I had a chance to catch up with David Lessing, COO of wealth management at Morgan Stanley Smith Barney, in advance of his keynote next month at the Customer Experience Forum. I spoke with David about what it means to have an outside-in perspective on customer experience at Morgan Stanley Smith Barney. Here are some of his thoughts.
Q: How would you describe the experience that you want Morgan Stanley Smith Barney customers to have?
A: The most significant driver of a client’s experience with Morgan Stanley Smith Barney is that client’s financial advisor and service team. We are focused on ensuring that our firm offers clients the most talented financial advisors with access to the best tools and investment insights in the industry. Although each client has somewhat different expectations of what they’d like to receive from us, we are committed to both excellent service and deploying our expertise to help drive investment results in line with the client’s goals, something we define as “investment excellence.”
Q: How does Morgan Stanley Smith Barney’s customer experience provide a differentiated experience from direct competitors?
Sometimes a CEO takes the reins at a company that’s in such great shape, I can’t help thinking, “Wow, it must be great to be that guy!”
And then there’s Dan Hesse, CEO at Sprint. Given the shape that Sprint was in when he got the top job in 2008, I was thinking more along the lines of, “Wow, he must be working off a karmic burden!” That’s because back then, the company had the lowest customer satisfaction ratings of any of the major wireless carriers. As a result, it was bleeding cash from high customer care costs and lost subscribers.
Faced with this mess, Dan decided to focus on systematically improving the quality of Sprint’s customer experience as a way of improving Sprint’s bottom line. We were so impressed by his efforts that we included a case study about Dan in Chapter 2 of our upcoming book, Outside In: The Power Of Putting Customers At The Center Of Your Business.
The book won’t be out until August 28th, but you don’t have to wait until then to get a sense of how effective Dan’s efforts have been. That’s because on May 15th, Hesse gave an address at Sprint’s shareholder meeting, and he had this news:
To be candid, I originally agreed to give the speech as a favor to Jim, whose inspirational story kicks off the chapter on chief customer officers in our upcoming book. I didn’t know what to expect of the event and somehow imagined that when I joined hundreds of doctors, nurses, and other caregivers in a big auditorium, I’d get trapped inside an episode of House — and I’d be the only one who didn’t know what the other cast members were talking about.
Was I ever wrong. The event was an extraordinary experience from beginning to end, and the content was accessible to anyone who works to improve customer experience, regardless of industry. As someone who helps put on Forrester's Customer Experience Forum, I even got a little envious.
A few things leapt out at me from the sessions I attended:
Executive-level commitment to customer experience as a business strategy. Dr. Delos “Toby” Cosgrove, CEO of Cleveland Clinic, and Dr. Kurt Newman, CEO of Children’s National Medical Center, appeared together on a panel. It was clear from their answers to moderator and audience questions that both of them connect the dots between high-quality patient experience and the bottom line.
Customer experience is, quite simply, how your customers perceive their interactions with your company. In Forrester’s soon-to-publish book, Outside In, Harley Manning and I show that customer experience is a fundamental business driver and — in an age when customers have access to vast amounts of data about your company and its competitors — it’s also the only sustainable source of competitive advantage.
In most industries, customer experience is the greatest untapped source of decreased costs. Fidelity Investments recently spent a modest $20,000 to fix a problem that made it difficult for customers to log into their accounts through the company’s automated phone system. This single fix saves Fidelity $4 million a year by averting calls to customer service. And it’s just one of more than 160 projects that came through Fidelity’s experience improvement system in 2011. Together those projects account for more than $24 million in annual savings.
Customer experience also drives increased revenue. Several years ago, B2B technology reseller and service provider CDW added a question to the customer survey it fields: “What additional things would you like to talk to your sales team about?” The company funneled the answers to this new question to the appropriate account managers. The account managers, in turn, closed the loop by getting back to the customers with a simple message: You told us that you have a need, we’d like to offer you something that could meet that need. And guess what? Customers took the CDW sales reps up on it. This seemingly simple innovation drove more than $200 million in incremental revenue in just one year.
Although the book won't be available to the general public until August 28th, attendees of our Customer Experience Forum at the end of June will get digital copies of the manuscript. They'll also hear keynote speeches from some of the people who appear in the book, like Kevin Peters, the president of Office Depot North America; Laura Evans, chief experience officer at The Washington Post; and Laurie Tucker, senior vice president of corporate marketing at FedEx.
If you'd like to get a preview of some of the concepts in the book, check out the video below — and then stay tuned for more announcements!
The only way your company will differentiate based on customer experience is if the culture of your organization aligns closely with the brand promise to customers. Zappos CEO Tony Hsieh puts it in his blog post entitled “Your Culture Is Your Brand”: “Advertising can only get your brand so far . . . So what’s a company to do if you can’t just buy your way into building the brand you want? In a word: culture. At Zappos, our belief is that if you get the culture right, most of the other stuff — like great customer service, or building a great long-term brand, or passionate employees and customers — will happen naturally on its own.”
When Forrester looks at building a customer-focused culture, we believe firms need some precursors in place, such as a clear strategy and vision, metrics that reflect customer perceptions, and governance mechanisms that set standards and hold people accountable for changes.
Once those are in place, rewards systems are one powerful lever to keep employees focused on what’s important. My colleague Belle Bocal and I identified nine ways that companies use reward systems to build a customer-centric culture.
Celebrate Target Behavior
Many companies make the mistake of trying to tie variable compensation (e.g., bonuses) to customer experience metrics too early. What many firms have learned is that the more informal recognition programs can be even more powerful at moving culture than the compensation metrics.
Last week, I released an update to a very popular report titled “The State Of Customer Experience, 2012.” The research is based on a survey of customer experience pros about their plans for this year. The data mirrored what we hear anecdotally when talking with clients every day and should help you answer the perennial question, "What's everyone else doing?" But beyond that, here are my big takeaways:
Everyone is talking about customer experience. Ninety-three percent of respondents said customer experience (CX) is on their company’s list of top strategic priorities. For 28%, it is the top priority. And when we asked CX pros how they plan to build customer-centric culture in 2012, about three-quarters said they expect to run training, education, and internal communication programs.