Words need to match expectations if we want our relationships to succeed.
Valentine’s Day reminds me how much the language of love corresponds to the business of engaging with customers.
Love is about building enduring relationships, where both parties feel like equals, where they each give and get something from the relationship. It is about two-way communication. It is about trust. It is about wanting to invest our time in the relationship, because doing so rewards us now and because we want it to do so in the future.
For most organisations, this also describes the relationship we would like to have with our customers (and more importantly, the relationship we would like them to have with us).
But, as many of us have learned to the cost of our broken hearts, this isn’t easy.
Chores vs Candlelight
While people can say the right things, what we say through the candlelight over dinner with a nice wine can be very different to what we do on a wet Wednesday evening when the chores need doing and we’re both tired after a long day at work.
And if we can take out the rubbish without being asked, or do the dishes and still smile because we want to cheer our partner up and maybe feel a little better ourselves, then – while candlelit dinners are all very nice – it is when we stand in the rain by the bin or at the sink up to our elbows in dishwater that we don’t just talk about love, we show it.
And showing our love is what counts.
Caring is Doing
We can love our customers during the sale, as we smile and show them our brochures and we give them the pitch and they get excited that maybe the thing we are offering might be the one, the thing that they are seeking.
But are we ready to work at this relationship? To show our love rather than just talk about it?
We do so when we let them call us for help and we answer in person, not with a computer; when we design our website to make it easy for them to do what they want, rather than just get what we want to tell them; when we remember their name and know what they have bought from us and recognise that even the smallest thing can cause frustration; and when we say “don’t worry about it” and give them their money back with a smile when they tell us they aren’t happy.
The experience we offer our customers shows how we care about them much more than any words we use.
Real relationships don’t happen just because we dress up nice and say we care, they happen because the things we do in the weeks and months and years after that first date show we care.
It’s true for our partners. It’s true for our customers.
Happy Valentine’s Day.
(Image credit: Quickmeme.com at http://www.quickmeme.com/meme/3pf2)
Imagine for a moment that we make swords for a living. We need a market for our product. Where are the opportunities? After extensive market research (in our local cinema and some classic books) we find our target customer segment.
A dynamic and exciting market.
Needs? Simple enough: a blade to carry between their teeth as they swing onboard a victim’s ship and something to parry other swords during spectacular duels.
But a standard cutlass already does this job pretty well. If we try to compete just by selling these, then pirates will just choose the cheapest ones. And we can’t compete on price with low-cost blacksmiths working on the Barbary Coast.
We need pirates to see our swords as better than those of our competitors. Do we need to offer a better sword? Perhaps something incorporating the latest technology?
Perhaps a multifunctional sword?
We don’t know.
We need to know what matters to these buccaneers. What are their problems? Their aspirations? How can our swords can help them address these? And how can they do so do so in ways which pirates value and our competitors find hard to copy?
So we blow the rest of our market research on more movie tickets and popcorn.
What do we find? Pirates are fundamentally conservative and don’t want radical new sword designs. They don’t want the equivalent of a sword iPad or a swiss army sword.
Other pirates would laugh at them.
Worse, so would their victims.
Is our venture doomed?
Not in the least. For this finding shows us a real customer need that we can meet.
Pirates don’t just want a sword which slashes through the air; they want to look good. A pirate has to look…dashing.
They want others to tell stories about their exploits. Sea voyages, even for pirates, are long, and stories told during endless night watches become legends told in taverns on shore.
And every pirate wants to be a legend.
A unique customer experience
And so we see that our swords have to be special. Sharper than anyone else’s, with blades black as midnight, maybe, with handles encrusted with cabuchons and rubies and trimmed with gold.
Each as unique as its dashing and charismatic owner. Each a sword fit for a legend.
And each sword has to be challenging to get, so that each owner not only gets their sword, but a tale as well.
In short, we need to offer our pirates not only a distinctive product, but a unique customer experience.
So we select our distribution channels very carefully. Caves on obscure islands, perhaps, or at the top of distant mountains. Then we throw in some traps, some quicksand and some fire swamps for good measure.
We prepare to go to market with a below-the-line PR budget to plant rumours of mysterious and wondrous swords in taverns, and above-the-line marketing through publication of obscure and blood-stained treasure maps (strictly limited edition).
And we make sure that the price for each sword is at least a treasure chest full of gold doubloons.
So now we know how we are going to get rich.
A time for thinking of risks
And it is at this point that we begin to think about the risks.
What kinds of risks? Pirates aren’t particularly trustworthy, so we’ll need to make it hard for them to double-cross us. We’ll need the ability to check treasure chests for poison needles among the doubloons. We’ll need good protection for our supply lines.
We will do all these things and more, but we do so knowing that the thing that matters is the customer experience we offer and how it meets their needs.
And while we act to address these risks, we don’t lose sight of what we are in business to do, or what our customers want, or the business model we have designed around meeting the needs of our customers by giving them a unique customer experience.
We think about our customers and how we will do business – and then weseek to manage the risks.
…And this is why banks will never get the customer experience right.
Banks begin with risk
Most businesses succeed by thinking about customers and the opportunities which these customers represent. They look for ways to help customers overcome their problems and achieve their aspirations. They try to align what their businesses do with what their customers want.
When businesses do this well, they become customer-centric businesses; when they do this badly, they find it hard to keep customers and grow.
Most businesses – except banks.
Banks begin, not by understanding customer needs and aspirations, but by considering customers as risks. They begin by assuming that customers will lose the money that banks make available to them, either through fraud or theft or poor money management or bad investment.
So when they consider the services they offer or the customer needs they will meet, banks start by seeking to minimise the risk which their customers pose.
So they make it hard for customers to become customers, because each new customer is a risk. They make it difficult to change between products as changing products carries a risk that something will go wrong.
Where possible, they try to offset such risks, usually through fees or charges. In effect, they ask customers to pay to cover the risk of their own untrustworthiness.
And they love being in the middle of deals as this enables them to offset risk at one end against risk at the other (and doubles their fees).
Bankers are proud of this. Speak to them and they tell you that a bank’s core competency is the quantification and management of risk. A key element of this is customer risk.
And so banks are hard-wired against innovation, because innovation requires both leaps of faith and a willingness to consider new ways of working with customers. These are, by definition, risky.
And, unlike the customer-centric businesses to which we refer to earlier, banks, because of this mindset, cannot align their businesses with their customers; instead they require that customers align their businesses with the bank.
A matter of trust
Banks can’t help being like this.
It’s not their fault.
It’s just that no matter what they do, they can never become customer-centric.
This is the effect of beginning with such risk thinking. It means that banks, unlike every other business, start thinking about what they do from a different first principle:
Do not trust the customer.
This is why, for example, banks find it so hard to offer good customer service when things go wrong. As their business is predicated on pushing risk and liability onto the customer if something has gone wrong, the working assumption is that it is the customer’s fault.
And when things go systemically wrong (LIBOR, PPI, money-laundering, credit card insurance) it is only after huge fines and new laws that banks accept that maybe it was their fault and that the customer might have been right after all. (Although they don’t really believe it).
Banks aren’t bad. (Most) bankers aren’t evil people. They are trying to do the right thing, most of the time.
But when your business is designed from the ground up on the assumption that you can’t trust customers, making your business better by aligning yourselves better to customers is going to be difficult.
And so while there are now many people all over the World in banks doing great work to try to make the customer experience better, their prospects for long-term success are limited.
Because no matter what they do, the customer experiences they create can only be an overlay on a business designed not to trust customers.
Any successes they have can only be maintained by rigorous and sustained attention to the customer experience. And when cost-cutting, new regulations, new systems or some other stress hits (as routinely happens in banks), their eye will leave the ball and the fundamental customer attitudes which underpin the banking model will kick back in and all their good progress will inevitably unwind.
Because, under stress, we all revert to the behaviours where we feel most in control and have greatest comfort. For banks, this is thinking about the customer as a source of risk.
A choice of experience
As far as I am concerned, I want to make things better for customers. So, in the main, I think I’d prefer to be in the sword business, selling to pirates.
And, thinking of the customer experience, wasn’t it a pirate who made famous the line: “As you wish*” ? – which is as perfect a customer experience philosophy as is possible in three words.
Yet for the life of me, I can’t think of any famous quotes from bankers about customers at all…
For a video of our target market, see here:
* Dread Pirate Roberts, in The Princess Bride.
(Image credit: Swiss Army Sword by Glenn Roberts, http://dribbble.com/shots/1207517-Swiss-Army-Sword?list=users)
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.
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.
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).
Banks 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.
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.
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.
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.
“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.”
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.
If 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.
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?
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-bogglinglybig). 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.