Tuesday 8 November 2011

"Don't bother wowing your Customers"

The recent HBR Management Tip (“Don’t Bother Wowing Your Customers,” October 20, 2011) and the larger article on which it is based (“Stop trying to Delight Your Customers,” HBR, July/Aug 2010, Dixon, Freeman and Toman) is both eye catching and thought provoking – and totally misleading.
The authors present data illustrating that their Customer Effort Score (CES) outperforms satisfaction and NPS as a predictor of customer loyalty. Responsible researchers and marketers, however, have long recognized that satisfaction is a necessary but not sufficient hurdle for loyalty, and the weaknesses (and strengths) of NPS are well documented. Outperforming these measures is a straw man performance and not much of an accomplishment.
I see two fundamental problems with their line of thinking. First, they fail to differentiate between the customer service experience and customer loyalty and actually seem to flip-flop between the two for their own convenience. Loyalty is a relationship concept (and measure) that is greater than the sum of the experience or contacts. Each and every customer interaction is an opportunity to strengthen the relationship, as well as a risk of undermining or weakening the relationship. But the interaction or experience is not the same as the overall relationship.
Satisfying or “wowing” customers on any one experience is important only insofar as the experience contributes to the larger equation of the customer relationship. Experiences are discreet events, although the customer’s memory is more cumulative. The value and importance of experiences are in their aggregated impact on the relationship.
 
More importantly, their argument is flawed because it sees the world in a linear manner in which it is assumed that improved performance on each and every performance measure (inputs or independent variables) drives ever higher levels of delight or loyalty ( the outcome or dependent variables). Dissatisfaction – the failure to deliver on basic expectations or table stakes – is the flip side of satisfaction and not the inverse of customer loyalty or delight. They present a feeble argument: simply fixing service problems that might disappoint and alienate customers never has been the equivalent of delighting customers any more than removing the proverbial fly from the bowl of soup makes for a delicious meal.
 
We do not live in a linear world. Performance criteria that are dissatisfiers or negative drivers of satisfaction need to be analyzed and managed separately from the enhancers or positive drivers of customer loyalty and delight. (See http://www.gfkinsights4u.com/insights4u.cfm?articleID=425) The dissatisfiers need to be remedied, as these are the basic performance expectations of customers. Dixon et al are right in that “wowing” customers on dissatisfiers is a non-starter without a positive ROI. But this is because these are not criteria that lead to differentiated customer experiences or delight, not because it isn’t worth delighting customers. Companies, in other words, have to wow customers on things that matter to the customer. Dissatisfiers, by their nature, have clear points of diminishing returns, and over-performing against customer expectations on these fundamental must-dos is an investment with little or even negative return (negative because this might pull resources away from more important service dimensions).
 
Dixon and company touch on the distinction between dissatisfiers and enhancers with their “two pies” analogy of drivers of loyalty and disloyalty. They introduce this concept – and then promptly totally ignore the positive drivers or enhancers that REALLY WOW customers and deliver meaningfully differentiated service experiences and drive customer loyalty. Companies DO NEED TO DELIGHT and WOW their customers on the enhancers that build loyal, enduring relationships that maximize customer lifetime value. The fact that every interaction with the contact centers (on which Dixon et al focus) does not necessarily contribute to loyalty is not proof to the contrary. So while companies may not need to “wow” their customers on each and every interaction, they need to deliver operational excellence to plug the leaks on those issues that might dissatisfy or disappoint customers, while truly WOWING their customers on those enhancers or differentiators that drive loyalty. The trick is to differentiate between the two type of drivers and ensure organizations apply the appropriate performance-improvement efforts and align their training/reward systems accordingly.

Young People Think The Internet Is As Important As Breathing

A new study by Cisco Systems reveals that one in three college students and young professionals under 30 believe the Internet is as important as air, water, food, and shelter (via CNNMoney).
The study, which polled 8,000 people in 14 countries, found that more than half of the participants said they could not live without the Internet, citing it as "more important than owning a car, dating, and going to parties."
Here are some more study highlights:
  • Many respondents cite a mobile device as “the most important technology” in their lives
  • Seven of 10 employees have “friended” their managers and coworkers on Facebook
  • Two of five students have not bought a physical book (except textbooks) in two years
  • Most respondents have a Facebook account and check it at least once a day
    • Half would rather lose their wallet or purse than their smartphone or mobile device.
    • More than two of five would accept a lower-paying job that had more flexibility with regard to device choice, social media access, and mobility than a higher-paying job with less flexibility.
  • At least one in four said the absence of remote access would influence their job decisions, such as leaving companies sooner rather than later, slacking off, or declining job offers outright.
    • Three out of 10 feel that once they begin working, it will be their right — more than a privilege — to be able to work remotely with a flexible schedule.


Why brands want agencies that collaborate well - Rebecca Lieb

Ten or so years ago, the big whinge in digital marketing was silos. Digital vets know the lament all too well -- digital was siloed off from print and from broadcast. Interactive never got to sit at the grownups' table. Campaigns never pointed anyone to the web page (hard to believe now, but it was certainly true then).
If all this were changed (the lament continued), digital would get its due. It would get more branding ad dollars and evolve far beyond email offers for nutritional supplements (which, of course it did).
Less than a decade later, digital advertising and media comprise a multi-billion-dollar industry. You don't hear a lot about silos any more. Yet I've begun to worry about them. Namely, that silos are springing up right and left within digital itself.
More on that later because there's another opposing view on this, from none other than Jonathan Mildenhall, Coca-Cola's VP of global advertising strategy and creative excellence.
In a discussion last week about what he looked for when selecting an agency, among other criteria he named the ability to collaborate.
"Digital brilliance has always come from understanding how to collaborate with very different types of thinkers -- storytellers, producers, and developers," said Mildenhall. "The digital industry has grown up out of collaboration. Traditional agencies have taught collaboration for the last decade, but they're only just now understanding how to practice collaboration. The rhetoric of collaboration is finally coming home as a reality."
Interesting thinking. Are we really good at collaborating in digital? The disparity of talents and personality types necessary to realize even the smallest campaign or digital initiative prompted the editors of this publication to ask me last week to write a piece on how to speak geek. It's not easy to bring right brain and left-brain talent together and make anything happen.
Meanwhile, digital's not getting any easier. Discrete disciplines are more complex by the week. Email, SEO, SEM, media planning and buying, creative, and analytics are just a few of the digital verticals that often require their own slew of specialists. New platforms are cropping up all the time, and have to be accounted for and made to work flawlessly, user-experience wise. (Tablets! Android! iOS!)
Bottom line: Increasingly, we understand less and less what our colleagues across the table actuallydo.
Another hindrance to collaboration? An increasing lack of clear boundaries and responsibilities as the lines separating advertising, media, content, and social blur smudge.
A digital marketing executive at a major healthcare company laments managing multiple agencies: one for social, one for display, one for media, and so on. Two years ago, she said, everything worked fine. Now, "They're all posting to our YouTube channel. It's a nightmare -- yet doing this is critical to each individual agency's performance goals."
So, who manages the collaboration? The rules that worked smoothly a scant two years ago are suddenly no longer applicable.
Another obstacle to collaboration is data. It's hard to get different teams on the same page if they aren't looking at the same data in the same way to work toward common goals, even if each team's point of departure is a different one.
All the above, as well as all future roadblocks to collaboration, will very soon have to be carefully considered and strategically overcome by the agencies that expect to remain competitive in digital.
Why? Clients have your number. Collaboration is explicitly what major brands say is the "No. 1 criterion for agency selection." A brand doesn't want its advertising agency telling it that the company can do social media, too. The brand wants the ad shop to work in harmony with the social team, and it wants the two to inform and enhance the other's efforts.
Easier said than done, and also easier when the shops expected to work in tandem are agencies of record (AORs), "part of the family," as one client-side executive recently put it.
Yet collaboration, and a deliberate attempt to avoid even the appearance of silos, seems a critical ingredient to becoming AOR nowadays.