Monthly Archives: June 2013

complexity, customer experience, customer strategy, Marketing, Strategy

Ryanair’s customer experience revisited

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Ryanair passenger numbers
Ryanair passenger number growth, CAPA Centre for Aviation

I wrote Ryanair: Kings of the Customer Experience to challenge the blind orthodoxy that offering a perfect customer experience should be the aspiration of every business.

This may be true if you run a seven-star hotel complete with customer butlers, but it does not apply, I believe, for most companies. Most of us need to trim our ambitions to focus on things which cause customers most pain or friction and on those things which customers most value.

An excellent response

Jim Lucas of Lucavia read my post about Ryanair, the Irish-based European budget airline,  and wrote an excellent article in response: The Real Ryanair, Please Stand Up.

Jim and I violently agree that Ryanair have set out strategically to offer a service based on the core things which their customers value: “…Low cost, on time, with bags, that’s it.”

Jim, however, then goes on to say:

‘…To me, Ryanair hasn’t, “…Designed a customer experience to compete strategically.” Their customers don’t care about it and they know it. Instead, Ryanair has chosen a low-cost, high-efficiency strategy vis-à-vis their competition to meet the needs of the utilitarian traveler. (Jim’s emphasis)  In that space customer “service” is all that is required and an experience isn’t a consideration.’

I think Jim’s view is one that many customer experience practitioners share: that customer experience is something separate from the service a company designs and offers.

The whole of the experience

I don’t share this view. I believe that everything that we do which affects the customer is part of the customer experience.  This includes offering the service, yes, but also the things we do which affect how this service is perceived: (I refer to this in another post when I refer to the qualia of customer experience).

Hence my use of Ryanair as an example. What they seem to do, explicitly and intentionally, is manage the customer experience to diminish expectations around anything which lies outside of their core offering.

Get you there on time? Sure.

Cheaply? Yes.

Refunds? Don’t bother.

This setting of expectations is, I believe an absolute part of the customer experience, which Ryanair actively manage in order to support their highly successful business model. This is a strategic choice which, judging by Ryanair’s business success, seems to be working very well.

Good is better than nice

From this choice came the other point of my earlier Ryanair article: “Customer experience is not about being nice, it is about meeting strategic goals.”

Talking to some marketing folk the other day at the IQPC CMO Customer Exchange Event a couple of weeks ago, I found myself reframing this statement so that it became:

Customer experience is not about being nice; it’s about being good.

I think this is profoundly true. Customer experience is not simply an offshoot of the customer service skills industry, as many people seem to believe.

As an air passenger, for example, I value getting to my destination on time, with my bags, more than I value a customer agent’s smile if my bags have been lost.

Yet many organisations, judging by the way they run their services and where they direct their investment, seem to put this the other way round. Yes, being nice is, well, nice – but it is less important than being good at the things for which the customer is paying.

What Ryanair do, better than any other organisation of which I am aware, is to deliver on the stuff that matters to their customers while at the same time actively managing down customer expectations – and delivery – of other stuff.

They are, I believe, managing the customer experience, and doing so very well.

Which is why, while I may not like Ryanair,  I have to admire them.

(My thanks again to Jim for his cogent and considerate response to the original article. His blog is well worth a read).

Image credit: Ryanair passenger growth numbers: CAPA – Centre for Aviation

complexity, customer experience, Legal, Marketing

The bank customer experience that’s 3 times better than Apple

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Red TapeBanks offer a specific customer experience three times better than that offered by Apple, because, it seems, Apple have let lawyers dictate it.

Red tape redux

I want to buy a house. I need a home loan for £250,000.  I approach First Direct, a direct retail bank in the UK, owned by HSBC.   I know that I will have to accept from them a comprehensive and rigorous set of terms and conditions.  After all, I am borrowing a quarter of a million pounds and mortgages in the UK are highly regulated.

First Direct’s terms and conditions for my mortgage are a comprehensive, rigorous and exhaustive 4,480 words.

To have some music to play while I move house, I want to download Our House by Madness, on iTunes.

And here is where things get cockeyed. To download the nutty boys’ masterpiece, I have to read and accept iTune’s terms and conditions.  These run to 14,451 words.

Apple expect me to plough through 3 times more verbiage than was needed for my £250,000 mortgage, just for a 99p song.

This can’t be right.

A novel experience

Legally, I am supposed to read Apple’s terms and conditions before I can install iTunes. But, like most of us, I haven’t.

Who has the time to read lawyer-speak that runs almost the same length as the first third of Kurt Vonnegut’s great novel, Slaughterhouse 5?

If I have that kind of time available, I’ll read a book.

It gets worse. Every time Apple updates iTunes, every couple of months or so, they require that I read these conditions again. This is neither practical nor reasonable.

Lawyers: enemies of customer experience

So First Direct, a UK retail bank, is offering a customer experience three times better than Apple’s. What’s going on?

The most obvious explanation is that Apple has let their lawyers off the leash. This is bad for the customer experience because most general counsel are required to think of the customer as the enemy. Corporate lawyers stay awake at night making sure customers don’t sue or rip-off or defraud or have grounds for compensation.

Giving the customer a good reading experience is not top of their insomnia list.

Something better

Someone, however, is doing something to make this particular experience better for customers of a range of companies, including, they say, Apple.

Terms of Service: Didn’t Read (ToS:DR) offers a free plug-in to browsers that rates terms and conditions on a five point scale (A- Green to E- Red) depending on the degree to which a particular set of terms and conditions require us to sign away our rights. It ‘s like a Reader’s Digest version of the terms and conditions to which we have to agree.

This seems to me to be an eminently sensible solution to this problem. I will sign up to ToS:DR straightaway – just as soon as I read their terms and conditions (409 words)…

So it goes.

PS Some may think that I am singling out Apple unfairly.  Perhaps, but by way of comparison, Google’s terms and conditions of service come in at 2,966 words, Facebook’s are 4,643 and Amazon, 5,269. (Word counts come courtesy of my browser’s cut and paste function and MS Word’s word count facility).

PPS This post comes in at 539 words.  If this was iTune’s terms and conditions, you’d be only 5% of the way through by now…

Image credit: Rosser 1954, released into the public domain.

Big Data, complexity, customer experience, innovation, Marketing, Strategy

Big Data is already here

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vorratsdatenspeicherung-540x304In my earlier post, How Big Data will Change Marketing (part 1),  I offered a definition of Big Data.  Here is a brilliant example of what it looks like.

A life revealed

Malte Spitz is a member of the Bundestag, the German parliament.  He sued mobile operator T-Mobile to get their records of his cell phone activity for a six month period in 2009.  It came in an Excel spreadsheet with 35,851 rows.

Zeit Online, the digital imprint of Germany’s top-selling weekly newspaper, Die Zeit, combined this data with other information about Hr. Spitz’s life which they gleaned from social media and publicly available online sources.

The result was illuminating.

To quote Die Zeit:

“Each of the 35.831 rows of the spreadsheet represents an instance when Spitz’s mobile phone transferred information over a half-year period. Seen individually, the pieces of data are mostly inconsequential and harmless. But taken together, they provide what investigators call a profile – a clear picture of a person’s habits and preferences, and indeed, of his or her life.

This profile reveals when Spitz walked down the street, when he took a train, when he was in an airplane. It shows where he was in the cities he visited. It shows when he worked and when he slept, when he could be reached by phone and when was unavailable. It shows when he preferred to talk on his phone and when he preferred to send a text message. It shows which beer gardens he liked to visit in his free time. All in all, it reveals an entire life.”

To model what they mean, Zeit Online produced this interactive map.

This is Big Data in practice.

I will leave it to other commentators to discuss the political, legal and ethical issues raised by Big Data.  I am going to assume, instead, that it is here to stay and that it will increasingly affect our lives.

In my next post, I will develop further some ideas about how Big Data will affect Marketing.

Tip of hat to Roland Harwood of 100% Open for the original Die Zeit article.

Image credit: Zeit Online

Big Data, complexity, Marketing, Strategy

How Big Data will change Marketing (part 1)

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Big data imageIf Big Data delivers what it promises, then the implications for Marketing – and indeed, all of business – will be profound. Before we can understand what these implications might be, we first need to understand what Big Data actually is.

The promise of the new oil

Big Data, we hear, is “…the new oil”. It is the next big thing, the new realm of business opportunity, the them thar hills in which gold can be found. With Big Data, we are told, we can see flu outbreaks before they happen, tell how the stock market is going to move today and discover that you are pregnant before your family does.

Big Data makes big promises. But many of these promises have been made before, with, for example, data warehousing (and the famous beer and diapers story). What is different this time, and what difference will it make?

Consultants and technology companies have been beating the Big Data drum for some time, but there is little consensus of what the term really means.  If, for example, I am trying to build a data centre to handle big data, then naturally my definition will reflect the size and complexity of the data to be handled.

I believe, however, that most of us with a business perspective need a definition which enables us to think about the value and uses to which Big Data might be put.  My stab at doing so is below, borrowing freely from excellent recent articles by Hung Lee (Big Data is Not ‘Lots of Data’) and Alex Cocotas of Business Insider.

Big Data is not (just) big data

What makes Big Data interesting is not the the size of the data sets (although these can be mind-bogglingly big). The value of Big Data is much more about the kinds of data which it embodies, and (particularly) the uses to which it can be put.

Big Data is unstructured data.

Big Data is not that which fits neatly into a relationship database or which can be categorised by tags (although it may well contain data of this type).  Big Data is a hybrid mashup of different kinds of data such as geolocation, contextual data, telemetry, life events, video, demography, social media and more.  It’s messy, complex and has fuzzy boundaries.

Big Data is behavioural, not attitudinal.

It is about what people do, not what they think. Big Data is not, for example, about focus group findings or survey results.

Big Data is about small interactions.

Big Data might include transaction information, such as what is in our shopping trolleys – but this is a known game and is only an adjunct to the important stuff. Important stuff?  What we do before we put things into our trolleys.  Where we have walked. Whom we have met.  What we do for fun. What the weather is like.  What we are wearing. What everyone else is doing. The TV channels we watch. You know: the small stuff we do all the time.

Big Data changes.  All the time.

Big Data is gathered continuously, in real-time, often from millions of dynamic sources. This means that at any time, we can only have a snap-shot of this continuing river of data. By the time we look at it, it’s already changed.

Big Data is online,  mobile and the real world.  

Big Data is credible because Google and Amazon and (a very few) others have been able to farm and use complex online customer behaviour data to make serious money. Now mobile is changing the game. Those of us with smart phones use them everywhere.  We use apps to help us in the physical world.  We use services like GPS and geolocation which note everywhere we go.   Now when we turn on our mobile phones, we create data about our behaviour in the physical world in ways comparable with the data we create online. What do we call this melange of online, mobile and physical information?  Big Data.

Big Data is informational debris.

Big Data is what we throw off when we do other things.  When we stop what we are doing to fill in a form, or have our picture taken or scan some stuff to get ourselves registered or updated – that is not Big Data. Or if it is, it is only a small part of it.  Big Data is what we leave behind us when we play games, or take pictures, or move house, or phone someone up, or browse around a shop, or go for a run or change the channel. It is a side effect.

That’s my shot at defining it.  Does this work for you? What have I missed or got wrong? Let me know.

If Big Data keeps its promises, the implications for all of business – but especially Marketing – are profound.  I will explore some of these implications in my next post.

This series of posts arose as a result of a panel discussion earlier this week at IQPC’s CMO Exchange event at St Albans.  I had the pleasure of sharing the platform with Paul Blacker of BT and Michael Woodburn of Capital One, and it was admirably chaired by my old chum Vincent Rousselet, CEO of the Strategic Planning Society.   Our conversation offered a good range of views on these questions. These opinions I express here, however, are entirely my own.