Archive for the ‘Customer experience’ Category

How to lose $250,000 in sales

by Bruce Kasanoff

Chris Zane opens his insightful book, Reinventing the Wheel, as follows:

How much is one customer worth to your business? For me, it’s $12,500. That means that my average customer will spend $12,500 on my products and services over his or her lifetime, $5,000 of which is profit.

I have owned five Audi automobiles, with a total value of perhaps $250,000. Is that enough loyalty to motivate an Audi dealer to treat me fairly and responsibly? Apparently not.

Since rants don’t make interesting blog posts, I’ll spare you the details. But my treatment at the hands of an Audi dealer in Fairfield, Connecticut was bad enough that today I not only sold my Audi, but also my other car, that I bought and had serviced at their sister dealership. Yep, traded in two cars to other dealers, to ensure I would never again give this company another dollar.

What got me was that up and down the line, no one in the dealership was ever willing to take responsibility for the mistakes they made. I made errors of judgment, too, and was willing to share the blame. But not the dealer.

I learned how bad customer service perpetuates itself: you divide your company into tiny cost centers. Not only do you separate sales from service, but you also divorce sales management from sales, and service management from service. In this manner, you get every employee to say with a straight face and utter conviction, “But it’s not fair for my profit center to absorb the costs of someone else’s mistakes.”

In this manner, you can win lots of battles, even as you lose the war. Not one of the employees I dealt with understands Chris Zane’s point, which is that only if you look at the lifetime value of a customer can you realize how important it is to treat him or her right. And, yes, this will cost your company some money.

Kensington Palace royalty come out to greet commoners

by Bruce Kasanoff

What do you do when events conspire against your organization, and business as usual becomes impossible? Go way out of your comfort zone, and try something completely different.

Historic Royal Palaces is the independent charity that cares for London’s Kensington Palace as well as the Tower of London, Hampton Court Palace, the Banqueting House, and Kew Palace. They began a £12 million major renovation project at Kensington Palace that required shutting all areas but the State Apartments – and for removing most of the furniture from the Apartments.

Sounds bleak, eh? A tour of a smaller number of empty rooms? The reality is just the opposite.

Artist Chris Levine created a series of unique light works, called Echoes, which combine with historical clues and thought-provoking questions to make visitors feel as though they are truly inhabiting the same space as royalty.

By waving my phone through the air, I took the above photo in the Palace, and it gives you a hint of what the experience is like. You can’t look directly at any of of the seven princesses who once lived at the palace – Mary, Anne, Caroline, Charlotte, Victoria, Margaret and Diana – but you see them in your peripheral vision as you turn.

You can learn more here

Where’s your customer experience lab?

by Bruce Kasanoff

There’s a reason why the most innovative, dynamic and successful firms end up that way: they experiment.

Google Labs is where employees toss around half-based ideas and eventually begin to expose them to the world at large. The App Inventor, for example, is designed to allow non-programmers to develop Android apps.

Apple enjoys a constant flood of innovative ideas, thanks to the 416,849 and counting submissions to its App Store. Through iTunes, it learns how customers browse, buy and use not only music but also TV shows, movies, podcasts and even audio books.

Truth is, there’s a growing tension between being a reliable supplier of quality products – Wall Street, reviewers and customers all demand this – and being innovative enough to stay ahead of fickle tastes, advancing technologies and fierce competitive pressures.

But to handle unprecedented volatility, firms need to experiment, to peer deeper into the future, to retain the flexibility to change course both suddenly and successfully.

Many of the strategies I endorse, such as creating cross-disciplinary teams and shortening work plans to leave room for near-constant shifts in direction, would spell disaster for the portions of major firms that have to churn out millions of products this quarter.

These adaptive, collaborative practices demand a lab, and not one that is locked away in the corner of your business. Google’s 20% Time policy allows every employee one-fifth of their time to work on any idea that interests them. The new Google Art Project came from Google Labs, and it offers a remarkable way to explore museums and artworks from your very own lazy chair. Gmail, Google Talk, and Google News all started as 20% projects.

Here’s the reality: in today’s networked, interconnected world a corporate lab can and should be ‘everywhere.” It should encourage contributions from all employees.

This is the only way to keep a firm’s customer experience vision ahead of customer expectations. It provides space to fail, to escape the constrictions of naysayers, and to give birth to substantive and lasting opportunities.

But at many firms, this is nonsense. No one “has time” to experiment. There’s no budget for “unproven” ideas. Few executives think it prudent to give any measure of self control over their time to “junior” level employees. Of course, these same firms have time and money for seemingly endless meetings, for excuses, and for reports that defend questionable levels of service, support and innovation.

Earlier today, I compared the 1960 and 2010 Fortune 500 lists. The 1960 list was filled with oil, car, and steel companies. The 2010 one still has some of the old stalwarts, but is dominated by financial, retail, healthcare and technology firms. Here’s my point: if you limit a bright engineer to making incremental changes in his existing product line, he will never be able to share his insight that your firm has opportunities to build entirely new and different businesses. You need to give your people the room to act as intelligently as the customers they serve.

If you can’t find your customer experience lab, or speak proudly of it, it’s time to fix that, and fast.

Amazing sneak preview of your future

by Bruce Kasanoff

Microsoft created this stunning look at what your future may hold.

Survey: smartphone users want to avoid customer service

by Bruce Kasanoff

Smartphone owners are trying to use apps to avoid placing phone calls to the customer care departments of large companies. The problem is that customer care apps are hard to fiind, and are seldom accessible when you really need them.

This is just one of the insights revealed in my conversation this morning with Scott Kolman, Senior VP of Marketing for Speechcycle, which offers customer self-service solutions for service providers such as cable companies. Speechcycle commissioned Echo Research to conduct the survey, which found:

  • Nine in 10 consumers have tried at some point to try to avoid calling customer service, especially 18-34 year olds (95%).
  • 50% of smartphone users would prefer to use a mobile customer service app to try to resolve their customer service issue before calling into the contact center.
  • Four out of five (79%) smartphone users would view their mobile, cable/satellite or Internet provider more positively if they offered a mobile customer service app.

The problem, admits Kolman, is that few people will download a customer care app designed solely for that purpose. “Downloading a customer care app in advance would require the customer to anticipate having a problem.”

Customers are not very likely to do that, but he says, “Customers will download an app that adds value to them over time,” and it makes sense to embed customer care functionality into apps that customers install for other purposes… such as watching entertainment or playing games.

I asked whether Apple’s new iPhone personal assistant, Siri, will impact customer expectations.

Kolman thinks so, explaining, “Even if Siri doesn’t immediately fulfill its promise, it has raised expectations of consumers in terms of how they can interact. We are seeing that in discussions with media and analysts, although executives are taking a little longer to recognize this.

“Siri is trying to be everything to everyone, at a broad consumer level. We see an opportunity to take similar technology to the more specific environment of customer care.”

Personally, I’m waiting as long as it takes for the Talking Company: when you can call a large company, get one automated voice who knows everything and can solve your problems in a single interaction.

I’m not being flippant. The missing link is gathering all the information from within each company into one reliable database. If Google can index the world, it’s not too much to ask companies that they index themselves.

Smart cars battle skininvaders

by Bruce Kasanoff

Augmented reality is one of those “hot” tech innovations that took some time to live up to the hype. But it has been gaining momentum. Here are a few compelling examples how augmented reality can utterly change the customer experience:

Not sure what augmented reality is? Ever watch a football game on TV and see the yellow line showing how far the offensive team has to go to make a 1st down? That’s augmented reality. The line isn’t really there, but looking through a digital device, you see it.

BMW has created some examples of their next generation Heads Up display. Basically, it adds a layer of visual information onto your windshield, helping warn you of potential hazards and steering you safely towards your intended destination. Be sure to watch this video demo, which starts out slowly but eventually reveals some very impressive capabilities.

A new iPhone app released on Friday transforms players’ faces into game terrain over which alien invaders, known as SkinVaders, battle it out for total domination. In other words, your face is the game board. It’s one of many immersive projects built on the Total Immersion platform. At their site, you can watch dozens of other augmented reality demos.

Country artist Hunter Hayes has a Blippar-connected new music release featuring all sorts of videos and interactive elements you can access by pointing your device at the release artwork. This is notable mostly because it is based on image recognition, and you don’t need to download an app in advance or fiddle with any sort of convoluted code.

Kinect and Siri terrify companies

by Bruce Kasanoff

In an earlier post, I described how the vast majority of established companies are at risk being stuck in the Land of Stupid, a bleak wasteland between the few companies who know how to make complex technologies seem like simple magic, and the millions of consumers and small businesses who increasingly expect magic.

Let’s take a closer look at how Siri and a slightly earlier innovation, Kinect for Microsoft’s Xbox 360, reveal how radically customer expectations are changing.

Kinect combined various sensors and language recognition to eliminate the controller altogether. There’s no keyboard, no remote. The unit simply “looks” around the room, gets a sense of the space and identifies the players. If you are one of four players and you leave the room, Kinect knows it was you who left.

Kinect has unleashed a wave of inventive people rushing to figure out what else you can do with a Kinect. The answer turns out to be a lot:

You put something like Kinect into a home or office, and it can map, recreate, or respond to whatever and whoever is there. Yes, the technology is at an early stage, and it’s not perfect. But it is light years ahead of the 99% of companies who still ship complex products with complex instructions and feeble tech support to back it up.

Now along comes Siri, who in the space of a week has taught millions of people to talk to their computer. She’s not perfect either, but she understand most of what I tell her, and suddenly we are talking about phones as though they are sentient beings.

Meanwhile, all these companies stuck in the Land of Stupid expect us to spend 45 seconds listening to phone messages that prompt us to press “9″.

Siri and Kinect are utterly transforming customer expectations, and both are selling beyond all predictions. No products, no technologies have ever spread so fast.

Companies in the Land of Stupid don’t have years to get out. They have months. This, I fear, many don’t understand.

Smart or stupid customer service?

by Bruce Kasanoff

I just browsed the Comments section over at the Consumerist, where they asked people to describe corporate policies they hated or loved. Here’s a quick sampling. All the words that follow are verbatim comments from others…

Smart: I like being able to return stuff at Target just by giving them the card I purchased it with so they can look it up.

Stupid: Best (Worst) Buy’s policy of allowing customers to use those silly ten percent off coupons they send out only on regularly priced items. That is insulting. It is one of the many reasons I shop online and use Best Buy only as a showroom.

Smart: I appreciate PetSmart / PetCo’s policy of being able to return food (3/4 or more of the bag must be left) if your pet doesn’t like it.

Stupid: I called BofA recently to let them know I was going away on vacation and to expect credit and debit card charges from far-flug locations. OK, they took care of that in short order and off I went. What I didn’t expect was to be hounded at least once a day for the next two weeks with email from them asking me to go online and “rate my recent customer interaction” with them. Sheesh!

Both:(post about cars that will monitor your heart rate) If the car will also dial 911 when it senses you’re having a heart attack and direct emergency vehicles to your location, then it would be worth the intrusion. Otherwise, it’s just letting you know you’re about to die before you lose control of the vehicle and careen into oncoming traffic.

Why customers hate “customer service”

by Bruce Kasanoff

True story from a friend who is trying to transfer funds from one financial services company to another. Old Company, which has my friend’s money, won’t accept the digital Letter of Acceptance from New Company; that letter contains the information they need to transfer funds.

Old Company insists that they receive a fax.

New Company refuses to fax. They say, “We don’t have faxing capabilities.” They will only send authorizations digitally.

Both claim their reason is “for security purposes.”

Is marketing dead?

by Bruce Kasanoff

I’m wondering whether marketing will still exist in five years. Nearly all customers will carry smart devices, and it’s possible that smart customers will only interact with smart companies.

No technology in human history has been adopted faster than wireless devices like smartphones and iPads. Tens of millions of these devices are spurring countless developers to innovate.

Customers are able to act smarter, because they have far better access to information and empowering capabilities. Traditional marketing tools like advertising and outbound solicitations look dumb by comparison, and will soon be ineffective and irrelevant.

Many marketing professionals don’t recognize the degree to which this sea change is the result of a perfect storm of four disruptive forces that are just now bearing down on us: Digital Sensors, Social Influence, Pervasive Memory and the Physical Web.

A very quick primer on the four forces that may kill advertising.

Digital Sensors are being embedded everywhere, transforming everything from your car to your toaster into a smart device.

Social Influence means that increasingly other people are influencing transactions or even preventing transactions between companies and customers. Imagine a crowd of your customer’s friends shouting, “Stop!” just as your salesperson is about to close a big deal, and you get the idea.

Pervasive Memory highlights the fact that every interaction via a digital device leaves a record in databases. When you make an error, everyone will know it. When your prices, quality levels or satisfaction ratings lag competitors, it will be obvious.

The rise of the Physical Web means that we will soon be surfing and bookmarking the real world like we do the Web. The sort of consumer tracking practices that have emerged online – following individuals and recording their actions – won’t be tolerated in the real world. Expect a flood of new privacy laws, and much stricter restrictions on the practice of advertising.

Om Malik, writing at GigaOm, today noted that Apple sold four million iPhone 4S devices in its first weekend, and observed that such devices are “in competition with the old way. Thanks to new chip technologies, cheap sensors and fast growing networks, the idea of what is a phone has changed. This is leading to behavior changes and new interactions. They are behaviors of a new connected life. These new behaviors will change many different parts of society and business.”

Disruption always comes from the edges of your industry.

Source: Clayton Christensen

Marketers at established firms often misjudge the pace of change, because they focus on their biggest competitors. But your biggest competitor is less likely to change your industry than a new start-up. Disruption comes from the edges, not the center, of an industry.

The only way to compete successfully in the years ahead is to be smarter than both your customers and your competitors.

By smart, I don’t mean that you hire smart executives, although that might help. I mean that the systems in your company act smart, and that all customer touchpoints act smart.

Unless you work at a disruptive start-up, Google, Facebook, Amazon or Apple… your company is almost certainly not prepared for the storm ahead. This does not mean that established companies are doomed, but it does mean that they’ll need to look at their business and their customers in ways that run counter to established channels and structures.

That’s why many of the incumbents who succeed at innovating do so with a bit of outside help to help them recognize and respond appropriately. So if you work for an established firm, learn what it means to “Act Smart” in this rapidly changing environment. Then look to intrapreneurship, skunkworks, your customers, independent developers and other sources of inspiration, and be prepared to go outside your comfort zone (and give up some control.)

Where will marketing dollars – and talent – go?

Most of the creativity and money poured until now into advertising, positioning and promotion will end up in the products themselves.

Instead of making a product look cool in an ad, companies will make the product actually be cool to find, learn, use, enjoy and share.

Customer experience will be the new marketing. Today, “customer experience” is a vague term. Soon, it will be the driver. Customer experience will be the main way to not only set your product apart, but to also gain attention. It will be about substance and style, functionality and form.

This is not just a business crossroads. It is a career crossroads.

Maybe the sky is not falling. Perhaps I am overstating the scope of change. But if I am even partially correct, these changes will impact the course of your career as well as the success of your business.

It is far better to lead a change than fall victim to it.