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About the Author
As one of the world’s leading innovation strategists and futurists, Nicholas J. Webb, CEO of Lassen Innovation, works closely with Fortune 500 companies throughout the world to help them lead their industries in innovation, strategy, and customer experience design. He also serves as an adjunct professor and the director of the Center for Health Innovation at Western University of Health Sciences in Pomona, California. Nicholas speaks at 50+ events annually to an average audience of 1,200 people, and his consulting clients include Gatorade, CIGNA, Freightliner, Johnson & Johnson, Verizon Wireless, Salesforce, and Microsoft.
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What Customers Crave
How to Create Relevant and Memorable Experiences at Every Touchpoint
By Nicholas J. Webb
AMACOMCopyright © 2017 Nicholas J. Webb
All rights reserved.
THE ADVENT OF "CUSTOMER EXCEPTIONAL SERVICE
Let's face it: Today, most customer experience programs are a disaster.
Don't blame yourself, because it's not your fault that these programs are failing you. Most organizations were sold the promise that if they used the right software, analytic tools, and processes, they would be able to manage their customer relationships and deliver what their customers wanted — every time.
This approach sort of worked for a while. We understood our customers through segmentation and who the customer was — white, black, male, female, affluent, not so affluent, in their thirties, in their fifties — thinking demography was the key. We believed the Voice of the Customer (VoC) was the answer and that Customer Relationship Management (CRM) alone would be enough to engineer exceptional experiences across the customer's journey.
The problem today is that this approach is almost always wrong. Yes, wrong. We cannot continue to apply old-fashioned models in today's hyper-linked and hyper-aggressive environment. In fact, even when an organization has built a reasonably good strategy, it virtually always fails in execution. According to some excellent research conducted for the software company Oracle, 93 percent of executives say that improving the customer experience is one of their organization's top three priorities in the next two years, and 91 percent wish their organization was considered a customer experience leader in their industry. However, many organizations are stuck in an execution chasm: 37 percent are just getting started with a formal customer experience initiative, and only 20 percent consider the state of their customer experience initiative to be advanced.
A NEW BEGINNING: THE FALL OF THE CUSTOMER SERVICE–INDUSTRIAL COMPLEX
The term military-industrial complex came into common usage when President Dwight Eisenhower used it in his 1961 farewell address to the nation. Eisenhower used the term to warn the country of the dangerous relationship among the government, the military, and the arms industry. I have adapted it to the customer service–industrial complex — to warn businesspeople of the dangers inherent in the continued use of the canned "customer service" programs still in use today.
For nearly half a century, from the 1950s into the 1990s, customer service was easy. Its approach was authoritarian and it did not directly connect with the consumer. Large organizations simply had control of the media through advertising and publicity and used one-way (simplex) communication to drive consumers to a specific service or product. In this way, they simply told consumers what their experience with a product or service was going to be like.
A great example of current success in our consumer-oriented economy is Uber, the alternative-to-cab car service. In the past, passengers had no control over what they would find when they got into a taxi. Sometimes passengers had good experiences, sometimes terrible ones. They felt they had little recourse but to accept what they got. Then Uber came along with its instant rating system, which let riders know exactly what other passengers thought of and had experienced with a particular driver. By the same token, the drivers could rate the passengers. In this way, both passengers and drivers can choose to not do business with people who have a reputation for obnoxious behavior.
However, in the customer service-industrial complex environment, consumers were practically blind to their choices. Their social connections were limited (when compared to today), so they had no real way of determining the quality or value of a product or service. With few or no other options, they simply got what was dealt them by companies. Purveyors of electronics, sellers of packaged consumer goods, hotels, airlines, and others were all experienced bullies, and there was nothing the consumer could do about it. This continued for decades ... until the Internet arrived.
Consumer bullying still exists. For example, have you ever called your cable company's service department and been told they'd be happy to install your line a week later sometime between 8 AM and 5 PM? This is a classic example of a broken customer experience, and it's only a matter of time until disruptive innovators end this sort of un-customer-centric practice forever.
To be fair, the customer service–industrial complex began with good intentions. Companies genuinely wanted to get closer to their clients as they realized this was the path to more sales. The problem arose because they tried to create assembly-line techniques in the customer service process. In their attempt to drive efficiency and reduce costs, they looked inward — at what worked for them — and became self-focused, not customer-focused.
For this reason, most CRM systems are designed to help companies sell more products or services to customers. They're concerned with identifying profitable and not-profitable customers and using this knowledge to find ways to allocate resources. Information about consumer behavior and purchasing habits is pooled into spreadsheets, and businesses create grand marketing and customer engagement plans based on that data. The problem is that no one along the way actually got to know what I call the Soul of the Customer(r). No one stopped to identify customer types and what people really love and what they really hate. As a result, these systems are a waste of time and painful at best, and counterproductive and destructive at worst.
Can you use CRM to deliver better customer experiences while meeting your enterprise goals? Yes. But I find that most organizations use the systems from the perspective of an experience-bully rather than that of a disruptive innovator best looking to pioneer exceptional experiences across a customer journey.
Disruptive innovators identify weaknesses in competitive customer experiences (i.e., in old school customer service), and then use the systems, methods, and tools of the enterprise innovator to create exceptional consumer value. In this book, I will show you how to do this.
Pablo Picasso, one of the most famous and influential artists in the twentieth century, said, "Every act of creation is first an act of destruction." He was a disruptive innovator. In order to completely change the way in which painting was done, he had to destroy the way in which people looked at art. Picasso might have done well in today's business world. This is far different from the incremental innovator, who really doesn't destroy anything but only adds or subtracts a little bit.
THE RISE OF THE INTERNET AND THE BIRTH OF CUSTOMER CONNECTIVITY
In the early 2000s, the Internet increased in influence and became available to consumers, causing an irreversible shift. Connection points, such as Yelp and Amazon, sprung up where people could rate their experiences and express their opinions about the quality of products and services. Yikes! No longer did companies get to solely prescribe an experience in a way that best suited their purposes.
The consumer began to take control. The power shifted and customer service will never be the same. Rating systems that cataloged what to buy and what to stay well away from sprouted, and blogs that exposed bad experiences and harmful company practices popped up.
In other words, connection architecture — the ability to connect anything to anything — emerged, and it is having a tremendous impact on the success of companies of all sizes. Nest, for example, is a technology that monitors home energy usage. Based on this information, homeowners can modify their behavior and save money on their electric bills. Netflix's connection architecture destroyed Blockbuster by allowing users to receive movies and TV shows in their homes via the Internet for only a small monthly charge, with no late fees and no trips to brick-and-mortar stores.
Question: How many completely self-serving, internally and operationally focused companies do you want to do business with?
CUSTOMER CONNECTIVITY IN TODAY'S HYPER-CONNECTED ECONOMY
A short two decades ago, most of us didn't even have email. Smart-phones were relegated to sci-fi shows. Notebooks? Only the paper kind. Laptops? Heavy, expensive, and relatively rare.
Today, we are on the verge of digital ubiquity. The spread of mobile technology is so pervasive that it's rare that a potential customer is not digitally connected. Customers now have unlimited options; they can buy anything, anywhere, anytime, and they can choose from a wide range of prices and quality. Perhaps even more important, they can buy, sell, praise, or condemn with a few flicks of the thumb.
Rather than stick our heads in the sand and pretend consumers don't have this power, we can instead embrace it by creating exceptional customer experiences — experiences that rise above what a customer "expects" and that demonstrate a deep understanding of their loves and hates. Such experiences are so remarkable that they lead to our clients doing much of our marketing for us. To create these experiences, we have to truly understand the hearts and minds of our customers — in other words, what they love and what they hate. Word of warning: I will drone on about this ad nauseam because it's the most important thing you can do in your business today.
IDENTIFYING YOUR CUSTOMER: CUSTOMER TYPES VS. SEGMENTATION
Given the world we live in, we can no longer understand our customers simply by grouping them based on their age, ethnicity, economic status, gender, and geography. This gets you nowhere on a good day and can bankrupt you on a bad one.
To help understand the difference between customer types and segmentation, think back to high school. Where I went to school, almost everyone was a sixteen-to-eighteen-year-old male or female Caucasian from an affluent family. In fact, 90 percent of my graduating class fit that demographic. So based on that market segment, we should all have been marketed to in roughly the same way, right?
If you looked in my high school lunchroom, you'd see it was divided into cliques, and it was the equivalent of social death to land at the wrong clique's table. Theories abound that even as adults we're still scarred by high school social disasters.
High school cliques are architected based on what those kids hate and what they love. If you're into Java and Python and C++, then you're most likely at the geek table with your new Mac. If you idolize LeBron James, are on the team, and know the stats of your favorite NBA stars, no way are you going to sit with the geeks. You're with the jocks. Cheerleaders hang with the band members? I don't think so.
These groups don't evaporate when we graduate. They are with us for the rest of our lives. Sure, they may change as we age, find careers, and discover different interests, and we might even find some overlap with other types. But we still love certain things and hate others.
In order to create exceptional experiences, we as businesspeople first have to understand consumers better and then deliver relevant experiences to specific customer types. Once we truly understand the customer types within our specific business, we can begin to innovate exceptional customer experiences to each of those types, throughout their entire journey, using both digital and non-digital channels.
These cliques — or segments — can be defined as customer types. And customer types can be defined by two extremely simple concepts:
1. What customers love
2. What customers hate
That's all? Yep.
LEANING IN: THE NEW CUSTOMER EXPERIENCE
People in the overwhelming majority of organizations believe they already deliver exceptional customer service. However, when their customers are interviewed about the quality of their service, it turns out that this isn't so. The overwhelming majority of customers believes companies are not delivering exceptional service. So what's causing this big disconnect?
Most companies haven't transitioned from their customer service-industrial service complex past to today's connected world. They're still stuck in the old ways, the old mindsets, of customer service. They're still internally focused on profit, rather than externally focused on the only thing that matters — the customers and what they love and what they hate. You must lean into the new customer experience to succeed.
THREE SIMPLE PRINCIPLES FOR CREATING EXCEPTIONAL CUSTOMER SERVICE
Success today comes from three principles that What Customers Crave embodies. Success isn't about some complex calculus algorithm plastered on a spreadsheet and regurgitated in a "Customer Service Training" seminar. Instead, success is derived from these three principles:
1. Understand your customers not through their market demographics but from the perspective of what they truly love and hate.
2. Invent exceptional human experiences across all five touchpoints (defined later in this chapter): the pre-touch, first-touch, core-touch, last-touch, and in-touch.
3. Express these exceptional experiences via digital and nondigital means.
That's it. The secret sauce. It's not rocket science after all.
THREE SHIFTS IN WHAT YOUR CUSTOMERS CRAVE
What Customers Crave expresses and embraces three power shifts in customer experience: the innovation shift, the customer shift, and the connection shift. These shifts will determine your business's future. They represent the difference between the failure of the customer service-industrial complex mindset and the success you will achieve as you accept the power of the consumer and experience the wonders they can achieve for you when you provide them with exceptional experiences.
I want to emphasize that these three power shifts occur across all your customer touchpoints. (We'll discuss touchpoints in greater detail later in this chapter.) It's not a push-this-button fix. Rather, you must incorporate these shifts across the entire customer experience, for all your customer types, using digital and non-digital channels. Now, let's move on to examining the three power shifts and their implications for your business.
The Innovation Shift
In the days of the customer service-industrial complex, the best organizations in the world invented products, which they sold for a profit. They told the customer what type of experience they were going to have and went on their merry way.
The innovation shift — the creation of all kinds of products and services serving every imaginable purpose — was the culmination of today's extreme competition, where we have reached value/ price saturation. As a result, successful companies now use disruptive innovation to create incredible human experiences. Uber is a perfect illustration of disruptive innovation: Uber didn't come out with a new kind of taxicab, but it forever changed the way we use cabs. Likewise, Netflix broke the barrier to viewing movies at home by creating a new delivery system based on a monthly fee and no other charges.
So while businesses used to invent bright, shiny objects, successful enterprises in the future will use innovation to invent new and exquisite human experiences. This shift is huge, yet most organizations don't yet view innovation as a core competency. Those that do are winners. It's as simple as that.
The Customer Shift
Customers today have virtually unlimited options for purchasing a product or service. They can sit in a commuter train, a Starbucks, or anywhere with an Internet connection and do their holiday shopping, buy a car on eBay, or search for the latest iPhone app.
More important, with a few clicks they can vet your business and determine if they want to be your customer or not — all while they go about their daily business.
The customer power shift is critical. It means that control has moved from the business to the customer. There's no place to hide if you deliver a lousy product and/or sloppy service. You will be vetted by customers, and that information will be shared throughout cyberspace forever.
On the other hand, if you're good, there is no better way to build your business. If you wrap your arms around this power shift, develop a partnership with your customers, and see them as the key to your successful business (which they inevitably are), they will look after you. They will announce your wonderfulness on every avenue of social media, and they will prime the way for you to get future customers as others Google, Yelp, or otherwise search your reputation.
Amazon is the ideal company to illustrate this point. It fully understands what customers want and what they hate and delivers on it every time. In fact, Amazon is the founding father of the customer shift. It created über-ease of shopping and a dynamic customer-based rating system that allows for almost risk-free shopping.
Excerpted from What Customers Crave by Nicholas J. Webb. Copyright © 2017 Nicholas J. Webb. Excerpted by permission of AMACOM.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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Table of Contents
Part 1 What You Need to Know About the Customer Experience 1
Chapter 1 The Advent of "Exceptional" Customer Service 3
Chapter 2 Bring Home the Bacon: The Value of Customer Types 27
Chapter 3 The Journey to Exceptional Customer Service Experiences 55
Chapter 4 Getting Down to the Nitty-Gritty: Why, Who, and What 81
Chapter 5 Innovating Excellence 105
Chapter 6 Innovation: A Collaborative Process 119
Part 2 Mapping Your Customer's Journey 133
Chapter 7 The Pre-Touchpoint Moment 135
Chapter 8 The First Touchpoint Moment 149
Chapter 9 The Core Touchpoint Moment 165
Chapter 10 The Perfect Last Touchpoint Moment 189
Chapter 11 The In-Touchpoint Moment 203
Chapter 12 Technology and the Future of Customer Experience 217
Chapter 13 Your Roadmap to What Customers Crave 227
End Notes 247
Connect with the Author 257