Over the years, we have followed shifting customer values that help to differentiate brands.
As we follow these developing trends we often gain clarity in interesting areas.  Clarity in the past couple of years came in a better understanding of certain segments of customer loyalty.
We have watched loyal customers for some time and have a good understanding of their make up.  But within these loyal customers, there are some that stand out.  These “raving loyalists” go beyond loyalty, they are willing to defend and represent our brand.  They are somewhat more engaged than those defined by the NPS methodology as “promoters.”   The raving loyalists feel a personal and emotional bond with the brand which causes them to not only recommend but defend and represent the brand.  Think of hard core Apple users; it would be an understatement to say “hardcore Apple customers have a strong willingness to recommend.”  Their bond to the brand is clearly more emotional than that.

Raving loyalists are not only important because they are loyal and drive additional business, but are also part of the “innovators” and “early adopter” set in the market.  It is they, who control access to the mainstream market (see the Law of Diffussion of Innovation – beautifully explained by Simon Sinek here).

In looking at these raving loyalists we find they have the following characteristics:

1. Raving loyalists believe they perceive the company’s purpose or mission (It doesn’t matter if they are right or not.  In this case perception is reality.)
2. Based on their consistent experience with a company or brand, a raving loyalist perceives the company or brand to be authentic to its purpose or mission.  Simply put, the customer thinks the company walks the talk.
3. The raving loyalist perceives an alignment between the company’s values (the source of the authenticity) and their own personal values.

When they see this alignment of values, the customer feels personally represented by the company or brand. In turn, becoming an agent of the brand that represents him or her.  This turns into an emotional bond of reciprocal kinship.

We see these types of relationships between fans and sports teams, within certain ethnic or socio-economic strata, in nationalism and regionalism, religious groups, and more specifically to our discussion, between customers and certain brands such as Harley Davidson, Apple and Corvette among many.

So, the raving loyalist who will promote, defend and represent your brand has only two overriding requirements.  They must perceive authenticity in your brand and they must feel the brand is aligned with their own core values.

Here then, are the obvious questions:

1. Do we understand our customer’s values?
2. Is our mission or purpose aligned with them?
3. Are our customer experiences across the company demonstrating consistent authenticity?

If the answer to any of these is no, raving loyalty is not possible and we have lost major ground in the battle for differentiation.

Our deepest quest as marketers and brand strategists must be authenticity.
However, authenticity is not found in an advertisement or in engaging creative production.  Authenticity is found in the operations of the company as it relates to a higher overriding purpose.  It is found in a company’s policies, processes and delivery mechanisms as experienced by the customer.

Without authenticity we cannot create deep rooted loyalty with our customers.

Rudy Vidal
Committed to XCL

There was a time when having consistently satisfied customers kept us ahead of the competition.  Those were the days when the differentiating power in the market was in products and services.  Now, as we become more and more accustomed to our EXPERIENCE economy, we begin to accept that the quality of our products and services rarely differentiate our brand.  Quality products and services are now common, expected, minimum business requirements – table stakes.  Brand differentiation and loyalty now come by way of our experience while consuming the product, service or brand.

I often ask in my seminars: “what does Barnes & Nobles sell?”  The reply is usually: “books”.
The truth is that I could do research for my next book at B&N for the next year, using their tables, sitting on their chairs, with clear access to all the books in the store, and never have to buy a book.  If B&N were really selling books, after a couple of days, they would ask me to buy something or leave.  But they don’t.  In fact, they are not selling books at all.  In stead, they are selling experiences and hoping that while we are consuming their experience (nice chairs while we read, a coffee shop, poetry readings, a children’s reading area, etc.) we will see a book we like and buy it.  Statistics show we do.

If we know our customers now value and are willing to pay more for experiences, but we continue to offer them marginally differentiated products, we should not act surprised when they ask us for a lower price.  Over 50% of the CEOs I speak with, actually believe customers DEMAND lower prices.  In most cases these CEOs are the source of unnecessary commoditization and failing businesses.   If we offer someone what they no longer value why would we expect them to pay a premium?  As long as we continue to try to differentiate our brands by the feature/price ratios,  we will always be “me too” brands.

Let’s get to know our customers and their values more intimately.  Then let’s create experiences for them that result in emotional bonds with our brand.  I know the temptation to simply lower the price is great since no one ever says no to a lower price,  but I also know if we are willing to think about our customers, talk to them, ask probing questions with humility and a sense of service, we can get to understand their values, those things that really matter to them; those things that will engage them emotionally and make them loyal.

Aligning our companies to our customers’ values is the only way we can gain sustainable differentiation in a commoditized market.
Alignments require the management of only a couple of key components: Customer Values, Corporate Purpose and Corporate Goals.  Align these three and magic will happen.

Customer loyalty is never an accident.

Rudy Vidal
Committed to XCL

In today’s commoditized markets customer loyalty is the result of consistency in customer experiences across an entire organization, from shipping and receiving to accounts payable.  Such consistency across divisional lines can not be managed effectively without considering culture.  For this reason, the topic of customer centric cultures seems to arise more and more in customer loyalty discussions.

The right culture holds the company together, committed to a common, high level purpose that inspires a certain “way of being”.  Management’s ability to effectively communicate this higher purpose and to show authenticity to it, determines the degree of cultural adoption and level of sustainability.

Clarity in communication of the higher purpose is helped greatly by a well thought out, well written statement of purpose (vision and/or mission type statements.)

There are some in management who strongly oppose the use of such statements, thinking of them as meaningless words no one ever reads.  I disagree.  An effective statement of purpose, when used and supported by authenticity in our management intentions, beliefs and behaviors can become a source of inspiration, employee cohesiveness, and clarity amidst the din of day to day business.

Below is an example of a mission statement we worked on a few years ago (shown with permission.)

MISSION
We believe an individual’s health is more important than money.
We are committed to providing optimum family healthcare where the best interest of the patient is the only consideration.
No patient will ever be turned away for the inability to pay.

- They are concise and easy to digest.
- It gives a sense of what the company does.
- It makes me want to join the club (as an employee and as a customer.)
- It provides an idea of why the company might feel this way.
- It tends to inspire others to follow suit.
- It can provide the basis for day to day decision making.
- It compels us to make more and more decisions at the customer level.

An aligned culture is the result of general employee engagement to a common purpose.

How we make that purpose clear to the organization is up to us.  Good statements of purpose are an important part of a culture management communications plan.

Rudy Vidal
Committed to XCL

Brilliant !
Here is a good example of the overwhelmingly powerful effect of experiences in creating customer behavior and loyalty.
The new product is clearly less effective than the alternative, yet customers prefer it 66% after the addition of the experiential component.

Suggestion:  Reduce your costs by dropping features and re-invest in adding experience.  The results are evident.
take a look:

Thank you  Volkswagen for the vision to undertake this project.

Rudy Vidal
Committed to XCL

We prefer to find good examples of customer centricity to make our point.
However, sometimes examples of poor alignment with customer values can serve as helpful warning beacons.

First, I must say that I love BlackBerry products, they are reliable and do the job.

Today I was delighted to see BlackBerry had corrected their lack of a Desktop Manager for Mac, which has caused me countless hours of grief in trying to sync my PDA and Entourage on my Mac. I was excited, so I followed the link and downloaded the software.

Here is my experience:

1.  The download did not include a pdf of the instructions. I went to the website to find the instructions and also found release notes – Cool.
2.  Oops, the release notes say that when synchronizing with Entourage there are several unresolved issues with data integrity, the same ones that were giving me grief with the third party software.
3.  I decided to call the contact center to ask if the release notes were still current and/or to get advice on whether I should make the switch.  No phone number listed for customer support.  They have self help and forums, I spent 15 minutes looking for an answer then gave up.
4.  Decided to send an email to the support desk with my question – I received a reply saying the email was not delivered, we have self-help options or payed-for-support.

• Why would a device come without necessary software to synch to well known computers?
• Why would they deliver software without operating instructions?
• Why would they deliver software that does not work, and not let you know before you download?
• Why would they lead customers to believe there is a support email address when there is not?
• Why would they consider reliable customer support for business people something beyond their responsibility?

The answer could be simple, and it can happen to any company in the blink of an eye:
Sometimes we may not consider the effects of our business decisions on the customer experience.
Perhaps even less if our products are leading the market.

Well, it’s not about the product, its about the customer and the company’s alignment to their values.

My 7 years of BlackBerry usage mean nothing if I don’t feel the company is ready to support me when I need them.

The point here is that great companies can quickly loose their footing simply by forgetting that we are no longer in a product economy.
Products are great, but no longer brand differentiators.  The differentiator is now the customer experience due to the company’s integrity of purpose.

My partner Donna Root, said it perfectly yesterday :  ” A company’s alignment to their purpose is critical because in an experience economy customers care about “HOW” companies win.”

Your customers have evolved.  Their criteria for loyalty has shifted to a more holistic view.  They care about what company’s stand for and about their authenticity in that purpose.

What does your company stand for?

Rudy Vidal
Committed to XCL

Friends,

Some of you may remember this posting from over a year ago.

As the need to differentiate becomes more and more critical, I thought I would have Johnny remind us
how its done.

This is a perfect example of the importance of the experience and the value of differentiation.

Enjoy.

Click for Johnny’s Video

Thank you.

At the recent inaugural meeting of the Chief Officer Council held at Oracle Headquarters and hosted by Jeb Dasteel/CCO of Oracle, I was invited by 50lessons.com to tell a few stories about customer service and the role of the CCO.

In my life, stories have always been a source of innovation.  For some reason, when we listen to other people’s stories we see our own situations from a different angle, this is always helpful.  For this reason I thought it may be interesting to post the stories.

These “Lessons Learned” will soon be offered on the 50lessons.com website and published in Harvard Business Press’ new book series “Lessons Learned”.

I would like to thank our friends at 50lessons.com for their consideration in the posting of these videos.  Also, since I mentioned him twice, I’d like to thank Don Szczepaniak as well as Lorraine Robbins and the entire Panasonic contact center team for all I learned from them over the years.  They are true professionals who make great customer service look easy.

Rudy Vidal
Committed to XCL

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While putting the finishing touches on a white paper on contact center cultures, this spilled out onto the keyboard.
It’s may not be right for the white paper but I thought I would share it.
(This is what happens when you listen to Schubert while working.)

Contact Centers form very specific kinds of cultures, which require special care and attention, and present challenges not usually seen elsewhere in the organization.  They are labors of love.

At times, it is difficult to discern a contact center culture from that of a production line, a command center or a hospital.  The origins of the contact center workforce is often diverse, at the same time, constant and committed.
Contact centers may have the highest turnover rate of any corporate discipline, but are kept running by devoted individuals that often offer entire careers to the service of those they don’t know.
A contact center reads the life-pulse of any organization, feels the tremblings of a failed business and the trends of immense growth, usually before the rest of us.
Customer contact centers hold the key to the future of our businesses through their access to the hearts and voice of our customers.  Yet, we often see them as cost centers, necessary evils in our effort to create brands.
Contact centers collect the leaks of corporate miscalculation and work knee-deep in water everyday.
Customer contact centers are one of most powerful touch-points we have, and the most directly impacting tool in creating Xtreme Customer Loyalty.

Support and visit your customer contact center, it’s good for business.

Rudy Vidal
Committed to XCL

Yesterday, I had the pleasure of speaking to a group of CCNG members in Cincinnati, and the topic of contact center cultures came up, again.  Seems to be a popular theme lately, so I thought a couple of points on contact center culture management might be nice.

Because it’s rare that people agree on the definition of corporate culture, I feel I should put one in. So, here is my definition (since I don’t like wikipedia’s)

A set of generally accepted norms and values that result in the behavioral/operational paradigm of an organization.

Regardless of the type of organization, I have found some consistencies with cultures:

• Cultures require management ownership
• Cultures cannot be changed.  They are either shifted or destroyed
• Cultural shifts cannot be mandated.  Mandate=Destroy
• Cultures are not the employees
• Cultures are usually the effect, not the cause.
• Cultures are a labor of love.

Key Levers

Before any culture work takes place, management must assume responsibility for the current and future cultures.

Culture management is much like gardening.  When the harvest is poor, an expert can easily point to our errors: we planted at the wrong time, used the wrong soil, provided too much or too little water, etc.  However, when the harvest is plentiful, we can hardly take credit for the miracle of nature, when all we did was ensure the right conditions.  Management’s responsibility is to place the right components in the right conditions and keep the balance.

When boiled down I find the key levers to be

(Expectations + People&Capabilities + Environment)/Purpose

Ensure clear Expectations.
Ensure the right People have the right Capabilities (knowledge and tools)
Provide an Environment conducive to gaining the desired results.
Alignment of each to a clear and accepted Purpose

The shifts in culture are determined by the balance of these variables in relation to the corporate purpose.

Please note: All of these variables are under the sphere of management control.  Again, management ownership is key.

Simplified Dynamics
When the key levers are sufficiently aligned to the purpose of the organization, things tend to go well.  The culture rarely feels problematic and business issues can usually be addressed through specific and focused action – ie. changing a policy, adding a person, adjusting a process etc.

When one or more of these key levers are sufficiently misaligned with the overall purpose of the organization, the culture will shift in an effort to regain purpose.  The shifts seem to happen in 2 major ways:

1. The culture will compensate through one of the key levers  (ie: people may work harder) or

2. The culture will adopt a new value system to reconcile the imbalance and justify the misalignment.

An oversimplified example:
A contact center is asked to cut costs through headcount reductions, and expected to increase its service levels.  The culture may keep alignment to the purpose by working harder.  If this solves the issue and is sustainable, the shifted culture compensates.
If the adjustment is not sufficient to achieve the management expectations, a new value system may be adopted – “Management is Unreasonable”.  This newly added cultural value will help or hinder the culture’s effectiveness (alignment).  As before, if it helps, it is accepted and maintained.   If it does not help, yet another value will be formed to further cover the gap – “the harder we work, the more they expect”.

In short, any time the culture has a continuous perception of being ineffective or misaligned, a new wave of value adjustments will take place to address the gap.  This will continue until the culture sees itself realigned or until it reaches “shift saturation”; the point where it stops making  adjustments for the overall benefit of the system.  At this point, shifts become personal in nature (at the employee level), and the inherent power of cultural wisdom is lost.

We can’t over-emphasize the importance of communications (to ensure correct perceptions) and the maintenance of balance to avoid a a series of shifts that do not serve the company well.  It is also important to keep in mind that the key levers for change hold considerable power in managing the culture and the effectiveness of the business.

Cultures Drivers
Although I know organizational behaviorists will not appreciate this oversimplification, I’ll throw caution to the wind in exchange for a graphical explanation of  cause and effect.

-    Management expectations or beliefs, set the wheels in motion.
-    These expectations result in the creation of policies & procedures.
-    The policies and procedures create an environment which promotes (or not), the attainment of the management expectation.
-    The interaction of all these with employees (at all levels), produce a cultural paradigm.
-    This culture interacts with customers.

The power of WHY?
Most management with whom I speak regarding culture are looking to “change it” in order to gain better business results.  However, the culture is rarely the cause of good or bad business results.  Unless the business model or market expectations have drastically changed, I find the culture is usually effect of an underlying cause.  Although it may definitely be problematic, it is rarely the cause of the problem.

I believe many of the difficulties in today’s corporate cultures are the result of an unclear or undefined purpose.

Most companies know WHAT they do
Some companies know HOW they do it
Few companies know WHY they do it.
See Simon Sinek

Without this clarity of purpose, the culture is usually left to rely charismatic leadership, which when changed, causes havoc and great loss of direction.

Next post: considerations for creating culture shifts.

Rudy Vidal
Committed to Extreme Customer Loyalty

Copyright 2009 – Rudy Vidal

About a year ago, I changed banks from Bank of America to MetroPacificBank in Irvine Califormia.  I was not happy with the customer service of BofA and decided to bank at a small single-branch bank hoping to get more personal service.

It was a good decision.  This last year, I had the best banking experience of my life without major issues and with great customer support.  But, as luck would have it, last month MetroPacific Bank was acquired by Sunwest Bank.   As is normal in these cases, most of the management team, including my banker, VP Colleen Brady, was let go.  At first I was a little nervous but figured that Sunwest deserved a chance.

Three weeks ago I had to open an new business account, and in making the request I soon found out that my great experiences with MetroPacific was more based on Colleen’s care and empowerment, than the result of mature customer centric processes.  My account is still not open. So, I decided to leave, in spite of the great personal efforts of Chris – a very customer centric account manager left in charge of my account. (thanks Chris !)

The lesson I learned:

When customers figure out that their satisfaction is the result of employee commitment and not the result of an institutional customer focus, they realize they are not loyal to the brand, but loyal to the employee.

I immediately called Ms. Brady and asked: “what bank are you going to?”

It’s great to have passionate, customer centric employees.  But, great employees are no substitute for institutional customer centricity.

We need to back those employees with tools, processes and policies that help them promote a corporate commitment to the customer and thereby create brand loyalty.  In addition, our customers need to see that the effort is not only in the employee, but innate to the company’s intention and values.

I hope Ms. Brady doesn’t go to Bank of America.

Rudy Vidal
Creating Profitable Customer Loyalty