’emotion’ – You can use this for good or for evil

Maurice FitzGerald / Behavioral economics, Blog, Cognition, Strategic initiatives, Strategy / Behavioral economics, behavioural economics, Cognition, Cognitive bias, Customer Experience, CX, Daniel Kahneman, Sponsorship, strategy /

Some time ago I wrote a short article suggesting that The plural of the word ‘anecdote’ is not ‘science’. My point was that just because a lot of people have their own personal stories about a subject does not make what they are saying true. Take the example of nutrition advice that follows a common formula, “I have been taking ten times the daily recommended amount of Vitamin D and have not had a cold for over five years. My sister and her best friend have found the same thing. Vitamin D is ‘the sunshine vitamin’. Everyone knows that we get far fewer colds in the summer than in the winter. Vitamin D is the reason why. Click here to buy my Vitamin D supplements with added iron and jubjub berries, which are essential anti-oxidants.”

I am sure you have seen lots of anecdote-based advertising like this. If twenty people all say vitamin D supplements prevent colds, does that make it into science? I hope you will agree the answer is no.

This happens in business settings too

The same phenomenon arises frequently when businesses are developing their long-term strategies, and indeed when they are deciding how to deploy resources in the short term. Your CEO goes to see a customer who has a particular problem with your product or service. The CEO only sees a couple of customers a month and comes back believing that because one customer told him/her that this was an issue, it is indeed a critical issue. The CEO may also have committed to the customer that the issue will be fixed as soon as possible. Major projects must be stopped and resources reallocated until the problem goes away. I wish I were fantasizing, but I have seen it first-hand a number of times.

It would be nice to think that your customer experience leader or another executive could approach the CEO and provide a list of the top five customer issues that you have learned about through research. You may even be able to list the three strategic initiatives that you have under way to address the problems. For some reason that won’t matter. The anecdote has become science in the CEO’s mind.

Daniel Kahneman’s work

While I say that your efforts to provide data won’t matter ‘for some reason’, what I mean is that they won’t matter for a specific well-understood reason. That reason has been documented by the Nobel-winning behavioral economist Daniel Kahneman in his book Thinking, Fast and Slow. He describes two ways our brains function in terms of two systems:

System 1 is intuitive, emotional, and quick to act.
System 2 is rational, scientific, and relatively slow to act.
And… if System 1 has jumped to a conclusion, System 2 will not engage at all.

French study on organic food as an example

If you Google “French study shows that eating organic reduces cancer risk by 25%” you should find a lot of links to articles on the topic. Indeed, you will find so many links that you might think that it is true. You would be absolutely certain that this is what the French study said.

What the study (which I have read) actually says is that a group of almost 70,000 people who lived particularly healthy lifestyles and also ate organic food had a cancer incidence that was 25% lower than that of the general population over the four-year period of the study. For example, the study group had 15.7% of ‘current smokers’, compared to an average of 31.8% in France as a whole. They also drank less alcohol and exercised more than average. I don’t find it at all surprising that they had far fewer cases of cancer. How much of this was due to organic food? The authors suggest that it had no effect for most of the observed cancers, and may have had an effect for two types of cancer. They also acknowledge that a much larger and randomized UK study of a million people did not show any positive effect of organic food consumption on the incidence of cancer.

The plural of ‘anecdote’ is ’emotion’

None of the facts make any difference. The 25% anecdote has passed into the folklore of the organic food and nutrition communities. In two of the three Swiss cases where the 25% cancer reduction story has been published, my attempts to provide the actual data have been rebuffed. The answer given is “So many sources are saying the 25% story is true that you must be wrong.”

The point here is that the many anecdotes have grouped together to create an emotion about a particular topic. System 1 has reached its conclusion. System 2 is not welcome.

Use this for good in your business

So, you can now use this information for good or for evil. If you have science-based facts that you want to promote, come up with some human stories that will help. If you work at a security software company and want to ask for funding for a particular project, make sure you have your data and add a human-interest story like this:

Or you can use it for evil

On the other hand, if one of your colleagues, or perhaps a political opponent, has science-based facts that are inconvenient to you, don’t push back on the science. Simply come up with a human-interest anecdote that supports a different direction. This is easy in politics.

Let’s take the example of immigration. In most countries the immigrant population commits far few crimes than the native population. If you are in one of these countries and want to promote anti-immigration legislation you simply come up with a story about your neighbour who was attacked by an immigrant. The story does not even have to be true. You simply imply that all immigrants from your target country are dangerous. “A woman down the road was attacked by a teenager from Outer Slobavia last week. The Outer Slobavians are all dangerous criminals and we need to keep them out of our country.” It does not matter what the data says. Evil, eh? [You can’t hear me practicing my evil laugh here.] And yes, I am sure you can work out how to use this general principle in a business setting.

Conclusion

I have to work on an email to the producers of a Swiss TV program that has been announced for January 8th. As far as I can tell from the trailer, the anti-GMO journalist is going to show a documentary about cotton production in India. I think the information will be based on an entirely false story that the Indian anti-GMO activist Vandana Shiva started to spread about 15 years ago. She says that GMO cotton, specifically a variety that is resistant to bollworm attacks, has been responsible for a large part of the 270,000 suicides there have been among Indian farmers since 1995.

Yes, it is tragic that farmer suicides represent 10% of the total suicides in India since 1995, but there are many holes in the story. For example, the GMO cotton in question was introduced in 2002, requires far less pesticide use, and has a much better ROI than non-GMO cotton in India. My challenge is that her argument can be summarized in three System 1 words, “GMO Suicide Seeds”, and I only have a System 2 rebuttal. Ideas on how to condense it into a System 1 summary are welcome. Contact me by email if you have any ideas.

Remember that our books still make great holiday and New Year’s Day presents! All of our books are available in paperback and Kindle formats from Amazon stores worldwide.

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.

July 2, 2018

Suggested method for choosing your strategy from a list of proposals

Maurice FitzGerald / Blog, Strategic initiatives, Strategy / decision-making, Decisions, Strategic initiatives, strategy /

Once you have a set of insights about customers, competitors, your industry, the external environment and you ability to implement, the next step is to decide what you are going to do about it. Ideally, the choices will be a collective proposal from the entire team that did the situation analysis. There is a human-nature challenge in reaching a consensus in that people tend to believe their own area is complex and difficult and that everyone else’s area of work is simple. Let me illustrate with an example.

We tend to under-rate other people’s work

Shortly after I became the European software operations manager for Digital Equipment Corporation, we held a workshop with the manufacturing team, based in Galway, Ireland. Manufacturing reported elsewhere in the matrix. The enlightened workshop facilitator had each team separately draw a diagram of their own and the other team’s workflows. The results were equal and opposite diagrams. Each team showed their own work area as a complex flow chart with many inputs, outputs and transformations. Each showed the other team’s work as a single box, either ‘Make it’ or ‘Sell it’. Over dinner that evening, the manufacturing site manager asked me why the European business leadership in Geneva was necessary, since they (we) only seemed to prevent him going directly to market.

How to prioritize your choices

The best single method I have found for prioritizing strategic choices has two steps. The first is to vote and the second is an Ease / Impact diagram. A simple voting method starts when everyone present agrees that the definitions of the strategic choices are clear. Each person then gets three votes to allocate as they see fit. They can give all three to a single suggestion or split their votes. If there is a tie after three votes, give each person a further two votes. The result should be a draft list of five initiatives. Use an Ease / Impact diagram to validate the list. The diagram below comes from a strategy session after a survey of business school students.

If all your potential strategic choices are in the low-impact high-difficulty box, you need to start again. If you want a more sophisticated prioritization tool than an Ease / Impact diagram, consider a criteria rating table. This takes some planning. You should agree the decision criteria before knowing what the list of insights is. It is too easy for people to reverse-engineer the criteria if they have a personal preference for which items are the top priorities. The table below came from an evaluation of six different software solutions for automatically analyzing verbatim answers to surveys, compared to human analysis. The decision criteria are along the top, and each had a definition that was agreed at the start of the study, before any software had been evaluated.

Articulate your strategy

Since you understand your current situation in all important dimensions and have decided on the top priorities, now is a good time to articulate your strategy concisely. Customer experience strategy is a subset of a corporation’s overall strategy and should be positioned as such. For example, if your company explicitly has no plans to grow its business, the customer experience strategy should not be positioned as enabling growth. Here is an example of a strategy statement, with associated initiatives:

Our vision: customers for life.
Our strategy: achieve industry-leading customer loyalty and renewal rates by ensuring every customer achieves the ROI they expect from our services.
Strategic initiatives:
- Implement Customer Success teams for our largest customers, dedicated to helping them achieve expected benefits.
- Implement online and social-media user groups to involve the most passionate users and develop a sense of community.
- Regular proactive outreach to all customers who do not contact us themselves and are not in the user groups. Ensure no customer is forgotten.
- Catch up with our competitors in the area of free online training and how-to videos.
- Catch up with our competitors in number of languages in our service centers, moving from the current two languages to eight, within two years.

The overall strategy statement shows a clear focus on existing customers. By implication, no new work will be done on using references to attract new customers, or on fixing defective products, for example. Outside the five initiatives, all existing improvement work is considered to be at least adequate. The five investment proposals may of course include moving people from an existing work area to do the new work.

Prepare for the investment decisions

If one or more of your top five priorities require no new investment in people or other resources, you are in luck, though that seems unlikely to happen. Preparing for the investment decisions requires hard work and good timing. For many companies, perfect timing means that the strategy development exercise is well-coordinated with the annual budget cycle. ‘Well-coordinated’ means the situation analysis and initiative proposals should be complete before the budget cycle starts, ideally several weeks before, to minimize surprises and maximize the opportunity to socialize the work.

Securing the investments involves understanding the level of sponsorship you have for your work, and how you will need to communicate it to each individual you are dependent upon for funding. These are topics for another day and another blog post.

(As is often the case, this blog post is a mildly-edited version of a chapter in one of our books. In this case the book is Customer Experience Strategy – Design and Implementation. All of our books are available in Kindle and print versions from Amazon.)

June 25, 2018

How demographics affect customer experience research – You should expect surprises

Maurice FitzGerald / Blog, NPS, Strategy / Customer Experience, CX, Demographics, Net Promoter System, NPS, strategy, student survey, Surveys /

It is tempting to keep feedback requests very short to improve completion rates and avoid wasting customers’ time. However, I have yet to see research where demographics did not make a difference. Sometimes the differences are surprising.

What we mean by ‘demographics’

Demographic information is that which you use to categorize responses. Of course you should never ask people to provide the categories if you already have the information. For web-based surveys, the categories you don’t already know about are normally provided using pull-down menus. Examples are things like these:

For product surveys, responses may vary depending on whether the respondent is a purchasing decision-maker, an influencer or an end user. Respondents are asked to self-categorize.
For employee surveys, whether the person works from home, the office or is always on the road may matter.
For a survey about a software product, it is useful to know what version of the software the customer is using. People using older versions of software may provide improvement suggestions that have already been implemented in the more recent versions. It is then easy to provide instant feedback and make them happy.

Gender matters

Even in B2B environments, women often provide different input to men. You should be able to do the demographic split well enough using people’s names, if you have a few hundred responses. In HP’s research on consumer printers, women mentioned ease of use and overall quality twice as often as men as a reason for recommending the printer. Men mentioned the price of supplies, low ink consumption and value for money twice as often as women. In short, the survey showed that women care about different things than men. It changed the messaging and marketing we used, as well as the training given to people in retail stores.

An example from a student survey

A Swiss business school did a simple NPS survey among its students. Once again, women and men scored quite differently depending on where they lived. Women living at home were far happier than male students living at home (meaning with their parents). This was not expected. It was pure chance that the survey owner decided to look at gender as a factor. The full range of NPS differences by demographic is shown below. Respondents with the attributes towards the top-right gave the highest Net Promoter Scores.

Demographic effect on NPS

The survey owner used the information to propose a series of actions. For example, the unhappiest students were those who came from countries other than Switzerland or France. The proposal was a specific welcoming process for such students, including free French courses. There was no clear proposal for how to make students living with their parents happier with their lot. If you have ideas, I will pass them on. (Strangely, this was mainly an issue for male Bachelor’s degree students. Or maybe you don’t think it is strange…)

I suppose one other entertaining factoid from this survey is worth mentioning. While the beauty of the campus, with amazing views of the Alps and Lake Geneva was in the top three reasons students liked the school, half as many Swiss people mentioned it as French students. Too blasé, I suppose.

Action orientation

One last point: If you don’t already have the demographic information but it is of no conceivable use in an action plan, please don’t ask. Let’s suppose you want to know what should be improved in your commercial air-conditioning products. Asking the respondents what age they are is of almost no conceivable relevance.

June 6, 2018

Maurice FitzGerald – Customer Strategy Newsletter #61 – New idea on relationship survey reporting

Maurice FitzGerald / Newsletter / CEM group, Customer Experience, Elon Musk, Help desk humor, LinkedIn, loyalty, Net Promoter System, newsletter, NPS, reading list, relationship surveys, strategy /

Welcome to the 61st edition of my customer strategy newsletter. The five topics this week are:

New idea: Reporting results of relationship surveys by function / business
You have got to wonder what Elon Musk is trying to say
Latest blog posts
Notable items from other sites – Help Desk humor, CX reading list
Looking forward

New idea about how to report relationship survey results

I had another call with the head of CX for a large global B2B company based in LA. He was looking for input about the way he planned to report their latest relationship survey results. The people surveyed were a good representation of the views of their largest customers. So… what is the problem with that?

My own opposition to reporting relationship research scores by individual customer is well known. I blogged about the subject back in April, and won’t repeat those messages here. However, during our discussion, I thought of something new. Why not report relationship research by position? By this I mean provide scores across all customers for respondents from the Finance function, from IT, from Procurement, from Facilities, and indeed from whatever businesses and functions you may find relevant?

That would have at least one big advantage, and perhaps one disadvantage that I can think of so far. Let’s start with the advantages. If you compete in a commodity business, the views of people in the procurement / purchasing department are important. If you can see the procurement trends and customer comments across all customers it should be easy to understand what is going on and how you can improve. If the end users of your product or service are trending negative, you will be able to understand this and act more quickly than if this were buried among the other data. The main disadvantage I see is a communication challenge. Not all respondent businesses and functions are equally important to you. It may be hard to communicate which are the decision-makers, the influencers, and the end users.

Anyway, that is the relatively simple idea. I am disappointed I did not think of it years ago when working at HP. Let me know what you think.

You have got to wonder about what Elon Musk is trying to say

When you run a company that loses lots of money over many years, your personal reputation is critical. Jeff Bezos understood this and managed to get shareholder support for his long-term strategy. Elon Musk has invested lots of his own money in Tesla and SpaceX, among other ventures. All I can say is that Musk seems to have lost the plot, as far as credibility is concerned. His tweets about nano technology and about the media may have started off as attempts to be humorous. By ‘doubling down’ and repeating his comments with stronger words I feel he came across as mentally unstable. Maybe he felt a lot of pressure coming up to the shareholder meeting on Tuesday this week.

On nano-technology, here is what he tweeted as a reply to one of the world’s foremost nanotech experts (Upulie Divisekera): ‘Ahem, you have “nano” in your bio. That is 100% synonymous with bs.’ He backed off this comment just a little, but not much. For a person who manages companies that make extensive use of nano technologies, this is surprising.

As far as the media are concerned, well, his comments are strange for someone who does little or no advertising and is dependent on the media for his success. Tesla has been having some difficulties with car manufacturing lately, along with potential auto pilot problems. Following some comments he made about “…increasingly immaterial reports [about Tesla] dominating news cycles” he became more extreme, saying “The holier-than-thou hypocrisy of big media companies who lay claim to the truth, but publish only enough to sugarcoat the lie, is why the public no longer respects them.” Things got worse after that. What can he be thinking? What can he be trying to say? At least the car company is allegedly in danger of running out of cash this year, and he needs all the media support he can get so that customers stay on his side. My message: Your reputation is everything. Don’t blow it.

Our latest blog posts

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

How I got my two biggest promotions: True Stories

I was speaking to a business school student recently. She asked me about how I managed to get promoted during my career. That got me thinking… Luck and hard work…

A legendary Mark Hurd speech to HP employees in Israel

Mark Hurd is CEO of Oracle and was CEO of HP before that. While at HP, he made many speeches about cost. His general philosophy was best illustrated by my favorite event; his speech to all employees in Israel. It was broadcast to the entire company, coming shortly after the company acquired EDS…

The start of a long story: How I learned about ‘customer-centric cost reduction’.

Such a contrast I was looking out my office window near Charles de Gaulle airport in 1982. The phone rang just as I was watching Concorde take off on its daily run to New York…

Notable customer experience items from other sites

Help Desk humor

I have not posted anything funny in a while. Or at least, nothing that I intended to be funny. So let’s plug that gap with a Blogspot page on the subject of Help Desks. Those who are extremely sensitive and concerned about political correctness may want to skip this. Get it here.

Ricardo Saltz Gulko: 30 Best Customer Experience books for 2017 and 2018

Brazil-based CX influencer Ricardo Saltz Gulko manages a CX group on Facebook and posted the list of books he read and is looking forward to here. Yes, one of our books is on the list. Personally, I keep Facebook for private things and follow Ricardo’s group passively. If you want to have a look, you should be able to find the Facebook group here.

Looking forward

We have updated the privacy statement on our website to be fully in line with the new GDPR regulations. Yes, we use cookies and Google Analytics, but receive no personal data whatsoever about visitors to our site.

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.

May 23, 2018

#59 CEM Group on LinkedIn, Is my NPS or CSAT score any good? Infographics on journey mapping and on customer loyalty

Maurice FitzGerald / Newsletter / CEM group, Customer Experience, Journey mapping, LinkedIn, loyalty, Net Promoter System, newsletter, NPS, strategy, Temkin /

Customer Experience Management LinkedIn group. FAQ: Is my NPS or CSAT score any good? Welcome to the 59th edition of my customer strategy newsletter. The five topics this week are:

Now managing the Customer Experience Management group on LinkedIn
Some thoughts on whether a particular NPS or CSAT score is good or not
Latest blog posts
Notable items from other sites – Infographic on journey mapping, and one on customer loyalty
Looking forward – CEM group, and GDPR

Now managing the Customer Experience Management group on LinkedIn

Last week Axel Schultze (the owner) asked me to help with the management of the LinkedIn CEM group. As I write this, the group has about 97,600 members, with new membership requests arriving every day. The group content is not as interesting as it should be. I would like to do something about that, and your input would be most welcome.

First, I note that members almost never ask any questions about anything. I find this surprising. I asked a question about GDPR and the management of mailing lists last week and did at least get some useful input. The membership list is long, so it should be possible to find deep expertise on almost any topic.

Most of the content is simply links to other websites, with covering notes. The linked articles are often interesting, though the covering notes usually do not do a great job of explaining why a customer experience professional should bother reading them. Linking to other sites is inevitable, as the LinkedIn group interface does not allow you to write long articles directly in a group. And job openings are posted reasonably regularly.

Spam is not a major concern. When I see it, I delete it instantly. Among other factors, I consider a link posted without a covering note to be spam.

One of my early ideas is to ‘feature’ any article that attracts a discussion. ‘Featuring’ means locking the article at the top of the list. I can only lock one article at a time, so don’t want to lock anything for more than two or three days at a time. Anyway, your ideas about how to make the it all more interesting and useful would be most welcome. The CEM group is here.

Frequently Asked Question: Is my NPS or CSAT score any good?

I have been reflecting on one aspect of the question of the ‘goodness’ of any CX score. For once, my comments and suggestions are not going to be about methodology. I have simply been asking myself why scores in some industries are consistently low. Let’s use the Temkin graphic for NPS by industry in 2017 as an example…

Let’s think about the nature of the businesses at the top of the list compared to those at the bottom. Can an electricity supplier make you happy? I don’t think so. I believe we only notice our utility, TV and internet service providers when things go wrong. Otherwise, they are invisible, just doing their thing in the background. This is not the case for most of the industries at the top of the diagram. They really can make us smile.

What do you think? If you agree, the only conclusion possible is that the people at the bottom of the list are there not because they are doing a bad job, but simply because we don’t notice them most of the time.

Our latest blog posts

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

A legendary Mark Hurd speech to HP employees in Israel

The start of a long story: How I learned about ‘customer-centric cost reduction’.

Such a contrast I was looking out my office window near Charles de Gaulle airport in 1982. The phone rang just as I was watching Concorde take off on its daily run to New York…

How do you know whether your latest relationship survey score is better than your last one?

This is not a stupid question! Last week I had the pleasure of speaking to an LA-based reader and head of customer experience for a very large company. He had his latest research results, and there had been a slight decline in scores, despite improvements he knew they had made.

Notable customer experience items from other sites

David Jacques: Infographic: How to do effective journey mapping

David is from Québec and has been living in Hong Kong for a long time. He is well known as a thought leader, both locally and internationally. He is a fan of customer journey mapping and has recently created the best infographic I have seen on the topic. The diagrams are beautiful and the explanations are clear. Highly recommended if you are going to start a journey mapping process.

Get it here.

Brendan Gannon on PR Daily: Infographic – Why you should show loyal customers some love

And since we are talking about infographics, here is another one. This time it provides 20 interesting statistics about customer loyalty. You may find them useful for your own presentations. Sources are listed just below the infographic. You can find the article here.

Looking forward

The main thing I expect to do in the coming days is to implement whatever suggestions I receive on how to improve the CEM group on LinkedIn.

I mentioned the new EU General Data Protection Regulation two weeks ago. If you feel like reading it, here is a link to the English version of the new law. After reading it and some dialog with others, I now believe the rules for email address lists for companies based outside the EU to mean the following for me: since I do not track your behavior and I do not directly try to sell you anything in my newsletters and don’t any eCommerce ability, I am not affected by the new regulations at all. If any reader thinks otherwise, please let me know, ideally after reading the actual regulation, rather than someone’s opinion about it.

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.