Category Archives: customer experience

How Big Data will change marketing (part 2)

Big Data imageBig Data is coming. It will change Marketing, but not necessarily in the ways we might expect.

In an earlier post (How Big Data will change marketing (part 1)) I wanted to introduce the idea of Big Data in practical terms. My take on Big Data is not in terms of volume, velocity or variety, (as coined by Gartner analyst Doug Laney) but in terms of what it is in practice and how it might encourage action.

In my view, Big Data has seven characteristics:

  1. Big Data is not (just) big data.  Big Data is more than data warehouses and structured data repositories.
  2. Big Data is unstructured data. Big Data is messy, error-strewn and has fuzzy edges.
  3. Big Data is behavioural, not attitudinal.  Big Data is about what people do, not what they think
  4. Big Data is about small interactions. Big Data comes from the simple stuff we do, often without realising it
  5. Big Data changes.  All the time.  Big Data is never still. It is always being added to.
  6. Big Data is online, mobile and the real world.   Big Data is coming from all kinds of activity, on- and offline.
  7. Big Data is informational debris. Big Data is a side-effect of other activity – it is mainly not the information we as customers enter consciously when we think we are sharing personal data.

For marketers, the looming presence of Big Data is likely to change many things, including these:

Scientific method  The scale and nature of Big Data are making marketing a rigorous, experimental discipline.  We are getting the means to interrogate very complex data sets very quickly to decide which marketing idea works best.  This is already happening online.   Disciplines such as A/B testing and the thinking embodied by Eric Ries’ excellent Lean Start-up are already in action in many places. Examples include Amazon offering A/B testing as a free service to android developers and Barack Obama using it to raise $60m.  (See also my post, ‘Let’s go hippo hunting‘). This thinking is rapidly moving offline.   Marketers will have to master strict, efficient scientific method to succeed in this new world.

Attitudinal marketing is dead  Well, if not dead, then it’s about to enter life-support.  The  quantity and predictive value of behavioural and activity data means that what people think or feel about a product or brand will become increasingly irrelevant.  We are already finding this on the web.  If A/B testing shows us that consumers prefer to press a red button, and not a blue one, then we are better served by changing all our buttons to red than spending a fortune trying to understand why. This thinking will soon apply everywhere.

Prepare for the segment of one   Big Data will enable us to direct contextual, customised marketing directly at individuals based on such things as (say) their mobile GPS history, online and social media activity, and offline behaviour.  In effect, a marketing campaign for one person.  One implication of the segment of one is that a consumer marketing operation may well need to deliver a million tailored campaigns a year.

This is not just an automation problem.

To run at this level, with minimal errors, cost-efficiently, means the winning marketing operations will be those which adopt and implement the Lean manufacturing disciplines which enabled car manufacturers to deliver a batch size of one, with a cycle time approaching zero. (See my earlier post – SMED: The secret sauce of customer experience, for a related discussion).

We are all going to become Lean, people.

Create platforms, not campaigns  The role of the creative will change. Increasingly, we will need our creatives to design communications platforms, rather than individual campaigns. These platforms will have to flex in innumerable ways to meet the contextual demands of the segment of one.

Brand as algorithm   Brands will be formulated into heuristics – rules which can drive real-time decisions to enable real-time marketing.  The automated brand is coming.

Source, don’t build, your data  By definition, Big Data is a mix of different data sources.  Very few organisations have the capability to assemble, structure and support such heterogeneous sets of data and stay sane (and profitable).  Ignore the Big Data hype about the need to build Hadoop clusters and recruiting data scientists. This isn’t how it is going to go.

Here is how it might.  Companies are going to realise soon that they will be better off working with trusted data intermediaries rather than trying to build their own Big Data. They will pose questions to these intermediaries, such as “….what is the best way to segment the market to identify the people most likely to buy our stuff?…”, or “…when in the customer’s day are we most likely to get positive attention for our proposition…?”  or “…who could be our next customers….?”

These intermediaries will orchestrate data sources quickly to get the best answers to these questions. They may already own some data, some data they may rent, some they may commission and some will come from their clients – but such tasks are best left to specialists.  There is no need to build your own data engine. Spend your time instead trying to understand the questions you need to answer to get to market most effectively.

Of course, for companies which specialise in data harvesting, brokerage, mashup and orchestration, this intermediary role will be a lucrative opportunity. For the rest of us, being able to use such services intelligently will become an increasingly important skill.

Big Data is going to change marketing. But those marketers who do embrace this change will become hugely more effective, productive and  influential.

It will be marketing, Jim, but not as we know it.

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Ryanair’s customer experience revisited

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

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

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 is already here

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

Contact centres – the end of 28 days later

28 DaysContact centres aren’t perfect, but they are better than what went before.  They are here to stay, even while we continuously improve their performance.  Contact centre transformation is easier when we don’t lose sight of the core reason for the centre in the first place: to enable customers to talk to our company, buy things and get help.  

28 days.

Nowadays it has a different association (see illustration) but many of us in the UK still associate this timeframe with a familiar phrase:  “Please allow 28 days for delivery.”

It was a routine part of the terms and conditions for mail order.

A serious customer journey

Mail order, of course, meant not just receiving goods by post, but ordering them by post as well.  Find the product you wanted in a newspaper (or magazine or catalogue), fill in a paper form, cut it out, write out a cheque for payment, put them both in an envelope, address the envelope, put a stamp on it, go to a post box, post it…

…and wait.

For up to 28 days.

Almost a month.

Then when the parcel arrives, open it and see if what you have received is anything like the black and white image in the original advertisement.  Or the right size.  Or if it works properly.  And has not been damaged in transit.

And if it’s not right, begin the whole rigmarole again. In reverse.

Not, by any measure, an ideal customer journey.

Contact Centres make it better

Contact centres changed all that.  Want to buy something? Call up, place the order and it will be dispatched quickly.  Problem with a product or service? Call up and the agent will handle your problem or help explain what we need to do to resolve it.

Sure, none of us like being put on hold or to have to navigate through endless sequences of IVR numbers; and many of us have service disasters we can recount about when we got to speak to the agent from hell, but we forget, sometimes, how much better it is than it used to be.

Oddly, the internet hasn’t killed off the contact centre. Despite that we can now order things and services online from our laptops and tablets and mobiles, many of us still want to call up and talk to someone. And when things go wrong, while email, customer forums and online chat are all very well, many of us still want to call up and talk to someone.

Why?

Because our lives are complicated and what we want is complicated and our problems are complicated and sometimes we need to explain to someone – a person – what we want, and have them confirm that they have understood what we want, and that something will be done about it.

And a website can’t do that.

Sometimes, of course, it doesn’t work this way, and every one of us has a horror story to tell. But most of the time it does, and often, it works very well indeed.

Contact centres enable this experience.  And they continue to do so: while most now also handle customer communications across a range of channels, the customer telephone call tends be the heart of the operation.

Keep sight of the purpose

The challenge facing all of us who work with customers, however, is how we equip our people in contact centres to deliver a service which is consistently good, and consistently cost-effective – while  customers remain complex people with changing needs, and the technologies available to customers and to us develop constantly.

I believe that the only way to succeed in meeting this challenge is to remember one thing:  the core purpose of the contact centre is to enable customers to talk to our companies, to buy and get help.

Everything we do in a contact centre is about doing this better.

And when it gets hard to do this – and it will – we can console ourselves with one fact: even when things aren’t great, for most of our customers, things are much, much better than they were.

Contact centres revolutionised how we engage with customers and vice-versa. People complain about  them, sure, but how many of us remember what it was like before they were commonplace? I, for one, don’t want to wait 28 days again…

Ryanair: kings of the customer experience.

Image of Michael O'Leary 2/06/2011Silver tongued charmer

“You’re not getting a refund, so **** off. We don’t want to hear your sob stories. What part of ‘no refund’ don’t you understand?”

“People say the customer is always right, but you know what – they’re not. Sometimes they are wrong and they need to be told so.”

“Mother pays £200 for being an idiot and failing to comply with her agreement at the time of booking. We think Mrs. McLeod should pay €60 [just] for being so stupid… Thank you, Mrs. McLeod, but it was your ****-up. We’re not changing our policy.”

“We already bombard you with as many in-flight announcements and trolleys as we can. Anyone who looks like sleeping, we wake them up to sell them things.”

Michael O’Leary is the CEO of Ryanair, a European budget airline headquartered in Ireland. The quotes above are some of the things he has said at press conferences and results announcements over the years; this thinking is reflected in the uncompromising ways in which the company operates. In many ways, he is the antichrist of orthodox customer experience thinking.

The Ryanair Customer Experience Paradox

According to much customer experience orthodoxy, Ryanair should be in serious trouble. Poor customer experience should result in customer dissatisfaction, disloyalty, social media backlash and poor brand reputation.

And it does.

In spades.

But here’s the thing.  The customer experience Ryanair offers does not  affect the bottom line. In fact, one might argue that it is a major reason for Ryanair’s consistent, spectacular bottom line growth.

Ryanair has just announced yet another set of stellar annual profits. To March 2013, the airline made  operating profits of €718m ($924m) on revenues of €4.88bn ($6.28bn), up 11% from last year.  And this is no flash in the pan: Ryanair consistently grows revenues and profits every year. Ryanair is a company that likes recessions.

Something is amiss.  And on the basis of the company’s sustained growth and returns, it doesn’t look like it’s Ryanair. So is received customer experience wisdom mistaken?

And if so, does this mean that we should abandon our efforts to improve the customer experience?

Just the opposite.  Ryanair succeeds (and its CEO is noteworthy) precisely because it is one of the few companies to have understood exactly the customer experience that it needs to compete strategically – and then makes sure this is what it delivers.

Ryanair proves the strategic case for customer experience

Ryanair is a lean, low cost airline.  It sets expectations for customers about how it works and what it will and (and particularly) won’t do.

It does not burden itself with the very high costs associated with exceptional customer service, because it offers very little by way of customer service.  This is why O’Leary is so uncompromising about refunds – because if Ryanair compromise on this once, they will have to do it again.  And then they will need to employ people to manage refunds. And they will get more complaints, because customers will think that they might get something by complaining.

So Ryanair will have to staff a complaints department.  And this will lead to escalations, and reporting, and budgets, and bureaucracy, and management’s attention will get distracted by customer issues, and this will take their eye off the ball of running things very cheaply and efficiently.

And at that point, their cost base will have ballooned and they will no longer be competing on cost.  (And then their competitors will kill them by competing on service).

Instead, Ryanair are very explicit about the customer experience they offer.  They are low-cost. They will get you there, on time. With your bags.  That’s it.  No other promises. They deliberately limit the customer experience and manage it tightly because doing so is essential to their strategic success.

And against these things – the things which, because they really understand their customers, they know are most important to them – Ryanair are among the best in Europe.

And this is the lesson Ryanair teaches all of us about the customer experience.

Customer experience is not about being nice,
it’s about meeting strategic goals

We must not fall into the trap of blindly accepting that our goal is to make things a great as we can for customers. This is not the purpose of customer experience transformation.

Our purpose is instead to specify, build and deliver the customer experience we need in order to meet our organisations’ strategic goals.  And then we must drive this experience as ruthlessly and singlemindedly as Michael O’Leary drives Ryanair to succeed.

Ryanair and Michael O’Leary are, in effect, posing each of us a very challenging question:  what is the customer experience our companies need to offer so that we can best meet our strategic goals?

PS I hate flying by Ryanair, but I do so when I have to. 

(Image credit: ilovemyirishculture.com under a Free Art License)

The customer experience is about more than fixing things.

Perusing books at Selfridges 1942It’s about employees

At the start of the year, Forrester Research‘s Kerry Bodine and colleagues made some predictions about the areas which will grab attention in the customer experience space this year.  One prediction was that employee engagement will be “…white-hot…” in 2013.

They may be right.  The good folks at HCL have been making this point for some time and attribute their startling growth to an “Employee First, Customer Second…” approach.  In 2010, their CEO, Vineet Nayar, even wrote a book about it in 2010.

Unusually for a CEO these days, at the time of writing some three years later, Mr Nayar is still in post and the HCL stock price appears to be doing very well. Perhaps there is something in what he says.

The core idea, I think, is this: employees are the company.  They make the difference for customers.  If they are happy, motivated and enabled to succeed, then a good customer experience may be possible.  If employees are unhappy, unmotivated or not equipped to succeed, then nothing we try for the customer will really make much difference.

It is in our control

For those of us interested in customer experience transformation, this perspective offers another potential bonus: while we cannot manage our customers, we can and should manage our people. The challenge of working with our people to make things better for customers is in our hands, no-one else’s.

I believe that how company drives its people to make things better for customers indicates whether a company regards the customer experience as an overlay on their “core business’ of selling, shipping and service – or if their approach to customers reflects serious strategic intent.

As Jeff Bezos, CEO of Amazon, said in his letter to stockholders a couple of months ago:

“One advantage – perhaps a somewhat subtle one – of a customer-driven focus is that it aids a certain type of proactivity. When we’re at our best, we don’t wait for external pressures. We are internally driven to improve our services, adding benefits and features, before we have to.”

Proactive customer experience is a strategic choice

This idea of proactivity is the whole game, right there.  Organisations which are serious about the customer experience proactively drive their people to seek to make things better before customers see reasons to complain.

Sure, there are companies which are doing good things by listening to customers and putting in improvements to fix things which customers don’t like.  This work is valuable, and good, but it does not address the real challenge.  If we simply fix things about which customers complain, then we are  playing catch-up. We are saying, in effect: “we aspire not to make customers unhappy.”

The difference is in the bottom line. Jeff Bezos again:

“Proactively delighting customers earns trust, which earns more business from those customers, even in new business arenas. Take a long-term view, and the interests of customers and shareholders align.”

Customer experience is much more than fixing things for customers. It is about making a strategic choice to be proactive in making things better for customers, it is about reflecting this choice in the ways we guide and enable our people to make things better for customers – and it is about doing so because it is the most effective way to grow and sustain the bottom line.

How do our companies measure up?

(Image credit: Ministry of Information Photo Division Photographer [Public domain or Public domain], via Wikimedia Commons)