Posted by Paul Hagen on January 11, 2013
The way that firms can deliver value to clients has massively changed. Firms can interact with customers in the context of using products (e.g., think Rosetta Stone and language coaches). In fact, customers interacting with each other within the product may deliver more value than the product itself. Companies can harness the data exhaust of product usage and turn it into powerfully useful information to help customers succeed at their goals (e.g., think Nike Plus and fitness).
Firms need to rethink how they operate to capitalize on these opportunities. This means rethinking marketing and support roles that make less sense in a world of such ubiquitous interactions and data. It means rethinking separations between front and back office, both of which have very powerful impacts on customer experience.
How do customer experience leaders reinvent how their firms operate? Two articles give customer experience leaders some excellent guidance. The first is John Kotter’s “Accelerate!” He argues that companies need to build a parallel second operating system for the organization that more nimbly adapts to rapid change and disruption. For customer experience leaders, what does this operating system look like? A second Harvard Business Review article, “Adaptability: The New Competitive Advantage,” provides a nice framework for thinking about this new operating system. Its three imperatives are to: manage complex multicompany systems, read and act on signals, and experiment often. I’ve adapted these into a customer experience context:
- Use key customer journeys to align stakeholders across the customer experience ecosystem. The quality of every customer experience depends on a complex interdependent ecosystem of employees, partners, processes, policies, and technology. Nokia's chief executive officer (CEO), Stephen Elop, captured the importance of this idea: "Our competitors aren't taking our market share with devices; they are taking our market share with an entire ecosystem." Firms like USAA, Apple, salesforce.com, and Starwood Hotels are firms that do a good job of orchestrating across the ecosystem. USAA has identified approximately 100 key experiences associated with customer journeys like buying a car or preparing to deploy abroad, all of which have owners and cross-functional teams held accountable for underlying processes. For one of those key experiences (the “car-buying” circle), the company manages auto dealership relationships on behalf of customers, understanding that customer hesitation haggling with dealers for pricing slows its ability to provide loans and sell insurance.
- Read and act on customer signals. Your customer insights team and voice of the customer (VoC) program are vanguards of this effort. I’m not talking just satisfaction surveys — customer understanding doesn’t come just from spreadsheets and data crunching. Instead, I’m talking about a robust program that takes a holistic approach to understanding customer sentiments and needs through qualitative research that identifies unspoken or latent needs (e.g., unsolicited feedback, observational field research) as well as quantitative research (e.g., surveys, online behavioral analysis, sentiment analysis, transactional analysis). Firms that game their surveys for some marketing purpose or focus their program simply on identifying and fixing problems miss the point of reading customer signals that put them ahead of competitors. Having a governance mechanism to act on insights is critical . . . otherwise all a firm does is read the signals but doesn’t act on them.
- Experiment frequently by co-creating products and services. An effective way to ensure that experiences meet customers' needs is to bring customers and frontline employees into the design process through co-creation. When they are face-to-face with a design team, customers can provide valuable input, including firsthand accounts of what they want, seeds of ideas to build upon, and feedback for real-time prototyping. In a single-day workshop, the Fidelity Charitable team gave employees just 1 hour to create pen-and-paper prototypes for ideas that they thought would fill a particular donor need. Customers then joined the group for a mocked-up fundraising cocktail party that enabled them to test out the prototypes in a realistic setting. Through this process, the Fidelity Charitable team got multiple rounds of feedback that focused its work on the most valuable solutions. Intuit has likewise embraced a hybrid of design thinking and “lean startup” to do rapid experimentation and prototyping across the organization. It also has 200 "Innovation Catalysts," specially trained design-thinking Jedis deployed across the company to help the organization better deliver customer delight (even when those customers are internal).
Many firms seek to differentiate on customer experience. The ones that will succeed will adapt the way they go to market. Some firms unable to shift culturally may wind up purchasing smaller startup companies with a more flexible operational and technology stack that will cannibalize the less nimble entity (e.g., Allstate’s acquisition of Esurance Insurance Services).
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